Beirut, Lebanon May 17, 2007

1. Presentation Social Inter-Ministerial Committee Progress Report # 1 Beirut, Lebanon May 17, 2007 This document is confidential and is intended solely for the use and information of the client to whom it is addressed.

2. The objective of this first Social IMC meeting is to share with your Excellencies the GR PCO structure and progress to-date, resolve pending issues, and agree on the prioritization of initiatives Meeting Objectives • Brief your Excellencies on GR PCO structure • Review implementation progress to-date • Outline issues and challenges • Agree on a prioritization methodology for Paris III initiatives (a preliminary draft of the prioritized initiatives will also be shared with you) • Agree on IMC Secretariat (MoSA) role and responsibilities Note: GR PCO stands for Government Reform Program Coordination Office

3. Ministerial Initiatives Teams Ministerial Initiatives Teams Ministerial Initiatives Teams Cross Ministerial Initiatives Teams Cross Ministerial Initiatives Teams Cross Ministerial Initiatives Teams GR PCO Structure The Inter-Ministerial Committees (IMCs) are chaired by the Prime Minister, and will focus initially on Paris III related activities – The GR PCO will liaise with, and support all stakeholders High Level Structure of the Oversight Committee The PCO will also support (as needed) the MoF in its interaction with Donors Parliament Council of Ministers Prime Minister Quarterly Progress Reporting on Paris III Initiatives Periodic Reporting Prime Minister’s Office GR PCO • Committees chaired by the Prime Minister • IMC Secretary appointed during IMC first meeting Reporting Consolidation Social IMC Economic & Fiscal IMC Infrastructure & Privatization IMC Technical Support “Natural Owners” “Natural Owners” “Natural Owners” M & S Unit M & S Unit M & S Unit Note: M&S Unit = Monitoring & Support unit reporting to “Natural Owners” (Ministers/ Government Entities Head) to be set-up as needed

4. To-date, the team conducted introductory meetings with Ministers and Heads of Government Entities, and initiated the second round of technical meetings with M&S Units where available Progress To-date Meetings with Natural Owners and M&S Units • Technical meetings were conducted with Natural Owners to discuss their understanding of own commitments under Paris III • Most Natural Owners were positive on GR PCO implementation • Follow-up meetings with M&S Units were held • Review and analysis of III Paris initiatives • Grouping of initiatives into programs • Preliminary allocation of Paris III initiatives to Natural Owners • Highlight of overlaps and gaps • Initiation of the development of detailed work plans

5. Progress To-date As they stand today, the 4 Natural Owners of the Social IMC have a total of 27 programs … List of Social IMC Programs

6. Progress To-date … And 128 initiatives, representing 39% of the total number of initiatives, thereby emphasizing the social aspect of the Paris III reform program Distribution of Paris III Initiatives on Natural Owners Social Affairs CDR HCP Health Energy/ EDL Telecom Education 39% Justice OMSAR BDL Labor/ NSSF Economy & Trade Finance

7. From the initial round of meetings, some issues emerged related to initiatives ownership, M&S units engagement, staffing and NSSF reform plan Issues and Challenges Issues Facing the Social IMC 5 6 1 4 2 3 6 (*) Natural Owner’s programs were developed in coordination with the World Bank

8. Issues and Challenges One labor program consisting of 5 initiatives is directly dependent on the Ministry of Labor (not engaged to-date) 4 MoL/ NSSF Current List of Programs Programs Totally Dependent on the Ministers’ Engagement

9. Issues and Challenges Two initiatives relating to healthcare services remain without clear Natural Owner 5 Initiatives to Be Owned by MoH or MoSA

10. Issues and Challenges NSSF/ MoL and MoSA require urgent mobilization of new M&S recruits 6 M&S Unit for NSSF/MoL and MoSA • Currently the NSSF does not have the needed resources to prepare program charters and the necessary GR PCO reporting • At least two recruits are needed to work with the NSSF Director for NSSF initiatives, and the Minister of Labor for the Ministry’s initiatives • Similarly, MoSA needs additional resources (1-2 recruits) as the staff currently doing the work has other activities at the Ministry • A request was made to the Prime Minister’s Office for speedy engagement of the M&S Units for the NSSF/ MoL, as well as MoSA

11. Prioritization of Initiatives Current initiatives can be prioritized according to several criteria including the extent to which they could translate into “quick-wins” and have a noticeable impact on the concerned sector reform Initiatives Prioritization Criteria • Should have a noticeable impact before November 2007 • The impact should affect a large part of the population • The impact on the concerned sector reform should be easily communicated to the public Short-term Impact • Can be implemented without the need for legislation enactment • Requires long preparations (more than 5 months) before being submitted to the Parliament • Could be implemented with alternatives to legislation Absence of legislative barriers • Already progressing and requires minimal budget • Budget already allocated through other sources Budget availability / Ongoing activity

12. Prioritization of Initiatives Ministry of Social Affairs – Short-term Paris III Programs and Initiatives PRELIMINARY List of Programs and Initiatives

13. Prioritization of Initiatives Ministry of Health – Short-term Paris III Programs and Initiatives PRELIMINARY List of Programs and Initiatives

14. Prioritization of Initiatives Ministry of Health – Short-term Paris III Programs and Initiatives … (Cont’d) PRELIMINARY List of Programs and Initiatives

15. Prioritization of Initiatives Ministry of Education – Short-term Paris III Programs and Initiatives PRELIMINARY List of Programs and Initiatives

16. Prioritization of Initiatives Ministry of Labor / NSSF – Short-term Paris III Programs and Initiatives PRELIMINARY List of Programs and Initiatives

17. Next Steps MoSA is ensuring the Secretariat role for the Social IMC and will be providing administrative support Functions of the IMC Secretary • Provide overall administrative support • Prepare agenda and circulate it before the meeting • Receive contribution of the IMC members and compile them • Distribute documentation to IMC members before the meeting • Prepare and distribute minutes of meetings

18. Next Steps Overall, four IMC meetings need to take place to finalize programs, timelines, KPIs and funding, with steady-state implementation progress reporting starting in August IMC Engagement Schedule – First Six Months Meeting Objectives Dates • Appoint Secretary to the IMC and agree on his/her role • Review progress, and resolve escalated issues • Endorse initiative and program allocation, and resolve overlaps • 1st Social IMC: 17 May 2007 First Round of IMC Meetings • Follow up on 1st round of IMC meetings • Endorse cross ministerial initiative teams • Review and discuss program charters, plans and milestones • Start filtering funding / TA requirements • Resolve escalated issues • 2nd Social IMC: 13 June 2007 Second Round of IMC Meetings • Approve natural Owners funding/ TA requests • Endorse program charters including action plans, KPIs and milestones • Sign Paris IIICommitment Documents with Natural Owners • 3rd Social IMC: 9 July 2007 Third Round of IMC Meetings • Follow up on 3nd round of IMC meetings • Resolve issues arising out of funding requests and other items • Review monthly progress of implementation • Start steady-state implementation progress reporting • 4th Social IMC: 13 August 2007 Steady-State Implementation Progress Reporting

19. Next Steps Going forward, Natural Owners should finalize and prioritize their list of initiatives, and follow up on the development of Program Charters with their respective M&S Units Actions Required • Review and finalize programs and initiatives ownership: • Quickly finalize NSSF and MoH reform initiatives currently being developed in coordination with the World Bank • Decide whether MoSA or MoH should own the provisioning of healthcare to poor and disabled citizens • Engage MoL and identify its initiatives accordingly • Review and agree on short term initiatives prioritization • Identify the need for, and assign specific ministerial or inter-ministerial initiative teams • Follow-up on progress in development of Program Charters with M&S Units