07/23/2003 Partial Revision
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y revised.
ADS Chapter 350 19
a. Financial Constraint. Financial constraint is important but is not a
sufficient justification for granting a waiver. In assessing the validity of the
financial constraint, overall budgetary performance, existing expenditure
patterns, and development priorities of the host country should be considered.
Recent World Bank and IMF analyses of a country's financial performance may
justify granting a waiver. Even where a waiver of the 25 percent contribution
requirement may be justified, a determination must be made whether a lesser
contribution would be appropriate, either of a financial or in kind nature. If it is
decided that a contribution of less than 25 percent is inappropriate, a
memorandum of justification must be prepared for the record.
b. Country Commitment. Where a waiver is justified on financial grounds,
other indications that a country is interested in a particular program, project, or
activity become more important. Examples of a country's interest are a
willingness to contribute even though it is not 25 percent and the importance
attached to the program, project, or activity in the country's development
priorities.
c. Nature of the Program. The nature of a particular program, project, or
activity is a significant factor. Where the success of an activity depends upon a
country's willingness and ability to assume an appropriate share of the cost, a
waiver might either not be justified or may be granted only if a lesser contribution
is considered sufficient. On the other hand, there are a number of programs or
activities where no country contribution needs to be required because their
successful implementation can be expected to generate the necessary financial
resources, other benefits and/or support -- thus providing reasonable assurance
that the program, project, or activity will be continued. Pilot and demonstration
activities fall into this category.
d. Phased Contribution. In some cases it may be desirable to combine the
initial waiver of all or part of a contribution with a requirement for a gradually
increasing contribution. This would allow the host government to reorder its
expenditure pattern, and perhaps raise additional revenues without delaying the
implementation of the program, project, or activity, while providing reasonable
assurance that the host government will eventually assume the necessary share
of expenditures in order to ensure the success of the program, project, or activity.
e. Other Factors. There may be other relevant considerations, such as how
similar projects are funded by other bilateral donors.
350.3.6 Exceptions to Mandatory Provisions
Effective Date: 05/05/2003
The following requirements are in addition to approvals required above or by other ADS
provisions: