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Bilateral Aid Review March 2011 Slide 1 Contents - Objectives of the review - The review process and methodology - Summary of key outcomes - Questions Slide 2 The aim of the review 1. Identify a clear rationale for DFID country allocations and establish: countries in which we should retain and increase DFID presence, programmes and offices which we should close and graduation strategies when closing. 2. Establish which results we should prioritise in each country and how to factor in performance to aid allocations. 3. Establish levels of spending for each country for 2011/12-2014/15, including where to potentially scale up investment to achieve DFID’s objectives. 4. Set out clear strategic choices for the delivery mechanisms for bilateral aid. 5. Provide guidance on preparation of country Operational Plans. Slide 3 The bilateral aid review process: Footprint: need, effectiveness, DoL Offers: Results, Market for Ideas, Theory of Change Peer Review / Scrutiny Panel: Innovation, Girls & Women, VFM Ministerial drill downs: build on analysis & aggregation, offers likely to be taken up Allocation Process: top down constraints; BAR/MAR and Pillar trade offs; Challenge funds Operational plan: translating concept notes into a credible, resourced operational promise Slide 4 Our revised bilateral programme: Between now and 2016 UK bilateral programmes in the following countries will come to an end: Angola, Bosnia, Burundi, Cameroon, Cambodia, China, Gambia, Indonesia, Iraq, Kosovo, Lesotho, Moldova, Niger, Russia, Serbia and Vietnam. Slide 5 Our revised bilateral programme: We will concentrate our resources and impact in 27 countries: Afghanistan, Bangladesh, Burma, Democratic Republic of Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, Occupied Palestinian Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe. Slide 6 Results Offers in each strategic priority: • Wealth creation: helping people prosper for themselves • Poverty and Vulnerability: through tackling hunger, malnutrition and helping people break out of the cycle of poverty Slide 7 Results Offers in each strategic priority • Education: harnessing the transformative power of education • Health: saving lives and preventing illness by focusing in areas like: maternal health, vaccinations, HIV, malaria, TB and polio Slide 8 Results Offers in each strategic priority: • Providing access to clean water and sanitation • Helping to make countries safer, fairer and free from conflict, through work on security, governance and conflict prevention • Working with other UK government departments to combat climate change Slide 9 Slide 10 Climate Change MDG: Humanitarian MDG: Water and Sanitation MDG: Poverty, Vulnerability, Hunger MDG: Education MDG: Health Governance and Security Wealth Creation Spend in £m Uptake of results offers by strategic priority Ministers Take up 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Uptake by strategic priority Delivering MDGs Wealth Creation Governance&Security Climate Change Slide 11 Wealth Creation • Private sector provides 90% of jobs in most developing countries • Trade An increase in the share of trade in GDP from 20 to 40% over a decade raises real GDP per capita by 10% • Macro-economic stability: Inflation rates above 11% depress growth. Slide 12 • • • Political economy/governance: State legitimacy in Africa is worth up to 2.5% annual GDP growth. Savings and investment: investment rates of 25% of GDP or more are needed. Women’s economic participation. Sustainable Wealth Creation ? ACRONYMS ! • IGC • AFTI • ICF • ICF • CUTS • FIAS • M-PESA • M- KESHO Slide 13 CHALLENGES • Climate • Resource scarcity • Population What changes do we need ? Slide 14 Et hi op ia Af N r ic i a g er Re ia gi on al DR Ta C nz an ia Su da n Ke ny Ug a an da G ha n M a a Zi law m i M bab oz am w e bi qu Rw e Si an er ra d a Le on So e m al i Za a So m b ut h ia Af ric a Li be ria Spend in £m Total agreed bilateral allocations 2011-15: Africa 1400 1200 1000 800 600 400 200 0 Slide 15 Total agreed bilateral allocations 2011-15: Asia and other countries 1600 1400 Spend in £m 1200 1000 800 600 400 200 Slide 16 eg io na l be an As ia R ar ib a C Bu rm ep al N en Ye m PT s O Ba * ng la de sh Af gh an is ta n In di a Pa ki st an 0 How did we do? Spend Profile of DFID's Bilateral Country ODA based on MAR 'need-effectiveness' model 100 4th quartile 90 As % of Total Country-Based Bilateral ODA 80 3rd Quartile 70 2nd Quartile 60 50 Rest of 1st Quartile 40 Next 5% Most need Effective countries 30 Top 5% Most need Effective countries 20 10 1st Quartile 0 2004-09 Slide 17 2011-15 (BAR)