The latest review is available at www.oecd.org/dac/peerreviews/belgium
GENERAL FRAMEWORK AND NEW DIRECTIONS
Dynamic for reform
Since 2001, Belgium introduced reforms and taken measures that help it adapt to the new international context of development co-operation, and take into account the recommendations from the previous Peer Review. Positive examples include: a legal framework to the target of allocating 0.7% of gross national income (GNI) to official development assistance (ODA) by 2010; strengthened geographical concentration of aid, a federal strategy adjusted with regard to the Millennium Development Goals (MDGs); and consolidated institutional structures following the 1999 reform.
Belgium is now anxious that its efforts be placed in the context of the Paris Declaration on Aid Effectiveness to adapt its aid delivery instruments and methods. Its commitment in the Democratic Republic of the Congo (DRC) in the pilot exercise implementing the Principles for Good International Engagement in Fragile States is evidence of its engagement in this respect.
This dynamic for change has benefited from the Plan Copernic introduced in the early 2000s with the object of reforming Belgium’s federal public administration. In 2003, development co-operation was incorporated in the new Federal Public Service Foreign Affairs, Foreign Trade and Development Co-operation (FPSFA) in the form of the Directorate General for Development Co operation (DGDC). The plan calls for introducing results-based management. A process of administrative rationalisation which began in 2004 has resulted in a more determined quest for internal consistency inside the FPSFA and has identified blockages in the implementation of aid programmes. Significant results of this could include the provision of additional expertise and the introduction of measures to encourage ex post rather than ex ante expenditure controls.
The measures undertaken need to be pursued, firstly in order to consolidate what the reforms have achieved, secondly to develop a more strategic approach to the different aid players and, lastly, to take account of changing needs – especially where human resources are concerned – because of the increase in the co operation budget and the introduction of new aid arrangements.
A legislative and institutional framework conducive to commitment to the MDGs
The Law of 25 May 1999 is the reference where Belgium’s development co-operation policy is concerned. The prime goal is sustainable human development, to be achieved through combating poverty, on the basis of the notion of partnership and in compliance with the criteria concerning relevance to development, as defined by the DAC. The Law brought in the principle of geographical and sectoral concentration of aid. Belgium’s direct bilateral ODA targets 18 countries and five sectors: (i) basic health care; (ii)education and training; (iii)agriculture and food security; (iv) basic infrastructure; (v) conflict prevention and the consolidation of society. Added to these are three cross-cutting themes which relate to gender, the environment and welfare economics. In addition, the commitment made in Monterrey to increase Belgium’s ODA to 0.7% of GNI by 2010 was written into the law in 2002. The promotion to ministerial rank, as of 2003, of the member of the government responsible for development co operation is indicative of the importance that the latter has acquired in government policy.
The October 2004 policy note by the minister for Development co operation confirmed that the MDGs are central to Belgium’s co operation policy. The result of that choice is that Belgian aid is targeted very much at the least developed countries (LDCs) and that Belgian co-operation remains substantial in the fragile States of Central Africa. It ought in future to prompt Belgium to give more attention to access to basic social services and gender equality, and also to measures to combat HIV/Aids and the protection of children’s rights – two themes which are at present somewhat neglected. The minister has also identified the promotion of effectiveness and improved consistency as strategic priorities. Implementing these positive options will involve stepping up efforts to simplify procedures and developing complementarity between the different aid delivery channels. It is true that Belgium could enhance its impact by making its aid instruments more rational.
The Belgian parliament has a monitoring role where co-operation policy is concerned and helps to shape policy via its legislative function. It defends the 0.7% commitment vis à vis the government. Those involved in indirect co-operation, particularly NGOs and universities, also play an important role in terms of arguing in favour of development, informing and mobilising support. They receive appreciable backing from the DGDC in this respect. Educating people in development matters and communicating areas in which the DGDC is stepping up its efforts – must continue to be priority targets for investment, bearing in mind how little the Belgian public knows about development questions and what action is taken at federal level in this area.
“Defederalisation” of development co-operation on hold
Development co-operation is currently still 95% the responsibility of the federal government. However, there is still talk of “defederalising” or devolving it, i.e. transferring certain parts of development co-operation to the federate entities, on the basis of the responsibilities allocated to them internally. This principle is embodied in the special Law of 13 July 2001 transferring various competencies to the Regions and Communities, and was confirmed in a government statement of July 2003.
While reiterating that development co-operation remains a federal responsibility, the Minister for Co-operation is seeking, in compliance with the laws of 1999 and 2001, to build up synergies between federal and federated entities, which can carry out development co-operation activities in line with their own competencies. He has not ruled out increasing the share of the budgets allocated to the latter, within the framework of negotiations aimed at achieving the budget target of 0.7%, on condition that overall policy coherence can be maintained.
The risks that “defederalisation” involves in terms of dispersion and loss of effectiveness, relevance and coherence, which were identified by the DAC in 2001, remain a reality. With the Paris Declaration calling for more harmonisation and Belgium wanting to play an active part in drawing up a more coherent European co-operation policy, it is vital that its institutional arrangements be geared towards aid effectiveness and it be given the means to play its role at the international level.
Belgium is invited to consolidate and stabilise its development co-operation architecture by adapting the existing instruments in such a way as to strengthen synergies and improve complementarity.
A challenge: to continue increasing ODA in line with the national commitment
After reaching a high of USD 1.85 billion in 2003 as a result of a large scale debt forgiveness operation, Belgian ODA fell back to USD 1.46 billion in 2004. The ODA/GNI ratio has moved sharply up and down in line with debt forgiveness operations, rising from 0.43% in 2002 to 0.60% in 2003 before falling back to 0.41% in 2004. There has been, however, an appreciable upturn in public funding of aid since 1999. In 2004, Belgium was in ninth position among the DAC countries in terms of the percentage of GNI, with a ratio above the DAC average (0.25%) and almost equal to the average figure by country (0.42%). Belgium is therefore in line with the target that member countries of the European Union have set themselves of devoting 0.33% of their GNI to ODA by 2006, while its commitment to reach the 0.7% ratio by 2010 means that it is ahead of European commitments to reach 0.51% by 2010 and 0.7% by 2015.
A growth framework has been drawn up so as to ensure compliance with Belgium’s commitment. In view of the contribution that debt forgiveness operations have made to the recent increase in ODA figures – accounting for as much as 40% of ODA in 2003 – it is essential to look for new budgetary resources and/or identify new financing, whereas the Belgian authorities have undertaken to maintain public finance equilibrium. Programming these resources, how they are to be implemented and the human resources required are challenges which the DAC is encouraging the Belgian authorities to address without delay. Managing a volume of aid destined to all intents and purposes to double between 2004 and 2010 will mean adjusting the capacity of the DGDC and Belgian Technical Co-operation (BTC), particularly since increased aid should be reflected more in flows of fresh money to partner countries. By taking the appropriate budgetary decisions, the latter could give support to the strategic choices made by Belgian co-operation in order to achieve the MDGs.
Bilateral co-operation: persisting with geographical and sectoral concentration
The key player in Belgian co-operation is the DGDC which directly or indirectly manages some 60% of ODA. Also important is the Federal Public Service for Financial Affairs which manages country to country loans and contributions to international organisations, i.e. 10% of ODA. Some of the FPSFA’s general directorates other than the DGDC also have an important role, the Foreign Affaires Ministry being in charge of conflict prevention and part of humanitarian aid (i.e. 5% of the ODA budget). Then there are the measures taken by the Regions and Communities, the Provinces and a large number of communes (5% of ODA), and a variable share depending on the year of debt relief managed by the National Delcredere Office. Belgian bilateral ODA is delivered via two channels: (i) direct bilateral co operation (or government co operation), which is made up of the different forms of aid managed at federal level or at federate institution level; (ii) indirect bilateral co-operation, which consists of the programmes cofinanced by the DGDC, but prepared and implemented by so called indirect players which, in the main, are recognised NGOs, Belgian universities and scientific establishments and associations specialising in training the developing countries’ human resources.
There are, in addition, special programmes relating to humanitarian aid and conflict prevention, and also the Belgian Survival Fund (FBS). Indirect co-operation is steadily increasing and is substantial, having accounted in 2003 for 29% of Belgium’s overall ODA not including debt reduction operations. Special funds account for 20% of the aid managed by the DGDC.
The geographical concentration of government co-operation, which since 2003 has focused on 18 countries, is increasing significantly: the five main recipients of bilateral aid accounted for 64% of total bilateral aid on average in 2002-03, compared to 34% in 1997-98. More than half of Belgian aid goes to the LDCs and great priority is given to Central Africa, that region receiving on average more than 60% of the bilateral aid disbursed by Belgium in 2002-03. This increase in concentration needs to be maintained because it improves the impact of Belgian aid. It should therefore be seen whether, in view of its importance, indirect aid might not also be involved in the quest for more geographical targeting.
The sectoral concentration strategy contained in the law is designed to meet the needs of assisted countries more efficiently and to make intervention possible in an entire sector. The example of Morocco demonstrates the effectiveness of such a strategy. However sectoral concentration, which again only concerns government aid, needs to be more fully implemented. Similarly, the increase in aid to social services and basic infrastructure must be continued and greater account taken of cross-cutting themes, with the object of achieving the MDGs. This could mean revising some of the features of indirect co operation so that the co operation system is better adapted to the objectives pursued.
Towards a more strategic approach to multilateral aid
Multilateral aid accounts for 20% of Belgium’s net ODA, but this share goes up to 30% if hypothecated financing (“multi bi” projects and emergency aid) is included. A policy of concentrating on 12 priority organisations is being applied, but it has to contend with the growing complexity of the international aid system. At the same time, Belgium is seeking to promote a more strategic approach. This could be taken further in future by borrowing from the approaches adopted by other donors and making more use of the lessons to be learnt from its experience of bilateral co-operation in the decision-making bodies of multilateral organisations.
Towards better co ordination for policy coherence for development
The focus on policy coherence is a matter of increasing importance for the Belgian authorities. The latter are devoting special attention to the security aspect and to the stakes involved in international trade. In this regard, Belgium favours the removal of export subsidies for agricultural products and the lifting of protectionist measures which impede developing country trade. The quest for coherence also involves continued efforts to relieve the debt of the highly indebted countries and a policy of untying official aid which goes further than the provisions of the DAC recommendation.
The FPSFA, and the DGDC in particular, have a strategic role with regard to co ordination between ministries (and also the Communities and Regions) on multilateral and globalisation issues. Incorporating Co operation in the FPSFA and setting up consultation mechanisms within the FPSFA and between Federal Public Services has improved co ordination, especially between Diplomacy, Defence and Co- operation. That said, a lot of consultations take place on an ad hoc basis. Improved coherence means restructuring interministerial consultation mechanisms and providing specialised human resources. This would make it possible to go further than information sharing and one off strategic co ordination and to put in place a common strategy including looking for synergies between the different dimensions of Belgium’s relations with the developing countries. These changes are the more necessary in that the defederalisation of responsibilities in key areas such as foreign trade, agriculture and the environment may complicate the quest for this coherence and mean setting up an arbitration mechanism between the federal and federate authorities.
Improving policy coherence in certain key sectors
Analysis of the different political, economic and trade dimensions of Belgium’s relations with the DRC shows the importance of policy coherence, particularly in the case of a fragile country where institutional weaknesses combine with the illegal exploitation of resources to fuel instability and insecurity. With Belgium continuing to be one of that country’s key trading partners, it would be useful for the economic dimension to be built more into the analysis of co-operation so that a comprehensive strategy of support for the development of the DRC can be shaped. For this to happen there needs to be clarification of the economic interests involved; this could focus primarily on the contribution of Belgian private investment to the economic development of the DRC.
Secondly, Belgium should continue to improve its monitoring of the behaviour of Belgian companies with interests in the DRC and imports from the DRC, including diamonds and coltan. This is a key part of coherence for the promotion of peace and security in the region, given the clear link between the exploitation of and illegal trade in resources and arms dealing. So Belgium’s efforts to limit illegal practices must be continued. It is important, in this connection, to emphasise Belgium’s support for the work of the OECD’s Investment Committee which is currently pursuing a study on how business is conducted in areas with weak governance, including an analysis of the case of the DRC. Belgium’s National Contact Point (NCP) responsible for following up the OECD directives on multinational enterprises could in future be more incisive in dealing with the complaints lodged with regard to the DRC. This would mean having increased recourse to expertise and strengthening communication with the DGDC. Closer links between the economic and trade sector and development co operation ought also to bolster the connection between cracking down on corruption and preventing it. Where aid management is concerned, stepping up measures to combat corruption – as the minister wants – will involve introducing new mechanisms, such as anti corruption clauses, in compliance with the 1996 DAC Recommendation on aid financed procurement.
Co-operation which is appreciated in the field
Belgian co-operation enjoys a good reputation and has good relations with partner countries. This is attributable in particular to the continuity of these relations and the quality of the dialogue which is possible because of competent and committed teams. Even so, the joint committees system which oversees direct bilateral co operation is rigid and cumbersome; it would benefit from being reconsidered with the idea of encouraging partnership relations where the emphasis would be more on ownership and alignment and facilitating harmonisation with other donors. This sort of reappraisal ought also to set out to improve the predictability of Belgian aid.
Clarifying the roles of federal actors and improving the project cycle
One of the principles behind the reform of Belgium’s bilateral co operation was the partial separation of the framing of co operation policy and its actual implementation. This led to the creation of, on the one hand, the DGDC which is responsible for the preparation and budgetary and statistical co ordination of co- operation programmes and, on the other hand, the Belgian Technical Co-operation (BTC) which is a public, social purpose corporation and is the DGDC’s sole partner for the implementation of direct bilateral aid. A great deal of effort has been put into defining the respective roles of the two institutions and improving the effectiveness and quality of the partnership. These efforts need to be pursued in two directions: (i) increasing the capacity of the BTC to act so that there are no hold ups in aid disbursements which are set to increase; (ii) improving the conditions governing aid delivery. For this to happen, there will have to be some clarification of the way responsibilities are shared between the DGDC and the BTC. Similarly, it will be important to reconsider the details of the project cycle, looking to identify any malfunctions and facilitate procedures, including by making financial controls simpler.
The responsibilities of the minister for co-operation with respect to emergency aid and conflict prevention have, since 2004, fallen to the minister for foreign affairs. It is important to check that the resulting new division of tasks is practicable from the point of view of the administrative burden and the effectiveness of the decision making and disbursement process and, if necessary, envisage other institutional arrangements.
Adopting a more strategic approach vis-à-vis all the actors in the aid field
A great many bodies are involved in implementing bilateral aid: apart from the BTC, numerous NGOs and Belgian associations, and also unions, universities, research institutions, towns and communes participate by means of co financing and using a wide variety of procedures and methods. Similarly, the Belgian Survival Fund and also BIO, the Belgian corporation for investment in the developing countries, which is the main channel for delivering aid to the private sector in the developing countries, each works in its own specific way. As a result, the DGDC only directly manages (with implementation by the BTC) about one third of the volume of aid entrusted to it. This splitting up of aid delivery channels makes for considerable flexibility, which has proved useful in the case of fragile states. But by reducing the DGDC’s room for manoeuvre, it also leads to dispersion and can undermine both the coherence of Belgian co-operation and, by the same token, its impact. It would therefore be as well to adopt a more strategic approach to all the players involved in aid by clarifying the responsibilities of each of them and looking more systematically for synergies. This is the object of the current management plan put in place by the Director General for Development Co-operation.
A more strategic approach is particularly necessary where the 135 recognised NGOs are concerned, they being the foremost distributors of indirect co-operation and receiving co-financing to the tune of 75 to 85% of the cost of the programmes presented. A reform of the co financing system is now under way and is designed to improve efficiency by making financing more predictable and easing the administrative side of monitoring. The reform could also provide an opportunity to develop a more strategic approach to the partnership with NGOs, based on a policy view of co financing which has still to be defined. This view will have to take into account the specific nature and added value of NGOs’ activities, and also the imperatives deriving from the need for convergence and complementarity between the co financed programmes and the objectives of Belgian co operation. This more strategic approach will also be needed where the other partners in indirect co-operation are concerned and especially universities and research institutions – so as to ensure that they contribute to the objectives of Belgian co-operation efficiently and without duplication. Other Belgian co-operation instruments also need to be reappraised for the same reasons. This is true of the BIO in particular. Although it is funded mainly by the DGDC, the latter cannot for statutory reasons influence its choice of activities.
Towards increased devolution
Since 2000, Belgium’s embassies have had increased responsibilities in the field of direct bilateral co operation as a result of the creation of a new post of development co-operation attaché. That said, the degree of delegation of authority is limited from both the decision making and the financial points of view. Multilateral co-operation and indirect co-operation are largely outside the control of DGDC authority. Greater devolution is desirable from the point of view of implementing the Paris Declaration on Aid Effectiveness. This means closer consultations between Brussels and those in the field where strategic decisions are concerned, delegation of decision making in the case of smaller scale projects, a reappraisal of financial procedures with the emphasis on a posteriori instead of a priori controls and increased delegation of responsibility for monitoring indirect and multilateral co-operation. Devolution along these lines will benefit from the culture of communication and consultation now being developed in the DGDC. It will need to be backed up by improved access to sectoral and thematic expertise based on the new, cross cutting policy support service.
Rationalising human resource management
Belgium is contending with the two-fold challenge of renewing development co-operation personnel and maintaining internal expertise. A lot of posts remain unfilled because of the shortage of civil service staff, this despite having substantial recourse to contract staff. This situation is affecting the proper functioning of the DGDC. Coping with these challenges is vital in a context in which the response has to be adapted to changing needs and forms of partnership, and in which the increase in personnel needed to manage the scheduled rise in the volume of ODA has to be planned. This will involve more rational human resource management which suffers from the coexistence of seven different types of status.
One necessity is to look at ways of stabilising the number of regular staff and competent temporary staff so as to arrive at the required figure, while another is to review the conditions governing the entrance competition for the external career. It will also be important to consider how to ensure that the juxtaposition of the external career, confined to the new co-operation attachés, and the internal career, the members of which are serving in Brussels, is not damaging to the smooth running of co-operation. Lastly, Belgium needs to consider how best to keep its internal technical expertise in those sectors where Belgian co operation has a strong comparative advantage, bearing in mind the expertise available in the BTC. At the same time, it must be borne in mind that 2006 should see the creation of a single foreign affairs framework (encompassing diplomacy, consular affairs, trade and co-operation) at external career level.
The monitoring evaluation sector is being completely overhauled following a difficult period in the early 2000s, and an internal evaluation service was put in place in the DGDC in 2004. At the same time, the Special Evaluation Department, which is responsible for all development co operation at federal level, also became operational in 2004. The need now is to accelerate the development of evaluation instruments, establish the right mechanisms for drawing on the lessons learned from these evaluations and clarify the roles of the different co operation actors involved in evaluation – and especially between the DGDC and the Special Evaluation Department and between the DGDC and the BTC – so as to avoid any duplication. A multi-annual strategic plan for evaluation could then be drawn up with a view to encouraging those involved in development co-operation to make use of these evaluations. It is also important to continue introducing the tools needed for results based management.
Promoting aid effectiveness
Belgium subscribes to the Paris Declaration on Aid Effectiveness and endeavours to implement it via its operations in each of its partner countries – as its adoption of the principle of co management shows. Similarly, while Belgian co-operation is predominantly in the form of project aid, Belgium has taken steps to develop more of a programme approach to aid, having launched a 3 year pilot phase during which between 15 and 20% of bilateral aid is scheduled to be granted in the form of general budgetary aid. Belgium is also actively involved in promoting co ordination and harmonisation between donors, and is exploring new forms of co operation such as trilateral co-operation.
Belgium now needs to develop a genuine aid effectiveness strategy by drawing up a plan for implementing the Paris Declaration. To do this, it must weigh up all the institutional and procedural adjustments needed to enhance aid effectiveness which include, in particular: taking devolution policy further, strengthening the expertise needed to implement a more programme based approach, revising some of the rules on co- operation funding which make harmonisation and alignment difficult, adapting the BTC and the way it co- operates with the DGDC to the new instruments (budgetary aid, delegated co operation, joint programmes, etc.) and, lastly, review the process for drawing up strategic notes and the system of joint commissions so as better to ensure alignment on national strategies and improve aid predictability.
A humanitarian programme with potential to grow
Belgium operates a comparatively small humanitarian aid programme although increased attention has lately been given to humanitarian aid. Belgium has committed itself to the Principles and Good Practice of Humanitarian Donorship (GHD) and participates in various fora related to humanitarian policy development. Since the last Peer Review in 2001 Belgium has increased its net disbursements on emergency and distress relief from USD 26.6 million in 2001 to USD 110.8 million in 2003. This volume represents 6% of gross disbursement and is below the DAC average (7.4%). However, this increase reflects disbursement on the item “refugees in donor country” and has not resulted in additional funding available for responding to humanitarian needs. Belgium’s humanitarian programme has remained constant around USD 33.5 million between 2000 and 2003, which is below the DAC average.
Management structures and procedures for administering humanitarian aid are complex. Responsibility for humanitarian aid is shared between the Minister for Foreign Affairs and the Minister for Development Cooperation. Administration of humanitarian aid is primarily located in two departments in DGDC, namely the Department for Special Programmes and the Department for Multilateral and European Programmes. The management system with dual responsibility for humanitarian aid is also reflected in a complicated budget structure which is fragmented and not optimised to promote flexibility and timeliness, placing high demands on co-ordination and administration in a system with very few staff.
Addressing the challenges of good humanitarian donorship
To confirm its commitment to GHD, Belgium should consider developing an internal implementation plan for GHD. Such plan should address challenges at policy level, management systems and administrative routines. Despite the Royal Decree of 1996 which sets the framework for financing humanitarian action and implementing humanitarian aid, there is no comprehensive policy document explaining Belgium’s approach to humanitarian action. This makes it difficult to assess how priorities are set and how support for humanitarian action adheres to humanitarian principles. Belgium should therefore consider elaborating a comprehensive policy document for humanitarian action. When developing its humanitarian aid policy Belgium should consider its implementation approach and how this policy area relates to other activities indirectly linked to humanitarian aid i.e. conflict prevention and assistance to “fragile states”. Furthermore, preventive measures for emergencies such as disaster risk reduction, including support to local capacities, could be further developed and integrated in Belgium’s development cooperation planning, in view of the priority it gives to partner countries vulnerable to natural disasters.
Belgium’s potential role in financing humanitarian action should be seen in light of the ambitious targets set to improve ODA volume. As Belgium moves towards the 0.7% ODA/GNI target in 2010, it should consider a substantial increase in allocations for humanitarian purposes. Belgium should also clarify and strengthen its management system for implementation of its humanitarian programme. To strengthen the needs-based approach and promote harmonisation and alignment in complex emergencies, it could explore further how to take full advantage of its country operations and develop humanitarian strategies based on the UN Common Humanitarian Action Plans (CHAP).