Diagnosis and cure

Good intentions, mixed results

The mid-1990s was a time of change, with the end of the Cold War, shifting international relations and emerging new regional conflicts in Africa. In the Netherlands, following a review of Dutch foreign policy in 1996, the Ministry of Foreign Affairs was reorganized to integrate development cooperation with foreign policy. The IOB evaluation assesses how these changes affected the Dutch Africa policy, its implementation, and its impacts.

The IOB focused on Dutch bilateral development aid only, and attempted to answer three basic questions. First, what considerations influenced the evolution of the Dutch Africa policy? Second, how, and to what extent, was the Africa policy implemented? Third, what has the Dutch Africa policy actually achieved? The 300-page report starts with an explanation of the methodology, and then describes developments in Africa over the past decade (demographic trends, democratization, trade liberalization and conflicts), the changing perceptions of what constitutes effective aid, and the influence of the major multilateral and bilateral donors.

Policy intentions

The first part of the report explains Dutch policy intentions with respect to sub-Saharan Africa over the period 1998–2006. Throughout the period studied, the Dutch policy for Africa changed and evolved under the various ministers. The IOB evaluation centres on what these ministers’ intentions were, and whether they were translated into policies with a true focus on Africa, in what fields did they want Dutch aid to make a contribution, and by means of which implementation strategies.

Breaking with the past (1998–2002)

In the first period covered in the evaluation, 1998–2002, the Minister for Development Cooperation Eveline Herfkens (Labour), together with Minister of Foreign Affairs Jozias van Aartsen (Liberal), wished to make a clear break with the past. First, in order to improve the effectiveness of Dutch aid, the number of countries receiving aid would be reduced. Only 12 countries in sub-Saharan Africa (See box, ‘Improving the effectiveness of Dutch Aid, 1998-2002) were to receive long-term bilateral assistance (involving direct government-to-government negotiations). The criteria for eligibility for this assistance were the degree of poverty, the quality of socio-economic policies, and good governance. In addition, two other countries would receive more limited bilateral assistance, while eight others would be included in the thematic programmes. Under these criteria, 15 ‘exit countries’ would no longer be eligible for bilateral assistance.

Second, the Netherlands aspired to take a lead in the design of a new international aid architecture. Therefore, an increasing proportion of Dutch aid would be channelled through the multilateral agencies, eventually rising to around one-third of the total aid budget. It should be noted that these multilateral funds are not included in the IOB evaluation.

Third, in order to improve the quality of Dutch aid, the focus on projects would be replaced by a new approach providing support to sectors. General budget support was also introduced. To promote ownership and increase efficiency, part of Dutch development funds were to be transferred to the treasuries of selected partner countries, and their governments were free to decide how to spend it.

Finally, in response to the growing calls for ‘trade not aid’, and to help developing countries strengthen their position in international markets, the government wished to improve the coherence in its trade policy. For that purpose, a ‘coherence unit’ was created within the Ministry of Foreign Affairs.

It was decided that as much as 50% of Dutch bilateral aid was to go to the African continent. The foreign policy intentions formulated at the time, however, were rather general and lacked a specific focus on Africa.

Consolidation (2002–2006)

Following the election of a new government in 2002, Agnes van Ardenne was appointed Minister for Development Cooperation and Jaap de Hoop Scheffer became Minister of Foreign Affairs. When de Hoop Scheffer was appointed secretary-general of NATO, he was succeeded by Ben Bot. All three are Christian Democrats.

The period 2002–2006 saw the consolidation of previous policy intentions in terms of improved coherence and the implementation of the sectoral approach. The provision of general budget support (GBS) to selected partner countries also continued. Donor harmonization was placed high on the agenda. Dutch aid was to be more strongly connected with the Millennium Development Goals (MDGs), as well as with the recipient countries’ own poverty reduction strategies (PRSPs). New elements in the policy included an emphasis on the theme of peace and security, the importance of an integrated foreign policy (diplomacy, political dialogue, security, trade and market access), and a larger role for the private sector in development.

Minister van Ardenne attached greater importance to accountability in the use of Dutch aid, and called for new instruments for measuring and reporting results. Among these were the ‘results reports’, introduced in 2004, in which staff were required to distinguish between results achieved through Dutch efforts alone, and those achieved in collaboration with other parties, and to state their contributions to the MDGs.

The spending targets for aid to Africa (50% of total bilateral aid), education (15% of the development budget) and environment and water (0.1% of GNP) remained unchanged. The expenditures on efforts to fight HIV/Aids, tuberculosis and malaria in 2007 were double those in 2002. The government continued its bilateral relationships with the original 12 African countries, and added three more. Under Minister van Ardenne, the focus on Africa was much stronger than it had been during the previous four years.

Implementation and results

Such were the policy intentions of the various ministers. But what came of them? This section summarizes the IOB’s evaluation of the implementation of Dutch policy, and the results achieved. With regard to general budget support and the sectoral approach, the picture is at best, mixed. Dutch policies on humanitarian assistance, coherence and conflict are evaluated mostly positively. Another positive note is that the intention to improve the effectiveness of Dutch aid was followed up. Whereas in 1998 the government had aid relationships with 47 sub-Saharan countries, this number had been reduced to 20 four years later. The IOB is highly critical about the implementation of the Dutch debt relief policy.

General budget support

Over the eight-year period, the Dutch government provided a total of €5.8 billion in bilateral aid to sub-Saharan Africa. Of this, €800 million went to 10 countries in the form of general budget support. GBS was the third largest spending category, despite the fact that there was no explicit policy with respect to this form of support.

What did the IOB find about the implementation of GBS? The ministry uses a complicated system, called the ‘track record’, to determine whether or not a country should receive budget support. Questions have been raised about the objectivity and the quality of this system, given that decision makers at the ministry regularly disagree about whether or not GBS should be granted. According to the IOB, in three cases (Burkina Faso, Tanzania and Uganda), ‘the controversial outcome of the track record determination was put aside by the minister in favour of a politically motivated decision’. The IOB concludes that GBS was used de facto as a political instrument. It also criticizes the fact that the conditions and procedures involved in the use of the track record are not shared with either other donors or the recipient countries.

General budget support often proved to be a budget-balancing item. The funds available as GBS depended on what was left over from the country budgets, and fluctuated considerably. This finding challenges the supposed advantage of GBS – that it ensures the predictability of Dutch funding. Disbursement pressure, which resulted in large amounts of ‘incidental budget support’, especially in 2000 and 2001, only made matters worse. In recent years the predictability of funding has improved, however.

What have been the impacts of GBS in Africa? Governments are free to dispose of the GBS funds as they wish, which has helped to strengthen their capacities and to provide better public services. As a result, more poor people gained access to education and health care. At the same time, however, the evaluators could not prove that GBS had contributed to economic growth or poverty alleviation. Although the IOB adds that this does not necessarily mean that a relationship does not exist, this is a serious conclusion given that GBS was the third largest category of spending. The IOB warns that more research into the effects of GBS is urgently needed to prevent the erosion of Dutch public support for this form of aid. This also holds for the issue of corruption, which the IOB describes as a ‘ticking time bomb’ that threatens this form of aid. Countries receiving GBS are supposed to have a good record on tackling corruption, but in practice this is not always the case. The IOB also expresses its concern that GBS may lead to increased donor dependency: what will happen to the salaries now paid to teachers and nurses if donors decide to cut down on GBS?

Another positive effect of budget support is that it promoted donor harmonization. The Dutch government signed various multi-donor agreements.

Sectoral approach

Sector support was introduced to improve the quality of aid through better donor coordination and the allocation of funds based on the development plans of the partner governments. The IOB finds that the Dutch sectoral approach indeed contributed to improved donor coordination. But donors often lacked the political will to rearrange their aid in accordance with the countries’ poverty reduction strategies (PRSPs).

Sector support had some positive results. Many Africans benefited from increased access to and improved public services, especially education. However, because most sector funds are channelled through national governments, the political will and the capacity of those governments determined whether poverty reduction was given priority. Attention to rural poverty declined.

Like many other donors, the Dutch favoured social sectors (education, health) and neglected support to productive sectors. Very little attention was given to increasing incomes in agriculture and in the informal sector.

Education

During 2002–2006, education was the fourth largest category of Dutch bilateral aid in Africa. As a result of the introduction of the sectoral approach, the allocations to education shot up. Dutch aid contributed to the ‘spectacular growth’ in access to education in several countries. In Uganda, for example, enrolment in primary education increased from 2.5 million children in 1995 to just over 7 million in 2005. The IOB nevertheless raises several criticisms.

First, children in poor rural areas benefited less from increased access than those in urban areas. Second, the quality of education has barely improved. Many problems remain, including high early school drop-out rates and children leaving school with very poor reading, writing and arithmetic skills. Most African countries will have difficulty achieving the MDGs relating to universal primary education and gender equality in education). Third, Dutch aid followed the international trend of focusing almost exclusively on primary education. This has been at the expense of improved access to and quality of adult education, vocational training, secondary and tertiary education. A fourth weakness has been the focus on educational ‘hardware’: investments in teachers, schools, classrooms and books. The studies in Uganda and Zambia show that investments in school management, district management and schools inspectorates are urgently needed.

The IOB is very positive about the leading role played by the Dutch in harmonizing donor efforts in the education sector in Africa. The Netherlands is also the biggest funder of the Fast-track Initiative, a global partnership of donors and developing countries that aims to accelerate progress on the MDG of universal primary education by 2015.

HIV/Aids

The IOB is generally positive and commends the government’s clearly defined policy and its labelling of HIV/Aids as a human rights issue. The implementation of the policy was largely in line with intentions. The goal of integrating Aids policy with other sectors is not yet common property, but it worked well in education. Initiatives treating HIV/Aids as a human rights issue were introduced in only half of the partner countries. But while most policy objectives were achieved, actual impacts are harder to measure. IOB believes it ‘plausible’ that Dutch support for national Aids programmes, support to the health sector, and the funding of specific HIV/Aids projects made a modest contribution to fighting the disease.

Rural development and agriculture

IOB’s judgement on this subject is generally negative. In the years 1998–2006 no strategic sector analysis of rural development and agriculture in relation to poverty eradication was conducted. Although rural development and agriculture were key areas for Dutch poverty eradication strategies in the 1980s and early 1990s, with a focus on marginal and remote areas, most of the support to these two policy areas was largely dropped. No explicit policy was formulated to explain or defend this change. This happened despite the fact that many African governments have stressed the importance of agriculture in their PRSPs. Existing aid activities in agriculture were sometimes continued under the headings of ‘private sector development’ or ‘environment’.

The IOB report concludes that the run-down of support to productive rural sectors has resulted in a decline in knowledge about rural development and agriculture within the ministry, at the embassies and in the field, which is rather ironic in view of Dutch experience and expertise in this area. Only in Mali is Dutch bilateral aid for rural development still considerable. Food security and the export position in Mali have improved, while farmers are benefiting from higher yields and more varied production systems.

Finally, in those countries where the Dutch government cut back its involvement in rural development, other than at the project level, exit strategies were only rarely applied.

Urban poverty

The policy intention to achieve a more integrated approach to urban development has barely been realized, and few results have been achieved. The IOB blames the introduction of the sectoral approach, which demands a focus on a limited number of priority sectors. Urban development was not among them. Activities undertaken as part of other policy themes – education, microcredit and health – improved specific aspects of the living conditions of the urban poor. Given that 35% of sub-Saharan Africans live in cities, more attention to urban poverty is needed. The IOB raises the question whether Dutch assistance should take the form of sector support, or through a focus on urban slums.

Good governance

The Dutch government introduced good governance as a key criterion for deciding whether a partner country would be eligible to receive general budget support. For at least the first five years, however, there was little political interest in, and a lack of in-depth knowledge about the subject of good governance within the ministry. In 2003, the policy papers Aan Elkaar Verplicht ( Mutual Interests, Mutual Responsibilities) and Sterke Mensen, Zwakke Staten ( Strong People, Weak States) eased this situation. The 2004 ‘Handbook on Good Governance’ was conceptually well developed, but was rarely used by embassy personnel, who did not think it practical enough. The IOB concludes that the Dutch policy on good governance suffered from the slow start and a rather technocratic focus. Nevertheless, Dutch support had impressive results in terms of advancing the so-called ‘narrow conception’ of the constitutional state by, for instance, training of lawyers and building courts of law. Dutch aid was less geared towards the higher goals of strengthening the constitutional state (respect for human rights and poverty alleviation), and sought little connection with economic development.

The IOB report poses a serious question: does sector support fit with the theme of good governance? Civil society appears to be a victim of increasing exclusion as a result of the provision of sector support, which flows through government-to-government channels. This is alarming considering that civil society is crucial for the advancement of the constitutional state in its widest sense.

Humanitarian assistance

Over the eight years, humanitarian assistance, amounting to €825 million, was the second largest spending category. The IOB concludes that, on the whole, this humanitarian aid was relevant and effective, but also expensive as a result of the geographical and other specific contexts of the interventions (for instance, the non-functioning state in Somalia and parts of the DRC, and the weak state institutions in southern Sudan). In light of the funds and personnel available, and the Dutch government was right to concentrate on a limited number of countries and regions. The importance of adopting a regional policy was stressed in several documents, but proved difficult to implement in practice. Regional policies have to include both partner and non-partner countries, which do not have the same access to bilateral funds. In some cases, the policy for a region proved to be subordinate to the policies with regard to partner countries in that region (the Rwanda–Burundi–Uganda–DRC region, for example).

After the attacks of 11 September 2001, some donors politicized their humanitarian aid. The IOB states that the Dutch humanitarian aid policy in sub-Saharan Africa was not negatively influenced by the ‘war on terror’. However, it was due to politics that humanitarian aid to Darfur came late (see box, ‘Sudan’).

Finally, a policy gap remains between humanitarian aid, support for reconstruction and bilateral development cooperation.

Conflict prevention and management

The Dutch government made an important turn when it decided that diplomacy, defence and development cooperation were to start moving in concert. This intention to integrate the various areas of foreign policy indeed found its way into specific policy papers and their operationalization in the Great Lakes region and the Horn of Africa. In these cases, the strategies for diplomacy, peace and security, emergency aid and structural assistance were clearly well aligned. The IOB commends the government for this. A downside is the time spent on the many consultations between different ministries that are now necessary.

The results of the policy on conflict prevention are difficult to judge. Many elements play a part in peace and democratization processes. Not only is it difficult to measure the impacts of the various means employed by the Dutch government (e.g. the Stability Fund, Civil Military Cooperation (CIMIC), diplomacy), it is also impossible to assess accurately the impact of one single donor. The IOB nevertheless concludes that the Dutch policy has certainly played a role in the stabilization of the Great Lakes region and the Horn of Africa in recent years.

The IOB is critical of the absence of the envisaged special budget for reconstruction, an instrument that could facilitate support for post-conflict countries and failing states.

Coherence

The coherence unit within the Ministry of Foreign Affairs prepared several policy papers as well as assistance strategies for specific sectors (sugar, cotton, fisheries, cut flowers), which provided a clear framework for action. Based on two case studies – the cut-flower industry in southern and East Africa and the cotton industry in West Africa – the IOB concludes that the coherence policy has made a considerable contribution to the efforts to improve market access for African flower and cotton producers. In the case of cut flowers, successes included a more favourable EU inspection regime leading to improved market access, from which small exporters such as Tanzania and Zambia in particular have benefited. Nevertheless, the cut-flower sector in these countries has not expanded over the past 10 years. No new jobs were created, but the fact that jobs were preserved is considered by IOB a contribution to poverty reduction. Dutch efforts – including those of the embassy in Benin – to improve the export position of West African cotton producers are highly appreciated by the West African countries, and by many developed countries and development organizations. However, due to the rigidity of US trade policy and only gradual changes in the EU position, Dutch pressure within the World Trade Organization and the European Union did not prove strong enough to achieve the desired fairer trade conditions on the international cotton markets.

With regard to the programme to encourage public–private partnerships (PPPs), which was intended to involve the Dutch private sector, progress has been disappointing. The IOB concludes that PPPs are mainly determined by the availability of donor funding.

The verdict

At the end of the report the IOB formulates a list of general conclusions and recommendations.

1. Making choices has not been the Dutch government’s strongest point. The years 1998 to 2006 were characterized by ‘too much policy’, with ‘too few priorities’, which made monitoring and effective guidance difficult.
2. The poverty focus of Dutch development assistance weakened due to debt relief and the introduction of the sectoral approach. Poor people in marginal rural areas and urban slums have increasingly gone unnoticed.
3. In future, funds used for the cancellation of export credit debts should no longer be drawn from the budget for development cooperation.
4. The Dutch government should be more reticent about giving general budget support to governments that violate human rights, manage their public sector badly and do too little to stop corruption.
5. Productive sectors need more focused attention.
6. The shift away from projects to sector and budget support was supposed to strengthen ownership. However, in view of the long lists of donor demands and pressures on recipient governments during the policy dialogue process, in most cases the Dutch government paid ‘little more than lip service’ to ownership.
7. Improving the effectiveness of long-term aid, which involves leaving responsibility in the hands of the recipient governments, has become subordinate to the need to score successes in achieving the MDGs. This could be remedied by applying a blend of different forms of aid rather than budget support alone.
8. Gender issues have increasingly been ‘mainstreamed’ into other policy areas. Focused attention on women decreased. Also, too little attention was paid to women in areas of conflict.
9. The gradual improvement in cooperation between the Ministry of Foreign Affairs and the Ministries of Finance, Agriculture, Economic Affairs, Defence and Education has been a positive development.

Footnotes