In February 2001, the Presidents of five multilateral development banks (MDBs) decided to create the Multilateral Development Bank Financial Management Harmonization Working Group (FMHWG) to address the harmonization of their policies and practices in financial management (FM) and analysis. The members include the World Bank, the African Development Bank, the Asian Development Bank, the European Bank of Reconstruction and Development, the Inter-American Development Bank, and the Islamic Development Bank.
In early 2003, in advance of the High-Level Forum on Harmonization (HLF) in Rome, the working group concluded that there would be substantial benefits to greater collaboration among participating MDBs on their FM practices. They reached agreement on how they would harmonize these practices and issued Notes on Harmonization of FM Practices in the following three areas:
FM harmonization was a focus area of the Rome HLF, where international and bilateral organizations, and donor and recipient country representatives committed "to take action to improve the management and effectiveness of aid and to take stock of concrete progress" by early 2005 at the second High-Level Forum.
In March 2005, the 2nd High-Level Forum (HLF2) in Paris concluded with the signing of the Paris Declaration by over 100 partner and donor countries and international organizations, committing to "continuing and increasing efforts in harmonization, alignment, and managing for results," and to monitor progress using a set of monitorable actions and indicators (PDF, 26 Kb) to accelerate progress in 12 areas, including public financial management (PFM).
Efforts are now focused on supporting implementation of harmonized approaches at the country level and monitoring progress to achieve the Paris Declaration targets by 2010. The next HLF will be held in Ghana in 2008.
For further information on the Working Group's activities, contact Sanjay Vani, Svani@worldbank.org, tel. +1-202-458-4885.