APPENDIX 16
Memorandum submitted by Save the Children
UK
1. Save the Children UK welcomes the opportunity
to submit evidence to the International Development Select Committee.
Our key areas of concern relate to:
— Risks for marginalised social groups
and the poorest people of fully aligning donor support with PRSPs
at this time.
— Importance of engaging diverse stakeholders,
including civil society, in Poverty and Social Impact Assessments
and of examining a range of policy options.
— Democratization of World Bank and
IMF governance.
2. This year's World Bank Development Committee
Communiqué of 28 September 2002 states:
"We reviewed further experience with PRSPs
which confirmed the broad findings of the joint Bank/Fund review
earlier this year. The Committee is encouraged by the increased
momentum in countries' efforts to develop and implement their
PRSPs. We call on the Fund and Bank together with all donors to
align their support with country PRSPs and to collaborate with
each other to: strengthen their analysis of the sources of growth;
streamline conditionality; help countries improve their public
expenditure management systems; facilitate an environment conducive
to private sector development; and intensify efforts to help countries
undertake poverty and social impact analyses on a more systematic
basis."[77].
3. Alignment of Bank, Fund and other
donor resources with PRSP priorities.
Reducing administrative costs to countries and
ensuring aid meets nationally defined priorities
SC UK in principle welcomes the Development
Committee's call for the Bank, Fund and donors to align their
support with country PRSPs. Basing aid on nationally defined priorities
clearly helps avoid replication of locally-inappropriate blueprints.
The importance of national level analysis is clearly demonstrated
by the fundamental problems related to some current World Bank
investments in the nutrition sector. Reduction in malnutrition
remains a key indicator for the achievement of the Millennium
Development Goal on hunger. Addressing malnutrition has focussed
on large-scale projects and the World Bank is now the biggest
donor for nutrition worldwide. Unfortunately WB community nutrition
projects adopt a blueprint approach and are replicated from one
country to another. Save the Children has observed and researched
these projects in Ethiopia, Uganda and Bangladesh[78]
and noted the major preoccupation with addressing gaps in the
nutritional knowledge of caregivers as a mechanism for addressing
malnutrition. There is very little evidence that such knowledge
gaps are the major cause of malnutrition in any of these three
countries. In Uganda and Ethiopia the project design period failed
to take into account research and understanding at national level
of the key causes of malnutrition. Aligning World Bank support
with nationally defined sector priorities would help avoid problems
of this nature and poor countries incurring debts for activities
of limited value.
When provided via budgetary support, aid can
reduce the substantial administrative costs to recipient countries
associated with project-based aid. Much work remains to be done
to reduce these costs, by the World Bank, as well as by other
donors. Some of this work involves moving faster on streamlining
conditionalities. Some involves continued efforts to ensure programmes
are operating within the PRS framework.
4. Concerns about equity
However, SC UK continues to be concerned about
the equity effects of fully aligning donor support with this generation
of PRSPs. As is widely recognised, the policy choices laid out
in most current PRSPs are unlikely to reduce the poverty of the
poorest. Most PRSPs rely strongly on trickle-down effects to reach
the poorest. Only a quarter of a sample of Interim and Full PRSPs
examined by Save the Children explicitly discussed equity as a
concern or an objective[79].
The record of development efforts over the last 50 years strongly
suggests that relying on growth trickling down is insufficient
for reducing poverty and promoting social wellbeing[80].
Indeed several of the I-PRSPs and PRSPs we examined (Mali, Burkina
Faso) recognised that child malnutrition and income poverty had
increased during a period of growth.
5. While most Interim and Full PRSPs lay
out some social protection policies, these do not constitute a
holistic approach to reducing poverty among the poorest and most
vulnerable groups.[81]
Typically, ministries charged with improving the wellbeing of
such groups, such as Ministries of Social Welfare, or Women and
Children, have had very little voice in PRSP processes, and have
been unable to advocate for strong pro-poor, gender and child-sensitive
policies[82].
6. There is a thus strong risk that this
generation of PRSPs will contribute to meeting the Millennium
Development Goals principally by reducing the poverty of people
close to the poverty line and deeper, entrenched poverty may be
left unaddressed. Aid which simply follows existing PRSP priorities
may therefore reinforce these inequalities.
7. Poverty and Social Impact Assessments
may help achieve more pro-poor policies within PRSPs. However,
it is important that support for PRSP priorities does not marginalise
approaches which can promote social development and poverty reduction,
even if not discussed in a PRSP. This implies a need to support
the development of good quality analysis and policy dialogue over
different options which recognises the implications for different
social groups. It may also require a diverse approach to aid in
the medium term, which recognises the capacity and policy development
required at all levels for budget support aligned with PRSP priorities
to be effective.
WE URGE
THE COMMITTEE
TO ASK
THE SECRETARY
OF STATE:
What steps the Government will take to ensure
that alignment of aid with PRSP priorities does not marginalise
the poorest people?
8. Intensifying Efforts to Help Countries
Undertake Poverty and Social Impact Analysis on a more Systematic
Basis.
We welcome the increased commitment on behalf
of both the IMF and World Bank to analysing the consequences for
poverty and social wellbeing of particular reforms and the important
contribution this could make to ensuring that PRSPs do improve
the situation of the poorest. To date this has principally been
carried out through a series of pilot Poverty and Social Impact
Assessments (PSIAs). These are intended both to stimulate debate
about policy reforms, and enable a range of stakeholders to appraise
each potential policy choice in the light of supporting evidence.
They are also intended to review a range of policy reform options
in particular contexts.[83]
However, to date most pilot exercises have not involved a range
of key stakeholders—in some cases, key government ministries
and civil society organisations—are unaware of these activities
and researchers have been selected by IFI or donor staff.[84]
Furthermore, most PSIAs are concentrating on narrower social impact
analyses of one specific policy choice or ways of implementing
a particular choice- for example, privatisation of a particular
utility or parastatal—rather than whether that is the right
choice, or the potential social consequences of addressing key
reform concerns in different ways.
9. We therefore suggest the following:
— in each country a government-led
multi-stakeholder steering group, including representatives from
national government, parliamentarians, civil society, and international
donors (including the IFIs), should take primary responsibility
for guiding the PSIA process. This could be part of multi-stakeholder
committees or processes linked to the PRSP. This steering group
would take responsibility for selecting independent researchers
to undertake the analysis and deciding when and where the technical
support of foreign donors may (or may not) be appropriate;
— national civil society actors should
be involved in PSIA processes throughout—from the conceptual
stage, setting the terms of reference, identifying priority areas
for analysis, discussing policy options, ensuring that outcomes
of analysis affect policy decisions and monitoring implementation;
and
— PSIA should be conducted on a range
of different policy options, so that the best policy for poverty
reduction can be selected.
WE URGE
THE COMMITTEE
TO ASK
THE SECRETARY
OF STATE:
How will the Department for International Development
will work towards a more inclusive and open approach to Poverty
and Social Impact Analysis?
10. World Bank and IMF Governance
SC UK strongly supports enhancing the voice
and decision-making power of poor countries within the World Bank.
Without progress in this area, the steps being taken to share
decision-making power at national level through the PRSP process
will lack a vital complement at a global level. We look forward
to the background document being prepared for discussion at the
spring meetings[85],
and to the opportunity to submit our own comments and proposals.
11. Enhanced developing country representation
on the Board
At present, ultimate power in the World Bank
resides with the Board of Executive Directors. However, the make
up of the Board, being based on representation in proportion to
financial contributions, is fundamentally undemocratic. It is
unacceptable, for example, that of 24 Executive Directors (EDs),
only two come from Sub-Saharan Africa, representing over 35 countries
between them, while the UK, US and other members of the G8, each
have an ED on the Board. Governance needs to be changed to reflect
democratic values.
WE URGE
THE COMMITTEE
TO ASK
THE SECRETARY
OF STATE:
What progress is being made on enhancing developing
country decision-making power on the World Bank Board?
12. Selection of the Bank President
and Fund Managing Director
"In all these institutions [IMF, WB, WTO],
the UK Government favours open and competitive processes for the
selection of top management. This could include a definition of
the competencies for the post, selection and search committees
and a clear process for taking the final decision, in which competence
would be put above considerations of nationality"[86].
13. To date, candidates for the Bank's President
have been nominated to the Board by the U.S. Executive Directors,
and have always been U.S. citizens. A similar arrangement existed
with regard to the Fund's MD and Western Europe. This is fundamentally
undemocratic and we would urge this issue to be addressed as well
as Board representation in the reform proposals.
We welcome the Bank and Fund's initial thinking
on more democratic and inclusive processes for selection of President
and Managing Director as laid out in the Draft Joint Report of
the Bank Working Group to Review the Process for Selection of
the President[87].
However, it is not clear how this has been taken forward since
April 2001.
WE URGE
THE COMMITTEE
TO ASK
THE SECRETARY
OF STATE:
What progress has been made on this issue since
the Draft Joint Report of the Bank and Fund Working Groups on
this issue in April 2001?
Save the Children UK
October 2002
This submission was accompanied by a recent
Save the Children publication, entitled "Whose Poverty Matters?
Vulnerability, Social Protection and PRSPs", Rachel Marcus
and John Wilkinson. See http://www.chronicpoverty.org/CHIPWEB/publications.htm.
77 http://wbln0018.worldbank.org/DCS/DevCom.nsf/(communiquesm)/6DB9D2015F03B84F85256C42007BBFF6?Open
Document Back
78
The Food Security Project, Ethiopia, 2002-09; The Nutrition and
Early Childhood Development Project, 1998-2003; Bangladesh Integrated
Nutrition project, 2000-04. Back
79
http://www.edldis.org/poverty/prspnew.htm, accessed on 24/10/02;
R. Marcus and J Wulkinson, 2002, Whose Poverty Matters? Social
protection, vulnerability and PRSPs, CHIP Working Paper 1, CHIP,
London. Back
80
Cornia, G A (2000). Inequality and poverty in the era of liberalisation
and globalisation. United Nations University Millennium Conference:
Tokyo. (www.unu.edu/millennium/cornia. pdf; accessed on
September 2,2002); Stewart, F., 1995, Adjustment and Poverty,
Oxford University Press, Oxford. Back
81
Marcus and Wilkinson (2002). Back
82
See Marshall, J. (forthcoming) Partners in Poverty Reduction:
Donor Approaches to Tackling Childhood Poverty in Tanzania (provisional
title). Back
83
See http://www.worldbank.org/poverty/psia/ Back
84
See joint NGO letter to World Bank and DFID, 16 October 2002,
submitted by Christian Aid to this committee as accompanying evidence.
Copy placed in the Library. Back
85
Communiqué, World Bank Development Committee, 28 September
2002. Back
86
Eliminating World Poverty: Making Globalisation Work for the
Poor, DFID, 2000. Back
87
Draft Joint Report of the Bank Working Group to Review the Process
for Selection of the President, April 25, 2001. See http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:20041074-menuPK:34616-pagePK;43912-piPK:44037-theSitePK:29708,00.html Back
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