Examination of Witnesses (Questions 120-139)
MR SHAHID
MALIK MP, MS
BELLA BIRD,
MR MIKE
HAMMOND AND
MS SARAH
COOKE
2 JUNE 2008
Q120 John Battle: That co-ordination
is good but it is a question that backs up my colleague's question
in a way and it is about the limitations of ownership, because
one of the bodies that gave evidence to us was Muslim Aid and
they looked at Somalia, a disastrous failed state where there
is an absence of a single stable governing body, but they used
an interesting phrase: they said in order for ownership to work
you need to co-ordinate with those who have authority on the ground.
In other words, rather than going upstairs to the UN, go downstairs
to work with NGOs on the ground to make sure that the aid reaches
the people that really need it. Is there a tension between sometimes
looking to the UN and hoping they sort it out or getting stuck
in there and saying no, we are going to go through NGOs on the
ground and have direct contact with civil society because the
place is in such a mess that if we do not do that the people will
not get the help they need? What is DFID's view?
Mr Malik: Our view, as in Burma
for example, is that where NGOs are working on the ground and
doing good, credible work which is making a difference, then our
role is to support those NGOs and civil society organisations
and whether they are southern or northern or working in partnership
is completely irrelevant. In answer to your question we would
certainly seek to be investing where already organisations are
making a difference, but with the UN I was really speaking about
the kind of post-conflict environment where the UN plays more
of a macro level lead role. We must not ignore, and I apologise
if I have misled to an extent, the role that civil society organisations
play in those countries and our desire to support them increasingly.
I suppose the Governance and Transparency Fund that I spoke of,
£5 million up to five years, is an example of that, £130
million in total; the Civil Society Challenge Fund, £½
million up to five years is another example of that. There are
many other examples, so we are absolutely committed to civil society
organisations. We do not believe that you can eradicate poverty
without engaging and utilising NGOs and civil society organisations,
it has got to be a partnership approach.
Q121 Hugh Bayley We could sit here
for five days, grappling with this and trying to make it change,
but in relation to the Accra conference you look at what has changed
since before Paris up to Accra and I would have said actually
not very much has changed and it is how little has happened rather
than how much has happened that ought to be worrying us. It was
put to us on some of our visits that one should be much, much
more radical and decide that as a donor A should lead within country
B and others could work around that lead, and then other donors
could lead in country C. Should we not be much, much more ambitious
in terms of what we are trying to do and what are the prospects
of Accra delivering a really radical change to the aid architecture?
Mr Malik: The first thing I would
say is to go back to the principle that I hope I have been trying
to hit home while we have been in this session, which is really
country-led, and on division of labour as well it must be country-led,
so it is for the country to say who has the comparative advantage
to an extent as well as us to look at the evidential base for
some of that. You have hit on a word which we are very keen on,
which is ambitious; we would all agree that Accra really needs
to have a very ambitious agenda in September. We are pushing for
it to be ambitious and we think that our priorities for an international
agreement are really identified by five different strands: improving
the predictability of aid, strengthening accountability at country
and international level, improving the division of labour, strengthening
incentives for donors for aid co-ordination and faster progress
on the untying of aid. The last two there are sometimes quite
difficult because it is important to be honest and to recognise
that each country is motivated by more than just a desire to do
good. I am sure that is the only thing that motivates people in
this room, but the truth is that there are countries that, for
political reasons, will want to go down one route or another and
in those circumstances it is important that we look at incentives
that push people towards better co-ordination. The untying of
aid again is a very complex area for some countries. I gave the
example of consultants quite often, perhaps, emanating from the
country that happens to be the donor and quite often large sums
of money being subsumed by those consultants, and we need to ensure
that we start to untie aid—I have talked about some of the
benefits of that. We need Accra to be much more ambitious than
some people might feel is possible, both in terms of delivering
a better rate and in terms of the MDG call to action which you
will be familiar with. The Prime Minister has really said that
we are so off-track—and I know that everybody in this Committee
will agree—in meeting some of the MDGs it is an emergency
situation that requires emergency action and on 25 September there
will be a high-level meeting in New York where we will be pushing
for that, where the Prime Minister along with Ban Ki-Moon will
be pushing that agenda. We need better results and for financing
for development to focus on more aid, so it needs to be more ambitious,
that is certainly where we are and that is what we are pushing
for, but time will tell.
Q122 Hugh Bayley In Ghana we saw
the UK working through a Dutch health adviser or using a Dutch
health adviser to advise on our programmes, we saw a Danish engineer
managing a water purification project which was co-funded by DFID,
but we have not yet got to the position where we simply delegate
a project to another donor. We are clearly using experts from
other countries, on the staff of other donor agencies, to manage
our work rather than delegating budgets. We are a very strong
advocate of the principle of budget support, that is to say, delegating
to developing countries a budget and saying it is up to you to
manage it and report back to us within certain parameters. Why
is there not a similar willingness to delegate budgets to other
aid agencies, to the Danes, to the Dutch?
Mr Malik: Mr Bayley, if I could
just say two or three things on that. The first thing to say is
that we do actually delegate and it was interesting that the individuals
that the Chairman talked about initially were critical—perhaps
that is too strong a word—of DFID in terms of our leadership
role, but they are quite often the very organisations that tend
not to delegate or defer. I have given examples in Yemen where
we do, and there are examples in other African countries where
we do delegate budgets in the way that you describe. With respect
to Accra, to go back to your first point and to Sir Robert Smith's
point earlier on about Paris, we need to ensure that the targets
that we set there and the things that we agree there are ambitious,
yes, but they are specific and measurable; that is critically
important. I would also just add that I do believe that the International
Development Committee and parliamentarians have a key role to
play as you go around meeting other parliamentarians to really
push them to be more ambitious for Accra, push them on the areas
where you believe that DFID principally is right or even, dare
I say it, ideologically right. You have a very important role
to play and I do not under-estimate how difficult some of that
pushing might be, but it is crucial. It is very difficult for
DFID, obviously, to do that with governments and parliamentarians,
but you with the specialist skills and the respect you have got
will be very effective in that role with respect to other parliaments
across the world where it is needed most.
Hugh Bayley: Can I just say that if we
have got it wrong and there are cases where DFID is delegating
to another bilateral agency a budget, could you let us know?
Q123 Chairman: What you have said
about Yemen, could you give us a note on that?
Mr Malik: Yes, of course. There
is £3.5 million there that we delegate on health.
Hugh Bayley: That is how we have understood
the situation, but if it is more widespread than just in Yemen,
if there are examples in other regions, that would be useful.
Q124 Chairman: Mr Hammond might just
remind us of the arrangements in Ghana. My understanding was that
we have a shared adviser and also effectively the money was fed
through locally. Perhaps you could just clarify that.
Mr Hammond: There are two models.
The first model is shared advice where we share the advisory resources
of the Dutch adviser. We still have a programmatic budget, General
Budget Support, which is linked around the Ministry's programme
of work. Whether we release that budget or not is a decision left
with us, so we are getting advice from an adviser mainly. In the
case of the water project we actually simply give the money to
DANIDA and GTZ to co-finance their programmes. We are not directly
funding, it is not a DFID programme per se.
Q125 Hugh Bayley: I appreciate that,
but the distinction I was trying to make is this: in that particular
case we examined a project, we decided it was a good project and
decided to put money behind it. The distinction is we were not
saying we are going to spend £5 million a year on the water
sector in Ghana and we will pass the budget to DANIDA, shall we
say?
Mr Hammond: No, that is what we
have done, we are spending £8 million and we are giving the
money to DANIDA to spend on its programme for water. It is a DANIDA-designed
project.
Q126 Hugh Bayley: It is not our project.
Mr Hammond: We are giving DANIDA
£8 million to spend on a DANIDA-designed programme of work
in the same way as we give £3 million a year to Ghana AIDS
Commission on a World Bank-designed programme in support of the
Ghana AIDS Commission. So we do do it and it is a mechanism that
we consider, particularly in the sectors that we consider are
important in a country.
Mr Malik: Just to spell out the
arrangements in Yemen, the Netherlands represents DFID and manages
£3.5 million to fund increased midwifery, obstetric and family
planning services for poor and marginalised women. I would say
one thing: the alignment of aid through country systems is far
more important than donor to donor co-ordination, and that is
a really important point. Strengthening the country systems is
far more important ultimately than who we defer to in country,
and that is obviously where you have that sustainable development
which hopefully will ultimately make us redundant.
Q127 Ann McKechin: I want to come
to the EU Code of Conduct on the Division of Labour. The Code
is voluntary but evidence that the Committee received from the
ODI cites difficulties for example in Zambia where "the number
of donors per sector barely reduced ... and the willingness of
donors to withdraw from sectors in which they are engaged is limited".
Is the Code of Conduct having any real impact anywhere and can
you provide any examples to us?
Mr Malik: It is true to say that
the Code of Conduct is of a voluntary nature but we still see
it as a significant milestone in moving forward. There are some
barriers to the implementation of division of labour and sometimes
that is suspicion and mistrust by partner countries when division
of labour is donor-led, and I go back to that point. They sometimes
feel powerless when faced by a co-ordinated group of donors. I
suppose at one level there is an argument made by partner countries
that there are too many donors and then when donors come together
they feel a bit powerless in the face of those donors, but there
is also a fear that some sectors will not be sufficiently supported
once donors withdraw. There are, therefore, a number of challenges
to the implementation but some of the examples that have already
been given actually show that there are benefits: for example,
in Zambia the division of labour is led by the government and
has reduced transaction costs by an estimated 60%, which is quite
significant. That is one example of how the division of labour
has been fruitful.
Q128 Ann McKechin: Does DFID have
any other strategies for making the division of labour a reality?
You have mentioned the understandable suspicion of partner nations
that if donors disappear the money disappears with them; is there
any discussion or debate, multilaterally or in the EU for example,
about how that fear and suspicion can be overcome?
Mr Malik: Obviously I have raised
that because it is a genuine concern for partner countries and
I think the best way to overcome it is to ensure that there is
a strategy in place that is country-owned and country-led; in
that sense there is an element of predictability built into the
system for the partner country because it will know that donors
that are pledging to work in that country are doing so according
to the priorities and needs that have been identified.
Q129 Ann McKechin: That would seem
to suggest that as well as the EU Code of Conduct on Division
of Labour we need an EU code of conduct about sustainable funding
to match that code; do you believe that that would go some way
to try and address this problem?
Mr Malik: For our part in the
UK we think that in an ideal world it would obviously be helpful.
What we have tried to do is develop different kinds of mechanisms
which we are testing out in different countries. We have a number
of development partnership arrangements with countries over ten
years; those obviously help in terms of building of confidence
in that country, building stability and allowing other people
to invest, whether it be donors or private sector investors if
they can see that commitment is there. In terms of whether there
ought to be a code, I actually do not think it would be unhelpful,
it would be helpful in the context of the discussion we are currently
having.
Q130 Sir Robert Smith: When we were
in Denmark Professor Finn Tarp of the University of Copenhagen
told us of concern that the staff incentives within DANIDA (the
Danish development agency) were "screwed-up" as he put
it—
Mr Malik: A technical term.
Q131 Sir Robert Smith: Yes, in that
incentives and performance measures did not encourage staff to
focus on aid effectiveness, and others in Denmark also backed
that up. We wondered how is DFID ensuring that its own commitments
under the Paris Declaration are reflected in the priorities of
members of staff?
Mr Malik: What I said earlier
was that we had built this into our planning process and I will
just very quickly go through how we have done that, just to give
you an understanding and a feel for how important we think the
Paris Declaration is. Departmental strategic objectives now entrench
aid effectiveness as a corporate priority at global and country
levels. All country assistance plans are expected to include an
assessment of aid effectiveness. A new Results Action Plan was
published in January of this year, setting out how we will embed
results into our own and our partners' culture and systems and
progress against the Paris Declaration targets is included in
our institutional strategy papers for key multilateral organisations.
We are also running training courses, as I mentioned earlier on,
on aid effectiveness for staff, both in the UK and in country,
which teach staff about best practice in implementing the Paris
Declaration, tackling corruption and strengthening public financial
management. I also mentioned earlier on, Chairman, the monthly
aid effectiveness newsletter that shares information and best
practice across the organisation. We have therefore been quite
methodical in our approach in terms of mainstreaming some of this
and it shows just how important we believe it to be.
Q132 Sir Robert Smith: At a practical
level do heads of DFID offices have performance targets which
prioritise harmonisation and aid effectiveness?
Mr Malik: I have one on my right
who might be able to help us.
Mr Hammond: Yes.
Ms Bird: Yes, we do. In our country
performance frameworks we all have to set out clearly what our
objectives and our targets are for aid effectiveness.
Mr Malik: That is unanimous then,
two yeses.
Q133 Chairman: For DFID to be effective
in co-ordination we need obviously to work out and evaluate the
impact. We were concerned at ActionAid's suggestion to us that
the current system for evaluating the Paris Declaration is not
credible because they said that in the 2006 DAC survey of the
implementation of the Paris Declaration donors insisted on negotiating
the figures and the figures in the final document were in many
cases significantly different from earlier drafts, so they concluded
that that evaluation was fatally undermined. First of all, do
you accept that that is true—that is a clear assertion by
ActionAid—and if that is the case how can that kind of evaluation
be deemed credible?
Mr Malik: What is clear from the
DAC peer review in the context of the UK is that over the last
five years we have improved quite a lot in terms of looking at
issues of impact evaluation. I want to give you some confidence
about our approach and then Sarah will add to that confidence.
I would say that we recognise this is one area where there is
a lot of scope for improvement. I understand the points that you
make and that some of these points might lead to people not having
as much confidence as we would like them to have in impact evaluation
and evaluation more generally, but within DFID we have fairly
recently established an Independent Advisory Committee on Development
Impact which the Committee will be aware of. I also talked about
the Results Action Plan which was launched in January 2008, and
that is quite methodical in some ways, there is a new country
planning process which focuses on identifying expected impacts,
more careful and robust performance and results frameworks for
voluntary programmes and development of a small number of standardised
indicators that can be aggregated across country programmes. These
will allow a more systematic measurement of the aggregate output
of our programmes and investment in statistics in partner countries.
We recognise that there is much more to be done and there was
great confusion in the 2006 review over the definitions used—I
know that we discussed definitions earlier on. These were resolved
in the case of the present survey that was undertaken and the
2010 survey should be more realistic.
Q134 Chairman: That implies that
you thought there was confusion and ActionAid thought that was
a negotiation of the terms.
Mr Malik: Now I am getting confused.
Mike.
Mr Hammond: At the time of the
2006 survey a number of donors filled in questionnaires using
their interpretation of definitions that had been drafted at that
time. When it came out it was fairly obvious that people's definition
of what was programmatic assistance, what was technical assistance
differed and I think that is what ActionAid is referring to in
terms of negotiations, when people were trying to come to a common
understanding in definitions. That led to some changing of figures
in country reports. That debate took place this time before the
survey was sent out so hopefully the 2010 survey will be more
consistent.
Q135 Chairman: Another suggestion
that was put to us by the International Initiative for Impact
Evaluation (3IE) which has a clear appeal is that the evaluation
of OECD DAC is carried out by OECD DAC. What about having a review
conducted by developing countries? In other words why do we not
ask their opinion of how well we are co-ordinating aid and how
effective that co-ordination is?
Mr Malik: I will ask Sarah to
come in in a minute, but what I would say to you is that as a
general principle we think there are few things more powerful
than a partner country actually giving direct input into the evaluations,
and that is certainly something that we are looking at improving
and increasing. Sarah, do you want to comment?
Ms Cooke: I do not have anything
to add to that actually. It is very important to get partner country
views and we certainly listen to partner country views around
our programmes and our projects as we design them. It is very
important.
Q136 Chairman: The Committee would
entirely accept that DFID does that, I do not think that would
be a point of issue with us. The more interesting suggestion is
that donors should subject their programmes and their co-ordination
to evaluation by developing countries as a collective response
to a collective initiative. I am not disputing the observer on
the ground, of course DFID does that, but this is a slightly different
approach.
Mr Malik: It seems to me, given
what I have said earlier, that the principle is a sound one and
there is much added value that would emanate from it and it would
give a more holistic and inclusive position on just how effective
aid is in those countries. In isolation, just looking at the partner
country, I do not think that would be entirely healthy and I accept
that the other side is not entirely healthy either. A combination
might be something that gives a more balanced picture of impact
in country.
Q137 Chairman: Is that something
that you think you as a minister could recommend.
Mr Malik: It is something that
I as a minister will certainly have discussions internally on.
Ms Cooke: If I could make one
additional comment, there is a current evaluation of the Paris
Declaration going on in terms of implementation and how we are
doing and this is looking at studies of ten donors but also looking
at ten studies in country as well, so that will very much get
in the views of partner countries as to how the implementation
of Paris is going forward. Just one additional piece of information
is that DFID is chairing the Network of Networks on Impact Evaluation
(NONIE) and what it does is bring together representatives from
donors and developing countries as well to share information and
to develop standards and guidance on impact evaluation. That is
very much an attempt to bring us together with developing country
partners to understand how we can improve impact evaluation.
Q138 Chairman: We will look forward
to seeing how that develops because that is all very helpful but
it still looks very often as if it is DAC evaluating DAC so it
would be good to start seeing the partner countries becoming involved
in that. The final point is that Professor Finn Tarp again made
the point that he thinks there is a lack of detailed and sound
methodology for evaluation, and he has of course a British colleague
Sam Jones who we also met. What is DFID doing to try and ensure
that the evaluation does use good, up to date and objective methodologies,
whether they come from the University of Copenhagen or anywhere
else?
Mr Malik: We have to recognise
that this area is quite complex and that people are looking at
various approaches, that we need to invest more globally in research
to find sophisticated tools that would allow accurate measurements
to take place of impact. Some of the entities that we have already
mentioned, whether it is NONIE or the (3IE) or whoever else it
might be, are looking at some of these issues and our own independent
advisory committee for DFID is certainly looking at some research.
I would ask my colleagues whether they know of anything more tangible
that means they could give a more accurate response to the Chairman's
question. I do think it is an evolving area and there is a recognition
that enough has not been done and much more needs to be done,
and in that sense there is a need to invest more in research to
get the right kind of methodologies.
Q139 Chairman: The depressing comment
that people make is that the poorest countries in Africa have
been in receipt of the most aid and actually perform worse, which
makes all the causal connections sound completely wrong. The point
that Professor Tarp is making is that if we had better methodologies
this causal link between aid and development and poverty reduction,
or whatever the other outcomes are that they measure would be
clearer, and then you would have more of a chance of putting more
of your money country by country and donor by donor in places
where you actually think the measures will help. That is something
the Committee feels very strongly about and what we need to see.
DFID has the biggest and sharpest rising budget of any of our
initiatives and that is good, we support it, but we all know that
if we cannot maintain proof that that aid can make a difference
in objective ways then public confidence is called into question.
Mr Malik: I remember recently
that Oxfam did some research that showed that for every pound
in aid that was going out, £1.20 was being lost because of
strife that was going on in parts of Africa. I do think there
is a need to develop better methodology and I would also say—I
know you would concur with this—that issues like internal
strife and climate change can obviously undermine the impact that
aid can have and the effectiveness of aid, but it is still important
to ensure that we continue finding ways of making aid effective
in those areas and certainly not withdrawing it. That is why I
spoke about the UN in a post-conflict environment and the role
that they can play. Our role is to try to ensure that through
these difficult times—and Nepal was a great example—we
were able to continue our aid flowing into Nepal and we have the
situation now where we have the first ever constituent assembly
elections there. I would finish by saying that the thrust of what
you are saying is absolutely right and we need to really improve
and enhance the methodology that is out there. DFID can contribute
to that, is contributing to that and will increasingly do so.
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