International Aid Transparency

Toespraak | 20-10-2009

Your Excellencies, ladies and gentlemen,

It’s a pleasure to welcome you here to The Hague. I am delighted that you’ve come from so many different countries, and in such large numbers, to the first annual Conference of the International Aid Transparency Initiative. When I was asked by the IATI secretariat to open this conference, I didn’t hesitate for a moment. I truly believe transparency to be one of the most important issues when we talk about accountability and openness in the aid business. In essence transparency is about emancipation of people through information: empowering people by showing them what we do, when and how.

By bringing together donors, governments of developing countries, civil society organisations and aid information experts, this conference aims to deliver a step shift in the availability and accessibility of information on aid flows. This is key: everyone should be able to see how much aid is provided, what it is spent on, and what it aims to achieve. Transparency is needed in the interests not only of accountability, but also of the overall effectiveness of aid.

Transparency is important for us as donors, for our partners in developing countries, but it is of crucial importance to the people that we are trying to help: the poor. I saw this yet again during my recent trip to the sixth poorest country in the world, Burkina Faso. There in the capital of Poni province, Gaoua, I visited a hospital that it at the forefront of the struggle against malaria. By distributing bed nets and meticulously tracking the inflow and outflow of funds, the hospital has been able to significantly reduce the number of cases of malaria amongst the local population. A real achievement!

Tracing the money is key. Whether we are talking about a hospital in Southern Burkina, or a whole sector programme in a country: transparency helps ensure that aid is used in the most efficient way, so that every euro, dollar or pound can be stretched as far as possible in fighting poverty.

Transparency is also vital to ensure investments in development are effective, consistent and predictable. Our discussion in Accra on the predictability of aid flows pointed this out. In hindsight that discussion – that at that time might have seemed hypothetical to some – turned out to be very topical. The financial and economic crisis that has gripped the world has really underlined the difficulty for donors to maintain a predictable aid flow in times of economic adversity. This holds true even for my own country. As most of you will know that the Dutch aid budget is a fixed percentage of ODA to GNP. With our economy contracting over 5 percent I have recently been confronted with an enormous budget cut. This fiscal year alone I have to economize EUR 601 million. We have decided to stick to our promise of 0.8 percent aid, but have had to accept the reduction in the predictability of our aid.

This reduces the predictability of our aid and we therefore have to discuss with other donors to have a good division of labour so we are not all cutting the same sectors and areas.

You can imagine this involves a lot of discussions and often difficult choices. We try as much as possible to keep in close contact with our partners to explain to them which choices we have made. Also we keep in close contact with other donors to agree upon a good division of labour and avoid all donors cutting in the same sectors and areas. It is, however, not easy to be transparent at all phases of that process.

And that, ladies and gentlemen, is also the reality behind IATI, and an enormous challenge. Openness will lead also to more countervailing power of all our decisions. It forces us to explain more our decisions, to our partners, to our colleagues, to the taxpayer, to all people concerned. Personally I have long been a strong advocate of local democratic accountability. As chair of the Parliamentary Network of the Worldbank, I tried to facilitate and encourage direct dialogue between parliamentarians and multilateral development institutions in order to promote greater transparency of the policies and practices of the Bank. It is high time to do the same in the field of bilateral aid.

Ladies and gentlemen,

We are here today because IATI stands at a crossroads. At the High-Level Forum in Accra a year ago, I had the privilege of playing a role in the launch of this important initiative by my British colleague. Now we face the challenge of taking this initiative from plans and commitments to concrete implementation. A collective effort is required to make this happen. In the last year we have been able to take a number of positive steps, including the regional partner country and CSO consultations. I believe we now need to build on these steps and assess IATI’s strengths and weaknesses, agree on the next steps and commit to an ambitious agenda. This agenda should embrace both a timeframe for making the necessary information available and a set of monitoring practices for donor compliance.

As I said, this is even more important in times of economic crisis. Let me elaborate on this. The financial and economic crisis, which is now at its peak, has enormous implications for balanced and sustainable development. The effects are being felt worldwide, but the consequences are particularly harsh for developing countries. This is extremely regrettable because developing countries had no part in the gold rush of the last decade.

I know that the governments of developing countries, many of which are represented today, are doing what they can to protect their citizens from the effects of the crisis. But financially, their options are limited. Rising deficits mean that both investment and growth are slowing down even further. In many countries this will make it harder to achieve the Millennium Development Goals. Even before the crisis, when growth percentages were healthy, there was real uncertainty as to whether the MDGs could be achieved. In the current economic climate it will be almost impossible. According to IMF statistics, economic growth in Africa this year will drop to under three per cent: substantially lower than the seven per cent needed to make progress in the fight against poverty.

In my view it is a global responsibility to help countries affected by the economic crisis turn the tide. So I was pleased that in Pittsburgh last month, the G20 took important steps aimed at promoting a fair trade system and preventing protectionist measures. An important element was the shift of at least five per cent in country representation at the IMF towards dynamic emerging markets and developing countries. What’s more, the leaders stressed their commitment to the world’s poorest countries, saying ‘steps to reduce the development gap can be a potent driver of global growth’.

The crisis has put additional pressure on all capital flows to developing countries. Whether we’re talking about exports, investments or remittances, the trend is a downward one. This has only increased the importance of development cooperation as a relatively constant factor for development financing. It also boosts the importance of aid transparency and accountability, because these things assist in making the most effective use of resources; help the international division of labour; and underpin the decisions developing countries have to make.

Given the importance of aid-related information to our partner countries, and fully aware of the difficulties that face us as donors, I call on my donor colleagues to take the lead. We should become more proactive in disclosing information on our aid plans and our intended resource flows. There is a lot we can already do as the IATI initiative is taking shape.

The proof of the pudding is in the eating. Back from Accra and inspired by IATI, I took some measures that make Dutch development cooperation more transparent. Shortly after the launch of IATI, I decided to publish the country-level multi-annual strategic plans on bilateral assistance. A recent stocktaking exercise showed that these plans are now easily available on the embassy websites, often with indicative allocation by sector and an overview of implementing partners. But I had wished to make more progress, because still we can do better. Work is now underway to further improve the content and accessibility of the websites of our embassies, for it is at field level that transparency is most important. I hope can all agree to present our information to local parliaments and NGO’s. I am convinced this would not only strengthen the countervailing powers, it would also reduce the opportunities for corruption.

My message today is increasing transparency and accountability advisable, it can be done. Here in the Netherlands a NGO, SNV, has launched a number of interesting project to help local governments improve their performance, be accountable to their citizens and hold service providers accountable. For example in Tanzania, where – in partnership with our embassy – SNV is developing the capacity of elected officials in 21 districts, as part of a national decentralisation support programme. This has led to improved control over the executive and increased central budget allocations for service delivery improvements. In Bhutan, one of the world’s youngest democracies, SNV has launched a programme of capacity development for newly elected local leaders which has helped to clarify their roles and responsibilities, and built their capacity to perform their functions and respond to local development priorities.

Ladies and gentlemen,

As I have said earlier, the Netherlands remains committed to the IATI-initiative. Recently we received a delegation of the IATI Technical Advisory Group for a fact-finding mission. The outcome was very encouraging. It seems we are well placed to swiftly meet most of the information needs identified by the regional consultations. A lot of the required information is available in our management information system, and to a large extent, all that remains is to make it public.

I’m aware that quite a few of our partners in developing countries present here today have established aid information systems which are very valuable for linking aid information to national planning and budgeting. Making use of these local systems is what we agreed on in Accra 2008. The Netherlands will remain an ardent champion of local systems, and we know that this is also the position of most of our donor colleagues. We expect IATI to add value to this change in donor behaviour by improving the timeliness, consistency and quality of information feeding into these systems.

Our involvement in the IATI steering committee and the technical advisory group has shown us that close involvement in these forums allows donors, developing countries and NGOs alike to shape the implementation phase of IATI. It is very important that all voices are heard to ensure that IATI provides real added value. I am particularly keen to see how IATI will channel the experiences of partner countries with advanced aid management information systems and boost stronger south-south cooperation in this area.

Now is the time to take new steps. As far as I’m concerned these should include:

1. agreeing on the scope and standards of the system before the end of the year. These things should be firmly based on the information needs of our partner counties and clearly show the added value of IATI; and
2. agreeing on a code of conduct with clear rules for monitoring donor compliance.

In closing I would like to point out two key issues that I consider vital to the success of the implementation of IATI. The first is making the greatest possible use of existing national and international systems, initiatives and institutions. There is no reason to create another standard that duplicates those already used by donors, recipient countries, the DAC and other relevant parties. The role of IATI should be to ensure that any competing standards are able to be compared or reconciled. Where standards do not exist, IATI should work to develop a standard.

The second is reaching agreement on an ambitious agenda for implementing IATI. Studies have shown that a lot of the required information is available and just needs to be made public. This requires a culture change. From a reactive to a proactive approach to transparency. As I have argued now is the time for implementation:

• Not only do we need to agree on what will information to publish, we need agree when it should be published.
• Not only should we agree on common definitions for sharing information, we need to start using these definitions so that donors and partner countries become more compatible.
• And: not only should we talk about ways in holding donors accountable for compliance, they should be held accountable.

This conference provides a unique opportunity to discuss all of these, and other the important issues surrounding transparency and effective and accountable aid. The list of speakers is truly impressive. I would therefore like to encourage you all to participate actively so that we can make real headway.

Unfortunately I am personally not able to participate in the whole programme. However, I leave you in the capable hands of my ambassador for development cooperation, Maarten Brouwer.

Thank you.