Slide 1

Bilateral Aid Review

March 2011

Slide 2

Contents

- Objectives of the review

- The review process and methodology - Summary of key outcomes

- Questions

Slide 3

The aim of the review

1. Identify a clear rationale for DFID country allocations and establish: countries in which we should retain and increase DFID presence, programmes and offices which we should close and graduation strategies when closing.

2. Establish which results we should prioritise in each country and how to factor in performance to aid allocations.

3. Establish levels of spending for each country for 2011/12-2014/15, including where to potentially scale up investment to achieve DFID’s objectives.

4. Set out clear strategic choices for the delivery mechanisms for bilateral aid.

5. Provide guidance on preparation of country Operational Plans.

Slide 4

Offers: Results, Market for Ideas, Theory of Change

Peer Review / Scrutiny Panel: Innovation, Girls & Women, VFM

Ministerial drill downs: build on analysis & aggregation, offers likely to be taken up

Allocation Process: top down constraints; BAR/MAR and Pillar trade offs; Challenge funds

Operational plan: translating concept notes into a credible, resourced operational promise

Footprint: need, effectiveness, DoL

The bilateral aid review process:

Slide 5

Our revised bilateral programme:

Between now and 2016 UK bilateral programmes in the following countries will come to an end:

Angola, Bosnia, Burundi, Cameroon, Cambodia, China, Gambia, Indonesia, Iraq, Kosovo, Lesotho, Moldova, Niger, Russia, Serbia and Vietnam.

Slide 6

Our revised bilateral programme:

We will concentrate our resources and impact in 27 countries:

Afghanistan, Bangladesh, Burma, Democratic Republic of Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, Occupied Palestinian Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe.

Slide 7

Results Offers in each strategic priority:

• Wealth creation: helping people prosper for themselves

• Poverty and Vulnerability: through tackling hunger, malnutrition and helping people break out of the cycle of poverty

Slide 8

• Education: harnessing the transformative power of education

• Health: saving lives and preventing illness by focusing in areas like: maternal health, vaccinations, HIV, malaria, TB and polio

Results Offers in each strategic priority

Slide 9

• Providing access to clean water and sanitation

• Helping to make countries safer, fairer and free from conflict, through work on security, governance and conflict prevention

• Working with other UK government departments to combat climate change

Results Offers in each strategic priority:

Slide 10

Uptake of results offers by strategic priorityMinisters Take up

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Wea

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Clim

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£m

Slide 11

Uptake by strategic priority

Delivering MDGs

Wealth Creation

Governance&Security

Climate Change

Slide 12

Wealth Creation

• Private sector provides 90% of jobs in most developing countries

• Trade An increase in the share of trade in GDP from 20 to 40% over a decade raises real GDP per capita by 10%

• Macro-economic stability: Inflation rates above 11% depress growth.

• Political economy/governance: State legitimacy in Africa is worth up to 2.5% annual GDP growth.

• Savings and investment: investment rates of 25% of GDP or more are needed.

• Women’s economic participation.

Slide 13

Sustainable Wealth Creation ?

ACRONYMS ! • IGC• AFTI• ICF• ICF• CUTS• FIAS• M-PESA• M- KESHO

CHALLENGES• Climate• Resource scarcity• Population

What changes do we need ?

Slide 14

Slide 15

Total agreed bilateral allocations 2011-15: Africa

0

200

400

600

800

1000

1200

1400

Ethiopia

Niger

ia

Africa

Regio

nal

DRC

Tanza

nia

Sudan

Kenya

Uganda

Ghana

Mala

wi

Zimba

bwe

Moz

ambiq

ue

Rwanda

Sierra

Leo

ne

Somali

a

Zambia

South

Afri

ca

Liberia

Spe

nd in

£m

Slide 16

Total agreed bilateral allocations 2011-15: Asia and other countries

0

200

400

600

800

1000

1200

1400

1600

Spend in

£m

Slide 17

How did we do? Spend Profile of DFID's Bilateral Country ODA based on MAR 'need-effectiveness' model

0

10

20

30

40

50

60

70

80

90

100

2004-09 2011-15 (BAR)

As %

of

To

tal C

ou

ntr

y-B

ase

d B

ila

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DA

4th quartile

3rd Quartile

2nd Quartile

Rest of 1st Quartile

Next 5% Most need Effectivecountries

Top 5% Most need Effectivecountries

1st Quartile