A time of change; reorganisation of the aid system; Resources; Policies; Poverty reduction; Multilateralism and accession to the European Union; Special programme areas:
A time of change
Sweden's development cooperation programme is at a critical turning point:
the organisational system is receiving a major overhaul and renewal;
the level of resources is being significantly cut;
policies are both contributing to and reflecting a new international convergence in approaches to development.
Given Sweden's commitment to development cooperation, its historic role as a pacesetter, its constructive multilateralism, and its outstanding official development assistance (ODA) volume performance, these changes will have an influence and ripple effects beyond the confines of the Swedish programme itself.
Sweden's commitment to poverty reduction, economic and social development, and the betterment of conditions of living in developing countries is a major factor in national policy and is even part of the national identity. For over three decades this commitment has been expressed in a generous level of ODA to gross national product (GNP), perennially in the top three among Development Assistance Committee (DAC) Members. The seriousness of purpose Sweden has devoted to development cooperation and the strong support accorded to it by Swedish civil society are not in question. But recent decisions to suspend the 1 per cent of GNP aid target and to cut the aid budget quite severely along with other public expenditures, indicate that domestic stabilisation requirements have the ascendancy for the time being.
Reorganisation of the aid system
The sweeping reorganisation of the aid system that has taken place will affect virtually all aspects of Swedish development cooperation. Heretofore, five autonomous entities, the Swedish International Development Authority (SIDA), the Swedish Agency for International Technical and Economic Cooperation (BITS), the Swedish Agency for Research Cooperation in the Developing Countries (SAREC), Swedecorp and the Swedish Centre for Education in International Development (Sandö Ucentrum), carried out the development cooperation programme with relative independence. These entities have been merged into the new Swedish International Development Agency (Sida). At the time of this review the new Sida has been operational for less than one year. A reorganisation of the Ministry for Foreign Affairs (MFA) is now also underway, in which the responsibility for country aid strategies and programming is being devolved to the regional departments of the Foreign Ministry and treated as an integral part of overall political and commercial relationships. Overall aid policies and the management of Sweden's input into multilateral development cooperation will continue to be handled in specialist departments of the Foreign Ministry.
The effect of these organisational changes will be to provide more focus to the Swedish development cooperation programme, and at the same time make it more adaptable to new conditions. Recipients, which might understandably have been confused by the number of Swedish organisations in the field dispensing aid, will now have essentially only two entities to deal with the Ministry for Foreign Affairs, which oversees all development cooperation, and the new Sida which manages and implements the ODA programme. In the field these two entities are integrated in the Swedish Embassies making the system now essentially a unified one as far as partner countries are concerned.
The organisational principle behind the new Sida is based on a matrix approach with a balance between geographical departments responsible for planning and policy, and sectoral departmentsdoing project design and implementation. A strong policy department has been created to provide strategic orientations on crosscutting issues such as poverty and gender and to generate longerterm aspects. There is also a unit devoted to strengthening the evaluation process throughout the agency and to creating a "learning" culture. These changes in the Swedish aid management system are farreaching and it may still take a year or more before they are completely absorbed.
That these changes bring more clarity to the aid system seems obvious. They also appear to have been conceived so that Sweden will be able to meet future challenges and attain a better coordination between the various instruments of Swedish aid and with Sweden's overall bilateral relationships and multilateral development diplomacy. The new organisational arrangements should help to improve the links between the disaster relief and development continuum. Sweden devotes a relatively large share of its ODA, over 18 per cent in 1994, to disaster relief. They should also lead to better focus and coordination in the difficult areas of poverty reduction, social equality, democracy and human rights, gender equality, reproductive health, population, and environment, and the changing roles of the state, market and aid. Indications are that the spirit of innovation, dialogue and devotion to the cause of development cooperation which for years has characterised the Swedish programme will be preserved and enhanced.
With respect to resources, the situation is less positive. Sweden has traditionally been one of the leaders in the DAC with respect to ODA volume. Following the establishment of the ODA concept in the mid1960s, Sweden was among the first DAC Members to provide over 1 per cent of GNP as ODA net disbursements in 1982 and through the 1980s Sweden provided between 0.80 per cent to 0.96 per cent of its GNP in ODA net disbursements. In 1995 Sweden was the second leading DAC Member with respect to ODA/GNP ratio at 0.89 and was the eighth largest in absolute terms with $2 billion in disbursements.
This level of resources permitted Sweden to conduct a broad development cooperation programme in its areas of emphasis which have been aligned with the main objective, improving the standard of living of the poorest people, and the goals defined by Parliament:
growth of resources;
economic and social equality;
economic and political autonomy;
democratic development and society; and
a far-sighted utilisation of natural resources and concern for the environment.
The Parliament has recently approved a sixth goal: equality between women and men.
In 1995, ODA volume dropped by 3 per cent and the ODA/GNP ratio fell to 0.89 per cent. Because of budget deficits Sweden has embarked on a stringent budgetcutting exercise to definitively halt the large deficits of recent years and reverse the serious buildup in public debt. These objectives are reinforced by Sweden's integration into the European Union and prospectively, the European Monetary Union. The government now proposes to cut ODA budget allocations in fiscal year (FY) 1997 to 0.7 per cent of GNP and to hold them at that ratio through the fiscal years 1997-99. This implies a further large fall in disbursements, cushioned to some extent by reserves.
For the large majority of DAC Members the announced "floor" of 0.7 per cent might appear almost ironic since reaching the 0.7 per cent ODA/GNP level is for them but a distant goal. But, for Sweden to drop its ODA/GNP level to 0.7 per cent is surprising given Sweden's commitment to development cooperation, its sterling past performance, and the traditional leadership Sweden has shown in ODA volume. In making the cuts the government has retained in principle the goal of allocating 1 per cent of GNP to the development cooperation budget. Abandonment of that target is a "temporary measure" until economic conditions permit its restoration. Nevertheless, experience in other countries indicates that rebuilding aid levels after major cuts is a highly uncertain endeavour.
A drop in ODA of the magnitude announced will have consequences. As a leader in the DAC on the volume issue, the example will be negative for other donors unless the cuts are clearly seen as shortterm and are restored as soon as possible. In addition, since Sweden joined the European Union as of 1 January 1995, its contribution to the European Community (EC) development cooperation programme has risen to an estimated 6 per cent share of available ODA resources and will eventually increase to about 10 per cent.
In sum, other parts of Sweden's development cooperation programme, both bilateral and multilateral will need to be reduced.
Another aspect of the ODA volume issue in Sweden is its decision to report refugee costs as ODA (such reporting is voluntary under DAC rules). These costs have been high and increasing in recent years. They will fall in 1997, but remain a significant diversion of funds. An analysis of both budget and disbursement patterns shows that a declining portion of the programme is available for the traditional bilateral longterm development programme.
ODA volume has therefore become a matter of concern. The cuts envisioned for the near term are a departure from Sweden's traditional approach which accorded special priority to the ODA budget. It can only be hoped that such cuts will be shortlived, and that Sweden will progress towards its target of 1 per cent of GNP for ODA as soon as possible.
While the overall objective and goals of Swedish development cooperation remain the same, with the addition of the gender equality goal in 1996, there are changes taking place in the policies adopted to implement them. Few DAC Members have invested as much energy and time into studying and evaluating the effects of their programmes as Sweden has in the past several years. In 1993 the Swedish government set up the Secretariat for Analysis of Swedish Development Assistance (SASDA) to analyse the results and effectiveness of Swedish development cooperation. That research programme produced ten reports and 38 working papers.
The SASDA programme produced much useful information and valuable indications about development cooperation in many fields, as did the normal evaluation programme that was carried out in Sweden's bilateral programme as a matter of course for many years. Perhaps the salient lesson of this work has been that to be a better partner, Sweden must become more demanding on quality and must insist that recipients meet certain requirements without which aid cannot be effective.
Senior Swedish aid officials recognise that some development cooperation programmes continued year after year even when the conditions for success were obviously absent. While Sweden intends to remain a constant, stable partner, it can be expected to be much more insistent on:
assuring that the fundamentals for sound economic management are in place; and
requiring recipients to live up to their commitments and to demonstrate that they are taking greater responsibility for their own development.
Growing out of the SASDA exercise, the government established an Expert Group on Development Issues (EGDI) which operates independently of the government to provide advice and analysis on development issues in a global context. This semipermanent advisory mechanism is an interesting innovation to assure that the government receives on a continuing basis, the broad, strategic and independent advice and information it needs to set policies. The subjects chosen for study the problem of aid dependency; the implications of trade and market orientations; learning processes in aid agencies suggest interesting new perceptions on the part of the Swedish aid authorities.
In sum, it would appear that the solidarity with third world socialism that characterised Sweden's policies in the 1970s and 1980s is now being adapted to the major changes in developing countries and in the dynamics of the world economy in the 1990s. On both the development policy front and the political front, Sweden is now part of a solid mainstream in the donor community in which "likeminded" countries and the other donors are joined.
The major objective of Swedish development cooperation is poverty reduction. It would therefore be expected that all aspects of the programme would be trained on that objective in a concerted manner. A major investigation of this subject by Sida's Task Force on Poverty Reduction indicates that this was not the case.
In essence, the Task Force study suggests that an effective poverty reduction programme must deal with each unique recipient situation on an individual basis. This has given a powerful impetus for Sida to prepare pointed country strategies based on a careful poverty analysis in each recipient country environment. Sida has already prepared 21 poverty profiles for recipient countries and is engaged in preparing country strategies for each of its 21 country programmes. This approach is encouraging and welcome. Notable in the Task Force's analysis is the emphasis given to capacity building and human resources development, with a special emphasis on primary education and gender equality.
The process that Sida has gone through to analyse the broad issues for reducing poverty and then examining them from a sectoral and agencyinternal perspective has been valuable and informative. It will not only enlighten Sida and help to guide it towards announced objectives, but will be of interest to all other members of the international community dealing with the same issues.
Multilateralism and accession to the European Union
Sweden has been able to expand its influence in the multilateral development banks through effective collaboration with the other primary countries in their constituencies on the Banks' Boards of Executive Directors. Operating through the Nordic Group, Sweden has been able to leverage its voice and vote to achieve Multilateral Development Bank (MDB) reforms and alterations in lending policies, more effectively than if it had been forced to operate as a lone voice. Sweden and the Nordic group of countries will need to use this influence actively in the current round of MDB soft fund replenishments which are under intense contractionary pressures from several of the funds' leading contributors.
Sweden has worked hard for UN reform, including disaster relief delivery, in particular within the Nordic group and the "likeminded" group. These efforts have yielded some success in UN governance systems. It is clear that Sweden's support for the UN system is being more carefully linked to reforms, results, and burden sharing. As noted above, the fact that Sweden has joined the European Union as of 1 January 1995 will have an effect on its allocation of both budget and staff resources.
Membership in the EU requires a large investment in staff time, particularly since Sweden intends to bring to bear its special interests and experience to the European Community development cooperation programme. This is to be welcomed since Sweden is strong in participatory development, human reproductive health, and crosscutting social areas where the European Community might benefit from Swedish experience.
Democracy and human rights
Sida's new organisational chart reflects the high priority accorded to democracy and human rights as one of the sector departments is titled Democracy and Social Development. A specific budget line for democracy and human rights exists (over $70 million in 1994/95) and wide use is made of NGOs and international support organisations as intermediaries. Sida's strategy envisions cases where human rights violations are due to government action or tacitly accepted by the government or, on the other hand, where it is a question of improving respect for human rights.
An innovation for Sweden is the initiation in 1995 of support for political parties in developing countries, Central and Eastern European Countries (CEECs) and the twelve New Independent States of the Former Soviet Union (NIS), through bodies associated with political parties represented in Sweden's Parliament. Sweden is also the host country for the International Institute for Democracy and Electoral Assistance (International IDEA) founded by 14 countries in February 1995, whose objective is to promote sustainable democracy worldwide.
Sweden is the third largest donor among DAC Members in absolute terms in the field of disaster relief (over $334 million in 1994). Among the largest donors, Sweden also provided by far the largest share of its ODA disbursements for this purpose in 1994 (over 18 per cent compared to the DAC average of 6 per cent).
Two trends might be noted in this field. First, the fact that it has expanded so rapidly in terms of monetary and staff resources is striking. Second, the disasters to which Sweden has been directing its resources are increasingly longterm, complex cases that last for years (i.e. Sweden provided disaster relief to Cambodia for over 15 years) and not so much the classic shortterm natural disaster (earthquakes and floods). It is noteworthy that the largest recipient of Sweden's ODA in recent years has become exYugoslavia, another complex, longterm case.
Both of these trends are causes for reflection. They are equally important for Sweden's bilateral and multilateral aid policies and programmes. They are not unique to Sweden, except perhaps in terms of their magnitude. As more effort is devoted to disaster relief, less resources are available for traditional development cooperation. Disaster relief is visible and popular. But, it is costly and cannot be equated with longterm sustainable development. Moreover, to capitalise on expensive disaster relief operations, they must be followedup by longterm sustainable development programmes for which additional resources must be forthcoming, but the availability of such resources is in question.
Sida has made several evaluations of its disaster relief programmes in particular in Southern Africa, the Horn of Africa and Cambodia. Because Sweden channels a high percentage of its disaster relief through multilateral organisations, often UN agencies, it is particularly interested in UN reform, including in the field of disaster relief. Sweden perceives that a more effective integration of political, military, civil and humanitarian inputs is required of the international community in longterm complex disasters.
Gender equality has been recognised for many years in Swedish programmes and the policies of the new Sida reflect it strongly. Policy support for gender equality has been stepped up by raising it to an overall goal of Sweden's entire development cooperation programme. It is heartening that the leadership Sweden has provided in this field will continue and can be expected to be intensified.
Reproductive health, population and environment
Sweden has stepped up its work in the field of reproductive health and population, where it was a pacesetter two decades ago. Sweden's polices have changed in the light of the Cairo population and development conference (1994).
Given its strengths and experience in working in the field of population it is a welcome development that Sweden is increasing its emphasis on this field, particularly in view of the urgency expressed in Cairo about the unmet need of 350 million couples who desire, but are unable to obtain, reproductive health services, and the fact that the growth of world population is at an alltime high in absolute terms.
In the field of environment Sweden has instituted policies and procedures for assuring that projects are screened, monitored and implemented in accordance with state of the art information relating to their environmental impact. The Swedish authorities should take steps to assure that this is effectively the case in all parts of its development effort, including associated financing, and that the necessary procedures, staff and resources are in place.
[October 2004: this publication is unfortunately out of stock.]
List of Peer Reviews of DAC Members