VII. DEVELOPMENT PARTNERSHIPS AND BURDEN-SHARING
Development Partnerships: From Rhetoric to Reality
- The much-trumpeted shift from donors imposing conditionality on developing countries, to the practice of policy dialogue is part of what the Chancellor referred to as a change in the "international atmosphere", and an increased emphasis being given to shared responsibilities and balanced partnerships. The suggestion that international development ought to be about partnership is far from new, dating back to at least the Pearson Commission's Report of 1969 on Partners in Development which proposed the 0.7 percent ODA target. However, the idea of partnership has been re-invigorated, particularly since the OECD/DAC report of 1996 on Shaping the 21st Century.
- At the beginning of the twenty-first century, partnershipsor at least talk of partnershipare everywhere in international development, in the eighth of the MDGs ("Building a global partnership for development"), in the Monterrey Consensus, in the concept of global-burden sharing, in WSSD Type II outcomes, in the USA's Compact for Development, in the New Partnership for Africa's Development, in PRSPs, and in DFID's Partnership Programme Agreements with the major UK NGOs. What matters though, is the practice of international development, rather than the rhetoric. As ODI put it in evidence, "Partnership is a much-used word in development cooperation. It can sometimes offer little more than a fig-leaf to hide covert conditionality, with accountability working one way, from the recipient to the donor. At its best, however, partnership really does offer a new way of doing business: genuine debate about policy, clear commitments on both sides, good procedures for independent review, and the possibility of redress if things go wrong".
- Fundamentally, partnerships are agreements between two or more parties to work together in pursuit of shared goals. They are entered into voluntarily by participants, on the basis of overlapping objectives, and often, shared perceptions, and entail a commitment to work together, and to make decisions together, until the objectives are achieved. Effective partnerships make clear the rights and obligationsincluding the expected roles and contributionsof all the partners, and may well codify such agreements in the form of rules, codes and standards.
- Indeed, the first three building blocks of the Chancellor's proposed Global New Deal concern rules of the game, codes, and standards, in relation to finance, investment and trade, with only the fourth building block concerning resource transfers. Effective partnerships will alsoin addition to being conducted transparentlyinclude mechanisms for monitoring, preferably independent monitoring. The first purpose of monitoring is to check on participants' performance of their assigned roles and compliance with the rules; the second purpose is to evaluate progress towards the objectives so as to facilitate joint-learning. The final feature of effective partnerships is some sanctioning mechanism to punish a partner who fails to comply with the pre-agreed terms of the partnership, no matter whether the partner in question is powerful or relatively powerless. Workable mechanisms for coordinating joint actions exist in many spheres of social life; they would surely be of benefit in the sphere of international development. As ODI argued: "if you are a couple of plumbers working together and one of you lets the other down, there is a contract. You have a partnership agreement and, if the worst comes to the worst, you go to court. If an OECD donor lets Ghana down there is absolutely nothing Ghana can do about it except to feel cross".
- In the real-world of international politics, national interests, distrust, misunderstanding, and massive inequalities of power and resources, the construction of effective partnerships is a huge challenge. If asymmetries of power are not to undermine partnerships, all participants must be accountable for their actions. In addition, safeguards must exist to protect the relatively powerless, and efforts must also be made to build the capacity of weaker partners, empowering them to play a fuller role in the development partnership. We are glad that DFID understands the importance of making partnerships more equal, as illustrated for instance in its efforts to build the negotiating and legal capacities of developing countries in the trade sphere.
- Whilst the construction of development partnerships is a challenge, many organisations have taken up the challenge. Development partnerships, or incipient development partnerships, have been established at a variety of scales from local and project-based agreements, through national PRSPs, regional and continental partnerships, to the global new deal. Some of these partnerships employ mechanisms of mutual accountability, ranging from loose peer reviews to formal contractual arrangements. Global partnerships set the context for more local partnerships, in some cases providing resources and capacity-building assistance to make local partnerships work; the objectives enshrined in global partnerships will only be achieved if local partnerships can be made effective. This interplay between global and local partnerships is expressed in the tension between externally-imposed conditionalities, developed from global models and agreements about the conditions of aid effectiveness, and the need for local ownership of development strategies.
- At country level PRSPs are the key mechanism through which the international community hopes to make progress towards the MDG targets. PRSPs are intended to provide a better balance between local ownership and externally-imposed conditionalities, but, as we heard during the course of our recent inquiry into European development assistance, and as the IMF and World Bank acknowledge, there is much room for improvement. In particular, there needs to be more transparency, more room for country ownership, and more debate, including parliamentary debate about priorities, and parliamentary scrutiny of spending. In addition, as WDM pointed out in their evidence, if PRSPs are to be truly locally owned, the participation of in-country civil society, able to hold its government to account, is crucial.
- The PRSP process is full of promise, but if it is to deliver on poverty reduction, greater priority will have to be given to local ownership. As the Chancellor put it: "I think the key is how successful the Poverty Reduction Strategies are going to be in the future, because, in theory, these are country-owned, indeed, they are not just country-owned but they are civil society and community-owned, and obviously they have not been going for a great deal of time, but we believe that that is the key to future success. And I think there is some evidence that they give that sense of ownership, and there is some evidence also that they are working". We intend to keep a close eye on developments in the PRSP framework, and on the implementation of PRSPs on the ground.
- Rwanda provides a second instance of partnership at a local scale; the shared objectives, long term commitment, and independent monitoring. Clare Short recounted the story to us, explaining:
"So we got involved, trying to get others in, who would not go to Rwanda, because it was difficult politically, to commit aid resources over time, to get the Bank and the Fund to have a slightly more ambitious programme for the country. And this route led us to a memorandum of understanding, the UK with Rwanda, committing long term our resources, behind a reform agenda, in a high risk environment, and Rwanda tends to be very scarred by its history and not trust anyone very much. So we agreed that the Rwandan Government would commit to reforms, we would commit to deliver, and there would be an independent monitoring of how we both kept to our commitments. And that has been seen as a model, in some parts of the world. It really has helped move Rwanda forward."
- On a larger scale there is the New Partnership for Africa's Development (NEPAD). NEPAD will, as part of its accountability mechanisms, make provision both for peer review of African countries' adherence to agreed standards of good governance, and, for African countries to review the practices of donor countries. The intended objective of the peer review process is to encourage mutual learning, monitor progress towards agreed goals, apply peer pressure on governments to adhere to agreed standards and benchmarks, and to disseminate good practice. Of longer pedigree, there is the Cotonou Agreementformerly Lomé Conventionwhich governs relationships between the European Union and its African, Caribbean and Pacific (ACP) partners. The Cotonou Agreement is perhaps the most contractual of international development partnerships, including joint parliamentary assemblies and arbitrators, and legally enforceable reciprocal agreements. In their evidence, ODI suggested the Cotonou Agreement as a possible model of partnership, explaining that:
"The Cotonou Agreement between the EU and 77 ACP countries covers aid, trade and the political relationship. It is governed by a joint Council of Ministers on which all parties sit. If the provisions of the Agreement are broken, with respect to human rights, democratic principles, or the rule of law, then 'appropriate measures' may be taken, including suspension. The joint Council of Ministers acts as a court of appeal, but independent arbitration is also available. This framework has yet to be tested fully, but it has real potential and should be extended to make EU countries more accountable".
The Cotonou Agreement certainly has its critics, with serious questions being asked about the nature of the partnerships between powerful aid-wielding EU countries and their ACP partners, and about the balance between local ownership and imposed conditionalities, but as Poul Nielson, the EU's Development Commissioner, put it when we visited Brussels in February, the Cotonou Agreement is "the only thing on earth between north and south with such a contractual relationship in it".
- Partnerships are not a panacea for international development, but they do offer a way forward. The Committee is keen to play its role in the construction of a global partnership for development. Indeed we believe that parliaments and parliamentariansin the developed world, the developing world, and in collaboration with each otherhave important roles to play in helping to ensure that development partners live up to their promises, and that global partnerships are translated into national and local legislation and local action. We urge DFID, along with networks such the Commonwealth Parliamentary Association, the Inter-Parliamentary Union, and the Parliamentary Network on the World Bank to help build the capacity of developing countries' parliaments to play their role in scrutinising decision-making and spending on their side of the emerging global development partnership.
Burden-Sharing and the Role of the USA
- In our view, global partnerships for development must include the USA. Without the USA's active participation, the MDG targets will not be reached. If the USA does not share the burden of financing, the US$50 billion extra per year required to finance the achievement of the MDG targets will not be raised. We warmly welcome therefore, the USA's renewed commitment to international development, signalled by the 50 percent increase in ODA announced by President Bush shortly before the Monterrey Summit. We heard in evidence that the USA was a determined negotiator in the run up to Monterrey, objecting to mentions of the 0.7 percent target and the MDGs in the Monterrey Consensus, and seeking to dilute and exclude the more radical proposals put forward in the Zedillo Report. We have also heard the USA's explanations: the USA never agreed to what it sees as the now-outdated the 0.7 percent target; the USA regards effectiveness rather than volumes of ODA as most important; the USA is the greatest source of private capital to developing countries; the USA leads the world in charitable donations to developing countries; and, the USA, whilst signing up to the Millennium Declaration, had not endorsed the subsequent road map of targets, indicators and deadlines.
- Given this background, the aid increases announced by the USA were an extremely welcome surprise. However, it must be remembered that even after the increases in aid come fully on stream in 2006, ODA provided by the USA will still amount to only 0.15 percent of its national income. The US Government is not generous with its aid. As Jenny Ross of BOND reminded us, "For the US, the extra annual spending of $11 billion required to meet the 0.7 percent target represents around a quarter of the increase in military spending scheduled for 2003 and announced after 11 September, and a seventh of the tax cuts for the period 2002-2014". Persuading the USA to engage seriously with international development issues, to support rather than undermine an emerging multilateralism, and to share the burden of financing development, remains a challenge.
- The announced aid increases are a key component of President Bush's new Compact for Development, a compact which is described as a shared effort between developed and developing nations to stop the cycle of poverty in the developing world. The Compact for Development is to be a "new partnership between the United States and those governments in developing countries that have made and are demonstrating a commitment to domestic reforms that are necessary for sustained growth". A second component of the Compact is the Millennium Challenge Account, the structures through which the new funds will be disbursed. In this results-oriented approach, developing countries which wish to gain access to funds will have to show that they are implementing sound policies that promote growth, development and also poverty reduction.
- The underlying philosophy which apparently guides this highly selective approach to allocating and targeting aid is that "we want to do the greatest good for the greatest number of people". To access funds, developing countries will have to demonstrate commitment to: firstly, good governance, including measures to root out corruption, uphold human rights, and adherence to the rule of law; secondly, its people, by investing in their health and education; and, thirdly, sound economic policies, including open markets, sustainable budget policies, and the fostering of enterprise and entrepreneurship.
- In a spirit of openness, the USA has been keen to solicit external comments on its proposed Millennium Challenge Accounts to inform its design of the new mechanisms. We hope that the USA will continue to consult widely and that our comments, and subsequent discussions, will assist in the debate about how best to contribute to the generation of a global partnership for development. As discussed above (see paragraph 76), we too believe that the effectiveness of aid should be maximised through careful and sensible allocations, and we believe that President Bush's initiative is proposed in good faith as a serious effort to renew American engagement with international development issues.
- However, we do have some concerns about the Millennium Challenge Accounts, particularly about the sort of partnership that they and the USA's Compact for Development represent:
- We believe that rather than setting up a separate mechanismthe Millennium Challenge Accountsit would be better if the USA were to move in the direction of harmonising the delivery of its aid with other major donors. Ideally, we would like to see the USA pooling its funds with those of other donors, supporting the PRSP approach, and, where prudent, providing direct budget support.
- We trust that the primary objective of the Millennium Challenge Accounts will be poverty reduction and elimination, and that assessments of countries' performance, and allocation decisions, will be driven by this objective, and by evidence-based models of development and of how aid works. The USA should make explicit the criteria which govern the allocation of Millennium Challenge Account funds, and desist from imposing additional restrictions on its aid. We are particularly concerned about the consequences for reproductive health services of the restoration of the "Mexico City Policy" which demands that NGOs in receipt of US aid must not perform abortions or promote abortion services.
- We trust that the allocation criteria will be applied flexibly and sensitively, taking account of individual countries' circumstances. We are particularly concerned that if the allocation criteria are applied too strictly the result may be that more money goes to Latin America at the expense of poorly-governed and conflict-ridden countries in sub-Saharan Africa. We are glad that at the recent G8 summit it was announced that 50 percent of the ODA increases announced previously at Monterrey will be earmarked for sub-Saharan Africa.
- We hope that the USA will recognise that development strategies need to be locally owned if they are to be successful, and will take account of this when it assesses countries' commitments to good governance and sound economic policies, and attaches conditions to its aid.
- We recognise the importance of engaging with the USA, as regards the Millennium Challenge Accounts, and in relation to its development-related activities in general. As Clare Short put it: "you cannot not engage with the world's biggest economy and the world's only great power". DFID should seek to influence the establishment of the USA's Millennium Challenge Accounts to ensure that they are informed by up to date development thinking, focussed on poverty reduction, and do not neglect poor and poorly-governed countries, for instance in sub-Saharan Africa. For our part, we intend, in the next session of Parliament, to engage further with parliamentarians and staff of the international financial institutions in Washington, D.C.
146 Q121 Back
147 Shaping the 21st Century: The contribution of development cooperation, OECD/DAC, May 1996. Back
148 Not printed-see http://www.odi.org.uk/opinions/3_aid_architecture.pdf Back
149 Tackling poverty: A global new deal-A modern Marshall plan for the developing world, HM Treasury, February 2002. See footnote 13 for web-site. Back
150 Q64 Back
151 See http://www.worldbank.org/poverty/strategies/review/earlyexp.pdf for the World Bank's review of the PRSP process. Back
152 Ev 112, para 13 Back
153 Q118 Back
154 Q121 Back
155 Not printed-see http://www.odi.org.uk/opinions/3_aid_architecture.pdf Back
156 See, for instance, Reality of Aid, 2002, pp.131-134. Back
157 Q210 of evidence given to the Committee in relation to its recent inquiry into the effectiveness of the reforms of European development assistance. See Second Report from the International Development Committee, Session 2001--2002, The effectiveness of the reforms of European development assistance, HC417. Back
158 Q4 Back
159 Ev 7 Back
160 Ev 26 Back
161 Q22 Back
162 Ev 27 Back
163 Ev 28 Back
164 Ibid. Back
165 Q115 Back