Speakers:
H.E. Ambassador Robert Dewar, UK Ambassador to Ethiopia and Permanent Representative to the African Union
Paul Ackroyd, Head, DFID Ethiopia, Department for International Development
Chair:
Simon Maxwell, Director, ODI

1. Unusually for ODI, this discussion was held under the Chatham House rule.

1. Simon Maxwell, in the chair, welcomed participants. He referred to his blog and Opinion piece on the connection between foreign policy and development, suggesting that it was time to operationalise the concept of joined-up thinking, identify the choices that had to be made, and explore possible problems. It was notable that the US Secretary of State, Condolezza Rice, had been in Addis Ababa, certainly putting joined–up thinking into practice. It had also been reported that Lord Paddy Ashdown was likely to go to Afghanistan, in a role specifically designed to bridge military and development work.

1. Bob Dewar introduced the discussion on Ethiopia. He reminded the audience that the Government’s international strategic priorities included sustainable development - with human rights and governance at the heart - and also real partnership with developing countries. Peace and respect for human rights were integral to the agenda. It was essential for all branches of government to work together coherently and seamlessly. Prime Minister Gordon Brown had underlined this and other themes in his Mansion House speech, including pursuit of hard-headed internationalism and acting for a different better world.

1. In Ethiopia, the events of 2005 had triggered re-thinking across the whole donor community, particularly about the suspension of direct budget support, but simultaneously how to protect financing of social services and stimulate an honest dialogue on Human Rights and Governance. Suspending DBS was not a decision to abandon Ethiopia, but the reverse, with efforts redoubled to help improve the quality of life of the poor. International partners worked closely together, through the Ambassadors’ Donor Group (ADG) and the Development Assistance Group, co-ordinating action and issuing joint policies and statements.

1. Paul Ackroyd expanded on this, providing contextual information on the situation in Ethiopia and on the size and complexity of the aid system. He reminded the audience that the country contained one of the largest groups of poor people in the world, was comprised of 80 ethnic groups, some of them avowedly separatist, and that power  had never been transferred peacefully. Ethiopia received $1.9bn in aid, from a large number of bilaterals and multilaterals (25 of whom were members of the Development Assistance Group), and 27 UN agencies. This made donor coordination a development and political challenge.

1. UK development assistance is conditional on the three published principles, viz: (a) commitment to poverty reduction, (b) fiduciary standards, and (c) governance. In Ethiopia prior to 2005, the judgement had been that everything had been moving in the right direction, resulting in increased aid and a commitment to budget support (£50m in a budget of £90m in 2005). After the events of 2005, a descion had been made to maintain overall levels of support but to suspend budget support, and design a new instrument to protect basic services, tightly targeted and with tighter reporting, and new accountability requirements. At the same time, donors had intensified diagnostic work on governance issues, had agreed engagement principles based on the DAC fragile states principles, and had also intensified dialogue with the Government on governance. Extensive effort had been required by both DFID and FCO in ensure a co-ordinated international response.
   
2. The speakers felt that this strategy had been successful. An international consensus on engagement had been agreed. Aid funds were re-directed to protect basic services which were now producing impressive results and a dialogue on governance and human rights had been started. The speakers felt that the UK policy of constructive engagement based on mutual respect and frank dialogue had established a new and stronger basis for the overall UK relationship with Ethiopia.
   
3. A large number of points were made in the discussion. They fell into three main categories:

1. 1. Questions about development strategy in Ethiopia, covering such issues as water, trade, resettlement policy, etc. There was also a brief discussion about the effectiveness of budget support versus programme or sector support.
   2. Questions about the link between aid and governance, with some speakers arguing that the human rights situation remained poor and that aid continued to support the government.
   3. Questions about aid and foreign policy, with speakers suggesting that aid around the world clearly often did support foreign policy objectives, sometimes successfully and sometimes not. There was a lack of joined up thinking, one speaker argued, for example in Afghanistan.

1. Concluding the meeting, Simon Maxwell referred participants to the Prime Minister’s Mansion House speech on foreign policy, in which Gordon Brown had spoken clearly about the need for integrated planning and delivery of development, humanitarian and political programmes. He (SM) thought that, if this vision were adopted, we would all be working in very different ways in the future.