What needs to happen when aid ends?

21 Nov 2016

This week, the independent body set up to scrutinize DFID’s aid spending (the Independent Commission on Aid Impact –ICAI) released their review and findings on ‘When aid relationships change: DFID approach to exit and transition in its development partnerships’.

So why do we at RESULTS think this is important?

We believe that no matter where people live, they should have access to health services, education, and economic opportunities which allow them to lift themselves from extreme poverty. Equity is a core principle of what we believe in and fight for every day, through our grassroots, parliamentary, and policy advocacy.

However in 2015, 19.4 million children didn’t receive basic vaccines, 45% of all child deaths were caused by undernutrition, and 1.8 million people died from TB, an increase of 20% in reported numbers from 2014. Undernutrition, vaccine preventable diseases and TB are all conditions which are either preventable or treatable, and we still have a long way to go to ensure equitable access to health services to reach the health targets in the Sustainable Development Goals.

As economies of countries are growing, many countries around the world are gradually becoming ineligible for development assistance, including donor support to health systems.  We are concerned that the global development and financing landscape in some of these countries is changing too fast, and if not managed correctly, it could prevent progress, and even put past investments at risk. This is especially true for health, where constrained resources could lead to people and children not getting the life-saving TB treatment or vaccinations they need.

Why are aid relationships changing?

It is universally accepted that donor assistance cannot, and should not, be ever-lasting. Aid is not going to eradicate poverty alone. As we set out last year in our Who Pays for Progress report,there is still a very important role for donor assistance, alongside a significant increase of domestic resources, especially in middle-income countries (MIC).

In many cases, when countries move from being a low-income country (LIC) to a middle-income country MIC (as classified by the World Bank when gross national income per capita passes above $1,025), relationships with some donors change, including the amount and type of support a country might be eligible to receive. This is a way for donors to encourage countries to take greater responsibility for the provision of services and reduce the reliance on donor assistance.

For example, Gavi, the Vaccine Alliance has Eligibility and Transition Policies which set out when countries' co-financing obligations change. A country’s GNI (and some other factors) dictates how much a country is required to pay as a co-financing payment alongside support from Gavi.  For example, a LIC is required to pay 20 cents per vaccine, but this increases over time once a country passes a GNI threshold, and again after another threshold is reached. This is done with the aim of encouraging countries to increase their own domestic financing and move towards fully supporting their full routine immunization programme, ultimately removing the need for donor support completely. This ongoing process is commonly called the transition process.

Source: Gavi website http://www.gavi.org/support/sustainability/transition-process/

However, this transition process is something countries are facing from multiple donors, often at the same time, or with only a few years apart. The process explained above for Gavi is not unlike a similar process countries are going through with the Global Fund, PEPFAR, USAID and other bilateral donors.

Although this process is often termed transition away from donor support, in reality it is in its simplest form, donor withdrawal. We need to be sure countries are prepared and able to increase domestic resources to both continue to provide the existing level of services, and also scale this up to ensure no one is left behind.

What are the outcomes of the review and why do they matter?

We need to be sure donor withdrawal is gradual and responsible and does not put at risk development gains and cause harm to individuals and services. The challenges countries face from simultaneous withdrawal of financing for health must be taken seriously.

The ICAI review is an important independent public analysis which brings vital lessons of where DFID has previously withdrawn or changed its funding model to the wider attention of the Government and other donors. We welcome the recommendations and the global attention which we hope this review will bring to this important issue.

You can read the full review but here is a summary of the main recommendations and why they matter:

  1. The Review correctly points out that donor withdrawal requires the correct policies and guidance to be in place to support countries through the process. We welcome the recommendation that a central point of responsibility for exit and transition should be established within DFID.
  2. Policy coherence, risk management, and coordinated communications across DFID and other government departments is an integral part of the recommendation to improve relationship management with partners throughout transition. This is a very practical recommendation which is needed as this process is not always as clear cut as simply ending aid, but can often mean a change or scaling up in support but through different UK government departments.
  3. The third recommendation focused on accountability and transparency of decisions for the UK taxpayer and the importance of clearer communication with the public about the status of transition. This is an important recommendation to enhance trust in DFID especially around UK support for MICs.
  4. RESULTS UK believes that civil society has an important role to play before, during, and after changes in donor financing. We were pleased to see the Review emphasized the impact and consequences for civil society. Civil society organisations often play a crucial role in delivering services to populations that government cannot reach and in holding their governments to account. It is therefore of real concern that the review found that DFID withdrawal resulted in the parallel withdrawal of other donors and an overall significant loss of funding for CSOs. This placed past DFID investments at risk, as well as reducing the policy space and opportunity for civil society engagement in country. Going forward, DFID must ensure there are appropriate mechanisms in place to prevent this occurring in future.

If we are truly committed to leaving no one behind and meeting the health SDGs, successful donor withdrawal and transition to new types of relationship need to be done well. It isn’t something we can afford to get wrong.

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RESULTS UK is a charity registered as RESULTS Education in England and Wales (1015286), a company limited by guarantee (2761858), and a charity registered in Scotland (SC041481).