26 November 2012

Since Busan, A Changing Aid Landscape

Rwanda went to the 4th High Level Fourm on Aid Effectiveness in Busan last year with the agenda of increasing transparency and ending untied aid. Paul Kagame challenged the attendees asking, "While donors may not be entirely to blame for bypassing these systems where they are weak, or non-functional, why not use aid to build up and strengthen such critical systems?" Rwandan Minister of Finance John Rwangombwa echoed the same sentiments in an interview to the Rwandan newspaper The New Times.

The implementation and measurement of aid accountability have changed since the agreement that came to be known as the Paris Declaration. South-South aid cooperation, the rise of the BRICS, and the graduation of countries like India to middle-income status have all contributed to a changing accountability landscape. 

Rwanda, the very country that advocated for untied aid only a year ago, is now serving as the sparkplug for a wider discussion on how aid can be used by donors to achieve political goals. The application of aid as a political tool is not new, but the case of Rwanda is one that offers a glimpse into the evolving relationships between donor and recipient countries. 

World leaders like Bill Clinton, Tony Blair and Bill Gates have found it easy to say nice things about Rwanda’s President Paul Kagame and the progress made by Rwanda. Clinton ended his annual Clinton Global Initiative meeting in New York this past September by inviting a group of leaders from Rwanda to commend them on their efforts to implement a universal healthcare system.

However aid accountability became a political issue for Rwanda when a leaked U.N. High Level Panel report disclosed findings that linked the Rwandan government and the M23 rebels in eastern DRC. The U.K. decided to withhold £16 million in funding it was set to disburse, following a visit to the region by then international development secretary Andrew Mitchell. Countries such as the Netherlands also suspended aid to Rwanda and human rights groups voiced support for suspending aid from the Kagame government.

Mitchell surprised many when he then reinstated aid to Rwanda, a move that was supported by the Cameron government, before assuming the role of government chief whip in September. He argued in a letter dated August 31, that pulling aid from Rwanda would only hurt the country’s most vulnerable. 

“Taking away budget support would have no effect on the elite in Kigali, but it would, bluntly, take girls out of school elsewhere in that country,” wrote Mitchell. “It might make us feel better to remove budget support and avoid taking these difficult decisions, but it would not affect who makes decisions in Kigali and it would have the effect of damaging the poverty programme." 

A public investigation followed as pressure from human rights groups mounted. Hearings were held earlier this month and Mitchell defended the decision. While awaiting the outcome of the hearing from Mitchell’s replacement Justine Greening, the M23 rebels continued forward to seize control of the city of Goma, eastern DRC’s main hub and home to numerous NGOs. 

A U.N. source told the Guardian the suspension of aid, the decision reversal and a very public debate has caused another kind of harm. 

"The mixed message from the U.K. obviously emboldened the Rwandans. They probably thought they could get away with it. They were delivering equipment and new uniforms in the run-up to this offensive, so it is no surprise,” said the source.

The same Guardian report says that the capture of Goma is building further pressure for the U.K. to seriously reconsider the suspension of aid to Rwanda. There are concerns about the message sent when providing aid to a country that is funding a rebel group seeking to overthrow the Congolese government.

Goals leading up to and following HLF-4 focused on accountability through a lens of reporting and data collection. Stakeholders talked about publishing data according to the International Aid Transparency Initiative (IATI) standards and ensuring that countries have the capacity to measure results.

The reaction to Rwanda’s support for M23 illustrates a different form of accountability that can lead countries to withhold aid. Other examples include India, where public and political pressure over the past few months led to the recent announcement by the Greening administration that DfID would move to ending aid to India and increase its focus on expanding and supporting trade.

Furthermore, questions emerge following recent examples of organizations and countries admitting to the misuse of funds. Findings by the Global Fund’s Inspector General of waste and fraud in some programs led donors to withhold money and ignite a series of reforms that ranged from the resignation of the Executive Director to the implementation of a new funding scheme.

An audit into Uganda’s aid spending found that money was transferred from Prime Minister Amama Mbabazi's office into private accounts. The European countries, including the U.K., announced the suspension of aid to Uganda this month following the news. The Ugandan government is attempting to regain the trust of donors as the effects of suspended aid are being felt. Money meant to support over 6,000 new community health workers in Uganda was not released this month as a result of the reduction in aid.

As aid actors work towards meeting the accountability measures set forth in the HLF-4 outcome document, the events of the past year are evidence of the political complications and pressures on accountability. Wielding aid disbursements as a political tool can lead to new partnerships (India), reform (Global Fund) and possibly lead to negative outcomes (Rwanda). Going forward, the process of accountability will have to continue to adapt to the changing politics of aid.

Thanks to Jennifer Lentfer for some editorial help.