Q20 Chairman: Quite of lot of that
has to do with commodity prices.
Sir Suma Chakrabarti: Partly,
but also increased aid. Aid fell dramatically in the 1990s in
Africa and it has now risen, and partly it is to do with good
policies. There has been a mixture of those things. Conflicts
have also ended in a number of places. Therefore, a lot of things
have come together and it is good news. As to the impact, the
poverty rate in Africa was stuck at about 45% at the turn of the
century, and the latest estimate shows that it has decreased to
41%. There has been some impact. Clearly, there is a long way
to go, but a few years ago I was worried that it would stick at
45% for much longer and we are all rather pleased by the trend.
Clearly, Africa is still way behind and has a long way to go to
meet the MDGs, but the trend is in the right direction. Within
that there are a number of countries that are doing rather well.
Mr Lowcock: I offer two other
examples. Of course, poverty is multi-faceted; it is partly income
and partly other things. If one compares the number of girls and
boys in school in Africa today with the position in 1999, there
are now 38 million more of whom 20 million are girls. If one looks
at immunisation rates in Africa, there is not yet a full picture
but there is emerging evidence of massive increases in many countries
from perhaps 30% to 70% plus. In time that should translate into
reductions in child mortality. You are right that there are complex
linkages and lags, and there is always a need to do more research
to make sure we understand the linkages between growth and poverty
reduction and focus on the outcomes, of which growth is a means
to an end, in which we are interested. Certainly, the overall
picture is much brighter now than it was five or eight years ago.
Q21 Hugh Bayley: The overarching
aims of the Department are to achieve the Millennium Development
Goals. I imagine that the Department wants to maximise the impact
of DFID's spend in Africa towards that goal. Money spent on one
particular sector may have a greater impact than money spent on
another and money spent in one region of a country may have a
greater impact than money spent elsewhere because of governance,
geography, climate and all sorts of things. If the idea is to
maximise the number of people coming out of poverty, the number
of children going to school and the number of mothers of children
dying neo-natally the Department ought to have data about the
relative cost-effectiveness of every £100 spent on education
in Tanzania as opposed to Ghana as opposed to Ethiopia and over
time to be targeting resources both in areas where cost-effectiveness
is greatest and working with the laggards, if I may put it like
that, to help them achieve cost-effectiveness for the resources
put in and encouraging them by increasing resources. To what extent
do you have measures of the relative cost-effectiveness of programmes
in different sectors and countries?
Sir Suma Chakrabarti: It may not
surprise you that the data quality in many of these countries
is not good enough necessarily to give us very robust measures.
At a very broad level we know that £1 spent in Tanzania is
probably better spent than £1 in Sudan in terms of effect.
Having said that, we need to get much more detailed data on exactly
what the relative cost-effectiveness is. That will take time.
We are trying to build up the statistical capacity of a number
of these countries to give us that data. It is not just we who
need it; they need it for themselves anyway to make sure that
their finance is also spent on the most cost-effective things,
for which they need evidence-based figures. We have invested very
heavily in trying to build up the statistical capacity in these
countries. It will take some time to get the data that we need.
At the moment, for our own programme spending what we try to do
is work out the beneficiary populations that we are targeting
and the cost-effectiveness of it. We are about to set up an investment
committee under the management board which Minouche will chair.
That will start to look across countries and portfolios to see
the relative cost-effectiveness. The data will still be an issue
for a number of years, but we shall try to get a better handle
on this than we currently have.
Ms Shafik: You are quite right
that that is our motive, and in everything we do we are trying
to allocate each incremental pound to maximise poverty reduction.
At the macro level we have a resource allocation model that tells
us in which country it is most effective to put that incremental
pound. That model is basically driven by how much poverty is in
that country and how good its policies are. If the country is
very poor but has quite good policies you get very high rates
of return from aid there. All the academic literature shows that.
That is what we try to use to guide us. At the micro level, however,
it is a different story because the question whether education,
immunisation, water or roads will have the highest rate of return
will vary at the country level. That is where issues around data
and local knowledge are quite important. Some aggregate studies
have tried to answer this question and look globally at where
the highest returns are. Interventions like immunisations have
huge pay-offs because very lost-cost interventions saves huge
numbers of lives. Bed nets are a similar example. We have cost
data for education. Our education specialist would be able to
tell you how much it costs to create a school place in a particular
country and how it is benchmarked. On average, the benchmark that
is used is approximately $40 or $50, but it varies at local level.
The harder part is to figure out the return. The costs are easy,
but which ones have the highest pay-offs? I would argue that you
can make those judgments only at local level because many of these
investments are interconnected. Therefore, the school place will
have a high pay-off only if there is a road, latrine and so on.
One has to make more nuanced judgments about that.
Q22 Hugh Bayley: The PSAs themselves
seek change by and large within the countries in which you work.
The first one is a reduction of 4% in the proportion of people
who live in poverty across the entire African region. It is extremely
difficult to disaggregate the impact that the country's own government
has as against the impact of donors and to work out to what extent
DFID's contribution has made a difference. Do you really believe
that PSAs of this type are the best measures of your department's
performance, or should you have a mixture of measures, that is,
the ones where you really cannot tell whether it is DFID's work
that has made a difference and some PSA targets that relate to
blocks of work for which you are solely or largely responsible?
Sir Suma Chakrabarti: I think
it is very important to have this sort of PSA. Why do we exist?
We exist to achieve the MDGs. That is done to measure our worth
but also as a means of inspiring our staff which is quite an important
part of it. You are right about the problem of attribution. I
do not pretend it is easy to try to pull out DFID's contribution
from others. What we have tried to do in the Departmental Report
is show against each of the MDGs for each of the PSA countries
where we are active what we have done and what we believe has
had an impact on the progress of that MDG, or not, in the country
concerned. We try to be very honest about that. Beyond that, as
part of the PSA we have a target which is a value for money index
of our own projects and programmes. That is our portfolio of quality,
if you like. A lot of work has gone into that. About 18 months
ago we were a bit worried about the portfolio quality. We put
in a lot of effort and we can now report that quality has improved
by 15%; there is now a 77% success rate, which is extraordinary
for this organisation. I think it is hats off to Minouche and
her team for achieving that at country level. That we can identify;
it is clearly about us and our effort. To go back to the question
of attribution, some countries are more aid-dependent than others.
I think we can make a fair claim in logic that we have had more
of an impact on the turn-round in, say, Tanzania, Mozambique and
Ghana. I think it would be a much harder sell for me if I included
China.
Q23 Mr Singh: I want to turn to agriculture
and rural poverty. Most people accept—certainly the National
Audit Office does—that we will not achieve the general poverty
reduction targets without tackling rural poverty. I believe that
in rural areas 75% of people live in poverty. Sir Suma, recently
you told the Committee of Public Accounts that there had been
dramatic improvements in tackling rural poverty over the past
10 years. Which countries would you highlight as succeeding in
those areas?
Sir Suma Chakrabarti: I think
that one of the best examples is Uganda, and I shall ask Minouche
to talk about that. I believe that Uganda has halved the rural
poverty rate over 10 years in the very period in which we scaled
up our efforts. Vietnam would be another great example. I could
go on giving examples, but I think the essence of DFID's efforts
in those countries is to get its country teams to try to get the
governments to think about the political economy. It is a bit
like the gender issue, though slightly easier, in the sense that
there has been a bias in representation and policy in many of
these countries. The question is: can we help these countries
shift the political economy and therefore the public expenditure
allocations to where the poor are, whether they are in urban or
rural areas? That is what the teams have been trying to do, and
clearly in some countries they have had an impact. Sometimes they
go with the grain. For example, the Government of Vietnam views
this very much in the same light as we do. I do not claim that
we have pushed an unwilling government. In some countries we have
had to push very hard against governments. As to Pakistan, there
has been a 25-year push—I know this because I was associated
with this 25 years ago—to try to get allocations in favour
of rural areas, and only in the past two or three years have allocations
moved in favour of rural areas. We are beginning to see the fruits
of that.
Ms Shafik: Uganda is a good example
because its rural poverty fell from about 60% in 1992 to 34% in
2005 when the last survey was done. That is quite a remarkable
drop and reflects improvements in agricultural. Coffee is a successful
key export crop for Uganda. As for Vietnam the budget support
programme has clearly focused on rural poverty. There is a very
clear poverty map of Vietnam which the Committee must have seen
when it was there. It highlights the greatest pockets of poverty
and our budget support programmes are clearly focused on trying
to get more resources into the very poorest communities, often
rural ones with ethnic minorities.
Q24 Mr Singh: In terms of Africa,
is any of the success in reducing rural poverty due to the Maputo
declaration in 2003 where a number of African governments said
they would allocate at least 10% of their budgets towards tackling
rural poverty? Is any of this due to that declaration?
Sir Suma Chakrabarti: It is difficult
to trace it back to that declaration, but what it shows, I think,
is a sign of intent on the part of the leadership of many African
countries that they would work against some of the political incentives
in their own countries to privilege urban sectors. There is a
whole history of manufacturing and urban sectors being quite privileged
in pricing policies and so on, because that was what development
theory was about. That has been reversed, but with it grew a whole
set of vested interest groups who also had to be seen off. What
the Maputo declaration was about was the leadership of these countries
saying that they were willing to go in that direction. If anything,
10% is probably not enough. What we have been pushing in many
of these countries is to try to get public expenditure allocations
to favour the poor, whether they be in rural or urban areas.
Ms Shafik: It is important to
note that Africa is the fastest urbanising region in the world
and so the whole dynamics of rural poverty are changing over time.
We need to be aware of that in our own plans.
Q25 Mr Singh: Perhaps I may be bold
enough to suggest that DFID's publicly stated objectives do not
match the reality of what it does on the ground, because its support
for agriculture as a percentage of total aid to Africa declined
from 4.72% in 2003/04 to 1.3% in 2005/06. UKFARD[15]
considers that DFID has failed to translate into action its widely
stated high level commitments to agriculture as a key to poverty
reduction. It believes that it is now crucially important that
this sector receives the attention and funding required.
Sir Suma Chakrabarti: The problem
is that for some vested interest groups success will be measured
only by a volume of spending which it then certifies is the right
level. The UK Government made it very clear in 2005 when it published
its agricultural policy paper that it had a number of principles
and priorities. It was very clear about what it saw as the comparative
advantage of DFID in this was not spend; it was about policy work
and reform and the sorts of things I have just mentioned about
country offices trying to shift domestic resources in favour of
the poor and trade policy work in international agricultural markets.
That was where we believed our comparative advantage lay, whereas
at the financial end of the spectrum—no one denies that
finance is important—the comparative advantage lay very
much with the multilaterals, particularly the World Bank, the
European Commission, the Rome agencies—WFP, FAO[16]
and so on—and the bilaterals such as the USA which had historic
strength in this area. That was the division of labour. It is
quite important to us also that when the policy paper came out
NEPAD[17]
praised it for being exactly the right mix of things on which
to focus. We shall have an evaluation of that paper in about a
year's time. It is only three years old but we want to see how
we are doing. Since then our agricultural research budget has
gone up, so on the research side we are saying that we have a
comparative advantage. That is £40 million a year and it
will rise because our research budget is to go up further. A number
of country programmes have taken forward that policy paper and
tried to implement it, for example Afghanistan, India and about
five or six countries in Africa, certainly Rwanda. With respect
to UKFARD I believe that is a fairly partial picture of what we
are trying to do.
Q26 Mr Singh: Let me push it a little
further. To move away from UKFARD, the National Audit Office told
us in one of its studies that the time spent by DFID staff in
rural areas amounted to five days per staff member per year and
the Department now had fewer advisers who could provide assistance
on agricultural projects.
Sir Suma Chakrabarti: You will
be aware that we had quite an interesting exchange in the PAC
on that report. As I pointed out to that Committee—I say
this for the record again—as to the number of visits by
country officers to rural areas, if the data had been presented
a different way the picture would be quite different. Several
of our country officers make more than 100 visits a year to rural
areas. If one divides that 100 by every single person in the office
one will get a low number. But does one really expect every single
person, whether it be a driver or typist, to go to a rural area,
because that is the implication of using that denominator? Clearly,
we do not do that. I believe that the total number of visits gives
a better picture. We should have presented those numbers better.
As to advisers, the key issue is: do we really expect only our
rural livelihoods advisers to work on agriculture? No, we do not.
I think it is very important for the economists and the governance
advisers to work with governments and argue the case for public
spending to be skewed in favour of the rural poor, for example.
It is very important that our private sector enterprise advisers
should work on small and medium-scale enterprises in rural areas;
and it is really important for our health advisers to be concerned,
as I know they are, about the number of clinics in rural Zambia
or whatever it is. All of our advisers, rather than just one narrow
set of advisers, are trying to work on aspects like that.
Q27 Mr Singh: To return to your strategy
for research into sustainable agriculture, what impact has that
had?
Sir Suma Chakrabarti: We will
make a full evaluation in a year's time. We have made an interim
evaluation which we have published. So far that evaluation shows
that we have done rather well on the research side—we have
a number of examples of things that are working well—and
some of the country programmes are working well and others need
to do better.
Mr Lowcock: Perhaps I may illustrate
a couple of points that we have learnt about the impact of the
research programme. Over the past three or four decades DFID has
financed the creation of thousands of technologies and new bits
of knowledge related to agriculture, whether it is new seed varieties,
new systems of crop protection or a variety of other technologies.
The main lesson we have learnt is that the world as a whole has
been much better at creating new technology than at promoting
its uptake, so the big change in DFID's new research strategy
three years ago—as you know, we are out to consultation
on the success or not of that strategy, but my guess is that that
emphasis will continue—is much stronger emphasis on what
it is that turns the existence of a new technology into its uptake.
That whole research issue is about usage and markets, institutions
and so on. To give one example, in Kenya most farmers still plant
a variety of maize seed that is more than 50 years old. That is
not because there are not more modern varieties; it is to do with
markets, institutions, incentives, agricultural extension and
all those things. The important thrust for us in our future research
programme is about that end of the challenge as opposed to just
knowledge creation.
Q28 Mr Singh: How do you respond
to the criticism of UKFARD that you are not mainstreaming your
research outcomes from the strategy?
Sir Suma Chakrabarti: I think
that was the point Mark was trying to get at. There are other
examples we can give. My favourite one is India where there is
an example of massive research into the cotton boll worm pest.
That pest costs India about $1 billion a year in lost farm output.
We had a virtuous triangle, if you like, where the country office,
the Indian Government and researchers worked on this together.
That resulted in 100,000 farmers taking up the research, basically
halving the use of pesticides, and it has increased farm production
by 11% and profits by about 75%. There are examples like that.
We need to ensure that more of those examples get not just into
our work but fundamentally into the work of partner governments.
That is what we shall be working on, and our new research strategy
is very much about that.
Q29 John Battle: UKFARD has a vested
interest, though not an illegitimate one. It will claim that it
has the research capacity and a long established tradition of
dealing with former colonies and many other developing countries
that it assists. Its simple complaint is that it is not getting
enough support from DFID to continue that. You are not there to
support UKFARD per se, but what it says is that it has an expertise
which if it is not used will cease to be available. Do you believe
it has any grounds for that concern?
Sir Suma Chakrabarti: I honestly
do not know enough about UKFARD. What I suggest is that our Director
for Policy and Research sees them in the next couple of weeks
and tries to clarify it.
Chairman: I declare a slight constituency
or regional interest in that the Rowatt Research Institute and
Macaulay Institute in Aberdeen have had those long connections
and find fewer opportunities to maintain them and yet their expertise
is relevant. From my own experience I testify to the relevance
of that expertise in developing countries. They tend to say that
DFID is one of the prime sources of funding and if DFID does not
support them there is not much else they can go to. A little bit
of this is about the policy of untying aid. They say that it almost
reaches a point where they have more chance of getting a commission
from the Swedish development agency than from DFID.
Q30 John Battle: I want to ask some
questions about evaluating effectiveness and the matters raised
by my colleague Hugh Bayley. I note that both the present and
previous Secretaries of State were asked in general how aid programmes
were proceeding. The reply tends to be in terms of the increased
aid going in. I am beginning to think that for three decades the
development debate has followed fashion. We went towards agriculture
and then moved away from it and then returned to it. On 11 June
the United Nations declared that more than half the world's population
lived in mega-cities. It strikes me that to try to live on less
than $1 a day in a shanty town round a city is much harder than
trying to live on $1 a day in a rural agricultural community.
Some people are now beginning to question whether the Millennium
Development Goals are effective methods of evaluation. For example,
they do not refer to employment— there is no reference to
youth employment. So are the MDGs right? Recently, Paul Collier's
work about the bottom billion has had a real go at the whole strategy[18].
Others have said that we should stick with it. Roger Riddell has
produced Does Foreign Aid Really Work? He has made a very
careful analysis to suggest the opposite. I just wonder where
you are. I have been impressed by the work of the DFID Evaluation
Unit, but I am still not quite clear how DFID sees measuring aid
effectiveness by outcomes and its impact rather than counting
how much has been disbursed and spent. How do you answer that
criticism?
Sir Suma Chakrabarti: We believe
that we are very much about outcomes and do not want to be measured
necessarily by the amounts of money going into this, that and
the other. What we have tried to do in the Departmental Report
is talk very much outcomes. The good thing about the MDGs—we
can always argue about whether there should be an MDG9, 10, 11
or 12—is that they are outcomes essentially to do with the
characteristics of poverty. That is why I rather like basing our
systems on outcomes. Our evaluation work—Sue may want to
say something about it—does try to get at outcomes. Occasionally,
we have to look at things on the way to outcomes, like instruments,
budget support or whatever, because there is a debate about whether
or not it is the right instrument to reach an outcome rather than
whether it is the right instrument in its own right. On the whole,
we are talking the language of outcomes. For us the next step
is to produce a Results Action Plan, which we want to share with
the Committee in the next few months—that is very much about
outcomes and how we will get there in the coming years. We are
just developing that and so have not been able to send it to you
yet. Perhaps Sue wants to say something about evaluation.
Ms Owen: Perhaps I can tell you
about the new committee that we are setting up. We have all sorts
of scrutiny of our work: this Committee, the Committee of Public
Accounts and the NAO which looks for value for money. We also
have our Evaluation Unit which you probably met when you visited
Scotland. There are three issues in connection with evaluation.
There is an issue about the perception of its independence. Is
it just DFID scoring DFID? I do not believe that it is because
most of our evaluations are conducted externally, but a valid
criticism is that we are the ones who choose what is evaluated.
There is another issue about the use of the results of the evaluation.
Do they genuinely feed back into the policy process? That is something
we want to encourage and incentivise staff through the Results
Action Plan. By setting up this light touch independent committee[19]
we hope to have seven people who will be independent and responsible
for choosing what is evaluated so we are not seen as just choosing
for ourselves what to do. We also want this group to be professional
experts who can give guarantees that we are using the best techniques,
and we also want them to monitor how far the outputs of our evaluation
function are used and followed up in practice and are not just
seen as a nerdy report that is over there and nobody does anything
with it. We hope that to have that external impetus will help
us challenge ourselves more to follow up the results of evaluations.
The committee will report to the Secretary of State through an
annual letter. The minutes of their meetings will be published
and I hope that there will be a good deal of transparency. At
the moment, we have advertised this committee and have received
some applications. We shall be sifting through those applications
and interviewing for a chair of the committee by the end of this
month. The chair will take part in the selection of the members.
The panel that selects the chair will be headed by the head of
evaluation at Irish Aid and the head of the OECD-DAC[20]
evaluation committee.
Q31 John Battle: How do you see it choosing
topics for evaluation? Will you suggest the topics to them? Will
they just do a trawl and report on them?
Ms Owen: The idea is that they
will choose. They may choose to be on the steering committees
for each evaluation; they can be represented on that if they want,
but the important point is that they will select the work programme.
At the moment how we choose topics to be evaluated and what is
in the work programme is a little unsatisfactory.
Q32 John Battle: The Department spent
£128 million this year on research. How would one do an evaluation
of the research? What are you researching? Does it lead to policy
changes? Are you comparing notes with what international practitioners,
ODI and others, are doing? I get a very strong sense now that
DFID is not a disbursement aid agency but a leading practitioner
in the methodology of development as opposed to aid, if I dare
say so. Therefore, it is not about aid but longer-term development
and a more integrated approach. I get a strong sense of real leadership
by DFID internationally in that area. How are you coping with
that? How are you building your in-house research to cope with
the critiques rather than the criticisms that are starting to
develop? I do not believe this is a settled area at all; it is
incredibly dynamic, but it can also oscillate very quickly between
aid-for-trade one day, between one area of the world and another
the next and between rural agriculture to urban the next. How
is your research contributing to that?
Sir Suma Chakrabarti: I shall
ask Mark to give a considered reply to that. It is striking that
this organisation has undergone major policy thrusts over the
past 10 years. You know well the White Papers each of which has
been informed by research undertaken either by DFID or others.
Research is taken quite seriously in developing the policy positions
going forward. What we would certainly like to do as we go forward
is to have more of our policy products peer-reviewed and checked
through by others as well before we advance a particular position.
That is the sort of challenge we wish to bring to bear, as on
the evaluation side as well. Clearly, it is a good thing for any
organisation to do, but we do take account of research done by
others, that is, the Canadians, ODI, IDS[21]—the
lot.
Mr Lowcock: We are in total agreement
with your proposition that knowledge generation and use is a major
part of what we hope is the value added by DFID. It is not just
about resource transfer. To give examples of how we have used
research products in some of our policy documents, about 40 or
45% of the citations and research base in the White Paper on globalisation,
which at the time was viewed as an important statement on globalisation
in developing countries, came from DFID-financed research. A lot
of it is done through IDS and various other UK-based universities
and other academics. Earlier reference was made to our aid allocation
model and, in addressing Mr Bayley's question, how DFID sought
to maximise the poverty reduction impact of its expenditure decisions.
That process is strongly informed by research, first by that done
by Paul Collier and David Dollar at the World Bank. That was followed
up by others including people who currently work for DFID, for
example Jonathan Benyon. He is one of our economists whom you
may have met on some of your overseas visits. If we want to be
on the cutting edge of policy development we must understand new
knowledge creation, whether it is financed by us or others. A
massive challenge for us in an organisation of 2,700 people dispersed
around 70 countries is how we give those people access to knowledge
products and create incentives to learn. We finance various websites
and so on which have very high numbers of hits. There is a science
in development website financed by us that has 20,000 hits a week
internationally. An important question for us is: how do we create
enough space for our own staff and sufficient incentives for them
to continue to learn? When you come to test us on the "more
with less" agenda that is something about which we are thinking
very hard because it will be a bigger challenge in future.
Q33 Sir Robert Smith: I am just trying
to understand how you categorise budget support. We understand
that 28% of bilateral aid is channelled through budget support,
but does that include only assistance specifically designated
as Poverty Reduction Budget Support?
Sir Suma Chakrabarti: All our
budget support is called Poverty Reduction Budget Support and
it comes in two forms: one is general budget support and the other
is sector budget support. It covers all budget support.
Q34 Sir Robert Smith: Therefore,
the 28% is the total of general and sector budget support?
Sir Suma Chakrabarti: Yes.
Q35 Sir Robert Smith: Do you measure
how much of the aid that goes through multilateral organisations
ends up in effect as budget support as well?
Sir Suma Chakrabarti: I do not
think we actively measure that. We know that under IDA, for example,
a certain percentage is involved in policy lending which is the
World Bank term for the same sort of thing. I believe that the
figure is 20%, but we can check the number[22].
I am not sure that we know the figure for all the other agencies.
Q36 Sir Robert Smith: In a reply to a
Written Question about budget support to Afghanistan[23]
we were told that that country did not receive any Poverty Reduction
Budget Support in the financial year 2005/06 and it was not projected
to receive any during the following financial year, but on your
website we are told that Afghanistan does receive budget support.
Ms Shafik: The Afghanistan Reconstruction
Trust Fund differs from budget support in two important ways:
one is that the Afghan Government is allowed to use the funds
only for a very specific set of predefined categories, for example
in the education sector or for water supply. We have an agreed
list of eligible expenditures. The second difference is that they
are reimbursed on an ex post basis, whereas budget support
is an ex ante contribution to the budget. Because we did
not have confidence in the Afghan Government's ability to manage
budget support in an ex ante and more open-ended way we
have put in place this sort of structure.
Q37 Sir Robert Smith: Perhaps the
Written Answer should be expanded slightly?
Ms Owen: Yes; we can correct that.
The outcome looks like budget support because assistance goes
to the Afghan budget for certain types of eligible expenditures,
but the accounting of it is different from what it would be for
a budget support programme.
Q38 Sir Robert Smith: Is this a unique
mechanism for Afghanistan?
Ms Owen: It is unique. It has
some appealing qualities for fragile states and it is one that
I should like to see tried in other countries. It was fairly unique
given the crisis in Afghanistan. The World Bank put in place this
mechanism on an exceptional basis, and we have been very keen
users of it. If you talk to the Afghan Minister of Finance he
will tell you that this is his preferred aid instrument because
70% of aid going into Afghanistan is off-budget and the Afghan
Government never sees it and in effect has no control over its
own development process, whereas the Afghan Reconstruction Trust
Fund is different and more desirable in that way.
Sir Suma Chakrabarti: We are about
to start an internal debate on whether the ARTF is a good model
for other fragile states. Our Government wants to do more for
fragile states for good development reasons, but the fiduciary
risks and so on from the classical budget support-type operation
are high in those states. The question we are asking ourselves
is: is the ARTF a good model? The Afghans like it, but we need
to satisfy ourselves that it would work elsewhere.
Q39 Mr Singh: I can see how you can
monitor the use and effectiveness of sector budget support, but
how do you monitor the use, effectiveness and impact of general
budget support?
Ms Shafik: It is really the same
principle in terms of an agreed set of outcomes which the government
should deliver with that support, but obviously with a broader
array of measures. In sector budget support those outcomes could
be in education or health; in general budget support we would
have a broader array. It varies by country from 20 to 80 indicators
against which the government has to report to donors to be eligible
for continuing budget support.
Sir Suma Chakrabarti: In order
to get general budget support one has to satisfy some quite tough
criteria. People regard us widely as an organisation that uses
budget support, as we do in the right circumstances, but 28% is
not as high as some people might think because criteria have to
be satisfied.
15 UK Forum on Agricultural Research and Development Back
16
UN World Food Programme; UN Food and Agricultural Organisation Back
17
New Partnership for Africa's Development Back
18
The Bottom Billion: Why the Poorest Countries are Failing and
What Can be Done About It, Paul Collier, 2007 Back
19
Independent Advisory Committee on Development Impact Back
20
Organisation for Economic Co-operation and Development-Development
Assistance Committee Back
21
Institute of Development Studies Back
22
The figure for fiscal year 2007 (1 July 2006-30 June 2007) was
25%, covering IDA and International Bank for Reconstruction and
Development (IBRD). Back
23
HC Deb, 1 May 2007, cols 1532-3w Back
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