Guiding principles for multilateral development policy. BMZ Strategy Paper e

Transcription

1 Guiding principles for multilateral development policy BMZ Strategy Paper e

2 Dirk Niebel, MdB Federal Minister for Economic Cooperation and Development Gudrun Kopp, MdB Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development Hans-Jürgen Beerfeltz State Secretary of the Federal Ministry for Economic Cooperation and Development

3 3 Contents 1. Context 4 2. Three guiding principles for German multilateral development policy 5 3. Implementing the guiding principles 11

4 4 1. Context Improving efficiency and effectiveness in development cooperation is a key concern of the German Federal Ministry for Economic Cooperation and Development (BMZ) in its efforts to shape its policies with cooperation countries and international organisations. In its bilateral cooperation activities, the BMZ has taken important decisions putting German development cooperation on track towards greater efficiency and effectiveness by reducing the number of cooperation countries, merging the implementing agencies of technical cooperation, and establishing an independent evaluation institute and contact point for civic engagement in the field of development policy. This reflects the political preference of the German Federal Government as expressed in its Coalition Agreement: to strengthen and expand Germany s bilateral development policy engagement in the cooperation countries. In the field of multilateral development cooperation, too, the BMZ has set itself ambitious goals that are enshrined in the Coalition Agreement and in the BMZ Development Policy Strategy Minds for Change Enhancing Opportunities. Both documents identify a set of key priorities for Germany s multilateral cooperation: increasing the effectiveness and coherence of the structures and instruments of multilateral organisations, raising the German profile in the international arena, and implementing the principles of the international division of labour in the spirit of Paris, Accra and Busan 1. These priorities are in line with the recommendations made by the OECD Development Assistance Committee (DAC) Peer Reviews for German development cooperation in 2005 and Those reviews called upon Germany to elaborate a strategy for multilateral organisations setting out the priorities for reforming the multilateral system and the criteria for multilateral funding. The present paper derives from the above tenets specific guiding principles for cooperation with international organisations and identifies the next steps in their implementation. This statement of guiding principles is to be circulated to the implementing agencies and to key bilateral partners and multilateral organisations. The German public with an interest in development policy is a further intended audience. 1 cf. the Coalition Agreement between the CDU, CSU and FDP, October 2009, pp. 128/129, StatischeSeiten/Breg/koalitionsvertrag inhaltsverzeichnis.html [24 September 2012]. Development Policy Strategy of the BMZ Chancen schaffen Minds for Change. Zukunft entwickeln Enhancing Opportunities, August 2011, pp. 16/17.

5 5 2. Three guiding principles for German multilateral development policy Through its multilateral development policy, the BMZ contributes to shaping cooperation with state and non state actors within and through international organisations, forums and networks in pursuit of global sustainable development. The following principles for multilateral development policy are to provide guidance for the BMZ in order to boost the effectiveness of multilateral development cooperation and improve its strategic focus. The guiding principles are to put the BMZ on track towards cooperating more effectively in future with a smaller number of more efficient organisations, and conveying its interests and positions in a targeted and proactive manner in the international arena. The BMZ will pursue this objective in cooperation with multilateral organisations such as the World Bank, regional development banks and the United Nations (UN). It will also do so in and with international forums and networks, such as the G8/ G20, the Organisation for Economic Co operation and Development (OECD) or vertical funds, in which, as a member or shareholder, it has sufficient scope to shape processes. The development cooperation activities of the European Union (EU) are a special case, for the EU, in contrast to the above mentioned multilateral organisations and forums, performs supranational tasks in relation to its member states and thus has development policy competencies which it exercises through its own institutional structures and financial resources. PrINCIPle 1: The BMZ promotes effective cooperation with multilateral organisations within an efficient international development architecture. The trend towards an ever broader donor spectrum that includes new bilateral donors, foundations and vertical funds, in combination with the growing number of multilateral organisations 2, offers huge political and financial potential. At the same time, however, this trend is leading to fragmentation of the international development system, exacerbated by a proliferation of new organisations and financing channels. This results in the available resources in partner countries being split among many channels, generates higher direct and indirect transaction costs and creates inefficient duplication of structures through newly established financing channels. It also binds and often overstretches governance capacities in partner countries, especially in the least developed and fragile states. Not least, fragmentation and proliferation constrain the effectiveness of multilateral organisations and prevent a targeted engagement for poverty reduction and sustainable development. The following measures are necessary to combat fragmentation and proliferation effectively and achieve an improved division of tasks at multi lateral level and between the multilateral and bilateral levels: 2 The 2011 DAC Report on Multilateral Aid distinguishes six major development organisations EU institutions; World Bank/ International Development Association (IDA); UN Funds and Programmes; Global Fund to Fight Aids, Tuberculosis and Malaria (GFATM); African Development Bank (AfDB); Asian Development Bank (ADB) and more than 200 small organisations.

6 6 > Limitation of the number of organisations or withdrawal from those which the donor community classes as lacking capability or development policy relevance. Germany s multilateral cooperation is already comparatively well placed in this regard, as the bulk of resources is channelled to the EU and the World Bank (cf. Figure 1) 3. Any decisions on withdrawal from organisations are a fundamentally complex and politically sensitive matter in which the BMZ must also take account of other aspects and especially of foreign and security policy commitments (e.g. membership of the UN Security Council, or strengthening Bonn as a seat of UN organisations). > Winding down programmes and funds within organisations, or merging sub organisations, programmes etc. that have similar mandates (as already initiated within the UN system by drawing together the organisations of development policy relevance under the UN Development Group (UNDG) umbrella). > Strengthening multilateral organisations in their core mandates or with regard to their comparative advantages for instance as international setters of norms (UN) or standards (OECD/DAC), development financiers (development banks) and global pacemakers and preparers of decisions (G8/G20) and establishing efficient ways in which tasks are divided among them, and between them and bilateral donors. 3 cf DAC Report on Multilateral Aid, p. 65; Reisen, Helmut (2012), Effizienz und Wirksamkeit in der Entwicklungszusammenarbeit. Vorund Nachteile bilateraler und multilateraler EZ. Papier vorbereitet für die öffentliche Anhörung des AwZ am , p. 3. Figure 1: German ODA to multilateral organisations and the eu, average from 2007 to 2011 in eur million 238,38 786,42 EU World Bank Group UN 193,62 339,16 Regional Development Banks Other Organisations (including GEF, GFATM) (Source: Federal Statistical Office/BMZ) 1.994,42 In order to implement the measures set out above the BMZ will: > assess the specific development policy capabilities and relevance of individual multilateral organisations and, on that basis, will decide on the type and intensity of its cooperation with them (cf. on this the notes on implementation in Section 3 of this paper);

7 7 Since 2009, the BMZ has collaborated with 16 other major donor countries in the Multilateral Organisations Performance Assessment Network (MOPAN). The network regularly reviews the performance of multilateral organisations. The BMZ works to advance MOPAN in both institutional and strategic terms, in order to make even better use of MOPAN s assessment reports and data in its own assessments of multilateral effectiveness. > actively support the reform activities of multilateral organisations and those instruments that help to reverse fragmentation within organisations; Successful examples of such approaches include the Delivering as One Initiative of the United Nations, the establishment of UN Women, and the trust fund reform agenda of the World Bank. > deploy targeted incentives and mechanisms to reduce fragmentation and proliferation; A good starting point for this is the more stringent regulation of Single Donor Trust Funds (SDTFs), which are often set up upon the initiative of individual bilateral donors and are administered by multilateral organisations. Increasing the overhead charges for establishing SDTFs at the United Nations and World Bank could provide a lever by which to constrain their further proliferation and create incentives for mergers into Multi Donor Trust Funds. The BMZ is cooperating in this regard with donors who have similar positions, and is seeking to influence those donor countries which rely greatly on funds to implement their measures. In the United Nations, Germany is advocating fixed core contributions instead of the now increasingly widespread payment of earmarked contributions, as the latter increase fragmentation and make it harder for an organisation to engage in autonomous planning in accordance with its mandate and to focus its activities strategically. Figure 2 illustrates that UN organisations in particular are currently funded to a great extent by earmarked contributions. > promote a purposeful division of labour among organisations, even if this means that organisations specialise in sectors and countries and must leave individual activity areas; The introduction of joint programming between the European Commission and the member states in individual partner countries is a promising example of the division of tasks. Participation in this instrument is open to non EU members and multilateral organisations. The BMZ would expressly welcome its expansion to include further partner countries and the participation of further organisations and donor countries in joint programming. > consult closely with other donors, newly industrialising countries and multilateral organisations on the further procedure to be taken to reduce fragmentation and proliferation;

8 8 Figure 2: Proportions of core and earmarked funding among international organisations % 10% UNFPA UNRWA UNHCR 8 12% UNICEF 6 16% UNDP 23% 4 25% WFP ILO FAO UNOCHA WHO 18% 2 0 EU Institutions World Bank Group UN Funds and Programmes Other UN Regional Development Banks Other multilaterals earmarked contribution core contribution Source: 2012 DAC Report on Multilateral Aid, p. 14. One aspect to discuss in this respect is how to best ensure systematic implementation of the think twice principle 4 before any new financing instruments are created. Beside bilateral consultations and the conferences of multilateral organisations, a suitable platform for debating this issue is provided in particular by the Global Partnership for Effective Development Cooperation, which is responsible for promoting and monitoring the implementation of Article 25b (on reducing the proliferation of multilateral channels) of the Busan Outcome Document. The Busan Building Block Managing Diversity and Reducing Fragmentation and the Senior Level Donor Meeting on Multilateral Reform (SLDM) also offer suitable forums for debate. The BMZ has a lead role in that Building Block, and hosts the SLDM in The BMZ addresses the issue of multilateral reform in a targeted manner in its consultations with other donor states in order to explore potential for cooperation and advance joint reform activities. 4 The 2012 DAC Report on Multilateral Aid specifically recommends this principle for international implementation. Cooperation within multilateral organisations also provides opportunities to discuss the issues

9 9 of fragmentation and proliferation with new donors and to involve these donors actively in efforts to solve the issues. New donors play an increasingly important role as members of international organisations and global agendasetters. The next phase of voice reform within the World Bank, for instance, should ensure that the contributions by newly industrialising countries to concessional financing (IDA) are reflected more strongly in the voting formula. PrINCIPle 2: The BMZ engages in systematic and targeted agenda-setting at international level. At present, Germany is perceived at international level as an honest broker and major donor addressing a broad array of themes. In future, the BMZ will define its profile among multilateral organisations in a more systematic and targeted manner, concentrating on specific themes which it wishes to advance. In addition to ensuring that Germany is clearly identified with selected themes and that there is a recognition effect among partners and multilateral organisations, the role of the BMZ as a pioneer of prospective themes is to be advanced. A twin pronged approach will be taken when selecting themes for agenda setting: On the one hand, the BMZ will identify its own priorities and advance these at multilateral level. This is done, for instance, by the BMZ placing staff in an issue focussed manner at key interfaces within the EU or multilateral organisations and maintaining close exchange with the German staff of other organisations. Such an approach has been practised successfully since 2004 within a strategic partnership with the Inter American Development Bank (IDB) in relation to climate issues. Furthermore, in 2012 the BMZ developed, in a process involving the World Bank and regional development banks, a joint initiative assisting partner countries to integrate climate change mitigation and adaptation activities into their national development strategies. At the same time, national implementing agencies are to be prepared for the future utilisation of the financing avenues provided by the Green Climate Fund. Issues that the BMZ considers to have priority for future German development cooperation, including with multilateral organisations, are: water supply and sanitation, the nexus between water, energy, rural development and nutrition, sustainable growth, as well as human rights and good governance. On the other hand, the BMZ makes active contributions to addressing the themes prioritised by multilateral organisations. For instance, the BMZ has succeeded in enshrining stricter criteria for the allocation of budget support in the Agenda for Change, the EU development strategy adopted in The BMZ will continue to monitor closely the implementation of the new EU allocation criteria and will contribute to the relevant working groups. The introduction and development of the newly established financing instrument of the World Bank, Programme for Results (P4R), which ties the disbursement of funds to partner countries with the attainment of previously agreed results, was advanced by the BMZ in close cooperation with United Kingdom. In the context of the 16th IDA replenishment round, the BMZ has succeeded in gaining the support of the World Bank for a reform agenda designed to improve its cooperation in and with fragile states. The further modernisation and substantive orientation of the World Bank will continue to be a key field in which to convey German positions and thematic priorities in future. Within the term of President Jim Yong Kim, a particular goal is to expand the Bank s role in the financing and provision of global public goods and to strengthen cooperation with the private sector.

10 10 Within the budget line International cooperation with regions for sustainable development, the BMZ has been implementing, since autumn 2012, the measure Strategic cooperation in and with international organisations, which focuses on agendasetting activities. Under this budget line, the BMZ finances, for instance, studies, conferences and workshops, but also staff secondments, in order both to convey its own themes in multilateral arenas and to strategically advance within international organisations the issues considered by the German government to have priority. PrINCIPle 3: The BMZ fosters the pro-development inter locking of its bilateral and multilateral c ooperation. Bilateral and multilateral development cooperation are complementary factors for successful work on a joint development agenda. In order to further enhance the efficiency of its development cooperation, the BMZ needs to coordinate and interlock its bilateral and multilateral engagement more closely. It is important to ensure that a win win situation emerges for both sides. At the multilateral level, the priorities of bilateral German development cooperation are to be established in a more targeted manner. When planning bilateral contributions in cooperation countries, Germany must ensure that these are coordinated optimally with the measures being taken by multilateral organisations and the EU at the local level. A raft of instruments designed to improve integration is already in place. These include delegated cooperation, basket financing, strategic partnerships, EU blending and national provisions. Tanzania is a pilot country for the provision of financial cooperation resources for GAVI, the global immunisation alliance. The experience gathered in Tanzania will be used by the BMZ to assess the performance of this instrument and take decisions on its future application. EU blending involves grants provided by the European Commission e.g. interest subsidies, loan guarantees, technical assistance, risk capital etc. being used to leverage market resources of European development financiers (e.g. Kreditanstalt für Wiederaufbau [KfW], Agence Française de Développement [AFD], European Investment Bank [EIB]). The single source financing provided within blending arrangements reduces effort for cooperation countries, as several financiers act in unison. The EU blending platform, which commenced operations in December 2012, will allow an even more effective use of this instrument. Agreements on mutual recognition of procedures (Mutual Reliance Initiative), streamlined decision making processes and uniform results measurement procedures will further augment the effectiveness of both European and national development cooperation. The BMZ promotes a coherent voice of German development cooperation in the international arena. Because questions of political governance often cannot be separated from implementation matters, the BMZ envisages in a manner analogous to the consultations with key bilateral partners carrying out regular high level management talks with the multilateral organisations of greatest relevance to its own policies and with the EU. The implementing agencies will be involved in these talks as the need arises, for instance in order to discuss how Germany s implementation expertise can be better utilised to develop the capacity of international organisations and how disparate procedures and standards at bilateral and multilateral level can be harmonised. Such talks may serve to optimally capture the value at international level of the Gesellschaft für Internationale Zusammenarbeit (GIZ), the largest implementing agency for technical cooperation in the world.

11 11 3. Implementing the guiding principles In order to implement the guiding principles set out above, a systematic assessment of multilateral organisations, forums and networks is to be carried out applying three criteria: > Development policy relevance/mandate of an organisation > Performance of an organisation > Scope for Germany to exert influence This assessment will then be used to take fundamental strategic decisions on the type and intensity of the BMZ s cooperation with individual multilateral organisations. These decisions concern: > identifying those organisations in and with which the BMZ can best attain its goals; > the political and thematic priorities and reform issues which the BMZ wishes to advance within the multilateral organisation in question and with regard to which it wishes to act as agendasetter; > the instruments and channels through which priorities and reform issues can be realised or conveyed at international level (for instance, forming alliances and conducting consultations at government level with like minded donors, convening regular high level management talks between the BMZ (involving implementing agencies as appropriate) and key multi lateral agencies, and engaging in strategic staffing policy); > allocations within the BMZ budget, both in relation to medium term financial planning and in specific budgeting. The BMZ will make use of the assessments of multilateral organisations to clarify its positions concerning an improved international division of tasks, reduced fragmentation and proliferation, and closer interlocking of bilateral and multilateral engagement. In future, the existing strategy papers which guide BMZ s cooperation with individual multilateral organisations are to be revised successively in the light of the criteria in order to create a uniform and comparable basis for multilateral cooperation. The BMZ will conduct the assessment of individual multilateral organisations with regard to specific decision making situations of relevance to the institution in question (strategy definition, replenishments, pledging conferences, etc.). This will mainly use the data gathered by previous surveys 5 in order to minimise effort for the BMZ divisions involved, the structure on the ground and representations at international organisations, and, in particular, for the multilateral organisations themselves. When conducting its assessments, the BMZ will collaborate with other donors (such as United Kingdom, Australia, Sweden, Denmark, the Netherlands, Norway) and partner countries which, using different methods and diverse data, also review the effectiveness of multilateral organisations. The criteria to be applied are explained briefly below: Development policy relevance and mandate of an organisation: We ascertain the mandate of an organisation by analysing the operational priorities and/or regions stipulated in its founding agreements. The key aspect is whether the organisation s mandate matches the BMZ s development policy goals and priorities (above all those set out in the BMZ Development Policy Strategy Minds for Change Enhancing Opportunities ) and the goals set by the international 5 Such as MOPAN, COMPAS, QuODA, and the assessments conducted by other donors and by partner countries etc.

12 12 community (above all the principles of the Millennium Declaration and the Millennium Development Goals). A further factor which may be important is whether international organisations cover countries and regions that are no longer included in the BMZ s bilateral portfolio, in which case the cooperation with organisations can be utilised to complement bilateral cooperation. This applies, for instance, to smaller, often under aided fragile states in which Germany and other bilateral donors do not engage and where multilateral organisations and the EU can act as donor of last resort by mobilising the requisite development contributions and thus spreading the associated risks more widely. To assess the development policy relevance of an organisation we review, firstly, its contribution to enhancing the effectiveness of development cooperation, secondly, the generation by the organisation of visible results that can also be communicated to the German public and, thirdly, the demand from our cooperation countries for the services offered by the organisation. Finally, we assess the influence and weight of the organisation in terms of setting international norms and development agendas and its role in coordinating different donor activities. Performance of an organisation: The concept of performance subsumes criteria such as internal organisational efficiency (including cost effectiveness), results orientation and partner orientation of the organisation. When gathering data on these criteria we can draw on a large number of existing surveys 6. When conducting a performance assessment, we not only monitor how effective an organisation is (performance level), but also the probability of its effectiveness increasing and improving (trend analysis). It must be borne in mind that the settings in which the various organisations operate differ considerably, which limits their direct comparability. For instance, the UN organisations often operate in politically sensitive situations and difficult settings, which can impair the anticipated results of their measures. Even institution building activities, such as capacity development in the education, health or environmental sectors, are only amenable to quantitative measurement to a limited extent. Influencing processes to reflect German positions: The assessment of Germany s scope to exert influence depends partly on formal factors, notably the German voting weight and the level of its financial contribution to an organisation. However, soft determinants must also be taken into account. We will therefore examine the general proportion of German staff in an organisation, how this will develop over the medium term and how we can engage in strategic staffing policy, including at higher management level, for instance through targeted secondments. A further decisive factor is whether alliances with like minded countries exist or can be established for specific issues within an international organisation in order to give the BMZ s positions additional weight and a stronger voice. 6 cf. also Footnote 5. The following are particularly noteworthy: MOPAN ( COMPAS ( org/compas/index.html) for the multilateral development banks, the results measurements conducted by the organisations themselves where available, such as the IDA Results Measurement System ( catalog/ida results measurement), and QuODA ( quoda). It needs to be kept in mind, however, that each of these approaches is based on different data gathering methods, which limits their comparability.

13 Published by the Federal Ministry for Economic Cooperation and Development (BMZ), Division for public relations, information and education Edited by the BMZ, Division Multilateral Development Policy; G7/G8/G20 Design and layout BLOCK DESIGN Kommunikation & Werbung, Berlin As at March 2013 Addresses of the BMZ offices BMZ Bonn Dahlmannstraße Bonn Germany Tel (0) Fax + 49 (0) BMZ Berlin Stresemannstraße Berlin Germany Tel (0) Fax + 49 (0) poststelle@bmz.bund.de

14 The priorities of German development policy More effectiveness More visibility More commitment More private sector More education More democracy Dirk Niebel Federal Minister for Economic Cooperation and Development Gudrun Kopp Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development Hans-Jürgen Beerfeltz State Secretary of the Federal Ministry for Economic Cooperation and Development