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Edge of Chaos By Dambisa Moyo

10. Mai 2018 - 21:23

Edge of Chaos

By Dambisa Moyo

 

 

Dambisa Moyo’s Dead Aid was controversial, or ‘Dead Wrong’ as many argued: see heavyweight reviews by Kevin Watkins, Owen Barder and Madeleine Bunting, or the Hard Talk debate between Moyo and Alison Evans. Duncan Green commented himself and also rounded up sceptical African voices. Moyo’s new book, Edge of Chaos, is likely to ruffle even more feathers.

Ostensibly, this is a book about reforming democracy, with a ten point programme of slightly bonkers suggestions, like insisting that voters pass a civics exam before being allowed to vote, or giving extra weight to selected voters ‘based on their professional standing or qualifications’.

Before we get to that point, in Chapter 7, Moyo makes the case for political reform. The argument rests on three legs, each of which has shaky foundations. First, Moyo rhapsodises about growth, in a chapter called ‘The Imperative is Growth’. Second, she extols untrammelled globalisation. Third, she denigrates all forms of Government other than liberal democracy. The ten point programme of reform is needed, she says, because liberal democracy has failed to embed full-blooded globalisation and deliver sustained growth.

We might argue about whether people of high professional standing, like members of the Masons or the Rotary Club, should have votes more heavily weighted than others, or whether people with a 25m swimming badge should be offered a red carpet at the polling station; but it is not possible even to open that conversation without a measure of agreement on what problem exactly political reform is designed to solve.

So, growth. Moyo argues that ‘Growth is imperative for fulfilling human demands and improving lives. Economically, growth promises to reduce poverty and raise living standards; politically, growth is the sine qua non for free markets, free people, and the rule of law; individually, growth is essential to allowing people to maximise their potential’. ‘Quite clearly’, she says, ‘economic growth is utterly vital to the survival, success and stability of a nation’. It is a problem that growth is ‘flatlining, and lower for longer’, with emerging economies averaging only 3% p.a. rather than the 7% needed to double per capita incomes from one generation to the next. And it is not just any old problem: ’Creating and maintaining economic growth are the defining challenges of our time’.

There is discussion in the book of the drivers of growth, categorized under the headings of capital, labour and productivity. And there is a chapter on the seven hurricane-force headwinds that are said to constrain the prospects for growth. These are: poorly managed debt; natural resource scarcity; misallocation of capital; the declining quantity and quality of the global workforce; growing inequality; the impact of technical change on jobs; and slow growth of productivity.

Hang onto that list, because it provides a framework for judging the next step of the argument, on globalisation. Perhaps add some other factors: unfair terms of trade, or tax evasion, or the arms trade, or monopsony, or oligopoly . . .  Look also, which Moyo does not, at the impact of colonialism on the long-term capability and growth of countries like India. She cites Niall Ferguson, a defender of empire, but for a contrary view, try Shashi Taroor on the Inglorious Empire.

In addition, look carefully at the section on natural resource scarcity, in particular, and ask whether the analysis is consistent with Moyo’s enthusiasm for growth. You might think not. Moyo says that ‘the combination of greater global demand and a shrinking supply of commodities poses a dire threat to global economic growth. Ultimately . . . a world of depleting natural resources cannot support long-term economic growth’. Indeed, Moyo runs through a list of scarce resources (water, land, energy, minerals), bemoans population increase, and worries about resource use by cities. She acknowledges that ‘according to many environmentalists, economic growth is degrading the planet’. And the answer? Well, there are compelling (unspecified) arguments for ‘green growth’, but the debate between environmentalists and economists ‘still rages’.

There are no further references in the book to green growth. I checked the references to climate change. There are only three, simply name-checking the problem without any discussion. The neglect can charitably be described as a missed opportunity. Moyo might have started with the World Bank policy paper on inclusive green growth, from 2012 (read my review here), or browsed more recent material from the OECD or on the website of the Green Growth Knowledge Platform. She might have looked at the wider literature on climate change, including on adaptation: see, for example, the book by CDKN on mainstreaming climate compatible development. Key topics include the regulatory regime, greening finance, and the sequencing and coordination of policy interventions; managing the politics is also a recurrent theme.

More generally, it is astonishing that Moyo does not explore the debate about the long-term sustainability of growth. Where is Tim Jackson, Prosperity Without Growth?  Or Kate Raworth’s Doughnut Ecopnomics, sceptical about growth, and pleading for a regenerative economy? Or, though published after Moyo went to press, Jason Hickel in The Divide, arguing for ‘degrowth’ as a paradigm for the future. I have personally been sceptical about a zero growth prescription, especially for poor countries; and have argued that progressive politics needs a ‘narrative of accumulation’. But finding an environmentally and socially sustainable approach to global growth is a much better ‘defining challenge for our time’ than just ‘growth’.

Is globalisation the answer? According to Moyo, it seems so. Chapter 4 is headed ‘The False Promise of Protectionism’. She contrasts a world of no globalisation with one of full globalisation, ‘characterised by unfettered movement of goods, services, capital, and people’. Most countries live in a mish-mash middle ground, the product of zero-sum thinking and a short term mentality. Worse, attempts to roll back globalisation, often in response to the legitimate concern of those left behind, threaten longer-term economic prospects. Protection, she says, ‘causes economic weakness, costs jobs, and slows economic growth’. In fact, people ‘think they are objecting to globalisation when in fact they are objecting to an incomplete and impure form of globalisation’. Impure globalisation, ‘globalisation lite’, especially in relation to trade, capital movement and migration, ‘sets in motion a global economic death spiral’.

Well, yes, up to a point. Protection can indeed harm the poor, as the recent IFPRI Global Food Policy Report has demonstrated in the case of agriculture and food security: this is consistent with Dambisa Moyo’s analysis. But then ask whether her enthusiasm for the Washington Consensus is widely shared, even these days in Washington; and also check the prescriptions against the seven headwinds. There is nothing in a package of liberalisation and structural adjustment that guarantees innovation, equity, social justice or participation – let alone fair trade or action on global or national market failure. I checked the text: no references to Stiglitz or Ocampo, or Hausmann or Ha Joon Chang or Mariana Mazucatto. Let’s not labour the point.

The third leg of the argument is that liberal democracy is the only route to growth.  This is Chapter 5. The purpose is to counter the claim that China has found an alternative path, descried by Moyo as ‘authoritarian state capitalism’. She says that ‘while this economic and political model holds tantalizing promise in the short term, it places the world on a dangerous path in the longer term . . . (and) is decidedly inferior to Western liberal ideology, liberal democracy and market capitalism’. Why is this? Or, to ask the question another way, citing Moyo’s own examples, and paraphrasing Monty Python, ‘what have the Chinese ever done for us’? Taken 300 million people out of poverty? Of course, but apart from taking 300 million people out of poverty? Built infrastructure? Well yes, but apart from taking 300 million people out of poverty and building infrastructure? Provided health and education? Yes, but apart from taking 300 million people out of poverty, building infrastructure and providing health and education? And so on, including with respect to China’s many activities in Africa . . .

Moyo’s problem with China is rooted in a general scepticism about the burgeoning role and size of Government, which, she says, should limit itself to three functions and focus on carrying these out effectively. The three are: provision of public goods (including national security, health and infrastructure); enforcing and regulating laws; and acting as financier of last resort at times of financial crisis. Then she asserts that ‘any shift toward an expanding role for the state in an economy poses a risk to government effectiveness and ultimately the prospects for economic growth’. China appears to be tarred with this brush.

Specifically, Moyo thinks that ‘the Chinese model has its limitations and is not necessarily replicable’.  Its state-centric system leads to structural inefficiencies, supply and demand imbalances, inflation, the crowding out of private sector investment, higher costs of doing business, debt, a property bubble, pollution, and possibly corruption.

China watchers may wish to unpack this argument, wonder why no data are provided, and examine the success or otherwise with which China is managing its various problems. The evidence is that China has become a global leader in renewable energy, for example, contributing to a cleaner environment. And for anyone interested in active industrial policy, innovation and investment in capability, an informative and authoritative source on China’s advance is Haour and von Zedwitz ‘Created in China: How China is becoming a global innovator’. It is important not to look at China through rose-tinted spectacles. But on the other hand, it would be complacent to write China off.

Probably, Moyo would agree. In effect, she uses the China case to frighten the Western democracies and urge them to reform. This is where we get (in Chapter 6) to short-termism, lobbying, corruption, and political gridlock; and (in Chapter 7) to the ten-point plan. There is a strong US focus in Chapter 6, but the recommendations in Chapter 7 are ‘intended for mature democracies like the United States, Western Europe, Canada, Japan and Australia’, and, it turns out, all emerging economies across the developing world that pursue democratic principles. That’s quite a few. They should (i) bind the Government more firmly to policies, (ii) control campaign finance; (iii) pay competitive salaries to ministers, including an element of results-based remuneration; (iv) extend terms in office, (v) set term limits, (vi) insist on work experience outside politics, (vii) stop gerrymandering the boundaries of political constituencies, (viii) make voting mandatory, (ix) make the right to vote conditional on knowledge of the issues, and (x) weight voting power in favour of the better informed. Not all bonkers, of course, but to my mind not worth discussing without a better statement of the case.

I would make a different case, and have been writing about it under the rubric of ‘Taming Cerberus’ (see here and here). Indeed, there are headwinds, though I would call them disruptors, technological, environmental and political. I focus on three, viz unequal globalisation, automation, and climate change, which all imply large-scale restructuring of the global economy. Indeed, there are different political reactions, in particular a lurch towards populism and protectionism, or alternatively a call for reinforced neo-liberalism. Up to this point, Dambisa Moyo and I kind of agree. But whereas she plumps firmly for the pro-globalisation, Washington Consensus, neo-liberal view, I have been concerned to demonstrate that developing countries have learned through history that neither populism nor neoliberalism delivers what they need. There is a progressive alternative for the successful management of change, including: active state-led industrial policy, with a strong focus on innovation; high standards of accountability for corporate social responsibility; strong social policy, including social protection, to help underpin transition and help the losers from change; political mobilisation to guarantee participation; and strengthened multilateralism (for a full list see here). That implies a different political project.

Kategorien: english

The Mordaunt doctrine: A mission for Global Britain

13. April 2018 - 14:26

The Mordaunt doctrine: A mission for Global Britain

 

 

 

 

Penny Mordaunt’s big speech on 11 April, The Mission for Global Britain, was billed as setting a new agenda: a determined attempt to face down the critics of aid, and take back the initiative after the safeguarding and sexual harassment scandals. The speech was certainly big – over 4,000 words, pasted in at the end for ease of reference. It appealed to both emotion and logic. And in its substance, it laid out what might be thought of as the ‘Mordaunt doctrine’: in particular, that tackling global poverty is the right thing to do, but can also benefit Britain, that the development offer should be a national mission, and that the way to achieve this is through a new Great Partnership. Penny Mordaunt should be congratulated for taking on the critics of aid. There is probably a debate to be had about the framing, but it is great to be having a conversation about the positive case for aid.

A quick summary

I’ve just been reading Sam Leith on the art-form of rhetoric, and from that point of view, the speech nicely conforms to the three legs, or rhetorical stages, of ‘ethos’ (establishing a connection), ‘logos’ (laying out the argument) and ‘pathos’ (an engaging peroration). Cicero would be proud. There are no sub-headings, but the first third or so of the speech makes the case for aid: that is ethos. Most of the rest deals with the substance: logos. There is a short peroration, pathos, ending with the rallying cry (note the imperative and the direct appeal to the audience) ‘Be proud of who we are’.

Part 1 is very strongly about values, and appeals directly to the emotional sensibilities of the British people: ‘we believe in sharing’, ‘we are leaders’, ‘we take responsibility’, ‘we hate not being able to help’. The word ‘we’ is used 128 times in the speech. The Second World War is referenced, and the Paralympics, and Amnesty International. President Kennedy is quoted. That is pretty full on. The key idea is that ‘we’ (the British people) care about aid, but that ‘we’ have lost trust in the aid industry: ‘it is not a lack of logic that causes pubic concern over UK aid. Nor is it a lack of love. It is a lack of trust that we are spending their money well.’

Part 2, then, is about how to rebuild trust. ‘Our offer’, the Secretary of State said,

‘should reflect the public’s strong support of control and independence of our programming and the value they place on partnership. Partnership between nations, between businesses, between institutions and between people. It should reflect the people’s priorities of Global Britain. It should unashamedly have British values at its heart. And it should be fit for the world as it is today.’

The way forward has multiple elements:

  • Shifting the focus to Africa;
  • Tackling the man-made crises which drive the need for humanitarian action;
  • Leaving no-one behind, especially women, girls and disabled people’;
  • Supporting countries which transition out of poverty;
  • Addressing mass migration, displacement and statelessness;
  • Helping countries build sustainable health and education systems (which means being sure that countries do not simply outsource funding pubic services to donors);
  • Incentivising joined-up working between Government Departments;
  • Improving accountability and performance management; and
  • Working much more strategically with global business.

There will be four criteria for spending aid:

  • How does this deliver the UN Global Goals?
  • Is it really working hard for Britain?
  • Would it happen without us?
  • Could that money not be better spent?

In practice there will be five priorities:

  1. We will help through humanitarian assistance;
  2. We will care through global health partnerships;
  3. We will develop economies and human capital;
  4. We will protect through security, rule of law, human rights, tackling crime and corruption;
  5. And we will connect all that our nation has to offer, its talents, its people and communities, its expertise and knowledge, and its resource to those in the developing world through a new Initiative: the Great Partnership.

Many specifics are then name-checked: resilience; the UN Global Compact on Refugees and Migration; humanitarian innovation; working with the NHS; pandemics; anti-microbial resistance; nutrition; neglected diseases; FGM; extremism; organised crime; modern slavery; press freedom; illicit financial flows; trade; investment, including partnership with the City of London and with pension funds; tax collection; business integrity; and partnership with civil society, to share ideas, creativity and resources.

It is tempting to ask what is left out, but anyway, there are some things ‘we’ will not do: tied aid; programmes that do not meet the new criteria; funding of organisations that do not meet standards; or funding Governments that do not pull their weight.

Finally, the peroration challenges the naysers, points to UK aid as a ‘shield’ against the evils of the world, and asks people to be proud of what aid can achieve.

A short commentary

On framing the message

The first and most important thing to say is that Penny Mordaunt should be congratulated for standing up and making the case for aid. The Daily Mail accused her of ‘going native’ (an unfortunate phrase to describe a development minister, or probably anyone), and found some MPs to chip in sceptical voices, but still reported the main elements of the speech. Larry Elliot in the Guardian said she had the hardest job in the Cabinet, noted that she wanted to give the aid budget more of a British flavour, and said that ‘there is no viable alternative to Mordaunt’s approach’.

That, though, is an interesting question. The morality + shield approach, and the emphasis on mutual interest, contrasts quite markedly with the global social justice formulation in the recent Labour Party Vision Paper, which I reviewed just the other day.  Remember, there are six Big New Ideas in the Labour paper, including global social justice, but also the dissolving boundary between developed and developing countries, inequality, and the impact of a ‘rigged system’.

Without getting into a discussion about which of these narratives might be ‘right’, it is important to know which one might appeal more to the British public. Penny Mordaunt cites Eurobarometer on the underlying support for aid, with 89% of Britons believing that helping developing nations is the right thing to do. The source, I think, is a Special Report on EU Citizens’ Views on Development, Cooperation and Aid, published in April 2017. This does, indeed, show that 89% of UK respondents said it was very or fairly important to help people in developing countries, a higher number than the worst performers in the EU (Czech Republic, Estonia, Lithuania, Bulgaria), but quite a way behind the (rather surprising) best performers (Sweden, Cyprus, Luxembourg, Portugal). 75% of UK respondents also said that tackling poverty has a positive influence for EU citizens, and 83% agreed that it is in the EU’s interest (for example by creating trade opportunities): both these numbers are about average for the 28 Member States. There is support for the view that aid contributes to a more peaceful and fairer world, and for the view that aid is an effective way to help tackle irregular migration. All that reinforces the Mordaunt narrative.

However, Eurobarometer is not the only source, and more detailed polling of the UK population show somewhat different findings. The Aid Attitude Tracker has surveyed 8000 people every six months since 2013 and a summary of the findings for BOND shows that the moral case resonates more strongly than self-interest (Figure 1). The tension between the moral case and the self-interest case was also highlighted in work for Oxfam on framing development.

The most recent analysis of this question is by Jennifer van Heerde-Hudson, David Hudson and Paolo Morini. They conclude that there is little support among the British public for giving aid to help advance UK interests:

‘Aid in the national interest may be a tactic to shore up support among more sceptical elites, but it rings hollow with the British public. Our evidence suggests the government would do better talking less about our national interests, such as addressing migration, or creating business and trade opportunities, and more about mutual interests, particularly around health security and global diseases. It should also not forget that aid given to help those who need it most remains a core priority for the British public’.

The Aid Attitude Tracker also shows that support for development is in decline. The most recent data, for 2017, I think not yet published, confirm earlier trends, that something like a third of donors and a third of fundraisers have been lost in recent years. The proportion of people fully engaged in development hovers at about 5%, with the proportion totally disengaged rising. This may reflect the breakdown in trust that Penny Mordaunt references.

Lots of people know more than I do about framing, messages and messengers, and no doubt Penny Mordaunt’s ‘pitch’ is based on careful segmentation and analysis. Still, it will be very interesting to see how the different approaches play out.  Perhaps having different approaches maximises the opportunity to reach different audiences? The next set of results from the Aid Attitudes Tracker is eagerly awaited!

Figure 1

Aid Attitude Tracker

Source: https://www.bond.org.uk/sites/default/files/resource-documents/bond-aid-tracker-online.pdf

On the content of policy

It is not easy to reset policy. Penny Mordaunt is the fourth Conservative Secretary of State in seven years, the third in five years. She is bound for the time being by the UK Aid Strategy, published at the end of 2015 (my review here), by the findings of the various aid reviews published in 2016 (commentary here), and by more recent policy reviews, like the National Security Capability Review (Owen Barder’s commentary here). The SDGs as the framing . . . commitment to 0.7 . . . 50% of spending on fragile states . . . more spending by Government Departments other than DFID . . . more on economic development . . . more with the City and the private sector . . . more engagement with smaller NGOs . . . an enduring commitment to efficiency, effectiveness and transparency . . . changing the ODA rules . . .These are all familiar themes. The Great Partnership sounds new, but is not yet fleshed out. As so often, it would have been good to hear a stronger commitment to multilateralism, and to policy coherence in its various manifestations. The latest aid statistics, for 2017, show that multilateral aid accounted for 38% of the UK’s total spending. Penny Mordaunt’s predecessor, Priti Patel, invested considerable political capital in reform of the multilateral system including both the World Bank and the UN. Is that still a priority?

One interesting proposition in the speech is the ‘tilt to Africa’. If taken seriously, this might mean quite a big shift. In 2017, Africa accounted for 58% of DFID’s bilateral country or region-specific spending. Is that set to rise? And who would be the winners and losers? The detailed aid statistics are only available for 2016, but they show (Figure 2) that there were only 10 African countries in the top 20 recipients of UK bilateral ODA, 6 in the top 10. Pakistan is far and away the biggest recipient of bilateral aid.

Figure 2

Source: https://www.gov.uk/government/statistics/statistics-on-international-development-2017

Conclusion

There is probably more to say on the policy side. For example, there has been commentary on social media about the treatment of migration. However, for me, the most interesting aspect of the speech remains the question of how to make the case for aid in the world ‘as it is today’. That definitely helps to shift the mood from the defensive place that aid has been.

____________

International Development Secretary on UK aid - The Mission for Global Britain: 12 April

Good morning. 

Thank you so much for being here today.

I am the Secretary of State for International Development. And it is my job is to lead the UK’s charge on delivering the Global Goals, but it is also my job to listen.

 And in this role I have listened to a lot of people.

I have listened to my department, I have listened to my wonderful Ministerial team.

I have listened to the recipients of aid, to refugees in Syria and Yemen, to the Rohingya and those who helped in the Hurricane-ravaged Caribbean

I have also listened to commentators.

to the critics of aid those who say that we are spending too much.

Or that our spending is wasted.

Or goes straight into the pockets of the corrupt.

That we are neglecting our domestic priorities, like the NHS.

Or that it is not necessary as progress will happen without us.

Or that it is a futile exercise and so we should just give up.

I hear you. 

I get it. I really do.

You want a return to the priorities of the people.

not the priorities of the politicians.

I understand that.

That is one reason why I voted for Brexit.

We wanted a return to the priorities of the people.

We chose a different path. we chose British self-determination.

We did this not just to do something. 

We did it to be something. 

We wanted to protect our values, of freedom, equality, independence and democracy.

Values that we believe the world is better for.

We are a global power, as well as a European one. 

And In voting for Brexit I wanted my country to project those values on to the world stage

Brexit itself is both an example of our faith in democracy and fundamental freedoms.

The recent Oxfam scandal shook the public, because they care about those values.

Remember, we only learned about that from journalists, operating in a free press, in our democratic country.

Our national values and institutions are unselfish.

We believe in sharing. In paying tax.

In our communities, we volunteer, we help each other, we try and be good neighbours.

We believe in democracy. Even when an election or a referendum doesn’t quite go as we would wish, we stick with the democratic result.

Britain stands for free trade and cooperation, the rule of law, justice and human rights. 

We believe in bravery, in service and in sacrifice.

We believe in the potential of the people. 

that everyone should have the opportunity to reach their full potential. 

We’re unselfish because we believe in freedom.

And that places an immense responsibility and duty upon nations that have those values.

In April 1945, with German consent, Britain, Canada and the United States air-dropped 11,000 tonnes of food onto the still unliberated Netherlands. 

Three weeks after the airdrop, rations in Britons were actually cut.

Why did we do it?

It bore no upside to the war effort. It could have helped our enemy. 

It was done at great risk.

And it took from our own.

But we chose do it and saved thousands of lives.

Last year, the British people voluntarily donated £30 million to help the Rohingya fleeing terror in Burma. This was in addition to the contributions we made through UK Aid and with their taxes. 

Why did they do that?

Why do thirteen million Brits volunteer every month to help others?

Because we’re leaders. we take responsibility. we feel motivated to act, to share what we have, to help.

Whether it is the needy in our own communities. Or those fleeing terror on the other side of the world.

We hate not being able to help, when there aren’t immediate answers, or a course of action is frustrated.

Research undertaken by Eurobarometer found that 89% of Britons believe that helping developing nations is the right thing to do, and they are especially supportive of crisis aid, health and education. 

They’ve learned through much experience that the best place to stop evil is where it starts.

They believe that good aid is the good that it does. Not how much we spend, or how good it makes us feel it is what it achieves.

And some believe we should set out to do the most good we possibly can with what resource we have.

That if we can tackle global poverty and deliver the global goals and benefit the UK into the bargain, then we should.

They’re right to believe that.

The public have no truck with the polarized views of aid:

The view we can only deliver a global goal in the recipient nation,

that if we chose to it  in a way that also brings other benefits, to the national interest, or another part of government, even if it is the most efficient, even if it is most sustainable way of doing it, that it is somehow less worthy. 

The public know that is perverse.

The view that it is better to fail at delivering the global goals, than let others –such as the private sector- help. 

The public know that is dogma.

Or the view that we should withdraw from the world, just put up a great big shield and focus solely on our own shores. 

The public know that that is asking for trouble. 

 hey know their history. They understand the connections.

Between global health security and our own health.

Between trading partners and our own prosperity.

Between security in fragile states, and violent extremism on our streets.

 And they understand our ability to act in our own or another’s interest is predicated on our own capabilities and resources. And in fact the 0.7% makes that explicit.

If our economy does poorly, the aid budget shrinks, if we do well, we can do more.

There is a strong desire amongst the public that we as a nation should have the power to influence, to prevent, to deter and to intervene, even when that means us standing alone.

Our greatest accomplishments have been driven by that courage and by these values.

To fight, whether it is with arms, with knowledge or science and discovery, against tyranny, against hunger, against disease, for humanity’s sake.

Our nation was the cradle for democracy, the fight against slavery and for universal suffrage.

It was the provenance of the Paralympics and Amnesty International, for Leonard Cheshire, and of Live Aid.

The British people believe in ‘we’ not ‘they’.

There is only ‘us’.

As President Kennedy pointed out: “We all breathe the same air. we all cherish our children’s future. And we are all mortal.”

We are determined to be a great global nation.

And to be a Great Global nation we need the trinity of the ‘three Ds’.

We need the influence and encouragement of diplomacy.

We need the aid, alleviation and economic empowerment of development.

And we need the stability, deterrence and, as a last resort, the intervention of defence.

All three are essential.

We know we can only talk softly if we carry a big stick.

And we know that without diplomacy and the 0.7% on aid we are going to need an even bigger stick.

No it is not a lack of logic that causes public concern over UK aid.

Nor is it a lack of love.

It is a lack of trust that we are spending their money well.

That concern – a concern shared by 50 per cent of those polled on this issue - is one that we must address head on and not just because it’s their money we are spending.

Global Britain must mean a country with which the rest of the world wants to engage. 

It must also mean a Britain which promotes and defends national interests effectively.

Our values, our institutions and our collective offer must be world-class.  

To do that that our development offer must be something that we can be really proud of.

It must be something that can be clearly understood.

And supported - in spirit and in practice by those who wish to contribute further to it through extra resource, or their expertise or their time. 

It must deliver on both the purpose of Official Development Assistance and also on the public’s concerns.

Our new development offer needs to be a national mission that we can all unite behind. 

To borrow from the Prime Minister, we need a development offer that “works for everyone”.

That means that 0.7 must not just “be spent well”, but “could not be better spent”. 

It must be more effective at ending poverty and delivering the global goals - goals that we are currently years adrift from, or even measuring.   

0.7% is often spoken about as though spending it is the goal. The public want a greater focus on the outcomes.

It’s about what we’re doing, not just what we’re spending. 

Our offer should reflect the public’s strong support of control and independence of our programming and the value they place on partnership. Partnership between nations, between businesses, between institutions and between people.

It should reflect the people’s priorities of Global Britain.

It should unashamedly have British values at its heart.

And it should be fit for the world as it is today.

While global poverty is falling, we still need to deliver more for the world’s poorest and those global goals. 

Our focus must now shift further to this task, to where the heavy lifting is yet to be done: Africa.

We must also recognise that the common thread that runs through the world’s worst humanitarian crises is not famine or drought, but man’s own actions: conflict, crime, corruption, capital flight, and climate change. 

We must focus on tackling those man made crises which now absorb most of the global effort to alleviate suffering and are a block on development.

And we must ensure that no one is left behind, that the potential contribution, and the rights, of women, girls, and disabled people are fulfilled.

And we need a new offer for countries transitioning out of extreme poverty.

To keep developing their economies and so that we can meet our objectives on climate change too.

And we must address the great challenge of our generation. we must identify the answers to mass migration, the displaced and stateless people. 

We must focus on helping developing countries stand on their own feet and build sustainable health and education systems. 

When governments, who could and should be putting their hands in their pockets refuse to, we should too. And we should recognise those who do step up.

We are clear - governments cannot simply outsource funding their public services to donors indefinitely.

And we will continue to press for further reforms to the global aid rules which prevent 0.7 per cent being spent effectively and flexibly.

 uch as being unable to use ODA to assist those devastated by a natural disaster because yesterday before the cyclone hit they were doing perfectly fine.

But we also need to examine how we operate ODA in Whitehall:

How we incentivise more joined up working between departments 

How we account for ODA

And the quality of our programmes and management of those programmes. 

Last month, I convened a meeting of all ODA spending-departments and the NSC and agreed greater coherence and effectiveness. we agreed a package of tools and training to be delivered by DFID to enable them to spot opportunities to design and manage their programmes really well.

In addition we will change our planning processes to ensure that ODA meets that new spending bar.

How does this deliver the UN Global Goals?

Is it really working hard for Britain?

Would it happen without us?

Could that money not be better spent?

 And we will co-design projects and lever in social and private finance to supplement our ODA spend and enable us to do more.

This will create programmes that reflect the people’s priorities.

- That are a win for the UK and a win for the developing world.

We have already done much of this, for example UK aid budget funding the resettlement of refugees in the UK, but we are going to take this much further.

With the Department for International Trade, we are working with sub-Saharan Africa to create jobs and growth. That’s good for them, but also good for British companies too. 

With the Department for Work and Pensions, we’re working to ensure that the International Citizen Service helps young people from disadvantaged background, build the confidence and skills they need to get into work.

With the Department for Environment, Food and Rural Affairs, we’re tackling illegal wildlife trade, supporting food security, and tackling waste and pollution, all issues the public care deeply about.

And with Defence we are taking forward new projects, to increase our own countries’ capacity to respond to crises and build stability. 

In future years, if it is cost effective for us to deliver aid using taxpayer funded assets, we should do. That’s common sense, and the fact it might also help another government department’s budget shouldn’t count against it. 

We will take this approach - a win for the developing world and a win for the UK - with every single government department.

It is an approach that does not dilute the good we do, it doubles it.

We shouldn’t stop at Whitehall either in the rolling out of our tools to track progress.

In the future, we should develop our tracking tools so the public can see in real time the results of the geocoded projects they fund.

It’s not about who spends it within government - whoever spends it needs to spend ODA really well and the public should always know what, where, how and why.

And if we want others to help towards the global goals, we need to further open up our work further still. we need to work much more strategically with global business, we need a network of entrepreneurs.

We need to broaden our supplier base, we need to create more partnerships.

We need to match the nimbleness and flexibility of the private and tech sectors and smaller organisations. 

We have a moral duty to both the people we seek to help, and those who enable us to do so, to provide the best value for money and the most positive impact for every single pound we spend.

That’s our approach.

So here’s what we are going to do:

We’re going to keep it simple.

We are going to focus on five things to tackle global poverty:

  1. we will help through Humanitarian assistance 
  2. we will care through global health partnerships
  3. we will develop economies and human capital 
  4. we will protect through security, rule of law, human rights, tackling crime and corruption
  5. And we will connect all that our nation has to offer, its talents, its people and communities, its expertise and knowledge, and its resource to those in the developing world through a new Initiative: the Great Partnership.

Firstly, humanitarian assistance: of which the public are rightly proud. The work of our team in responding to crisis, the expertise of our healthcare, rescue and aid workers is world class. We’re a major humanitarian donor and it is in our interests to increase the resilience of those countries that are in need.

So we are going to prioritise getting the humanitarian system to work better, working in concert with other major donors and we will require agencies and suppliers to share data, to share intellectual property and collaborate.

We will pre-empt the need for humanitarian relief by building in resilience through recovery reconstruction and through the development and promotion of insurance schemes.

We will devote more effort and resource to tackling the complex challenges of migration, refugees, stateless and displaced people. we will call on the international community to enshrine a new approach later this year in the UN Global Compacts on Refugees and Migration. 

 e will no longer be content to merely raise the plight of people we currently cannot help due to the limits of our capability. I have already launched, with my US counterpart, a challenge fund: Hope in Conflict, to ask tech innovators to find solutions to protect people from harm. 

Today, I can announce that we will set up a Humanitarian Innovation Hub to increase our capability to be the best in the world at what our public feel so strongly about: protecting people who cannot protect themselves.

Seventy years ago that principle and our unselfish values led our nation to create the best healthcare system in the world: The NHS.

Our healthcare innovation, our health economics and research base has much to offer the rest of the world.

And UK Aid spent on such initiatives delivers huge returns on that investment. 

Thousands of lives saved, thousands more in school, thousands more spared a life-changing disability.

And as we have seen from the work we have done already in this area such schemes benefit own population too. Diagnostic tests in use today as I speak to you in NHS wards have been created by UK aid. 

And having NHS expertise contribute to global health security ultimately keeps NHS resources from being needed to combat pandemics and plagues on our own shores.

So, secondly, we will build on our work with the NHS and Public Health England.

We will work to build comprehensive, effective healthcare systems – not just a collection of separate projects and programmes, after all weak healthcare systems in the developing world are not just a danger for the people that live there – they pose a risk to us all.

In Global Britain we will take a stronger lead in ensuring Global Health Security – protecting humanity from pandemic diseases and tackling the growing threat of anti-microbial resistance.

We will work also to tackle undernutrition - today I can announce that together with funds raised from the private sector and foundation funds we will extend our programme the Power of Nutrition to a further five million people. 

We will redouble our efforts in the fight against polio, malaria, neglected tropical diseases, TB and AIDS.

And I reiterate our commitment to end FGM and to continue our work on family planning, as others step away from that field.

Thirdly, we’ll increase our work supporting security, the rule of law, human rights, and tackling crime and corruption.

Without security you can’t develop. You cannot achieve investment, you can’t have economic activity, the state cannot collect taxes, you cannot invest in human capital.

ID is already committed to ensure the 50% of our budget that is spent each year in fragile states genuinely tackles the underlying drivers of instability. we will focus on building long-term stability, addressing the causes as well as the consequences of conflict.

However, we will go further as part of cross-government efforts to directly tackle national security threats such as conflict, terrorism, violent extremism and organised crime. 

We will create new country-level programming targeted at specific communities and locations vulnerable to extremism and organised crime. 

One of our objectives will be to reduce the need to provide emergency humanitarian support and we will move to deeper more enduring partnerships as we are already doing with countries such as Jordan and Lebanon.

In addition, we will do more to end modern slavery, building close partnerships with countries where slavery is widespread. And under the Prime Minister’s leadership we will continue to push the international system to end this global disgrace.

We will introduce new programming to support human rights, schemes to protect those who are persecuted for their religious beliefs.

And we will support and promote the freedom of the press.

We will work with new rising powers to strengthen and shape the international system and to tackle global issues such as crime and corruption. 

And we will develop a new area of co-operation to stop illicit financial flows that pick the pockets of the poor in Asia and in Africa. 

DFID will explore setting up a presence in the world’s financial centres. And we will work with the National Crime Agency and the City of London to ensure there are no hiding places for illicit flows and that we have a global financial system of which we can be proud.

We should recognise that inclusive free trade and the creation of jobs and livelihoods is the most reliable bringer of peace. Millions of people in the world’s poorest places have gotten a job, or improved their income, thanks to UK support. But we need to do more. So fourthly we will develop economies and human capital.

If we want nations to move from aid to trade, we must too.

So we are stepping up our work through education and a new strategy which will prioritise good learning, good teachers and national reforms and we’ll reshape our economic development work.

We are going to have a new trade offer which includes a new partnership with the City of London to bring down the barriers to trade and unlock investment for emerging markets in Africa and Asia.

Achieving the Global Goals and delivering financial returns, innovation and markets for the UK.

And as we leave the EU, we will scope new instruments and institutions to sit alongside CDC, our private sector investment arm, to provide loans or guarantees to ensure a better offer to developing countries as they transition our of extreme poverty but before they’re fully reliant on international capital markets. 

We can show the world that doing the right thing – pays. 

And our work can create new opportunities for British pension funds to invest in new markets in developing countries and deliver higher returns for British pensioners. 

Last year, I instructed DFID to deepen its work with the Treasury and HMRC to enable developing countries to manage their tax collection better. And today I can announce a further unit focussed on business integrity, which will enable companies working in developing countries to place anti-corruption and human rights front and centre.

And we will ensure British businesses can compete freely and fairly. As we will also expect from any competition using EU instruments that Britain has contributed to.

And as we leave the EU we must deliver on the promise of Brexit to the world’s poorest, and demonstrate how our new freedoms are mutually beneficial for developing nations through preference utilisation. we will be explicit about this and we will be a champion of free trade.

Finally, we will found a great partnership

The aid budget is a fraction of what Britain has to offer the rest of the world. It is also our knowledge, the City of London, our law, our technology, our education, our charity sector, our faith and community groups, Whitehall, town hall, our entrepreneurs, our public servants, our agencies and institutions.

We will create partnerships, we will connect great people, we will share ideas and our creativity, we will develop our aid match and small charity programmes to enable the small and local to be able to contribute too, and next week you will hear more about commitments and connections that will be championed by a revitalised Commonwealth. The Commonwealth Heads of Government Meeting will be the largest gathering of Heads of Government, Foreign Ministers and Commonwealth organisations the UK has ever hosted.

People will come together from across all 53 nations to discuss the issues of most importance. And we will deploy our development expertise in the emerging group of countries that are increasingly important for finding solutions to our global challenges.   

So that is what we will do.

Here’s what we won’t.

We won’t do tied aid. It’s bad for UK competitiveness and it’s bad for developing nations.

We won’t fund programmes that fail to meet the new spending bar.

We will not fund organisations that don’t perform or meet our standards or contribute to our objectives.

We won’t fund governments who can afford to, yet chose not to, invest in their own people.

We will not fund projects that would happen without us.

Or spend money that could be better spent otherwise. 

To those who say the private sector has no place in development, I say: “Do you want to deliver the global goals or not?”

To those who say you can’t spend ODA effectively and support the UK’s national interest, I say: “Watch us.”

To those who are shy about promoting British values, I say: “the world needs us to be confident.”

To those who say the Global goals are just unachievable, I say: “Look how far we have come.” 

And to those who say please put up a shield,

I say, we are.

A shield against uncontrolled and unsustainable economic migration. 

A shield against pandemic disease. 

A shield against organised crime. 

A shield against poverty and its parasitic disease terrorism. 

It’s a shield called UK Aid. 

It’s a defence against all those ills, but if we want to do better than a score draw, then we also have to fight. 

And to win that fight we must come together: 

Behind smarter aid and global Britain.

United in a national mission.

In the national interest.

Striving for global goals.

​So to the British public, who I know to be generous and compassionate and who also want us also to return to their priorities, I offer this new approach and I say to them.

Be proud of what you enable.

Be proud of the lives you save.

And the future you build.

Be proud of your country.

Be proud of who we are. 

Source: https://www.gov.uk/government/speeches/international-development-secretary-on-uk-aid-the-mission-for-global-britain

Kategorien: english

Does ICAI need a broader remit? Lessons from the Review of the Conflict, Security and Stability Fund

11. April 2018 - 12:49

Does ICAI need a broader remit? Lessons from the Review of the Conflict, Security and Stability Fund

 

 

The ICAI Review of the Conflict, Security and Stability Fund (CSSF) has attracted quite a bit of publicity and commentary, but the report itself and the debate it has engendered both overlook some key issues. Is there a general problem with ICAI’s remit, or is the issue something to do with the difficulty of examining cross-Government programmes, or more specifically with the difficulty of assessing a programme governed by security considerations and therefore not fully transparent? Probably all the above, but the main conclusion is that ICAI may need a wider perspective and possibly a wider formal remit.

The Report was published in March 2018. As a typical ICAI Performance Reviews, it provides background and context, and then looks at (a) relevance, (b) effectiveness, and (c) learning. Each of these is scored on a four point scale, with the three scores combined to give an overall score. In this case, the CSSF gets green-amber for relevance, amber-red for effectiveness, and amber-red for learning, giving an amber-red score overall.

The Report explains that the CSSF was established in 2015, as the latest example of cross-Government conflict prevention funds dating back to 2001. Its initial annual budget of £1 billion is set to rise to £1.3 billion by 2020-21. The CSSF exists to support and implement strategies defined by the National Security Council, and only part of its funding counts as ODA: in the first two years, 34% and 41% of programmable funds. The CSSF works in 70 countries (Figure 1) and on a range of topics (Figure 2). 52% of its programmable funding is spent through private companies and NGOs, 27% through multilaterals, and 18% through Government Departments. NB what is meant by ‘programmable’ needs unpacking: the figure ‘excludes ring-fenced activities’, , ‘including peacekeeping’. The CSSF’s own website says that the main ring-fenced items are Afghan Security, the Deployed Military Assistance Pool, and contributions to multilateral peace-keeping, mainly via the UN. Some peace-keeping costs qualify as ODA, but are excluded from the ICAI review. Should they have been?

Figure 1

Source: https://icai.independent.gov.uk/report/cssf/

Figure 2

Source: https://icai.independent.gov.uk/report/cssf/

The Report finds that the CSSF is well-aligned with overall UK aid policy, but that theories of change and results frameworks are both weak, and that the programme is not well monitored or evaluated. It is not very good at learning. There are six recommendations, mostly about results frameworks and learning.

The media coverage of the report mainly focused on the amber-red score, on inadequate safeguards for human rights, on the results frameworks, and on some egregious examples of poor spending highlighted in the report, including a prison building in Mali: see e.g. here,  here, here, and here. There has also been a debate on Twitter about the application of complexity theory to results frameworks, and the difficulty of designing such frameworks in volatile conflict situations. Craig Valters has led on this, based on his recent analysis of DFID’s approach to results, as well as his earlier synthesis of the evidence on the (limited) contribution of capacity-building to security.

There is obviously a lot to say about conflict prevention, peace-making, peace-keeping, conflict resolution, transition to sustainable peace, and long-term social and political resilience  – each of which, by the way, is a separate topic. This is not my specialist area, and the report does not really summarise best-practice, but it does point to some useful resources, including ‘Pathways for Peace’ by the World Bank and the UN, and a report by the OECD on Evaluating Peacebuilding Activities in Settings of Conflict and Fragility. I don’t think ICAI makes much use of the OECD State of Fragility Report, the latest edition of which, in 2016, focuses specifically on violence. Not does it cite NGO material, like the work on peacebuilding by Phil Vernon for International Alert. I was surprised not to see more on humanitarian aid, and humanitarian dilemmas, including the serious challenge of supporting state capacity in conflict zones where humanitarian aid is supposed to be neutral as between warring parties.

This was obviously a difficult review to carry out, covering work in places of which some are unsafe, and with public transparency hampered by incomplete access to documentation and analysis hidden behind the security barrier of the National Security Council.

The bigger issue, however, is one I tackled in an earlier piece, about what the key questions are in relation to cross-Government funds. Writing in November 2017, I said

‘To my mind, the exam question is not ‘Is it good to focus on big, cross-sectoral issues like peace and prosperity?’. The answer to that question is self-evidently ‘yes’ . . . Nor is the question ‘Is it good to have cross-ministerial collaboration in delivering international development?’. The answer to that question is also self-evidently ‘yes’ . . . (In that case) the debate should . . . focus on six questions:

  1. Where do strategic questions get asked about the balance between bilateral and multilateral allocations?
  2. Are the criteria for allocating aid pro-development?
  3. Is oda spent through the FCO untied?
  4. Does setting up separate funds lead to excessive earmarking of aid?
  5. Does having multiple agents undermine unitary management and Balkanise the aid programme?
  6. And, of course, is the FCO any good?’

My reading of the ICAI report is that it answers Q 6, and to some extent Q 2. It could have answered question 3, but did not (I discuss tying here, including the question of whether military spending should be market-tested). The ICAI Report does not deal with the other questions, viz 1, 4 and 5.

I see two problems, one of practice and one of policy.

The first problem relates to practice, which is that ICAI does not routinely look at alternatives to current practice. At least, it did not in this case. That really relates to Q 1: ‘OK, we agree that peace and security are legitimate topics for UK development, now, what is the best way to approach them?’. In November, I pointed out that the UK supports many other funds and programmes on this topic, including (and this is a non-exhaustive list):

Would it not have been interesting for the ICAI review to carry out a comparative analysis? And, if not ICAI, who? The National Audit Office? The Public Accounts Committee? The IDC? Or DFID’s own evaluation department?

A comparative perspective would have been useful also on the core competence question 6, viz is the FCO any good? The report is not complimentary about implementation by the FCO, but it is not clear that DFID itself would have done any better on its own, with a relatively new programme in the difficult environments in which CSSF operates, and with all the problems of designing foolproof, ex ante theories of change in such circumstances. Nor is it clear that the FCO finds the job any easier than the UN or the EU. I am inclined to give the FCO the benefit of the doubt. But, in any case, surely, comparative analysis should be standard for ICAI?

The second problem relates to ICAI’s remit, specifically whether it is empowered to look at ‘policy’ questions, and what these are. The remit has been discussed over the years, not least by the International Development Select Committee, which has been rightly been concerned about possible overlap with its own mandate. For discussion, including of a previous review of ICAI by the Cabinet Office see here and here: so, No, these are not new issues.

ICAI’s current remit is formally described on its website as follows:

‘ICAI’s formal remit is to provide independent evaluation and scrutiny of the impact and value for money of all UK Government ODA. This involves:

  • carrying out a small number of well-prioritised, well-evidenced, credible, thematic reviews on strategic issues faced by the UK Government’s aid spending
  • informing and supporting Parliament in its role of holding the UK Government to account
  • ensuring our work is made available to the public.

The remit and other aspects of ICAI’s work were reviewed by the Cabinet Office in a Tailored Review published in December 2017. The review analysed ICAI’s remit in the terms given above and concluded that ‘ICAI’s remit is clear and well understood by its stakeholders. ICAI distinguishes itself from other scrutiny bodies by focusing on assessing aid impact.’

The focus on impact is important, but there are some other important words in the remit, like ‘thematic’ and ‘strategic’. Qs  1, 4 and 5 from my list are all both thematic and strategic, so could they form part of ICAI’s mandate or not? Perhaps that needs to be tested in the next iteration of ICAI’s work programme, submitted to and approved by the IDC. I imagine that if the IDC were strongly supportive, then the boundaries of the remit could easily be tested.

If not, then either we have to wait for the next triennial review by the Cabinet Office, or another solution has to be found. Perhaps the IDC itself should pick up the baton in its own enquiries?

Kategorien: english

A World for the Many Not the Few: The Labour Party’s Vision for International Development

11. April 2018 - 10:10

A World for the Many Not the Few: The Labour Party’s Vision for International Development

 

 

 

The new Labour Party Policy Paper on international development, published in March, warrants analysis, as the development policy of the Official Opposition, but also because it contains a number of Big New Ideas (BNIs). The Paper reads like a manifesto or a White Paper (the word ‘will’ is used 21 times in the Executive Summary), but is billed as a Green Paper, open for discussion and refinement over coming months. That is helpful, because, although there is much to like in the approach, some of the BNIs, though pointing in the right direction, need further work. In particular, Kate Osamor and her colleagues would find it useful to balance their ‘narrative of predation’ with a ‘narrative of accumulation’.

What the Paper says

The paper has a Foreword by Jeremy Corbyn, an Introduction which acts as a tour d’horizon and diagnostic, then: a Vision, with 5 priorities; an action plan covering 6 key areas; and a list of 34 specific actions to be rolled out over a five-year period. So: no danger of empty rhetoric.

The key focus is labelled on the tin: building ‘a world for the many, not the few’.  This is embedded in a recurrent refrain about justice, social justice, international social justice, and global social justice. The word ‘justice’ appears more than 40 times in the document. Importantly, global social justice is for everyone, in both developed and developing countries. The paper says that ‘what people need and want in the UK, people need and want everywhere: our needs, our rights and our struggles to achieve them are one and the same.’ There are two BNIs here: global social justice, and no distinction between developed and developing countries.

The Introduction provides a catalogue of challenges (poverty, ecological breakdown, conflict, inequality, and so on), plus a short history of Labour’s long-standing commitment to development, and an attack on the Conservative approach, characterised (it would be fair to say caricatured) as ‘charity’. The important BNI is the argument that development problems are not natural, but manufactured, by what Jeremy Corbyn, in the Foreword, describes as a ‘rigged system’. Thus, the paper says that

‘People are increasingly aware that poverty, income inequality and gender inequality are not natural – they are created. They are symptoms of an unfair system that funnels wealth and power into the hands of a few. Our globalised economy has been designed over several decades to benefit a few at the expense of the many.’

This leads to a focus in the diagnostic on tax avoidance, illicit financial flows, unfair trade, low wages, poor working conditions, environmental deregulation, and the privatisation of public services. It also sets up the Vision and the action plan.

‘The solution is clear: we must find ways to unite across borders in solidarity against elite control of our global economy, and in support of this living planet that is our home.’

The Vision begins with another BNI: setting the reduction of inequality alongside the reduction of poverty. The Paper promises to carry this through to new legislation and a series of global initiatives, including exploring the possibility of a global wealth tax. The main focus is on income inequality, to be measured by the Palma ratio, but there are also references to gender inequality, discrimination against marginalised groups, and inequalities in power. It might have been better for the headline to say ‘inequalities’.

There are then five priorities, connected to the SDGs and summarised in Figure 1:

  1. A fairer global economy
  2. A global movement for public services
  3. A feminist approach to development
  4. Building peace and preventing conflict
  5. Action for climate justice and ecology

Figure 1

Labour’s five priorities

Consistent with the Vision, the priorities for a fairer global economy lie in the area of tax and trade, as well as the end of ‘neoliberal structural adjustment conditions’. Note the word ‘growth’ does not appear in this section, and indeed barely in the document as a whole, except with negative connotations (though there are a couple of references to more equal societies being able to sustain growth).

The global movement for public services is about spreading the availability of ‘universal, free, high quality and gender responsive public services’, especially health and education. Note that social protection is not mentioned in the document.

The feminist approach to development is described as ‘implementing a gender transformative approach across all of DFID’s work’.

Building peace and preventing conflict is a priority embedded in an ethical foreign policy linking diplomacy, defence and trade, with increased spending on crisis prevention, better humanitarian aid, and more support to refugees. Peace-keeping is not mentioned, but there is a pledge to replace the Conflict, Security and Stability Fund (CSSF) with a new Peace Fund.

Action for climate justice and ecology is about taking action at home and abroad to live within planetary boundaries, including divesting DFID from fossil fuels, and ‘developing an alternative measure of wellbeing and economic success instead of GDP growth, and reducing the importance of GDP growth as an objective for UK-funded development programmes.’ Is this another BNI?

Chapter 4 deals with ‘How Labour will achieve this vision’. It talks about development effectiveness, as might be expected, but also about redistributing power to people, improving delivery (including via more support to NGOs), increasing voice (including by better transparency and accountability), supporting development education, and improving communication. The Chapter also contains sections on managing the transition out of aid for middle income countries (Figure 2), renewing DFID, working better across Government, and strengthening the legislative framework. There is a commitment to policy coherence, which may be the main BNI in this section, with

‘an annual whole-of-government plan . . . in place across government departments, setting out development objectives for the year with measurable indicators, and signed off by the Secretary of State for International Development. Each government department will be accountable for delivering on their objectives.’

Figure 2

Planning for transition

Finally, there is the 34 point action plan, with some items to be completed within 100 days, some by the end of the first year, and some within five years. A White Paper is promised in the first year.

An assessment of the Paper

Overall, the document provides a coherent, systematic perspective on international development, grounded in institutional realities, and rich in propositional detail. It has had significant input from a specialist task force and a public consultation, but is presented as a signed product by the Shadow Secretary of State, Kate Osamor. It builds usefully on the keynote speech she delivered at ODI in November 2017.

But is it right? That is a question best addressed by examining the BNIs. I have identified 6 of these:

  1. The framing of global social justice;
  2. Universalism across developed and developing countries;
  3. The rigged system;
  4. Prioritising a reduction in inequalities;
  5. Reducing the importance of GDP growth; and
  6. Taking policy coherence (more) seriously.

Some comments follow on each of these, based partly on my own work. But note, these are big topics, which need full and nuanced treatment.

The framing of global social justice

This seems like a very good idea. It was a term used in relation to climate change by Douglas Alexander, Labour Secretary of State for International Development, in a lecture for the Foreign Policy Centre back in February 2008, and is one I picked up myself the same year as possible framing for development policy as a whole. I found inspiration in the work on Amartya Sen, and in the work of Prof David Miller of Nuffield College, Oxford, who identified the four defining characteristics of social justice as: equal citizenship; entitlement to a social minimum; equality of opportunity; and fair distribution. If I had been writing now, I would probably have tried to incorporate and unpick the arguments between Rawls and Sandel.

I thought in 2008 that we had work to do on voice, rights, social protection, distribution, and mutual accountability. Some of those are covered in the Labour paper, but there is nothing on social protection, and rather little on genuine international accountability. There is also more to say about distribution, but just note at this point that ‘global’ social justice requires a discussion of ‘global’ distribution. In 2008, I observed that

‘This is a fraught topic at national level, as we see in the UK, and also in the international debate on income and assets in the development process. Global distribution is very little discussed, yet we know that the global gini-coefficient (for income) is around 0.65, higher than for any national gini, a level which, if seen in a single country, would pretty well guarantee social unrest. What would those who campaign for global social justice see as a reasonable global gini? And what measures would they recommend, and over what time scale, to achieve it?’

It is worth noting that world per capita income, in Purchasing Power Parity  $, is equivalent to $US 16,515, 39% of the UK level.

As a footnote, Dirk Messner, Laurence Tubiana, Francoise Moreau and I tried to sell the idea of global social inclusion to the EU as a big idea, even a BNI, when we were asked to scope the idea of a European Report on Development. This was in 2006. We had the idea that this could be a transformative idea for EU development cooperation, with metrics to back it up. We said that a socially inclusive world would be one in which

  • Democracy and the rule of law are the norm;
  • Human rights are respected;
  • Individuals are able to maximise their capabilities and potential (based on the MDG agenda);
  • Excessive inequalities are addressed (nationally and globally);
  • Global change is tackled effectively and the environment is protected;
  • Global Governance is based on principles like effectiveness, transparency, accountability and fairness (fair multilateralism);
  • Regional cooperation is a cornerstone of global governance.

This list points to many of the same issues as in the Labour paper. It also suggests that global governance is an issue to which the next stage of Labour’s policy development could pay more attention. The Paper talks about a renewed commitment to multilateralism, but without much detail. UN Reform? Cooperation with the EU? Reinvigorating the WTO?

Universalism across developed and developing countries

Here is another good idea. The dissolving boundary between North and South was an idea I worked on at the Institute of Development Studies in Sussex in the mid-1990s (see here for the IDS Bulletin on Poverty and Social Exclusion in North and South, jointly edited with Arjan de Haan, and here for the recent IDS Bulletin entitled Universal Development Comes of Age, edited by Richard Longhurst (and containing reprints of several articles from the earlier publication)). It was also a topic we devoted some time to at ODI, with a meetings series in 1999 on Lessons Without Borders, and another in 2004 on Targets, Voice and Choice, with speakers from both developed and developing countries. There were several publications linked to these events, including this one, written with Peter Kenway, on the need for North-South dialogue on poverty reduction policy.

The intellectual scaffolding for this work was provided by the idea of examining ‘Comparisons, Convergence and Connections’ between developed and developing countries. John Gaventa, himself a pioneer in the field, has endorsed this approach, writing in 2017 that

‘through addressing the contrasts and parallels, the interconnections of groups and communities, and the convergences of power and resistance around the world, we have enormous opportunities to develop a research agenda that goes beyond geographical boundaries and artificial binaries.’

So, fertile ground for Labour policy, especially understanding the connections between development in developed and developing countries, through trade, finance, technology, and migration. Technology is not mentioned in the Labour Paper, and migration barely addressed (only two mentions, both in the context of alleged Conservative failures).

The rigged system

Here the paper enters more difficult territory: not because there are not aspects of the international system that work to the detriment of developing countries, and that may indeed even be ‘rigged’, but because there is surely more to say about the benefits that may also accrue.

The Paper is certainly right to highlight issues like tax avoidance, illicit financial flows and labour conditions. Those are well-established themes of those who work on ‘policy coherence’ in development, including organisations like the Tax Justice Network and the Ethical Trading Initiative. There was a parliamentary enquiry on Beyond Aid in  2015, which coverd those topics, and also others like drugs, technology, migration, and the arms trade.

The paper is also right to recognise failures in political and economic management of globalisation, in the working of capitalism, highlighted by authorities like Joseph Stiglitz, Ha-Joon Chang or Adair Turner. In this sense, the controversy generated by the Washington Consensus has not dissipated, and has taken on new life since the Global Financial Crisis.

That said, I have more difficulty with the repeated assertion that poverty is ‘created’, and reinforced, by a world system that has been ‘designed’ for the purpose. We can allow that colonialism and centre-periphery inequities have played a role at global level, and that institutions have conspired against shared progress at local level, but surely this is too simple a view of human progress: read David Landes, or Jared Diamond or Yuval Noah Harari for the long view. Consider also that world per capita income has increased by over 10 times since 1820 (Figure 3). Think about the importance of trade to that trajectory. And don’t forget that poverty has fallen and that human development indicators have mostly improved in the past half-century. Charles Kenny at CGD has marshalled the evidence, including in The Upside of Down. Or try the new book co-authored by the late Hans Rosling, ‘Factfulness: Ten Reasons why we’re wrong about the world and things are better than you think’. There are now only 31 countries below the World Bank low income threshold, with per capita income less than $US1005.

Figure 3

Per capita GDP over the long run

Source: https://ourworldindata.org/grapher/gdp-per-capita-over-the-long-run-MaddisonAndWorldBank

This evidence is a big challenge to the narrative of the Labour paper. Where is the positive narrative about the pathways to prosperity and human development? Where is the joy?

Prioritising a reduction in inequalities

This is, of course, another good and long-standing topic. We had an effusion of work on inequality at ODI in the early 2000s, including when the World Development and Human Development Reports on poverty were published in 2000.  See the series of Inequality Briefing Papers, work on inequality in middle income countries, many other references, and much later work at ODI, including by the Chronic Poverty Research Centre. I even wrote a paper in 2001 recommending an international development target on inequality. The abstract read:

‘The current narrative on poverty reduction, summarized in WDR 2000/1, rehabilitates distribution as a central topic on the development agenda. WDR argues (i) that redistribution matters for instrumental reasons, as a route to faster growth and faster poverty reduction; (ii) that changes to income distribution result from complex changes in sectoral, geographical and individual performance; and (iii) that better distribution can be achieved in a win‐win fashion, without undermining incentives or forcing a choice between equity and efficiency. The argument can be extended: (i) the case for redistribution is not simply instrumental, but can be rooted in a discourse about social inclusion and rights; (ii) observed changes are strongly associated with liberalization policies, and with changes to social norms; and (iii) governments can do more than the Bank suggests to achieve greater equality. A commitment to redistribution should be enshrined in a new international development target: a ceiling on Gini coefficients of 0.45.’

The ceiling of 0.45, by the way, was the inflexion point calculated by Andrea Cornea at which inequality began to impede growth.

So far, so good. There are, however, two points to make.

The first is that Labour needs to be rigorous about the recent data. It is a commonplace to say that inequality is increasing, but new evidence for both the UK and the world shows that this may not be the case. The latest UK data show that income inequality rose sharply in the 1980s, but then stabilised. In 2016/17, the Gini coefficient was at the same level as in 1994. Of course, a Gini-coefficient in the 30s is still relatively high, say compared to some other EU countries. Wealth inequality has also not increased. As Chris Giles concludes:

‘Calling for action to help the poorest or to address inequalities is entirely legitimate, but any call to arms should not be motivated by a desire to correct a deepening gulf — because that has not happened.’

Globally also, the alleged increase in inequality has been contested. The data underlying the well-known Milanovich ‘elephant chart’, showing that globalisation has driven increased inequality, have recently been revisited in careful work by Homi Kharas and Brina Seidel at Brookings. They conclude that

‘the primary narrative is one of convergence: Poorer countries, and the lower income groups within those countries, have grown most rapidly in the past 20 years. The data do not support the idea that the poorest people are being left behind, nor that the richest are taking all the income gains.’

This is a good example of where nuanced analysis is required, for example distinguishing between regions, countries, and social groups.

The second point is that the debate badly needs an understanding of what causes inequality – within and between countries. The overwhelming impression given in the paper is that the author(s) think inequality is entirely driven by venality: tax avoidance, illicit financial flows, profiteering, driving down working conditions, self-serving remuneration committees etc . . . No doubt. But were other factors considered and excluded?

For example, it is not uncommon to find that inequality rises during the early stages of development (the famous Kuznets curve), when both skills and capital are scarce and earn higher returns. Similarly, it is hard to resist the conclusion that growing inequality and/or stagnant living standards have penalised those not able to benefit from globalisation. Read Janesville, for example, or Hillbilly Elegy, or look at the experience of forgotten towns in the UK. If jobs move to China and are not replaced, that is not a positive sum game for those who find themselves unemployed and perhaps unemployable. And another example, new technology often offers increasing returns to scale, as Ryan Avent has argued in The Wealth of Humans, or as Andrew Norton has explored for developing countries. Norton concludes that there are multiple ways in which technical change can lead to greater inequality: a loss of manufacturing jobs; greater returns to capital; rising incomes of top-end workers; loss of opportunities for the rural poor in modern supply chains; and greater insecurity for workers in the digital economy.

How to manage structural transformation is one of the great issues of the age (see ODI’s work on the topic or my own work on the transformative power of the food industry). It is interesting that neither of the words ‘industry’ or ‘manufacturing’ appear in the Labour Paper (except in relation to the ‘development industry’). The word ‘jobs’ only appears a few times, in relation to jobs for women. Yet Africa needs to create 18 m jobs a year up to 2035, just to absorb new labour market entrants.

Reducing the importance of GDP growth

Is the absence of discussion about jobs the result of downplaying the role of growth? No-one will disagree with the proposition that GDP should not be the only measure of development and that well-being should be considered in the round: the Stiglitz-Sen-Fitoussi Commission carried out an exhaustive review in 2015. Nor will anyone disagree with the need to take account of natural and human capital, as in the latest edition of the World Bank’s Changing Wealth of Nations. But it is quite a step from that to saying, as the Report does, that Labour will commit to ‘reducing the importance of GDP growth as an objective for UK-funded development programmes’. Is that true of Liberia (2016 per capita income $US812 in purchasing power parity on World Bank data) or only in the UK ($US42,609)?

This is an important discussion, driven partly by environmental concerns, for example the work of Tim Jackson on Prosperity Without Growth, and Kate Raworth’s more recent work on balancing environmental and social concerns through what she calls doughnut economics. The Paper’s concern for planetary boundaries is praise-worthy. When I last looked at this in 2011, developing ten propositions on climate change and growth, I noted that Jackson specifically excluded developing countries from his admonition not to grow. The Global Footprint Network shows which countries do need to slow down – those marked in red on the map in Figure 3. There are not many sub-Saharan African countries in that group.

Figure 4

Source: https://www.footprintnetwork.org/our-work/countries/

Where, I wonder, does Labour stand on this issue? The paper says that ‘we will work at home and internationally to decarbonise the economy, reduce fossil fuel reliance and promote alternatives that enable us all to live within planetary boundaries’. It would be good to spell out what this means for growth (and jobs) in the poorest countries.

 

Taking policy coherence (more) seriously

Finally, and briefly, just to note that there is a strong statement about the importance of policy coherence across Government. The paper says that

‘We will ensure that an annual whole-of-government plan is in place across government departments, setting out development objectives for the year with measurable indicators, and signed off by the Secretary of State for International Development. Each government department will be accountable for delivering on their objectives.’

There will also be international development special advisers posted in key Government Departments, as well as staff seconded from DFID.

Policy Coherence, or PCD, is a popular topic in the EU and also the OECD. As already noted, it was the subject of an enquiry entitled Beyond Aid by the International Development Select Committee of the House of Commons in 2015. Writing about the various initiatives at the end of that year, I said

‘Some people think that PCD – Policy Coherence for Development – is for anoraks. They’re wrong. In a world with fewer low-income countries, and in which official aid is declining in importance relative to other sources of finance, policy engagement is the future and PCD its standard bearer.

  • First, the various reports demonstrate that PCD is a valuable concept, which opens new conversations.
  • Second, the new paradigm is what development will increasingly be about in the future. This, of course, has huge implications for the orientation and staffing of development agencies.
  • Third, in a world in which global public goods and global deals become central to the development project, ‘Policy Coherence for Development’ is a misnomer, implying a one way relationship, when what we need is a two-way, shared commitment to collective action. ‘Policy Consensus for Development’ might be a better term.
  • Fourth, procedures and processes matter, but substance matters more. We should celebrate past work on conceptual frameworks and checklists, declare victory on process, and ask for a moratorium on method.
  • Fifth, when it comes to substance, we should choose a few priorities and really push.

My view is that the priority is to move away from high level statements (‘PCD is important’) and methodologies (‘we need a framework’) to action on specifics (‘what are we going to do about refugees?). . . . My own list includes refugees, of course, but also additional action on climate change, environmentally sustainable and fair trade, joint technology and innovation work, macro-economic coordination, and other things.’

The Labour paper is more or less consistent with this approach. More would be useful on macro economic coordination: for example, the G20 is not mentioned in the paper. The idea of Policy Consensus rather than Policy Coherence is worth exploring. And I do think the paper underestimates the political and institutional difficulty of implementing a new approach.

Conclusion

It is one thing to work through the paper and identify gaps: more on social protection, or multilateralism, or mutual accountability. The bigger point, however, is one which links many of the themes into a grand narrative about the alleged global ‘crisis’. This is a narrative about a rigged system, rising inequality and environmental degradation. Call it a ‘narrative of predation’. What it seems to me is missing is a companion ‘narrative of accumulation’: discussion of trade, technical change, migration and mobilisation of finance. I have written elsewhere about how to build a progressive industrial policy. Useful references for the next stage of dialogue include Jacobs and Mazzucato on Re-thinking Capitalism, McMillan, Rodrik and Sepuldeva on structural change, and Lin and Monga on Beating the Odds.

Kategorien: english

A Brexit update: why the development sector needs to mobilise

8. April 2018 - 21:54

A Brexit update: why the development sector needs to mobilise

 

 

You need to concentrate to keep on top of the Brexit negotiations. This is true even on a topic as circumscribed as international development- though I shall argue shortly that that throws the net pretty wide. The development sector is not fully engaged, I would say, and needs to work better together. Part of that means asking the right questions, including about the non-negligible possibility that we might not leave at all. There are seven priorities, for the Government and for the sector:

  1. Map the political landscape, including both the remain and leave sides of the argument, and in the rest of the EU as well as in the UK;
  2. Create and analyse scenarios up to and beyond the meaningful vote, so as to be ready for all eventualities;
  3. Stay engaged in planning for the period after Brexit, not just during the transition period, but beyond 1 January 2021;
  4. Understand better the implications of channelling money through the EU after Brexit;
  5. Develop strong, eye-catching proposals for collaboration with the EU after Brexit;
  6. Extend the aid analysis to other sectors, especially security, migration and climate change; and
  7. Assess the extent to which Brexit proposals affect the EU’s future plans, especially for the next Multi-Annual Financial Framework.

This is not a trivial project and will require many hands to complete. The British cabinet has a war cabinet on Brexit to lead key decisions, as well, of course, as a new Government Department specifically tasked with managing Brexit. Should the non-governmental sector have a similar structure. Will BOND lead? Or the think-tanks?

Mapping the landscape

To catch up with the negotiations, start with Theresa May’s agenda-setting speeches at Lancaster House in London in January 2017, in Florence in September 2017, at the Munich Security Conference in February 2018, and at the Mansion House in London in March 2018. Check the Road to Brexit contributions by the Trade Secretary, Liam Fox, and the Foreign Secretary, Boris Johnson. Read the latest negotiating guidelines agreed by the EU Council in December 2017. Trawl through the various versions of the Draft Withdrawal Agreement, most recently the colour-coded version published in March 2018 -  all available in the EU repository of Brexit documents. Don’t forget to keep up-to-date with the work of the Brexit Committee in the UK Parliament. Track the work of the think-tanks, including ODI, CER, UKTPO and CGD. And finally, keep an eye on the press, for example a recent article in The Times, reporting that the UK is offering to continue contributing to EU aid programmes after Brexit, as quid pro quo for a deal on security.

Two points before diving in.

First, the obvious point that development is about much more than aid – and also about more than policy specifically labelled ‘external’. Trade, climate, security, and migration are all intrinsic to development. And when the EU takes apparently inward-looking decisions on agriculture or industrial policy, or action on CO2, these all impact on developing countries. So the issue is not that tightly circumscribed after all.

Second, it is necessary to stand back from the minutiae and survey the entire political landscape, both in the UK and the EU.  Some think – and many hope – that the UK may revoke Article 50, and decide to stay in the EU, perhaps if a ‘meaningful vote’ in Parliament in October triggers a political crisis. Others disagree, and think the legal routes are blocked. Meanwhile, the EU itself is progressing its own political agenda, responding inter alia to the ambitious agenda for reform laid out in Emmanuel Macron’s Versailles speech in 2017; and, actually, does not necessarily see Brexit as its most urgent priority.

The question, then, is not just what a Brexit deal might look like, but rather about a range of scenarios. There are five questions to examine, with actions relating to each. They are:

  1. Will the UK leave? And what will the end game look like?
  2. What will it be like if the UK stays? And what preparations need to be made for that eventuality?
  3. What will the UK do wrt development if it leaves?
  4. What will happen to the EU wrt development if the UK leaves?
  5. What needs to happen now to prepare for the UK leaving?

In considering all these, I have found it helpful to think about possible applications of second best theory. Crudely, this says that if one of the conditions of the first best option is not available, the right way forward may not be the one that meets all the conditions save the missing one. The Free Exchange blog for the Economist has a nice example:

‘Consider a frivolous analogy to cookie-baking. If the optimal cookie contains chocolate chips and coconut flakes, but you have no chocolate chips, chances are you don't need the coconut either. The second-best cookie may be the gingersnap. If ingredients (or logical conditions) do their work through a certain combination or complementarity, you may have to aim for something completely different even if you're missing just one of them.’

Where do things stand at present?

So, where are we now?

  • Phase 1 of the Brexit talks covered the rights of UK citizens in the EU and EU citizens in the UK, Northern Ireland, and the financial settlement. The outcome was summarised in a Joint Report in December 2017. It included the important financial commitment that the UK would continue to contribute to the EU budget, and to off-budget instruments like the European Development Fund, until the end of 2020, and would ‘contribute its share of the financing of the budgetary commitments outstanding at 31 December 2020’.
  • The European Council agreed in December 2017 to transition to Phase 2 of the talks, covering the transition period and the framework for the future relationship. The text of the decision is here. Note especially that the UK becomes a third country on Brexit day in April 2019, and that it ‘will no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies’, including during the transition period. Nevertheless, ‘all existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will . . . apply, including the competence of the Court of Justice of the European Union’. Further ‘as the United Kingdom will continue to participate in the Customs Union and the Single Market (with all four freedoms) during the transition, it will have to continue to comply with EU trade policy, to apply EU customs tariff and collect EU customs duties, and to ensure all EU checks are being performed on the border vis-à-vis other third countries’.
  • The Council then agreed in March 2018 that the transition period should last until December 2020 and adopted new Guidelines, endorsing the commitment to a close trading relationship, but warning against ‘cherry-picking’, for example on regulatory alignment. The Council emphasised that the UK’s decision to leave both the Customs Union and the Single Market would necessarily add friction to trading relationships. The Guidelines also note that ‘the future partnership should address global challenges, in particular in the areas of climate change and sustainable development, as well as cross-border pollution, where the Union and the UK should continue close cooperation.’ And they say that ‘in view of our shared values and common challenges, there should be a strong EU-UK cooperation in the fields of foreign, security and defence policy.’
  • There is much more detail on all of this in the draft Withdrawal Treaty, including chapters on the European Investment Bank and the European Development Fund, and on Trust Funds.
  • Meanwhile, the UK position on future cooperation with respect to development, principally aid, has been set out in a ‘non-paper’, reproduced for ease of reference in Annex 1. This focuses on the design of aid instruments for the period after 2020, and argues that they should be designed so as to enable the UK to participate. Thus, the UK suggests that ‘new instruments are designed so that they are open to external partners . . . Partners should be invited to participate at a strategic level, with a seat at the table, where they are able to contribute expertise or resources (funding or in kind).’ Participation would be on a case-by-case basis, and would apply to development aid and humanitarian instruments, as well as to Trust Funds, the European Investment Bank, and a peace-keeping facility. A preference is expressed for off-budget options.
  • Theresa May touched on this issue in her Munich speech when she said that ‘while the UK will decide how we spend the entirety of our foreign aid in the future, if a UK contribution to EU development programmes and instruments can best deliver our mutual interests, we should both be open to that. But if we are to choose to work together . . ., the UK must be able to play an appropriate role in shaping our collective actions in these areas’.
  • Further clarification was offered by a UK Minister, Harriett Baldwin, in a parliamentary debate (in Westminster Hall) in March 2018. Specifically, she said ‘if we opt into EU programmes when that is the most effective way to deliver our mutual objectives, we would expect to engage with the EU at a strategic level on programme direction and would need to be assured of adequate governance arrangements to allow us to track and account for our spending and the results we deliver.’

Let us then turn to the five questions, and the implications for people working on and in development.

Will we leave? And what happens if we do not?

First, will the UK actually leave? That is hard to predict, but there are certainly many campaign groups lobbying either for remain, or for variants of a ‘soft Brexit’ (for example, retaining membership of the single market and the customs union). Groups include : Remain in EU: (@remainineu); Open Britain); Britain for Europe; Vote for Europe; I’m still in; European MovementBritain Stays; Pro Europa; UK to Stay; 16 Million Rising; People’s March for Europe; and Best for Britain. Key players include Tony Blair, Nick Clegg, Andrew Adonis, Chuka Umunna, Anna Soubry, Vince Cable, and Mark Malloch-Brown, among many others.

At the very least, development practitioners need to keep track of the debates, and think about what the end game might look like. For example, what happens if the ‘meaningful vote’ promised for October rejects the framework deal agreed with the EU? Will there be another referendum? Or an election? Note that a petition to the UK Parliament calling for the vote to include the option of a second referendum will be debated on 30 April.

Second, if Article 50 is revoked and the UK stays, there will be a scramble. The Multi-Annual Financial  Framework covering the period 2021 to 2027 will either be agreed or close to. Within a few months, in June 2019, there will be elections to the European Parliament, with lead candidates (‘spitzenkandidaten’) identified for each party group before that. A decision will be pending on the future of the ACP, the EU’s partnership framework with countries in Africa, the Caribbean and the Pacific. Probably, there will be action on many other issues (new migration rules? Syria rehabilitation?). The EU will (hopefully) have moved forward on reform, for example with respect to the euro.

It is hard to imagine the UK back at the table, trying to catch up. It follows that the Government needs to stay engaged as far as possible, and that development people need to stay on top of the agenda, maintaining close links for the purpose with counterparts in the rest of the EU. For example, the European Think Tanks Group, of which ODI is a member, is tracking the evolution of proposals about the new EU budget framework, contributing to the debate, and expecting to respond to the Commission’s specific proposals, when they are published in May.

Relations with the EU if we leave

Third, and concentrating on development finance rather than the single market or the customs union, the non-paper and associated discussion offer one answer to the question of what the UK will do with respect to development if it leaves, viz continue to contribute to EU activity on a case-by-case basis. There has even been a suggestion, as in The Times article cited earlier, that the UK will use the development and humanitarian aid budget as a bargaining chip in the negotiation about access to EU institutions. At present, the UK contributes about £1.5bn a year to EU aid programmes, just over 10% of total oda. Over the seven year period of the next MFF, assuming no change in the overall size of the EU development budget, the total UK contribution could amount to over £10bn (at current prices).

I have no idea whether this is a serious proposition or not. Brexiteers would undoubtedly be highly sceptical, as Priti Patel, former DFID Secretary of State, has already suggested. It is worth noting three points, however. First, there is a very good case for collaboration with the EU in one way or another, as Theresa May made clear in her Munich speech, and as the non-paper also argues. Second, however, the emphasis on a case-by-case approach is reminiscent of ‘cherry-picking’, or what Tony Blair has described as ‘cakesim’ (as in having one’s cake and eating it), which conflicts with the EU Council guidelines. Third, the devil is in the detail. At first sight, UK participation in EU aid instruments, would involve agreeing to the whole panoply of EU Council and Commission leadership, oversight by the European Parliament, implementation according to EU Regulations, financial control by the European Court of Auditors, and final adjudication of disputes by the European Court of Justice. Following Brexit, the UK would not be a member of any of these bodies, and the latest negotiating guidelines from the EU are clear that Brexit precludes ‘participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies’.

These arrangements, by the way, would kick in from Brexit-day in 2019 and apply throughout the transition period, even though the financial obligations of the UK would continue. The relevant paras of the Withdrawal Agreement, coloured green and therefore agreed, read as follows:

‘during the transition period, representatives or experts of the United Kingdom, or experts designated by the United Kingdom, may, upon invitation, exceptionally attend meetings or parts of meetings of the committees referred to in Article 3(2) of Regulation (EU) No 182/2011, of Commission expert groups, of other similar entities, or of bodies, offices or agencies where and when representatives or experts of the Member States or experts designated by Member States take part, provided that one the following conditions is fulfilled: (a) the discussion concerns individual acts to be addressed during the transition period to the United Kingdom or to natural or legal persons residing or established in the United Kingdom; (b) the presence of the United Kingdom is necessary and in the interest of the Union, in particular for the effective implementation of Union law during the transition period. During such meetings or parts of meetings, the representatives or experts of the United Kingdom or experts designated by it shall have no voting rights and their presence shall be limited to the specific agenda items that fulfil the conditions set out in point (a) or (b).’

If the instrument of choice were Trust Funds, or if off-budget instruments were created, the role of the EP might be reduced, but other arrangements would apply. Is that why Harriett Baldwin emphasised not just ‘strategic programme direction’ but also ‘arrangements to allow us to track and account for our spending and the results we deliver’?.

An important element in all of this is access to EU funds by UK institutions, especially NGOs, which may well become harder after Brexit. That needs action now, as per the recommendations I made a year ago: full untying of EU aid ought to be an objective, for intrinsic reasons (because untying is a good thing), as well as to protect the interests of UK NGOs and research institutes. Harriett Baldwin said she was on the case of NGO access, but some have described the UK NGOs as hostages in the negotiations.

My own view on the financial settlement has been shaped by the trade debate, where single market access and customs union membership after Brexit has been described by Prof. Alan Winters as ‘Pay, Obey, No Say’, to which  I add ‘No way’. Instead, a better option, which I laid out in August 2017, is for new initiatives, for example on fragile states, jointly strategized and led by the UK and the EU, but independently implemented, respecting each sides’ different institutions. This is the ginger biscuit option, rather than the ‘coconut and chocolate chip cookie but without chocolate chips’ option.

On fragile states, for example, this could be a new and large scale facility, jointly owned, and bringing together the best of both sides’ aid and non-aid resources. From the UK side, the expertise of the Conflict, Stability and Security Fund, currently run by the Foreign Office, as well as the resources of DFID, CDC, and the full panoply of the UK’s renowned military and intelligence capability. From the EU side, the aid resources of the EU, but also the European Investment Bank, and the expertise of the European External Action Service, for example in running military and civil missions in fragile states. This could to be big and ambitious, with joint funding from existing resources running into the billions not the millions.

Bargaining chip or not, it is obviously important to think through aid relations with the EU after Brexit. Strong and eye-catching proposals are needed: another topic for development practitioners.

The previous paragraphs deal with aid, where the 0.7% legislation in a sense protects developing country interests in the negotiations. The same does not apply to trade, climate, security or migration, four other key pillars of the UK’s relationship with developing countries. There is good analysis on trade, not least by ODI. Has there been similar material on other topics? I would be interested to have references. And shouldn’t someone be commissioning a systematic overview? For example, a Global Compact for Migration is currently being negotiated in New York, but it is not clear how Brexit might affect the EU’s already problematic diplomacy. And does Brexit encourage or discourage the EU from ramping up climate ambition in time for the 2020 review and 2025 Global Stocktake by the Conference of the Parties of the UNFCCC?

In this connection, it seems a pity that the proposed full enquiry on this subject by the International Development Select Committee in the UK House of Commons appears to have fallen off the agenda, at least for the time being.

How will the EU adjust without us?

The fourth question is what happens to the EU with respect to development if and when the UK leaves. The main immediate question relates to the Multi Annual Financial Framework, on which proposals are expected in May. A paper from the European Parliament discusses the approval process in detail, and notes that the Commission would like to finalise the exercise before the elections to the European Parliament. Personally, I think it would be desirable to tie the final decision to the European Parliament electoral cycle, so that fiscal issues become visible in the democratic process next year – but that seems unlikely to happen. On the substance, there has been a series of papers setting up the formal proposals, including a White Paper on the future of the EU published by Jean-Claude Juncker in March 2017, and a ‘Reflection Paper’ on the budget published by the European Commission in June 2017. The main issues are about the value-added of the EU, the overall size and sources of the budget, and the allocation of funding between different uses. The European Think Tanks Group has usefully reviewed the external aspects, which need to be rooted in a vision of Europe 2030. . But how do the vision and the comparative advantage change if the UK is not a member? That has been little discussed.

From the perspective of Brexit, it remains to be seen whether the shortfall created by the UK’s withdrawal will be made up by Member States and what the impact will be on the distribution of the budget as between its main purposes. That may become clear in May, and thereafter as negotiations begin. A related issue is what might happen if the UK commits to making contributions to EU aid instruments outside the framework of the MFF. Might the EU be tempted to allocated money elsewhere if it knew the UK would make up the shortfall? Something else for the development community to watch.

Next steps for the development community

Finally, then, what needs to happen now to prepare for the UK leaving, or not leaving? The next six months are key, from now until the meaningful vote in October. It follows from the points made earlier, that the development community as a whole, including the UK Government, but also the NGO and research communities, need to:

  1. Map the political landscape, including both the remain and leave sides of the argument, and in the rest of the EU as well as the in the UK;
  2. Create and analyse scenarios up to and beyond the meaningful vote, so as to be ready for all eventualities;
  3. Stay engaged in planning for the period after Brexit, not just during the transition period, but beyond 1 January 2021;
  4. Understand better the implications of channelling money through the EU after Brexit;
  5. Develop strong and eye-catching proposals for collaboration with the EU after Brexit;
  6. Extend the aid analysis to other sectors, especially security, migration and climate change; and
  7. Assess the extent to which Brexit proposals affect the plans for the next MFF.

This is not a trivial project and will require many hands to complete. The British cabinet has a war cabinet on Brexit to lead key decisions, as well, of course, as a new Government Department specifically tasked with managing Brexit. Should the non-governmental sector have a similar structure. Will BOND lead? Or the think-tanks?

Annex 1

The EU beyond 2020

Future Development Instruments: A UK Perspective

We stand at a key point in the future of EU development architecture. Debate on the shape of the post-Cotonou political framework for the EU’s strategic engagement with African, Caribbean and Pacific (ACP) states and Overseas Countries and Territories  is underway, and discussions are also taking place on the future financial frameworks for all EU development assistance from 2021.

A flexible, open and responsive EU is in everyone’s interests. We have seen how creating new, open, instruments, such as the migration Trust Funds, has enabled us to respond swiftly and effectively to large scale crises, working with the right partners in the right places. The flexibility shown by ECHO in opening up to externally assigned revenues (EAR) from third parties to participate in specific programmes, such as in the Sahel, where the EU is the lead humanitarian donor and has a strong field presence, has allowed key partners to boost the collective effort, and coalesce around a flexible but coordinated approach.

We are all clear that the development challenges facing us are only likely to increase in the coming years: reaching the SDGs, security, peace and stability, governance, human rights and the rule of law, migration management, investment worldwide, Africa, humanitarian aid and crisis response and conflict prevention. The $2.5 trillion funding gap to achieve the SDGs alone is well known. But it is also the complexity of the challenges that will require new and innovative approaches. We need therefore to collectively match this growing challenge with an increased level of ambition and creativity. Reaching out to a wide variety of partners which can offer technical expertise, geographical knowledge or presence, resources and/or funding, will increase the ability of the EU to develop new, joint approaches and increase our collective impact.

The EU has the opportunity now to design a set of future instruments which builds on the positive examples of the last few years, and creates an open and flexible enabling framework, within which the EU and its partners can work together to tackle these global challenges and help to build a secure, stable and prosperous world.

The EU will remain one of the largest development actors in the world, and the UK wants to retain a close partnership with the EU in the future. We share the same concerns, the same values and the same commitment to the SDGs, to the Paris climate change agenda and the Addis Ababa agreement on financing for development. We share a commitment to 0.7% and to testing new and innovative approaches.

We suggest that the new instruments are designed so that they are open to external partners that share these values and commitments, to enable this free-flow of ideas, pooling of technical expertise and resources, and joint approaches.  Partners should be invited to participate at a strategic level, with a seat at the table, where they are able to contribute expertise or resources (funding or in kind). Partners should be able to earmark funding within the geographical funds for Africa, the Caribbean and the Overseas Countries and Territories, and the Pacific, as well as to the neighbourhood.

The EU plays a global role in funding and responding to humanitarian crises, working with a wide variety of partners. The existing flexibility demonstrated by ECHO should be preserved, and further maximised by allowing key partners to contribute core, unearmarked, funding, in return for a close, strategic partnership in tackling the world’s humanitarian crises.

We welcome that the Commission’s proposal for new Post-Cotonou Agreement is open to external partners. This should be on an opt-in basis at a strategic level, with clear governance arrangements. We agree that political steering and activity takes place within the regional pillars, to ensure each region is given specific attention taking into account its particular challenges and needs, rather than at an ACP-wide level.

We suggest a coherent approach to migration, focussed on a “whole of route” approach. The trust funds have worked well, and their principles of flexibility and openness should be retained within any new instrument. A migration specific instrument could support joint European efforts, together with third countries and international partners, to better manage irregular flows, address their root causes, respond to humanitarian needs and maximise the development potential of migration.

The flexibility of the EDF to support peace keeping activities has worked well. We can see benefits in the proposal for a separate instrument to support global peace and security activities (including peacekeeping) but would like to continue to engage with discussions about the right structure. Given the global and regional nature of peace and security issues, the EU will need to preserve the ability to work with partners who have the relevant capacity and expertise. Any instrument should therefore be open to external partners to contribute on a case-by-case basis where priorities and objectives are shared, and governance mechanisms must ensure that partners have a strategic voice over activities to which they contribute.

We note the discussion on the EU’s investment instruments, and the proposal from the EIB for a new development subsidiary. We believe that here the same principles of open partnership and sharing of expertise should apply. In the future architecture for external investment, we would like to see particular attention paid to the importance of crowding-in private sector investment, facilitating the long-term development of local capital markets, and leveraging limited ODA budgets for maximising impact.  We need to find clever and more efficient and innovative ways of doing this in order to meet the challenge of financing the SDGs.

Priority should be given to the investment needs of least-developed countries and fragile and conflict-affected states, particularly in the areas of critical infrastructure and sustainable economic development. We would also stress the importance of using the EU’s investment architecture to promote collaboration between EU institutions and other regional and multilateral development banks, for example the EBRD and African Development Bank.

The call for budgetisation of all EU expenditure is well understood on the grounds of transparency and accountability. But we believe that such transparency and accountability can be achieved with some creative thinking, even if some parts of the EU’s development programmes remain off budget. Specific funding streams could still be “ring-fenced” to guard against funds being diverted to other priorities without due process. Having an off budget development programme further enables closer, more strategic  partnerships, and thus increases the chances of additional financial contributions. In a world where development resources are increasingly squeezed, the opportunity for such additional contributions should be encouraged.

We welcome these consultations on the EU’s future development architecture. As a current and future development partner, the UK has a clear interest in ensuring these discussions result in a flexible and modern development architecture, promoting collaborative partnerships, value for money and development results for partner countries, which is fit for the challenges of the 21st century. We look forward to discussing specific proposals over the coming months.

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