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AID POLICY: Spotlight on New Deal for fragile states

DAKAR, 20 December 2011 (IRIN) - At the global aid effectiveness forum in Busan, South Korea, in November and December this year, the “G7+”, a group of nations which includes 19 fragile and conflict-affected states, agreed a New Deal on fragile states, which sets out concrete and, they hope, more relevant ways to improve peace- and state-building goals.
 
The New Deal will be piloted in Afghanistan, the Central African Republic, the Democratic Republic of Congo, Liberia, Sierra Leone, South Sudan, and Timor-Leste, with help from Australia, Belgium, the Netherlands, the UK and the USA.
 
It identifies five peace- and state-building goals as prerequisites for development without which “no MDG [Millenium Development Goals] will be met”, said Marcus Manuel, director of the Budget Strengthening Initiative at the UK’s Overseas Development Institute (ODI), one of the architects of the New Deal.
 
The goals include legitimate politics, security, justice, economic foundations and revenues and services. “If you don’t sort them [these criteria] out, no matter how many schools you build, if you haven’t figured out the payroll, you won’t be able to move forward,” Manuel told IRIN.
 
For years donor governments have struggled with how to approach development support to fragile states, which lack the systems or resources to process aid effectively, and often have high levels of corruption leading to low value-for-money.
 
Aid to fragile states has often propped up corruption, rather than weakened it, says the World Bank.
 
Some 1.5 billion people live in conflict-affected and fragile states, most of which are not on track to meet a single MDG.
 
However, the recognition that fragile states need a different approach to aid altogether, has gradually turned from policy and discussion - at the Paris and Accra aid fora and declarations for action - into a more concrete action plan, said Manuel.
 
New approach
 
Under the proposed changes (to be presented to member states at the UN General Assembly in September 2012 ) “compacts” with countries will be agreed, i.e. there will be a shared understanding of aid modalities and priorities drawn up by donors, recipient governments and civil society.
 
Rather than each donor assessing a recipient’s fragility, countries will be encouraged to carry out their own fragility assessments, which should create more apt solutions, Manuel told IRIN. For instance, the government of Timor-Leste deemed the need to re-house internally displaced people as a security priority once the conflict was over, and proposed giving each displaced family significant cash sums to do so. Donors said this approach was too expensive and would not work, but it did, and paid off, says the ODI.
 
With country ownership at the heart of aid efforts, donors should not shy away from direct budget support to fragile governments early on, if the right safeguards are set up first, says the ODI in a briefing paper. Donors waited five years after the conflict to invest in government structures in South Sudan, versus two years in Sierra Leone and Rwanda, and just a few months in Afghanistan, and in each example the early support was “critical” to rebuilding state structures, says the ODI.
 
In Guinea, deemed by many to be a fragile state, the health and public hygiene minister, Naman Kéita, told IRIN donor hesitancy to fund ministries directly, hampered their chances of setting ambitious agendas.
 
However, supporting national auditing systems, and strict financial safeguards come with this approach, stress aid analysts.
 
In other proposed shifts, donors will agree to streamline aid flows and their administration under the New Deal, for instance by setting up just one programme management and monitoring unit in each ministry rather than the current practice, where each donor may have its own. When the Rwandan government insisted on this approach, the capacity of its ministries started to increase rather than be over-stretched.
 
Practical things, such as caps on pay rates also need to be introduced, say the G7+, though the modalities are yet to be worked out. In Liberia, the UN was hiring well-qualified professionals at the same time as the government was, but the UN hired 10 times as many staff, and could pay them two to three times more, constraining the government's ability to hire.
 
Critics
 
However, some practitioners with long experience of working in fragile states, say country ownership and dismantling corruption may not always be a priority for governments.
 
John Morlu, ex-auditor-general in Liberia, who some say was pushed out of the job because his anti-corruption probes threatened high-level government officials, was skeptical. “I think we have to be very careful. We talk about countries taking ownership, but do they want to take ownership? I can think of cases in Liberia where it’s much easier to say, `This is UN driven, this is IMF [International Monetary Fund] driven’ because that gives you the political cover you need.”
 
Furthermore, local citizens may have priorities other than greater transparency and less corruption, Guinean and Sierra Leonean youths told IRIN: they want jobs more than anything else.
 
Manuel hopes that as country systems strengthen, development progress will also speed up - for now, patience is still required: a 2011 World Bank report estimates it takes 20-30 years to dismantle corrupt systems in a government.

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Theme (s): Aid Policy, Economy, Education, Governance,

[This report does not necessarily reflect the views of the United Nations]

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