FCDO launch offers opportunity for more coherent policy but depends on better data

The launch of the Foreign, Commonwealth & Development Office (FCDO) “charged with using all the tools of British influence” creates an opportunity for more coherent policies towards developing countries, but realising this opportunity depends on better data collection and use across government .

Bond, the UK network for organisations working in international development, has outlined 15 principles for the new department to support greater policy coherence. UK tax payers would also benefit from more coherent policies, as effective non-aid policies can be worth much more than aid spending. 

Just look at Nigeria – the UK spent an average of £240m on aid a year over the last 10 years, but improvements in non-aid policies could have been worth much more. For example:

  • Two corrupt payments out of Nigeria facilitated by a UK bank, alerted to but not acted on, by the National Crime Agency’s predecessor, were worth 2 years of aid spending.
  • Nigeria has asked for the return of stolen assets – it suspected at least $37 billion was routed through the UK in 2014-15. Returning a fraction of this would be worth many years aid spending. 
  • Cleaning up oil spills by the Nigerian subsidiary of UK-listed Shell has been estimated to cost at least $1bn, around 3 years’ worth of aid spending. The UK promotes awareness of voluntary guidelines on responsible business conduct but campaign groups argue that stronger rules are needed.

A huge range of UK policies affect developing countries beyond aid spending. They include anti-money laundering controls, return of stolen assets, investment and trade promotion, arms exports, trade agreements, tax treaties, policies on the environmental and human rights performance of UK multinationals, and transparency requirements for natural resource payments.

The UK has taken a leading role on several of these (e.g. transparency of payments for natural resources; tackling secret company ownership, modern slavery) and has world renown expertise in international development. But there is much more that could be done. The creation of new department with a new remit and approach is an opportunity to do so. 

A first step towards more coherent policy is to collect and publish relevant data: data that makes it possible to review and improve the performance of departments and public bodies with regard to the impact of their policies on developing countries, going beyond aid spending.

The good news is that there are a range of existing data sets, which are sufficiently complete and disaggregated to country level, that can already be drawn upon. These include trade in goods and services, CDC investments, business supported by UK export finance, and arms export licences. More data is emerging from transparency obligations imposed on UK companies, notably the publication of extractives payments to governments for natural resources.

However, in many other other areas data is published without a country level disaggregation, datasets are incomplete, or data is not collected at all. For example, the UK’s work on returning stolen assets and anti-money laundering controls aren’t reported by country, making it hard to know how much anti-corruption efforts are benefiting developing countries. UK direct investment data is missing for around half of African countries, making it hard to measure the effectiveness of African investment promotion activities. A small unit in DIT promotes the OECD’s guidelines for responsible business conduct to UK multinational enterprises, including those operating in developing countries, but awareness and implementation of the guidelines isn’t measured, making it hard to assess the effectiveness of its work.

Measuring and reviewing government performance using relevant data is already widely recognised as best practice, including by the NAO and Institute for Government, and necessary for government accountability. In practice the challenges of collecting and disaggregating data will vary considerably. In some cases, data already exists but needs collating and publishing. In others the design of new metrics will need to be carefully considered and systems upgraded. In addition, responsibility for collecting data lies across multiple departments and agencies. 

But improvements are achievable. Measuring the UK’s environmental performance is also complex with responsibilities across Whitehall, but government has defined and has started reporting on a wide ranging set of environmental metrics. Given the global challenges now being faced, the effort to collect better data on the UK’s international interactions must surely be worth it.

Photo by Foreign and Commonwealth Office – Flickr, CC BY 2.0

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Transparency can help get the Sustainable Development Goals back on track

Countries need to provide reliable data about their impact on global challenges

The Sustainable Development Goals (SDGs), or Global Goals, which promise to end extreme poverty and inequality by 2030, were already “seriously off-track” in November last year, according to the UN secretary general António Guterres. The UN’s latest report shows that with Covid-19 reaching these goals is an even greater challenge, with least developed countries (LDCs) amongst those that “stand to be hit hardest”.

Achieving the goals depends on international cooperation

The Covid-19 pandemic has, like climate change, reminded us that national actions can have consequences for people around the world. So whilst the SDGs are national targets, many cannot be achieved through national efforts alone – they depend on international action and collaboration.

For example: 

  • Goals on reducing modern slavery and child labour (target 8.7) depend on multinational­ corporations undertaking effective due diligence to reduce risks in their supply chains and operations. 
  • Goals on increasing government revenues (target 17.1) depend on global companies paying their fair share of taxes and not being able to shift profits to tax havens.
  • Goals on reducing illicit financial flows (target 16.4) depend on effective anti-money laundering controls in international financial centres around the world.

The impact of actions taken elsewhere is particularly significant for countries who face the greatest challenges in meeting the SDGs and are disproportionately affected by global problems, including the world’s least developed countries. In an interconnected world, progress in these countries benefits everyone.

Measure the actions which impact the goals

However, without accurate data on actions that impact the SDGs, we cannot really know where progress is being made on the wide range of targets that depend on international collaboration. These include targets relating to migration, debt, remittances, environmental impact, human rights, illicit financial flows, aid, trade, and tax. 

Example data gaps include transparency of loans to governments, progress on returning stolen assets, multinational corporation tax payments and environmental performance. This type of data complements, but goes beyond, measuring progress on the goals within a country, which most SDG indicators and current SDG data efforts focus on.

In addition, governments that spend their citizens’ taxes on aid to developing countries owe it to their citizens to be transparent about the others ways they impact those countries. There are plenty of examples of donor countries exacerbating, or not doing enough to mitigate, problems in countries which are recipients of their aid (see some UK-Nigeria examples).

Donor countries like the UK could get much better value for their tax payers if they looked at their performance on international development in the round, by measuring the impact of their non-aid actions towards developing countries. 

Disaggregated data is powerful data

There are many initiatives to campaign for improved transparency on specific issues included in the SDGs – including illicit flows, tax, debt and corporate transparency. But even where data has started to be reported, there’s often more to do to make it more powerful in progressing the SDGs. Here are three common challenges:

First, the most basic problem is that governments and companies often default to aggregate information, such as the total amount of stolen assets returned by the UK, or companies reporting polluting discharges[1] without a country breakdown. These figures aren’t good enough to understand the implications for SDG progress because they hide whether the people and countries have furthest to go in achieving the SDGs, are being disproportionately affected. They also don’t help the people and countries affected hold those responsible for their actions.  All data should be disaggregated, at least to a country level, so that the impact on low income and least developed countries is clear.

Second, for transparency data to be powerful it needs something to compare it to. For example, the value of stolen assets returned to Nigeria by the UK has greater meaning when provided beside an estimate of the total value of stolen Nigerian assets in the UK. Payments to governments for natural resources are more meaningful if you also know the value of resources extracted.

Third, users of the data should know what they are getting.  International data is rarely perfect or complete so it should be complemented by data on its quality and comprehensiveness. This can then be used to track progress in the quality of reporting. A good example are the data quality checks undertaken in compiling the Aid Transparency Index.

Better data is possible

Despite these challenges, powerful international data to support the SDGs is not out of reach. People have shown they care about the accuracy and reliability of nationally reported data pertinent to global crisis (carbon emissions and the spread of Covid-19). Progress in opening up government data and strengthening government accountability for domestic policies shows what is possible. The importance of measuring national progress on the SDGs has been grasped. Another step in the sustainable development data revolution will help that progress to be realised.

[1] Alliance for Corporate Transparency 2019 Research Report An analysis of the sustainability reports of 1000 companies pursuant to the EU Non-Financial Reporting Directive. E.g. 20.9% of companies surveyed provided an aggregate KPI on polluting discharges to water, 1.5% disaggregated this by country.(page 56) 

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