Biwott lashes aid conditions as donors consider change

Kenyan Minister for Trade and Industry Nicholas Biwott, an influential figure in the government of President Daniel arap Moi, has criticised the aid conditions imposed on Kenya as impractical, and suggested that they smack of double standards.

Biwott cited “good governance” as an impractical conditionality which lacked a uniform definition, the independent ‘Daily Nation’ newspaper reported on Wednesday.

“The donor community would rather extend aid to Russia, which has no respect for human rights, and deny the same to a poor country like Kenya. Why the double standards?” he asked, in opening a workshop entitled “Challenges for Improving Africa’s International Market Access” in the Kenyan capital, Nairobi.

“Kenya would like to be assisted without being given conditionalities by the donors but, since we happen to be poor, we are sometimes unable to argue,” the ‘Daily Nation’ quoted Biwott as saying.

Late last year the IMF discontinued aid to Kenya because of its failure to fulfil promises on tackling corruption and privatising the economy, leaving a policy framework that was not conducive to continued lending.

Lending was not suspended or precluded, Samuel Itam, the IMF’s senior Resident Representative in Nairobi told IRIN on Friday.

Disbursements that would have been expected in support of Kenya’s economic reform programme were not made because the government had not delivered on a number of key issues, he said. Once these issues were addressed, the funds could be released, he added.

“We believe the reform process is important for Kenya, and a fundamental pillar of that is governance,” Itam said, adding that the IMF wanted to continue its dialogue with the government to address the problems and get the process back on track.

The main issues involved, he said, were: the need for a constitutional amendment to re-establish the Kenya Anti-Corruption Authority (KACA) within a legal framework; the need for legislation dealing with corruption and economic crimes; and the need for a code of conduct for all three branches of government - the executive, legislature and judiciary.

Itam said these matters were “signposts” along the way to objectives commonly agreed by the government of Kenya and the IMF, and that they could not be unilaterally discarded.

He also said that the treatment of Kenya was different to that of other countries because the approach the Fund took elsewhere - in Russia, for instance - could not be duplicated in Kenya. This went precisely to show that the IMF did not take a “one-size-fits-all” approach, as some detractors have charged, but tailored its approach to the particular context of each country, he added.

Biwott has been a longtime critic of conditionalities, and in 1993 called on President Daniel arap Moi to reject donor aid conditions. In the same year, he accused the International Monetary Fund (IMF) and World Bank of wanting to “strangle the ailing [Kenyan] economy”, according to the ‘Africa Confidential’ newsletter.

Wednesday’s criticisms by Biwott came on the same day that the Commonwealth Secretariat in England hosted what it called “frank talks” with the World Bank and IMF on “Conditionality and Ownership”.

Hosting the talks, Commonwealth Secretary-General Don McKinnon said they “would help determine how these two institutions fight poverty” and address the often onerous conditions attached to loans for the developing world.

McKinnon insisted that no programme of economic reform would succeed unless the government and citizens of a country felt “ownership” of it, and encouraged donors and lending institutions to agree on perhaps five - rather than 50 - essential conditions, based on which countries could secure loans.

He also called on lenders to consider the long-term nature of structural reform in making loans, and that they get better at working together to present a common message and avoid overlapping or conflicting advice, as well as the excesses of cross-conditionality.

Biwott’s criticism also came just days after donors, UN agencies and the international financial institutions were criticised for some of their ways at a round table on technical cooperation for development in Switzerland. The UNDP and the World Bank Institute organised that event as part of a year-long study aimed at developing proposals for reforming technical cooperation.

In technical cooperation, there was a difference between “doing things right” and “doing the right thing,” said Jan Boer, Deputy Director General of the Netherlands’ Ministry of Foreign Affairs. The former may mean “doing the wrong things efficiently”, a UNDP press release quoted him as saying. The latter, at a minimum, included stopping doing the wrong things, such as donor countries insisting on the use of their own experts on projects they supported, Boer added.

Technical cooperation - which includes advisers, consultants, teachers and training intended to build skills and strengthen institutions in developing countries - accounts for about one quarter of total development aid provided by donor countries, and amounted to some $14 billion in 1999.

The Dutch government was the first donor to untie technical assistance: recipient governments were not now required to use Dutch experts and equipment, and could choose freely where to procure services needed, the UNDP stated.

Participants in the Geneva round-table also criticised donors’ excessive reliance on expatriate consultants, reports by foreign experts which failed to reflect local realities, poaching of skilled people from national institutions, and the failure of many technical cooperation efforts to create sustainable local institutions.

It was also noted that technical assistance from different donors had led to a plethora of different rules and procedures, placing a huge administrative burden on recipients.

Part of the challenge that needed to be addressed was the “power and vested interests embedded in the development industry,” according to South Africa’s Minister for Public Service and Administration, Geraldine Fraser-Moleketi.

Another issue raised was that technical cooperation often bypassed parliamentary scrutiny and budgetary procedures in recipient countries.

Abdul Magid Osman, former finance minister of Mozambique, recalled an incident in which he had to decline a request by a provincial governor for $50,000 for 100 additional teachers due to lack of resources, only to see an expatriate consultant hired for $150,000, paid out of a technical cooperation budget.

Participants proposed various ways of improving technical cooperation, including the central issue of “ownership”. Recipient countries needed to be able to decide for themselves how to use the technical cooperation they received, it was said.

Participants agreed that technical cooperation should move from short-term thinking to long-term, stable commitments, while it was also suggested that technical cooperation be integrated into parliamentary and budgetary processes, and that it could take the form of contractual arrangements, with agreed targets and results.

“Are donors willing to let go, and are African countries willing and able to assert themselves in order to take charge of their overall development?” asked Dr Soumana Sako, former Prime Minister of Mali and head of the African Capacity Building Foundation.

Still the fact remained, according to Commonwealth Secretary-General Don McKinnon, that donor countries and lending institutions need to be convinced that the money received by developing countries will be spent for the good of their populations.

“Borrowing countries must recognise that the lending institutions and their shareholders (not forgetting shareholders’ electorates) need reassurance that money lent - often on very fair terms - is used for the stated purpose of poverty reduction,” he said on Tuesday, at the Commonwealth ‘Conditionality and Ownership” seminar.

“Ways must be found to offer this reassurance while avoiding very invasive and expensive inspection and auditing requirements imposed from outside by donors,” he added.

“If you don’t have good governance, you will waste precious resources that you want to tackle poverty, to improve the conditions of the people,” Samuel Itam, the IMF’s Senior Resident Representative in Kenya, told IRIN.

In the matter of lending, “there must be safeguards, and this is what is now being called conditionality”, he added.