Progressing Aid Effectiveness in the WASH sector

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By Clare Battle, Policy Analyst, Aid Effectiveness & Sector Strengthening, WaterAid

As the 2015 deadline for the Millennium Development Goals (MDGs) approaches, the Water, Sanitation and Hygiene (WASH) sector continues to face serious challenges that are hampering progress. Although the world has met the MDG target for drinking water, 748 million people still lack access to an improved drinking water source, and 2.5 billion people cannot access a basic toilet. Sanitation is among the most off-track of all the MDGs, with the percentage of people with access to improved sanitation barely increasing since the MDGs were agreed 15 years ago.

Yet despite these considerable challenges, ambition is increasing. As negotiations for a new set of post-2015 global development goals move forward, there is growing expectation that universal access to water and sanitation by 2030 will be a key pillar of a new framework to eradicate extreme poverty. Such international commitment would amount to an historic opportunity.

But the step change needed to meet this goal would not only require significantly more investment; it would also require a different way of doing business.

Governments, donors, the private sector and civil society will all have a vital role to play in ensuring sector resources are put to good use. They must strengthen the country processes needed to deliver permanent WASH services that reach everyone. One particularly important area is the effectiveness of development aid. Many developing countries remain heavily dependent on donor funds to deliver WASH services, and effective aid that enhances recipient country governments’ capacity to extend and sustain WASH services is crucial to achieving permanent universal access.

However, evidence suggests that aid to the WASH sector is not currently as effective as it could be. Fragmentation remains a challenge, and donor commitment to strengthening national institutions and addressing national priorities is sometimes trumped by desire to maximise short-term impact. Statistics show that project type interventions accounted for 88% of water supply and sanitation aid in 2012.

There is therefore an urgent need for the WASH sector to improve its understanding of how aid can optimise progress, and to foster mutual accountability for sector performance. A new report by WaterAid – released last month – is a useful starting point, drawing on previous work both within and beyond the WASH sector. It looks at how the health and education sectors have tackled the challenge of strengthening mutual accountability, with case studies in Ethiopia and Timor Leste providing examples of current practice in the WASH sector.

These studies demonstrate the complexity of development co-operation in the sector. In Ethiopia, the Government has launched its One WASH National Programme (OWNP), with the vision that development partners will align around a unified set of country-owned systems. But despite donors’ broad commitments, there are concerns that headquarter rules and perceptions of risk will limit how far they can align with these policies in practice. In Timor Leste, new Water and Sanitation Information Systems have marked important progress in monitoring WASH sector results, but there are still major technical and political challenges to effectively link monitoring to planning and resource allocation. Both countries also face challenges in increasing transparency and strengthening mutual accountability in the sector.

WaterAid’s report aims to support the sector in addressing such issues. It proposes a series of common practice and performance measures that capture the most important facets of effective WASH aid. It also explores the types of institutional arrangements that could be used to monitor practice. This provides the first step towards a global framework that can introduce greater scrutiny and mutual accountability into development co-operation in the WASH sector.

wateraidquoteWe must ensure that the WASH sector’s work to strengthen mutual accountability is closely linked with global efforts to improve the effectiveness of development cooperation.

Over the coming months WaterAid will work closely with other members of the Sanitation and Water for All partnership (SWA) to increase our understanding of current practice in aid to the WASH sector, and to develop a bold roadmap to make it more effective. But the Global Partnership for Effective Development Co-operation also has an important role to play in ensuring development resources are translated into improvements in sector performance. There is clear evidence that momentum created by global agreements such as the Paris Declaration and Busan Partnership Agreement (and their associated monitoring processes) can drive progress and improve the effectiveness of development co-operation among WASH sector actors. A globally coordinated dialogue that maintains momentum around these principles is therefore invaluable. The WASH sector also has much to learn from initiatives to strengthen country processes in other sectors, such as health and education, as well as much to contribute from its own experiences. The Global Partnership can play a unique role in facilitating such dialogue and exchange by doing more to reach out to sector actors, and using their experience and expertise to strengthen the Partnership’s own work.

We must ensure that the WASH sector’s work to strengthen mutual accountability is closely linked with global efforts to improve the effectiveness of development cooperation. Only then can we successfully catalyse the step-change in performance needed to realise our ambition of sanitation and water for all.


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Clare Battle is a Policy Analyst at WaterAid, an international charity that transforms lives by improving access to safe water, hygiene and sanitation (WASH). Her role includes leading WaterAid’s work to improve aid effectiveness and strengthen country processes in the WASH sector.

Using domestic revenue to build democracy

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By Peter Moors, Director General for Belgian Development Cooperation and Humanitarian Aid

 
Revenue authorities are central to building viable and accountable democracies. This idea is gaining traction in sub-Saharan Africa. Governments are recognising that social services and infrastructure will increasingly have to be financed with domestic revenue. Reinforcing the tax system in order to raise this revenue is central to strengthening the state and fostering good governance. A transparent and efficient tax system simultaneously bolsters intra-societal relationships and the relationship between citizens and the state.

Belgium believes that international assistance for domestic resource mobilisation is an important catalyst for broader governance reforms and development.

Domestic resource mobilisation is crucial in building sustainable states, representing an excellent investment for the development community. It is a vital avenue to finance human development and recovery and can provide an eventual exit from aid dependency. This vision was widely shared at a focus session that Belgium co-organised with Germany and the Effective Institutions Platform at the first High-Level Meeting of the Global Partnership for Effective Development Co-operation in Mexico earlier this year.

As the 2014 OECD Fragile States report points out, mobilising revenue in fragile states is a key element of a functioning civil service and robust state-society relations. It should be seen as a vital process whose positive side effects for society and stability are at least as important as the financial outcome itself. In many fragile countries, however, revenue authorities must be (re-)built from scratch. In this regard, Belgium is offering assistance to the Burundian authorities.

'Back To School' Programme in BurundiOfficial Development Aid for building tax systems can yield impressive returns on investment. The case of Burundi clearly demonstrates how effective revenue reforms can transform a developing country’s fiscal position, increasing country ownership.

Burundi, like many other fragile developing countries, has not yet been able to collect sufficient tax revenues to finance the necessary services and public goods to help the country meet the Millennium Development Goals. In 2009, however, the Burundian government began taking measures to improve public financial management in the face of out-of date legislation, weak governance structures, excessive bureaucracy and opacity over organisational roles and low skill levels. These efforts included a tax revenue modernisation programme and the creation of the Office Burundais des Recettes (OBR – Burundi Revenue Authority).

The OBR’s initial goal to improve the proportion of tax revenue contributions to GDP by 1% before 2016 was already achieved by 2011. That year, the OBR collected tax revenue that was nearly 60% higher than in 2009 – the year before it was set up – and one-third higher in real terms. By 2012, Burundi almost doubled its domestic revenues in comparison with the base year of 2009. In that year taxes collected by the OBR rose to BIF527 billion (US$350m), 75% more than in 2009, and the contribution of tax revenues to GDP was 16.7% against 13.8% in 2009. By 2013, the OBR was the most improved revenue administration in East Africa, having a score of 16.4 on the East African Bribery Index, down from 35.7 the previous year. This is a clear indicator that the OBR integrity policy is producing results.

Although the OBR has made very good progress in its brief five-year history, establishing a fully functioning revenue authority is a long-term project.

Burundi’s government is now generating a great deal more revenue from domestic sources, but there are insufficient domestic resources or external funding for the massive infrastructural development and expansion of public services required to consolidate the relative stability experienced since 2005. Burundi’s tax base remains narrow and for many years, fiscal revenues have formed just 20% of GDP, compared to an average of 45% in OECD countries. Annual GDP growth of around 4% is half of what the country needs to make real headway towards achieving its Poverty Reduction Strategy and Vision 2025. Until there is a significant rise in GDP per capita in Burundi, tax revenues will unfortunately be insufficient to finance the country’s development priorities.

In order to increase the quality of support, the political economy of tax reforms (in particular ownership and political will) has to be taken into account. Tax reforms should also be embedded in broader governance reforms. They should involve not only tax administrations, but also Ministries of Finance, sub-national governments (and the relationship between the national and regional levels), Parliaments and civil society, in order to increase accountability. The private sector, including informal businesses, is also an important actor.

Funding these reforms is a complicated affair, involving multiple donors. The UK’s Department for International Development (DfID) was the OBR’s inaugural donor in 2009, encouraged by its successful support of the Rwanda Revenue Authority (RRA). When it closed its office in Burundi in 2011, the administration of DfID’s funds – and the task of acquiring new donor support – was taken over by TradeMark East Africa (TMEA), a regional programme which works closely with East African Community institutions, national governments, the private sector and civil society organisations. It seeks to promote economic growth and poverty reduction through increased trade. The TMEA Burundi programme runs from 2010 until 2016. Belgium has provided funds through delegated co-operation and will also offer direct assistance to the OBR from mid-2015 through the Belgian Development Agency (BTC).

Official Development Aid for building tax systems can yield impressive returns on investment. The case of Burundi clearly demonstrates how effective revenue reforms can transform a developing country’s fiscal position, increasing country ownership.


Moors%20-%20A%20day%20in%20the%20life%20-%2028.03.2008Peter Moors is Director General for Development Cooperation and Humanitarian Aid in Belgium’s MFA since 2007. A career diplomat, he was Ambassador to Athens and Deputy Chief of Staff of the Prime Minister. Prior to that, he served at the Embassies in Prague and Rabat and the Permanent Representation with the European Union.

Why partnering with the private sector is key to inclusive growth

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By Lakshmi Venkatachalam, Vice-President of Private Sector and Cofinancing Operations, Asian Development Bank

 
Over the past couple of decades, no one can deny that the Asia and the Pacific region has represented a remarkable success story. Absolute poverty levels have fallen significantly and the region is on course to achieve a number of Millennium Development Goals (MDGs).

But more than 1.6 billion people in the region continue to live on less than USD 2 a day and remain vulnerable to shocks — whether economic or environmental. The region is also confronting widening inequalities and the challenge of enabling a decent quality of life.

A strong need remains for both dedicated knowledge support and for financing to address the region’s social and infrastructure gaps, including urgent measures to address climate change.

Over the past few years, policymakers and development finance institutions (DFIs) have increasingly looked to the private sector to help meet these financing needs. In the right investment climate, the private sector can support the inclusive and environmentally sustainable growth that is at the heart of the global development agenda.

A key contribution of the private sector is in promoting economic growth, which it does through investments, knowledge transfer, and enhanced productivity. By creating new markets, fostering competition, and making investments, the private sector helps allocate resources productively and efficiently, improving prospects for economic growth. Economic growth generates resources that can be used for future investment as well as social development.

According to the World Bank, the private sector is the source of nearly 90% of the world’s jobs. So by providing direct employment, as well as finance to the sectors and geographic regions where it is most needed, the private sector promotes not just growth — it promotes inclusive growth.

The private sector also helps to boost living standards. This extends beyond extreme poverty as captured in the MDGs to areas such as the availability and quality of goods and services such as housing, infrastructure, health, and education. In this context, the private sector also plays a critical role in improving service delivery through public-private partnerships. These are particularly relevant in the case of infrastructure, as they allow for risk sharing, and are benefitting from improved institutional capacity and clearer legal and regulatory frameworks.

The private sector can also promote the adoption and/or retrofitting of environment-friendly technologies. This is valuable in the face of climate change, which can adversely impact many critical development goals such as food security, health, and water. The largest mitigation opportunities, especially for energy efficiency, remain in middle income countries.

Lastly, the private sector is a reliable source of revenue for government operations through its contributions to taxes and duties.

Given these advantages, it is not surprising that DFIs have come together relatively quickly to agree on a core set of principles that would guide support for private sector initiatives. These include commercial sustainability, promotion of high standards and additionality – that is, the extent to which a new input or action can add to already existing ones. More importantly, the private sector itself, not least due to the fall-out from the global financial crisis, has begun to reexamine its role in promoting economic growth as well as its responsibility to society. It is therefore increasingly open to engagement on these issues, particularly with DFIs.

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Asia and the Pacific’s financing needs are indeed daunting. We, the multilateral development banks, need to engage the private sector on all fronts to an even greater extent than we currently do, to leverage both finance and knowledge.

The Asian Development Bank (ADB) has long recognised the private sector as a key driver of change in attaining its three long-term strategic agendas of inclusive growth, environmentally sustainable growth, and regional integration. In line with our commitment to transparency, ADB publishes the annual Development Effectiveness Review, with 89 performance indicators to assess progress in implementing these priorities. The dedicated 2013 private sector operations Development Effectiveness Report was published on July 25th.

With $1.8 billion approved in 2013, our Private Sector Operations Department provides comprehensive financial assistance including loans, equity investments, guarantees, cofinancing and technical assistance. Our clients are private companies, banks and financial institutions, investment funds and state-owned enterprises. All our private sector interventions are aimed at maximising development impact. In doing so, our aim is to supplement or complement commercial finance, particularly in areas where perceived or persistent market gaps are inhibiting private investments.

What can ADB contribute to effective development co-operation with the private sector? Firstly, we are an Asian institution with a long and stable relationship with developing countries in the region. Based on the foundation of our strong infrastructure and financial sector exposure, we are increasingly entering sectors where we see promising potential for sustainable inclusive business models, such as agribusiness, education and health. Our strength lies in the synergies we derive from our sovereign operations in the core areas of policy and regulatory support.

Our private sector portfolio has more than doubled since 2006, totaling $6,219 million in 2013, comprising 155 accounts and 140 projects in 20 countries. Aligned with ADB’s core specialisations and sector priorities across individual member countries, 96% of the portfolio supports infrastructure, environment, and finance sector development.

Asia and the Pacific’s financing needs are indeed daunting. We, the multilateral development banks, need to engage the private sector on all fronts to an even greater extent than we currently do, to leverage both finance and knowledge.


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Lakshmi Venkatachalam is the Vice-President (Private Sector and Cofinancing Operations) of Asian Development Bank since June 2010, leading ADB’s private sector initiatives and cofinancing activities. Based on the Midterm Review of its Strategy 2020, ADB’s activities in private sector development and private sector operations are targeted to reach 50% of its annual operations by 2020.

Civil Society’s Campaign for Effective Development: the Istanbul Principles

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By Patricia Blankson Akakpo, CSO Partnership for Development Effectiveness

How has civil society adjusted to the shift in global dialogue from aid to development effectiveness? Civil society has been at the forefront of campaigning for effective development, while still recognising that aid has the potential to help eliminate the root causes, as well as the symptoms of poverty, inequality and marginalisation.

Under the banner of the CSO Partnership for Development Effectiveness (CPDE), civil society has committed to the three-year programme “Civil Society Continuing Campaign for Effective Development.”

The programme, announced at the Global Partnership for Effective Development Co-operation’s High-Level Meeting in Mexico in April 2014, aims to make several concrete contributions to global development. At the end of the three years, CSOs in at least 50 countries should be able to claim their rights in multi-stakeholder development effectiveness policy arenas, as well as working on their own effectiveness. By then, CSO advocacy positions should also be clearly influencing global development and development co-operation policies. Finally, multi-stakeholder initiatives should be advancing an enabling environment for CSOs at relevant national, sub-regional, regional and global policy arenas.

Looking at our own effectiveness

In the two years since Busan, CSOs around the world have been actively promoting the Istanbul Principles for CSO Development Effectiveness and the International Framework for CSO Development Effectiveness. Hundreds of CSOs at the country level have developed initiatives to assess and improve their practice to make sure development has more positive effects on the lives of poor and marginalised people.

CPDEquoteDespite strong evidence of shrinking spaces for CSOs as independent development actors, stories of good development practices attest to the commitment of CSOs to work in ways that are consistent with the principles of development effectiveness.

For example, a “Training of Trainers” workshop in Johannesburg, South Africa involved 45 trainers from around the world to develop regional plans and advance development effectiveness in their region. Codes of conduct, workshops and learning tools have been adapted to country contexts to increase awareness of the Principles and their practical implications. This work includes promotion of the Principles with official aid provider agencies and partner country governments; workshops to strengthen Human Rights-Based Approaches to development co-operation; promoting gender equality as an essential condition for CSO development effectiveness; and developing tools and workshops to strengthen understanding of development relationships that reflect equitable partnerships. Finally, CSO are working to be more transparent and fully accountable for their development efforts.

Reflecting on emerging results

These efforts are starting to show results. For instance, the Istanbul Principles helped grassroots communities in Cameroon to participate in local development plans. They also helped establish five citizens’ councils across the country to give the people a voice in local governance.

In Georgia last year, a Memorandum of Understanding (MOU) was signed between local CSOs and the Parliament, officially endorsing the Istanbul Principles. The MOU institutionalised policy dialogue based on mutual respect, trust and fair co-operation between legislative bodies and CSOs —reflecting the beginnings of equitable partnerships and solidarity.

In Asia, CSOs in Cambodia developed their own Code of Ethical Principles and Minimum Standards for NGOs to support their work on their own organisational practices. Cambodian CSOs also played a pivotal role in developing their own self-regulation system to practice transparency and accountability.

CSOs’ commitment to maximising their development impact is starting to bear fruit, as shown by some of the many examples of CSOs working on their own effectiveness and accountability as independent development actors.

Continuing the Campaign

The fourth High-Level Forum on Aid Effectiveness held in Busan in 2011 was a breakthrough in its acknowledgement of the link between effective CSO work and the conditions that enable them to maximise their contributions to development. The policies and practices of governments, donors and the private sector all affect and shape CSOs’ capacity to engage in development practices. Progress in realising effective development, therefore, depends not only on CSO initiatives but also equality among all stakeholders involved in shaping the global development architecture.

Despite strong evidence of shrinking spaces for CSOs as independent development actors, stories of good development practices attest to the commitment of CSOs to work in ways that are consistent with the principles of development effectiveness. Clearly, challenges remain and more progress is needed, which is why the CSO Partnership is more committed than ever to continue its campaign for effective development.


AkakpoBioPatricia Blankson Akakpo is one of the CPDE Co-Chairs and Senior Programme Officer/Head of Secretariat for the Network for Women’s Rights in Ghana (NETRIGHT). She has a Master’s degree in development studies from The Hague, Netherlands, and more than fifteen years of experience in the field of gender and development, human resource management, labour relations and programme management.

Triangular co-operation and knowledge-sharing: a view from Italy

Population Explosion - The Concern of All Nations

By Lapo Pistelli, Italian Vice Minister for Foreign Affairs

 

In a world of multipolar growth, there is no longer room for a “one size fits all” model of development. New forms such as triangular co-operation offer significant opportunities to promote both mutual learning on development experiences and to maximise resources, capacities and knowledge.

Triangular co-operation promotes the engagement of new development actors and donors. This is crucial as the international community is in the process of defining a new global development agenda. The traditional distinctions and labels such as “donors-beneficiaries” or “North-South” co-opertation will no longer be as relevant as before in consideration of the diverse challenges all countries are facing. Partnership, common responsibility and mutual benefit are now key concepts for the development community.

In this framework, knowledge sharing across a broad spectrum of stakeholders is critical for laying and strengthening the foundations for endogenous capacity development. It is essential to foster mutually beneficial learning and to enhance local ownership and leadership. Triangular co-operation can promote knowledge sharing and enable new types of horizontal partnerships between “developed” and “developing” countries, creating “win-win-win” situations. These co-ordinated actions are of tremendous benefit, helping trigger the sharing of resources, competences and specific know-how, in line with aid effectiveness principles.

Field Coverage: BrazilWorking on a programme along with several partners with different financial and organisational mechanisms is not always easy. However, we believe that this kind of co-operation helps to share and disseminate best practices.

Italian Development Co-operation actively supports triangular co-operation initiatives. One clear example is Amazonia Sem fogo” (Amazon Rainforest Without Fire) programme, addressing the persistently problematic use of fire in livestock and agriculture in the Amazon region. The programmeaims to reduce deforestation through the development of alternative means to the use of fire in agriculture, thus contributing to the protection of the environment and the improvement of the living conditions of the rural communities.

After the successful experience of the bilateral programme from 1999 to 2009in Brazil, the Italian Government along with the Government of Brazil agreed with La Paz to replicate the programme from 2012 in Bolivia. The programme has strong training and capacity building components, and knowledge sharing is an essential element. The methodologies and systems developed in Brazil are now replicated in Bolivia. Brazilian Ministry of Environment officers and technicians who took part in the implementation of the programme in their country are training their fellow colleagues and farmers in Bolivia. Such co-operation between Italy and Brazil will now be extended to Ecuador: “Amazonia sin fuego” is currently in its activation phase.

Working on a programme along with several partners with different financial and organisational mechanisms is not always easy. However, we believe that this kind of co-operation helps to share and disseminate best practices. This is done by engaging partners in research for shared solutions to common problems and by promoting inclusive and sustainable models of development.

This same spirit is at the core of Expo Milan 2015 with the theme “Feeding the Planet, Energy for Life”.  There are now 147 official participants registered and millions of visitors are expected. All of this will coincide with the negotiations on the Post-2015 Development Agenda. Expo Milan thus represents a unique chance to contribute to the global debate on sustainability as well as food and nutrition security. It is an opportunity to share best development practices. It will be a platform for mutual learning and for building new partnerships among different actors on key issues of global development.

South-South and triangular co-operation can have a key role in achieving sustainable development in the framework of the Post-2015 Agenda. The Global Partnership for Effective Development Co-operation could be the right platform for encouraging networks for experience and knowledge sharing in order to improve and strengthen development policies and practices.


Pistelli_54381_mediumLapo Pistelli is Italian Vice Minister of Foreign Affairs and member of the Italian Parliament, elected in 2013 for the Italian Democratic Party. He was a member of the Committee on Foreign Affairs from 1996-2004, and a member of the European Parliament from 2004-2008 where he served as both Head of the Italian Delegation and as a member of the committees for Foreign Affairs, and for Financial and Economic Affairs. In the Italian Democratic Party, he is the Head of the Foreign Affairs and International Relations Department.

Philanthropy and development – A new paradigm?  

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By Clare Woodcraft-Scott, Emirates Foundation

 
Philanthropy is changing. Not in any radical or revolutionary way, but slowly, oil-tanker style. It is moving at a slow but steady pace, creating new structural trends, a new appreciation of learning through failure and a healthy opening up to the idea of collaboration. Some might call it a paradigm shift.

Previously, foundations generally implemented time-bound, short-term projects, limited to a 12, 18 or 24 month timeframe, but today’s philanthropists are thinking much more systemically. The lexicon is changing as talk of long-term social investment programmes and inter-generational change gains traction. The difficulty of creating sustainable social value through short-term interventions is being recognised.

Where once foundations took a ‘spray and pray’ or ‘scatter-gun’ approach disbursing multiple short-term grants to multiple third parties in multiple different sectors, today they increasingly focus. Historically, when the remit of foundations grew, too often it diluted their impact. Today, foundations are much more targeted and in some cases focusing on just a single issue with a view to eradicating it permanently, rather than simply mitigating it temporarily.

Our model at Emirates Foundation is a case in point. From working with multiple different categories of beneficiaries and multiple themes with a large grant making portfolio, we now work on only one area – youth development. Moreover, rather than issue hundreds of grants each year to multiple third parties, we now run and manage our own programmes in-house.

While grant making is still the norm, new financial instruments and new operational models are emerging. Social impact bonds are being watched closely by governments, social investors and even conventional ones. These performance-based investments pay out when successful social outcomes result in public sector savings. They are driving a new way of thinking about how social finance should be structured.

Emirates2jpgWith our new operational Venture Philanthropy model, where we focus on only one area, we are already seeing a difference in terms of measurable outputs – over 40,000 youth in the UAE have been impacted by our programmes.

While often rightly reiterating the criticality of grants, foundations are now also looking at loan guarantees, debt and equity. As the world’s ‘wicked problems’ persist in their intractability, new financial instruments are needed to help scale up solutions. Community-specific innovation is not enough. The world needs large-scale initiatives to address large-scale problems. Extreme poverty still affects over one billion people on the planet despite over ten years of Millennium Development Goals (MDGs).

Measurement is also coming to the fore. In the past, foundations tended to track inputs – the number of grants processed, the number of projects completed and the total spend. Today, they increasingly look at outputs and outcomes. What was the real impact of their efforts and did it last? Impact investors go further, demanding a tangible social (and often financial) return on their investments, forcing philanthropists to focus on real value creation rather than simply delivery and execution.

New entrepreneurial ways of thinking are giving rise to new mechanisms of delivery with social enterprises at the fore. This hybrid model combines business principles such as efficiency, accountability and value creation with the traditional focus of social organisations. Social enterprise is also capturing the imagination of younger philanthropists disillusioned with the pure profit mantra of big business but convinced that philanthropy should be more results-driven and more transparent.

Where once money was a key component, philanthropists now look to combine financial resources with technical ones. Many foundations are now very ‘hands-on’ in terms of delivery and much less comfortable with a transactional ‘cheque-writing’ model. Traditional dependence on single donors is being replaced by a drive for financial viability as a critical component of achieving long-term sustainable results.

Where previously foundations may have kept their internal learning a closely guarded secret, today they are more inclined to share knowledge and insights. Logical frameworks and ongoing comprehensive evaluation are now seen as critical tools of improving internal learning and performance management. Foundations once averse to sharing ‘failure’ are now embracing it as a means of building capacity and credibility among investors, as a sign of track record and experience.

These trends have not yet been institutionalised across the sector but are more and more prevalent in its literature, networks and events. Emirates Foundation’s annual philanthropy summit was dedicated entirely to this topic last year, themed ‘Philanthropy in Transition’. The OECD-hosted foundation network, NetFWD recently published a report reiterating these points. Entitled Venture Philanthropy In Development: Dynamics, Challenges And Lessons In The Search For Greater Impact,the report documents the transition of four global foundations (Rockefeller, Shell, Lundin and Emirates) from traditional philanthropy to Venture Philanthropy (also known as Strategic, Catalytic, or Enterprise-based Philanthropy). All four changed their business model with a view to deploying philanthropic capital more efficiently and creating more measureable social value.

Not all are convinced of the new direction. Some traditionalists still challenge the idea of applying business acumen to creating social value. Even Boards are sometimes averse to applying the same principles of effectiveness and efficiency to a foundation that they would to a commercial entity. Such reticence continues to stymie the performance of the sector, allowing foundations to continue to report input rather than output and to gloss over things that didn’t work. However, the tide is turning as more and more philanthropists look for new models and new ways of delivering more impact and recognise that learning through failure is a powerful tool for driving greater accountability.

At Emirates Foundation we publicly acknowledge that the sheer size and diversity of our earlier portfolio was significantly diluting our impact and ability to create sustainable outcomes. With our new operational Venture Philanthropy model, where we focus on only one area, we are already seeing a difference in terms of measurable outputs – over 40,000 youth in the UAE have been impacted by our programmes.

Accountability and transparency lie at the heart of this new sectoral change. A step-change in both is moving philanthropy very much in line with global trends and the global demands of a twenty-first century where connectivity and a digital revolution kill opacity. It could also render the social impact of philanthropy much greater and more sustainable. Ultimately, foundations have a significant and growing potential to make a very strong contribution to some of the world’s most pressing social challenges. The sheer size of the philanthropic capital market means it can’t be ignored. With a new philanthropic paradigm that embraces efficiency and openness, perhaps emulated to some extent by the formal development sector itself, the MDGs and their reinvention, the Sustainable Development Goals that will replace them in 2015, might seem much easier to achieve.


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Clare Woodcraft-Scott is CEO of Emirates Foundation and oversaw its transition from grant-making to venture philanthropy. She has 20 years’ experience in sustainable socio-economic development as a practitioner, journalist and corporate executive. She was formerly Deputy Director of Shell Foundation which invests in social enterprises and earlier ran Shell’s social investment portfolio in the Middle East and North Africa. She previously headed Visa International’s public affairs in emerging markets and worked in Palestine for various development agencies.

 

Images used courtesy of the Emirates Foundation.

Data Revolution – The fulcrum for delivering the development effectiveness agenda

 

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By Vitalice Meja, Reality of Aid Africa Network

Real access to and use of data is crucial for development co-operation, and for the billions of people whom this co-operation aims to benefit. For development co-operation stakeholders, real access to data allows for transparency as well as better planning, targeting and review. For beneficiaries, real access enables ownership and accountability, while strengthening participation. As we deepen the implementation of the four key Busan principles, we must have a revolution in both access to and use of data in our development co-operation. Good data is essential in order to involve all people interested in delivering development results. It is also vital in enhancing transparency and accountability.

However, we must realise that this will not be a one-off exercise. It will not be achievable at the flick of a switch. It is going to take a lot of hard work, exercising political will and leadership for institutional and legal reforms, capacity building, and behavioural change.

Efforts towards a data revolution are underway and encouraging. Global and national initiatives have attracted development providers and recipients alike, improving access to information. The International Aid Transparency Initiative is working on the global front, while several initiatives such as Kenya’s e-ProMIS exemplify national efforts. However we must observe that neither global nor national initiatives have attracted all relevant players. IATI remains a coalition of the willing, while national governments struggle to get their development partners, including South–South partners, to supply correct and timely data. More positively, we can see that there are systems out there that can improve data access both at the global and national levels.

MejaQuoteData use should not lead to ‘business as usual’. It must bring about a total behavioural change in addressing the real needs of the people as well as leading to a better enabling environment for civil society initiatives.

Despite having systems to improve data access, bureaucratic procedures and political considerations still pose challenges to providing timely information. Lots of data supplied to the recipient country are not only outdated, but sometimes inconsistent with the information held by the provider country’s headquarters. This affects analysis and programming. Furthermore, few development partners are able to provide forward-looking data, making it impossible for actors in the recipient country to plan.  Furthermore recipient Governments have increasingly failed to capture adequately ODA flows in their national budget as well as their medium term planning instruments thereby compromising the integrity of these planning instruments as the data is never quite forthcoming in a timely manner. For civil society organisations, this problem is compounded by the technical nature of the data, as well as by the political considerations of recipient governments before releasing such information to the public. Data access seems to be a preserve of the executives and not the general public and the codification of such information reflects this mindset.  The view is that such information may be too politically sensitive to release to the public.

To combat this, we must invest heavily in the infrastructure and institutional frameworks necessary for the data revolution to take effect. Institutions must be capable of receiving, reviewing and processing data in a timely and effective manner. They must also be able to ensure the accessibility of this data to all who may need it. We must address the legal and regulatory impediments that impinge upon access to information.

Governments must also be willing to receive and process various forms of information from various stakeholders, including data beyond financial flows. For example, data from civil society on any negative impact of development programmes on communities, violations of human rights and abuse cases, domestic and sexual violence against women also need to be accommodated in the new data revolution.

While access remains key, data use is also important. The data revolution will have reached its objective when it has increased democratic ownership, strengthened partnerships and led to better development results. In this regard, we must build the analytical capacity of the institutions receiving data. This will not only require the technical aspects of capacity building but also human and financial resources. For millions of citizens around the world, data usage only becomes relevant when it empowers them to hold governments to account and to claim their own rights from the relevant institutions. Data use should not lead to ‘business as usual’. It must bring about a total behavioural change in addressing the real needs of the people as well as leading to a better enabling environment for civil society initiatives.


MejaBioVitalice Meja is a development policy analysis specialist in the areas of development cooperation, economic development, poverty reduction policies and microfinance as it relates to NGOs, government and intergovernmental organisations.He co-ordinates the Reality of Aid Africa Network – a pan-African network working on poverty eradication through effective development co-operation.

The importance of knowledge-sharing, triangular co-operation, and inclusive partnerships

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By Seiji Kihara, Parliamentary Vice-Minister for Foreign Affairs of Japan

The international community witnessed a number of natural disasters in 2013. Typhoon Haiyan, which hit the Philippines in November, caused extensive damage with about 8,000 people dead or missing and more than 16 million affected. Other countries, including India and Mexico, were also severely damaged by typhoons and hurricanes in 2013. The Solomon Islands, China, and the Philippines were struck by massive earthquakes. Many precious lives were lost and long years of development efforts were destroyed by these natural disasters.

Knowledge and experience sharing and triangular co-operation, discussed in the session at the High-level Meeting of the Global Partnership for Effective Co-operation in Mexico City in April, 2014, are valuable tools for promoting human security and establishing societies resilient against natural disasters.

Here is one example from Japan on how these tools can be used. In March, 2011, an unprecedented massive earthquake and tsunami struck our country, resulting in approximately 20,000 dead or missing, 130,000 collapsed houses, and 470,000 evacuees in the aftermath of the earthquake.

However, in that catastrophic situation, there was no damage to homes in a small coastal village in Iwate Prefecture despite this being the highest tsunami run-up ever – 40 meters above sea level – to hit this area. Why? This village had been hit by a tsunami in 1933, and had kept a record of damages and lessons learned on a stone monument as a way of sharing wisdom on where to build houses to prevent damage by future tsunamis. This knowledge-sharing saved many lives 80 years later.

Though this is just one example of knowledge-sharing across generations in a small village, Japan’s experience demonstrates that a country’s sharing of its knowledge and experience can save precious lives elsewhere. Japan has, tragically, confronted various natural disasters. We are sharing our knowledge and experience through opportunities such as the Third UN World Conference on Disaster Risk Reduction to be held in Sendai, Japan, on 14-18 March, 2015.

JapanStoneThe village – hit by a tsunami in 1933 – had kept record of damages and lessons learned on a stone monument to share wisdom on where to build houses to prevent damage by future tsunamis. This knowledge-sharing saved many lives 80 years later.*

Japan is also using triangular co-operation to reduce the risk of disasters. Japan initiated a project to construct Mexico’s National Center for Prevention of Disasters (CENAPRED) and offered grant aid and technical assistance to develop the country’s capacity after Mexico’s massive earthquake in 1985. Through the efforts of both countries, CENAPRED is now a disaster management hub for Latin America and the Caribbean to promote disaster-prevention measures, such as earthquake-resistant infrastructure, earthquake observation, and citizen safety.

Following the earthquake in El Salvador in 2001, Japan and Mexico launched a joint project to establish and promote an earthquake-resistant housing construction model through grant aid and technical co-operation provided by Japan. This project leveraged the strengths and experiences of both Japan and Mexico to maximise development effectiveness. Japan provided equipment and technical experts, including on earthquake-resistant construction, while Mexico sent technical experts to support the effective application of the technology based on their own knowledge, as well as their experiences working with Japan.

Approximately 60,000 people have participated in third-country training programmes so far since Japan started triangular co-operation 40 years ago.  Japan will continue to contribute its expertise to promote triangular co-operation around the world.

As well as knowledge and experience sharing and South-South co-operation, the Global Partnership meeting in Mexico also highlighted the importance of partnerships with the private sector to address diversifying development challenges. To achieve sustainable growth, it is necessary to create a virtuous cycle through infrastructure development, using Official Development Assistance (ODA) to leverage private investment, create jobs, and raise income standards, to attract further investment.

A people-centered perspective is essential when promoting private investment in developing countries. This includes having as many people as possible enjoy the economic benefits of investment; enhancing social resilience to economic fluctuations, climate change, and natural disasters through investment; and advancing local people’s capacity to promote investment.

Last but not least, Japan is currently revising its ODA Charter. It aims to promote Japan’s development co-operation more effectively by building upon the global discussion on the post-2015 development agenda and through the growing diversification of ODA’s role. In revising the Charter, we would like to stress the importance of strengthening partnerships with various development partners in order to maximise development effectiveness. This is a common principle underpinning both Japan’s ODA and the Global Partnership.

An inclusive partnership among various development actors is indispensable for addressing development issues looking ahead to post-2015. I sincerely hope that the Global Partnership will continue to play a crucial role in further strengthening this alliance.


New PictureSeiji Kihara is Parliamentary Vice-Minister for Foreign Affairs of Japan, and is serving a second term as a member of the House of Representatives. Prior to that, he worked for the Ministry of Finance for 11 years, including a secondmentat HM Treasury, U.K. He headed a Japanese delegation for the First High-level Meeting of the Global Partnership for Effective Co-operation in Mexico City in April, 2014.


* Picture source: A website page with archived information on tsunami damage, and tsunami stone monuments from the Tohoku Regional Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Japan

Boosting economic development: real aid to the Private Sector

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By Clare Coffey, ActionAid UK Programme Policy Manager

 
Right now, the development community is busy readying itself for the Global Partnership High Level Meeting in Mexico this month. Conversations there promise to range widely, but how best to use increasingly pressured aid budgets is sure to be high on the agenda both for donor and partner countries, as well as for the myriad of non-state actors who will be present.

The most effective use of aid will of course be subject to much debate well beyond Mexico. Should aid’s primary purpose be to support the delivery of essential public services to improve people’s lives in countries that simply do not have the money to do this themselves? Or should it be used to help countries grow wealthier and transform economically in ways that reduce poverty and inequality? Or perhaps we should use aid for both service delivery and catalysing economic development, with the question being to find an appropriate balance between the two?

These are decisions that should rightly be taken by partner countries themselves, in accordance with the now long established principles of country ownership and inclusive development partnerships. But in reality, evolving donor ‘fashions’ still very much colour the picture.

The current darling of many donor agencies is to channel increasing amounts of aid to economic development and to or through the private sector. In terms of securing long term development, it is widely accepted that economic growth is central but not sufficient – it is the type of growth that ultimately matters to promoting equality and reducing poverty levels. Indeed, according to a recent IMF paper, lower net inequality is robustly correlated with faster and more durable growth. In line with that view, it is critical that economic growth generates more government revenues that are then shared out, notably through taxes, and that a broad range of people participate directly in that economic growth through decent and well paid employment.

BusinessQuote2The role of states and the private sector is clearly critical here, with recipient countries needing to define and shape the quality and direction of growth so that it meets agreed social, economic and environmental objectives.

This is done using a carefully tailored set of economic and industrial regulation and subsidies, including but by no means limited to aid.

So as donors look at targeting increased aid at the private sector as an engine of economic development, it is important that they do so on the basis of clearly defined national strategies and using country systems and local procurement. Any donor targeting of aid to the private sector should be based on clear evidence that this spending not only will generate development results but that these will be truly developmental and transformational, helping to diversify economies away from heavy dependence on agriculture and informal sectors. They should also consider the opportunity cost of aid going to the private sector, given the likely implications in terms of reduced spending on other areas such as essential services. Critically, they should also assess whether aid is actually the best policy tool available for the partner country to promote economic development at all.

Unfortunately, it seems that donors are all too often pursuing other priorities in their support of the private sector. There are particular concerns that donors are using aid to benefit their own companies, either directly funding investments or by using aid to smooth the way for investors by securing greater access to resources or to markets. The G8 New Alliance, which seeks global investment in food security, is a case in point. Under this initiative, some African governments have committed to changing seed, land and tax laws to become more favourable to private investors. The promotion of aid to leverage private finance for the delivery of essential public services including health and education is also concerning, given growing evidence of the impact this can have for poor and marginalised communities.

Development agencies face many difficult questions in times of economic austerity, so it is more vital than ever that the international community meeting in Mexico next week is a chance to explore some of these openly and critically, and based on evidence of what works in the best interests of partner countries. The ultimate goal being that Official Development Assistance continues to deliver the best ‘bang for the buck’, reflecting the priorities and choices of partner countries themselves, and delivered in ways that supports country systems and local procurement.


CoffeybioClare Coffey is programme policy manager for ActionAid UK responsible for overseeing ActionAid UK’s research and policy analysis on a range of issues, including aid, the private sector and land. She can be contacted at clare.coffey@actionaid.org.

The Global Partnership High Level Meeting in Mexico City

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By J. Brian Atwood

 
 
There is a natural link between the post-2015 United Nations development goals process and the Global Partnership for Effective Development Co-operation High-Level Meeting that will take place in Mexico City, April 15-16. The efforts are complementary, but they are being pursued on separate tracks and with a different set of actors. Those attending the meeting in Mexico are charged directly with implementing the development agenda. They are ministers of development, planning or finance, and civil society and private sector representatives engaged in development co-operation. Their common purpose has had the effect of reducing the political tension that often accompanies other international meetings. Every effort should be made to transfer this intangible goodwill to the debate surrounding the post-2015 global development goals.

Accountability in the development field is here to stay, and this is where the Global Partnership’s effectiveness agenda has made its most important contribution.

Institutionalising Trust

Trust is not an easy commodity to create on the international stage and it has taken over a decade of intense work to create the partnership that is the basis for the success of this forum. It would be premature to suggest that the Global Partnership has been permanently institutionalised, but the Mexico meeting will be a good first test of that proposition.

Ministerial Agenda Driven by Partner Countries

The ambitious planning for Mexico City reflects intense participation by developing country partners. One of the plenary sessions— on domestic resource mobilisation and illicit flows—reflects a very healthy trend toward self-sufficiency and away from dependency. Recapturing illicit flows is a major objective of Nigerian Finance Minister and Global Partnership Co-Chair Ngozi Ojonko-Iweala, a cause she took up initially at the World Bank.

The Mexican government has promoted a session on the particular challenges faced by middle-income countries where poverty remains prevalent. Meanwhile, sessions on the increasing number of triangular projects involving traditional donors, new providers and partner countries reflect a willingness to work beyond the old North-South boundaries. “Knowledge sharing,” a key aspect of an increasingly sophisticated definition of the South-South model, will also be a central topic for the agenda. The meeting will focus, as did the UN High Level Panel, on “inclusive development,” possibly presenting a new “Framework for Inclusive Development Partnerships” involving governments at all levels, civil society, the private sector and donors.

These topics reflect the interests and the commitments of partner countries to the Global Partnership. It is this intense participation by low and middle-income governments that has made participation by the so-called “new providers”—the China, India, Brazil, and others like them—so attractive.

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This is a forum where traditional donors, new providers and partner countries can discuss their programmes, policies and approaches in a non-threatening environment.

These countries participate actively not because OECD donors ask them to, but rather because their South-South partners want them there. In this regard, the leadership being shown by Mexico as the host country is vitally important.

Monitoring: The Essential Accountability Tool

One of the most compelling aspects of the meeting will be the presentation of a monitoring survey showing evidence of countries’ progress or failure to meet obligations undertaken in the Busan outcome document. This survey has involved about 50 developing governments and the traditional donors, both bilateral and multilateral. This will provide a platform to call for accelerated progress, a higher level of ambition or for action to overcome bottlenecks where they exist. It will also credit donors who have shown real leadership in both the quantity and the quality of the assistance they provide.

Private Sector Dialogue

Mexico City will also see a major push to confirm the private sector as a partner in development. The premise for this important consensus was built at Busan where over 45 business associations participated to express their willingness to create a new partnership with development agencies and partner governments. This will hopefully lead to further innovations in financing investment, particularly in low-income countries where the risk is highest.

Creating an Even Better Partnership

Lastly, the steering committee chairs will present their ideas for strengthening the relationship between the committee and the key constituencies that make up the partnership. There is a tentative agreement to expand membership from 18 to 24, which will allow positions for Arab donors, another African member and a labor union representative. The three co-chairs will step aside and there seems to be interest in assuring that at least one be replaced by a representative of the next host country. Korea has offered to hold a meeting of an expanded committee each year between High-Level Meetings. This will in itself improve communications. The Steering Committee will be expected to exercise more substantive leadership and to concern itself less with process, a matter better left to the secretariat. What is encouraging is that this discussion goes to the heart of the institutionalisation of the Global Partnership.

It was my hope that when the Global Partnership was created it would become the central institution among all others in the development community. The global development challenge will require better co-ordination among all constituencies and this forum more than any other has the potential to play that role. There is also need to strengthen the capacity of the UNDP and OECD secretariat, and resources will be needed for that.

Let us hope that the Mexico City High-Level Meeting will live up to our aspirations. If it does, it will not only institutionalise a vitally important global forum, it also will positively influence the UN effort to conceive and endorse development goals for 2015 and beyond.


AtwoodBio J. Brian Atwood is a nonresident senior fellow in the Brookings Institution Global Economy and Development Program and Chair of Global Policy Studies and professor of Public Policy at the University of Minnesota’s Hubert H. Humphrey School of Public Affairs. He was OECD Development Assistance Committee Chair from 2011 to 2012. Previously, he was Administrator of the United States Agency for International Development from 1993 to 1999.

This post is an abridged version of the full text originally written for the Brookings Institution, available here.

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