Conclusion: Less pretension, more ambition

Development Policy22 Jan 2010The Broker

Development aid is a subject for discussion. In many ways the world has improved immensely over the past sixty years, however the question is increasingly being raised as to what aid’s contribution was to this development. Progress has primarily become apparent over the last couple of decades. Over the past twenty-five years, life expectancy in all developing countries has risen by ten years, and the percentage of children attending school has doubled. Poverty around the globe has also halved to a quarter of the world’s population, however this success was primarily achieved in Asia: China alone is responsible for three quarters of that decrease. In Sub-Saharan Africa real incomes have doubled over the past twenty-five years, but the percentage of people living on an income under the poverty line has not decreased.

English translation; ‘Less pretension, more ambition’ by the Scientific Council for Government Policy (WRR), presented to the Dutch Minister for Development Cooperation, 18 January 2010

Can the successes be attributed to development aid or can the lack of success be blamed on development aid? The answer to both questions is: “No”. Development aid is a subject for discussion. In many ways the world has improved immensely over the past sixty years, however the question is increasingly being raised as to what aid’s contribution was to this development. Progress has primarily become apparent over the last couple of decades. Over the past twenty-five years, life expectancy in all developing countries has risen by ten years, and the percentage of children attending school has doubled. Poverty around the globe has also halved to a quarter of the world’s population, however this success was primarily achieved in Asia: China alone is responsible for three quarters of that decrease. In Sub-Saharan Africa real incomes have doubled over the past twenty-five years, but the percentage of people living on an income under the poverty line has not decreased. Can the successes be attributed to development aid or can the lack of success be blamed on development aid? The answer to both questions is: “No”.

Development aid definitely contributed to the massive leaps forward made in Asia, from the economic support to Taiwan and South Korea in the 1950s to the aid for agricultural improvement provided to India in the 1970s. However, these contributions were limited – all manner of other factors were important. On the other hand, the lack of success, in particular in Sub-Saharan Africa, cannot unequivocally be traced back to aid failing. A lot of aid, particularly in the 1990s, had geopolitical objectives. Even today, a lot of aid primarily aims to improve the immediate living conditions of the poor instead of creating development. Moreover, economic, political and social structures in African countries are of a very different order. These countries still clearly reveal the traces of colonialism with their convoluted borders and institutions that are hardly rooted in society. Strong governments with a clear view of the future development of their country are rare in Africa in sharp contrast to Asia.

Simple analogies between development paths in various parts of the world soon become misleading. For example, a parallel between development aid and the Marshall Plan is wrong because the latter started out as an attempt to rebuild Europe after the war. It boiled down to reviving a formerly healthy patient, however many of the countries who need aid now have never had a healthy market economy or a functioning state system. The point of departure for the countries in Asia which managed to undergo rapid development in recent decades was very specific. Japan, South Korea and Taiwan could integrate into a world economy which was many times less regulated and (over)full than today’s world market – African countries who currently wish to produce for export not only face fierce competition from China and other Southeast Asian countries, but also a wide range of requirements that products and production processes have to meet. Development paths are in other words pre-eminently country and era-specific.

The first lesson to be learned from sixty years of development aid is that we should be modest. First of all, modesty is suitable due to the relative importance of aid. Development only depends on development aid to a very limited extent. This applies financially: foreign investments and the funds migrants send home constitute bigger flows of money to most developing countries than aid does. It also applies institutionally: with the exception of the aid to fragile countries and the very poorest countries, financial transfers are not, by definition, the best tools for contributing to development. In the majority of countries, unilateral trade concessions, more stringent international global tax regulations that also apply to multinationals in the West, financial stability, less strict intellectual property rights, the abolition of tax havens, knowledge pertaining to the climate-friendly development of agriculture, companies, transport systems and cities, and the return of stolen funds make a bigger contribution to development than classic aid does.

Modesty would also be good for our thinking patterns. For too long now, attempts have been made to use all encompassing plans to provide universal explanations for a multitude of specific situations and to subsequently write out equally universal prescriptions. In preceding decades, these were macro-economic reforms and good governance, and, in recent years investments in social sectors were popular, but every time the prescriptions were too general. After sixty years of generalising it has become apparent that specificity is required because it is impossible to be able to say – in general – what works best and why. This lesson is unavoidable: countries in Asia, such as China and India that took little notice of western economic orthodoxy and which worked pragmatically and creatively, underwent unparalleled development while growth lagged behind in Latin-American and African countries which, partly due to pressure from the IMF, tried to reshape themselves according to the general guidelines of the Washington Consensus.

Moreover, the world is changing. China, India and Brazil have become important players on the world market and this process has been accelerated by the current financial crisis which these countries – in which the government has a more important role, precisely also in the financial sector – proved to survive better than western countries. The world is rapidly becoming more crowded and more interdependent. The world’s population is expected to quadruple between 1950 and 2050 and, if the current trend continues, it will become nine times as rich. This means that social, physical and sustainability limits will soon come into view. Development itself will therefore increasingly become regional and global in character. The climate, trade, migration, energy and safety mean that national policy will increasingly be less of a sole determinant factor; the pressure to act globally and to enter into agreements will only increase. The principal task is to find ways to structure this globalising world in such a way that the joint interests, on the one hand, and space for countries and peoples to substantiate their own future, on the other, retain their equilibrium. This is only possible if every country and people has the impression that they have a place, count and can keep up with other countries. In that respect, the development of poor countries is increasingly becoming an unavoidable necessity.

This multiplicity of developments means the development aid sector faces countless major questions and the range of answers is therefore broad. For example, there are aid advocates who stubbornly continue to maintain that we could permanently rid the world of poverty for a few trillion dollars. This is an appealing message which appeals to the good in every human and many are only too happy to believe it (not in the least due to the efforts of many television stars who want their own ‘Bono moment’). However, there is no empirical basis for this statement: if only it were true that we could buy a better world for a reasonable sum. It is however impossible to lift countries ‘out of poverty’ from the outside in one fell swoop.

On the other hand, scepticism with regard to the value of development aid is also widespread. In particular, the idea that the preconditions have not been fulfilled in Sub-Saharan Africa which would allow development aid to act as a catalyst, depresses a lot of people. The image of neo-patrimonial structures with excessive corruption and local elites with a glaring lack of a sense of responsibility is easy to evoke. That impression is not entirely incorrect, but is too one sided. Developing countries differ and are complex entities with all manner of fractions, path dependencies and their own dynamics. It is about aligning with this intelligently and facilitating the right development processes.

There is therefore no general answer to the question whether development aid helps. Sixty years of evaluation studies also bear this out. The development of countries is influenced by so many factors and is, moreover, so complex that every attempt to provide a general answer encounters exceptions. That projects and initiatives sometimes fail is, upon closer inspection, not strange. In complex situations, acting is always a matter of trying things out, experimenting. That things go wrong every now and again is not bad, though it is important to learn from these mistakes. The latter requires continuously repeating the question under which conditions, which forms of aid can be useful. This is not easy, but is very productive. Putting specification and learning first does, however, demand a reorientation of Dutch development policy.

10.1 revaluing goals

Dosing and structuring development aid in such a way that this makes a difference in a world which is becoming increasingly interdependent: that is the central task for development aid policy. That task first of all translates into being clear about the goals, the means, and creating good links between the two in the assignment. There is no lack of visionary ideas in the development aid sector. Nor is there a lack of possible activities. Moreover, every ideal has its counterpart somewhere in a specific project. A minister for development cooperation can therefore easily demonstrate that he has thought of everything and that every random idea occurs in his policy. However, it is all about structuring the aid in such a way that it is systematically aligned with the goals selected. It is therefore also important to make targeted choices and to subsequently link these to serious consequences.

Modern development policy should organise itself in accordance to clear objectives. These objectives may differ. Analytically speaking three types of objectives can be distinguished at this point in time. To start with there are concrete poverty alleviation and the improvement of living conditions aimed at the here and now. The majority of development aid focuses on this and this form of aid can bank on widespread support from Dutch society. It proves that many citizens are becoming increasingly personally involved in this type of aid and are taking the initiative themselves. The government’s role in this is limited. It can facilitate those involved in finding out what the best thing is for them to do and how they can tackle this. The government can, moreover, try to prevent Africa becoming a playground for irresponsible amateurism. In the UK, for example, work is already taking place on a code of conduct aimed at preventing abuses in the South. The Netherlands could align itself with this or could do something comparable.

Development aid’s second objective is development that centres on structural improvements in countries using sustainable economic activity. The principal preconditions for this are an effective government which can play a facilitating role and a sufficiently stable social climate. Aid which aims to make countries self-sufficient is very complicated to provide. To start with, it presupposes that one can ascertain how development can be stimulated. Subsequently there is the assumption that this can be contributed to from the outside. Moreover, the aid provided should have more positive, than negative effects, such as creating aid dependency or reinforcing neo-patrimonial structures.

The third important objective for development aid is to contribute to global public goods. Our self interest becomes apparent here: national objectives for climate, food, energy and safety cannot be achieved without active contributions by other countries and should be coordinated at a supranational level (regional and global). The problem with this is primarily that finding an adequate structure for this is difficult and that the Netherlands is not a major player.

More centralised development again

Direct poverty alleviation is relatively simple to visualise and is high on the agenda for moral reasons, but the development aid sector’s attention has acquired a very strong focus on this facet. Almost eighty percent of the budget is currently spent on social sectors – productive sectors such as agriculture and infrastructure which are less likely to lead to visible results, but which – in the long term – can structurally alleviate poverty, each receive no more than ten percent. Part of the investment in social sectors will, perhaps, in time also contribute to development, but the effect is very indirect, all the more because education in many African countries is not only of poor quality, but is also hardly attuned to local needs. In addition, aid is often so fragmented – across countries, themes and channels – and often so untargeted that this also, insufficiently stimulates structural development for this reason.

This can and must be improved. The development of objectives should once again receive more emphasis. Growth is emphatically part of this, because without growth there is nothing to distribute in developing countries. This also entails that poverty alleviation does not act as a mantra and that the poor need not have to always immediately benefit from the aid provided – the development of the middle classes is essential to development. It also demands that more attention be paid to agriculture – for food security, but also for export – and for the importance of market parties. This means that entrepreneurship should be given more attention and that the provision of credit, in particular to small and medium-sized companies, should be supported in developing companies. Moreover, the question as to whether job opportunities should be created, should become an important parameter for development policy. Paragraph 10.2 discusses how this can be achieved.

Putting development first as an objective also entails a more emphatic orientation towards the regulation of global affairs. For example, properly functioning, stable financial markets, fiscal coordination against tax evasion, migration policy, knowledge transfer and knowledge sharing are much more important to many developing countries than direct financial aid. Moreover, as international public goods, they are also to our benefit. In spite of this, when it comes to development aid, the Netherlands still spends almost all its attention on the tiny piece of GNP that the Minister for Development Cooperation has in his budget. Paragraph 10.3 deals with how this could be done better.

10.2 development professionally organised

Development should once again become central to development aid – that is the first of the two tasks. Organisationally this entails: much more pronounced country orientation combined with substantial professionalisation. This more pronounced orientation starts by recognising that development always, to a great extent, comes from the inside out and that development paths differ per country. Development aid basically constitutes help developing. At most, development aid can, and even this is no certainty, provide a small contribution to move along a development process. Where and how such support can be of use, differs from country to country.

Good diagnostics per country are necessary to determine which aid is required. The capacity to provide aid depends entirely on having a lot of local knowledge and local contacts. Aid is therefore only useful as a long-term, programmatic investment which comprises a cohesive package of interventions and which is carried out in collaboration with local institutions or actors. To provide a concrete example; there is very little point in trying to develop agriculture in Ethiopia without ascertaining whether there is sufficient credit available to entrepreneurs, whether the infrastructural quality is sufficient for the transport of products, whether good seed is available, what the irrigation systems are like, which options there are for university research and development, what skills education at both primary and secondary schools is like, which role private investors have/could have, which trade limitations Europe enforces and what wider developments are on the global market. Fully comprehending this type of cohesive systems and knowing when, where and what can be done in a worthwhile manner presupposes long-term presence, thorough knowledge and the capacity to utilise a multitude of parties here and there (from good legal experts in the field of agriculture and trade, to people who can help set up education programmes and private investors). Finally, all these efforts are only worthwhile if they take place on a large enough scale to really make a difference.

At the moment these conditions are insufficiently met. Take, for example, the demand that it should be clear along which lines the development of a specific country can best be furthered. It sounds trivial, but such analyses are rare. If you read the Ministry of Foreign Affairs’ website or the ministry’s budget, there is a lot of valuable information to be found, but usually not the most essential information namely a justification why the Netherlands is of the opinion that the contributions it is attempting to make are actually also the most sensible. In practice, the Netherlands primarily does a lot of education and healthcare because it always used to do a lot of that: usually there is no more reasoning behind it than that. However, investing in primary education is not the best way of stimulating structural development in every country. In this respect we could learn from the countries around us: the British, Swedish and Norwegians do make such considerations transparent. This enables other people to also contemplate the question as to what is the most sensible contribution in this or that situation. Precisely because there are no simple, general answers to the question of how development can best be stimulated, it is important to continually exchange insights into this.

If development aid truly wishes to make a difference it should also be professionally organised. The Swedes have already arrived at that conclusion and have created an own development organisation; it is for this reason that the British split the DFID off from the Foreign and Commonwealth Office in 1997 and the Canadians are going to organise their development aid separately on the basis of this motif, at some remove from the embassies. Moreover, the Canadians have opted to focus on a substantially lower number of countries and a limited number of sectors, a route the Nordic countries have also selected. An obvious choice for the Netherlands would be to select a limited number – a maximum of ten – development aid units which are based in the recipient countries involved. Call this NLAID (or NethAid), in line with the US’ USAID or the British UKAID (the DFID’s new name). These units should constitute their own organisational whole within the Ministry of Foreign Affairs. These local organisations are located somewhere near the embassy in the countries concerned, but have their own HR policies which focus on the professional requirements of a long-term presence and specific expertise. The demand for professionalism pertains to the underlying subject matter; if you want to develop the water sector, you really have to know something about it; with processes – the capacity to involve the right parties in the activities at the right point in time – but also to be streetwise – to be able to deal with local relations.

This organisational model presupposes that the Netherlands, which is currently active in 36 countries, stops fragmenting its aid and limits itself to a small number of places where it has a proper presence. This is sensible for three other reasons too. First of all, in order to be able to deal with the fact that aid also has negative consequences better. After all, aid is never innocent: it puts countries in a dependent position and incites all sorts of power politics in which individuals try to benefit themselves and their people. In that respect, corruption is only one of the problems. Such dependencies should be manageable and two requirements have to be met to ensure this. To start with, the Netherlands as a donor should be a serious player; threatening to withhold relatively small sums scares no one. The Netherlands should, moreover, have a wide range of aid tools to ensure, to the best of its ability, that aid does not create dependency or undermine local justification procedures. This entails the constant weighing of the method used to provide aid. This can be done entirely indirectly (improved trading conditions/migration policy) or directly (using funds or the transfer of knowledge) and, in the latter case, the channel used is also of importance: the government or service users. This should be accompanied by the abolition of the pressure on annually spending the money available: financial means should be made available for a longer period of time in the shape of a fund.

A second advantage of far-reaching concentration on a few countries is that this allows something concrete to be done against the enormous increase in donors per country. All donors, both government and private, support the Paris Declaration on Aid Effectiveness which dates back to 2005 and in which donors promised to increase the structuring of aid, but which has so far insufficiently been put into practice. Donors enthusiastically discuss the importance of good governance, but when it comes to the way in which they themselves structure their aid, the term suddenly seems a lot less important to them. The European Union has done good work by describing a form of division of labour, but in practice almost no progress has been achieved with regard to this point. It is therefore important for a number of countries to set a good example and start pruning their own activities. The Netherlands should preferably decide to do so in conjunction with a number of likeminded countries. The time is ripe.

Finally, a focused, professional organisation also makes it possible for our development aid to be organised as a learning system. If serious investment takes place in a limited number of countries and sectors a knowledge infrastructure can be set up around it which involves both the staff involved and (Dutch and international) knowledge institutes. A meaningful portion of the total budget should therefore also be made available for systematic research and development. If we were to adopt six percent as a standard and that is not a high figure given the permanently seeking nature of development aid, just under three-hundred million should be on the development aid budget for this. Compare this, to the British DFID organisation which, as of 2010, will spend over two-hundred million British pounds a year on research and development, and can easily decide to make 34 million pounds available for the development of a growth strategy and the setting up of an International Growth Centre, because it gets the impression that it is in the dark too much in that field. Moreover, a form of monitoring and justification can also be developed in such a knowledge structure i.e. not trapped in an accountant’s perspective and by the question whether they had the right to spend the funds (which is characteristic of current practices), but focused on cataloguing the impact of activities. This is suitable for independent research that is to ascertain whether it is reasonable to suppose that we have made a positive contribution. This should also involve the assessments of those involved in the recipient countries. This creates the building blocks for a (country-oriented) justification framework that should constitute the basis for the consultation between the minister and parliament.

In line with this, is the Netherlands’s task to actively promote the decentralisation of knowledge development i.e. developing countries should be enabled to create their own knowledge infrastructure. The West currently has a quasi-monopoly on this. That might have been justifiable if knowledge on development was incontrovertible, but that is not the case. Global variation and selection are required and the best way to do this is to set up three or four knowledge banks around the world which collect knowledge on development and introduce ideas for policy which both learn from and compete with one another. At least one of the knowledge banks belongs in Africa and another in Asia. It would also seem obvious to work on a type of European ‘World Bank’ which brings European tools for knowledge, loans, subsidies and policy together. By linking the European Development Fund to coordination mechanisms for bilateral aid, credit provision by the European Investment bank and the European Bank for Reconstruction and Development, and with a knowledge function such as the World Bank in Washington already has, improved conditions can develop for strong, effective European development policy.

What about the others?

An as yet unanswered question is why this type of development aid should take place via separate Dutch efforts. Is it not more obvious to primarily organise aid in larger associations? After all, that would prevent fragmentation and mobilise real political power and professional implementation. In theory it would, but in practice this will definitely not be complete for the time being. To start with, it is a political chore to provide sufficient insight into what exactly was done with their money to Dutch taxpayers – it is simply a bridge too far to make do with the words that the money was transferred to the World Bank and that it is doing good with it. In addition, multilateral organisations in developing countries face legitimacy problems. The World Bank is burdened by its history and monopoly, and in many poorer countries it is still viewed as the IMF’s natural accomplice. In the long term, doing more via the EU is definitely an option, but as yet, there is little political will among the member states to have the EU adopt a central role in the field of development aid. Instead of an umbrella organisation, the EU has become more a new donor which means it contributes to further fragmentation of aid as opposed to reducing the latter. This will have to be dealt with first before the Netherlands can consider refraining from its own efforts.

An equally relevant question is what the role for Dutch NGOs could be. Many of these organisations have developed into hybrid organisations which work on fundraising, the expansion of support, look after interests, influence policy, develop projects, subsidise southern NGOs, provide aid and support civilian initiatives in a large number of countries. This is understandable from a historical perspective, but this sometimes badly waters down the NGOs’ contributions and means there is little to nothing left of their decisiveness. Subsidising southern NGOs through Dutch NGOs is increasingly unsuitable in a reality in which developing countries have their own social organisations. The Dutch co-financing system therefore needs to be reviewed. The situation in developing countries, instead of that of Dutch organisations, should be the point of departure for funding. NLAID’s branches should, in future, provide support and funding directly to southern NGOs in line with the function they require (service provider, watchdog or social process supervisor). Dutch NGOs should more emphatically profile their added value if they wish to be eligible for funding. This entails: professionalisation and specialisation. This can, for example, be done by having special ties with organisations in countries with whom the Dutch government does not (wish to) maintain ties with due to their being ruled by authoritarian or failing regimes. The specialisation can also be shaped by a theme. The South will however increasingly wish to look after itself. Soon enough, some things will no longer be relevant for Dutch NGOs, but a role that definitely does demand reinforcement is the monitoring of policy at national, European and global levels. Developing countries are not part of the meetings of ministries, companies and other organisations that (should) work on policy coherence for development and Dutch NGOs can help to get their voices heard after all.

Where and what?

The question remains; which countries should the Netherlands focus on. To a certain extent that choice has become more simple over the past decade. Most Asian countries have, in recent years, managed to help the majority of their poor themselves. China will, if things continue the way they are going now, no longer have substantial groups of poor people sometime after 2025, as is the case in Vietnam and Cambodia, and Indonesia is also on the right track. Numerically speaking Bangladesh and India are the unquantifiable entities in Asia. There is a lot of work left to be done in Bangladesh and even though India is progressing well, it will take decades before no one is poor anymore. The question is, which role do western powers have in this. In 2003, India announced that it was no longer interested in Dutch development aid. In Latin-America there are only a few poor countries left such as Bolivia. At most, the Netherlands could make a limited investment in supporting democratisation as it has a good track record in that field.

It is therefore primarily a matter of properly contemplating what the Netherlands can do in Sub-Saharan Africa, a sub-continent with well over nine-hundred million inhabitants, but a gross national product comparable to that of the Netherlands or South Korea. It is also a sub-continent which is underpopulated which makes building infrastructure and irrigation much more expensive than in the heavily populated parts of Asia, which in many areas has a depleted soil and which has a one-sided economy that is heavily dependent on raw materials. A sub-continent where, moreover, the majority of countries have a more or less functioning government, but seldom have one which deserves full confidence. In many cases, aid will therefore have to be tied to a sensible political strategy and support to civil society. And, in those countries with a state apparatus that hardly functions such as the classic fragile states such as the Democratic Republic of Congo and Somalia, the difficult assignment will be to help to shape such a state apparatus often by initially investing in safety and stability. It is not for nothing that many donors have developed a separate African strategy in recent years (Sweden, Denmark, Canada, the UK and the EU).

Selecting a limited number of companies does not mean that the relationships with other countries, for example medium-income nations, are no longer important. These relationships should however not be made the focus of development aid, but should be the focus of cooperation which is substantiated using tools other than funding with specific goals in the field of knowledge exchange, environmental policy, economic activity, etc. It is becoming increasingly apparent that countries which have left the total poverty phase get the most benefit from executive and knowledge development. This has been concluded on many occasions by large multinational organisations, but much less by bilateral donors. For some time now, the World Bank has been profiling itself as a knowledge bank, while the Inter-American Development Bank (the development bank that focuses on Latin-America, where almost all low-income countries have transformed into medium-income countries) has swapped a large number of specialists in the field of providing loans for specialists in the managing of large projects.

The specific choice of countries can be based on three simple criteria: a country’s needs, the extent to which these are already being met by other donors and finally, the added value the Netherlands could have. The latter is new. So far, most donors pretended to be able to do everything, but that is becoming increasingly problematic. Good development aid is set up professionally and that entails the presence of specific expertise. The Norwegians have therefore concentrated their efforts on peace and reconciliation. They also spend a substantial part of their funds for development aid on a wide ranging Oil for development programme, which makes drilling and environmental technology expertise available, but also knowledge on how to adequately manage the revenue from natural resources, and, how a government enters into contracts with major oil companies. All manner of public and private parties cooperate in this programme. Countries in the South can – if they need to – conclude a ten-year contract with the Norwegian government which sets out how the support will be substantiated. The Netherlands could develop a Water for development, Agriculture for development, Justice for development or a HIV/AIDS for development programme in a comparable manner in which the Netherlands combines the broad spectrum of public and private knowledge available. The choice of themes could be even more daring. The Netherlands has always set great store in civil society and is an international leader when it comes to the sums available to NGOs. Internationally, thinking about the meaning of civil society is only mediocrely developed and this represents a unique profiling opportunity. The same applies to a regional approach – a lot of development not only has to do with a country’s proper functioning, but also with regional cooperation and integration. This is also largely unknown territory – and was the Netherlands not one of the founders of the EEC and is the EU, which developed from the former, not an example to many regions around the world?

10.3 beyond classical aid

Besides more focus and professionalisation, the promotion of development also presupposes paying more attention to the management of cross-border interdependencies and the achieving of global development opportunities. In that respect, we, just like other countries, have only just started this path. Coherence policy for development proves difficult and that is only about ensuring that one ministry’s policy does not contravene that of another. It is even more complicated to seriously, substantially manage the coherence between various cross-border issues, and to approach eventual global development as a strategic task. Whilst ‘international cooperation’ suits the era in which states sovereignly maintained external relations with one another, the term ‘global development’ expresses the fact that national policy also has consequences for other countries, while national agendas are coloured and influenced by what happens outside the country. This demands new ways of dealing with other countries and in that context the distinction between developing and developed countries will, to a large extent, become outmoded.

The new world this will create demands innovative ways of dealing with the cohesion between various policy tools. For example: a country that is serious about helping to reduce co2 emissions both at home and in developing countries will have to deal with knowledge policy and knowledge transfer, technology policy and technology transfer, intellectual property rights and negotiations concerning the latter by the WTO, technologies and energy saving systems and those for generating energy adapted to local conditions, the thinking up and setting up of new funding tools with private parties and government bodies, adequate and inclusive international institutions, and, last, but by no means least, international and national coherence so that more biofuels here, do not lead to higher food prices and increased poverty in the South. There are plenty of good coordination mechanisms for this. This applies globally, but also nationally: the Netherlands’ existing administrative model for approaching trade, migration, financial stability, climate, food, energy, knowledge, safety and development from a cohesive perspective is too insipid: coordination mechanisms are currently lodged too much at operational and not enough at political-strategic level.

At a global level, more intensive attention to coherence policy and international public goods demands investments in innovation in the shape of funding and regulation, and moreover new forms of global governance. The UN provides a lot of worthwhile ideas, but is weak organisationally and in implementation. All manner of adjacent structures and consultations have developed – since the economic crisis, the G20 instead of the G7 as a global coordinating body, is the last in this line. In fields such as climate, fisheries, trade and healthcare there are often separate systems which are often only loosely affiliated to the UN system, and for migration and financial stability these are only present to a limited extent or are not very effective. New forms and structures will have to develop. The Netherlands’ task is primarily to actively promote this process.

At national level it is a matter of developing better tools and coordination systems. Suitable tools will partially have to be developed ‘on the job’. There is no reason why we should not in any case invest in developing expertise: a good global issues research institute or network could also help our profile internationally. The increased use of NGOs in this direction can, as stated above, be promoted. Investment in suitable justification frameworks should be the next step. More justice could be done to development policy coherence if – in future – country reports were to be used which juxtapose the expenditure of funds on development aid and efforts aimed at other issues. The question will then be how to deal with, for example, a region in Africa in terms of aid funds, migration, knowledge, trade and climate. That would constitute a meaningful innovation.

It would exhibit suitable ambition to also take the next step and to question the importance of the 0.7 percent of the national income set aside for development aid. When that standard was devised in the 1960s, it expressed the estimated scope of the aid demand in developing countries. However, since the 1970s it has had the character of a politically-based international standard which keeps being confirmed at international summits and conferences. Such a standard however suits an isolated system of development aid while development in a world that is increasingly interdependent depends more and more on other issues. It will become more interesting and more suitable to this new reality if an attempt is made to formulate a new measure which not only includes aid, but also Dutch efforts with regard to international regulations and public goods relevant to development policy. This also leads to a much more fruitful debate than the eternal question as to whether our budget for development aid should be more or less than 0.7 or 0.8 percent. Such an exercise can simultaneously provide good input for the debate which will undoubtedly develop concerning what should be used as the international framework of reference after the MDGs elapse in 2015.

The coordination systems at state service and political-administrative system level require reviewing. The distinction between the Ministry of Foreign Affairs which is supposed to deal with foreign affairs, professional departments that are ‘only’ substantively expert or who interfere in foreign affairs, and a prime minister who should primarily view all of this from a distance is no longer suitable for the twenty-first century; it is a nineteenth-century construct from the time when policy stopped at the border and the Internet did not exist. In an increasing number of fields, the distinction between national and foreign affairs is less relevant if not meaningless. Operating internationally should primarily be substantively driven and the administrative structure will have to rapidly keep abreast of this new reality. An obvious step to take, would be to systematically dovetail the substantive policy of the professional departments with the Ministry of Foreign Affairs in the shape of joint directorates, programme directorates and other meaningful structures. Furthermore, the current minister of Development Cooperation’s portfolio should be recast into a package of tasks that consists of two recognisable parts: controlling NLAID and formulating the Dutch globalisation agenda in which a number of global problems are considered in their context and a Dutch perspective on these is developed. This minister will still approach NLAID as own domain, but will, just like the minister of Foreign Affairs primarily function as an extension of the prime minister.

10.4 less pretension, more ambition

Changing the organisation and focus of development aid is no easy task. Development aid is caught between extremes. In the Netherlands, there is a desire for results that have immediate appeal: television rules. Developing countries would benefit more from long-term perspectives. This is a difficult dichotomy. In the meantime, scepticism concerning development aid is increasing among the population, and not only in the Netherlands. Various countries have recently issued policy documents reviewing their development aid strategies. Some of these, such as Norway, Sweden, and –as far as we can tell – Canada, are reorienting themselves by making much more defined choices. Others, led by the British, want to do everything they undertake better: more professionally, more transparently, more responsibly. At the moment, the Netherlands has not determined its course. The official development policy aid including part of the underlying institutional world, seems to be unintentionally heading for a radical confrontation with those who, by now, are of the opinion that it need not be continued. This would not be a sensible route to take.

The other thing that does not help is separating the what and why question from the how question. What does help is to make choices and to structure the organisation accordingly. The various objectives outlined – providing direct aid, promoting development (directly or indirectly by incorporating development effects in other policy) and cherishing international public goods – all have their own legitimacy. How much money and energy should be spent on that is, in essence, a political decision which concerns the question as to how much importance we should attach to various issues. Our political decision making process was designed to answer such questions. If how much is available for development policy has been determined using this method, a distribution could subsequently drawn up between the means available for direct aid, structural development and international public goods – political debate could gain quality and relevance if it focused on that more. It is politics’ assignment to subsequently align the structure with the goals selected.

Ultimately, this can lead to the development of a development aid practice which can be described as: ‘less pretension, more ambition’. The Netherlands has been very proud of its development aid for a long time. That was justifiable and in the rest of the world the country still has a good reputation. However, in the meantime the debate on the future of development aid has shifted. The British have the advantage that, thanks to the setting up of the DFID ten years ago, they could invest in a new, streamlined organisation; this has given them a leading position in terms of strategy development, policy implementation and knowledge acquisition. Traditionally, it was always the small countries that led the way in thinking through innovative development aid. That is the position the Netherlands should aim for.

Not the quantity, but the quality of our contribution to a world in which people and countries are self-sufficient and in which international public goods are adequately safeguarded, should be the point of departure for what we now still refer to as development aid, but what may later on be referred to as: global development. Global development concerns targeted strategies, the capacity to work in various fields at the same time, and the art of reticence and differentiating between goals and thereby between levels of intervention. It is all about the combination of ambition and the realisation that you can only play a modest role.