• by IPS Correspondents (stockholm)
• Thursday, January 19, 1995
• Inter Press Service

STOCKHOLM, Jan 19 (IPS) - Norway is poised to embark on a far- reaching overhaul of its foreign aid policy in an attempt to promote greater accountability among recipient nations and clamp down on inefficiency.

The Scandinavian country is the world's most generous aid donor, allocating a higher percentage of national income to development projects than any other nation.

However, a long-standing unease over cases of corruption and wastage in many recipient countries, on top of poor returns from numerous Norwegian-funded projects has prompted a top-level reappraisal of national aid policy.

The Aid Commission on North-South and Aid Policies, an independent panel of Norwegian experts convened by the government in 1993, is due to present a report to Norway's Storting (parliament) next month.

It is already clear that the eagerly-awaited document will urge a radical shake-up in the way development funds are allocating and the commission is likely to recommend cuts in grants to countries which fail to demonstrate improved accountability for the success of projects.

One key proposal is likely to be the creation of "development contracts" between Norway and recipient countries. These would last 10-15 years and provide a long term basis for improvements in institutional systems and educational development in programme nations.

The Commission's members believes such a system would circumvent the negative effect of Norway's annual budget process, in which funds are often hurriedly appropriated to projects which then fail to live up to expectations. Greater initial scrutiny and monitoring of projects is also likely to be suggested.

Observers in Oslo believe that the commission's main findings will generate broad parliamentary backing amid a widespread unease among politicians over reports of failed projects and incompetent management of development programmes by recipient countries.

Last week Foreign Aid Minister Kari Nordheim-Larsen grasped the nettle by stating publicly that development support should be suspended in the absence of improved accountability in recipient countries or if projects fail to produce results.

"We cannot support commercial development without the aid going hand in hand with the right policies from recipient countries' authorities," Nordheim-Larsen told the newspaper Aftenposten.

"Third World countries must themselves take responsibility for their development. Eighty per cent of Tanzania's state budget has been aid grants. Such things cannot continue."

The closing stages of the commission's deliberations have coincided with two reports from Norwegian research organisations heavily criticising national aid policy.

Helge Ole Bergesen, a leading development expert at the Fridtjof Nansen social science institute outside Oslo, said Norway had been "generous but naive".

Backed by opinion polls which consistently show more than 80 per cent of Norwegians in favour of high levels of foreign aid spending, political parties have been competing to increase development grants, he said.

"The preoccupation with giving has meant there has been little public and political concern with the results," Bergesen explained, adding that the Norwegian system of annual aid appropriations meant there was a rush every year to find projects to donate money to, some of which were unrealistic.

"This, in turn, left ample scope for manipulation by beneficiaries.

He said more money needed be channelled directly to "real recipients" through NGOs rather than via governments.

"Governments are not part of the solution but part of the problem," he said, referring to widespread corruption in developing countries.

A broad consensus appears now to be building not just among Norwegian researchers and aid workers but also among policymakers that the key future improvements lies in empowering developing countries to take a far greater initiative in aid programmes than before.

"Development assistance should be directed so that the recipient countries themselves are in a position to solve the problems," leader of the main opposition Conservative party, Jan Petersen, said in a media statement last week. "The intention never was for industrialised countries to pursue a worldwide social policy."

Such comments are backed by a study in 1993 which claimed that Norwegian aid between 1984 and 1992 had been strikingly unsuccessful in solving development problems, particularly in Africa.

In some cases assistance was actually counter-productive, creating what the report considered 'aid dependency' and fostering lethargy among recipient governments.

"If you look at Norwegian aid over the last 30 years it seems like it has been more important to increase the aid budget every year than finding the right ways to use the money," said Bjorn V Klovstad, spokesman for the Norwegian state development aid agency, NORAD.

He said the fault lay on both sides: Norway had failed adequately to administer and follow up all projects, while recipients had not had the capacity or incentive to use aid monies properly.

NORAD, he added, had implemented new guidelines aimed at encouraging "self-help" in donee countries though the building up of accountable administrative structures in project countries.

"We are working towards creating greater consciousness and responsibility at the receiving end," said Klovstad. "In the past, recipient countries have either not had the money or the skills to complete projects once our experts have left. Now we are helping them to run their projects from day one."

Although the problems are seen as worst in Africa, which receives the lion's share of Norwegian aid, there are parallel difficulties in Asia and Latin America.

Arve Ofstad, secretary of the Commission on North-South and Aid Policies, said Norway had to clamp down on projects that failed to give results or were "obviously stupid".

"We must find a way of putting money only into worthwhile projects... and reduce the risk of failure. Norway must be more vigilant and stop projects that we see are going nowhere. For that we need real dialogue with recipient countries and greater responsibility on both sides."

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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