Time to reset the international development agenda transcript
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Simon Cullen [00:06] Hello and welcome to the Make Change Happen podcast from the International Institute for Environment and Development. I'm Simon Cullen.
On this episode, we're going to try to grapple with a really big question: how best to support sustainable international development at a time when many governments around the world are slashing their foreign aid budgets? And this is obviously happening when multilateralism itself is being stress tested in ways we haven't seen in a very long time. So what's the path forward?
Joining me for this episode is the executive director of IIED, Tom Mitchell. Tom, welcome back to the podcast.
Tom Mitchell [00:42] Thank you, Simon. Delighted to be here.
Simon Cullen [00:44] Well, Tom, if you could start by painting us a picture of where we are at the moment when it comes to sustainable international development. For example, what's working, what's not working?
Tom Mitchell [00:53] Thanks, Simon. Well, obviously, the first place to start is on the kind of financial picture. So we have an international system where a group of countries provide official development assistance that is registered through the OECD, and it's counted towards different targets that are set nationally with an overall goal of being able to meet the needs of various developing countries or least developed countries and Small Island Developing States with some of their development priorities.
But I think in the last several weeks, months, years, there has been an erosion of commitment to international development and potentially to sustainable development from some of the countries in Europe or in North America, obviously most symbolised by the decision from the Trump administration to close USAID and radically reduce the international support from the US.
So in this situation, this has kind of created a kind of ripple effect where many countries are then questioning whether they should be putting so much money into international development, partly under pressure from the US, but also partly a reaction to the US kind of withdrawing its tacit military support. And so, countries like the UK choosing to switch some of its international development budget into defence spending.
So overall, we've got this kind of almost snowball effect of money being removed from international development, services collapsing, organisations either disappearing off the scene or seeing huge redundancies, but also ultimately those who need the help having that critically withdrawn and some organisations claiming that that is leading now too to deaths and to kind of widespread negative impacts. So, it's a pretty bleak picture and I think the question is what happens next?
Simon Cullen [02:48] So there's a lot to unpack in your answer there, and we're going to get to some of the drivers of what's behind this later on, I think. But let's just talk about one of the things you touched on, which was getting the support to those who need it most. And one of the things we've often talked about in this sort of debate is how best to get the money to the frontlines of the various challenges, whether it's the climate crisis or other development challenges. Yet our research and that of many other organisations, shows that this remains a big challenge. So, what are the obstacles of getting money to those local communities?
Tom Mitchell [03:22] So many governments who provide their international development assistance provide it through different intermediaries. Those intermediaries could be UN bodies, they could be multilateral climate funds, they could be big NGOs, a whole variety of other organisations. And the reason they like to do that is because it allows them to keep their own administrations fairly small. It allows them to pick a number of organisations as trusted partners for delivering that money, and it allows them to retain a good degree of accountability that they can then report back to the various taxpayers.
But the big downside is that if you put the money then into this group of intermediary organisations, each of those intermediary organisations have their own costs. And then those intermediary organisations choose in a variety of ways to pass the money on, often into a particular country through another third party. It could be the government, often less so. It can be local implementing organisations, local civil society bodies and so on.
But that creates then another layer of administration and of intermediary costs. And then it can be a number of steps down the chain before the money actually gets to a local community. And all along, there's these processes of accountability, of procurement, of due diligence, of assessment, and everybody wants to make sure that corruption and loss of money is minimised and 'value for money', in some inverted commas, is retained.
But this kind of high level of intermediary structure is what characterises quite a lot of official development assistance. So our organisation, IIED, has done a lot of research suggesting that it can be as little as 10% of that total amount of money originally pledged gets to those frontline communities.
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Simon Cullen [05:15] And so the obvious question, Tom, is how do we change it? How do we make sure that money gets to those local communities?
Tom Mitchell [05:21] I think the timing now is really interesting. If you're in a situation where the total amount of resources available in the system is now much less than it was even a few months ago, then people are asking the question of what does efficiency look like? What is really value for money? How do we make that money go much further?
And I think it means that the topics of kind of locally-led action or localisation are much more to the fore now. And what that means in practice is getting money directly into the hands of the community organisations or local government organisations rather than necessarily going through these extended intermediary chains. And at the same time, it means giving the communities who are in need much more say or ownership in the design of how that process works. And so in being more bottom-up rather than top-down.
But fundamentally, that means that the governments or the organisations providing that money need to be ready to acknowledge that there is a different way of doing business. They may need to rethink the way they're doing risk assessments and due diligence. They may need to make reporting simpler so it doesn't have such a big burden. They may need to change their own internal processes to make sure that the models of procurement or the models of expenditure don't have these requirements in place that prohibit local community organisations from accessing them.
So it's by no means easy. We are looking to come out with new assessments very soon on whether or not we're changing the picture and more money is getting locally. But fundamentally, it means trusting local organisations to meet local problems, the ones who know best on how to deal with them.
Simon Cullen [07:01] It kind of sounds like a a fairly big reset in how we think about it, doesn't it?
Tom Mitchell [07:05] It is a very substantial reset, and it's something that the kind of international development community has struggled with for some time. The tendency is that the organisations, the countries giving the money, want the control. They want to be able to clearly see where their money is going. Often it can be used for some degree of geopolitical reasons or a bargaining chip around trade and so on.
So there are very, you know, strong incentives for countries to maintain that control. But actually, the test here, the reset test, is in recognising that real value for money and impact and results is better if you can somehow bestow trust on the local organisations closest to the challenges.
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Simon Cullen [07:55] Well, let's switch a little bit to discuss the geopolitics, which is what you've just touched on there briefly. And it's worth noting that we're recording this episode in the lead-up to a once-in-a-decade Financing for Development Summit taking place in Spain in July. So when you consider the current state of geopolitics, where does that leave big summits like this one?
Tom Mitchell [08:15] So the international development agenda has really been dominated by a kind of a group of Western powers and then organisations, and the countries who are on the margins of that have had relatively little say. Particularly countries in Africa or at least developed countries or Small Island Developing States, have been on the margins of those. And that's partly because you know, they don't hold the power in some of the governance bodies, for example, in the World Bank or in other multilateral development banks. The power sits much more with the shareholders, those big countries giving the money. And so, they're quite sidelined.
But what's happened in the last few months has been, I think, quite a radical shift. So, the US, for example, has often either resigned its board seats from some key organisations or withdrawn completely, leaving some space, I think, for more creativity.
I think we're seeing, for example, Brazil, or the BRICS countries coming to the fore much more, choosing to make their, you know, their own decisions and to influence international organisations in a way that maybe we didn't see even a year ago, because there is some of that space created. But also some of the European countries who are sticking to the agenda and really reinforcing their commitment, finding also more space for new alliances.
And so I think the upshot here is that a conference like the one that's going to happen in Spain is an opportunity for new types of relationships to emerge between countries that are tackling similar challenges, climate change being one of them, finding new opportunities for alliances when there's a strategic value in that. But I'm not sure it's completely clear yet where we're going to end up.
Simon Cullen [10:01] And one of the big factors we haven't spoken about yet in all of this is debt. And many countries, especially many developing countries, are locked in this cycle of debt, new disaster, and then even more debt. And so when we talk about international development, we're obviously talking about projects and funding, but there's some much bigger structural issues at play too, isn't there? Is there an appetite for tackling the debt crisis as well?
Tom Mitchell [10:24] That's a great question, Simon. I think IIED has been looking at this debt challenge from multiple different angles. And the kind of the fundamental problem here is that countries find it very difficult to radically reduce their debt burdens, their sovereign debt burdens.
And in fact, actually many countries are seeing that debt burden increase. And I think the problem then that flows from that is when you get unsustainable debt, you also have a situation where many countries are spending more on servicing their debt, you know, paying back the interest, than they are on education or on health care, let alone on tackling some other sustainable development goal areas, for example, like climate change or environmental pollution. So it creates this kind of incredibly constrained system.
And as you highlighted, the moment a country gets hit by a disaster event or another negative shock, often the response is that they take on more debt in order to be able to recover quickly. And, you know those countries don't have other types of financial protection, so the cycle just perpetuates and we see these kind of negative debt spirals.
And we've worked with many of those countries, whether least developed countries or Small Island Developing States, and many of them don't see the opportunity to get support internationally in a way that gets them out of that negative cycle. Whether the existing programmes associated with the IMF [International Monetary Fund] or the G20 or so on, they often have very stringent rules associated with them. Many countries can't get access to them. And beyond that, there is not really an appetite to design something more bespoke. So we're not really seeing large-scale movement towards freeing up this system.
It is going to need to happen. Otherwise, we will get to a point just with more disasters and more climate impacts where this level of unsustainable debt starts to see more large-scale defaults and so on. So much better to design something more fundamental and inclusive now rather than to get to that point. And the conference in Seville is going to be one of those opportunities to take stock of what debt instruments there are out there to help countries and to see whether there's something that can be done.
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Simon Cullen [12:38] Tom, and in these last few minutes, we've discussed some really big challenges, and I sometimes wonder if we if you were to take a step back, do you feel more or less hopeful about the direction of travel? And indeed, what's the one big change, if you had to just distil it into one thing, what's the one big change you'd like to see?
Tom Mitchell [12:56] The big change that I'd like to see is a fundamental recognition that resources are much better handled and more effective if they are held very close to the communities and to the needs that they're there to address.
And I think that sense of fear that there might be around, or is that going to lead to more money being squandered, or is that going to create the possibility for corruption and so on? These are instruments and ideas and mindsets, I think, that are now out of date. The risk of those is not worse than 90% of the resources being swallowed up in an international development system with too many intermediaries.
So, I'd like to see a shift in that mindset. I'd like to see resources at the local level. And I'd like to see that being you know supported through national systems that are effective in scaling up what's working. So that would be a priority for me.
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Simon Cullen [13:54] Tom, thank you so much for joining the podcast. Obviously, with any of these topics that we've discussed, we could have talked about them for hours. So appreciate your time and your expertise in charting us through what's going on in the world at the moment.
Tom Mitchell [14:06] Thank you, Simon. I appreciate it.
Simon Cullen [14:09] Tom Mitchell is the executive director of IIED. Well, to listen to previous episodes or to read more on what we're doing in the world of sustainable international development, or indeed any of our other work, head to our website, IIED.org. That's IIED.org. Thanks for listening.
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