The Hindu : Help the poor by cutting red tape

Online edition of India's National Newspaper
Tuesday, Feb 25, 2003

Opinion

Opinion - News Analysis

Help the poor by cutting red tape

By James D. Wolfensohn

This week in Rome, Ministers and senior officials from 26 developing nations and representatives of the international aid community will meet to find ways to better coordinate their efforts to reduce poverty. The challenge is to maximise every dollar of foreign aid delivered to developing countries by cutting through the red tape that often ensnares even the simplest projects.

The challenge is clear. We in the development community must take off the national and institutional flags that are often attached to projects merely for good public relations at home.

We must reduce the costs to the poorest countries of meeting donor demands for oversight and evaluation, essential as they are to good outcomes. Fundamentally, we must look to support and strengthen the policies and procedures of the developing countries themselves, aligning our own requirements with the home-grown approaches of developing nations. We must forge stronger and more effective partnerships within our community of aid agencies and donors, partnerships that are truly based on coordinated policies and practices to match our common goals of reducing poverty.

If we can agree to coordinate more effectively, the meeting in Rome may prove to be as important for the future of foreign aid as last year's fora in Monterrey and Johannesburg. The drive for harmonisation of donor demands has been born out of harsh experience on the ground. Today, there are more than 63,000 aid projects under way in the developing world, often with different sets of procurement, evaluation, environmental and social approaches. A United Nations study found 1,500 projects in Burkina Faso alone, while Bolivia has hosted as many as 850 donor projects.

Too often, donors run parallel projects even in the same district, splintering assistance into multiple high-cost aid boutiques. The consultancy industry that has sprung up around foreign aid is worth $4 billion a year in Africa alone. And this is about more than just money. World Bank studies show that a developing country typically may be dealing with 30 aid agencies across a wide range of social sectors. On average, each agency sends at least five missions a year to oversee its projects. For governments already stretched to make the most of their resources, the result is an enormous amount of time and money spent hosting nearly three aid agency missions a week.

By harmonising our aid policies and procedures, we hope to save developing countries time and money, speeding the delivery of the assistance and making it much more effective and efficient.

To achieve this, the international community will have to change decades of past practices that have contributed to the roadblocks and bottlenecks that plague the developing countries. Those attending the Rome meeting need to declare they are ready to work more closely together in all these areas. We must review our own policies and procedures and align them with a common approach to reduce the burden on the recipients. We need to forge stronger partnerships to improve the relevance, quality, and efficiency of foreign aid. We must expand our work in this area outside the handful of countries — which includes Ethiopia, Jamaica, and Vietnam — that have offered themselves as proving grounds for a more coordinated approach to aid. We know it can be done differently. Take Bolivia, where recently three aid agencies joined together to fund the construction of a building for the Ministry of Health.

With each having different standards and approaches it seemed at one point that they would end up building one floor apiece. Eventually, one donor pulled out, and the other two now have agreed to abide by one set of standards, to hire one contractor, and to have one agency perform project oversight. It is exactly this kind of approach that we now need to take worldwide. Some initiatives are already showing results, and yielding valuable lessons.

Tanzania has overhauled its aid coordination system, and has an independent monitor to track progress. Bolivia's Ministry of Health has adopted a results-based management approach stressing constant, and consistent, performance monitoring. In Vietnam, the government is working with a wide range of donor countries and agencies on common aid procedures.

If, as a global donor community, we can get our act together, we will serve so much better those people in developing countries who now want to lead their own development efforts.

If we can make the tough political decisions to take the national and institutional flags off aid; if we can reverse the trend towards a high-cost development unilateralism, we will have taken a crucial step forward in meeting the goal of halving the numbers of people who live in poverty by 2015.

(The writer is President of the World Bank Group.)

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