Examination of Witnesses (Questions 1-19)
MR MYLES
WICKSTEAD, MS
SARAH MULLEY
AND MS
LINDA DOULL
29 APRIL 2008
Q1 Chairman: Good morning and thank you
very much for coming in to assist us with this inquiry into aid
coordination, or the lack of it. Obviously it has been triggered
by suggestions that, for example, recipient countries have difficulties
with so many different donors and so many different programmes
and limited capacity to engage, and indeed donor countries also
have issues about whether or not they coordinate. First of all,
for the record, might you introduce yourselves before we start?
Ms Mulley: My name is Sarah Mulley
and I coordinate the UK Aid Network, which is a network of around
40 British development NGOs and we work together on aid-related
issues, doing policy and lobby work.
Mr Wickstead: My name is Myles
Wickstead; I am currently Visiting Professor of International
Relations at the Open University. I was previously in DFID and
also British Ambassador in Ethiopia, and was Head of the Secretariat
to the Commission for Africa.
Ms Doull: I am Linda Doull; I
am the Director of Health and Policy at the British NGO Merlin.
We are a health NGO and we work in approximately 18 countries,
90% of which are fragile states.
Q2 Chairman: Thank you very much
for that. Perhaps we should start with the Department of International
Development's own claims. To be fair, the Committee has seen some
evidence of coordination on the ground in countries that we have
been to where DFID has been taking something of a lead; nevertheless,
the Overseas Development Institute has suggested that DFID is
not quite as good as it thinks it is, and I quote, "Preliminary
findings ... show that DFID has some way to go in delivering on
aid effectiveness commitments at country level. Among the 14 donor
countries surveyed the UK ranks comparatively low in aligning
general budget support missions with poverty reduction strategy
reviews ... The UK does little better than average among surveyed
donors in minimising the number of reviews and missions it mounts,
and in aligning disbursements with the national budget cycle",
which I guess is not something that DFID would like to hear and
it is certainly not what they claim.[1]
So the Committee would not have a clear view because we have certainly
seen some evidence of DFID's coordination, but perhaps you can
give us an indication of whether you feel that criticism has validity,
or alternatively where you think they may have something that
they can—not boast about—point to as being an achievement
in coordination?
Mr Wickstead: Having been a civil
servant in DFID, as indeed Sarah has as well, I would have said
that their record is pretty good on the whole, would be my experience.
No doubt it varies from country to country and depending both
on the relationship with other donors and the sort of relationship
that one has with government. But certainly DFID does its best
to align itself with the rest of the donor community and behind
government policies. So I would take a reasonably positive view
of their record. I am slightly surprised that they come a bit
further down the league table than one might think.
Ms Mulley: Maybe I can add to
that? I think there is a question here about how you assess DFID
and I think there is a sense from DFID that they are sort of top
of the class and that they perform well against other donors and
I think that is right, and I support the previous comments. I
think the thing to remember, though, is that the class overall
is not performing all that well, so they are not up against a
terribly high performing peer group. My concern is that the way
in which their performance is measured is, at the moment, very
highly dependent on the Paris Declaration monitoring process,
and that monitoring process is not comprehensive and I do not
think it is an especially reliable measure, so I would want to
see DFID actually doing more proactive monitoring and evaluation
themselves of where they think they are and actually how they
are performing on the ground because I do not think we have enough
information on that.
Ms Doull: I would like to partly
agree with Myles. I think it is a very mixed and very context
specific. There is a country level where Merlin works, there are
some countries like Liberia where DFID are aligning quite significantly
with governments that have strategy and policy, particularly in
health, and compared to some other donors, particularly the US,
who choose not to align at all then they are definitely ahead
of the game on that. But if you then take somewhere like DR Congo
it is a mixed picture where there is almost no alignment on some
specific issues, particularly in the finance and the health sector,
where other donors are aligning behind governments and their strategy
and DFID is not—probably for good reason, but it does create
complexity on the ground.
Q3 Chairman: What good reason?
Ms Doull: They tried to focus
on the issue of providing free access to health care in Eastern
Congo which is a major issue and there is still a huge humanitarian
crisis and high mortality rates, so in principle it is an action
that we very much support. But when you have a national strategy
which is based on user fees and there is only one donor going
against that strategy you get a very mixed picture and from Merlin's
experience in Maniema Province we are actually in a position where
we have one donor, DFID, saying free health care, no user fees,
where the other donors are saying, "We want user fees in
place to support it." So that is very difficult to manage
both for the Ministry and for others delivering healthcare, and
for the population to really understand why there are two competing
views.
Q4 Chairman: If you take that example
that would presumably challenge the ODI's[2]
assertion that the UK ranks comparatively low in aligning general
budget support with the poverty reduction strategy, as that would
appear to be exactly the case of aligning the two.
Ms Doull: I think it is the case
in DRC[3]
but it is different—if I can again take Liberia as a better
example, and even somewhere difficult like Maniema where it is
a whole different issue about whether you align with national
strategy or not—it is a shadow aligning process going on
that is actually supportive of national health strategy and the
way it is being funded and delivered is obviously the shadow alignment
approach. I think you have to look at it very much on the contextual
basis.
Q5 Chairman: So where does that take
us? As a Committee we engage all the time with DFID both in the
countries we visit and the evidence we get both in writing and
orally, and I think it is fair to say that the Committee not only
from its own view, but what people tell us will conclude that
DFID has a very high reputation both in being a leader and a coordinator.
But is there a danger of perhaps becoming a little smug about
that if in its Annual Report it does engage with, say, the traffic
light system relating to the MDGs[4]
as the indication because there is a big gap between the Millennium
Development Goals and DFID's input and the connection between
the two which obviously we will press you to explain a little
bit more. The question I have here is, is DFID doing enough to
justify the claim that it is at the forefront on these issues,
but perhaps I should rephrase it—is there a danger of some
degree of smugness, complacency, we are doing quite well, rather
than really challenging to say how much more could we do to ensure
that what we do is coordinated more effectively?
Mr Wickstead: I am sure there
is still plenty of scope for DFID to do better. I think there
are lots of issues around the MDGs and the international community's
role in helping to deliver on the MDGs. The MDGs are essentially
about primary education and those basic health outputs, but in
order to achieve those outputs you have to have a whole mass of
inputs, which include, for example, infrastructure, which include
science, technology, tertiary education, all those sorts of things,
and there is a little bit of donor competition to see who can
best deliver directly on primary education and basic health. I
think DFID is in a situation where it ought to be sufficiently
sophisticated to press on some of those other issues which are
needed to deliver on the MDGs, which actually include not only
those physical things but also issues like governance, peace and
security, which takes us into some of the areas, in which I know
your inquiry is interested, which is to do with relationships
with other Whitehall departments.
Q6 Chairman: I am going to bring
in Hugh Bayley, but the one thought that occurs to me is that
DFID is now in many, many places and, across the piece, is one
of the biggest donors in the world and in many countries it is
the lead donor. That has both advantages and disadvantages. There
is a danger that maybe they will take the view that they can force
coordination through as the biggest player and not listen. But
what is your evidence? Is it genuinely something that gives a
reach that would enable DFID to do more in coordination, and if
that is the case do you believe, taking on board that they vary
from country to country, that they can do that in a way that is
sensitive; in other words, it is coordination and not imposition?
Mr Wickstead: I would certainly
contend—and I suspect my colleagues here would also contend—that
the people who really need to take the lead in coordination are
the developing countries themselves and the governments of those
countries, which is easier in some instances than others. It is
much more difficult to do, of course, in situations of crisis
or in fragile states. Traditionally the UN, I suppose, and the
World Bank have been the organisations which, because of their
multilateral nature have been, as it were, at the side of government
in coordinating. I think DFID's range of expertise across a whole
range of issues—and there are in most countries in my experience
a range of sub groups, looking at housing and education, good
governance and whatever—I would say that DFID would certainly
have the potential and the capacity to play a major role in some
of those sub-sectors.
Ms Mulley: I would agree with
that, and to go back to your previous point I have read several
DFID documents recently where they talk about the fact that DFID
provides only 12% of global aid and they said they need to be
influencing others. I think 12% is a lot and we need to make sure
that there is enough attention being paid to what DFID is actually
doing itself with its own budget. As I said before, I think we
need some better monitoring there. To pick up on the previous
point, I think DFID is in a very strong position in many of the
countries where it works to really lead these agendas and we have
seen that in some countries certainly. DFID has been playing a
really positive role in countries like Tanzania or Mozambique
where DFID has really been at the forefront of these coordination
arrangements and has been supporting government leadership. I
think the challenge is rolling that out across the whole portfolio
and making sure that good practice which develops in one place
can be used to develop good practice elsewhere. I think the current
set of targets, which are set internationally are not stretching
enough for DFID and this is the problem of DFID being at the top
of the class. I think the international structures are not really
stretching DFID because they are operating in a difficult international
context where you have a very wide range of donors at very different
points in this process. So I think there is a need for more leadership
from DFID to challenge itself. I think we should not underestimate
how difficult this is, either. I would not want to suggest that
this is an easy process; it is a very challenging change in the
way they work and it really does change everything about how they
work potentially. So I think it is a lot to ask but I think we
should be asking for it.
Ms Doull: Can I support much of
what has been said in that I think DFID is ahead of the game in
many ways and certainly from our perspective as an implementing
NGO they are now allowed to push the boundaries of discussions
on issues of where investment is being made on more predictable
funding, etcetera. Just taking it back to the ownership and investment
area, I think also in a number of countries they support the issue
of ownership of aid delivery within a country but it is very variable
within countries and I think there perhaps has to be a more coherent
approach to the type of leadership and stewardship assistance
that we give to governments. Then in terms of where aid is being
invested, if we take it back to health, I agree that there are
a lot of competition brownie points to be scored in being seen
to provide basic services but I would say that there is too much
emphasis on the actual delivery and not enough on the health system
itself, particularly in issues of health system management and
developing human resources. So I think again, being a bit more
astute about where investment is being made would be useful, particularly
in fragile states.
Q7 Hugh Bayley: DFID has a donor
coordination department but it does not have representation in
the capitals of most donor countries, so obviously it relies upon
the Foreign Office and I wonder whether DFID has a strong enough
lead within Whitehall to ensure that donor coordination gets the
priority it should from Foreign Office officials in places where
there is no DFID representation. What is your experience?
Mr Wickstead: Again I think the
experience is probably quite variable and depends a good deal
on individuals. Certainly within Europe I know that there are
a number of ambassadors in posts who take the development agenda
very seriously indeed. They talk to governments in other European
capitals on a regular basis about the development agenda, the
importance of alignment, etcetera. I think it is less true in
other places. I think it is a problem perhaps that could be helped
by a system of greater secondments across Whitehall and exchanges
and interchanges. For example, if you take our mission in New
York or our mission in Brussels where these are clearly issues
that are discussed on a very regular basis and at the highest
levels there is a regular input of DFID officials into those missions,
and that is clearly right. I think if you look at a number of
other governments and the way they handle these areas there is
much more regular interchange. Some of, as it were, the good donors,
the Swedes, the Dutch, the Finns, have basically a consolidated
system of diplomacy and development running alongside each other,
and I think that naturally gives you the sort of synergies that
you need, so that when somebody in a particular post goes overseas
they know what the development issues are. So I think that there
is certainly scope for getting people to take these issues more
seriously in a lot of posts. Perhaps the same happens in developing
countries as well where aid is not necessarily the biggest issue
on the agenda but is nevertheless important. It is important to
have people there with a strong background in development in those
posts to advise the senior management in the posts.
Q8 Hugh Bayley: How many Foreign
Office officials get seconded across to DFID for DFID postings
and would it be a good idea if that happened more frequently.
Mr Wickstead: Yes. I am afraid
I cannot give you a definitive answer on that. I certainly know
that when I was appointed as an Ambassador in Ethiopia, having
been a DFID official then secondment took place in the other direction.
I certainly think there is more scope for that to happen and it
certainly happens at lower levels in the system. My sense is that
could happen a good deal more, and not just between the Foreign
Office and DFID. I think that there are other departments which
are international departments in trade issues, education issues
and health issues, and in my view there would be a lot more scope
for exchanges between those departments.
Q9 Hugh Bayley: If I think back to
the Commission for Africa days I thought that the Commission and
DFID did a brilliant job in terms of teasing out the policy issues,
but I think the UK probably did a less good job on the politics
of building a political momentum behind the commitments to more
aid, debt relief, to better coordination and so on. In fact I
remember having a conversation either with you or the Downing
Street team early in the year to say, "Look, you need to
be rolling out a pledge from the Germans to do this in February
and the Dutch to do this in March," and thinking about the
process since Gleneagles there has not really been the political
follow through, which is part of the reason why we are doing this
inquiry. That again suggests to me that there is either a lack
of joined-upness between the Foreign Office—and maybe other
government departments, the Treasury perhaps—and DFID in
terms of following through the development agenda because it is
a development agenda long term, so that there is a strategy for
how we move American policy more into the mainstream over a three-to-five-year
period. Do you sense that there are some weaknesses there in terms
of our relationships with other donors, that they are not fostered
with a driving political strategy over the medium term on a donor-to-donor
basis?
Mr Wickstead: I am not sure the
issue identifies essentially a problem of coordination across
Whitehall. I think we did make huge progress in 2005 and that
was a combination—and thank you for your kind words—of
the Commission for Africa, which was an independent body and we
kept some distance away from the British Government, but working
very closely together, and I think we made a lot of progress.
I think it was inevitable that there should be some sort of relaxation,
as it were, after that process. I think that we achieved in 2005
some terrific commitments from the international community and
the trick now is to keep the momentum behind those commitments.
I think the UK continues to do its bit and other members of the
international community are not stepping up to the mark as strongly,
and I completely agree with you that there is scope for the UK
to push very hard on that, and that requires a lot of diplomatic
effort and endeavour because you just cannot keep banging away
as people will get fed up, frankly. So you have to address this
in a rather subtle way. As I said, not everybody buys into this
agenda. In many of the G8 countries, for example, you do not have
this fantastic political consensus that developed here in 2005,
essentially, around the importance of achieving a 0.7% target,
and that puts the UK in a fantastically strong position. But I
do not think that that is essentially a problem, to come back
to your point, about Whitehall coordination, necessarily; it is
about how you keep that political will developing amongst other
countries and administrations.
Q10 Hugh Bayley: This is something
about which Sarah and Linda may have views. You talk about this
political consensus that has been developed in the UK largely
by NGOs and the churches, but supported by political parties and
the political establishment, behind "drop the debt"
and behind 0.7%, but should DFID not be more political internationally?
Should it not be working with UK NGOs and UK churches to do more
work with European NGOs, American NGOs and Canadian NGOs and churches
to try to build similar civil society fan clubs for development
in other countries? And it always strikes me that so much more
could be done on a parliamentarian-to-parliamentarian basis. I
remember in 2005 going with little teams of MPs to see the German
parliamentarians, to see Italian parliamentarians to try and excite
their interest in the Gleneagles process, but should not DFID
have a parliamentary support unit or parliamentary unit that sees
the importance of this and tries to make sure that UK parliamentarians
are being their ambassadors in the parliamentary field?
Ms Mulley: A couple of points.
I think in terms of DFID's international strategy they need a
twin-track approach because there is a group of donors who are
in agreement with DFID and who are sympathetic, particularly in
the EU context, and I think that DFID needs to be doing more to
build on that like-minded coalition to see what can be delivered
within that group. So, for example, I think we could be doing
a lot more at the EU level. Then I think there is a separate strategy
about trying to bring in the donors which are less sympathetic.
I think if you try and do both at once you probably miss on both
counts; so that is the first point. In terms of building the international
political movement in these countries, I work, for example, with
a coalition of European NGOs and we have groups in all 27 Member
States working on these issues and trying to bring them up the
political agenda, and we publish an annual report which sets out
the progress about European targets for all those Member States.
I think there is that movement emerging but I think you have to
remember the different contexts in different countries, so to
talk about aid in, say, Romania, it is obviously a very different
discussion than to talk about aid here. Whether it is DFID's role
to do that I think is an interesting question, and whether DFID
could be doing more to support that kind of advocacy in donor
countries, I honestly do not know what the right answer is because
they obviously have to be sensitive about not being seen to interfere
in other people's political processes; but they are certainly
supportive of our efforts to do that, and that is something on
which we work quite successfully with them. I think the parliamentarians
point is a very good one; I think we should be doing more to build
up those connections. I would also add to that that there is great
scope, I think, for even more work to be done to link up parliamentarians
in donor countries with parliamentarians in developing countries
to actually share those experiences and to understand that perspective,
because obviously you have a very useful perspective from here
and if more could be done to support those relationships that
would be great. Again, I do not know quite what DFID's role in
that should be but we would certainly be supportive.
Ms Doull: I am not sure I have
anything particular to add to that, but I wonder again in terms
of greater civil society engagement, that is actually a role of
NGOs like ourselves who are really on the ground and very close
to civil society, and whether that is something in which we should
be more active; but, again, it comes down to how that is supported
within country programmes, both at national level and through
individual agency programmes. But it is something worth exploring.
Mr Wickstead: Just simply to record
the fact that before this meeting I had a meeting with the Secretariat
of the Commonwealth Parliamentary Association who are proposing
to have a series of discussions in November precisely around these
issues of aid effectiveness and precisely to bring together these
different groups of MPs, to which Sarah referred, both from the
donor international community and from the foreign community.
Q11 Sir Robert Smith: One of the
benefits of coordination, as DFID point out, there are a lot more
bodies involved as donors. There were 12 per country in the 1960s
and now 30 in 2001 to 2005. One of the frequently cited benefits
of coordination is lower transaction costs, yet the OECD[5]
are concerned in their monitoring of the Paris Declaration that
progress has not been fast enough and that donors will need to
work aggressively. I just want to explore what you saw in terms
of benefits. When we were in Ghana the Health Ministry recognised
that obviously now that the Netherlands and the UK are working
together that is one meeting instead of two meetings, but they
did point out that since they were pretty well aligned before
they coordinated that they as a Health Ministry had not seen—but
DFID possibly have seen -benefits in reduced transaction costs.
I just wondered what difference you felt that has made on lowering
transaction costs.
Mr Wickstead: I think there is
a pretty mixed picture. I think the international community is
beginning to understand the burden that aid can put on developing
countries, particularly on their finance ministries but also on
other departments like health and education particularly, and
I am very conscious that even back in the 1990s when I was running
British development programmes in East Africa that the Treasury
in Tanzania told me that they had 400 donor missions per year.
That is just over one a day and these are the people who, essentially,
should have been responsible for running the Tanzanian economy
and they did not really have time to do that. I think that since
those days we have made significant progress, and my view is that
this shift towards budgetary support is a welcome one and that
is a way that it should be possible to reduce transaction costs
by people putting money essentially into the budget with a general
understanding of the areas for which that budget support will
be used, but with a single set of reports back to the international
community at the end of every year or whatever. Nevertheless,
it remains a significant burden on the capacity of Treasuries
and other ministries and I think that the donor community would
do well to think about supporting the capacity within developing
countries to deal with the international community. Not, importantly,
from outside the system but within the system because I think
the risk is that you set up a project implementation unit or whatever
to deal with all this stuff and you do not build up the system,
as others have referred to. The crucial thing that we now have
to do is to build up the capacity, build up the system so that
countries can take on these responsibilities themselves.
Ms Mulley: Can I make one quick
point? I think there is a risk with moving to these modalities
that what ends up happening is that you keep the old modalities
and then you layer the new ones on top, and you actually end up
in the short term potentially increasing transaction costs. So
I think there need to be commitments from donors not just to do
new things but also to stop doing old things. I think it also
means that we might not expect to see the benefits of this immediately;
that this is going to be something that happens over time and
people need to stick with it. To add to what Myles has said, it
is not just about coordination, this transaction costs point,
it is about budget support, it is about predictability, crucially.
One of the most difficult things for recipient country governments
to deal with is just never, ever knowing how much aid is going
to come, whether it is going to arrive on schedule, whether it
is going to arrive on the last day of the budget year, and it
is dealing with some of those problems. Those can be done individually
by donors as well as through coordination, so it is not all about
coordination.
Q12 Sir Robert Smith: We will come
on to budget support in more detail but on the other perceived
benefits or risks of seeing transaction costs going down, which
way does it take it in terms of staff levels for DFID? Some of
our evidence suggests a concern that by trying to "do more
with less"—the government's slogan—in a sense
we missed the point that possibly coordination requires quite
a lot of work by the donor countries in terms of staff resources
and also in terms of monitoring. Where do you think the benefits
lie and where do the risks lie?
Mr Wickstead: I think it is very
important to monitor where resources go because DFID has a responsibility
through Parliament and the British taxpayer to ensure that those
funds are used properly. My guess is that as you move away from
project support towards more budget support then you do reduce,
probably, the number of people that you need in order to be able
to manage the programme. At the same time I think it is very important
that DFID and HMG generally have a pretty good understanding of
what is going on within the country. So if you are talking about
budget support being used to development health systems, education
systems, capacity in those areas, you cannot just sit in the capital
and expect to know what the impact of that is in areas in other
parts of the country. Essentially you have to have eyes and ears
out in the country to develop a real understanding of what is
going on. That does not necessarily have to be DFID people or
even funded by DFID, but they need to be working very closely
with civil society groups, with NGOs, perhaps with volunteers
who are spread throughout the country. When I was ambassador in
Ethiopia where we had about 100 VSOs[6]
spread throughout the country they were a fantastic source of
information and intelligence about what was going on and, for
example, what the impact of drought was on poor people in those
areas. So I think it is very important to maintain those networks
so that people can really understand what is happening at local
levels.
Chairman: From the Committee's point
of view, quite often when we have visited countries we have found
out that our visit has been a rare opportunity—to put it
in those terms, rather than an excuse—for DFID staff to
actually leave the capital, in order to first of all prearrange
our visit and then to accompany it. In some cases this is because
of security and in some cases because of pressure of work, but
it does bear the point out. Although I think it is quite interesting
what you have just said, that it does not require always DFID
staff to go and do the gathering of information.
Q13 Mr Crabb: You have already alluded
to the importance of direct budgetary support, but for clarification
are you saying that you believe that providing more bilateral
aid through direct budgetary support is the best way for the UK
to achieve greater coordination?
Mr Wickstead: I think that in
certain country circumstances that is the case, but before you
can give direct budget support you need to ensure that countries
have transparent and accountable systems; you need to be able
to track those resources being used effectively. So you cannot
apply that to all developing countries. You basically have a spectrum
that for the best managed economies budget support is appropriate,
and as you move, as it were, down the spectrum towards fragile
states you have to engage at that level in fairly small-scale
projects, or for large-scale project activities where you are
counting every penny. So there is a spectrum. Ideally what we
should be doing is helping borrowing countries to move along that
spectrum to the stage where they are able to deal with direct
budget support. That, in my view, is the ideal scenario.
Q14 John Battle: Just to follow up
on that. First of all, I am in favour of budget support. When
you were ambassador did you find that Britain was campaigning
for budget support and other countries, or your colleague ambassadors,
were not in favour of it? Were we leading the caravan and cajoling
them around for it, or is there a consensus in the international
community that what you have just said is the way forward?
Mr Wickstead: There is no consensus
but I think that there are a number of donors which are very firmly
alongside the UK in believing that budget support is the right
way to go, and there are other countries which firmly believe,
for whatever reason, that what they should be doing is continuing
to fund projects. That can be for a number of different reasons.
There are accountability arguments; they feel that by funding
projects they could more closely monitor every penny or every
cent or every yen that is going into these projects.
Q15 Chairman: Not mentioning any
particular countries, then!
Mr Wickstead: But of course that
does not address the issue of accountability, which is that if
you are funding a particular project however carefully you count
everything that is going into it, other resources could be used
for other purposes. So I think that there are pretty clearly two
camps—at least two camps—within the leading donor
communities, some of which favour a shift to budget support where
possible, and others which are very hard to move away from that
sense that the project is the right way to go.
Q16 Mr Crabb: What are some of the
risks associated with using direct budgetary support and how well
does DFID do in terms of assessing and managing those? For example,
how well does DFID do with assessing, monitoring levels of fiduciary
risk in countries where it is engaged in direct budgetary support?
Mr Wickstead: I think it does
quite well. There was an NAO[7]
report on budgetary aid quite recently, which gave a little bit
of a mixed picture but on the whole was quite positive about the
way that DFID was managing this. It is easier of course with projects
to account in accountancy terms for what every penny is being
used for, but what you do not know is that the money that would
otherwise have been used by that government for funding that project
could well be being transferred to excessive military expenditure,
for example. I think what giving direct budgetary support does
is give you the ability to look across the budget as a whole and
to look with the government at priorities within that overall
budget and make your judgments about it, which include, for example,
military expenditure, and being within certain bounds and limits
of what people would consider to be reasonable. So I think it
is the more responsible approach in practice, and I think it gives
you the ability to see the big picture and not just focus on the
small picture, and I think that is what we should be about at
government-to-government level.
Ms Mulley: Can I just add to that?
I think the key thing is to think about the relative risks and
benefits of budget support; it is not about looking at budget
support in isolation—we need to be comparing it with other
possible modalities. Projects are not immune from corruption and
fiduciary risk. I would agree with what has been said about the
benefits of budget support and I would also say that in the long
term it has to be about this; it has to be about building up country
systems and building up those domestic accountability mechanisms.
Donors will never be able to tackle corruption from the outside;
what needs to happen is that those domestic processes need to
be built up. The one thing I would maybe nuance slightly differently
is the appropriate role of donors in determining priorities across
the whole budget. I would agree that I think one of the advantages
is to give donors that overview, but I would say that ultimately
those decisions about how budgets are spent and what policies
are followed need to be accountable to citizens in the recipient
countries, and donors will obviously need to take a view. But
I think donors need to be very careful when giving budget support
that they do not replace that domestic political process, and
that is a very delicate balance.
Ms Doull: To use Liberia as an
example, where within the health sector budget which is US$100
million, $30 million of that currently is direct budget support;
the other $70 million goes to a number of project related funding
streams, either through global health partnerships or NGOs. Coming
back to these specific points, with a government that has just
come out of 15 years of conflict, what expectation should we have
of their ability to manage what level of direct budget support
they get and what is the role of DFID and other donors in providing
that support and how that links to predictability of aid in funding.
Q17 Mr Singh: But does not budget
support tie you in more closely and if there was ever a need to
withdraw it would be very difficult because you would destabilise
the whole budgetary system? So are you not tied in long term as
you go down that route?
Mr Wickstead: Can I give you a
specific example of how that has happened? We have touched on
it in answer to some of the previous questions about issues not
only of levels of support but predictability, and on the whole
now DFID is making 10-year commitments to a certain level of budget
support; but of course on the understanding that there may be
circumstances in which it is no longer appropriate to give those
levels of support through the budget. What happened in Ethiopia
after I left, in 2005 there were some issues around the elections
and the British Government concluded that it was no longer appropriate
to give that sort of direct budget support at the time, but rather
cleverly, I think, decided that they would maintain the levels
of support but targeted very specifically on health and education
issues, and making the expenditure of those resources more directly
accountable. And I now understand that they are now moving back
into budget support. But I think that was a rather sophisticated
way actually of keeping up the level of expenditure and making
sure that it was targeted but addressing the accountability points
that you have mentioned.
Q18 Ann McKechin: Can I tease out
with you this issue about country ownership, which is now part
of the common jargon about aid effectiveness. Myles, your Commission
noted the absence of an overarching aid strategy in most sub-Saharan
African countries, and I wondered to what extent anything has
been done by DFID in particular or the donor community in general
about trying to tackle that? A subsidiary question that would
follow from that is that if they are supporting ownership how
do they do it without making their influence so strong that it
actually inhibits true ownership from the recipient countries?
Mr Wickstead: I think on the whole,
just thinking about Africa, that there has been really quite significant
progress over the last 10 years. This is 10 years on from the
Birmingham Summit, 1998, and I think there was some frustration
around that—the UK and others wanted to do a good deal around
debt relief and the Jubilee Debt Campaign was beginning then,
all those sorts of things—that they felt there was nothing
within Africa really to hang on to. They did not have these clear
objectives themselves. Looking at the first five years of this
decade there have been huge developments, for example the creation
of the African Union out of the old OAU, the creation of the New
Partnership for Africa's Development (NEPAD), which is about regional
projects which have developed precisely that African ownership
which allowed us in 2005 to make that progress because there was
something there which the international community could support.
The Commission for Africa report was precisely that these are
the things that Africa needs to do, these are the things that
Africa is beginning to own and how can the international community
seek to support that. That would not have been possible 10 years
earlier, for all sorts of political and other reasons. But I think
it is very important and I think there has been really good progress.
Ms Mulley: I think more needs
to be done on this question of aid strategies. I think a number
of African countries have now developed very good aid strategies.
I think donors could support that process more in other countries
and I think there could be some quite specific outcomes this year,
for example from the Accra High Level Forum in September, to really
pledge that support. I think the other thing to recognise is that
ownership is not just a recipient country responsibility. I think
the Paris agenda, as it is currently set out, is ownership is
over there with the recipients, and actually donors are not recognising
enough that the way they behave can inhibit that ownership, which
picks up your second point. I think what we are really looking
for from the UK and from other donors this year is much more of
a recognition that the way that they behave can inhibit that ownership
on approaches like tying aid or heavy policy conditionality. I
think the other thing to say is that the definition of ownership
that is currently used is problematic and it is often used just
to talk about central government agencies, maybe just the Ministry
of Finance, maybe just three people in the Ministry of Finance,
and it is very closely tied to the World Bank's Poverty Reduction
Strategy Paper (PRSP) process. We recently did some research in
seven countries about this issue and one of the government people
in Cambodia we interviewed said that the PRSP is so broad that
donors would have to build hotels on the moon in order to not
align with the PRSP because so much is in it that anybody can
find a hook. So I think there is a real need for donors to be
willing to actually change what their priorities are and change
what they are doing, and until donors show themselves to be willing
to do that recipients are going to be very reluctant to take the
lead because they do not want to risk angering their donors.
Q19 Ann McKechin: I just wondered,
following on from that, particularly in Africa whether NEPAD has
a role in terms of actually generating an interest in policy development
about this issue of ownership and how it can be expanded in recipient
countries, so that it is not just the few officials in the Ministry
of Finance who make the ultimate decision.
Mr Wickstead: I do think it has
an important role and I think it is a genuinely owned African
programme and countries are now beginning to support a number
of NEPAD programmes. I think there are other complications around
NEPAD, which are to do with the relationship between NEPAD and
the African Union, which makes it particularly difficult, but
this is a teething process and I think it will be resolved. But
I think there are some tensions between the AU Commission and
the NEPAD Secretariat, which means it has not developed quite
as vigorously as one might have hoped.
1 ACo 12 Back
2
Overseas Development Institute Back
3
Democratic Republic of Congo Back
4
Millennium Development Goals Back
5
Organisation for Economic Co-operation and Development Back
6
representatives of Voluntary Service Overseas Back
7
National Audit Office Back
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