Blog | Michal Kaplan

CzechAid welcomes findings of the peer review by OECD

Peer reviews are a unique feature in international relations. OECD has mastered the art of peer pressure to perfection. Other organizations have followed such as the African Peer Review Mechanism. There is no perfect model of development cooperation. OECD respects and benefits from the diversity of its members. Peer reviews are a mutual learning exercise. They work both ways which I can confirm having served as an examiner during the peer review of Portugal.

The recommendations of the OECD to the Czech Republic come at a crucial moment. When we read them and study them we need to apply two lenses. First, international lenses: there have been new international commitments such as Agenda 2030, financing for development, climate change, development effectiveness, and humanitarian principles. Second, domestic lenses: there are local specifics and internal dynamics such as the building, transforming and strengthening of our institutional system for development cooperation.

I am glad that most OECD recommendations are aligned to our own strategic vision. They are work in progress and we would be implementing them anyway. The added value of the OECD report is that it places our domestic reforms into a global context and draws on the bet practice of the biggest club of donors. The OECD has presented 16 concrete recommendations for making our aid even more effective. When reviewing them, three sets of issues come to my mind: the issue of scale, the issue of delivery, and the business model.

Scale up and focus down

At 0.12% of GNI the Czech Republic ranks 26 out of 28 members of the committee. OECD is clear in recommending that the Czech Republic should adopt a binding multi-year timetable for increasing its ODA towards 0.33% GNI in 2030. But scale is not only derived from the volume of aid.

Some years ago the OECD published a study on aid fragmentation. It calculated respective donor shares in given sectors and partner countries. The Czech aid is registered in 105 sectors worldwide but it belongs among significant donors only in 5 cases: In water in Moldova our share is 7.7%, in health in Serbia our share is 6.5%, in agriculture in Bosnia 5.3%, social infrastructure in Moldova 3.6% and water in Mongolia 3.4%. In all remaining 100 cases we are an insignificant partner which means that we do not rank among top 90% of cumulative donor assistance.

Austria, Poland, Slovenia – they all rank better. They don’t necessarily provide more aid but they are better focused. Hence, I welcome the decision of the Czech government to limit our focus to 6 partner countries and also limit the number of priority sectors in each of them. The fragmentation is visible at the implementation level as well. Although the CzDA has been established by law as the bilateral development agency, in fact less than 1/3 of bilateral Czech aid flows through the agency.

Effective aid delivery

The evidence and testimony from our partner countries, such as Moldova or Ethiopia, tells us that the Czech Republic is a flexible, responsive and frugal partner. OECD has even called us an „emphatic donor“. However, several challenges remain to make our aid more effective.

First, we need to decentralize our aid delivery. This means sending more CzDA staff to the field but also empowering them with more authority. The project cycle needs to be managed as close to beneficiaries as possible. This also involves making our procedures more flexible. We have already taken steps in this regard. We should also use partner systems for aid delivery whenever we have sufficient trust. OECD estimates that local procurement and aid untying can save up to 30% of the cost of aid for Czech taxpayers.

Second, as a small donor we need to collaborate closely with other international partners. This includes joint programming, joint implementation and joint evaluation of our activities. As a member of the Practitioners Network CzDA is well placed to take part in joint approaches. In this regard, CzDA has recently launched so-called pillar assessment for EU delegated cooperation. This is crucial considering that more than 2/3 of Czech ODA flow through multilateral channels such as EU.

Third, we should manage our activities by results. This means focusing on long-term outcomes and impacts of our aid rather than on short-term outputs and intermediary activities. I am glad that OECD has recognized the independence of our evaluation system. We should harness knowledge and learn not only from successes but also from failures. And once we achieve results we should communicate them transparently and actively to the public both at home and in our host countries.

An agency of the future

OECD has launched a study on „Making Development Agencies Fit for the Future“. Indeed, agencies must constantly change their business model and adapt to the new environment for international development.

The traditional model consists of a donor agency, which is based primarily on the provision of money. Either directly to the partner country’s budget or for activities which are carried out by other organizations, mostly NGOs. This model still makes sense in the poorest and fragile countries, where it is often the only way how to deliver aid. However, in many stable and advanced developing countries this model is being phased out.

The second, still prevailing, model is an implementation agency, which runs its own projects. The Czech Development Agency understands that it is not enough just to give out money. We need to manage our own projects and frame them into coherent programs. We rely on sectoral experts in water and sanitation, agriculture, energy, the environment and healthcare. In doing so, we prefer those areas where we can apply specific Czech solutions.

The most recent model is an enabling agency. It does not only implement projects directly, but also acts indirectly in a catalytic manner through partnerships with other agents. In CzDA’s portfolio we already find a business partnership scheme. Thanks to the 50:50 rule we do not only share project risks, but also multiply our effort. We don’t expect charity from companies but rather viable business ideas with positive social or environmental effects.

Towards a new strategy

I assume the implementation will remain at the core of our business. However, we are not social engineers and should remain humble. Development is far from a laboratory experiment where we could easily move from A to B and from B to C. It is rather a dynamic, spontaneous and sometimes unpredictable process. We may wan to abandon linear thinking and allow for innovation and creative destruction to take root. Such an environment can be cultivated. Therefore, support for good governance belongs among priorities of the Czech aid.

Each player – the state, municipalities, universities, civil society and the private sector – has its place. We intend to further promote such synergies and multi-stakeholder partnerships. The preparation of a new strategy of international development cooperation of the Czech Republic is a timely opportunity to reflect on new challenges and opportunities and adjust our tools and models accordingly. The Czech Development Agency is ready for these tasks.