Working Effectively in Fragile and Conflict-Affected States: DRC and Rwanda - International Development Committee Contents


2  The Government's approach to security and development

The National Security Council and its Strategy

14. On 12 May 2010, soon after forming a government the Prime Minister announced the creation of a National Security Council (NSC) to oversee all aspects of UK security. The Prime Minister chairs the Council whose permanent members include the Foreign Secretary, the Secretary of State for Defence and the Secretary of State for International Development. In October 2010 the Coalition Government published its National Security Strategy. This declares that the Government will adopt a cross-departmental approach to UK security:

Our response to global instability, conflict, and failed and fragile states brings together a wide range of government activity, from diplomacy to development to overseas military operations. We favour early engagement, to prevent conflict developing or spreading and to tackle threats to our national security at source.[25]

15. The Secretary of State for International Development told us: "Through the National Security Council we discuss the importance of working in conflict states and, indeed, we agreed that up to 30% of the development budget should specifically be deployed in conflict states."[26] He had high praise for the Council saying it was:

an absolutely brilliant innovation to the machinery of Government. It has brought diplomacy, defence and development together in a structural way that was nothing like so effective before. It underlines the fact that our security is not just dictated by guns and bullets but, [...] by training the police in Afghanistan, [...]building governance structures in the Middle East and getting girls into school in the Horn of Africa."[27]

We were told that the Council had discussed and determined the UK approach to Libya and that in the process the three departments had worked better together than ever before.[28]

MORE JOINED UP WORKING?

16. We wanted to ensure that, as a result of the new National Security Council and its document the National Security Strategy (NSS), the way in which the three relevant Departments approached a given conflict situation would be better than in the past. We were also concerned that DFID's primary focus on poverty reduction should not be negatively affected by wider concerns about UK security.

17. It is clear to us that not all areas of development concern should or will be brought to the National Security Council—only those which relate to the UK's national security as set out in the National Security Strategy. The Council should enable the provision of a coherent response to such issues, one with which all the relevant Departments agree. DFID must ensure that funding for countries such as the DRC, which may not be viewed as important for the UK's national security, are not abandoned in favour of more strategically important countries such as Pakistan. The formation of the National Security Council indicates a greater determination to work together, and we will monitor its impact on international development expenditure and policy choices.

Building Stability Overseas

18. The Government also published the Building Stability Overseas Strategy (BSOS) in July 2010 which sets out how the UK will "promote stability and prosperity in countries and regions where its interests are at stake"[29] with a strong focus on conflict prevention. Announcing the BSOS, the Secretary of State for International Development said:

The Building Stability Overseas Strategy will help the UK to work more effectively to tackle instability upstream, helping to prevent conflict and the suffering it causes. This goes to the heart of the drive to achieve better targeted, more effective aid. Not only is this cost-effective and beneficial for the security of the UK, it will also help to improve the lives of some of the poorest and most vulnerable people on the planet.[30]

19. The Building Stability Overseas Strategy has three strands:

  • Early warning: improving our ability to anticipate instability and potential triggers for conflict
  • Rapid crisis prevention and response: improving our ability to take fast, appropriate and effective action to prevent a crisis or stop it spreading or escalating
  • Investing in upstream prevention: helping to build strong, legitimate institutions and robust societies in fragile countries that are capable of managing tensions and shocks so there is a lower likelihood of instability and conflict.[31]

It is intended to ensure an integrated approach to unstable countries recognising that a military response is not always appropriate.

20. As noted in the BSOS, conflict prevention is often less costly than responding to conflict and, if effective, can reduce humanitarian expenditure. The Secretary of State commented: "There is credible research now that shows it is four times the cost to deal with the dysfunctionality that now besets Somalia and Afghanistan than if you are able to tackle the causes directly upstream."[32] The cost of responding to the humanitarian needs created by conflict are evident in DFID's programme in Somalia where DFID has allocated £89 million since April 2010 for humanitarian assistance.[33] In 2010-11 this accounted for 63% of DFID's total bilateral aid to Somalia and this percentage is likely to increase in 2011-12.[34]

21. We were concerned that the three main strands of the strategy made no reference to development and post-conflict reconstruction as a means of helping to ensure countries do not fall back into conflict. The Secretary of State reassured us that the focus on conflict prevention in the BSOS included reconciliation and stabilisation in the aftermath of a conflict even though this is not explicitly set out in the Strategy.[35]

22. The funding streams and main delivery mechanisms for the BSOS include the cross-Departmental Conflict Pool[36], the Stabilisation Unit[37] and the UK's contribution to multilateral peacekeeping.[38]

23. The Conflict Pool is funded from a separate HM Treasury settlement which is additional to Departmental Expenditure Limits, rather than pooled DFID, FCO and MoD resources. Funding for the Pool will increase from £229 million in 2010-11 to around £300 million by 2014-15.[39] Most funding for the work of the Conflict Pool is allocated at the beginning of each financial year. In addition there will now be a new Early Action Facility of £60 million for the period to 2015 "to help the Pool move more swiftly in response to warnings and opportunities."[40]

24. Not all activities of the Pool are reportable as Official Development Assistance (ODA) under the rules set out by the OECD Development Assistance Committee (DAC),[41] but the portion represented by DFID's contribution must be.[42] DFID's contribution must be used for the purposes of poverty reduction as set out in the 2002 International Development Act.[43] DFID told us that one of the strengths of the Conflict Pool is that it can blend ODA and non-ODA spending enabling it to work with civilian and military stakeholders.[44] In South Sudan the UK's Security Sector Reform and defence transformation programme is funded from the Conflict Pool.

25. However the BSOS makes no reference to the OECD guidelines. The Secretary of State said he did not feel constrained by the OECD-DAC rules on eligible expenditure.[45] NGOs warned that it was important that poverty reduction continued to drive decisions about where the UK's ODA budget was spent.[46]

26. We are pleased that the Government is seeking to ensure through the National Security Council, the National Security Strategy and the Building Stability Overseas Strategy that the Government's response to conflict includes diplomacy, development and defence. This must be seen to change practice. We are also pleased with the renewed focus on conflict prevention which is less costly and can reduce expenditure on humanitarian assistance and other post-conflict expenditure. These are important changes in emphasis. The impact of these changes is not yet apparent and we will continue to monitor this.

27. All UK ODA must conform to OECD guidelines and DFID's ODA must also contribute to poverty reduction under the 2002 International Development Act. We want to ensure that OECD guidelines on what is ODA-eligible and what is not, are adhered to at all times, especially when ODA is being spent by other government departments or through pooled funding mechanisms such as the Conflict Pool. However the OECD criteria are not set out in the Building Stability Overseas Strategy. The absence of reference to the importance of rehabilitation and recovery as a means of preventing recurrence of conflict is another omission to the BSOS. DFID must explain why these were excluded from the strategy and how they will inform cross government work in fragile and conflict affected states.

WHICH FRAGILE STATES?

28. There is no commonly agreed list of fragile states—different organisations use different data and draw different conclusions about which states are fragile.[47] Generally these are states with weak capacity or weak legitimacy. In 2005 DFID defined fragile states as those where the government cannot or will not deliver core functions to the majority of its people, where core functions include service entitlements, justice and security.[48] DFID's list is compiled from three different indices—the World Bank's Country Policy and Institutional Assessment (CPIA), the Failed States Index of the Fund for Peace and Uppsala Conflict Database.[49] The World Bank uses only the CPIA and has a different list. Depending on the definition of a fragile state, calculations about how many of the poorest people live in these, and the extent of need will vary.[50]

29. In 2010 DFID decided to reduce the number of countries with which it has bilateral programmes from around 43 to 27.[51] The choice of states was based on a number of factors including development need, likely effectiveness of assistance and strategic fit with UK Government priorities. DFID then used a needs effectiveness index to validate its proposed focus states.[52] This index was compiled from the Human Development Index, a fragility index, the number of people living on under $2 a day and World Bank's Country Policy and Institutional Assessment (CPIA) scores.

30. We are concerned that this index has a built in bias towards large populous countries such as India, Pakistan, Nigeria and Ethiopia, at the expense of smaller countries like Burundi. The use of the number, rather than the proportion, of people in each country living on less than $2 a day creates this bias. If the proportion was substituted for the total number of poor people, smaller poor countries such as Burundi would have ranked higher in the index. While using poverty numbers might be appropriate for apportioning development aid between countries it is less useful for establishing the intensity of poverty. We understand that the Millennium Development Goals will not be met globally, unless they are met in these large countries, and that in seeking to reduce administrative overheads, larger programmes are more efficient. We believe a case can also be made for prioritising countries which have a large proportion of their population living in poverty and less capacity to respond to this.

31. After making its decisions on which countries to assist, DFID then determined how it would divide its bilateral aid based on the (largely quantitative) projected results each country office said it could deliver at specified costs, whilst offering value for money. However DFID maintains that it does not shy away from countries such as the DRC where it costs more to deliver programmes—"DFID does what is best value for development, not necessarily what is easiest or lowest cost"[53].

32. By the end of the Comprehensive Spending Review period the five top recipients of DFID aid overall will be Pakistan (£446 million), Ethiopia (£390 million), Nigeria (£305 million), Bangladesh (£300 million) and India (£280 million). All are large populous states and all except India are on DFID's list of fragile states.[54] On DFID's list of those fragile and conflict-affected states it funds, five are middle income countries (Nigeria, Occupied Palestinian Territories, Pakistan, Sudan, Yemen), and the remainder low income.[55]

Table 1: Current Budget Allocations For Fragile States


*Tajikistan part of a broader budget allocation for Central Asia. Budget allocations for Central Asia are 14m in each of 2011/12, 2012/13, 2013/14 and 2014/15. (Total: 56m)
** Country Plans not published externally
*** The Liberia programme will be reviewed after the elections in 2012
All above figures are indicative budgets by country as published in DFID's Bilateral Aid Review 2011.
Figures are rounded and subject to performance and sensitive to political and economic circumstances.

33. The level of funding that DFID allocates to each country per poor person living there varies considerably. Looking at the largest recipients within the fragile states group plus Rwanda, DFID provides £9.2 per poor person in Rwanda, £8.2 per poor person in Afghanistan, £7.5 per poor person in Ethiopia, £5.2 per poor person in Pakistan and only £3.5 per poor person in the DRC.

Table 2: Aid Per Poor Person[56]


Source:
A - http://data.worldbank.org/indicator/SI.POV.DDAY/
B - http://data.worldbank.org/indicator/SI.POV.NAHC/
C - http://data.worldbank.org/indicator/SP.POP.TOTL/
D - http://www.dfid.gov.uk/Documents/publications1/departmental-report/2011/Annual-report-2011-vol1.pdf

34. The aim of the Bilateral Aid Review was to "identify a clear rationale for DFID country allocations and establish: countries in which we should retain and increase DFID presence, programmes and offices which we should close and graduation strategies when closing."[57] It is unclear how DFID makes decisions about the relative importance of countries such as Pakistan which may be the largest DFID programme next year and of clear strategic interest, and the DRC, which is of less strategic interest. The Secretary of State told us that the since the DRC was a large country with nine neighbouring states it was important for stability in Africa, which was also in the UK's interest. The decision to increase funding to Pakistan from £178 million in 2010-11 to £446 million in 2014-15 was made to help build stability by focusing first on assisting with the immediate effects of the flooding, and secondly transforming education.[58] He further explained, "These are subjective matters. Clearly, which countries you engage with depends on past history."[59] Written evidence supports the decision to increase funding for fragile states which are "home to some of the world's most vulnerable and poor people."[60]

35. DFID should be clear and open about the reasons it operates in different fragile countries and the basis for the choices it makes. The Bilateral Aid Review led to a smaller number of focus states where DFID assessed it could make a contribution and deliver results. The needs effectiveness indicator it used in the process created a bias towards large populous countries with large numbers of poor people. If it had used an index which used the proportion of people living on less that $2 a day, the difference in score between larger and smaller countries on the needs-effectiveness index would have been smaller. We recognise that the Millennium Development Goals will not be met globally unless they are met in large developing countries but we are concerned that smaller countries, with a large proportion of their population living in poverty, for example Burundi, have lost out.

36. There were political aspects to these decisions. The public might question the large sums of money being spent in the DRC, where the UK has no historical links, and in Pakistan, a middle income country, where the motive may have more to do with national security than reducing poverty, although the two are linked. The Government must be clearer about where its development assistance is being driven by political objectives, and should explain better the choices it makes about which states to fund. In a context where the DFID budget is increasing to meet internationally agreed Official Development Assistance targets, it is important that the public understands the value—morally and politically—of the decision to invest increasing amounts of aid in fragile and conflict-affected states.


25   HMG, A Strong Britain in an Age of Uncertainty: the National Security Strategy, October 2010, Cm 7957, p 33 Back

26   Q 106 Back

27   Q 118 Back

28   Q 119 Back

29   www.fco.gov.uk 19 July 2011 Back

30   DFID, Press Release, July 2011 Back

31   Building Stability Overseas Strategy, July 2011 Back

32   Q 106, Q 114 Back

33   Ev 75 Back

34   Ev 75-76 Back

35   Q163 Back

36   The Conflict Pool funds discretionary conflict prevention, stabilisation and peacekeeping activities. It is funded by the FCO, DFID and the MoD Back

37   The Stabilisation Unit (previously the Post Conflict Reconstruction Unit) was set up, in the aftermath of the UK's involvement in the war in Iraq, to respond to the challenges of fragile and conflict-afflicted states, and works with such countries to enhance their capacity for self-governance. The Unit reports to the Ministry of Defence, Foreign and Commonwealth Office and Department for International Development, and includes staff from each parent Department. Back

38   Ev 67 Back

39   Ev 68 Back

40   Ev 77 Back

41   The OECD-DAC is the body responsible for defining what types of expenditure are reportable as Official Development Assistance. The basic definition refers to financial flows to developing countries for the purposes of economic development and welfare. There are no plans to revise the current definition. Back

42   Ev 77 Back

43   International Development Act 2002, Section 1 (i) Back

44   Ev 76; Military aid may not be reported as ODA under the OECD guidelines Back

45   Q 117 Back

46   Ev w 60 Back

47   Andy Sumner, 'Global Poverty and the New Bottom Billion: Three-quarters of the World's Poor Live in Middle-income Countries', IDS Working Paper 349, Brighton: IDS, 2010 Back

48   DFID, Reducing poverty by tackling social exclusion, 2005  Back

49   Q 109  Back

50   Andy Sumner, Global Poverty and the New Bottom Billion: Three-quarters of the World's Poor Live in Middle-income Countries', IDS Working Paper 349, Brighton: IDS, 2010. Back

51   Now 28 with the creation of South Sudan in July 2011. In addition DFID will continue programmes in three Overseas Territories and will have three regional programmes by 2016. Back

52   DFID, Bilateral Aid Review, Technical Report, paragraph 19  Back

53   International Development Committee, Departmental Annual Report, Oral Evidence taken on 2 November 2011 [not printed] Back

54   The list and DFID's aid allocations are set out in Ev 70-71. In addition to those countries in the table, DFID also sets out allocations for Liberia, Malawi, South Sudan, and Tajikistan.  Back

55   Ev 75. South Sudan has a per capita GNI of US$984 in 2010 according to the National Bureau of Statistics in South Sudan. It is therefore the verge of becoming a middle income country which refers to countries with a per capita GNI of between US$1,006 and US$12,275.  Back

56   Compiled by the NAO Back

57   DFID, Bilateral Aid Review, Technical Report, Introduction Back

58   Q 108 Back

59   Q 109 Back

60   Ev w 60 Back


 
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Prepared 5 January 2012