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Comments to IBP Brief No 1: Linking Budget Analysis with Aid Advocacy: How Civil Society Groups Can Monitor Donor Budget SupportForeign aid makes up a significant percentage of government income for low-income countries, in some cases half of the budget. Aid is likely to rise as a proportion of the budget if richer countries fulfill their commitments to increase their foreign assistance towards reaching the MDGs. At the same time as the expected rise in aid volumes governments have pledged a series of important changes in how aid is delivered, notably a trend towards donors providing money as direct budget support. This Budget Brief describes what donors and civil society organizations can do to make the budget support approach succeed.
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Comments:
- George Sabat from the Center for Public Information shares his thoughts and examples from Lebanon.
- Ernesto Mpararo from la Lïgue Congolaise de lutte contre la Corruption in Congo comments on the Congolese's perspective on foreign aid.
- Eva Carvajal from Ojo Energetico in Bolivia comments on budget support and its obstacles in Bolivia.
Comment by: George Sabat, CPI The Lebanese Center for Public Information
Back to the top>1. Is Budget Support a good idea in the first place?
• Yes, provided it is used by the recipient country to achieve specific, well defined, quantified objectives according to a precise time-table. In other words, the demand presented for budget support should satisfy all the above requirements before the donor agrees to consider it.
• Furthermore, a procedure should be set up for monitoring, on a monthly basis, the proper usage of the funds provided to the recipient country. The monitoring should be undertaken separately by the donors and by some thoroughly accredited representatives of the Civil Society in the country that benefits from that support. A comparison between the results of the two separate investigations should provide useful information to all the parties concerned.
• The monitoring reports should be made available for public inspection to associate the citizens to the monitoring process, increase the level of transparency within the Public Administration, and improve the relationship between the people and the Authorities.
• The object of the monitoring process is to determine whether the funds have been properly utilized and within the time frame initially set up for their utilization.
2. What are the major obstacles to budget support in your country/developing countries?
• Although some significant progress in the Financial Control of the Aid has recently been achieved at the Lebanese Ministry of Finance, much remains to be done to attain some satisfactory level of transparency in that domain. Our NGO, The Lebanese Center for Public Information, has encountered many obstacles during the past three years while attempting to monitor the different types of Aids successively received by the Lebanese Government from the Paris II Conference, the Stockholm Group and the Paris III Resolutions.
Some of the major problems that we regularly face are:
i. Too much or too little information, is often communicated too late to be of real use, and is not clearly related to the aid that has been provided.
ii. The amount of the aid that is received is not shown clearly in the monthly financial reports of the Ministry of Finance. Tracing the actual amounts received in these reports is consequently a difficult, if not an impossible task.
iii. To the credit of the Finance Ministry, one must recognize that the current public accounting system of the Lebanese Government is not the least adapted to the implementation of an effective budgetary control procedure.
iv. Finally I would like to concur heartily with the final remark made by Mr. Paolo de Renzio concerning the funding of Civil Society when it is provided, nearly exclusively, by the State, or by some interested third parties. We have seen enough specific examples of such conflicts of interest in Lebanon and the poor standard of monitoring efficacy and impartiality that has resulted from it.
3. Should donors provide a greater portion of aid in the form of budget support? Why?
We believe that, as a rule, aid should be provided for specific purposes so that pre and post control of the aid can be more easily undertaken.
In the cases where some degree of budget support is indispensable, like in Lebanon where the service of the Debt accounts for eighty per cent of the total public deficit, the donors should increase their aid in that domain. However, the Lebanese Government should clearly specify the exact purpose for which that aid is required and should subsequently faithfully account for its usage. The government should also adopt a clear cut policy and strategy to resolve the problem of the Public Debt over the long term. The policy and the strategy should be communicated to the donors.
Sincerely yours,
CPI The Lebanese Center for Public Information
George Sabat (Chartered Management Accountant and Director)
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Comment by: Ernest Mpararo, Lïgue Congolaise de lutte contre la Corruption, Democratic Republic of Congo.
Back to the top>I read the report on the budget that you have just published and thank you for sending it. I would like to tell you that in countries rich in oil and minerals, aid given to these governments does little more than protect the interests of western countries.
The most concrete example is the DRC where we haven’t yet seen the positive impact of aid on the living conditions of the population.
The large majority of Congolese think that aid given to the government only serves to corrupt President Kabila so that he gives them access to gold, diamond and copper mines.
Pour la Lïgue Congolaise de lutte contre la Corruption,
Ernest Mpararo
PresidentOriginal Text:
J ai lu le rapport sur le budget que vous veniez de publier et merci pour cela.J aimerais seulement vous dire que dans des pays riches en ressources petrolieres et minieres, l aide apporte a ces gouvernement ne sert qu´a proteger les interets des pays occidentaux.
L exemple le plus concret est la RDC. Nous n avons pas encore vu l impact positif de l aide apporte au Gouvernement sur l amelioration des conditions de vie de la population.
La grande majorite des Congolais pense que l aide apporte au Gouvernement de la RDC ne sert qu´a corrompre le President Kabila pour qu il leur cede des mines d or, de diamant et des cuivres.
Pour la Lïgue Congolaise de lutte contre la Corruption,
Ernest Mpararo
President
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Comment by: Eva Carvajal, Ojo Energético, Bolivia.
Back to the top>Hello and congratulations for the first budget brief. Following you will find our answer to the questions posed.
- Is Budget Support a good idea in the first place?
Yes, as long as there are changes in the social control mechanisms, and most importantly that the purpose is planned and made known to citizens.
- What are the major obstacles to budget support in your country/developing
countries?Corruption, embezzlement and the consolidation of the dependence of the country on donors are some of the mayor obstacles. In Bolivia there has been quite a controversy over the general budget support of the famous "Venezuelan checks." On a good note regarding these checks is that it was brought to people’s minds the topic of the ideological dependence that is required to receive this type of support.
There is no timely information about how much and how are funds used.
There is little interest on the part of the citizens. The reactions of the citizens are occur after the press denounces the fact, and there are not many things they can do, only to wait for that the justice system take charge of the case.
In Bolivia there is a case that has not yet been resolved and continues in the judicial system. In 1998 there was an earthquake of great proportions in the provinces of Aiquile and Totora, aid was received from many donors to help the victims; however the funds where not all used to help the victims of the earthquake, instead they were destined for the purchase of an overpriced airplane. To this day there is only one accused (ex- minister of defense); but no conviction.
- Should donors provide a greater portion of aid in the form of budget support?
Why?Depends on the situation and the purpose of the funds. The mechanisms of social control must change and the problems identified in the brief must be resolved.
Original Text
Hola, felicidades por el primer número de la gaceta. Paso a responder a tus preguntas.- ¿Es el Apoyo Directo al Presupuesto una buena idea?
Si, siempre y cuando se cambie los mecanismos de control social, y sobre todo se conozca y planifique el destino de los recursos con la ciudadanía.
- ¿Cuales son los mayores obstáculos que enfrenta el Apoyo Directo al
Presupuesto en su país?La corrupción, malversación de fondos y la consolidación de la dependencia del país, para con los donantes. En Bolivia ha generado bastante polémica el apoyo directo al presupuesto de los famosos " cheques venezolanos". Lo positivo del asunto es que se ha llegado a pensar en la dependencia ideológica que exige el recibir este tipo de apoyo, ¿consolida la dependencia?.
No hay información oportuna de cuánto ingresa y en qué se destina el dinero.
Tampoco hay mucho interés por parte de la ciudadanía. Las reacciones de la ciudadanía se dan después de que la prensa denuncia el hecho, pero aún después no hay muchas acciones a realizar, solo esperar a que la justicia se encargue del caso .
En Bolivia hay un caso que aún no se ha resuelto y continúa en los estratos judiciales. En 1998 hubo un terremoto de grandes proporciones en las provincias de Aiquile y Totora, llegó ayuda de bastantes lugares para los damnificados, pero los recursos no llegaron por completo a las víctimas del terremoto, y fueron destinadas para la compra de un avión con sobreprecio, y hasta la fecha solo hay un acusado (el ex ministro de defensa); pero ningún responsable.
- ¿Deberían las agencias donantes proveer una mayor porción de la ayuda como
Apoyo Directo al Presupuesto? ¿Por qué?Depende del caso y el destino de los recursos, y si es que se cambia los mecanismos de control social y se supere los problemas identificados en la gaceta.
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Comment by: Paolo de Renzio, Overseas Development Institute , UK.
Back to the top>I found the Brief very clear and interesting.
I just wanted to add a couple of short comments. At one point, you state that “donors should move to providing ever more of their aid as budget support”. Although in principle I agree with your statement, given that budget support has many desirable characteristics, both governments and civil society in recipient countries should be aware of the fact that donors’ main accountability lies with their domestic constituency. In many countries, budget support is not seen in a very favourable light by parliaments and public opinion, who deem most recipient governments weak and corrupt. Recent reports by the audit institutions of Germany, the United Kingdom and the European Commission stressed the need for additional fiduciary safeguards in budget support operations. In a sense, no donor will ever give all its aid as budget support, considering it only as one of many possible instruments. This might be better for recipient governments as well, given the vulnerability of budget support to political crises (see the cases of Uganda and Ethiopia, for example). In order to favour transparency and local accountability, it is much better to stress the need for all aid, regardless of which modality it is channeled through, to satisfy some basic principles and minimum requirements which make it easier to be captured in budget documents, at formulation, execution and reporting stage. In this sense, it might be more important for all aid to be ‘on-budget’, meaning recorded in budget proposals and reports, rather than insist that all aid be delivered as budget support.
Another important issue, related to civil society’s role in monitoring aid flows as part of public spending, is that of accountability. If the same donors that provide aid to the government also provide most of the core funding for civil society monitoring of public spending, civil society groups might be reluctant to criticize the role that donors play, and the modalities that they use. Independent funding of civil society monitoring and advocacy work, clear agreements on the independence of civil society activities and positions, or multi-donor funding arrangements that limit direct interference are some of the possible avenues that could be explored.
Congratulations for a job well done!
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