Proposed IDA Crisis Response Window Support for the Drought Emergency in the Horn of Africa

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Proposed IDA Crisis Response Window Support for the Drought Emergency in the Horn of Africa International Development Association IDA Resource Mobilization Department (CFPIR) August 2011

2 Acronyms and Abbreviations AF CRW DRF FAO FPCR GAM GBV GDP GFRP GFDRR GoE HLTF IDA IEG IGAD IMF INDS KHPT MAC NGO OCHA PSNP RDP RHPT WBG WHO UN UNHCR UNSG USG African Union Crisis Response Window Drought Risk Financing Food and Agriculture Organization Food Price Crisis Response Global Acute Malnutrition Gender-Based Violence Gross Domestic Product Global Food Crisis Response Program Global Facility for Disaster Risk Reduction and Recovery Government of Ethiopia High-Level Task Force The International Development Association Independent Evaluation Group Inter-Governmental Authority for Development International Monetary Fund National Initiative for Social Development Kenya s Humanitarian Partnership Team Multi-Agency Coordination Non-governmental Organization Office for the Coordination of Humanitarian Affairs The Production Safety Net Program Reconstruction and Development Program Regional Humanitarian Partnership Team World Bang Group World Health Organization United Nations United Nations High Commissioner for Refugees United Nations Secretary General Under-Secretary General

3 Table of Contents I. Introduction...1 II. Summary of the Horn of Africa Drought Emergency...4 III. International Support and the World Bank Group (WBG) Response...9 IV. Rationale for CRW Support for Crisis...14 V. Proposed CRW Allocations and Planned Projects...16 VI. Conclusions and Recommendations...18 Boxes 1. Steep Price Increases for Staple Foods in Eastern Africa Food Security: A Core Element in IDA Partnership for Ethiopia, Kenya and Djibouti Opportunities and Challenges for World Bank Support to Somalia...13 Figures 1. Horn of Africa: Rainfall Received vs. Long-term Average Somalia: Comparison of Drought Episodes over the last 50 years The World Bank Horn of Africa 2011 Drought Response Plan...11 Tables 1. Overview of Most Affected Countries CRW Allocations and Projects Planned for CRW Financing...18 Annex 1. Requirements and Funding to Date per Country Programming Overview: World Bank Horn of Africa 2011 Drought Response Plan...21

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5 Proposed IDA Crisis Response Window Support for the Horn of Africa Drought Emergency I. Introduction 1. The severity, scale and human toll of the unfolding drought emergency in the Horn of Africa are exceptional in nature and call for concerted international support. Nearly 12.5 million people have been affected so far by the drought in the most affected countries, namely Djibouti, Ethiopia, Kenya and Somalia. The drought has also affected agro-pastoral livelihoods in the semi arid and arid areas of Sudan and South Sudan, Tanzania, Burundi, Uganda, Eritrea and Rwanda, although the impact in these countries has been less severe. In the context of long-term food insecurity for some populations in the Horn, the current crisis reflects a combination of factors that make it the worst drought emergency in over half a century. Consecutive seasons of low rainfall, steep increases in prices for staple foods, and constrained access to vulnerable populations owing to conflict have intensified pre-existing food insecurity to provoke an acute humanitarian crisis, potentially eroding a range of development gains across countries. Timely, coordinated international action remains vital to support the response capacity of the most affected countries. 1 The escalating drought emergency prompted the Government of Kenya to declare a national disaster on May 30, 2011, while the Government of Ethiopia outlined the growing crisis situation in a Humanitarian Requirements document in July The Government of Djibouti declared a state of emergency and issued an international appeal for crisis support on July 28, The United Nations (UN) confirmed the existence of famine initially in two parts of southern Somalia in July and in three additional areas by early August In response, the African Union (AU) hosted a pledging conference on August 25, 2011 that raised US$81 million from AU member states. 2. Forecasts for the second half of 2011 point to continued vulnerability and ongoing risks of widespread malnutrition and disrupted livelihoods in the worst affected areas. Depleted pastures, continued high prices for food, ongoing effects of fragility and conflict in Somalia, and the possibility of late or below-average summer harvests have created a difficult context for recovery in the coming months. Effective multi-sectoral intervention will be essential to avert the threat that malnutrition and mortality rates exceed famine thresholds across all of southern Somalia by end-september. In Kenya, rainfall estimates suggest that the emergency situation could worsen through October, while intense food insecurity in drought-hit southern areas in Ethiopia is expected to peak just before the November/December harvest later this year. 2 According to UN estimates, there were nearly 120,000 new Somali refugees in Ethiopia, Kenya and Djibouti by end-july, with up to 1,300 new arrivals per day in Kenya and 300 arrivals per day in Ethiopia in mid-august. In the context of scarcity in host communities, the rapid growth of the refugee population has intensified the challenge of adequate resource allocation and emergency response. 1 The Bank is closely monitoring potential effects of the emergency in Uganda, Sudan and South Sudan; preliminary assessments in Burundi, Rwanda and Tanzania suggest that impact to date of the drought emergency in these countries has been limited. 2 OCHA Horn of Africa Drought Crisis: Situation Report No. 10 (August 18, 2011).

6 The overall multilateral response to the drought emergency is coordinated by U.N. Under-Secretary General (USG) Valerie Amos at the request of UN Secretary General (UNSG) Ban-Ki Moon. USG Amos has made several missions to the region and is coordinating the multilateral response with the assistance of the Secretariat of UN-High Level Task Force on the Global Food Crisis (HLTF), led by U.N. Assistant Secretary General David Nabarro. Senior Bank management has been engaged in both the HLTF (chaired by the UNSG) and the current coordination effort in the Horn from the start. The Bank s approach is consistent with the guiding principles adopted by the HLTF to address the drought emergency, including inter alia (a) a country level focus; (b) working through existing mechanisms where these are functioning; (c) scaling up programs that are already working rather than starting from scratch; and, (d) focusing on institutions that have demonstrated a capacity to yield long-term results in ways that make efficient use of resources. In addition the HLTF recognizes the importance of the regional aspects of the crisis and encourages working with regional bodies such as the Intergovernmental Authority for Development (IGAD), which will help implement one of the planned IDAfinanced rapid response projects. In addition, the Bank is supporting IGAD in organizing a Heads of State Summit hosted by the Government of Kenya on September 8-9, 2011 to formulate a long term drought resilience strategy for the Horn of Africa. To inform participants, Bank teams will prepare best practice knowledge notes that capture the accumulated global experience in drought management. 4. In close collaboration with its international partners, the World Bank Group (WBG) has defined a comprehensive program of assistance to support national and international efforts to address immediate vulnerabilities and improve longer-term resilience. The drought emergency and the broader challenge of climate change and recurrent drought in the Horn of Africa have sharpened the focus on the need to strengthen social safety nets, restore livelihood systems, and build climate resilience. Bank country and project teams have coordinated their efforts with their respective country-level partners to ensure that Bank activities complement what others are doing to address the impact of the crisis. At the country level, the Bank has fielded missions to Djibouti, Ethiopia, Kenya and Uganda 3 in response to the drought. On the basis of extensive dialogue with partners, the Bank has formulated a comprehensive Horn of Africa Drought Response Plan for these countries. The Plan incorporates drought response at the national and regional levels, amounting to an overall drought response package of US $1.88 billion. This package encompasses resources from (a) restructured IDA projects; (b) new IDA projects financed with regular IDA country allocations; (c) proposed resources from IDA s Crisis Response Window (CRW); and, (d) trust funds (see Annex 2). World Bank Group support would integrate three phases: rapid response, focused on high-impact operations to strengthen safety nets and recovery over the next six months; economic recovery, focused on livelihood recovery, restoration of livestock production, resilience and preparedness over the medium term; and drought resilience activities over the next five years, focused on risk financing, investment in drought resistant agriculture, and climateresilient investments. 3 Although drought impacts in Uganda are less severe compared to Djibouti, Ethiopia, Kenya and Somalia, a mission was undertaken in early August to respond to Government of Uganda s request for preparing a comprehensive drought risk management strategy.

7 In support of the Horn of Africa Drought Response Plan, Management recommends that an allocation of US$ 250 million be made available from the IDA16 Crisis Response Window. This recommendation recognizes the exceptional nature of the current crisis and the need to address exceptional emergency requirements without undercutting investment towards long-term development objectives. The proposed US$ 250 million CRW allocation would account for roughly 13 percent of the total US$1.88 billion WBG response plan, emphasizing rapid response operations in the context of the transition from crisis response towards a focus on longer-term resilience. As outlined in the IDA16 report, IDA s comparative advantage rests in its ability to link short-term crisis mitigation and long-term development objectives. For the four most affected countries, the CRW allocation would complement IDA financing for three new projects and seven ongoing projects CRW financing would be additional to IDA16 country allocations, allowing IDA to respond effectively to the emergency while intensifying its ongoing commitment to building long-term resilience in affected countries. Given the regional dimensions of the Horn of Africa drought emergency, which affects several IDA countries and involves a large cross-border refugee population, the CRW would play an important gap filling role for facilitating a regional response in partnership with donors and the United Nations. Accordingly, Management recommends that the CRW allocation include financing for projects at the regional level as well as at the national level. Lastly, it is recommended that US$30 million (or 12 percent) of CRW resources be made available on a grant basis for a Horn of Africa Emergency Health and Nutrition Project that will be executed by the United Nations High Commissioner for Refugees (UNHCR). 5 This partnership would ensure rapid delivery of essential health and nutrition services in camps for Somali refugees in Ethiopia and Kenya, which are administered by UNHCR. The project would build on the implementation experience of an on-going Bank project financed by the Africa Catalytic Growth Fund and would contribute to the emergency response by expanding implementation of a health and nutrition package of services for refugees in large camps located in Ethiopia and Kenya. The project would be integral to the rapid response phase of the Drought Response Plan while also supporting the sub-region s mediumterm human development goals; UNHCR s long track record in managing the refugee camps in Kenya and Ethiopia would facilitate the timeliness and efficiency of the operation. In light of the extenuating circumstances of the drought emergency, and at the request of affected governments, the proposed UNHCR execution of the rapid response operation is considered the most efficient and effective approach for delivering results for the intended beneficiaries in the camps and regional clients. 7. The following report presents the main characteristics of the crisis and the WBG response, including the proposed role of CRW finance. The paper s sections include: (i) a summary of the severity and exceptionality of the crisis; (ii) international support and proposed WBG crisis response; (iii) the rationale for CRW financing; (iv) the proposed CRW allocation for affected IDA-eligible countries and planned projects; and (v) conclusions and recommendations. 4 The overall Horn of Africa Drought Response Plan includes less affected countries like Uganda, while CRW financing targets the most affected countries of Djibouti, Ethiopia and Kenya. 5 This proposed project would be the first to be financed from the proposed CRW allocation. It will be submitted for Board consideration in parallel to the proposal to access CRW resources.

8 - 4 - II. Summary of the Horn of Africa Drought Emergency 8. In the context of long-term vulnerability to weather-related shocks across the Horn of Africa, the 2011 drought emergency is exceptional. The Horn of Africa is one of the poorest sub-regions in Africa, with GNI per capita in 2009 of US$620 compared to US$1,125 for Sub-Saharan Africa. 6 The economies in the sub-region are vulnerable to a range of weatherrelated shocks, including recurrent droughts that are likely to become more frequent and intense as a result of climate change. Kenya relies heavily on water for both energy and agriculture, with up to 80 percent of its land defined as arid or semi-arid. Some 8.3 million Ethiopians have longterm dependence on food security programs, and several million are vulnerable to food insufficiency in the event of adverse climatic shocks. 7 Djibouti is also highly vulnerable to natural hazards, including extended multi-annual droughts that result in water scarcity for livestock, irrigation and domestic uses. At the household level, smallholders and pastoralists are particularly vulnerable to weather-related shocks, and many face chronic food insecurity. The severity and exceptional nature of the unfolding 2011 drought emergency reflect the convergence of multiple crises, including consecutive seasons of low rainfall, record high prices for staple foods, and a humanitarian crisis aggravated by fragility and conflict. The drought emergency is also having widespread impact on the young, with roughly 2 million children under the age of five in Somalia, Kenya, Ethiopia and Djibouti among the most vulnerable. Table 1. Overview of Most Affected Countries Local Population Somali Refugees Other Refugees Total Affected Areas Djibouti 146,600 17,600 1, ,710 Northwest and southwest pastoral lands Ethiopia 4,567, ,923 80,500 4,805,679 Somali, Oromia, Afar, Tigray, Amhara, Southern Nations, Nationalities and Peoples Region Kenya 3,200, ,808 77,777 3,754,585 Upper eastern, north eastern, lower eastern and south regions: Garissa, Wajir, Moyale, Marsabit, Turkana Somalia 3,700,000 3,700,000 Mainly southern Somalia; some areas in central Somalia also affected Total 11,613, , ,787 12,425,974 Source: OCHA East Africa Drought: Humanitarian Snapshot - Regions Affected (June 28, 2011); Population Affected Update (August 11, 2011). 9. The eastern Horn of Africa is experiencing the effects of the driest year on record for over half a century. An assessment of the historical range of annual rainfall in pastoral areas in Kenya and Ethiopia that compared annual rainfall from with the period between June 1, 2010 and May 31, 2011 found that 2010/2011 was the driest or second driest 6 Includes Eritrea, Ethiopia, Kenya, Sudan and Uganda (World Development Indicators 2009; comparable data for Somalia and South Sudan are not available). 7 IDA Country Assistance Strategy for The Federal Democratic Republic of Ethiopia, FY2008 FY2012, Washington, D.C., April 2, 2008.

9 - 5 - year since 1950 in all but four of the 15 pastoral zones reviewed. 8 Rainfall in 2010/2011 was below average in all reviewed zones (see Figure 1). Across the Horn of Africa, consecutive seasons of significantly below average rainy seasons have resulted in widespread crop failure, increased livestock mortality and contributed to the deterioration of critical resources needed to sustain agro-pastoral livelihoods. Inadequate performance of the March-June long rains in Kenya intensified drought conditions in its northern and north-eastern districts. These drought-hit areas also account for the majority of the refugee population. In Ethiopia, two Figure 1 consecutive seasons of low rainfall related to prolonged La Niña conditions triggered a rapid deterioration of food security in the drought-affected lowlands of southern and south-eastern Ethiopia and in parts of the central and southern highlands. According to the Djibouti Government, the current drought represents the fourth consecutive year of failed rainfall in the northwest and southeast and has severely affected more than 120,000 people in rural areas equivalent to 50 percent of rural population and 15 percent of the total population. 10. Steep increases in food prices have further undermined food security in the region, with particularly adverse effects on poor households. Failed harvests in the eastern Horn have been intense in the southeastern marginal agricultural areas and coastal areas in Kenya and Ethiopia, partly resulting in lower stocks of locally produced staple foods. 9 The increased prices of some staple foods in Eastern Africa reflect higher wheat and maize prices in international markets as well as the impact of unfavorable rains on domestic supply. 10 The world price for maize has more than doubled over the 12 months and is approaching the all-time high recorded in April In Kenya, the price of maize has now exceeded the high levels that prevailed domestically in 2009, jumping by 21 percent since May 2011 (see Box 1). In Ethiopia, the price of teff (a staple cereal crop), maize and wheat have also continued a steady increase, partly influenced by high fuel prices. Staple food prices in Djibouti are 68 percent higher than the fiveyear average in Djibouti City, while kerosene prices are nearly 50 percent above the five-year average. 11 Although alternative foods and imported provisions are available, the associated costs are often out of the reach of the poorest households. Poverty assessments in the region suggest that weather-related shocks have a significant impact on the poorest, with food price and drought as the first and second main drivers of households falling into poverty or deeper into existing 8 Famine Early Warning Systems Network (FEWSNET): East Africa: Past year one of the driest on record in the eastern Horn. June 14, Note that long term trends in precipitation and rainfall may also reflect climate change. 9 FEWSNET East Africa Food Security Update, August 7, World Bank Africa Region: World and Sub-Saharan Africa Food Price Update, August Urban food insecurity in Djibouti is rising due to high levels of unemployment and increased food prices aggravated by deteriorating terms of trade; the country s resistance to international food price fluctuations is particularly weak, as 90 percent of food is imported.

10 - 6 - poverty. 12 A mid-august food security update on the drought emergency noted that high food prices have reduced purchasing power among the poor and pointed to key impacts on health and nutrition, including levels of Global Acute Malnutrition (GAM) for under-five children that have exceeded emergency levels in most districts in Northern Kenya as well as throughout sourthern and central Somalia. Box 1: Steep Price Increases for Staple Foods in Eastern Africa World food prices remain close to an all time high. Although wheat prices fell by 8.1 percent in July 2011, they remain 107 percent higher than the recent low hit a year ago following its historic peak in March Maize prices resumed climbing, albeit marginally, ally, after falling by 3.6 percent in May. The price for maize has more than doubled over the past year and is nearing the all-time high set in April of this year. This has been supported by the continued slide in the US dollar, strong demand, low inventories in the United States, and concerns over possible downward yield impacts in the US of planting delays due to wet weather followed by recent extreme hot and dry weather. Eastern Africa countries are facing intense pressure related to food staples as a result of: (a) the pass through from higher wheat and maize prices in international national markets; and (b) unfavorable rains during the short season and ensuing impact on those markets wheree domestic supply has an impact in determining prices. Cereal prices continued to rise, and are at record levels els in Somalia, Ethiopia and Kenya. The flow of refugees from Somalia due to drought- and insecurity-decimated food systems is putting additional pressure on food markets and prices in neighboring countries. The recent exchange rate depreciation in Ethiopia has compounded the domestic effects of world price increases in wheat and maize. Price Trends for Selected SSA Countries Source: Country statistical offices, World Bank Development Prospects Group, FAO World Food Situation. (Joint Briefing by AFTPM and AFTSN). 11. The emergence of famine in Somalia has triggered large scale migration to Ethiopia, Kenya and Djibouti, while conflict in southern Somalia has gravely constrained humanitarian assistance. Protracted racted armed conflict in southern Somalia has provoked the worst food security crisis in the world, according to the UN, which declared a state of famine in two regions of southern Somalia on July 20 and verified the existence of famine in three additional regions on August 3. While drought is defined in terms of rainfall, famine is defined Poverty Assessment for Kenya, quoted in IDA Country Partnership Strategy with Kenya (FY ). March 10, p. 3.

11 - 7 - in terms of human wellbeing namely mortality rates, the extent of acute malnourishment, and access to food and basic needs. 13 Roughly 3.7 million Somalis are facing a severe food crisis, with up to 2.8 million people in southern Somalia potentially exposed to famine in the absence of scaled-up, immediate international relief (see Figure 2, below). The number of internally displaced people in Somalia increased by over 100,000 between June and July as a result of the famine conditions in southern Somalia. Regional spill-over impacts of the famine have been significant: over 120,000 Somalians migrated under extreme conditions to already overcrowded camps in drought-hit regions of Kenya, Ethiopia and Djibouti in June and July Figure 2: Somalia: Comparison of Drought Episodes over the last 50 Years Source: OFDA/CRED International Disaster Database People Affected (millions) Year of start People Affected Average 12. The regional dimension of the drought emergency demands action that addresses spillover risks and the particular challenges of refugees and their host communities. The Horn of Africa is home to the largest number of refugees in the continent of Africa. There are approximately 118,300 Somali refugees in the Dollo Ado area of Ethiopia and over 400,000 registered Somali refugees in Kenya s Dadaab camp, the largest refugee settlement in the world and effectively the third largest city in Kenya. The total refugee population now exceeds 652, percent in Kenya, 24 percent in Ethiopia, and 3 percent in Djibouti (see Table 1). 14 The sheer number of new arrivals, which peaked at 2,000 per day in Ethiopia, has overwhelmed the capacity of existing camps and urged the development of additional camp sites. In response, the Government of Ethiopia (GoE) opened an additional site in the Kobe refugee camp in June that reached full capacity within weeks, prompting the GoE and partners to begin work on a fifth camp to house as many as 40,000 refugees. Similarly, the Government of Kenya has authorized development of an additional site in Dadaab as a result of the drought emergency, and the 13 According to the Integrated Food Security Phase Classification, famine is declared when acute malnutrition rates exceed 30 percent among children; there are more than two deaths per 10,000 people per day; and there is severe lack of access to food and other basic necessities. 14 Estimates from UN Agencies, including UNHCR, as of August 11, (Horn of Africa Drought, Fact Sheet#7, USAID).

12 - 8 - Djibouti government will open the Holl-Holl refugee camp by the end of 2011 to accommodate new refugees and to relocate roughly 6,000 people from the Ali-Addesh camp, which exceeded initial capacity this summer. The rapid growth of the refugee population will pose important challenges related to the scarcity of available resources in already drought-affected areas. 13. The long, hard journey to the camps and the overcrowded conditions upon arrival have heightened the vulnerability of women and children refugees. UNICEF estimates that roughly 80 percent of the 2011 refugee arrivals are children, while 13 percent are adult women and 7 percent are adult males. 15 The vast majority of the households arriving in the camps are headed by women. The health and nutrition needs of the refugee population are reportedly dire: a nutritional survey in Ethiopia s refugee camps, for example, found that 47 percent of the children arriving from Somalia were acutely malnourished. 16 In addition, impacts of a rapid and concentrated influx of refugees include increased potential for crime, social tension, and communal violence. 17 The UN Office for the Coordination of Humanitarian Affairs (OCHA) has reported that congestion in some of the camps has exposed women and children to increased Gender-Based Violence (GBV), resulting in a call for additional staff related to GBV and child protection Spillover public health risks are also becoming evident. Drought-affected areas are at significant risk of disease outbreaks due to malnutrition, lack of access to potable water, and overcrowding. The percentage of the population in Djibouti that has been affected by communicable diseases such as diarrhea, tuberculosis, cholera and pulmonary infections has increased because of the drought and the World Health Organization (WHO) identified roughtly 200 cases of cholera in urban areas in mid-august The WHO also determined that the health situation in drought-affected areas in Somalia, Kenya and Ethiopia deteriorated during the month of August, with epidemiological assessments in mid-august reporting an increased weekly incidence of cholera in Somalia along with increased cases of measles in the refugee camps in Ethiopia and Kenya. 19 A confirmed cholera outbreak in Mogadishu and the Afigooye Corridor in Somalia was ongoing in mid-august, while the earlier cholera trend observed in Lower Shabelle was considered to be under control. 20 The WHO has emphasized the ongoing need for disease prevention, control and early warning, provision of basic health services, and enhanced management of severe acute malnutrition. 15. The economic impacts of the drought emergency are yet undefined but could be farreaching. The 2011 IEG review of the Results and Performance of the World Bank notes that the degree to which disruptive events have negative impacts depends on characteristics inherent in a country s natural conditions, economy, and institutional framework among other factors. 21 The Djibouti Government has highlighted that the drought is resulting in water and electricity rations and has constrained industrial production due to power rationing. Preliminary IMF 15 UNICEF Ethiopia Weekly Situation Report #4 (August 10, 2011). 16 Drought in the Horn of Africa: Children in Crisis, A Proposal. (UNICEF United States Fund: New York, NY. 2011). 17 World Development Report, OCHA Kenya Humanitarian Update (August 19, 2011). 19 Horn of Africa Drought Weekly Health Update: No. 2 (August 18, 2011). 20 WHO Emergency Humanitarian Action: Weekly Highlights (August 13-19, 2011). 21 IEG Annual Report 2011: Results and Performance of the World Bank Group (Washington, DC: 2011).

13 - 9 - estimates of the economic effects of the current drought emergency in Ethiopia suggest that the impact on GDP is likely to be modest, potentially as low as 0.5 percent of GDP if rains ahead of the major crop season starting in September follow a normal pattern. However, the drought emergency has increased headline inflation, which in July 2011 reached 39 percent (year on year), by 6 percentage points. Estimates suggest that Kenya s GDP growth could to be reduced by up to 1 percent as a result of simultaneous shocks to the economy, including the drought, higher international food and fuel prices, and emerging electricity shortages (due in part to the drought-induced need to scale-back hydroelectric generation). Importantly, the high food and fuel prices in Kenya have already translated into higher inflation now at 16 percent and have contributed to a sharp decline in the exchange rate. 22 The governments of Kenya and Djibouti have also requested technical assistance for drought impact and needs assessments; the Bank and GFDRR are working closely with other stakeholders to support the governments in quantifying drought impacts and defining a more robust drought management and resilience strategy for addressing medium and longer-term risks. III. International Support and the World Bank Group Response 16. Governments and development partners have outlined priorities and the institutional framework for emergency response. Early warning systems in Ethiopia and Kenya highlighted the potential emergence of drought conditions in October 2010, triggering initial actions by the governments to launch efforts to expand storage capacity and the availability of food assistance for vulnerable populations. In Ethiopia, the Government-led Multi-Agency Coordination (MAC) forum is responsible for the overall coordination of the emergency response, with line ministries and specialized bodies ensuring sectoral and refugee coordination. Kenya s Humanitarian Partnership Team (KHPT) provides strategic-level direction for response, alongside the Government s Permanent Secretary Level Crisis Response Centre. The Crisis Consultative Forum, also led by the Government of Kenya, brings together UN-Sector co-leads and technical line ministry representation. The Government of Djibouti has outlined a 7-point drought emergency response plan and has established an inter-ministerial committee led by the Minister of the Interior (co-chaired by the Minister of Finance, Minister of Agriculture and the State Secretary of National Solidarity) to lead the drought emergency response. In Somalia, the Coordination for International Support to Somalia group, co-chaired by the UN and the World Bank, brings together donors, international NGOs and the UN agencies, to coordinate and discuss general development issues, including crisis prevention and response. 17. International support will be essential to forestall a worsening of humanitarian conditions and to address large-scale food security challenges. To date, the grand total of Horn appeal contributions to meet humanitarian needs across 67 bilateral and multilateral donors amounts to US$1.62 billion for relief and early recovery activities in Kenya, Ethiopia, Somalia and Djibouti (see Annex 1). 23 African Union member states have committed a further US$81 22 World Bank staff estimates (August 26, 2011). 23 As of August 23, the IMF was in a position to provide budgetary support to the countries in the region (except Somalia, due to arrears) through existing credit facilities, with loans equaling up to 25 percent of the country s quota and a two-week timeframe for fast-track disbursement. Djibouti and Kenya have already requested this support.

14 million in cash and in-kind contributions. The top five donors and participating organizations include the United States (US$579.9 million); the United Kingdom (US$188 million); the European Commission (US$177.1 million); UN s Central Emergency Response Fund (US$107.3 million); and Japan (US$96 million). According to OCHA, roughly US$1.04 billion of the total humanitarian requirements remain unmet. The United Nations has provided active support in Djibouti, Kenya, Somalia and Ethiopia, coordinating and prioritizing its support through Humanitarian Country Teams, the Regional Humanitarian Partnership Team (RHPT) and the Food Security and Nutrition Working Group (FSNWG). In addition, a range of international and national non-governmental organizations (NGOs) is working alongside UN agencies and in coordination with the Governments to provide emergency relief. The most active groups include the International Committee of the Red Cross, Mercy Corps, Islamic Relief Worldwide, CARE and World Vision. To date, the private sector has contributed over US$100 million to the drought response, with the greater part of the funds passed on to the various UN agencies and the NGOs with field presence on the ground. 18. In collaboration with international partners, the World Bank Group has affirmed its commitment to help the affected countries to meet the emergency needs and to promote economic recovery and resilience over the longer term. 24 The Bank is working closely with the UN, bilateral donors and other development partners to link short-term crisis response with longer-term development objectives. 25 The World Bank Horn of Africa 2011 Drought Response Plan will provide immediate, medium and long term support to the worst affected countries through a US$ 1.88 billion drought recovery and resilience assistance package (see Figure 3). The Plan includes fast-track, rapid response operations that respond to the crisis and focuses heavily on medium and long-term investments needed for livelihood recovery, restoration of livestock production, resilience and preparedness, investment in drought resistant agriculture, and climate-resilient investments. This package, which builds on the initial US$500 million support announced in end-july, incorporates a number of ongoing and planned projects that will contribute to a comprehensive drought response. The package is fully aligned with IDA s ongoing country strategies for the affected countries and will consist of resources from restructured projects in each country s IDA portfolio (28 percent); new IDA-financed operations (57 percent); trust fund financing (2 percent) and a proposed allocation from the IDA Crisis Response Window (13 percent) The three phases of the World Bank Horn of Africa 2011 Drought Response Plan include rapid response over the next six months, economic recovery over the medium term, and drought resilience activities over the next five years. In the first phase, which will extend through early 2012, IDA, the Global Facility for Disaster Risk Reduction and Recovery (GFDRR), and the State and Peace Building Fund (SPF) will provide financing of roughly US$288 million for rapid response activities at the regional and country levels to support the public health response, provide cash for work programs and cash transfers, and support recovery World Bank Press Release No: 2011/039/AFR (July 25, 2011). On July 18, 2011, the Bank participated in an emergency ministerial-level meeting on the Horn of Africa at FAO Headquarters in Rome where it was agreed that relief and recovery activities were the first order of priority and that medium- to long-term support would also be critical to promote economic recovery in the region. This refers to the World Bank s overall Horn of Africa 2011 Drought Response Plan, which reflects in-depth portfolio reviews of IDA financing in Djibouti, Ethiopia, Kenya, Uganda and at the regional level.

15 planning. 27 Importantly, this phase will include GFDRR trust funds to launch pilot studies and small investments that may be scaled up to larger programs supported by IDA. The second phase will consist of roughly US$384 million for medium-run investments in economic recovery, including activities to stimulate crop and livestock production and strengthen livelihood recovery. The third and final phase of the overall response will reinforce and amplify the Bank s longstanding focus in building drought resilience in the sub-region. This will include US$1,210 billion for investments in drought resilient agriculture, risk financing, resilience planning and investments to strengthen social safety nets. Figure 3: The Horn of Africa 2011 Drought Response Plan World Bank Response immediate, medium and long term interventions Phases Timing Interventions Instruments Outcomes Rapid Response $288 Million First six months - Increasing safety nets -Cash transfer & cash for work programs - Recovery planning -Scaling up operations through additional financing - Reallocating operations -Projects with contingency and risk financing component -New emergency projects Increased livelihood protection for vulnerable groups Economic Recovery $384 million Six months to two years - Early livelihood recovery -Jump-starting crop and livestock production - Strengthen health facilities - Resilience & preparedness - Additional financing - Emergency Recovery Loans Affected people s livelihoods enhanced Drought Resilience $1.2 billion Two to five years -Investments in drought resilient agriculture, water -Risk financing, resilience planning & preparedness - Investments in social safety nets -Scaling up focus on drought resilience through regular investments Impact of drought mitigated in the coming years Africa Region 20. The WBG drought emergency response builds on pillars of the Africa Regional Strategy and core Bank instruments, namely knowledge, financing and partnership. 28 The Africa Region Strategy, approved in March 2011, includes a pillar on vulnerability and resilience to address shocks like droughts, food shortages, macroeconomic crises, pandemic diseases, and climate change. The Strategy s proposed interventions focus on provision of financing, global experience, capacity building, and policy support for shock prevention, crisis preparedness, and disaster management. At the national level, IDA s country partnership strategies with Kenya, Ethiopia and Djibouti each confront the issue of weather-related shocks along with the intensifying challenges posed by climate change (see Box 2). Over the past decade, the Bank assisted Ethiopia and Kenya to respond to the challenges of recurrent drought through early These Trust Funds are self-financing as they do not receive Bank Budget but can be Bank-executed. Africa s Future and the World Bank s Support to it (World Bank: Washington DC, March 2011).

16 warning systems, social safety nets, risk financing, contingency planning and policies and strategy development. Strategic interventions have focused on sustainable land and water management as well as assisting poor households to graduate from long-term food assistance programs. 29 Ongoing IDA operations in Kenya, Ethiopia and Djibouti incorporate a focus on vulnerability issues and productive safety nets; indeed, contingency components in agriculture and social development projects in Ethiopia have been triggered to facilitate accelerated disbursements in response to the crisis. 30 In addition, the Bank s experience in promotion of regional operations is particularly relevant given the cross-country constraints of the drought emergency. Box 2: Food Security a core element in IDA Partnership Strategies for Ethiopia, Kenya and Djibouti IDA s Country Strategy for Ethiopia (FY08 FY12) supports Ethiopia in achieving four main strategic objectives: (i) fostering economic growth; (ii) improving access to and quality of basic service delivery; (iii) reducing Ethiopia's vulnerability to help improve prospects for sustainability; and (iv) fostering improved governance. The CAS incorporates analysis of food security, income vulnerability, and the role of agriculture sector in the Ethiopian economy and proposes that stronger support to the agriculture and livestock sectors seems warranted in order to raise the bottom of the growth base. The core objective of WBG Country Partnership Strategy for Kenya (FY10 FY13) is to contribute to achieving more inclusive growth by supporting activities to: (i) unleash Kenya's growth potential, (ii) reduce inequality and social exclusion, and (iii) address resource constraints and environmental challenges. The strategy identifies enhancing agricultural productivity, with a special focus on food security as a key outcome and highlights that sustainable growth in Kenya would need to address the issue of resource scarcity along with a range of other environmental challenges. In line with Djibouti's National Initiative for Social Development (INDS), IDA s country assistance strategy (CAS) for FY is framed around strategic themes focused on supporting growth; human development and access to basic services; and governance and public sector management. In this context, the Bank has engaged in active policy dialogue with the Government of Djibouti on social protection and food security through: (i) the development of an action plan to improve social safety nets, in connection with the Global Food Crisis Response Program (GFRP) Development Policy Grant; (ii) the financing of basic economic and social infrastructure to increase community development opportunities in poor areas, through the Flood Emergency Rehabilitation and Urban Poverty Reduction projects; and (iii) assistance provided to Pension reform Impact evaluations on social safety nets found that many safety net interventions, including conditional and unconditional cash transfers as well as workfare programs, achieved their primary objectives of raising households immediate consumption and reducing poverty (Source: IEG Annual Report 2011: Results and Performance of the World Bank Group). The Productive Safety Net Program (PSNP) in Ethiopia provides regular nutritional support, non-farm income generation, vulnerability assessment and natural disaster management to benefit 7.3 million chronically food insecure households in rural Ethiopia. A 2008 evaluation of the program found that PSNP beneficiaries had greater levels of food security and were more likely than others to use improved agricultural technologies and operate non-farm businesses. The project incorporates a Drought Risk Financing (DRF) Mechanism, an innovation designed to make the safety net more responsive to shocks. The DRF incorporated a rainfall-based index to empirically trigger and scale disbursements in response to the onset of drought in PSNP districts, facilitating early response when needs exceeded available program resources.

17 Emergency relief and recovery in the worst affected parts of Somalia are an important priority. The Bank has not had an active IDA/IBRD portfolio in Somalia since 1991 and the country, which is in non-accrual status, currently has no access to IDA financing. 31 Any financing by the World Bank to Somalia is therefore provided through trust funds (see Box 3). Political instability in Somalia has impeded access by humanitarian agencies and development partners, but UN Agencies like the Food and Agriculture Organization (FAO) and the World Food Programme (WFP) have an ongoing presence in Somalia and the ability to deliver assistance in Somalia s most affected areas. In the absence of an effective central government in Somalia, the Bank s crisis-related efforts are closely aligned with Somalia Reconstruction and Development Program (RDP) for The international community articulated the RDP, an overarching development aid framework for Somalia, following a two-year Joint Needs Assessment (JNA) carried out by the UN in cooperation with the World Bank. The RDP explicitly indentifies the negative impact of frequent natural hazards that threaten the livelihoods of many Somalis and emphasizes the need to address disaster risks. Box 3: Opportunities and Challenges for World Bank support to Somalia There are many risks and constraints to WBG activities in Somalia, which has existed as a "failed state" for the past 20 years. There are basically three different operational environments in Somalia: (i) south-central Somalia, an area of prolonged crisis, with peace and relative order in areas controlled by the Islamist insurgent group al-shabaab but continuing armed conflict in and around Mogadishu, where the Transitional Federal Government (TFG) supported by African Union forces has tried to establish authority; (ii) Puntland, in the northeast, a semi-autonomous administration and area of deterioration; (iii) and Somaliland, in the northwest, an area of gradual improvement led by a democratically-elected government that has unilaterally claimed independence but is not internationally recognized as independent. While Bank activities aspire to cover all three areas in Somalia, in practice, security constraints concentrate most project activities in Somaliland and, to a lesser extent, Puntland. In the case of the current drought and famine with its epicenter in south-central Somalia the Bank relies on UN agencies (primarily FAO), which have staff on the ground and tested partners in Somalia that they can work with. With respect to the choice of financing available to Somalia in a crisis situation, the GFDRR and SPF Trust Funds prove most useful during the current drought and famine. Their choice was determined by: (i) the availability of funds; (ii) the existence of streamlined procedures that allowed for a relatively fast mobilization (but still within the Bank s due diligence procedures); (iii) relative flexibility in the use of resources; and (iv) an existing history of engagement of the Trust Fund (in case of the SPF) in Somalia. 22. In response to the 2011 drought emergency, a planned Drought Management and Livelihood Protection Project in Somalia will mobilize US$5.0 million from the GFDRR and an additional US$4 million from the SPF. The project objective is to provide targeted emergency support to drought-affected populations in Somalia through cash-for-work and the distribution of agricultural inputs. Cash-for-work programs will include the construction of infrastructure to build future drought resilience. The project will be implemented by the FAO, which has successfully implemented two emergency livelihood projects for the World Bank in 31 The internationally-recognized Transitional Federal Government does not exercise territorial control over the whole of Somalia and is not considered to be a government in power within the meaning of World Bank Operational Policy (OP) Accordingly, any Bank engagement in Somalia is based on an explicit request from the international community, facilitated by the United Nations.

18 Somalia, will use the implementation mechanisms established under the Rapid Response Rehabilitation and Rural Livelihoods Project (RRRRLP), a US$7 million project financed by the Bank in 2008 in the context of the Food Price Crisis Response (FPCR) Trust Fund. The project helped address the impacts of the 2008 food crisis in Somalia and offers pertinent lessons from past implementation experience. 23. In addition, at the request of affected governments, the Bank will provide rapid response support to address pressing public health concerns and nutrition needs of Somali refugees in the camps in Ethiopia and Kenya. The proposed US$ 30 million Horn of Africa Emergency Health and Nutrition Project would utilize existing execution arrangements of the Inter-Governmental Authority for Development (IGAD) Regional HIV/AIDS Partnership Program, an ongoing Bank-operation financed by the Africa Catalytic Growth Fund in the refugee camps. The rapid response project would be administered by UNHCR and would support the scaling-up of UNHCR s essential health and nutrition package of services in the targeted refugee camps in Kenya and Ethiopia, with emphasis on the hardest hit populations. As a result of UNHCR s mandate for aid coordination in a refugee context and its presence on the ground, the program would be closely aligned with other donor interventions and would support rapid delivery of services. More specifically, the project would complement rather than replicate the primarily humanitarian focus of the UN and other development partners by strengthening the link between emergency response and promotion of the sub-region s medium-term human development goals. 32 IV. Rationale for CRW Support for the Crisis 24. The severity, scale and regional dimension of the drought emergency in the Horn of Africa underpin Management s recommendation to access CRW financing. The main objectives of the CRW are to establish a more systematic approach for IDA to respond to severe crises caused by exogenous shocks; to enhance IDA s capacity to provide rapid response and effectively participate in global disaster response efforts; and to provide additional and predictable financing to countries hit by crises. The CRW targets events that are exceptionally severe. For recurring events, IDA countries typically rely on existing flexibility to reallocate resources within the existing project portfolio and/or to reprogram resources in the project pipeline. Importantly, the current emergency in the Horn of Africa reflects a convergence of factors that are broader than drought alone, encompassing record high food prices and a humanitarian crisis aggravated by conflict in Somalia. The extenuating circumstances of this emergency warrant extraordinary actions on the part of the affected countries in the context of strong partnership with the international community, including IDA. 25. CRW resources are reserved for exceptionally severe natural disasters, where alternative sources of funding are insufficient. The aggregate level of resources required to address both the short- and longer-term aspects the crisis are very substantial, and in short supply. For the immediate needs alone, estimated at US$2.4 billion by OCHA, there is a financing gap of over US$ 1 billion. The proposed CRW allocation would contribute towards this financing gap and would help smooth the transition from humanitarian relief to resiliency. 32 See Emergency Project Paper on a Proposed Grant to the United Nations High Commissioner for Refugees for the Horn of Africa Emergency Health and Nutrition Project (Report No AFR).