New Policy and Plan of Operations (2004)

Introduction

The Millennium Development Goals (MDGs), adopted at the United Nations'55^th General Assembly in September 2000, constitute the common criteria for both bilateral and multilateral international development co-operation. The main objective of the MDGs is to ensure that by the year 2015 the number of people suffering from poverty and hunger will be no more than half of what it was in 1990. Furthermore, the MDGs emphasise education, health care, gender equality, environmental sustainability and increased fairness in international co-operation. Inherent in the MDGs is the recognition that economic growth and social development are of equal importance in combating poverty. The policy of transparent economy and sound economic management, which has been the norm in international development co-operation since the 1980s, remains the goal but in addition to that, considerable emphasis is placed on democratic reform, a more equitable distribution of income and increased fairness of international trade practices.

Recent years have seen considerable changes in the ideas and approaches governing bilateral development co-operation, the field of activity of the Icelandic International Development Agency (ICEIDA). Many international development agencies currently focus on budget support and sector-wide approaches (SWAps) instead of the earlier project-based approach. This change has led to greater emphasis being paid to closer co-operation with the governments of the recipient countries, increased co-ordination of development assistance and increased co-operation between bilateral and multilateral development organisations. In the wake of the MDGs many industrial countries have committed themselves to definite goals involving increased contributions to developmental co-operation in the coming years. This is especially important as contributions from many industrial countries did decrease over the past decade[1] despite regular reiterations of the United Nations Assembly resolution of 1970 to the effect that industrial countries should aim to contribute approximately 0.7% of their GDP to developmental assistance to the world's poorer countries.

ICEIDA follows the policy of the Icelandic government in international development co-operation and operates on the basis of Act No. 43 from 1981 on bilateral co-operation between Iceland and developing countries. Furthermore, ICEIDA operates in accordance with the DAC[2] Guidelines and the DAC Good Practice Papers on development assistance and its implementation. Iceland's contributions to bilateral developmental assistance are expected to increase considerably over the next few years and that will require clearer strategy and increased focus. ICEIDA will align its approach to the changed emphasis in international development affairs and seek to observe and participate in co-operation between international development institutions and international organisations. In light of the MDGs, greater emphasis will be placed on aligning ICEIDA's projects to the poverty reduction strategies (PRS) adopted by partner countries and to the work done by comparable organisations in those countries. The Agency will continue to operate on a project basis and harmonise its approach with new procedures in international development co-operation.

I. General Criteria

Under Icelandic law, ICEIDA is responsible for the implementation of official Icelandic bilateral development assistance. The assistance is based on mutual international agreements on developmental co-operation between the government of Iceland and the governments of the partner countries, and is therefore primarily based on co-operation between public entities. However, this does not preclude ICEIDA from involvement in individual development projects which do not fall within the scope of formal bilateral international agreements.

The principal criteria underlying Icelandic bilateral development co-operation are based on combating poverty; accordingly, special emphasis is placed on co-operation with countries where the living standards are among the lowest according to the assessment of internationally recognised organisations. These criteria are in line with the United Nations Millennium Development Goals, to which Iceland subscribes as a member of the UN. Increased and more focused international co-operation in the field of poverty reduction forms the foundation of the goals.

ICEIDA puts emphasis on supporting people and institutions in its partner countries towards self-sufficiency, e.g. through the transfer of knowledge and skills in those fields where Icelanders are in possession of particular expertise. ICEIDA has also placed increased emphasis on improving the conditions of the poorest through increasing funding earmarked for basic education and health care. The Agency's overall aim is to promote democracy, human rights and gender equality, while taking full account of the particular needs and individual culture of the partner country. All projects undertaken by ICEIDA are carried out in accordance with the requirements of the partner country, in the spirit of the government policy of the country in question while taking into account the activities of other international development agencies operating in the country. ICEIDA will focus on adapting and simplifying the implementation of assistance based on the DAC criteria. Furthermore, the Agency will observe the DAC rules with respect to the abolition of tied aid and reporting on procurement and tenders.

Economic Development. One of the prerequisites for poverty reduction is the concurrence of economic growth and social reform. ICEIDA will seek to promote economic growth in partner countries through providing assistance towards the development of a strong and fair economic environment. This can, inter alia, involve assistance to government authorities regarding the drawing up of laws and regulations aimed at strengthening and supporting the private sector, increased international trade, greater employment opportunities and just labour laws. In this field, the Agency will also increasingly facilitate relations and co-operation between companies and organisations in partner countries and corresponding entities in Iceland. ICEIDA's intermediation in such co-operation will always primarily be based on the interests and requirements of the developing countries in question with the goal in mind of increasing economic growth and reducing poverty in these countries. Furthermore it will be expected that Icelandic partners participating in such projects will themselves contribute resources, knowledge and manpower to the co-operation projects.

Environmental Sustainability. The United Nations World Summit on Sustainable Development held in Johannesburg in September 2002 renewed the commitments made at the Rio Summit concerning development and environmental sustainability as well as establishing the main emphasis for the environmental and developmental issues for the coming decade. The principal goals of sustainable development, i.e. economic growth, social welfare and environmental protection are an important part of the activities of most international development agencies, and ICEIDA intends to incorporate these views into all its activities. The Agency's projects in the field of resource utilisation, e.g. fisheries and geothermal energy, will emphasise environmental sustainability in particular. Most international development agencies include environmental impact assessment in their preparation of development programmes. ICEIDA plans to adapt itself to this policy in the coming years and have such assessments carried out in preparation of the Agency's projects, particularly in the abovementioned fields of fisheries and geothermal energy.

Gender Equality. The MDGs emphasise the need for increased social equality in the fight against poverty. Most international development agencies currently emphasise the importance of gender equality in their activities, as repeated evidence shows that social discrimination, be it based on gender or other aspects, hinders progress and the fight against poverty in the world[3]. In accordance with existing policies in international development co-operation, ICEIDA intends in the coming years to integrate perspectives of gender equality into all its activities. Account will be taken of the needs and roles of both women and men during the preparation and implementation of the Agency's projects in an attempt to ensure equal opportunity for men and women to influence, participate in and benefit from the projects.

Support of Grassroots Activities and Democratic Development. In recent years ICEIDA has increased its financial allocations to grassroots projects, e.g. through co-operation with NGOs in Iceland and the partner countries. The Agency intends to strengthen this co-operation even further in the coming years and thereby endeavour to increase its support for civil society and democracy promotion in partner countries while enhancing public understanding of international development work in Iceland through co-operation with Icelandic NGOs. Co-operation of this kind will, however, always be conducted with the approval of, and in consultation with, government authorities in partner countries. Co-operation of this kind will emphasise contract-based, carefully prepared, clear and delimited projects, which will be subject to  regular assessment. Furthermore, steps will be taken to ensure that the financial management of such projects, accounting practices, custody of funds and supervision of their use are in accordance with requirements that ICEIDA must comply with.

 

II. Criteria for the Selection of Partner Countries.

Partner Countries and Scope of Activities. ICEIDA´s activities have mainly been focused on the poorest countries in Africa and were until 2000, mainly concentrated in the field of fisheries. In order to ensure maximum effectiveness of ICEIDA's development co-operation, the Agency will continue to focus on a small number of partner countries, mostly in Sub-Saharan Africa where the need for development assistance is great and the Agency has accumulated extensive experience. Co-operation with countries other than the current partners, including countries outside Africa, will be considered in conjunction with the expansion of ICEIDA's scope of activities. The Agency will also explore the possibility of participating in delimited and temporary projects outside the formal partner countries, particularly in fields where Icelandic expertise is most extensive, that is in the fisheries and energy sectors.

Through ICEIDA's growth in recent years its projects in partner countries have become more varied and the Agency currently works in the social, education and health sectors as well as in fisheries projects. In order to ensure efficient and effective development assistance, ICEIDA will continue to focus on these fields but plans to add the energy sector to its scope of activities. This means that the Agency will be working within five sectors in the coming years.

Matchmaking. When selecting the projects ICEIDA will thoroughly assess the partner country's ability to receive the development assistance that Iceland can offer in the sectors where the Agency operates. This criterion is important for the effectiveness of projects and the sustainability of the development assistance. ICEIDA plans to carefully examine the technical and administrative ability of partner countries to receive its development assistance and to make this an important factor in the preparation of future projects. This involves the need for ascertaining whether a partner country has the appropriate human resources, technical know-how and administrative capacity to receive and make use of specialist advice. In the absence of these factors, the emphasis of the development co-operation must be on capacity building and the development of the institutional and technical environment. In the future, ICEIDA plans to reduce the unilateral technical assistance by Icelandic experts and place greater emphasis on utilising and developing knowledge and human resources in the partner countries. For this purpose the Agency will increasingly utilise the expertise and knowledge already in existence in the partner countries. When selecting new partner countries and new projects it is important to ascertain that there is political will on the part of the government to attain the MDGs in the sectors where ICEIDA operates, e.g. in the education and health sectors.

Evaluation of the Need for Development Assistance and of the Potential for Project Success. Current trends in international development co-operation emphasise directing as much as possible of the development assistance to poor countries with clear policies (policy environment) and the will to work efficiently toward attaining the MDGs. This policy should, however, not mean that countries coping with conflicts, corruption or other administrative problems are left out completely. ICEIDA intends to integrate this policy in its future activities. The Agency will continue to emphasise development co-operation with countries where poverty is severe, but will endeavour to assess more effectively than it has before whether the development co-operation is likely to have the intended results. Such assessments will take account of the following:

• Development assistance should be provided where it is most needed, i.e. to the world's poorest countries. Assessment of poverty in a country will be based on national income per capita weighed by purchasing power[4].
• In the selection of partner countries notice should be taken of government policy performance in sectors where ICEIDA intends to operate.
• Countries selected for partnership will be countries supported by relatively few international development agencies, rather than countries where many donors are active and development assistance per capita is high.
• Countries to be selected should have stable regimes free from civil war and armed conflict.
• Developing countries with a relatively small population will be preferred, especially small island nations.
• Countries selected for co-operation should have an efficient administrative environment and economic management, which promote human rights, democracy and income equalisation. Internationally recognised yardsticks, such as the GINI income distribution coefficient and the CPIA administrative effectiveness rating of the World Bank, and the GDI and GEM gender equality indices of the United Nations Development Programme (UNDP) will be used for the evaluation of partner countries in this respect.
• Efforts will be made to select partner countries that have prepared and are implementing effective poverty reduction strategies (PRS) and are committed to attain the MDGs.
• Emphasis will be placed on co-operation with countries where democracy is in place and progressing.
• Partner countries where corruption is on the wane and where authorities actively discourage corruption will be selected. Internationally accepted indices will be used for the purposes of assessing the scope of corruption, e.g. the Transparency International Corruption Perceptions Index.

 

III. Co-operation and Co-ordination of Development Assistance

Most international development agencies now place greater emphasis on increased and more effective co-operation with other development agencies and international donor organisations in their strategic planning and implementation of partnership development activities. Also, greater emphasis is placed on the harmonisation of the activities of these organisations in each country and their adaptation to the development strategies of the countries in question. It is believed that this will make international development assistance more efficient and effective.

Harmonisation of Development Activities. In the next few years ICEIDA will adapt to the altered circumstances in international development co-operation and seek to establish its own role in such co-operation. The selection of new partner countries and projects will take into account the scope of the total development activities already in progress in the country and account will be taken of projects and programmes in which other international development agencies, institutions and NGOs are involved. In this way, ICEIDA will endeavour to direct its activities towards countries where the availability of development assistance is less than in other comparable countries, and also avoid the risk of its projects conflicting with the work of others.

Ownership and Participation. In each partner country ICEIDA will closely examine existing poverty reduction strategies during the selection and preparation of all new projects. This will be done in order to ensure that the development co-operation meets the criteria of the partner country and is in accordance with its policies. All new projects undertaken by ICEIDA will be based on requests from the partner countries for development co-operation in sectors where the Agency operates. The objectives of the co-operation shall be in accordance with the policies of the partner country and the project proposals shall be formulated in close co-operation between ICEIDA and the government authorities in question. Furthermore, the Agency will, to the extent possible, endeavour to ensure the active participation of stakeholders in the preparation and implementation of its projects. This policy is in line with the participatory approach in development co-operation; an approach which has gained support in international development assistance over the past decade and is intended to increase the success and sustainability of development work. The above strategy is intended to facilitate the transfer of ownership of ICEIDA's projects to the partner countries.

Participation in Donor Co-ordination. In the coming years, ICEIDA plans to participate more effectively in donor co-ordination in the partner countries. This will include increased participation by the Agency in development co-ordination groups that may exist in each partner country. Increased participation in such co-ordination will mean increased awareness of and alignment to the activities of other international development agencies active in the country. Moreover, such participation will further enable ICEIDA to adapt itself to the overall policies of the international community as regards the implementation of development assistance in each country, e.g. by building up expertise and human resources in partner countries. For this purpose ICEIDA will focus on employing local staff to work on the implementation of projects much like most international development agencies have increasingly done in recent years.

Co-operation in the Implementation of Development Projects. In addition to the co-operation and co-ordination already mentioned, ICEIDA will examine possibilities of direct participation in larger development projects implemented in co-operation with multilateral and/or bilateral institutions in partner countries. The opening of the Icelandic Embassy in Mozambique and the conversion of the ICEIDA country offices into diplomatic missions will facilitate such co-operation, as well as strengthen the Agency's position and facilitate its activities the countries in question.  Furthermore, Iceland's membership in DAC will open new opportunities for consultation and co-operation regarding development projects and their implementation.

 
IV. Financial Administration

The funds allocated to ICEIDA come from Icelandic taxpayers, a fact which imposes a requirement for transparent policies regarding their disposal. This involves, inter alia, careful preparation of projects and their budgets, precise monitoring of the disposal of allocations in partner countries and regular reports on project progress. The Agency must always be able to satisfactorily account for its financial and accounting affairs, and its finances must always stand up to critical third-party review. The same requirements will apply to co-operation projects between ICEIDA and other parties.

V. Civil Society, Communications, Information and Development Education.

Co-operation with Research and Educational Institutions. In 2003 an agreement was signed between ICEIDA and the University of Iceland regarding co-operation between the two institutions in the field of academic teaching and research, as well as in organising conferences and lectures on development issues. This co-operation marks the beginning of the implementation of ICEIDA's strategy of substantially increasing systematic co-operation with Icelandic as well as foreign research and educational institutions. Plans for increased co-operation with the Nordic Africa Institute in Uppsala, Sweden where the Agency has been a member for a number of years exist as well. The academic research and educational activities involved in such co-operation provide important support for the preparation of development projects and effective work in partner countries. Moreover, this plays an important part in the dissemination and promotional activities of ICEIDA in Iceland. Over the next few years the Agency plans to substantially increase its co-operation with Icelandic organisations in the field of science and technology, in both the academic and business sectors. In addition to this ICEIDA will continue its information and promotional activities inside schools and various associations in Iceland.

Co-operation with NGOs. In recent years, ICEIDA has been involved in co-operation with the Icelandic Red Cross Society, Icelandic Church Aid, the Icelandic Federation of Labour, ABC Children's Aid and other organisations on the basis of formal agreements regarding defined projects in the Agency's partner countries. Co-operating with NGOs has many advantages, one of which is the opportunity to work with NGOs in partner countries and with strong international organisations such as the Red Cross. NGOs are often engaged in grassroots activities and through co-operating with them ICEIDA gains important experience and knowledge. Moreover, co-operation with Icelandic organisations is an important part of the Agency's domestic public dissemination and promotion efforts and is likely to increase interest in and understanding of international development work. In light of this, ICEIDA intends to strengthen its co-operation with NGOs even further over the next few years. In co-operation of this kind, ICEIDA will put the emphasis on contract-based and clearly defined projects, which are carefully prepared and regularly reviewed. Such projects must always be carried out with the full knowledge and acceptance of the government authorities of the country in question and in accordance with their current policies and development strategies.

Training and Preparation of Employees. Owing to its small size, ICEIDA is unable to offer its employees the extent of training that many larger international development agencies offer their staff. In recent years the Agency has offered one-day preparatory briefing courses for first time employees off to work in one of the partner countries. The course covers policies and trends in international development issues, as well as the principal aspects of moving to a partner country and working on development projects. ICEIDA intends to continue these briefing courses and extend them and over the next few years a detailed strategy regarding these matters will be established.

Furthermore, ICEIDA intends to prepare the ground for offering young Icelanders, especially university students, opportunities for in-service training in connection with the Agency's projects in the partner countries. The ultimate objective of that training is the vision that it will assist them in their studies as well as in their career choice.

Publications. ICEIDA's publication strategy is undergoing comprehensive review. A new website has been designed to replace the printed newsletter previously published by the Agency. The website is intended to provide comprehensive information about ICEIDA and its activities, and at the same time serve as a medium for the latest news from the field and from the partner countries. An effort will be made to make the website as useful as possible with frequent updates organised by an on-staff web editor. The purpose of the website is, on the one hand, to serve as a source of information for the public and, on the other hand, to provide news and research material for the media. Texts on the website are both in English and Icelandic. A yearly review of the Agency's work is published in the ICEIDA Annual Report whose layout has been redesigned in order to improve it as a source of information. Annual Reports will be published in English. In addition, publications will be produced in Icelandic, both information booklets and periodicals, which will focus on issues relating to development assistance and its implementation. Plans for producing documentary films about the life and work of people in the partner countries of ICEIDA and about the Agency's development activities are also under way.

Cultural Relations with Partner Countries. Through the years, the work of ICEIDA in Africa has contributed to certain cultural relations between Iceland and the partner countries, including friendship ties between Malawian and Icelandic primary schools mediated by the Agency. During the next few years efforts will be made to increase relations of this kind and develop a more systematic plan of action in this field.

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