At the behest of the Brookings Institution, the public had the opportunity on Monday November 15 2010 to savor one of the latest publications on the Aid conundrum. The overarching point of departure of this work is that the current system of aid delivery is broken. In computer jargon, one could say the aid’s hard drive is corrupted and so needs a new operating system. It is important to note that according to the authors, the basic presupposition is that aid is indispensable to development. The moderator of this forum Dennis Whittle expressed it better saying, “Now is not the time to do different things but to do things differently.”
In setting the pace for the discussions, Homi Kharas (Senior Fellow and Deputy Director, Global Economy and Development at the Brookings Institution) lays out the main problem thus that for over the last fifty years aid has been in existence with over $3.2 trillion pumped in and yet experimentation is still rife. One cannot do the same things and expect different results. In appraising the current aid terrain, one thing that became obvious was the tons of literature spewed out stem mainly from the donors and little to nothing from the recipients. Hence, it was incumbent to scour the fields and piece together what is working whence the subtitle of the book – Lessons from the field. The book then is the story of aid efficiency in six randomly chosen countries namely Ethiopia, Kenya, Indonesia, Cambodia, Tajikistan and Pakistan.
Kharas identified four crucial issues bedeviling the current aid delivery model causing the clog namely: the acute fragmentation between the donors, volatility, lack of coordination and lack of information. It is fair to claim that the whole purpose of this new book was to address these epochal challenges with antidotal paradigms drawn from the field.
Kharas strongly affirmed that the impact of aid depends on organization and on information. He used the example of Aceh in Indonesia to make the point. In the aftermath of the Tsunami, the creation of a database whereby planners were able to overlay maps of needs on top of a map showing where resources were being provided led to the discovery of gaps in the delivery mechanism. With this, programmers were able to reprogram some of the aid in order to meet the discovered gaps.
Tajikistan provided another chapter in the book that examined the complex issue of joint country assistance strategies.
Beyond these country success stories, the book also drew lessons from the humanitarian relief industry, which according to this first speaker has been relatively successful. The one endearing lesson of this brand is in the fact that it had successfully set minimum standards and basically developed a laudable system of division of labor, specifying who is doing what, when, where and how.
Development assistance has not as much begun this journey, which is complicated further by the emergence of new actors like China and other International NGOs to add to the traditional aid donors.
In the wake of the foregoing, there is absolute need for a new model for aid for the 21st century, a little like having new wine in old wine skins. In Kharas’ words, it is a model grounded on a fairly old idea…that aid should be a catalyst for a country’s development and not a driver for the development. Therefore, what is necessary is not just the organizational structure at the country level, but also the will power to make sure countries actually own the aid that they receive. Such a model is defined by three D’s namely Differentiated country by country to align with development priorities of each country; it has to be Diverse and Dynamic to accommodate changes in aid and development conditions over time; they cannot but be inclusive to bring some of the new players into the discussion. The 1948 example of KFW channel for the Marshall Plan funds in Germany and 1950s US assistance to South Korea models are historical antecedents worth replicating.
In the second quarter of the presentation, Wolfgang Fengler (Lead Economist Nairobi Office of the World Bank) drew lessons from his experience in three different scenarios namely middle-income countries, very poor countries and aid volatile countries. He delineated three overarching lessons from the book for more traditional institutions namely:
a) Leverage – so rather than the World Bank building roads and schools, it should rather provide the funding to the government to do so.
– Big players should do big projects and leave the small projects to the small players.
– To get leverage, one would need good working relations with clients both within and without the government. China in the Kenyan experience for example though a new partner has more leverage because she delivers on her promises and avoids worthless prattle.
b) Aid donors must learn to stay on top of things and connect the dots instead of adding more dots. The example of Aceh is instructive here. To be efficient, donors should eschew the omnipresent temptation of focusing on building monuments; rather they should help in the backroom, in the control tower. In the Aceh reconstruction project, the indigenous controllers of aid posed the right questions such as: How much money will come from the NGOs? How many houses can you build in one year? The World Bank rather helped with connecting the dots such as “counting the money, counting the houses and helping to set benchmarks.”
c) Information is crucial especially in this age and time. Central to this project is information gathering and information sharing. Donor agencies must not lose sight of the fact that people and not machines are still running things. People provide information. To this end, the creation of Development Assistance Databases is indispensable. Three fundamental mistakes from previously poorly designed databases to be avoided in future are a) these databases must incorporate a comprehensive approach together with a b) clear cut methodology and above all c) donors must remember to share the information with those who provided the numbers.
In conclusion, Wolfgang applauded the Kenyan experience that has set up an Aid Effectiveness Group where government and partners meet regularly to exchange views. Secondly, Kenya has made giant strides in Information and Communication Technology with its crowd-sourcing tool whereby in the post election crisis with cell phones used to send text messages or other information onto a web server that then put them on maps. In his recommendation then Wolfgang noted that “aid needs to leverage knowledge because knowledge and information are the hardest currencies of this century.”
Dr Suruma a former Ugandan minister of Finance now Senior Presidential Advisor on Finance and Planning Uganda and Distinguished visiting fellow at the Brookings Institution) had the last quota where he validated the findings of the authors from his experience in public service in Uganda. He summed up his remarks with four Cs: Compassion and concern, complexity of aid, competition among donors and communication and coordination. One of the great assets of this work for Dr Suruma is the fact that beyond the rhetoric, cynicism and skepticism on aid, there is still abundant evidence that altruism is the driving force in aid. Aid is not only interested in politics and ideology but is born out of genuine compassion and concern for the poor.
Translation of this concern for the poor into effective aid, Suruma surmises could be the main point of this book. Suruma noted that it is one thing to provide aid, but it is quite another to provide the right aid and to provide it in the right way.
Competition among donors better known as the politics of aid is quite common. Here Suruma noted that there is the need to accommodate the competing interests and ideologies of donors and recipients. There is the need for flexibility in dealing with the vast array of actors especially with the novel donors like China.
To this end, communication among donors themselves and between the donors and the recipients must be vigorously pursued. Donors and recipients must avoid talking to each other or worse still over each other but rather with each other. The flexibility of the Ugandan President, Suruma intimated has greatly enabled the country to procure a great deal of aid, which is flowing in as budgetary support. To facilitate this process, Uganda has a strong liaison unit within the ministry of finance that tracks foreign assistance.
With respect to specific issues, Dr Suruma pointed out problems with implementation frames designed by donors. He demurred the paternalism of some donors who think they know better than recipients; then deliver very poorly designed and complicated programs, which take years to implement. He also identified the public procurement process as one of the complicated problems in the aid business and there is a good deal of corruption in the process on both sides. There is need for accountability for both donors and recipients.
In conclusion, Dr Suruma opined that it is not just aid that brings about growth but also investment, foreign direct investment, good policies and political stability.
A transcript of this discussion is accessible via the following link:
This book is also available from Brookings Institution.