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Multilateralism

Funding to multilaterals is increasing sharply. A more strategic approach towards engaging with multilaterals is needed.

Multilateral development cooperation, according to the OECD/DAC definition, involves funds that are given to multilateral organizations without restricting (earmarking) their use. There are a large number of multilateral organisations, which can be separated into International Financial Institutions (IFI), such as the World Bank or Regional Development Banks, and non-financial organisations, such as the UN and its associated agencies. On top of these, a number of Global Funds have recently been created. The European Union, and the European Commission as the body that implements development cooperation, is better defined as a supra-national institution.

The reasons for implementing development policy through multilateral organs are – to a varying extent, according to each respective organization – that they are more efficient due to economies of scale, they possess a store of technical excellence due to specialisation, and/or that they are more legitimate as a result of their governance structure. A specialisation of multilateral and bilateral development cooperation has been proposed, designating multilaterals to work on the core goal of poverty reduction, the European Union to work on the security-development nexus, and bilaterals to work on global public goods.1 The debates on “who does what best” and “how much should be given to multilaterals” remain open.

When funds are given to multilateral organisations, the common perception is that the donor loses control over them. There are, however, ways of influencing multilaterals in their policy formulation and effectiveness. Hence, engaging with multilaterals potentially multiplies the influence of single donors. There are some possible ways to go about this. One example is the ‘Multilateral Effectiveness Framework,’ with which the British agency DFID assesses the institutional performance of selected multilaterals. Another initiative, more based on building mutual awareness and consensus, is the Multilateral Organisations Performance Assessment Network (MOPAN), which engages in a process of country-based reviews that are accumulated and fed back to the multilaterals, which are then invited to respond. On the whole, influencing international organisations (multilateral aid) and implementing projects (bilateral aid) are two very different activities, which is why capacities and human resources need to be adapted to the different kinds of work.2

In Spain, multilateral funding has usually followed a pattern of “pay and forget”. The Master Plan has pointed to the need to work more strategically with IFIs and with the UN and its agencies. The Annual Plan 2007 reiterates this objective. No objectives or instruments are presented, however. The multilateral strategy has been announced, but is now overdue. This is why the report cannot undertake a comprehensive assessment of Spanish multilateral policies in development cooperation, beyond the simple allocation of funds. Even so, a number of developments can be observed, and these will be the main benchmarks to assess the quality of Spain’s multilateral strategy.

  • Volume: The Spanish government has increased significantly its multilateral funding. The star is the 528m EUR fund managed by UNDP and Spain. Additionally, there are a number of smaller contributions to UN agencies or the African Union.3
  • Bilateralization: The set-up for this Spain-UNDP fund involved co-management by Spain and the UNDP. Hence, the implementation criteria read: “The Fund recommends that [UN] Resident Coordinators institute a small Steering Committee at the country level, with representation of the Government, the UN Country Team and the Spanish Government.”4 This is a classical case of bilateralization of multilateral aid.
  • Non-financial Institutions: Maybe the most important shift within Spanish development policy, beginning with the budget allocations in 2006, is the shift towards the UN and its agencies. From 2.2 per cent in 2005 it jumped to 12.2 percent in 2006. (see chapter on aid volume)
  • Dispersion: In 2005, voluntary contributions to non-financial bodies were disbursed to 72 organizations, of which only 6 contributions were higher than one million. Whereas ‘silent funding’ without further engagement and follow-up might be a valuable option in some cases, a strategic approach to multilateralism would entail a more focused approach towards some organizations and more detailed follow-up. This begs the question of where Spain’s centre of gravity for development cooperation will be.5
  • Relationship and influencing: The relationship is managed by ‘comisiones mixtas’ – framework treaties between the multilaterals and the Spanish administration. In 2006, these treaties were signed for the first time with UNDP, FAO, UNICEF and UNFPA. Whereas the annual plan 2007 calls for Spanish sector strategies to be stressed at these meetings, this might be perceived as competing with the international organizations’ own strategies.
  • Responsibility: The institutional responsibility of engaging with multilaterals remains unclear. SECI, DGPOLDE and AECI are all connected to non-financial IOs in various ways. Supposedly led by SECI strategy, the Ministry of Economy is connected to the Bretton Wood Institutions. Any differences between them will not be resolved if the SECI publishes a strategy that is not ‘owned’ by other ministries. There is a potential trade-off between the effectiveness of inter-ministerial (secret) diplomacy and accountability to the public.
  • MOPAN: Spain has recently become a member of the MOPAN initiative. First and foremost, this will foster learning experience at field level and headquarters.
  • Domestic Oversight: The domestic oversight of Spanish actions within the IFIs has been non-existent. The delegates of the Spanish government have complete discretion to vote, propose and support whatever the government requires, without any oversight by parliament or civil society. This is about to change once the Development Commission of Parliament receives annual reports on these political concerns, as requested in a recent amendment. 6

Some of these questions might be tackled through the multilateral strategy. Others, however, need to be worked out incrementally by establishing relations between ministries on the one hand, and between the Spanish government, represented by SECI, and multilateral bodies on the other. For the latter, a common European position is still a mere aspiration. Civil society vigilance on these issues has been quiet, but is getting stronger.