October 24, 2013
By Richard Johnson
At a time when international development cooperation does not draw public focus, a new report highlights Sweden’s significant contribution to assisting countries in need of money they cannot afford to muster on capital markets. According to the Organisation for Economic Co-operation and Development (OECD), Sweden provided USD 5.24 billion in official development assistance (ODA) in 2012. This amounted to 0.99 percent of its gross national income (GNI) – in excess of the United Nations’ target of 0.7 percent of GNI.
This makes the country – after Norway – the second most generous member of the 34 member OECD’s Development Assistance Committee (DAC), which groups the world’s major donors, when ODA is measured on a GNI basis. The DAC commends Sweden for budgeting to reach its 1 percent ODA/GNI target each year since its last peer review in a climate of global financial crisis.
“Sweden has put development at the heart of its foreign policy agenda, showing a strong willingness to take the lead in addressing global challenges,” says OECD DAC Chair Erik Solheim. “We commend Sweden for its efforts to meet a medium-term goal of maintaining aid at 1percent of GNI, and remain confident that recently completed reforms should strengthen its ability to deliver an effective aid programme.”
The new DAC Review of Sweden notes that its 2003 Policy for Global Development continues to provide a strong foundation for development co-operation. The country remains focused on poverty reduction and three thematic priorities identified in 2007: democracy and human rights; environment and climate change; and gender equality and the role of women in development. Most of Sweden’s bilateral aid resources are committed in support of low income countries and fragile states in line with its poverty focus.
The report states that Sweden was the first DAC member to publish a strategy for considering the impact of domestic policies on developing countries – known as Policy Coherence for Development, or PCD – and has been a powerful advocate within the EU on this issue. “Sweden’s whole-of-government processes for policy making ensure that all major EU and domestic policies are screened for their impact on developing countries.” However, the report notes that there is scope for increasing transparency about how conflicts of interest in the process of policy-making are managed.
The DAC finds that clear political directives, policies and strategies reflect Sweden’s international commitments and good practice. It notes, however, that a large number of additional priorities – each with their own policies and strategic documents – make for a complex overall picture.
According to the report, Sweden has recognised this weakness and is striving to replace its “forest of policies” with an eagerly-awaited aid policy framework that puts forward a clearer policy vision and a strategy for concrete actions that bring results. This new framework is expected to provide a clear hierarchy of policies, adequate criteria for effective prioritisation of goals and perspectives, and indicate how these can be translated into concrete actions that get results.
The report also urges Sweden to finalise its planned bilateral and multilateral “results strategies” and continue its efforts to concentrate its resources for maximum impact. Currently, Sweden’s aid is spread thinly across a wide range of countries, themes and programmes.
“Sweden believes that corruption is a major obstacle to development which should be taken seriously. Its approach to anti-corruption adheres to the DAC Policy and Principles on Anti-Corruption (OECD, 2007) and its motto is “Always prevent, never accept, always inform and always act”, says the DAC Review of Sweden.
The Nordic country has also put in place an anti-corruption regulation as well as whistle-blowing guidelines. In 2012, three-quarters of the Swedish embassies in partner countries had anti-corruption strategies which follow DAC guidance. Sweden is also an active member of the OECD/DAC network for good governance (GovNet) and the Anti-corruption Task Team that reports to this.
Sweden is working with other donors to tackle corruption in several of its partner countries, such as Rwanda, Uganda and Zambia. In Uganda, Sweden has worked with other donors to develop a coordinated joint response to findings by Uganda’s Auditor General of misuse of donor funds intended for post-war recovery in the north of the country. The report asks Sweden to ensure that it adopts a joint approach to these kinds of issues in all cases.
Sweden is committed to the principle of untying its aid and up until 2010 it was reporting high shares of untied aid (95 percent in 2010 and 83 percent in 2009). These levels were in line with its international commitments made in Accra (HLF3, 2008) and Busan (HLF4, 2011).
In 2011, the share of Swedish aid reported as untied fell to 55 percent. This did not reflect any actual changes in Sweden’s policy or aid projects but was a consequence of difficulties it had in classifying some activities in SIDA’s (Swedish International Development Cooperation Agency’s) Contribution Management System. This resulted in Sweden not reporting the tying status of 31 percent of its bilateral ODA.
Sweden is seeking clarity from the DAC on how to report on some areas which it sees as “untie-able” because they represent no opportunities for international procurement. An example is aid to help refugees in the donor country.
According to the report, since the last peer review Sweden has improved the way it communicates with its partners about aid conditions, thus implementing the 2009 DAC recommendation. Sweden’s aid conditions are drawn from its partners’ results frameworks and harmonised with other donors, where possible.
The last peer review recommended that Sweden improve transparency to partners over how it assesses their progress in meeting its aid conditions. This was in response to criticism from partners that there was insufficient communication on Sweden’s decisions (OECD, 2009). Sweden has acted on this – its Open Aid website clearly documents communications with governments such as Tanzania, Mali and Burkina Faso in the form of letters and memos in which it outlines its conditionality assessments.
Sweden uses results-based conditionality in several of its partnerships. In Bangladesh, for example, it provides sector budget support to education with half of the funds paid upfront and the other half released on the achievement of specified results. In Uganda, Sweden is supporting an output-based voucher programme in the health sector together with the World Bank Global Partnership for Output Based Aid (GPOBA), USAID and the Government of Uganda/Ministry of Health.
The DAC Review of Sweden, known as Peer Review of Sweden took place over an eight month period, including visits to Stockholm, Uganda and the Democratic Republic of Congo, culminating on September 11, 2013 with the DAC peer review meeting in Paris. Belgium and the United Kingdom acted as peer examiners, with facilitation and analysis provided by the OECD Secretariat.
Peer review has been used at the OECD since the organisation was created more than 50 years ago. It has evolved over time to take account of new developments, including the involvement of civil society, business and labour. One measure of the success of the OECD peer review process is that other international organisations have also adopted the method, although the practice has been most extensively developed at the OECD. More recently, members of the New Partnership for African Development (NEPAD) have asked the OECD to help them bring peer review to their region.
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