The Fragility Commission’s new report is spot on. Support for fragile states is not working and we need a new paradigm. International financial institutions (IFIs) and donors need to change how they work if they are to translate their high profile policy commitments into approaches that actually deliver sustained change. The new paradigm needs to be much more focused on building an inclusive political consensus, working with governments on the priorities that countries set for themselves and developing their institutions. The recently published IMF Independent Evaluation Office (IEO) report expresses itself in a more nuanced way, but also clearly calls for profound change in IMF policies and practices, including financial support, approach to capacity development and greater staff presence in fragile states.
The more worrying, bigger question is why this all needs saying again. All the IFIs, all the thirty-three UN agencies, all the bilateral donors and all the most conflict affected fragile states met in 2011 and agreed that international engagement was not working. Led by the then UN Secretary General they signed up to a radical new way forward – the New Deal. ODI research was part of the evidence that led to this agreement (and was the first to suggest the system was so broken that a New Deal was required). The New Deal set out five new priorities. The first was inclusive political settlements. It also made the revolutionary jump in thinking about country-led approaches. Previously these were seen as only applicable in more stable countries. The New Deal recognised that country-led approaches were in fact even more important in fragile states if any fundamental change were to be sustained. The New Deal stressed the fundamental importance of developing and using countries’ own institutions, avoiding the all too common mistake of creating parallel donor systems to manage finances and deliver services. The New Deal recognised that this would require donors to take on and manage greater risks (and noted how this had been successfully done in some countries).
The Fragility Commission repeats many of the core revolutionary ideas contained in the New Deal. It also helpfully extends the New Deal to bring in the development finance institutions (DFIs), who were never part of the 2011 meeting, but play a vital development role. The IMF IEO report explicitly recommends that the IMF should sign up to the New Deal.
The real challenge ahead is to understand why IFIs/donors never implemented the New Deal and how a renewed call to action will secure traction and momentum. There were some promising new innovative approaches, especially in Somalia, but the Fragility Commission is right that overall donors have failed to adapt their policies to the challenges of fragile states. In retrospect the main failure in 2011 was over ambition. There was an agreement on the changes needed. But there was insufficient engagement about the constraints, especially on donors, in delivering these changes. Hopefully the Fragility Commission will prompt a reconvening of the New Deal group of donors and fragile states to work out why the New Deal was never implemented – and why policies and practices continue to be so far removed from where the evidence clearly points.
Half the world’s poor will soon be living in fragile states. They needed the New Deal to work seven years ago. The case for implementing the recommendations of the Fragility Commission is now even more compelling. The UK government has long championed the need to prioritise fragile states. For many years the UK has committed to spending half of its aid in fragile states. It is now time for the UK government to show leadership and champion the changes needed – in the UK and internationally – to make sure that aid is well spent. A first step would be to convene all the parties involved in the 2011 New Deal – this time bringing in the DFIs as well. Their task would be to identify the changes required, the barriers to these changes and methods for managing the risks. Then there might be a chance to deliver what the international engagement in fragile states needs: real and radical change.