WRITTEN EVIDENCE BY UK SUSTAINABILITY AND TRANSITIONS WORKING GROUP TO THE INTERNATIONAL DEVELOPMENT COMMITTEE INQUIRY INTO EXTREME POVERTY AND THE SUSTAINABLE DEVELOPMENT GOALS

Introduction

The UK Sustainability and Transitions Working Group is made up of UK based NGOs, think tanks and academic institutions working on issues relating to sustainability and transitions, primarily in the global health arena. We define ‘Transition’ as a process by which a country that was previously receiving external donor funding through Official Development Assistance has that money reduced, ended or it is transferred to another programmatic aim. The transition can take place slowly or suddenly, leading to a change in the aid relationship between the donor and recipient. A sustainable transition is one that protects development gains and ensures that the societal changes that are evoked by aid processes are long-lasting and transformative.

We welcome the broad scope of this inquiry and submit our answers to the following questions:

2. How might the FCDO’s strategy, policies and programmes need to change as the number of people in extreme poverty grows due to the global pandemic or the effects of climate change?

7. How the FCDO can play a more effective part in the eradication of poverty as a convener, thought leader and investor.

8. How has the merger of the Foreign and Commonwealth Office and the Department for International Development affected the UK’s approach to extreme poverty?

Recommendations:

●       The FCDO should outline the UK’s approach to transition in the International Development Strategy, and work with civil society to build on DFID’s ‘Working Principles on Transition’, which contains

○       Flexibility policies that include the possibility of reintroducing support should circumstances change;

○       A broad range of social, political and economic indicators to guide its aid eligibility and allocation methodologies;

○       A monitoring and evaluation framework and risk mitigation strategy;

○       A democratic approach to aid that involves all relevant and representative stakeholders;

○       Alignment with locally articulated poverty alleviation priorities.

●       The FCDO should work with other donors to collectively adopt transition principles and establish global and country-level coordination mechanisms to produce long-term, comprehensive, costed transition plans.

●       The FCDO should consider how incorporating a GPI approach could be a more effective route to eradicating poverty and inequality.

2. How might the FCDO’s strategy, policies and programmes need to change as the number of people in extreme poverty grows due to the global pandemic or the effects of climate change?

COVID-19 is causing global poverty to rise for the first time in 20 years; in 2019, 8.4% of the world’s population lived below the poverty line[1]. The pandemic has also affected the economic prospects of countries across the world differently. The International Monetary Fund estimates the cost of COVID-19 at US$28 trillion in lost output and has cost more than US$17 trillion mobilised in response[2].

Many countries are expected not to recover to their pre-pandemic levels of economic activity until 2024 and the crisis has slowed down the trajectory of many countries becoming less reliant on aid. Nine countries are forecasted to fall back into their previous income per capita group, compared to only one country pre-crisis[3]. This has increased the financing gaps and requests for technical support in many low- and middle-income economies[4]. The most basic aspects of pandemic preparedness, including resilient health systems, surveillance, and appropriate research and development (R&D), continue to be under-funded, unevenly supplied, and hard to access.

The economic toll of such health crises is substantial and scientists predict more global health threats in the future. To prepare for this, the FCDO’s strategy, policies, and programmes should be prioritising poverty and inequality alleviation, putting flexibility and sustainability at the centre of its approach. Within the FCDO’s recently published Health System Strengthening paper, this is recognised as a flaw of their current approach; “we need to do better at looking at longer-term strategies rather than just focussing on quick wins, acknowledging it can often take years to see the impact of health system strengthening efforts. This will require us to focus on both catalytic, short, and medium interventions while laying the foundations for long-term action”[5]. It is essential that the FCDO’s approach includes the process of countries transitioning away from aid, which should only happen when development gains have been achieved. This should be measured by a range of indicators, not when development budgets have been cut or when political or public opinion changes.

The FCDO can achieve this by recommitting to, and working with civil society to build upon, the Department for International Development’s (DFID) ‘Working Principles on Transition’ developed in 2019. This should include explicit commitments to:

●       Plan for a sustainable and gradual transition at the start of any investment with early and open communication with all relevant stakeholders (e.g., recipient country governments, civil society organisations, and other Government Departments with holding relationships) to create a realistic timeline for withdrawal.

●       Use an evidence-based, nuanced and broad set of criteria to realistically and effectively determine when and how transitions away from ODA should be made. This includes contextual indicators such as health service capacity and coverage; disease burden; political will; reaching the most marginalised; institutional capacity to address prevalent health issues; a country’s fiscal space and debt burden. 

●       Establish a monitoring and evaluation framework and risk mitigation strategy that is continually consulted throughout the transition process. The elements and stages of both successful, failed, or incomplete transitions should be clearly defined and indicators should be developed to measure success. FCDO should continuously analyse and evaluate the impact of its withdrawal against the targets set out in the Sustainable Development Goals and look at the direct impact of its withdrawal (e.g., upon civil society organisations’ delivery of services) and at the withdrawal landscape (e.g. the transitions of other donors) more broadly.

●       Incorporate a flexibility policy that includes the possibility of reintroducing support should circumstances change. Once transition plans have been put in place and are being implemented there must be the option of delaying or modifying the timeline if it becomes clear targets aren’t being met through monitoring the set indicators. FCDO should utilise tools, such as bridge funding for civil society or other key stakeholders, in situations where it becomes clear that to continue the process would unduly risk sustaining development gains, as seen throughout the pandemic. With growing poverty and nine countries being forecasted to fall back into their previous income per capita group, it is important for the FCDO to be prepared to respond to reverse transition and reintroduce support as necessary.

7. How the FCDO can play a more effective part in the eradication of poverty as a convener, thought leader and investor.

The FCDO has an opportunity to be a convener of other donor countries through building a collective implementation of transition principles. With the FCDO working on its International Development Strategy, they have an opportunity to reflect on and be guided by the recommendations from the Equitable Access Initiative (EAI) for their own approach to aid allocation.

The EAI was launched by heads of several multilateral organisations and explored what criteria should be used to determine funding eligibility. They proposed that policymakers consider a more comprehensive framework for decision making that accounts for countries’ position on a health development continuum, based on the analysis of countries’ needs, fiscal capacity and policies. The EAI also recommended that even when additional indicators such as disease burden are used, GNI should not be used as the sole economic indicator, and highlighted the importance of equity, both within countries and between countries[6].

Unfortunately, the majority of donors have either ignored or misquoted the findings of the EAI and did not significantly change their eligibility criteria. The only change at the time was the recognition of the need to mitigate the worst impacts of existing eligibility policies by improving transition policies rather than reviewing the criteria used.

The FCDO also has the opportunity to be a leader in the transition space by establishing global and country-level coordination mechanisms, in close collaboration with donors and governments, to avoid simultaneous transition. Simultaneous transition is where multilateral and bilateral donors withdraw funding at the same time, causing dangerous financing cliffs for health services, impacting the quality and availability of healthcare, and causing gaps in coverage for human development services[7]. As a bilateral donor and board member of multilateral organisations, the UK is well placed to establish coordination mechanisms with the central goal of producing long-term, comprehensive, costed transition plans. Donor coordination strengthens the effectiveness of investments and partnerships; it ensures the full impacts of the transition from different mechanisms are understood, that adequate preparations are taken, and that transition planning and support is not duplicative or run in parallel.

In the long term, the FCDO also has the opportunity to be a thought leader and investor in the global goal of eradicating poverty through considering the concept of Global Public Investment (GPI)[8]. GPI proposes a collective system to financing sustainable development based on co-responsibility and diffuse reciprocity, whereby all countries contribute on an ongoing basis, and all have a say in how the money is allocated to secure global public goods, services and infrastructure. The FCDO should consider how it could support GPI’s paradigm shifts that would evolve the way countries would deliver aid.

Recommendations:

●       Work with other donors to ensure that eligibility and allocation of aid is informed by a multi-criteria framework that takes into account income levels, income distribution and health needs, in addition to domestic capacity and policies as is recommended by the Equitable Access Initiative[9].

●       Establish, in close collaboration with donors and governments, global and country-level coordination mechanisms to produce long-term, comprehensive, costed transition plans.

●       Consider how incorporating a GPI approach could be a more effective route to eradicating poverty and inequality.

8. How has the merger of the Foreign and Commonwealth Office and the Department for International Development affected the UK’s approach to extreme poverty?

Since the departmental merger, there has been a consequential shift in the UK’s approach to development. Most significantly, this has involved the deprioritisation of poverty and inequality alleviation and ODA becoming aligned more closely with diplomatic, security and economic interests, as laid out in the Integrated Review. The merger has also seen the loss of DFID’s work towards creating a sustainable transition process.

Following the Independent Commission for Aid Impact’s Amber-Red rating of DFID’s approach to transition in 2016[10] and 2018[11], DFID formed a relationship with civil society through the Country Programmes Team. In 2019, DFID created ‘Working Principles on Transition’ which guided the planning and implementation of transitions, and began taking a ‘gradation’, rather than ‘graduation’, approach to aid relationships. However, since the merger, there has also been no clearly identifiable team working on transition, and it appears the FCDO has not recommitted to the ‘Working Principles on Transition’ or articulated its strategy, or systematic approach, to ensure effective aid withdrawal.

The FCDO should recommit to the Principles and work with civil society to develop a transition framework to ensure that sustainability, poverty and inequality are prioritised at all stages of the investment process of international aid. This should be detailed in the UK’s International Development Strategy, with a ministerial lead assigned to oversee its implementation, and include:

●       Details of a democratic approach to aid that involves all relevant and representative stakeholders, including country governments, impacted communities, and a fully-funded civil society, to be at the decision-making table around the allocation, direction and withdrawal of donor funding.

●       Affirmation that aid spending is to be determined by demonstrated poverty impact and alignment with locally articulated poverty alleviation priorities.

●       Identification of a broad range of social, political and economic indicators to guide its eligibility and allocation methodologies. Within economic indicators, the UK must look beyond solely using GNI per capita.

If you would like any further information about the recommendations in this submission, please contact the Amina Babirye and Beatrice Coates, Co-chairs of the UK Sustainability and Transitions Working Group, at amina@stopaids.org.uk and beatrice.coates@results.org.uk

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