Saturday, October 29, 2005

East Europe Development Prospects

Many of the accession countries will play dual roles as aid recipients and aid donors up to and beyond accession. At stake, ultimately, is the EU’s commitment to poverty reduction and the international development targets. EU Delegations in accession countries, for instance, are still adjusting to their new decentralised responsibilities. In these the administration of inward EU investment far outweighs looking ahead to the new roles of the accession countries as donors themselves. the leading NGOs in Central and Eastern Europe owe their capacities and resources as much, if not more, to North American than European sources to date. How far will these connections and influences extend beyond accession and to what extent will European values inform aid cooperation policies?
The notion that economic development could be fostered by the application of well designed macro policies grew, in the West, largely out of the experience of war time economic planning, and the experience of the Marshall Plan in promoting economic growth in devastated areas of western Europe in the post war years. Overseas Development assistance, from Western countries to the newly independent former colonies, initially concentrated on the same approaches: investment in large scale infrastructure, health and education projects, focussing on technology transfer.

This project approach often developed into wider scale projects, such as the ‘integrated rural development projects’ which aimed to tackle several issues in the same geographic area. The initial project approach during 70s, later developed into wider scale projects, such as the ‘integrated rural development projects’ which aimed to tackle several issues in the same geographic area. Recent years have again seen major changes in the aid strategies of most multi-lateral and many bi-lateral donors. Most initiatives, for instance the Highly Indebted Countries Initiative (HPIC) and the Comprehensive Development Framework (CDF) of the World Bank are focused on poverty reduction and are based on the premise that this goal will be achieved if there is ownership of the process in the recipient country.
Bi-lateral donors are similarly seeking evidence from recipient governments that there is a national strategy for reducing poverty. In addition, donors can encourage/require recipient governments to introduce those economic reforms required by the world market (or the powerful players in the world market).
One very significant aspect of these new paradigms of aid is that there is an explicit role envisaged for civil society groups both at the stage of negotiation (or at least consultation) about the government budgetary process, and at the stage of monitoring actual government expenditure. The monitoring role is about holding governments to account and possibly developing a more pro-active role in assessing the impact of specific policies.

The enlargement of the EU provides new opportunities through the inclusion of populations with additional areas of expertise in these areas. Most European bi-lateral aid is also defining explicit roles for NGOs and civil society groups, both as recipients of aid funding and as partners in policy dialogue.

Enlargement calls for the harmonisation of accession country institutions and public administration to EU models. In these regards there is no one EU model for accession countries to aspire to. The current EU is not a homogenous entity with regards to policies regarding trade, subsidies (CAP), monetary union or development cooperation.
The GDPs of Portugal, Greece and Spain are lower than those of Slovenia and Poland, and many current EU member states will find it difficult to reach the 0.39% target for ODA budgets set for 2006.

Pro-poor aid
However, most forms of tied aid are now criticised as not being in the best interests of the recipient countries. Good practice is now specifies that there should be a separation between trade and aid budgets. And, as we have seen, aid policy now focuses on methods of assistance which will benefit the poor.
Approaches include:
· The traditional use of external funds for investment in those areas of the recipient country economy which are likely to induce economic growth. This can include the transfer of skills (technical assistance). The theory here is that faster economic growth will benefit the poor in the long run through a ‘trickle down’ effect.
· External agencies can help improve domestic institutions (political, legal, judicial & administrative systems), to be more accountable and responsive to the needs of the poor. This can be through technical assistance programmes, specific interventions focussing on specific aspects of particular institutions, etc.
· External agencies can make specific poverty focussed interventions, targeted to specific populations. This can include the financing of individual projects and programmes. In recent years many donors have focused particular programmes in specific sectors, such as the health sector, or the agricultural sector. It is thought that these sector wide approaches may be more effective in making a difference in those sectors.
· External agencies can play a role as innovators – they can support new ideas as pilot projects to establish whether particular approaches can make a difference. If so, then these approaches can be scaled up and replicated more widely by domestic authorities.
The fourth generation of approaches is comparatively recent, and builds on the
advocacy approach. This generation looks to the power of global social movements to bring about the types of changes required in global institutions necessary for pro-poor strategies. This approach is seen as being, potentially, more sustainable in that social movements are not driven by budgets or organisational structures, but rather by ideas, by a vision of a better world.
Whilst not all Western NGDOs have ‘progressed’ through these four generations of approaches at the same rate, and whilst not all of them would agree of the necessity to be working at the fourth level, it is useful to understand this evolution of approaches, since it corresponds to a certain degree with the changes in models of ODA. Thus, official development assistance from the big donors, including the EU, is encouraging the active involvement of NGOs and other civil society groups in the development of pro-poor strategies. At the same time, NGDOs perceive the need to be involved in policy dialogue, in order to bring about lasting change.

Co-ordinating Platforms of NGDOs in accession countries


In the years following 1989, ODA programmes decreased dramatically, (although scholarship programmes were often maintained). Former donor countries in Central and Eastern Europe often became net recipients of assistance. Where ODA programmes are being re-developed, however, the structures for their administration have tended to remain the same as they were during the socialist period, with decisions about ODA being made and coordinated by the Ministry of Foreign Affairs.

The institutional arrangements of most of those accession countries from Central and Eastern Europe, which have an ODA programme, continue to be similar to those that existed during the socialist period. Thus, the responsibility for the programme generally lies with the Ministry of Foreign Affairs, which may play a co-ordinating role for programmes which are identified and funded from within other Ministries. The majority of ODA in recent years has been to fund Humanitarian programmes, and in support of diasporas in neighbouring countries, with the greater part of funding going to neighbouring countries (South Eastern Europe, countries of the Former Soviet Union).

The Czech Republic, Hungary, Poland, the Slovak Republic and Slovenia are all in the process of developing new policies, structures and institutions for their ODA programmes. The Czech Republic has established The Czech Republic
Development Centre which will take responsibility for the ODA programme of the CR and for managing UNDP’s programmes to assist ODA. Its strategy identifies new thematic priorities, which include:
· Support to the fostering of democratic changes, human rights and social justice;
· Support to equal integration of developing countries into the global economy, with emphasis on use of information technologies;
· Support to sustainable development and the protection of the environment.

The Slovak Republic has also recently adopted a new policy document to establish the basis of its ODA programme. It’s development cooperation work is supported by the Slovak Institute of International Studies and the recently opened Centre for Development Studies, which act as co-ordinating and advisory bodies for the Ministry of Foreign Affairs. It is expected that SE Europe will continue to be one of the priority regions of Slovak assistance, due to the region’s proximity, cultural links and the need for a small country like Slovakia to provide cost effective assistance. Slovakia has experienced a particularly difficult and volatile transitional process and one result is an active and coordinated NGO sector, and some of the most active and effective Development NGOs in the region. The Slovak Charter of Principles regarding ODA (December 1999) and the MFA recognise the value of the Slovak NGO and NGDO experience and notes its independence. In 2001 Slovakia allocated .042% of its GDP - $9.5m to ODA.

Hungary’s state owned consultancy, TESCO, has recently created a nominally
autonomous non-profit entity, called HUN-IDA, and which is likely to become the
implementing partner of the new ODA mechanism. Prior to 1989 the focus of the
TESCO programmes was aid to Latin America (Cuba) and Africa and 44% of this aid was through the technical support of Hungarian specialists. 48% of its training and technical support went to Cuba. In July 2001 a New Concept Paper for development cooperation adopted the DAC International Development Goals with its focus on poverty eradication. The government emphasises the importance of peace, security and solidarity in its ODA work. Priority areas are south east Europe and the Balkans, the FSU, and selected countries in Africa, Asia and Latin America. Three million Hungarians live outside Hungary in neighbouring countries and these communities remain a priority focus of what Hungary classifies as ODA.
Poland also places great importance on the stability of her eastern neighbours, for historical and cultural reasons, as well as the potential benefits to Poland if Belarus and Ukraine develop stable, pluralist democracies able to meet the economic and social needs of their peoples. There are also significant Polish minorities in these states and in Kazakhstan.
Slovenia, with Poland, has the highest GDP of the 10 accession countries in transition. Since 1997 and the end of the war in Bosnia, Slovenia’s ODA has increased rapidly due to financial independence and the changed political situation. It is estimated that Slovenia currently spends .01% to .02% of its GDP (around $3m) on ODA. 90% of this is bilateral and through the Stability Pact in south east Europe. Throughout the Soviet period faith based organisations maintained informal and underground links, and in the early 90s these were the most successful groups to rebuild national and regional links and networks. Poland, the Czech and Slovakian Republics, for example, have a large
number of church groups with experience of providing development assistance. Pre-1945 missionary and church based links with the South have been renewed and formed the basis of extending national NGOs work into development and ODA. The four Visegrad countries (the Czech Republic, Hungary, Poland and Slovakia) all have a strong tradition of charitable giving and volunteering. Each of these countries now has a core of NGDOs with overseas experience in a range of countries and sectors.
In addition, those NGOs with experience in humanitarian, reconstruction and
development work have been able to use these skills in other countries, both in the region and elsewhere. For instance the Hungarian NGO, Hungarian Interchurch Aid, is involved in humanitarian work in former Yugoslavia, Chechnya and the Ukraine, and more recently in Afghanistan with Hungarian government support. Regional and third country projects now form 40% of the Hungarian Civil Society Development Foundation’s work supporting NGOs. Slovak and Romanian organisations, recruited & trained election observers for OSCE missions in former Yugoslavia.

NGOs in Poland, in particular, have a great deal of experience in international
cooperation. Over 100 organisations are active in the Balkans and the Former Soviet Union. Many of the larger Polish NGDOs have regional offices. As the author of a recent report notes: ‘Polish organisations seem to have developed a niche role as regional co-ordinators and implementing partners for foreign funders, who prefer to use Central European NGOs to implement their programmes in the FSU’.


The Czech Republic Platform, the Czech Forum for Development Cooperation, was established in 2002 with 16 founding members. It has a formal coordinating
body which is organised by the largest NGDO, People In Need. Bulgaria, Estonia, Hungary, Latvia, Lithuania and Romania have no Platforms. Hungary and Estonia have active NGDOs and are expected to develop national Platforms. The other countries have active forums for NGOs on national issues and currently their activities and concerns are focused inwards on national policy and advocacy issues and social needs, and the legislative basis of NGO activities in their countries.
NGDOs in the region are keen to cooperate with the MFAs and other stakeholders and play an active role in the new ODA system. They feel their specialist knowledge and experience, having often led and developed the ODA of many accession countries throughout the nineties, is under-used by the MFA, and would like to play a greater role in the development and implementation of ODA, including participation in the development of strategy and administrative mechanisms.

Policy Options for the accession countries

Only now, through the re-development of ODA policies as part of the accession
process, is the experience and knowledge of development assistance gained in the Soviet period beginning to be reviewed and re-considered. Up till now this experience tends to have been ignored as part of the communist past; also, during the 1990s, the study and issues of the transition process took precedence. 80% of pre 1989 ODA was through the provision of technicians and experts (particularly doctors and engineers) to developing countries. It would be useful and informative to assess the impact of the past socialist development assistance programmes. For example, it would be very useful for those countries which provided significant scholarship programmes for students from
developing countries, to assess the contribution made by these, the remaining links and impact, and the value added (as seen by both parties) of re-commencing international development links.
An interesting example of this legacy is a current initiative in Slovakia. Angolan-Slovaks who studied in Czechoslovakia and then stayed, have formed an NGDO to support communities in Angola. Through the TRIALOG project this NGO is establishing links and projects with Angolan NGOs, and capacity building and training support from Portugese NGOs.

MFAs and development institutes already recognise the need to
adopt a strategic approach to development cooperation. Currently the focus of
accession country official ODA is on a limited number of strategic and neighbouring countries. These countries – in south east Europe, states of the Former Soviet Union and Central Asia – are all in transition.
There is significant expertise and experience, in government and NGOs, gained since 1992 in the economic, institutional and social transformations required in the processes of democratisation and economic transition, and the development of an active civil society. Some accession countries have already begun to use this experience in work in the Former Soviet Union and the Balkans, and this could be developed and built on.
Extending their focus and support not just to the most recent countries in transition in Central Asia but also to China and Vietnam etc.
Angola, Cuba, Vietnam, Libya and many countries in the Middle East (including Palestine and Iraq) and North Africa (Algeria as an example) are examples where the renewed involvement of East European member states may revive and renew EU development cooperation programmes.

Set up in 1999 at the EU’s initiative, the Stability Pact aims to strengthen the countries of SE Europe “in their efforts to foster peace, democracy, respect for human rights and economic prosperity in order to achieve stability in the whole region.” The Stability Pact consists of three working tables on Democracy and Human Rights, Economic Reconstruction, Development and Cooperation, and Security and Defence. These working tables are made up of representatives from South Eastern Europe together with the other member organisations (other EU member states, non EU members of the G8, Norway and Switzerland, International Organisations (eg UN, OSCE, NATO), IFIs and other regional initiatives. The working tables both negotiate agreements and administer
funds to selected projects. Participation in the Working Tables has enabled countries of the region to enter into policy dialogue and to use their specific knowledge and experience to inform the policy process: as an example, Slovenia has gained significant experience in chairing the working group on Human Rights and National Minorities and has used this experience in developing its own ODA programme.

However, the whole process has been driven by a very top-down process. Participating countries have been represented by representatives from the MFAs, and decisions made are therefore of an administrative and political nature, without the full understanding and support of the wider society.
Slovenia is focusing its ODA on stabilising and developing the states of former
Yugoslavia. Croatia and Macedonia have also supported refugee and humanitarian aid programmes in the area.

Whilst there is a strong tradition of charitable giving within some countries and some sectors of the population, public support for international development cannot be assumed. Of the 10 Eastern European accession countries only Slovenia and Poland have a GDP higher than they had 10 years ago in 1992.
There is the real need for the development of strong linkages between the NGDO sector and the local, domestic population, in order for a strong development programme, with well-rooted domestic support and understanding, to emerge. The systematic involvement of civil society in the process of enlargement will be a decisive factor in creating a Europe committed to the promotion of sustainable economic, social and democratic development in Africa, Asia and Latin America.
The Joint Commission/Council Statement on EC Development Policy of November 2000 further re-inforces that “Poverty eradication is the ultimate objective” of all EU development cooperation policies. In the majority of accession countries no central budget for ODA can be realistically
estimated as expenditure on international cooperation activities is often made from the budgets of a number of ministries. The definition between aid and trade, foreign policy initiatives and development cooperation is not always clear. For example, when attempting to calculate the amount spent by Slovenia on ODA in 2000/01, Dr. Mojmir Mrak, an economist from the University of Slovenia, needed to review data regarding the balance of payments, and the overseas expenditure of various ministries. This is because agricultural aid is administered by the Ministry of Agriculture, certain loans from the Ministry of Finance, infrastructure support and aid via the Ministry of Trade and so on.
In 2001/02 Slovakia allocated US$9.5 m to a central ODA budget held by the Ministry of Foreign Affairs.

Capacity Building Requirements for the region

The TRIALOG Project is a project of the NGDO – EU Liaison Committee (CLONG), which is the NGDO representational and co-ordinating body in Brussels for EU NGOs in Development (NGDOs). The project is coordinated from Vienna by the Austrian Platform. The project is in its third year (2000–2003) and has supported the creation of networks of NGDOs in accession countries as the basis of platforms of NGOs working in development in each country. The recently created platforms in Malta, the Czech Republic and Slovakia received TRIALOG support and are represented on the TRIALOG Project Steering Group. The project also facilitates, through seminars and an electronic database and information service, East-South and East-West dialogue on development and project partnerships. The project has developed a website and NGO database, produced policy and research papers on issues related to enlargement, enabled delegates from accession countries to attend CLONG and EC events in Brussels and thematic conferences in the region; and organised and facilitated capacity-building workshops and thematic seminars with the participation of delegates from candidate countries, the EU and global South.


Further Capacity Building Requirements
There is a variety of different levels of expertise associated with developing Official
Development Assistance Programmes:
· Knowledge of development issues and debates and the need for development education. Currently, there is not a high level of understanding either among the wider populations, nor within the government itself. Poland is currently taking the initiative by planning training on development issues for its diplomatic staff. There needs to be more of this.
· Development of appropriate mechanisms to administer and manage an ODA programme. MFAs, or other emerging bodies, which will administer ODA
programmes, need to be informed about the debates and enabled to take a
facilitative and strategic approach to developing well-rooted and coherent policies and mechanisms. MFAs need to create an operational environment which is Capacity building of civil society Whilst the new approaches of the World bank and other multilateral & bilateral donors talk of the need to include civil society in discussions about development strategies, the formulation of policy and the monitoring of outcomes, there is a fundamental difference
between different understandings of the term capacity building. Everyone agrees that Capacity Building is necessary in order for civil society to be involved in policy dialogue, but the different understandings of the term have different implications for the practice. In an early document, the World Bank usefully identified three elements to capacity building:
· Human development (basic health, education, nutrition and technical skills);
· Restructuring of many public and private institutions to create a context in which
skilled workers can function effectively;
· Political leadership that understands that institutions are fragile entities,
painstakingly built up, easily destroyed, and therefore requiring sustained nurturing.
A more democratic interpretation of what we mean by capacity building focuses on an explicit role for civil society actors in defining and shaping their own human development. UNDP defines this new approach as follows: “Traditional donor driven… and expert led practices are giving way to approaches promoting indigenous control, local knowledge and participation, and the dynamics and inter-relationships among various actors and levels of national programmes.”



New Paradigm for Capacity Development:

Nature of development: Societal transformation including building of ‘right capacities’
Conditions for effective development cooperation: Good policies that have to be home grown
The asymmetric donor recipient Relationship: Should be specifically
addressed as a problem by taking countervailing measures
Capacity development: Three cross-linked layers of capacity: individual;
institutional; societal
Acquisition of knowledge: Knowledge has to be acquired
Most important forms of Knowledge: Local knowledge combined with knowledge acquired from other countries – in the South or North

References:
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