Cohesion in international cooperation; response to the WRR report 'Less pretension, more ambition'

November 1, 2010 - nr.69
Summary

Summary

The AIV offers seven critical comments on the WRR report, and submits a number of its own recommendations. They are listed in order below.

Comment 1
The AIV is in favour of a broad interpretation of the term ‘development’, which apart from economic progress also does justice to the right to development, the political theories on human development, and the social dimension. We endorse the WRR’s broad approach, but wonder whether its conclusions do not implicitly fall back on economic growth as the definition of development.

The AIV makes the following recommendations:

  • Apart from national income, base policy on more recent theories of development, that go beyond income  growth, since the notion of development also includes both production growth and social, gender, political and ethical dimensions. Take account of the rights of future generations by devoting attention to sustainability.
  • Promote a clear definition of both the right to development and the human rights approach to development to achieve an integrated approach to human rights. Focus attention on the impact of the human rights approach on development (in the fields of politics, trade and aid).
  • Promote policy that aims for growth in conjunction with redistribution. Redistribution between and within countries can reduce poverty and encourage growth, especially if a social consensus has been reached on the socioeconomic policy lines to be pursued. It is a fallacy to believe that poverty reduction conflicts with economic development.
  • Apart from achievement of the individual MDGs, base an evaluation of the MDGs on both their contribution to poverty reduction, growth and redistribution and the extent to which they have contributed to greater policy coherence in developed countries and a broader development agenda.

Comment 2
The AIV calls for attention to the viewpoint of countries in the South, which is so essential
for ownership. We are in favour of continuing to use the term ‘international cooperation’
rather than ‘aid’.

The AIV makes the following recommendations:

  • As part of an ethics of intervention, quantify public bads and their impact on developing countries. In reports, highlight not only expenditure on and assessment of development cooperation, but also the consequences for the country concerned (and its least secure groups) of Dutch policy in such areas as trade, taxation, financialmarkets, agricultural and other subsidies, and climate.
  • To promote policy coherence, establish a global issues network in the Netherlands, geared to clearly defined global public goods, enabling research institutes and NGOs to combine their expertise.
  • Promote Dutch efforts to ensure that measures are taken in the short term to achieve good governance in international organisations such as the World Bank.

Comment 3
The AIV’s analysis of the problems relating to the 0.7% norm differs from the WRR’s. The solution is not abandonment of the norm, but multiyear expenditure and multiyear planning.

The AIV makes the following recommendations:

  • Maintain the 0.7% norm in the Netherlands; do not undermine the international norm.
  • Continue to justify the norm on the basis of calculations of current basic needs in developing countries. Explore the possible need for a – potentially higher – comprehensive norm, which also includes global public goods and innovative forms of development cooperation funding.
  • Introduce a multiyear budget linked to multiyear strategic country plans in order to prevent disbursement pressure, and continue to use the term international cooperation.

Comment 4
The AIV believes that lack of good governance in development cooperation does not imply that there is no need to develop the rule of law and democracy in the sense of a participatory political system to which equality before the law is central. In view of the new security paradigm (see below under fragile states), the Netherlands must remain actively involved in fragile states.

The AIV makes the following recommendations:

  • Continue to be involved in countries whose government does not function well. Focus development policy  precisely on this issue in order to prevent problems arising with security.
  • Continue to pursue an active policy on good governance as part of development policy. Ensure that participation of stakeholders is a focal point in formulating development policy.
  • Encourage attention in fragile states to coordination between the various actors, in particular between the military and NGOs and among all the ministries involved in Dutch peace operations (the whole of government approach).

Comment 5
The AIV is concerned about an overly Dutch, state-centred approach to international cooperation. Other actors are essential in development policy: the multilateral institutions, the business community and civil society organisations. The WRR report rightly stresses the need for a broader approach and criticises the fragmentation of international cooperation.

The AIV makes the following recommendations:

  • Review the system of grants frameworks for civil society actors, working towards an assessment framework that is based on a government vision of the role of civil society actors and that (a) provides opportunities for their permanent professionalisation, (b) provides scope for civil society actors to play various roles, each strengthening the other, (c) encourages civil society actors to do their part in protecting global public goods and using them more effectively (monitoring policy coherence at national, European and world level), (d) clarifies the conditions under which a Dutch government authority may or may not provide direct funding for southern civil society actors (and thus for Dutch civil society actors) and (e) clearly defines northern NGOs’ function as watchdogs (providing funding opportunities that enable them to influence policy while retaining their autonomy).
  • Recognise in policy that the role of the business community goes beyond corporate social responsibility and also entails making a positive contribution to facilitating local and national business in developing countries.
  • Ensure consistent policy geared to productive sectors and increased allocations instead of minor corrections to existing policy, in line with the AIV advisory report on ‘Private Sector Development and Poverty Reduction’.

Comment 6
The AIV has formulated additional recommendations on (a) gender (b) emergency aid and (c) migration and demographics. There is a need to recognise not only the increasing poverty among women but also their potential role in achieving sustainable solutions.
The AIV makes the following recommendations:

  • Base the analysis of broader coherence issues partly on sound gender analysis. Formulate a policy that can be assessed for its effects on improving the lives of women and facilitating the positive role they play in development.
  • Reaffirm the international consensus on achieving the MDGs, because this is substantially and politically essential; do so, however, in combination with the Millennium Declaration (2000) and the Beijing Declaration (1995).
  • Ensure that women play an equal part in decision-making at national, global and Dutch level: within multilateral, bilateral and civil society organisations, among Dutch diplomats working on international cooperation, and in working with fragile states and within peace missions.
  • Make emergency aid a publicly visible and important subject in international cooperation. Promote consistency with related policy fields.
  • Devote attention to South-South and rural-urban migration by focusing on a regional approach and urban poverty. Encourage flexible migration and flexible residence instead of pursuing a one-sided repatriation policy.
  • Integrate demographics into development policy. Promote development opportunities in countries with a demographic dividend.

Comment 7
Finally, the AIV is of the opinion that on the basis of the WRR’s analysis, other options may be considered besides its recommendations. For example, besides the proposal to transfer development activities to an NLAID organisation, there are other ways to implement policy that are less technocratic, yet preserve the achievements of the foreign policy review such as the integration of diplomacy and development cooperation.

The AIV makes the following recommendations:

  • Expand the portfolio of the Minister for Development Cooperation to include a globalisation agenda, with an integrated approach to development cooperation, coherence and international public goods.
  • Organise development policy to be more country-specific. Give regional departments budgetary responsibility, and restore the balance between job rotation and expertise and between the missions and the ministry.
  • Explain the ethics of Dutch intervention. Base it on ownership in developing countries, on policy criteria for the selection of countries and for distribution between and within multilateral, bilateral and civil channels, and on the relevance of various methods of measurement.
  • Always take the viewpoint of partners on board in taking decisions on the introduction of new policy, and show how they benefit by the proposed adjustments.
  • Devote particular attention to new development partners like China, Brazil and India, which are investing on an increasing scale in developing countries in order to gain access to raw materials and new markets and are less concerned about notions such as the rule of law and human rights.

The AIV notes in conclusion that there is a need for debate, based on the most recent research, on the meaning of the word development. The different worldviews underlying different concepts of development are decisive for the choices made in international cooperation.

Advice request

The advisory Council on International Affairs (AIV) prepared this advisory report on its own initiative.

Government reactions

GOVERNMENT RESPONSE TO THE WRR REPORT
LESS PRETENSION, MORE AMBITION

Main points

The Advisory Council on Government Policy (WRR) report entitled Less Pretension, More Ambition. Development policy in times of globalisation outlines a number of fundamental choices facing development cooperation policy. The government finds both the report and its recommendations very useful. As stated in the coalition agreement, the government is following the WRR’s advice regarding the implementation of fundamental changes, using the report as a guideline. The letter to the House of Representatives outlining development cooperation policy draws on some of the proposals from the report. This response will focus chiefly on the points not already covered in the letter. It also takes into consideration Cohesion in International Cooperation, the response of the Advisory Council on International Affairs (AIV) to the WRR report.

According to the WRR, the shift in motivation from moral conviction to business interest means that the development task is increasingly ‘inevitable’. The government shares this view. Development cooperation has an important role to play in tackling major global issues that face the Netherlands too, such as security and stability, climate change, food and energy scarcity and cross-border crime. Geopolitical considerations play a role, and affect the Netherlands’ strategic interests. The Netherlands is also party to international treaties and agreements that aim to give many more people access to global prosperity and to reduce global poverty. The government remains committed to these endeavours.

There is a clear relationship between stability, the legal order and increased prosperity, the central themes of Dutch foreign policy. Stability demands clear, reliable rules. The more these rules apply and are accessible to everyone within any given society, the more stable that society can become and the more open it will be to outsiders. Interaction with outsiders, sharing knowledge and experience with them, enables prosperity to grow. Without legal certainty and political stability markets cannot develop, economic activity will grind to a halt and development will stall. In a world that is shrinking, as the WRR notes, disparities become more stark, pressure on social and economic cohesion increases, problems become more complex and the effects of crises are felt more quickly and more intensively and by more countries, people and businesses. So development is indeed in everyone’s interests.

At the same time, the WRR also says that development cooperation – or development aid as it prefers to call it – must have an effect. The government wants to be realistic about this which is why, as the WRR recommends, clear choices are being made: a shift from social to economic sectors and from aid to investment, a greater emphasis on self-reliance, concentrating on fewer themes and partner countries, and better alignment with Dutch knowledge and expertise and common interests. These choices should also lead to a closer connection with the Dutch public, and thus strengthen support.

The government agrees that, in the medium term, traditional bilateral aid will become redundant for at least some existing partner countries. A recent publication by Steve Radelet1 focuses on 17 countries in sub-Saharan Africa that have experienced annual economic growth of more than 5% for the last 15 years. The development process in these countries already requires something other than traditional aid. This ties in closely with the WRR’s call for more development-oriented aid. Partnerships with the business community, such as the Sustainable Trade Initiative and innovative programmes such as the Health Insurance Fund are good examples. The government will expand this form of cooperation. The same applies to other innovative forms of cooperation and funding, such as the Global Alliance for Vaccines and Immunisation, and, in the framework of security and stability, the 3D approach.

At the same time there are concerns about a considerable number of countries that lag behind, particularly those affected by conflict. This is why the government explicitly opted for the theme of security and the rule of law in fragile states, which is a priority both globally and in the context of the MDGs. The same concerns also prompted the government to maintain the MDGs as the basis of policy. After all, the millennium development goals constitute an important framework of political agreements for mobilising international development efforts. A major priority in this respect is sexual and reproductive health and rights, including maternal mortality and HIV/AIDS. It is also important to factor in environmental and sustainability considerations. The same applies to a broader focus on gender.

The WRR warns that too little thought has gone into whether and when aid should be given, and its actual effect on recipient countries. This includes macroeconomic effects such as rising exchange rates as well as aid dependency, the absence of incentives to collect taxes and local governments’ poor accountability mechanisms towards their own people.

Aid that brings too few structural changes runs the risk of creating unwanted dependency relationships. This, in practice, is the dilemma. The government – like the WRR – believes that the pros and cons should be considered more explicitly. That will give a better insight into the positive – and potentially negative – effects of development efforts. Well intentioned cooperation should not lead to undesirable dependency relationships, or prevent vital changes from taking place. The WRR also calls for a broader perspective in development policy. In the letter to the House of Representatives outlining development policy, the government identified a number of priorities, which emphatically reflect the need for development cooperation to be more closely linked to global issues.

Finally, the WRR also made a number of recommendations on the organisation of Dutch development cooperation. The government has decided to address fragmentation by opting for fewer themes and fewer partner countries. The objective is to use available resources more effectively, gain greater experience and increase our knowledge of the specific context of our partner countries. It is still too early to determine how focus and specialisation can best be translated into professionalisation. The government is aware that the strength of development cooperation also lies in integrated policy implementation.

The WRR says that the Ministry of Foreign Affairs’ personnel policy is insufficiently focused on specialisation and stimulating expertise. As a result, the organisation of development cooperation is not professional enough. The Ministry of Foreign Affairs is working hard to invest more specifically in building, sharing and applying knowledge. Personnel policy will allow greater scope for building knowledge and experience. The government recognises that more improvements are required, but does not believe that the only solution would be to set up a separate unit within or outside the current organisation.

In its report the WRR gives only scant consideration to multilateral cooperation and the roles that organisations like the EU, the World Bank and the UN could play. The World Bank brings major added value as a global expertise centre for development issues. The WRR is right to point to the threat of blueprint thinking. Rather than creating a European counterpart, the government prefers to cooperate with knowledge institutions on development issues in a variety of ways. In the letter to the House of Representatives outlining development policy the government stated that it saw multilateral institutions as important negotiation platforms for tackling global problems. These institutions can also play a part in efficient implementation. As regards the European Union, the government is continuing to seek a better division of labour and closer cooperation between donors. In this connection the government will shortly be consulting with several likeminded donors on a more far-reaching division of labour, with a view to reducing the number of partner countries.

The report also gives little consideration to cooperation with NGOs. The government believes that NGOs make a vital contribution to the development process, precisely because they are often better placed than governments to reach vulnerable groups. They can perform this role with more legitimacy if they strengthen their ties with society, a logical consequence of which is less government funding. In the coming period the government will enter into dialogue with civil society on this matter. The previous government asked the Social and Economic Council (SER) to advise it on the role employers’ organisations and trade unions can play in encouraging social dialogue in developing countries. The SER’s Committee for International Social and Economic Affairs is currently working on the matter. Its recommendations should help us in our efforts to achieve a greater impact on development through economic growth.

More development-oriented aid

The WRR calls for a break with the primacy of poverty reduction. Instead, development cooperation should be geared to countries’ self-sufficiency and to safeguarding global public goods. According to the WRR, the focus on poverty reduction and investing in social sectors is not delivering the social changes needed.

The relationship between self-sufficiency and poverty reduction is complex. The government endorses the OECD/DAC’s definition which sees poverty as being much broader than insufficient income alone. After all, at individual country level, it is at one time the security situation that may form the most serious obstacle to development, while at another it is the economic, social, cultural and/or political circumstances. And because of that complexity, external solutions are not enough.

The WRR also calls for country-specific needs to be put first. The government will be following that advice and will be working even harder than before to help countries reduce poverty themselves. Quite apart from specific needs, we also need to consider how best to meet them sustainably. The government agrees with the WRR that sustainable economic growth and rural development are vital if partner countries are to ultimately finance social investments themselves. However, in the government’s opinion the WRR is too quick to dismiss investments in social development. Each euro invested in education and health yields a high return, particularly for women and girls. However, the government does believe that focusing on the productive sector should play a greater role in development policy. That is partly why the letter outlining development policy proposes severe cutbacks to social spending. For the record,, spending on the social sector does not amount to 75% of the budget, as stated in the WRR report. Direct investments in social sectors account for about 30%; in addition approximately the same percentage is attributed to social policy from, for example, general budget support.

Aid must be more specific

The WRR points out that each country’s development is unique. So a thorough knowledge of each country is needed if we are to intervene effectively. The WRR calls for country-specific needs to be given priority. The WRR is right. The previous government divided partner countries into three profiles, each with its own policy approach. A multiyear plan will be drawn up and published for each partner country, with a specific strategy for interventions based on thorough analyses of its economy, politics and government. These analyses will need to be fine-tuned in, and by, the partner countries themselves, in partnership with donors. The government will raise this issue within the EU and at Busan; after all, there is no point in every donor drawing up their own country analyses.

The WRR also wonders whether the number of partner countries is not an obstacle to providing an adequate response to country-specific circumstances. Knowledge plays a role here, as does having the resources to achieve sufficient impact. The government drew its conclusions in its letter outlining development policy: the number of partner countries will be reduced radically.

The WRR advises the Netherlands to limit itself to areas to which it can bring added value. This is also reflected in the letter, where we pledge to focus on food security and water. This is not about supply-driven aid. In the government’s view, the aid provided by the Netherlands should be more closely attuned to demand from our partner countries. Partnerships should be determined by the added value the Netherlands can bring, rather than by the resources available. The government’s answer to the WRR’s advice is to ensure that Dutch strengths meet the actual development needs of the country in question.

The government endorses the importance of strengthening the economy. The WRR notes that the objective of development aid is not to benefit Dutch business. The government agrees. Direct support for the business community for the benefit of development cooperation could distort the market. This does not, of course, mean that Dutch interests should play no role at all in development cooperation, as demonstrated by the priority themes established by the government in the letter outlining development policy. Moreover, the government will continue to encourage public-private partnerships, also when it comes to providing services in developing countries. We will continue to focus on increasing the development impact of the financial and other instruments that target the business community. Expertise centres and the business community can also contribute to development through their expertise, knowledge of markets, networks and products and services.

A high-quality contribution also requires a willingness to invest in knowledge. The WRR believes that the Netherlands falls seriously short in this respect, with too little investment in research. The government accepts that more specialist knowledge of development cooperation is required. The Advisory Council for Science and Technology Policy (AWT) has published an interesting report on this subject.2 The government will further develop knowledge policy together with expertise centres, the business community and NGOs, on the basis of the AWT’s report. Twelve organisations have already asked for a feasibility study on a new knowledge initiative on civil society building and the role of civil society organisations in this. The government will enter into talks with these and other organisations to examine how knowledge policy can be made more cohesive and easier to implement. However, the government does not believe that a new input objective is advisable – the WRR suggested earmarking 6% of the ODA budget for knowledge and research.

The WRR states that the burden of accountability has overshot the mark. At the same time it says that the results of development cooperation are not sufficiently transparent. In line with its desire to achieve more effective aid, the government will therefore strive to link accountability more closely to learning. In late 2011 the Fourth High-Level Forum on Aid Effectiveness will be held in Busan. One of the main themes will be the extent to which partners and donors have made real changes that will make aid more effective. The government is also seeking to render account with greater clarity and transparency. The project on this subject launched with the Netherlands Court of Audit in 2010 will be continued.

Development cooperation needs to be broader

The WRR notes that international public goods are becoming an increasingly important reference point for international policy. The government agrees. We need to make choices here, too, because new mottoes can easily lead to proliferation of policy. Far from all major global issues need tackling at global level. National and regional solutions will, in many cases, be preferable. The main issue is how local, national, regional and global problems interrelate, and the role the Netherlands wants to play.

The WRR recommends developing a Dutch globalisation strategy, over and above the policy area of development cooperation. When the budget was debated in parliament in December 2010 a motion submitted by Kathleen Ferrier, member for the Christian Democratic Alliance (CDA), was passed, with reference to this recommendation.3 The motion calls on the government to shape coherence for sustainable development on the basis of a global vision. The government will comply with this. Two matters are involved. Firstly, we need to identify a number of important global challenges which, from the perspective of both the Netherlands and developing countries, can be tackled much more vigorously. Examples include raw materials and energy scarcity, transboundary diseases, climate change, cross-border crime, and the need to reach international trade agreements. We need to develop a relevant policy agenda in consultation with all parties involved, and the government will take steps to do so. Secondly, we need to consider the government’s policy in areas other than development cooperation, which may be undermining our efforts. Coherence for development will form part of our new policy agenda for globalisation. The results will be made more visible in our reports.

The WRR notes that a decisive international response to the challenges these global issues pose will require the mobilisation of very extensive funds. The government endorses this. However, where official funds are concerned, this does not always mean development aid. It would be a good idea to make this clear at some point by compiling a specific summary of expenditure on international public goods in the central government budget and in the financial reports of institutions such as the OECD. This would also be a good way of demonstrating international cohesion between different funding flows.

______________________

Steve Radelet, Emerging Africa, Centre for Global Development, Washington, 2010.
AWT, Knowledge without frontiers – knowledge and innovation in a global context, advisory report 74, January 2010. This advisory report on the role of knowledge in poverty reduction and sustainable development states that global challenges should be a leitmotif when putting research on the agenda and encouraging innovation according to programme; that the focus should be primarily on contributions from economic and social key areas; and that knowledge institutes should be encouraged to take up these global challenges in cooperation with partners in developing countries.
Parliamentary Paper 32 500V-35, 2010-2011 session.
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