What Did the High Level Forum do for Conflict-Affected Countries? A scorecard from Busan
This blog post was adapted from an article co-written with Dan Smith, and which appears on the International Alert website. Versions also appear on OpenDemocracy and the The Broker.
At the end of November, more than 2,000 representatives of governments, international organisations and NGOs convened in Busan at the fourth High Level Forum on Aid Effectiveness. Just before the meeting I proposed a set of four criteria by which to judge its outcome as far as conflict-affected and fragile countries are concerned. I suggested that success at Busan would be measurable by the degree to which participants:
- Recognised how little is really known about how aid can promote and foster the emergence of better governed societies in fragile contexts.
- Disagreed on the best way forward, and thus retained the good ideas around which there is no consensus, instead of marginalising creativity in the search for what everyone can agree on.
- Decided to stop holding forums on aid effectiveness, and instead began a discussion about what effective development – human progress – looks like; and linked this to the process of replacing the MDGs with more appropriate measures of progress, and with the need for governments and others to change their behaviours outside the narrow realm of aid.
- Committed to operationalizing some of the exciting new ideas in development, such as building more peaceful and better governed societies, if necessary changing the architecture and mandate of aid and development institutions.
So how well did they do at Busan? To what degree does the Global Partnership for Effective Development Co-operation that was launched with the Final Statement from the meeting reflect this approach to meeting the needs of fragile and conflict-affected states? I wasn’t at Busan, and have based this assessment on the Final Statement, which is the official summary of the outcomes of the conference. Rather than assess the statement as a whole, I am simply concentrating on its relevance for development in conflict-affected or fragile countries. I rate the outcome of Busan as fairly mediocre with a score of 40%, as explained below.
1. Change & uncertainty
Change, yes – it frames the opening discussion in the Final Statement. The role of China at the meeting made some aspects of change vividly present. The document reflects on the increase in co-operation between developing countries and on the emergence of new aid providers. But this is not developed in the rest of the statement. Taken as a whole its flavour is more-of-the-same. Where it might have been possible to recast how to meet the challenge of development in the light of the changes in our understanding and in the world over the past and the coming decades, what we get in the Final Statement are just a few tweaks.
Fragile and conflict affected countries are mentioned on page one, but then pretty much relegated to a single paragraph much further on. This seems like not enough recognition considering that 1.5 billion people live in them.
As to uncertainty, it is barely acknowledged. Being realistic about this, perhaps it’s not really permitted in official communiqués of this nature. But that means that a lack of humility is still hardwired into the international aid and development discourse. That perhaps helps explain a failure to ask hard questions about how to promote peace and development in fragile and conflict-affected contexts, which is something international donors and agencies are still struggling to work out – as they readily admit informally.
Score: 3/10
2. Consensus
The Final Statement says “Our partnership is founded on a common set of principles that underpin all forms of development co‐operation.” So far, so good. But given the superficial recognition of the need for change and for new approaches, it is no surprise that a superficial – perhaps one can call it a fake – consensus was once again contrived. The temptation to go for it proved irresistible.
These shared principles are in themselves fine but they are neither profound nor inspirational:
a) Ownership of development priorities by developing countries.
b) Focus on results
c) Inclusive development partnerships
d) Transparency and accountability to each other
Apart from the welcome emphasis on results, this contains little that is new and masks a wide range of different interpretations, goals and strategies. Because of that diversity of interest and opinion, I argued that agreeing to disagree is preferable but, to nobody’s surprise, the Busan forum reverted to type for such meetings and promoted agreement on technical means rather than strategic goals. Thus the final statement lists numerous examples of ways in which actors must cooperate and collaborate, but is quite silent about what they can and should agree to achieve. Obviously it’s a lot easier to agree on how to work together, than on goals or strategies, which are inherently more ideological.
Because a too-easy consensus among everyone would be wrong, a sign of success would be a recognition of the need for a deeper and therefore more selective collaboration. The one place where this comes through is in relation to the New Deal developed by the International Dialogue on Peacebuilding and Statebuilding. This is a valuable statement by a group of fragile and conflict-affected states, donor governments and international agencies that is specifically directed at the development and peacebuilding needs of fragile and conflict-affected countries. The Final Statement welcomes the New Deal and continues, ‘Those of us who have endorsed the New Deal will pursue actions to implement it’ – thus distinguishing between those who are prepared to give the New Deal a passive welcome and those who want to make it work. Had it not been for this willingness to forego unanimity in action – which usually results in inactive unanimity – the New Deal would have been seen as an initiative that failed at Busan. Instead, it is one that comes out of Busan as a going concern with an increased degree of international legitimacy behind it.
Score: 5/10
3. Aid, or development?
There is an all too common elision between development and development aid; the latter tends to dominate discussion of the former yet is in the end merely a potentially important but relatively limited component, rather than its central element. Thus a successful HLF4 would have agreed that future forums and the international development discourse should be about promoting effective development progress, not just best practice in aid. HLF4 did not go so far but does include this statement:
‘Aid is only part of the solution to development. It is now time to broaden our focus and attention from aid effectiveness to the challenges of effective development. This calls for a framework within which:
- Development is driven by strong, sustainable and inclusive growth.
- Governments’ own revenues play a greater part in financing their own development needs. In turn, governments are more accountable to their citizens for the development results they achieve.
- Effective state and non–‐state institutions design and implement their own reforms and hold each other to account.
- Developing countries increasingly integrate, both regionally and globally, creating economies of scale that will help them better compete in the global economy.
‘To this effect, we will rethink what aid should be spent on and how, in ways that are consistent with agreed international rights, norms and standards, so that aid catalyses development.’
As far as verbal commitment goes, this represents some progress. Yet when one gets beyond the broad statements of principle, this and rest of the Final Statement is still overwhelmingly about aid modalities, rather than about how governments, citizens, businesses and international institutions can bring about change. Nothing much new is said about international trade or international crime and nothing at all about the need to change foreign policies that reinforce repressive governments in fragile countries. So it remains to be seen whether the words will be matched by action. At best, the statement provides a useful marker for future intentions, to which governments can be held to account in the future.
Score: 4/10
4. Operationalisation
The high ambition of getting global agreement tends to lead to an unambitious convergence on the least demanding positions and commitments. Therefore I argued that some of the most important progress over the next few years will not be based on global undertakings but on commitments made between a smaller number of actors. This gives a chance to put into practice the new thinking associated with the World Development Report 2011 and the International Dialogue on Peacebuilding and Statebuilding. The role of a global gathering should be to highlight and encourage such innovative work.
There is the endorsement of the New Deal as already remarked, and an acceptance of the need to take a less risk-averse approach to change, and for development agencies to delegate greater responsibility to their in-country staff. And Hilary Clinton’s unexpected acceptance that the USA would join the International Aid Transparency Initiative received applause. But otherwise the HLF4 Final Statement falls pretty flat in this regard. The closest the statement gets to supporting innovative approaches is in this passage: ‘We welcome the opportunities presented by diverse approaches to development co-operation, such as South-South co‐operation, as well as the contribution of civil society organisations and private actors; we will work together to build on and learn from their achievements and innovations, recognising their unique characteristics and respective merits.’
Score: 4/10
Overall Score
Taking the average of the four scores given above, and based on the Final Statement and with regards its relevance and positive impact on development in fragile countries, the HLF4 gathering in Busan gets an overall score of 40%. If that were the mark given to a student, I’d have to assume his or her professor would add: Not good enough; more effort needed.
Of course I’d be interested to know how others felt, and especially those who were present at Busan who will no doubt have picked up positive outcomes which I’ve missed.
How can responsible international mining and oil companies use their social investment funds?
In this longer than usual post (six pages in A4, sorry), I explore the evolution of mining and oil companies’ approach to what they have come to refer to and report on as sustainability. I celebrate the progress many companies have made, and propose that most need to do more to comprehend and take account of their impact on, and potential contribution to society in a broad sense. This is the next frontier for companies wishing to act responsibly. There are many ways they can push forward this frontier, among them a creative use of their social investment funds. In illustration, I propose a few ways they can do this.
Health and safety, environment and community
Over past decades, international mining, oil and gas companies have gradually embraced a series of additional “non-technical” elements in their work. At first these were seen as marginal, but one by one they’ve come to be accepted as part of the core business. First, companies took on board the need to improve health and safety, and as a result their assets are no longer routinely the risky and dangerous places many once were.
Next, they accepted the need to pay more attention to the environment. This remains a challenge. While health and safety can, with the right funds and commitment, be brought under control in most circumstances, there is virtually no way extractive companies can operate without having a negative environmental impact. But they have made great strides and now typically treat as routine the need to protect the environment for nature and for other users, and to restore it in some way once they have extracted what they seek.
Third, they increasingly accept the need to treat local communities as partners; to provide them with benefits to balance the disbenefits which having a mining, gas or oil company as your neighbour can bring. Some of these benefits are simply part and parcel of normal operations: upgraded roads and other infrastructure needed for the mine also benefit other local users; the mine and its suppliers and contractors provide jobs; and so on. Other benefits are purely compensatory: for example building new homes and schools for mine-displaced communities. Others still are ways of buying the support of people whose goodwill will smooth the path for mining operations in the area: supporting local community projects, improving facilities at the local school or health centre, drilling a water borehole for a remote rural community, and so on.
This is all very well. Through adding and integrating health and safety, environment and community lenses to the way it views its place in the world, the industry now provides a safer work environment, a less disrupted ecology, and happier neighbours. All this contributes to what companies call their “social licence to operate”, i.e. helps them obtain the “soft permission” needed to dig and punch holes in the ground and extract the minerals they need to fuel the global economy and provide a return to shareholders. In short, health and safety, environment and community have become normal and important features of responsible company practice alongside more traditional elements like engineering, cost control, logistics, and good people and financial management. As such they commonly feature as chapter headings in the “sustainability reports” of most extractive companies.
Being a responsible actor within society: responsibility vs. accountability
There is a fourth element in this model of responsible practice which has yet to be fully integrated. It’s about taking responsibility to look beyond the short-term licence to operate, and consider what it means to be a responsible actor within society, viewed on a wider scale, and thinking longer-term.
Just to be clear about the difference here: the concept of a social licence to operate is premised on the need to have the permission of others to mine or drill. It’s often an informal permission, to be sure, but the very concept implies that it can be withheld or withdrawn by those with an influence over the company’s ability to operate in a given location. It’s therefore more about accountability than responsibility: accountability is when others reward or sanction one’s behaviour; responsibility is when one sets high standards for oneself, regardless of what others require. Responsibility comes into play especially in contexts where accountability standards are low, for example when the interests of some communities or environmental stewardship are not taken seriously by government.
So responsibility is about the values the company holds and the standards it decides to meet. While it may be held accountable for some of these by outsiders, it also holds itself responsible for keeping and meeting them. Thus internal accountability becomes key to being a responsible corporation. Being a responsible mining company may mean going beyond what is required by government partners in some political contexts, and it means examining the context through a societal lens.
A societal lens
Using a societal lens requires companies to ask additional questions about their context and the impact of their own presence within it. The kinds of questions they ask may include:
- How does the political economy within which they are operating function, and what are their own interactions with and influences on it?
- Who are the winners and losers in relation to their investment, and is this reinforcing or lessening fairness within society? Do women, young people or other specific sections of society stand to benefit?
- Is the government re-investing its royalties in society, e.g. in education, or to underpin an alternative economic sector that will replace mining when the ore body is exhausted?
- Is their own company’s procurement privileging local suppliers and manufacturers rather than importers, to help stimulate the economy; and perhaps going even further by seeking to purchase from businesses run by members of disadvantaged groups?
- What will be the impact on the political economy if a mine provides hundreds of millions of dollars per year to an opaque and corrupt government – especially when mining and oil provide so few local jobs, per extra dollar of GDP generated?
- What will be the long-term impact on the relations between the people and the government, of a foreign mining company building a local school to keep the local community sweet, when it is actually the government’s job to build schools?
- In conflict-affected contexts they will ask whether their operating practices might inflame existing conflicts.
- At a larger scale they may ask a much more fundamental question about their own role, e.g. a coal mine company may question its contribution to global goods and bads in the context of climate change.
- And so on….
All these are difficult questions; in fact more often dilemmas without a clear answer. Sometimes the only responsible answer is to say “we won’t operate here, no matter what the opportunity cost”. But usually it’s more nuanced than that, and mining and oil companies all-too-frequently do find themselves working in places where the government’s relationship with its people – or some of its people – is dysfunctional; where the people have less voice and less protection or access to fulfilment of their rights than they ought; where the presence of the mine may either damage the fabric of society, or help to knit it. And international companies aren’t consistently held accountable – yet – for taking these issues seriously; thus it’s a question of how far they want to or feel they can take responsibility for understanding the context in which they (plan to) operate, and how far they feel they can go in minimising negative impacts. To do so certainly entails taking a much broader and deeper look than merely at what will give them their social licence to operate here, today.
So responsible mining and oil and gas companies need to make sure that they are equipped to deal with such situations as expertly as possible. This is why they need political-economy analysts on their staff at all levels, with a role not just in analysing what benefits and harms might befall the company as a result of political risk, but also what benefits and harms might befall the people and the society within which they are drilling and mining. Above all, companies need to be willing and able to understand the impact of their engagement with the context over the long-term, and using a very broad frame of reference.
Just as health and safety, environment and community projects have become mainstream, and are included in the production budget, so the costs of this wider engagement in and with society need to be, too.
Funding mechanisms
Companies have long found ways to pay for the costs of health and safety, environment and community relations work, and these are all now factored into production budgets and organograms. Typically each physical company asset will have a fund available to contribute to local projects, and some of these not only improve community-mine relations (the social licence to operate) but also have an impact as social improvement projects in their own right. Many companies have set up foundations or trusts, which is a useful way of protecting their ability to make community and environmental investments when commodity prices are low – a mechanism to smooth out the impacts of income fluctuations.
As companies understand their interactions and relationships with society better and make adjustments to their policies, strategies, approaches and plans accordingly, they will become more adept at mainstreaming it into their core work. This will have an impact on their work in a variety of ways. There may be some projects they would no longer regard as feasible when examined through the societal lens – e.g. because it would require them to collaborate with a repressive government which tramples on people’s rights. Other projects take longer to get off the ground, as the company takes extra care to avoid operating in ways which frustrate particular – and potentially disruptive – sections of society. Company operating practices may have to adapt, for example ensuring that railways built for the transport of ore are also accessible to passengers. They may decline to extract oil at the too-rapid rate the host government demands – as the government of Sudan demanded – on the basis that this will provide short-term gains at the expense of the long-term production. In a country like Guinea, the expected rapid increase in GDP due to mining over the next decade will provide huge royalties payments into a not very transparent tax system, without creating many jobs for Guineans, the resulting frustration among sections of the population may lead to violence; and thus companies operating there may need to sit down with government and proactively advise on investment or job creation schemes – thus going quite far beyond the limits of what oil and mining companies normally see as their role.
This is where the social investment funds come in
All extractive companies set aside funds for community projects, but they should really look at them more as “society funds”, designed to help ensure that their impact on society more broadly is a positive one. It is tremendously important for companies to set the mandate for staff running these funds as clearly as possible. This means getting the purpose right, and I’d suggest that an appropriate generic purpose might be:
Supporting initiatives which increase the social, economic and environmental capital in the societies where the company operates.
This reflects the very simple and basic idea that when minerals are extracted and sold, it is the capital and patrimony of the nation – the society – which is being used up on a once-only basis. Therefore the process should be done in such a way as to capitalise society in one way or another, i.e. use the natural endowment to endow society with public goods.
This implies widening the kinds of activities to be supported quite significantly. It doesn’t necessarily mean stop funding the kinds of community projects most often undertaken, but it does imply adding new ones. These would depend absolutely on the context, and should be defined accordingly, but it is possible to illustrate my point with a few generic examples.
Governance: societies in so many places where minerals are extracted face a problem of inadequate governance, and this is often revealed even more clearly when mines are dug, oil wells are drilled, and large sums of money are paid out. Governance is thus an obvious area of focus for mining and oil companies. Some of the ways companies can use their social investment funds to help improve governance, without being seen as “interfering”:
- Support national and local civil society initiatives to educate voters and monitor elections in places where democracy is still quite new and evolving.
- Build a governance component into other initiatives, e.g. enlist the parent-teacher association in decisions over how to improve the local school, and in overseeing or managing the company’s contribution; support local patients’ oversight groups to monitor health clinics’ choices and performance; support local groups advocating with government for improved health or education services; take steps to make sure community development initiatives are genuinely inclusive, providing benefits and giving a voice to those on the margins of the community.
- Sponsor debates on radio and TV about policy issues linked to natural resource extraction and management.
- Fund research and the dissemination of research results on issues related to governance, such as how natural resource extraction skews governance and how this can be mitigated; use long-term grants to link universities from different contexts to work together and pool knowledge on this issue.
- Sponsor visits by local and national government, MPs, journalists and civil society to countries where natural resource endowments are being well and fairly managed for the good of society.
- Provide training and other support to journalists through journalists’ associations or unions, thus contributing to improved political accountability.
- Support non-governmental participation in and monitoring of the Extractive Industries Transparency Initiative.
- Support civil society – nationally and locally, including in localities far from the mining area – to publish and disseminate transparent data about mining operations and payments made to government by mining companies; and to ask government how royalties and taxes have been used.
- Build the capacity of civil society groups to advocate and hold government, companies and other powerful economic actors to account.
A well governed environment is ultimately a public good and a better investment environment, so the impacts of initiatives like these would eventually be a benefit to the company.
The Economy: mining and oil companies generate economic growth, jobs, sub-contracts and taxes, and they build or attract public infrastructure, so are contributing value to society. Nevertheless, there are additional things they can do using their social investment funds, to help make sure the economy grows sustainably, e.g.:
- Support micro-finance NGOs which help capitalise small businesses, and enterprise advisors who can advise businesses on expansion and diversification plans.
- Invest in improved infrastructure in remote areas, such as broadband.
- Support research and policy advocacy/design into ways that mining- and oil-dominated economies can diversify and create more jobs and economic opportunities, in collaboration with universities. Subsequently, support the implementation of policy. This would be both locally, in mining regions, and nationally. Build research and advocacy capacity by supporting networks involving established and newer universities.
- Invest through local institutions in non-mining vocational training opportunities for young people.
These kinds of investments would make for a healthier economic and thus social and political climate in which to operate, and would create an environment in which the ultimate exit of the company, once the mine or well is spent, would be substantially easier for all concerned.
Social: The presence of the extractive industry in countries and localities has both positive and negative social impacts. Social investment funds are already used to mitigate the local negative impacts, and can go further, e.g.:
- Encourage public debate and action about the impact on society of creating employment honeypots in remote and underserved locations, and of how negative impacts can be mitigated; where appropriate, seed-fund some of these mitigation strategies.
- In countries where indigenous people are marginalised in the political economy, and yet disproportionately affected by mining, support moves to harness this opportunity to foster greater integration. E.g. by linking indigenous groups with mainstream civil society to create an integrated debate about how to harness the benefits of mining for the whole society, rather than sections of it.
- Support civil society initiatives to promote greater equality in society, e.g. for men and women, and for ethnic different groups.
As a result of these kinds of projects, society will be less divided, and the extraction of its natural endowment of resources will have contributed to fostering greater unity and sense of nation.
Environment: a healthy, well managed environment is a classic public good, therefore an indicator of a functional and forward-thinking society. Contributing to this is thus a subtle way of contributing to societal well-being. It’s fairly typical for mines and oil companies to restore land after use, and to fund small tree-planting projects and the like near their assets as an environmental or carbon sequestration offset. Using the societal lens, they might also use their social investment funds to:
- Sponsor research and engender debate about energy choices and sustainable mining/oil extraction, designed to promote good policy choices in an era of man-made climate change. This is not the same as direct lobbying: the objective of this would be to foster informed debate and informed policies.
Through this kind of project, companies would foster the kind of vibrant policy debate which is needed for an open society.
How to manage the funds
As to the mechanisms best suited to these kinds of projects, each company needs to figure out the best approach. Clearly there will be tensions and a degree of discomfort at the idea of supporting non-core interventions which may also seem a bit too “political”. But mining is after all already a highly political act. And there are ways to distance the company from direct involvement, e.g. by funding a national “umbrella grant” to a disbursing agency (likely a national NGO), or by giving large grants to NGOs operating internationally. It seems to me that there are three cardinal rules to follow:
- Get the purpose right: be as clear as possible regarding the purpose of the fund, and review its use and impact regularly accordingly.
- Staff up accordingly: e.g. if the fund is to support the kinds of activities listed above, ensure that staff involved in decisions and monitoring are knowledgeable about those kinds of activities. Where needed, engage advisors with the requisite skills.
- Develop monitoring and evaluation indicators appropriate to each project, rather than trying to determine them generically on a company-wide basis.
In conclusion
In this article, the focus is on what companies can do through creative use of their community or social funds. Some of the illustrations are examples of service provision, but most are about supporting ways for people to engage in shaping their society, through research and policy debate, or through their economic choices. Of course beyond their community or social funds, there many other ways companies can – and some do – proactively contribute to societal value, through the strategic and operational choices they make.
Why should companies spend shareholders’ money on issues that don’t seem to be directly necessary to provide their social licence to operate – and are also harder to address, because they concern very complex societal issues which may seem outside the competency areas of the average oil or mining company?
On the first part of this question – why spend scarce resources on societal issues not obviously connected to our commercial interest – there are two main answers. First, if you plan to operate somewhere over the medium term, it may be more in your interests than you think, to invest in a stable and better governed society. But the second reason is a more powerful one: it is about responsibility. The mineral reserves belonging to a country belong to society, as represented by their government. They are part of the patrimony and can only be extracted and sold once. Therefore they represent capital in its purest form, and it is the government’s responsibility to use the royalties to improve the capital base of society in some way: infrastructure, skills training, basic education, secondary and university education, etc. Frequently governments do not do enough of this. At worst, the funds are used to fuel a patronage-based political system which undermines rather than strengthens society; even in better cases they are just used to cover recurrent costs. In these circumstances the company has a responsibility to go further than simply saying “we pay our royalties, it’s up to them to do the right thing”.
The second question – how to work on societal issues? – is indubitably harder to answer. If the challenge of extracting minerals from deep below the earth’s surface seems tricky, it is nothing compared to the challenge of contributing to a “better society”. Nevertheless, it’s not impossible, it’s a key element of “sustainability” and therefore highly relevant in the run-up to Rio + 20, and there are many ways it can be done with the resources already available. One step on the way to doing so is to revise the purpose and goal of companies’ social investment funds.
Is Accountability of Aid the same as Countability of Aid?
Last week the Belgian Ambassador to the UK held a “salon” at his residence, on the subject of aid accountability and measurement, and a big focus was on Results. The three speakers were Paul Collier, Professor of Development Economics, Oxford University, Stefan Dercon, Chief Economist DFID and Professor of Development Economics, Oxford University and Marcus Leroy, Senior Advisor to the Belgian Minister of Development Cooperation.
It was particularly interesting to hear the views of Prof Dercon, who plays a leading role at DFID in the process of analyzing the business case made for all major new projects. A few highlights from the presentations and discussion:
- In the past, spurious “bad evidence” was often used to justify big DFID projects. Taxpayers were also wrongly treated as fools who could not be expected to understand how their taxes were being spent overseas. So more rigorous and transparent evaluation of proposed DFID projects responds to a genuine problem. Nevertheless, there is a real risk that oversimplification will lead to a rejection of the good projects which can make an important difference which is hard to measure or count.
- We are entering the Second Age of the Development Economist, who is recapturing the space s/he lost to political and social scientists over the past fifteen years. Not only that, but also the resuscitation of the lost art of cost-benefit analysis, which had fallen out of favour even among many economists. This is not necessarily a bad thing, as long as we keep in mind that for development projects, CBA is not a bad way to compare alternatives, but not suitable for use as an absolute evaluation tool. Prof Dercon spoke of the need to provide “five or six alternatives” against which to compare the proposal.
- There is a real danger of bias in the system of cost-benefit analyses and making business cases for DFID projects, because staff will increasingly send proposals for approval which are overly linear, have very obvious and countable outcomes, and are based on what has been done elsewhere. I.e. a combination of simplicity-bias and risk-aversion. Prof Dercon acknowledged this, but claimed it would be to some extent counteracted by their use of the average predicted outcomes when evaluating proposed projects. (I.e. I think he meant they ignore the worst and best case, and use the mean case to evaluate the benefits of proposals).
- … Not necessarily linked to this, but DFID are apparently undertaking a review of their capacity to innovate, which might mitigate the risk-aversion bias to some extent. Meanwhile, the Research and Evidence Dept at DFID has apparently grown from 12 to 240 staff – indicative of the shift in thinking form faith-based to evidence-based programming perhaps.
- The point was made by all speakers that aid as a sector has a ridiculous approach to risk. E.g. if you believe the official story, everything works, and very little money is lost or wasted. That approach would never work in business: there’d be no entrepreneurs and no creativity. Or is it, as Marcus Leroy said, that there’s a “truth aversion”, rather than a risk-aversion….?
- Dercon also accepted that in some cases, such as work on reconciliation in fragile contexts, where you simply can’t quantify your expected outcomes, nor produce 5-6 alternatives to compare them against, you simply have to be very clear about your theory of change and evaluate the business case on that basis. But even in such cases you still need to cite data from places where similar programming has worked. (Which might be seen as a strong discouragement to taking the context as your starting point, as the OECD-DAC rightly suggests aid agencies ought to do).
- What is the cost-benefit of doing cost-benefit analysis? One DFID-funded implementing agency which was represented at the meeting estimate they have spent 25% of their staff effort in one project over the past year fiddling around with this issue and revising and re-re-revising their logframe (which has over 200 indicators!).
- The point was made that it’s ironic that DFID is pushing for its projects to be justified with a business case, when it has made an entirely political decision to increase its budget by 30% over the next two years. Paul Collier, in his reply, gave the best answer I have yet to hear in justification of the 0.7% GNI figure. As I understand it, it goes like this: ODA is a global public good, and is therefore almost by definition under-supplied. Therefore it makes sense for a progressive country (the UK) to make a commitment to supply it at a rate which is higher than others, as a way to counteract their undersupply. Quite nifty, I thought.
Interesting stuff. It’s certainly right that the UK’s aid money should be spent transparently and with a view to making a difference according to a clearly articulated theory of change. But getting the balance right between what’s most easily measured now and what makes the most important difference in people’s lives over the long term will be hard.
As mentioned above, CBA is a decent enough method of evaluating alternative uses of capital. So for example, it helps determine whether a given sum of money is best used on project A or project B. But what it does not do is provide the information you need to determine if it is the most appropriate action to take in a given context. For that, you still need rigorous and creative context analysis which asks questions about how people can build a sustainably peaceful and equitably prosperous society; whether there is a role for outside agencies, and if so what role? That is a very different problem than the much simpler one of whether we should spend our money on this or that.
This is not to say that DFID, staffed by highly competent individuals and teams, ignores the need to invest in solid project design. But Andrew Natsios had it right when he said that the most easily measurable projects are the least transformative, and vice versa. We must take care not to let institutional incentives make the staff of organisations like DFID too risk-averse and less able to work in the fragile and conflict-affected contexts they are committed to helping. Accountabilty does not equal Countability.
The landscape within which new MDGs will emerge, post-2015
I attended a round table meeting with staff from one of the UN agencies in Geneva last week, brainstorming on their approach to the discussions about what should come after the MDGs in 2015. Like other UN agencies, this one has begun to mobilise its own ideas as the debate about what comes after 2015 begins to take shape. One thing we discussed is the global environment within which the new MDGs will emerge. The world is ever-changing in multiple dimensions to be sure, but if one limits oneself to the “aid sector”, one can discern six obvious trends relevant to this discussion.
1. The Need to Show Concrete Results
Three factors have contributed to an increased demand for aid and development programmes to demonstrate relevant and concrete results. First, the economic recession has made donor country taxpayers less generous, so their elected politicians are reassuring them with stories of concrete achievements in combating poverty overseas. Second, fifteen years of ever-rising aid budgets and an increasing proportion going to opaque multi-lateral organisations and government budget support somewhat on faith has made those in the sector nervous about whether this “faith based” approach to aid is having an impact commensurate with the amount of money spent. Third, and most important, people in many aid recipient countries are paying more attention to aid inflows than in the past, and asking harder questions of their governments and donors: this too provides an incentive to be clearer about the intended and actual results of aid.
All this is very welcome: who could argue with results and accountability? But the concern associated with this trend is that we need to avoid being driven by what’s most easily measurable, rather than by trying to measure what matters most.
2. Collier’s Bottom Billion
Well, not really Paul Collier’s but he did coin the phrase Bottom Billion. What I mean by this is the recognition that at least a billion people – the 2011 World Developent Report claims 1.5 bn – live in conflict-affected or fragile contexts, where the very same circumstances which allow conflict and violence to flourish also conspire to keep people poor, living undignified lives with insufficient income, assets and services, and with limited voice and power through which to reshape their circumstances.
The two main themes emerging from this line of debate are the need for better institutions, more fit for the purpose of governance and providing security; and the need for a major boost in the availability and accessibilty of decent economic opportunities for people, notably jobs.
The concern associate with this trend is we need to avoid seeing this as an emergency or a crisis. Emergency and crisis approaches to promoting improved institutions seem oxymoronic and doomed to do more harm than good…
3. Sumner’s Bottom Billion
Last year Andy Sumner identified an additional bottom billion, i.e. a billion extremely poor people living in Middle Income Countries (MICs). Some of these are also members of Collier’s club, but in the main this is a different group.
Much of this group lives in countries with established and emerging middle classes, paying taxes, politically engaged and with an eye on their own priviliges and benefits, and in some cases with a fair degree of democratic accountability, e.g. in India. Thus the importance of political debate in each country, to figure out its own tolerance of and approach to structural poverty. A swift look at Venezuela gives a sense of how this can play out: a left-wing populist president committed to redistribution, pitted against a middle class who claim he is destroying their wealth, and the nation’s with it – and with some reason. It’s by no means clear that Venezuelans’ institutions are up to the task of mediating their political differences peacefully. So poverty in MICs is above all a national, not an international issue; and it is highly political in a way that can put institutions under a great deal of stress and spark instability and violence – look also at Tunisia and Egypt in 2011 to see how …
4. New players within a changing architecture
Meanwhile, there are new players out there. According to Andy Sumner and Clare Melamed’s recent paper, the BRICS are providing over $11bn per year in aid, compared with $129 bn from the OECD countries. So the proportion is still low overall, yet is growing in importance, and in specific places and cases is more significant than in others. They also point out that BRICS provide an alternative role model for debveloping countries – perhaps helping some of them see ways to make progress somewhat different from the OECD prescriptions.
There’s also the looming $100 bn per year in climate adaptation and mitigation financing to be added to the pie. And a growing trend of big new philanthropy – pulling in two quite different directions. First, the Gatesian approach, characterised by two big ideas inspired by the world of the techno-entrepreneur: Focus, and Technology. These come together most obviously in projects like the Global Alliance for Vaccination and Immunisation. There’s much to recommend this, but it seems rather blind to issues like governance, and the need for better institutions. Bill Gates himself, when asked by a campaigning journalist on British TV recently whether it would not be better to focus as much on governance as on the techniques and technologies for child health, probably spoke and reinforced the view of millions of others, when he responded with a simple rhetorical question: “so are you saying it would be better not to save thousands of children’s lives?”. If only eradicating poverty were so simple…
The other philanthropic strand is symbolised by George Soros and his various Open Society Initiatives and the like: focused at the other extreme from Gates, attempting to foster, promote and incentivise the nudges and little improvements that make governance better and help subjects become like citizens. This seems a very sensible approach, but Soros is much quieter and less messianic than Gates.
Finally in this trend, and looking beyond the narrow world of aid, we have the shifting tectonic plates of global governance. Are we now moving beyond the unipolar world which was declared at the end of the Cold War? It looks like it; and we are also nearing the end of the “western hegemony”. This is greeted with a sigh of relief by so many – but a result of more countries having a say in global governance has so far been an inablity to agree on very much. That’s an indicator of two things: that getting global agreement among countries with different individual interests and needs is always going to be mighty hard by definition; and also that some of our global governance institutions are not fit for purpose in this more complex world. The Doha Round of the WTO – who even remembers what it was about? – and the long-running saga of Climate Change non-agreements are just two examples of how difficult it is to get everyone signed up.
Result: confusion, uncertainty and a very complicated game of the Prisoner’s Dilemma, with many prisoners taking part….
5. From “aid effectiveness” to “development effectiveness”
The rhetoric seems to be convening around the idea – captured already in the largely forgotten Millennium Declaration – that instead of more goals and targets about how poor countries can get better, we should develop a framework which is applied to the whole world, rich and poor. This would have the great advantage of undermining “us and them”, while recognising that all countries, rich and poor, have important equity challenges to meet. It would also take the conversation away from “how best to use aid”, to “how best to improve our societies and the lives of their members” – a far less technically and more politically oriented debate. As it should be.
6. Special interests
And finally: the chaos of special interests lobbies competing and collaborating to be heard. As the post-2015/post-MDGs debate gets underway, which lobby is not being heard? We have the cautious re-emergence of the population lobby, re-booting a Malthusian view of how many human beings this planet can sustain, and lobbying for this to be made more prominent in the gobal development narrative. Environmentalists and climate change lobbyists are pushing their perspectives. Peace and security-focused agencies clamour for peace and security to be central to the development narrative. Human rights activists see a rights-based model as most appropriate, and gender specialists are still quite rightly pushing for gender to be taken properly seriously. And so it goes on: people-with-disabilities, children’s rights activists, people living with HIV/AIDS, the better governance crowd, the statebuilding crew….. and all the rest.
… which tells us above all that whatever we – the international community – come up with, it had better provide space for all these issues and hundreds more, to be debated by those making decisions about development where it matters: in countries and localities where poor people live. Otherwise, it’s a recipe for chaos, confusion and more perverse incentives.
And so?
My own view: perhaps we can’t expect too much agreement between the representatives of 7 billion people, about what’s the right or best pathway to progress. But if the need to devise some kind of replacement for the MDGs provides us all with an opportunity to debate the issue, and we keep our minds as open as possible as the debate proceeds… well, we’ll probably learn quite a bit, even as we are reminded of how little we still know.
Four measures of success at Busan
This is slightly adapted from a piece co-written with Dan Smith and with inputs from other colleagues at International Alert, and represents not just my views but those of Alert, which has advocated for more effective aid in conflict-affected and fragile environments for many years. A version of this piece is also published on OpenDemocracy.
The Fourth High Level Forum on Aid takes place at Busan in South Korea, 29th November – 1st December. Two thousand representatives of governments, the UN, the World Bank, and other multi-lateral organisations and NGOs will meet to debate how aid can be delivered more effectively. Previous meetings in the series were in Rome (2003), Paris (2005) and Accra (2008). Such meetings produce worthy outcome documents full of technical language and compromise, which are often hard to pick through and get at what was really discussed and agreed. But ultimately we will know if the Busan meeting is a success if participants:
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Recognise how little is really known about how aid can promote and foster the emergence of better governed societies in fragile contexts
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Disagree on the best way forward, and thus retain the good ideas around which there is no consensus, instead of marginalising creativity in the search for what everyone can agree on
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Decide to stop holding forums on aid effectiveness, and instead begin a discussion about what effective development – human progress – looks like; and link this to the process of replacing the Millennium Development Goals with more appropriate measures of progress, and with the need for governments and others to change their behaviours outside the narrow realm of aid
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Commit to operationalising some of the exciting new ideas in development, such as building more peaceful and better governed societies, if necessary by changing the architecture and mandate of aid and development institutions.
New thinking about aid and development in conflict-affected countries
The background to this is that no conflict affected country has yet achieved a single Millennium Development Goal (MDG). This failure has stimulated much reflection over the past few years, for example:
- The World Development Report 2011 outlined a new paradigm for development assistance in conflict-affected countries – where a total of 1.5 billion people live
- An increasing recognition that development is about more than economic growth, health and education; it is also about how people are governed, the relationship between people and state, access to justice, and whether people are kept safe from danger
- A renewed focus on the need to show concrete results will help citizens in donor and recipient countries to hold their governments more accountable for aid effectiveness
- Some aid is being used in creative ways, in line with the new thinking.
Meanwhile emerging economies like China, Brazil and India are providing increasing slices of the aid pie, sometimes using different approaches that are not part of the aid orthodoxy.
The way ahead is unclear: we’ve learned enough to know how little we know
As our understanding of the complexity of development has grown, so we have better grasped the difficulty of programming aid effectively. The very purpose of aid has changed, to embrace the unfamiliar language of statebuilding and peacebuilding. It has become far more ambitious, and rightly so. Twenty years ago an aid programme might have built schools and trained teachers. Ten years ago, it might have strengthened the capacity of the government to plan, provide and oversee education, including a grant for school building, operating costs and teacher training, while increasing tax revenue to pay recurrent costs. Now some donors want to foster better relations between the state and the people, increasing the sense of responsibility, responsiveness and citizenship. This implies change in some of the institutions at the heart of governance and society. No small thing.
Peacebuilding organisations like International Alert have been arguing for these kinds of changes for ten years or more. Progress has been made, but many challenges remain, among them:
- Building responsive and responsible citizen-state relations is key to peace and prosperity, but little is known about how to do so at a speed and scale commensurate with people’s expectations; how to get the balance between democratic progress and stability right?
- The lack of decent work for young people is often a major threat to stability. Aid orthodoxy says the private sector should create jobs. But it will not do so at the scale and speed, nor with the dependability and stability needed in countries emerging from civil war (e.g. Sierra Leone), or from years of repression (Burma or Guinea), when people’s expectations are raised. Should we ignore the aid orthodoxy, and consider externally funded 30-year public works programmes, to provide employment, inject cash into the economy and provide breathing space?
- Climate change brings new challenges – of pressure on resources such as land and water, of the collision between growth and green priorities, and of adaptation – together with huge additional aid budgets. These are largely being managed separately from other aid, bringing a risk of increased incoherence, which can be a destabilising factor in fragile contexts.
- The practice of aid organisations in fragile contexts has not kept pace with the learning, and the new purpose of aid. Without urgent change, they risk being unfit for purpose.
- Getting the right metrics for assessing progress towards stability and peace in fragile contexts is a task that is far from complete. It cannot be done with the same metrics that suffice for health or education and it is increasingly tiresome that agencies seem pulled towards inappropriate indicators by the results agenda. Rigorous qualitative indicators and a time-frame appropriate to the task are key components.
- The behaviour of governments continues to hinder development. The foreign policy of some donors undermines their own aid goals, while some recipient governments use aid to strengthen their hold on power, undermining democratic accountability and holding back development.
Busan, the first step on a new road
The wording of the Busan Outcomes Document is largely agreed, and reflects much of the new thinking on aid: statebuilding and peacebuilding; human security; transparency and results. But it fails to reflect the challenge, scale and complexity of promoting and supporting development in conflict-affected countries in a changing world. Busan should be seen as the final High Level Forum on Aid Effectiveness, and the beginning of a new debate and discourse. A successful Forum will be recognisable by evidence of four critical factors in the speeches made and the documents emanating from Busan:
1. Recogniton of fundamental change, coupled with uncertainty about the way forward. A recognition that the framing of aid and development has fundamentally changed. It has become more complex and more political. We need new tools and methods to achieve and measure success. Good work has been done, but we don’t yet have the tools with which to meet expectations. Politicians, NGOs and opinion leaders like Bono and Bill Gates are uncomfortable with uncertainty, but they need to accept it now, otherwise they will continue to make the wrong choices. Participants at a successful HLF4 will define this challenge and set out a process for meeting it.
2. A balanced combination of agreement and disagreement. Beneath the technical language of aid, development is a highly political, ideological and contentious idea: it speaks to different theories of progress and change. International forums about aid in the past have glossed over this, focusing instead on agreements about process. That way consensus is achieved – but only a shallow and artificial one that often leaves aid practitioners in difficult positions, trapped by official niceties into policies they know are flawed, targets they know are unreal and actions they know are ineffective. Participants at a successful HLF4 will recognise that their different interests and perspectives lead to quite different views about how development happens, and how aid can be applied to promote it. This will allow the issue to be debated more openly as the international community begins defining the set of measures which will replace the MDGs after 2015.
Nevertheless, international agencies, governments and civil society do need to collaborate much more effectively, based on the comparative advantages of each. Thus participants at a successful HLF4 will agree to promote and mandate a more selective but deeper collaboration among agencies at national level.
3. Development, not aid. Aid is important, and the way it is planned and used matters. But the time for meetings about aid effectiveness is over; future meetings and processes should instead be about development strategies. They should debate what constitutes development, identify the policies and behaviours of governments, businesses, NGOs, IGOs and citizens which are most likely to promote progress, and how they can be encouraged and supported. Participants at a successful HLF4 will agree that future international forums should be defined in terms of promoting effective development progress, not just best practice in aid.
4. Operationalization. Getting global agreement on critical issues is hard, and results in a watering-down of commitments. So it is critical to recognise that some of the most important progress over the next few years will be made at the level of specific organisations, projects, countries, etc. This implies a need for individual countries and organisations to push through the operationalization of some of the new development thinking associated with the World Development Report 2011 and the International Dialogue on Peacebuilding and State-building. Participants at a successful HLF4 will agree to prioritise the operationalization of new approaches to promoting development in conflict affected countries, and to share the results of these.
NB In a later blog written after Busan, I have used these four criteria to score the success of the Busan meeting.
Civil war in Europe?
In the 19th century a continental union was torn apart by the tension between running two incompatible economies within a single monetary zone: the industrialising north versus the slave-plantation south. This unresolved tension led to the American civil war, perhaps the worst war in history until that time. Even no less a sage that Bob Dylan says in his book Chronicles that “it was one big battle between two economic systems, that’s what it was.” Later he notes that it was also a war between two cultures: the north where you had to be on time and live by the clock, and the south “where you lived by sun up, high noon, sunset, spring, summer”. (Bob Dylan, Chronicles Vol 1, 2004, Simon and Schuster UK Ltd.)
Could the same happen again, this time in Europe? On the one hand, I doubt it: war in Europe seems unthinkable now outside the Balkans; and hopefully not even there. But on the other hand, why not? If the current eurozone crisis goes the way the pessimists say it might, the people of southern europe will face economic ruin and devastation. What will their governments have to offer them, apart from military revenge against the economies of northern Europe who have ruined them, in populist rhetoric? Meanwhile, northern European leaders will explain to their people how their economies have been undermined by the profligate and ill-discplined south.
There is more at stake than we perhaps realise, in this “eurozone crisis”. It is not just about the banks and jobs; and it can’t be contained within national borders. The public institutions of the EU and of European civil society are our buffers against a political and human crisis which could, in the extreme case, lead to violent conflict within the EU zone.
Democratic Greece: lessons for African countries receiving aid?
Ancient Greece is the cradle of democracy, so how ironic that the democratically elected government of modern Greece should call a referendum on its latest bail-out agreement with the Eurozone leaders. Ironic, because referendums are anti-democratic in the way they allow politicians to shirk the difficult responsibilities for which they are elected, and particularly to allow the majority to tyrannize minorities – thus shirking one of the most important aspects of parliament, which is to ensure that the executive governs on behalf of all. Eighteenth century British MP Edmund Burke’s famous reminder to his Bristol constituents not to expect him to represent their narrow perspectives is a good illustration of how MPs should see their role: he reminded them they had elected him to exercise his voice and his vote in the interests of the country as a whole, not just them.
In the UK today, referendums would almost certainly lead to a large reduction in the country’s overseas aid programme; to the restoration of the death penalty; a reduction in the rights of asylum seekers; and the exclusion of many people in need from welfare and the support currently provided to disabled and other minorities. Yet these are all issues on which UK MPs have resisted the majority view and taken decisions which reflect a broader perspective and their responsibilities to higher values.
And yet, in the case of Greece, perhaps this is the right time to ask the people what they think, because in some ways the bail-out package represents a change in sovereignty, a constitutional change. Under the terms of the bail-out, the Greeks’ government – their elected ministers and their civil servants – will come under the supervision of bureaucrats from abroad, who represent the interests of taxpayers in 16 other countries and a bunch of foreign banks – not Greece. We may flippantly describe these people as “bureaucrats from Brussels”, but think about it: for the Greeks they represent German interests above all. When was the last time Greece was supervised by Germany?…
So Papandreou is calling this referendum not just as an alternative to a general election which he wants to avoid. It is to ask Greeks if they are willing not only to accept a restructuring package which will cost them dear over the coming 20 years, but also whether they accept the undermining of their democratic political process by the dictation of fiscal and other policies from abroad, and by the placement of viceroys to oversee their performance – as though sent from the capital of an imperial power. In those terms, seen from here, the referendum seems well justified, even if inconvenient: and after all, isn’t one of the whole points of democracy that it’s supposed to make governing just a wee bit inconvenient?
A second irony is that Angela Merkel feels justified in criticising Papandreou for doing what he feels he needs to do – the referendum – in order to stay in office and implement the restructuring he has been forced to agree to; even while she accepts that she has been bound by the terms of her relationship with the German parliament to string out the Greek bail-out negotiations for six months, rather than bring them to a conclusion back in the summer when the technical solutions and plans were already quite clear. Surely therefore she should accept that Greece needs to do its own politics before moving ahead with the plan?
Greece: a member of the EU and thus a relatively wealthy country, as viewed from Africa. But are there perhaps some lessons in this story for African governments and civil society. This is effectively a story of aid – of taxpayers from other Eurozone countries pledging and spending vast sums of money on and in Greece. The self-interest of the donors in this case is easier to see than in more classic models of overseas aid, but the basic idea is the same: use our money to help them.
Nevertheless the idea of bureaucrats from donor countries overseeing the decisions and practices of ministers and civil servants in recipient countries is very familiar indeed to Africans. I recall a few years ago being told by a British person working in the Ministry of Finance in Kampala that he was one of 26 outsiders who had been placed in the ministry to keep an eye on things. Such practices are a regular source of anger, frustration and shame in Africa – and are an essentially anti-democratic measure in countries whose citizens are trying very hard to nudge their rulers into being more democratically accountable to them, rather than to representatives of Brussels, London, Washington, etc. If the government in Uganda is being held accountable by representatives of the UK and the EU, what role is the Ugandan parliament playing on behalf of ordinary Ugandans? And, as some Greeks perhaps view Germany with mixed emotions, a mere 65 years after the Second World War, perhaps Kenyans and Ugandans view their donor the UK, and Malians France, a mere 50 years since their independence…
So perhaps there are some lessons from Greece for MPs and civil society in places like Uganda, Kenya and Mali: use occasional referenda to ask the population whether they accept an aid programme tied to outside meddling. Or at least, make the issue part of their election campaigning and political discourse. Perhaps the referendum result – “yes” to the money, and a begrudging “well I guess we have to” with regards the international oversight – is fairly easy to predict. But the campaigning and the individual and group reflections that the referendum would stimulate would surely be a step for democracy, and might go some way to offset the anti-democratic effects of receiving large sums of aid from elsewhere.
As the crow flies: mapping the power of DFID at home
According to rumours, the UK’s Department for International Development is planning to move from its current office next to Buckingham Palace to the Old Admiralty Building, off Whitehall. This is of course highly symbolic – one of the government’s tools of altruism and soft power, moving into the old headquarters of the Senior Service, ultimate tool of empire and Britain’s military reach for more than two hundred years; even while DFID’s budget is increasing and that of the Ministry of Defence is being cut. But it is important for more practical reasons, too.
The approximate distances in kilometres between the current and proposed new offices of DFID and other departments of state and government buildings are as follows:
| Distance from current DFID office | Distance from proposed new office | |
| Foreign and Commonwealth Office (FCO) |
1.5 |
0.7 |
| Department of Business, Innovation & Skills (BIS) |
1.2 |
0.9 |
| Ministry of Defence (MoD) |
1.7 |
0.4 |
| Department of Energy & Climate Change (DECC) |
1.7 |
0.4 |
| The Prime Minister’s office (10 Downing Street) |
1.9 |
0.6 |
| Parliament |
1.3 |
0.9 |
|
Average (km) |
1.6 |
0.7 |
True, DFID is closer to Buckingham Palace (where the Queen sometimes lives) than are the others, but in 2011 this is not a sign of its closeness to the centre of power. Meanwhile, the other departments of state listed above are all clustered in or very close to Whitehall – the centre of executive government – and Parliament.
DFID has often been seen, by its staff and its supporters and collaborators in civil society, as outside or on the edge of government. And some have welcomed that. The 1997 White Paper which was DFID’s founding document included language about how helping poor people abroad was somehow in the UK’s self-interest. But it wasn’t at all convincing, and you felt that then Secretary of State for DFID Clare Short and her staff didn’t really see that as important: what mattered was getting on with the higher mission and task of helping those who needed help. Under Short and successive ministers DFID’s aid programme has gone from strength from strength, quadrupling in size from £2 bn in 1997 to about £8 bn today. Famously, DFID is one of only two ministries whose budgets have survived the cuts instituted under the current government, which has committed to increasing the aid budget by more than 20% over the next two years.
Prior to the 2010 general election, when people expected the Labour government to lose, it was common to hear staff of UK overseas development NGOs expressing their fear that an incoming Conservative government would place less value on aid, and would make it subordinate to other national interests. It was common to hear people say we needed to “protect aid from foreign policy objectives”. At the time I felt this was the wrong approach, and that we should stop seeing overseas aid as separate from foreign policy, but rather an intrinsic and integral part of it. If there are tensions between our aid programme and other aspects of the UK’s interests abroad, we should manage and where possible resolve them – that is after all the whole point of cabinet government.
Good news therefore if DFID is moving to the Old Admiralty building next year, which puts it within a 5 minute walk of all the departments mentioned above, except the BIS which remains just under a kilometre away. UK overseas aid will remain an important feature of the international institutional landscape, as poor people’s lives continue to be disrupted by natural and man-made disasters, and as they try to build more prosperous lives and better approaches to governance. It’s important that everyone in government and outside sees DFID as a critical part of government, not some do-gooding add-on department, of limited relevance to the core issues of the next decade. This is particularly important given the hostility felt by most taxpayers towards the government’s commitment to increasing the aid budget at a time of economic difficulty. Thus being closer to No. 10 Downing Street – to which the Old Admiralty is presumably connected by an underground tunnel – is of great importance.
The rivalry between DFID and the FCO seems to have been much diminished of late. Some at the FCO harboured a feeling of resentment after their overseas aid function was removed with the creation of DFID in 1997; the progressive marginalisation of the FCO in UK foreign policy (e.g. over Iraq) did little to remove this feeling, especially as DFID’s budget continued inexorably to rise. A huge amount of time and energy has been expended over the years by civil servants from the two departments in trying to “coordinate” their efforts, and this is beginning to pay off, especially as the FCO feels like it is being taken more seriously under the current government, than before. Being closer physically to one another will make this that much easier, for example in collaborating on UK policy towards specific locations like post-civil war Libya, or on global issues like the UK’s engagement in and support for UN agencies.
And this is equally true of DFID’s need to work closely with other departments. There are countless examples: e.g. its shared interest with the BIS on improving the transparency of oil and mining companies and host governments in poor countries; its need to work with the MoD on Afghanistan; and its need to collaborate with the DECC on the development of financing mechanisms to support adaptation of poor communities in the face of climate change.
Meanwhile of course it is essential that DFID and Parliament are walking step-in-step, so that taxpayers’ representatives and ministers/civil servants can keep one another well-informed. The UK’s overseas development programme is justly viewed by many as one of the world’s best. It has been the subject of great changes over the past 15 years. It is now faced by the need to make other important changes in an era of increased transparency, more competition for resources, a greater focus on concrete results, on the need to find new mechanisms to assist conflict-affected and “fragile” countries, and within a changing international institutional landscape. This will be hard, and therefore all the more reason for DFID’s London office to be as close as possible to the place where important decisions of state are made and monitored.
DFID and the risk of corruption
The UK parliament’s Public Accounts Committee has warned that the amount of UK aid funding at risk of corruption will increase, as it targets more fragile and conflict-affected countries while increasing aid spend over the next two years. In response, the Department for International Development (DFID) reported it has a zero tolerance approach to corruption, and that only £1,156,000 (or 0.016% of spending) was lost to corruption in the 2010-11 fiscal year.
This unbelievably low figure, along with the statement about a zero-tolerance approach to corruption, are illustrative of a problem inherent when democracies provide aid to governments and other institutions in fragile or conflict-affected countries. On the one hand, you have transparently accountable donor governments trying to do the right thing. This entails – among others – transferring large amounts of funding, sometimes tens of millions of pounds per year, to the relatively untransparent and less accountable institutions of poor countries, as part of an attempt to strengthen their capacity and to provide much-needed services to their citizens. At its best, this approach allows DFID simultaneously to provide health and education services to millions of people at relatively low cost; to help governments build their technical, planning and service delivery capacity; to ensure a high degree of local ownership of aid programmes; and to strengthen the hand of citizens in those countries by building in accountability mechanisms – complaints and ombudsman systems, local management committees, the involvement of MPs and local councillors, parent-teacher associations, patient feedback mechanisms, etc. – into the service delivery models it supports.
On the other hand however, even when mechanisms for citizen involvement are built into DFID’s aid programme design, it is frankly inevitable that large percentages of aid money go astray (much more than the 0.016% figure). If you ask a citizen of Uganda, Kenya, Zambia, Ghana or India (by no means all seen universally as “conflict-affected countries”) whether her government funds are safe from theft and misuse by civil servants and politicians, you’ll get a resounding “no” in response. She knows what she is talking about, because she deals with them regularly. When DFID’s funds are handed over to such governments in support of public service delivery programmes, it is not merely a “high risk” that some will be misused or stolen: it is a virtual certainty. Only the amount will differ from one location to another, and from one programme to another. Funds go missing in several ways, but it is not all about personal theft. It is very often quite systematised. When civil servants steal money they are frequently required to share a significant proportion with their bosses, some of which may go to the ruling political party’s election fund; other times the money is used to buy political support within a patron-client system. And of course some stolen money also goes to pay the school fees and medical costs of underpaid public sector staff… It is impossible for donors to prevent this by placing their accountants in the system – that has been tried, and has failed.
The point is, that if DFID is to sustain such a high annual budget, and is to continue targeting progressive changes in fragile and conflict-affected countries, it really has no choice but to fund their governments directly. (Unless it provides funds to multilateral organisations and trust funds, which ultimately do the same). There are no other institutions in such countries with the capacity to spend and report on such high sums of money. And it makes little sense to create parallel service delivery systems for services which governments typically and traditionally are meant to provide. But when funding these governments it is certain (not just a risk) that some of the money will go missing.
The problem is, a very superficial story about aid and development has been told to parliament and civil society in the supposedly accountable and transparent UK over the years – by NGOs, campaigners and governments alike. This narrative has glossed over the truth about corruption – pretending it is an exception, rather than a rule, and seeing it as an anomaly, rather than a central feature of the way governance actually works in fragile contexts.
The current government is thus in a very difficult position: it has quite rightly decided to maintain a large and UK strong aid programme. And it has also quite rightly decided to focus most of this on the most difficult, fragile and conflict-affected places. But these are the very places whose governance systems are the most marked by a lack of transparency, and whose leaders are held accountable not for equitable service delivery but for keeping their own factions in power and their friends and supporters in funds and business opportunities. Ergo, the most likely places where UK taxpayers’ contributions will be used for something other than what was intended.
So, does the UK government come clean and ditch the idea that it has a zero-tolerance approach to corruption? Does it start to create a new compact with its taxpayers about the risk of theft and about whether this risk is acceptable as a price of building local capacity for transparent, accountable and delivery of critically needed services? Or does it continue to bury its head in the sand as successive governments have done for years? The risk of maintaining the latter course may be becoming much higher than the more obvious risk that, in coming clean, it will create unmanageable headlines in the Daily Mail, and turn even the Westminster and London elite against aid.
I strongly believe that the UK should continue to be a generous aid provider, and should do so in ever more intelligent ways. But I fear our ability to do this is being undermined by the half-truths which those of us involved in aid tell ourselves and others about how things actually work. The PAC’s questions and conclusions about DFID and corruption are therefore an opportunity to be seized, not ducked. As Margaret Hodge MP, Chair of the PAC said, the inability to understand mismanagement and fraud risks undermining DFID’s ability to fulfil its larger mission. It really is time to come clean about how things work in fragile and conflict-affected countries, and conversations in parliament and in our media would not be a bad place to begin.
What this also means of course, is that the likes of DFID and the multilateral organisations through whom it channels about 30% of its aid money need to become more adept at understanding and working within the corrupt systems they support, to promote not just better service delivery but also a more transparent and at times fractious relationship between recipient governments and the citizens whose interests they are supposed to represent. And thus a more transparent and less corrupt governance. This is the kind of thing for which UK parliamentarians should be holding DFID to account, on behalf of the citizens they represent.
Liberia: Unity in Diversity?
There’s a narrative in Liberia in which the erstwhile easy co-existence of different ethnic groups, including the “Americo-Liberian” settlers (ex-slaves and others from the US), Mandingo “settlers” from elsewhere in the region, and a number of “indigenous” tribes was manipulated by unscrupulous leaders during the civil war years. As a result, the country became mistrustful and divided, and remains so.
The part of this narrative I don’t buy is the idea that things were all sweetness and light before they fell apart. When Samuel K. Doe seized power in 1980, executed the previous government and launched more than two decades of disorder, he was surely acting somehow on behalf of an “indigenous” population which felt – and was – structurally disenfranchised within the political economy.
After all, the previous government (whom he displaced and many of whose members he killed) had itself recognised this and was beginning to try and redress the balance by extending education and leadership opportunities outside the ruling elite. The very symbol of the Liberian state – a ship riding at anchor with the motto The Love of Liberty Brought us Here – seems to represent only the Americo-Liberians and to exclude the descendants of those they found living in the land they colonised.
But there is no doubt that Doe’s action initiated or reinforced a period of ethnically based manipulation. Doe himself is widely seen to have engineered his own downfall (he was assassinated in his turn) partly by favouring his own Krahn ethnic group along with Mandingos. And so the Liberian civil war initially became a war defined and fought to a large degree on the basis of ethnicity and identity. When it was finally brought to a close in 2003, it was hardly surprising that many Liberians had learned to trust their own identity group more than others. Nor is it surprising that many – seeing the national institutions of Liberia collapse around them – sought solace and community in the institutions and identity of their ethnicity. And nor – given the later stages of the war when it was hard to trust anybody, is it surprising that there remains a generalised lack of mutual confidence within society.
Either way – whether you take a Hobbesian or a fallen-from-grace view of recent Liberian history – there’s no doubt that one of the big post-war challenges from 2003 was the need to recreate a sense of national identity and rebuild trust, confidence and solidarity among Liberians. Between Liberians such as “indigenous” Mano and Gio, and Mandingo “settlers” in Nimba County, whose disputes over land remain a thorny issue to this day; or between the indigenous tribes in the interior and the Americo-Liberians from the coast whose forefathers had unilaterally sold land belonging to the former to international rubber plantation companies.
The mistrust and enmity resulting from history was put somewhat to one side during the elections of 2005, as an artefact of the immediate post-war moment. Most people still felt too acutely the pain of the just-ended war. They voted for a measure of stability and, when Ellen Johnson Sirleaf won with 59% of the vote, even those who had voted against her accepted the result as an opportunity for a bit of peace and quiet. (Losing candidate George Weah – who had led in the first round – dropped his allegations of electoral fraud, in the interests of peace). The government’s subsequent exhortation to Unity in Diversity was a clear call to “think Liberia”, even while acknowledging local or ethnic identity.
It is perhaps a testament to the progress made since then, that people seem to have lost the inhibitions which subdued them in 2005. The electoral map and electoral tactics seem to be drawn very much with ethnic identity in mind. George Weah – member of the Kru group – has cleverly presented himself as the vice presidential candidate running with Winston Tubman, nephew of a previous president and of Americo-Liberian origin. Thus they can attract at least two sets of voters. Prince Johnson, an ex-warlord turned born-again Christian, has polled enough votes in the first round mainly from his Nimba people, to be seen as the kingmaker in the run-off.
This is not to say that ethnic identity is the only factor in the election; nor to deny the sophistication of many voters. But is an enormous factor nonetheless. Just as warlords and war leaders especially during the early years of the civil war manipulated people’s identify for warlike purposes, so their peacetime equivalents – political party leaders – are doing the same for political purposes. Highly understandable – what politician would not use the levers and tools available to gain or maintain power? – but also worrying. Because despite the rhetoric of Unity in Diversity, the practice is actually deepening divisions between peoples.
I have not examined them myself, but I have it on good advice from Liberians during a visit to Monrovia over the past few days, that the election manifestos of all 16 political parties are more or less carbon copies of each other. Perhaps that’s an indication of the dearth of fiscal and other political choices available to the next government of this poor country which is so dependent on the interests of international donors, mining and oil companies. But the phenomenon I have described above provides an important clue to one of the priorities the incoming government should adopt.
Whoever leads the government coming to office after the election must surely focus on the need to stimulate, promote and strengthen trust between and among Liberians. This means creating some kind of national framework for reconciliation along the lines suggested by the Truth and Reconciliation Commission which reported a couple of years back. It also means stimulating local trust building and reconciliation measures while resolving local conflicts e.g. over land. The envisaged decentralisation of power promises improved local governance, which should provide an important opportunity to situate decision-making closer to the people, while avoiding doing so along predominantly ethnic lines. There is also a plan to undertake a Vision 2030 process, involving Liberians in imagining the country they would like to live in two decades from now. That too, is an opportunity to put reconciliation and trust at the heart of national policy. Unity in diversity, yes, but diversity does not just mean tribe.
Phil Vernon 