The shift towards technical assistance means that foreign development consultancies will continue to prosper in developing countries such as India, says Vivan Sharan
A few years back I was approached by a European consultancy to bid for a project as part of the European Union’s (EU) ‘technical assistance’ for India. This project was ostensibly part of the Europe Aid, budget, which is aimed at “reducing poverty in the world, ensuring sustainable development and promoting democracy, peace and security”. The goal of the project was to provide technical assistance to an apex regulatory institution in India. At the outset, the project’s linkage with reducing poverty and sustainable development seemed tenuous. However, the justification provided by Europe Aid and the supposed by in from the local institution, seemed credible enough. I decided to take part in the bid as part of a consortium of entities.
After many rounds of applications and filtering, our consortium won the multimillion euro project. The European consultancy firm took the lead in the consortium, despite not having any physical presence in India. Since the EU guidelines strictly required that a European firm be part of the consortium, I did not question the science behind this. Needless to say, I was naïve and thoroughly unprepared for what happened next.
After an initial unproductive meeting with the Delegation of the EU in India, for which various members of the motley ‘consortium’ flew to India (on EU taxpayers money), it was clear that the European consultancy had no intention of actually harnessing our local technical expertise. It was convinced that the best expertise the consortium could cobble together would necessarily be lawyers from the EU. After making it clear that the entity I was part of did not envision its role as that of a ‘facilitator’, we were side-lined. What followed was a long silence on part of the lead consultancy.
Frustrated, I reached out to the office of the Delegation of the EU to India, and was thanked for informing them of the lack of communication within the consortium. I was also informed that the project was “very much ongoing”. That was the last I heard from any of the stakeholders involved. I can only assume that the consortium continued to get funded from the EU despite the lack of local ownership of the project.
I am highlighting this experience in order to offer a brief explanation for the way the traditional ‘donor’ ecosystem works. Since India’s prominence in the global economy has increased and it has become more self-confident on the global stage, the words ‘donor’ and ‘aid’ have become politically incorrect. India no longer receives or solicits ‘aid’ from foreign nations. Therefore the term ‘donor’ has been replaced by ‘partner’ and ‘aid’ by ‘development assistance’. However, many within this ecosystem continue to function as if they were disbursing aid. My own experiences taught me that ‘transparency’ and ‘accountability’ are only buzz words that are meant for the recipients of aid. They were never meant for the donor community itself.
The Fourth High Level Forum on Aid Effectiveness held in Busan in 2011 is largely considered a turning point in the international discussions on aid and development. It brought together both traditional donors such as Europe Aid and its counterparts in other OECD countries, and ‘emerging’ donors such as countries within the BRICS grouping. This was a dialogue which would be inconceivable even a decade before. It sought to remove once and for all, the dichotomy between traditional ‘”donors” and “recipients”. Among the agreed principles in Busan was “ownership of development priorities by developing countries”.
Earlier, in 2005, fifteen countries of the EU committed to spend 0.7 per cent of their Gross National Incomes on development assistance flows. After the financial crisis this commitment has been under strain since assistance to developing countries is not seen as a political priority. As result, a number of traditional ‘donors’ have begun to reorient development assistance, to get maximum ‘bang for buck’. For instance, agencies such as the UK’s Department for International Development have decided to completely shift focus to using technical assistance and investments in private sector projects, with an emphasis on working with state governments.
The shift towards technical assistance means that foreign development consultancies will continue to prosper in developing countries such as India. A handful of them, carefully nurtured by the donor ecosystem, will service a large proportion of the development flows by providing project management and technical assistance expertise.
In this connection, the recent bribery scandal involving the India arm of the New Jersey-based construction management company, Louis Berger Consulting, highlights a symptom of a larger problem. Louis Berger and its peers from the developed world have successfully cornered the programme implementation budgets of traditional donors. Louis Berger recently admitted to violations of the stringent US Foreign Corrupt Practices Act. The firm paid $976,000 to government officials in Goa for providing “project management consulting services” for a water supply and sewerage project funded by Japan International Cooperation Agency (Japan’s development assistance arm).
While Japanese bilateral cooperation in India has a better track record than most, there is very little to suggest that consultancies such as Louis Berger have what it takes to develop “inclusive development partnerships”; a key Busan principle. In fact, even a cursory glance at the websites of the largest development consultancies that receive regular support from donor networks suggests an acute paucity of local knowledge. Their legacies have been built on working in conflict areas and ‘fragile’ states, where they have gone in lock stock and barrel, acquired government contracts through any means necessary, and executed them with the help of donor monies.
A paradigm shift is in order if traditional donors are to gain credibility and achieve qualitatively measurable results. This will require that they work more closely with civil society and private sector in the countries that they operate. For instance there is no reason why participation of a European firm should be a prerequisite to an EU tender in India! A paradigm shift will also require a rethink in terms of local hiring practices of traditional donors. Why should Indian citizens be paid fractions of what their foreign counterparts are paid within the same institutions (and therefore have close to no sway on programme design decisions)? Until development ‘partners’ recognise the integral value of local expertise, the net result of ‘assistance’ programmes will continue to be perceived as self-serving “peanuts” in the context of India’s development ambitions.
The authot, Vivan Sharan, is a Partner at the Koan Advisory Group and a Visiting Fellow at the Observer Research Foundation, India
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