Select Committee on International Development Minutes of Evidence


Examination of Witness (Questions 200 - 213)

TUESDAY 22 JANUARY 2002

MR POUL NIELSON

  200. Do you help resource them to be able to match, so they get a clear view from their side of the fence of what they think development should be for them?
  (Mr Nielson) We are doing things very much in the same manner here as you are describing with DFID. Nicaragua, not being an ACP country, does not have the same formalised basis of public participation in our process—and it is a handicap not to be covered by those rules, I would say—but otherwise it is much better than before.

  201. Finally, you have mentioned resources. Have you still got a problem with the staffing of delegations?
  (Mr Nielson) Yes, but that is why we are pushing our staff out in this process of so-called deconcentration. By the way, we call it that because in the strange terminology of the Commission, deconcentration is giving our delegates a stronger say in decision-making, whereas if it was decentralisation it would mean giving our partner country governments that power. Personally, I try not to use that word, I call it delegation to delegations or strengthening. That would help in this but not necessarily, it is also a matter of following it up here but telling our partner governments that they have to invest in this. The feedback we get from the World Bank on this is that the overlap in timing of us doing the Cotonou Ninth EDF, the strategy planning process, with this PRSP wave which rolls across the geography, is extremely useful.

  202. A tying together.
  (Mr Nielson) Very useful. Because we have for the ACP countries this formalised contract agreed to do that and to open up, and they can use that as a very good lever. That is by coincidence a very good element.

Hugh Bayley

  203. We welcome very much your decision to sign up to a poverty focus, but can you tell us what AIDCO and your Directorate General are doing to evaluate the impact of that change in policy, and indeed to evaluate the overall effectiveness of your development assistance?
  (Mr Nielson) The first problem I think one has to address is the delay, which is the real problem. The stuff in the pipeline more or less has to be executed, to clean it up, to get to what we want to do. In this portfolio review on health we did last winter, we have to find out what are we doing. Everybody said we should do more on health, so we found out we had

1.7 billion committed, of which a little more than a year ago only something like 200 or 300 million had been implemented, dating back to not more than something like 1997 or 1996. There was a mountain of decisions in the health sector. So we are not small in health but the actual getting it done was the problem. Then I wanted to know what is in it. So we set out this big archaeological expedition into the archives and some of the stuff we saw was quite scary, because some of them said, "File not found" and things like that, or "No information available in RELEX." I will just mention two. One of them was 25 million health sector support in Bolivia, a real development case and our biggest South American partner. Nothing was known about it and nothing had been spent, zero spent, it was committed in 1997-98 and so far not one euro had been spent. I will come back to it. The other one was 10 million for Venezuela, also four years old, and nothing had happened. The first one actually turns out to be a regionally-focused health support programme in the Potosi region, and half of that 25 million is for sanitation, so modern sewage facilities, highly relevant in Potosi if you look at the tailings from the mining industry but also the whole situation. I was there in November so I got to know more about it for that reason. Something is materialising but it is extremely slow in the start-up phase, extremely slow, but it looks nice. The other one in Venezuela, 10 million, nothing happened, what is this? We had a closer look and it turns out to be sophisticated technical hospital equipment for a provincial capital, a new hospital, where nothing has happened because the Venezuelan side has not built the new building. That is something which should never have been decided; it is totally out of the scope of any poverty oriented development activity. That is why I say we also have a critical mess. But this is the legacy of saying yes and yes and yes to this and that manifestation, very politically driven in Latin America and other places by predecessors who each ran their own show. This is the big change, and I say this with full confidence: the staff everywhere are looking in the right direction. Many of us are embarrassed by what we have, we try to get it over with but for contractual reasons it is not that simple to tell Venezuela that the European Commission is going to default on what was signed. That is not so easy. This is why we have to swallow it and get it over with.

  204. You highlight with those two examples two problems. First of all, we need to be able to see what proportion of your spending goes in different subject areas, the DAC criteria, and we were disappointed, as I am sure you were, with your report last year. Can you tell us when you will be reporting rigorously to DAC criteria? You also highlight the need to look below the sectors and look at the effectiveness of the development outcome. Is it right that evaluation work should be carried out by the unit within EuropeAid? Is there not a possibility that it will become self-serving? How can you ensure that you have a thorough evaluation, where you would learn the sort of lessons you have learnt from these two archaeological excavations you have done?
  (Mr Nielson) Three questions and three answers—I will give one for each. On impact, we are seriously, and this is quite scary, working on the development and engineering of indicators. The expectations are very high because we have come from almost nothing, and we have promised we would do it, but the scary story is that when we start moving on this professionally, the reaction is a lot of curiosity and professional interest from other main players from DAC and others, expecting us, because it is a big organisation, they think, to come up with something new and interesting, because nobody has so far done really well. That is where we are. I told Parliament when I took office that this is what we have to be able to do. But the truth is that you do not have good, simple clear indicators which do the trick. Everybody is working on that but the statistics are so poor out there. I am warning on this but we want to do it. In Denmark, I did a small little pamphlet on how many kilometres of roads, how may kids go to school as a result of our interventions and so on, and it was an enormous job, but we managed to do it for one year and then we had the order of magnitude established—this type of road, that type of road, small, big and so on—but it was quite a job to do and we will have to find some other things to do next year. Everybody has for years been waiting for the DAC secretariat or others to produce it, so it is just to make you say to DFID, we are still in the market for expertise. That is one. On the sector and reporting back according to DAC criteria, this is on. A few weeks ago they started entering into the Common RELEX Information System—very nicely called CRIS—and from now on it is impossible to get any dossier moving in the decision-making process if it is not entered into this reporting system. So from now on, we are there, but we need an added effort on top of this to enter into this system 2001 and 2000, in order to be able to present something meaningful also for Parliament, which I have agreed to as part of the project. Now here it should be kept in mind that this is mainly driven by Parliament's wish to know this distribution globally but especially for the EDF money, which is outside parliamentary decision-making, because the European Development Fund it is not covered by the budget and it has several decision-making systems, so Parliament has no handle to do that. Of course, for that reason, they want to have this reporting so we have to do something. I support that but some Member States are against budgetising this, mainly Spain but not only Spain. We are getting there now on this sector distribution. In this effort I personally have been talking about the need for doing something that is better than what the OECD has. The DAC criteria and the matrix of reporting there has been grown over many years and is in fact not so simple. The retrieval value of it, to go across and cut out, is not so simple. For us it is a measure of going normal, going mainstream, so I announced it when I was questioned by Parliament in the first days of 1999, in August, "This is where we want to go", so that is the minimum. What we need is to be able to say, "How much of this activity, be it a programme or a project, is environmentally relevant? How much of it is the environment, how much is gender?" So what I would like to see is some sort of profiling. What we have done so far is to give the project a name, that is the categorisation. We need a profile, more or less like the bar code on the commodity in a supermarket, to give a sort of percentage, a rough (or less rough) estimate of the profile of this activity. That is something I would like to do.

  205. That will happen for future projects or—?
  (Mr Nielson) This is being studied. This is the Commissioner's crazy idea, but somebody has to be creative.

  206. What is the timescale for the development of crazy ideas?
  (Mr Nielson) Soon. On the third part of the evaluation: because of our staff constraints we are using external evaluation more than probably any other major development organisation. It is as simple as that. We are not satisfied, they are not all that good, they are all expensive but they cover themselves carefully because they need a customer next time round. They do not always communicate in clear language, whereas internal evaluations often come out more clearly because the problem of rocking the boat is smaller. This should not be over-interpreted, what I say here, but I do not see any clearly better solution of one model or another of where to put the evaluation. Our biggest weakness has been that the use of the feedback was almost non-existent. So, especially in the short-run, it is much more important to secure that we make new mistakes and not just repeat the old ones. The feedback reality, and having this put into the work, especially of the Quality Support Group when it screens and scrutinises the programme, that is fed into the implementation in AIDCO, is quite important. I think to have all the different phases of work, people all over the system, in delegations and elsewhere, seeing the evaluation as an integrated part of the learning process and participating in the whole cycle, makes good sense with a strong respected professionally good evaluation unit. Then we are not doing very much ourselves. We are in fact so small in this respect internally that we would like to beef it up to at least be able to do some evaluation ourselves, to show the consultants how we like it done.

  207. One final question was really sparked off by your response. You make a convincing case about doing more in-house because of consistency, because of an ability to be honest and not to grandstand. I think those are all convincing arguments, but possibly the evaluation operation ought to be located within your Directorate General rather than within the executive agency, partly because you put a little bit of distance between yourselves and the programme and partly because, your very final point, it is so important to learn the lessons and to feed back and adopt your policy, and policy is your direct responsibility.
  (Mr Nielson) True, but the weight and the impact, the intellectual impact, of the policy that emanates from here into the minds of people sitting in RELEX shows that there may be some additional work to do in the coming months. Where we need to learn things—I think it is a deception because we think in terms of what I like to call the co-operation cycle, I see errors starting in the programming phase, but we make a lot of magnificent errors down the road in the cycle, and maybe the delegations should have done things differently vis-a-vis the environment around them and so on. So where the feedback should hit hard and efficiently is not necessarily up-front in the total cycle. That is a very mathematical and engineering flow chart, and it is more blurred than that. The Quality Support Group is consisting of also both the upstream elements of people from Development and the broader policy thing, crossing-cutting the whole thing, and the upstream programming from RELEX and AIDCO implementation, and the evaluation unit is part of the Quality Support Group. Finally, the evaluation unit also evaluates the PHARE programme for accession countries and other activities which would be on the margin of development proper, is another reason why it is meaningful to have them somewhere in AIDCO.

  208. The important thing is what it does, not where it is.
  (Mr Nielson) It is my challenge to try to get my hands into the whole stuff.

Chairman

  209. The Country Strategy Papers are going to be of crucial importance, because for the first time there will be a public, transparent document relating to each country available on the website, and every one of our NGOs will be able to download it, look at it, and see what progress is being made, and presumably in each Country Strategy Paper the country concerned will have had to sign up to some concept of good governance.
  (Mr Nielson) Yes.

  210. If the countries concerned do not meet the good governance criteria, are we going to do as we have done with Zimbabwe—because we want to remain engaged with them we do not do very much at all—or is there going to be a point where if a country is not delivering on good governance and strategy we will withdraw the support?
  (Mr Nielson) The first phase of this is in the process of writing the Country Strategy Paper, because there we have a say, of course. The way we describe the political system is already quite important. Right now with India, some of the things we would like to express will have to be discussed at a certain stage, for instance, but this is with all of them. It is a meaningful meeting. As I said, after 11 September, we have to be careful to avoid a clash of civilisations, what we have to go for is to try to have a civilised meeting of cultures, and that is what we are trying to do in the writing of these Country Strategy Papers. Now for the ACP group we have a system for relating to these problems. For the rest, we have individual frameworks depending on the kind of formalised basis of the co-operation that we have. So with the wave now rolling across the total geography, leading us to new Country Strategy Papers globally, we have something which is still individual for the non-ACPs but which has some of the characteristics of the Cotonou Agreement in it. But the Cotonou Agreement is quite elaborate; the only thing on earth between north and south with such a contractual relationship in it. We do not use governance in the sense you asked. Governance is not one of the essential elements. I was the one who negotiated, and governance was used before as a sort of soft language, indirect word for corruption problems. I saw that as operationally bad and pedagogically weak, so I said, and got away with it, "Why don't we take out governance and describe it as a shared objective and link our capacity-building offer as part of our priorities in terms of what the state or what society should be able to provide, deliver and so on." Then we talked instead about corruption, using the one word for corruption which is closest to relating to the matter, namely "corruption", direct, on top of the table. That we now have. This is the new Article 97 which, for the first time, has been brought to use in the case of Liberia. The other stuff in 1996, which is now being strongly used and discussed for Zimbabwe, is what we used to have in this sense, and that relates to essential elements as the basis of the activity. They are, democratisation, human rights and these other things. There was never a reference to corruption before but we took it for granted. Most of the cases of stops of aid before were decided without using the system of the old Lomé. It is a recent thing that we have gone through, the formal motions of the process, as clearly as we are doing, and it is not easy, it is not that simple to do it meaningfully, and getting back, landing somewhere later, is not so simple. I warn against this as being an easy EC mechanism and the Member States are very eager and yelling at us to start using this instrument, because it always looks like something, but when it comes to actually conducting the dialogue, what we see is normally the permanent representative of the Presidency and one other sitting there and not doing very much.

Mr Robathan

  211. Could I follow on from that, because we have been discussing this both with the Trade Commissioner and over lunch. Let us take the case of Kenya, are you writing a Country Strategy Paper for Kenya? How is your dialogue going—I am delighted to hear you did talk about corruption—on corruption in Kenya?
  (Mr Nielson) It is a real problem.

  212. The detail is the test, if I might say so.
  (Mr Nielson) The most interesting story here, and there is a case to illustrate it, is that we were supporting the establishment of this Commission, they were then more or less trapped by some strange interpretation of the legality of them doing what the public prosecutor, according to their constitution, was supposed to do, but then why were they set up in the first place? They may have got too close and we had discussions with Dr Leakey. We had a road construction case where there was, not to make a bad joke, a leakage as part of the process of tendering, which looked bad, so we called off the tender totally and wanted it investigated. They agreed and the two sides started an investigation, and this was coinciding in time with this abolition of the special unit that was investigating corruption. It could be correct that this legal battle had been started before this balloon went up or it could not; that was not so clear. We do not feel we are a direct casualty of avoiding investigation, and it is not over in fact, the case is not dead yet. This was one and a half years ago. So we have not been passive and we have been looking after our interests, I would say. In a sense I feel it necessary to look at this pretty much like we look at the issue of democracy, where the name of the game is democratisation. It is the dynamics on the margin that interest us. We know it is corrupt out there, so it is whether we are moving in the right direction or the wrong direction, especially case by case. Of course, there is the big game and in fact you should read Article 97 because it is quite interesting. It is also about capacity-building from us, strengthening the police and the judiciary and so on. It is a shared endeavour between them and us to do something about corruption, plus specifying that in severe cases of corruption the hammer can fall and we can react, even if it is not only our money that is involved.

Chairman

  213. Commissioner, thank you very, very much for having given us so much of your time and having answered our questions so fully, which is much appreciated. I am sure these are all issues we are going to be returning to time and time again. You can rest assured we will certainly do our part in ways we can to try and ensure you get the largest possible budget. If there is anything we can do on the Cotonou Agreement—
  (Mr Nielson) You are now being more specific. You are not one of the guilty ones, you have done your work concerning ratificatoin. I should be clear on that. Unfortunately, I have good reason to fire the cannon, as I say, it is still only a few countries that have done it. Let me react by saying that I am very pleased by the very strong, political, professional interest you are investing in this. It is highly welcome. Maybe I would say that my biggest success in this job has been to see the value of being open and honest about what we are doing and what we are not doing and what we want to do and so on. It could have been quite different. By being open and working in the manner I want to, it could have been considered as so strange that I was outside the scope of things, but internally this has been welcomed with a great sigh of relief. People are much more direct. With our Member States, it is quite clear what is created is a very collegiate, good working relationship. So the risk of the drama of suspicion is not there. It is more a real, honest uncertainty as to whether we can do it but that is a totally different uncertainty than the other one. There DFID is very good in coming up with an expert here and an expert there in crucial areas and situations where we need a hand, and I look forward to reciprocate when we are strong enough to do it. A number of member countries are quite good at identifying where something could be useful. In the old days as a Danish Minister, I provided staff support for the capacity-building for the Commission on two issues—on gender for communications and on indigenous peoples. So this is not new but it goes on and the mood and the spirit is quite good. As I say, if it ain't fun, it ain't efficient, and it is a little more fun now than a few years ago.

  Chairman: Thank you.





 
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