Review of the development co-operation policies and programmes of Spain
Spain has set itself ambitious goals for its development co operation through to 2012. The Master Plan 2005-2008 sets out major improvements on past policy and practice, and Spain now faces the challenge of putting the overall vision into practice. Political support and the framework for policy coherence are strong, yet further progress depends on their more strategic and systematic use. Spain is rapidly scaling up its aid volume and needs to enhance its capacity for delivering bilateral aid while avoiding dispersion of effort. A new commitment to sub Saharan Africa reflects a sharpened poverty focus, and offers new opportunities for division of labour among donors. Spain’s increasing multilateral aid is becoming more strategic. The political leadership is driving major reforms in organisaton and management for improved aid effectiveness, which are generating a comprehensive change process in the aid system. Aid effectiveness is gathering momentum, as Spain applies the principles of the Paris Declaration well in the field. But successful implementation of the aid effectiveness agenda will depend on completing the reform process. Spain’s humanitarian action strategy reflects international good practice and the country should now ensure greater co ordination among its humanitarian actors.
Spain has set itself ambitious goals for its development co operation
Spain is in the midst of a comprehensive upgrade of its aid programme. Aid volume is increasing rapidly as Spain aspires to reach an ODA/GNI ratio of 0.7% by 2012. As a firm supporter of the Paris Declaration, Spain is also committed to enhancing the quality and impact of its assistance. The country has embarked on this comprehensive and challenging undertaking, which has addressed many of the recommendations of the 2002 Peer Review, with strong public and cross party political support. The government is working to make development policy a state policy that commits all official actors to a common approach and is able to withstand political change. This is particularly important given the substantial share of aid provided by autonomous regions and local administrations (decentralised co-operation). Spain will continue its strong development engagement in Latin America, where historical, cultural and language ties give it a comparative advantage. This also helped Spain attain a leadership role among donors in the region in promoting aid effectiveness. Sub Saharan Africa has become a new priority for Spanish development co operation, and aid to the region is set to increase significantly. The country’s own experience of development within the EU is an important factor in this regard, and the government is stepping up its engagement on aid questions in the EU, where initiatives such as the EU Consensus on Development and the Code of Conduct on Complementarity and the Division of Labour in Development Policy set a framework that will increasingly influence Spanish aid.
The Master Plan sets out major improvements on past policy and practice
The Master Plan 2005-2008 provides a comprehensive framework for Spanish development co operation. The plan is based on a nationwide consultation exercise, thus ensuring a high degree of support from all Spanish development stakeholders. It defines overall strategic objectives and priorities for Spanish aid, clarifies sector and geographic priorities, and provides guidance for the instruments and different players in the Spanish system. It also sets out the areas and objectives for improving aid quality. The Master Plan contains clear improvements on past practice, updating the existing legal basis for development co operation from 1998 in line with Spain’s international commitments, especially the MDGs, while also sharpening the original focus on poverty reduction. Spain’s multidimensional concept of poverty finds good expression in a thorough approach to addressing cross cutting issues as priorities both at the horizontal and sector levels. Finally, to maintain public support, Spain recognizes the importance of development education and plans, very appropriately, to integrate development education into formal and informal education systems, from infant schools to university education.
Spain now faces the challenge of putting the overall vision into practice
Spain recognises that implementing its strategic vision will be a major challenge, especially given the country’s international commitments for improving aid effectiveness. One essential task is to complete rapidly the full set of sector strategies; these are a key element of Spain’s policy framework, the basis for implementing its ambitious goals. The diversity of actors in the Spanish development co operation system is a valuable asset, but also implies important challenges. While the various Spanish development co operation stakeholders are generally well informed about the Master Plan and Spain’s vision for development, not all of them, including decentralised actors, feel bound by the policy framework. This has adverse impacts on co ordination, coherence and overall effectiveness. In working towards its strategic objectives, learning from experience in the field will play an important role. Spain is currently not yet systematically incorporating its impressive experience into policy.
Political support and the framework for policy coherence are strong
Spain is among the few DAC members to include policy coherence for development in its legal and planning framework. In 2004, Spain’s Development Co-operation Council took up the task of reporting annually to parliament on the issue. Policy makers have the advantage of strong political support for policy coherence for development, and the Master Plan sets out areas of action and the roles of different ministries. In the case of migration, the Secretary of State for International Co operation has embarked on joint activities with other ministries and has used the enhanced status of development co operation to bring policy coherence questions to political attention and debate at the highest level. Spain is also committed to promoting policy coherence for development in international forums. Spain is particularly well placed to do so in the area of migration, an area were some are concerned about the risk of an instrumentalisation of aid, given its own recent experiences of large-scale emigration.
Further progress depends on their more strategic and systematic use
The analytical capacity for policy coherence for development has improved in the Secretariat of State for International Co operation (SECI). It is, therefore, important that the Secretariat is increasingly recognised as a fundamental partner in inter ministerial deliberations on issues with clear and important policy coherence dimensions. The Master Plan does not define the role or requirements for autonomous regions or local administrations in policy coherence, nor are these decentralised actors represented in the Development Co-operation Council’s consultations on policy coherence. Moreover, attention could be paid at field level to policy coherence for development. Co-ordination among development actors remains a challenge, including the role of the military in humanitarian assistance. In its report on policy coherence, the Development Co-operation Council focused to a large extent on the international arena, paying limited attention to bilateral policies. But it made one key recommendation which, if followed through, will help improve policy coherence significantly: Spain should be transparent about, and communicate publicly, its official position on controversial policy coherence areas in international forums, such as the EU, where Spain’s national policies may conflict with development goals.
ODA volume, channels and allocations
Spain is scaling up its aid volume
Spain is committed to reaching an ODA share of 0.7% of GNI by 2012 — three years before the EU commitment date. With budget provisions to reach 0.5% of GNI in 2008, Spain appears to be well placed to reach its targets. It is, however, not clear how Spain will use its different instruments to achieve this. Therefore, overall budget planning for increasing aid now needs to be complemented by a more specific operational strategy for the use of different channels and allocations involved. This is especially important since debt relief and development lending, which accounted for significant shares of ODA in the past, are set to decrease in the years ahead. A more operational strategy for increasing aid should also aim to allow Spain’s partner countries to better predict, and make plans based on, this aid for the near- to medium term future.
Spain needs to enhance capacity for delivering bilateral aid and avoid dispersion of effort
While Spanish bilateral aid will continue to increase in absolute terms, its share of total aid is projected to decline from 62% in 2005 to 48% in 2007. Spain is aware that its capacity for implementing bilateral assistance has not kept pace with its soaring aid budget. Spain needs to swiftly complete the reform of the Spanish Agency for International Development (AECI), the main implementer of bilateral aid, to equip the system with an operational basis that can implement rapidly increasing amounts of bilateral assistance effectively in line with its objectives.
Dispersion of aid is another concern. With 56 partner countries in three categories (priority countries, special attention countries, and preferential countries), accounting for 71% of bilateral aid, Spain spreads its resources fairly thinly. Spain’s share of bilateral aid to its 23 priority countries stood at only 36% in 2006 – against a target share of 70%. As Spain increases its aid, achieving this target and avoiding further dispersion will require a conscious effort throughout the Spanish aid system. The active participation of decentralised actors will play an important part in increasing the concentration of aid in line with Spanish policy objectives.
A new commitment to sub Saharan Africa reflects a sharpened poverty focus
The new focus on sub Saharan Africa reflects a reinforced focus on poverty reduction, as recommended in the last peer review, as well as a “re discovery” by Spain that it has direct neighbours in the region. In the challenging undertaking of building up a stronger profile in sub Saharan Africa, Spain’s approach has so far been pragmatic yet prudent. Spanish development co operation offers substantial potential for added value beyond increased financial resources, and the DAC looks forward to Spain’s growing contribution in this region. Spain also sees a direct link between the new focus on sub Saharan Africa and its commitment to allocate a minimum of 20% of bilateral aid to least developed countries. Whereas Spain achieved this in 2005, largely through debt relief, it fell well short of the target in 2006. To meet the target consistently, Spain still needs to plan carefully its increase of programmable aid in its mix of channels and allocations of aid to least developed countries.
Spain’s approach offers new opportunities for division of labour among donors
Spain’s traditional regional focus on Latin America and its commitment to increase aid to sub Saharan Africa offer a good opportunity to divide labour between donors more efficiently. Other donors may wish to make use of Spain’s leadership role in Latin America, and Spain should consider how to prepare for this possibility. On the other hand, to increase its aid in sub Saharan Africa, Spain is entering a relatively unfamiliar context characterised in many cases by a high degree of aid dependency, a multitude of donor representation, and long standing co ordination mechanisms. Spain should, therefore, consider making use of existing mechanisms and other donors’ capacities for harmonised and aligned assistance.
Spain’s increasing multilateral aid is becoming more strategic
Spain is becoming a more active and strategic contributor to the multilateral system. Spain’s multilateral aid is rising sharply, consistent with the country’s overall vision as a donor. While contributions to the European Union account for much of Spain’s multilateral aid, the most distinctive aspect is the increase of funds to non-financial institutions, targeted at achieving the MDGs and at enhancing the quality of multilateral aid. These actions are in line with the Master Plan’s general priorities for the evolution of Spain’s multilateral engagement. But Spain also needs to urgently finalise a strategy which defines the rationale, objectives and actions for this multilateral engagement, including in the EU, in more detail so as to avoid allocations being driven by funding opportunities, rather than strategic considerations.
Organisation, management and aid effectiveness
The political leadership is driving major reforms
Planning for growth and improving quality are the greatest challenges to Spain’s ambitions, and will require facilitating the effective use of capacity within the Spanish system. Spain’s political leadership has embarked on reform and has the political vision to drive the process forward. The Master Plan sets out reform objectives for the main actors in the system to improve the quality and impact of Spanish aid. The main task is to reform AECI into an agency able to deliver on Spain’s commitments - an aid share of 0.7% of GNI, and the Paris Declaration on Aid Effectiveness - in an effective way. Spain is also acting to resolve long standing inconsistencies in its development assistance loans, which resulted from an ambiguous dual mandate for export promotion and development co operation.
The reforms are generating a comprehensive change process in the aid system
The profile and resources of the Secretariat of State for International Co-operation (SECI), which has the main responsibility for aid management, have increased. But although reform of the human resource system is addressing long standing problems - especially uncompetitive conditions for field staff - the pace and magnitude of change are putting capacity under strain, both in Madrid and in the field. SECI is encouraged to keep a close eye on system capacity. At the same time, Spain’s partners appreciate the improved quality of Spanish aid in the field, and SECI now seeks to improve the functioning of the system as a whole. In this effort, a key role will fall to more effective mechanisms to link the policy-making and monitoring in Madrid with operational capacities in the field. SECI is also aware of the need for a system that focuses on results and builds on a strengthened evaluation culture. These urgent needs remain to be addressed, both conceptually and in concrete terms.
Aid effectiveness is gathering momentum
The commitment to aid effectiveness is the key motivation for the reform process, and Spain has made a concerted effort to disseminate and promote the Paris Declaration across the Spanish system and to its partners. The DAC commends Spain for its efforts to untie its aid by 2012, in line with its commitment to partner country ownership. Spain also intends to increase the use of general budget support and sector wide approaches, although from a very low base and without quantitative targets. OECD’s 2006 Survey on Monitoring the Paris Declaration indicated that Spain still needs to make tangible progress for many indicators. This situation should improve as the reforms take hold.
Spain applies the principles of the Paris Declaration well in the field
Spain has shown skill in adapting the aid effectiveness principles to its co operation in Latin America, where most partners are middle income countries with low levels of aid dependency. In Colombia and El Salvador - both politically polarised countries - Spain appreciates the central governments’ prerogative to define national policy, as well as the need for ownership to be citizen based. As aid is only a small fraction of partner government spending, Spain’s focus is on aligning in areas which are essential for development results, and where donor support can trigger the implementation of partner sector strategies or initiatives. Technical co operation often plays a key role in this process. Whereas Spanish co operation still lacks the capacity and resources to put in place a system of management for development results, its engagement often promotes an implicit results focus by its partners. Moreover, Spain fosters accountability through a strong focus on national, citizen based accountability mechanisms. Finally, its deliberately low profile engagement allows it to maintain constructive relations with all relevant stakeholders. This effective approach has enabled Spain to play a leadership role among donors in countries such as Colombia and El Salvador.
Successful implementation of the aid effectiveness agenda will depend on completing reform
Spain needs to retain a clear focus on aid effectiveness throughout the reform process. To achieve greater co ordination and harmonisation beyond policy consultations, Spain needs to ensure the different actors - including decentralised co operation - take a common approach to implementing assistance at the country level.
AECI’s country offices are in the best position to facilitate and lead the co ordination process in the field. However, the protraction in completing the reform at headquarters is increasingly constraining effective operation in the field. The agency’s reform should lead to strong delegation of authority to the field for better harmonisation and alignment. To back this up further, AECI needs to develop substantive capacity for sector policies at headquarters, and in country programming should be at the strategic level, rather than at the level of instruments. A key element for success lies in a revamped human resource system which provides a professional cadre and career paths, competitive employment conditions and incentive structures for staff rotation. Spain risks losing critical skills and expertise, in particular among high-quality staff in the field, if it fails to address this issue comprehensively. This would seriously undermine its ability to meet its strategic objectives of more and better aid.
The humanitarian action strategy reflects international good practice
Spain endorsed the good humanitarian donorship (GHD) principles in 2004 and aligned its legal framework for humanitarian action with these principles. The country is finalising a humanitarian action strategy that reflects GHD principles and which will increase its capacity to undertake an expanding programme of humanitarian action. The strategy addresses shortcomings in the present humanitarian aid system and sets out a series of priority actions and intentions, including incorporating humanitarian aid aspects into all development planning documents, and commissioning evaluations. Spain also wants to increase humanitarian aid to the DAC average of 7% of bilateral ODA by 2008.
Spain should now ensure greater co ordination among humanitarian actors
The government recognises that its ambitious plans for humanitarian aid will require greater policy coherence and co ordination among development actors. At present, the Ministry of Foreign Affairs and Cooperation (MAEC), through AECI, manages about half of the central government humanitarian assistance funding. Humanitarian aid also comes from the Ministries of Defence, Industry, Labour and Finance. MAEC has reached an understanding with the Ministry of Defence confirming civilian leadership in the humanitarian response. The autonomous communities and local administrations, which have their own legal frameworks for humanitarian action, have been the second largest contributors after MAEC. But it would be helpful if they considered pooling resources when relatively small amounts of funding are involved. Some NGOs prefer decentralised funding because the procedures are often better adapted to the humanitarian response than those of the central government. The humanitarian action strategy intends to enhance the capacity of the humanitarian aid system by increasing staff numbers in AECI and by strengthening the capacities of field offices and embassies. The strategy also aims to enable AECI to fund local NGOs directly, though it will be necessary to find mechanisms that comply with Spanish financial regulations. At the same time, a review of Spanish humanitarian aid considered that direct interventions could lead to a multiplication of decentralised actors on the ground, contrary to GHD principles, making it important to agree on a division of tasks and common quality criteria.