The Manager of the Cities Alliance Secretariat reported on progress since the last meeting of the Consultative Group. The main issues raised under this item by Consultative Group members included:

• There is a need to build the political will and the financial support for the ambitious programme of the Alliance - even if $40 million is raised, it will not be enough for the scale of problems that the Alliance is trying to address (Japan). Financing instruments, including local financing mechanisms, have to be developed and the Alliance needs to engage the private sector in this process.
• Donors need to strengthen political support for the urban agenda, also within their own agencies. The Alliance can be the instrument to achieve that commitment (USA, Germany). The UN Millennium Summit should be used to make a strong case, since ministers and senior policy decision makers from Consultative Group member countries will attend that event. The Cities Alliance needs also to make the best use of the Patron of the Cities Without Slums Action Plan, President Nelson Mandela, to build the political will and raise awareness on urban development issues. Finally, the Alliance and the Cities Without Slums Action Plan should be on Mr. Wolfensohn's agenda for his briefings during the high level segment of the ECOSOC in New York in July.
• The Cities Alliance has a crucial role in gathering lessons and expertise and sharing knowledge. The meeting endorsed the role of the Alliance as a "learning alliance" – providing mechanisms for the exchange of knowledge and lessons to improve CDS and slum upgrading programmes. The Cities Alliance should use, distill and make existing knowledge and lessons more widely accessible and create an information platform that involves more cities in an interactive way. The lessons of the Consultative Group to Assist the Poorest (CGAP), a micro-finance programme launched in 1995 that currently includes 27 donor agencies, should be looked at and taken advantage of. The CDS Fukuoka workshop, which was presented by the Japanese delegation, is an important step in the process of sharing knowledge.
• The Secretariat should establish a discussion page on the Cities Alliance web site to promote informal interactions, exchange, discussion, and debate on urban development issues.
• Consultative Group members should articulate their own action plans and strategies for achieving the Alliance's goals, which would also be a good step towards building knowledge on each member's programs (USAID).
• In order to clarify how the global urban partnership programs work together, there was a request for a paper that would illustrate the linkages and fit between the various global programs.

The Vision document was extremely well received. Norway described it as excellent, a view supported by other delegations. The UK welcomed the document, saying it was very timely and very much needed, and proposed adoption. This was supported by Italy. After identifying the need for inserting a clear reference to the role of private sector, the document was adopted by the meeting.

Under this item, the draft revised application guidelines were also reviewed. The question was raised by Canada why all applications have to be co-sponsored by a multilateral partner. In response the Netherlands noted that this was particularly important given the priority which they attach to strengthening World Bank/UN collaboration. Some additional comments and suggestions are summarized below:

• The selection criteria should be different depending on the nature of the proposals, i.e. CDS or Slum Upgrading (Sweden).
• The requirement of coherence of efforts and complementarity among the World Bank, the UN system, and the bilaterals should be better spelled out.
• Investment follow-up may not be clearly identified at the stage of preparation of the proposals (Sweden). Norway suggested the addition of "where applicable" to section (c), page 3 of the Draft Revised Application Guidelines.
• Participatory/democratic process should be considered as a prerequisite for the Cities Alliance support (Sweden).
• Required sponsorship of proposed activities should not be limited to the World Bank and Habitat, but include also the endorsement of at least one bilateral partner, or a local authority association partner (USA).
• The guidelines should clarify the different procedures used for non-core contributions (Italy).
• The participation and ownership of resident communities should be more clearly reflected in the application form as a requisite for Cities Alliance support (Italy).

Given the urgency of finalizing them in preparation for the call for proposals that will be issued by 15 July, it was agreed that Consultative Group members will forward their comments to the Secretariat by 23 June.

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3. Budget and Finance, including funding for the 2001 work program

The following proposals were endorsed without objection:

• The Cities Alliance will use the same fiscal year cycle as the World Bank, which administers the trust funds.
• The budget request for July-December 2000 (Table C of the Cities Alliance Budget and Financial Report of 31 May 2000).
• The trust fund budget envelop for the 2001 Work Program will be USD 7.5 million (Table D).
• The Secretariat will inform the Consultative Group of the status of contributions, including non-core resources, on a routine basis as there are developments.

The representative of the Italian government announced that his country will contribute about USD 4.5 million to the Alliance Trust Fund as non-core resources for a project to reduce poverty in Salvador de Bahia (Brazil). Italy is also considering a similar initiative in India.

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4. Establishment of the Policy Advisory Board (PAB)

The Chairman decided not to table the proposal that had been submitted for discussion, noting that there was a need for further consultation. After some initial discussion, it was suggested that the composition of the PAB must reflect gender balance, regional balance, and expertise on slum upgrading, CDS, and micro-finance. It was also suggested that the PAB might include representatives of academia, the private sector, and organizations representing the urban poor, as well as a Consultative Group member and a representative of the local authority associations. The term of office might be for two years and could be staggered. The PAB should meet on the occasion of Public Policy Forum/Consultative Group meetings. The delegation of Japan requested that any discussions on the PAB be based on the criteria laid out in the Charter on this issue.

The Chair invited the Consultative Group members to forward proposals regarding the composition of the PAB to the Secretariat by 1 September. He designated an ad hoc committee to review these proposals and to recommend the composition, term of office, and operating procedures of the PAB. WACLAC was asked to designate a local authority association to chair this committee, which will also include Canada, Germany, Japan, and UK.

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5. Date, venue and agenda of next Consultative Group meeting

The Consultative Group endorsed Italy's offer to host the next meeting of the Consultative Group in Rome, on 30 November-1 December, or 4-5 December (the specific dates will be confirmed by Italy as soon as possible to the Secretariat).

There was consensus that, at least initially, future meetings of the Consultative Group needed to have a longer duration, i.e. 1½ or 2 days.

It was also suggested that three meetings may be needed in 2001. These meetings should be preferably scheduled on the occasion of major events that involve the majority of the Consultative Group members (e.g. the Istanbul+5 meetings). The principle of holding Consultative Group meetings in developing countries, especially where the Alliance has significant activities going on, was also endorsed.

Occasions for informal meetings among Consultative Group members should be encouraged.

The Secretariat will prepare and distribute a proposed calendar of Consultative Group meetings for 2001.

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6. Any other business

Review of the Secretariat

As agreed by the Consultative Group at its Berlin meeting, and reflected in para. 31 of the Charter, the current arrangements for the Secretariat will be reviewed and submitted to the Consultative Group for endorsement after one year, i.e. in December 2000. For this purpose, the Chair appointed a panel that will be chaired by UK and composed of Italy, USA, Habitat, and World Bank.

Other issues

It was suggested that the wealth of information and knowledge expressed at the Public Policy Forum be made available to as wide an audience as possible.

It was recommended that the Secretariat prepare a short paper on the CGAP experience in knowledge sharing that could be a useful model for the work of the Alliance.

Negotiations with regional development banks should continue.

There was support for Sweden's suggestion that Cities Alliance be accorded an important space in the Istanbul+5 preparatory process. Habitat will continue to contribute to the Cities Alliance on performance indicators, knowledge development, impact measurement, and maintaining an inventory of best practices.

UNDP and UNICEF, attending the Consultative Group meeting for the first time, stressed their support to the Cities Alliance (ILO made a similar statement during the Public Policy Forum).

The World Bank Urban Sector Leader of Eastern Europe and Central Asia noted the importance of focusing Cities Alliance activities to tackle issues of poverty reduction in transition countries.

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