Luxembourg's development cooperation - Annual report 2014

A key principle of Luxembourg’s development cooperation is its geographical concentration on nine partner countries, particularly Cabo Verde, Mali, Senegal, Burkina Faso, Niger, Laos, Vietnam, Nicaragua and El Salvador¹. In all these countries, the Indicative Cooperation Programmes (ICPs) are aligned with the medium-term and long-term national development strategies. Luxembourg’s programmes are wholly integrated into the priorities and timescales of these national strategies and guarantee the partner countries predictable financing over a period of 4 to 5 years.

The approach is adapted to suit the degree of development of the partner countries. The use of a mixture of arrangements and tools (e.g. sector-based budget support, budgeted aid, mutual funds, operational partnership agreements) aims to strengthen the use of the national systems.

Thus the ICPs guarantee inclusive partnerships as specified in Busan in 2011 and developed in Mexico City from 15 to 16 April 2014 at the high-level forum of the Global Partnership for Effective Development Cooperation. They lay down the framework for coordination and harmonisation with other donors’ action, as well as the involvement of the private sector, especially in the sector of vocational training, where Luxembourg often takes the leading role. They also include direct strategic support for civil society actors in the partner countries, to improve good local governance, to assist with the process of fiscal reform or simply to reach the most marginalised populations. 

Some new developments in 2014 should be noted with regard to this overall approach, which is intrinsically connected with the action plan for development cooperation effectiveness.

The identification of the first 4th generation Indicative Cooperation Programme between Luxembourg and Cabo Verde allowed these effectiveness principles to be followed even better. The identification procedure was very participatory both on the Cabo Verde side and on the part of the other donors, with the aim that the result be determined in genuine partnership and be part of the technical and financial partners’ and the Cabo Verde government’s overall efforts. Given the recommendations of the ICP evaluators, special attention has been given to defining the indicators in the ICP that enable its impact to be assessed. Since Luxembourg’s intervention in Cabo Verde sits firmly within the framework of sector-based programmes, it is possible to identify existing indicators at no additional administrative cost to the partner country.

Finally, it must be noted that Cabo Verde, as a middle-income country and member of ECOWAS, has an interest for the Luxembourg private sector. ICP 4 attempts to assist with this interest, without moving towards tied aid, especially in the renewable energy sector and in respect of the renewable energy vocational training centre built under the current ICP. 

Therefore, in the case of Cabo Verde, Luxembourg’s development cooperation is attempting to continue its commitment while also helping to diversify bilateral relationships, especially in economic terms.

This same approach was also attempted with another Luxembourg partner country, Vietnam. It was confirmed at the partnership committee in Hanoi in September 2014 that there would be no new ICP with Vietnam, another middle-income country. The time remaining until the end of 2015 must therefore be used by both sides to strengthen bilateral economic relations. Various methods are being used, including a programme involving the supervisory body of the financial sector in Vietnam, a project to be implemented with the Luxembourg Biobank and, finally, work on the green growth strategy in Vietnam. Luxembourg’s development cooperation will continue the implementation of the current programmes and projects until their completion and until relations are established, as part of this diversification, following the completion of the current ICP at the end of 2015.

It appears to be more difficult to diversify bilateral relations with another development cooperation partner country, El Salvador.

2014 has also seen, in addition to the case of Cabo Verde, intensive work done on identifying the new ICP with Mali. With the crisis over and taking into account the special situation of agriculture, especially the family situation, it was decided to focus the new ICP exclusively on rural development. In this case, too, the identification process has been very inclusive and participatory. There was also a need to align Luxembourg’s various agents with this objective and to ensure consistency and complementarity between them. The University of Luxembourg is a new partner in this ICP, as well as a Luxembourg based NGO, SOS Faim, for a in the rural microfinance sector. Malian civil society will also be one of the actors in the next ICP, as part of the efforts to support decentralisation. In order to manage this step, a member of the Luxembourg embassy in Dakar was assigned to Bamako for one year from May 2014. 

In order to guarantee consistency between actors in implementing an ICP, Luxembourg’s development cooperation will attempt to sign, with all the bilateral and multilateral actors on the ground, a memorandum of understanding which stipulates consistency and specifies the correct sequence of the results to be achieved. Follow-up occurs during the steering committees. An initial memorandum of understanding was signed with the partners in Senegal and will be implemented under the responsibility of the embassy in Dakar. A similar step will be carried out in Cabo Verde and Mali when the formulation of the programmes and projects is finalised.

Among the specific features to be noted in the ICPs with the partner countries in 2014, it must be pointed out that, in the case of Senegal, this year will enable the definitive introduction of the budgeted aid system, that is, support which follows the national procedures and is recorded in the national budget, but remains wholly traceable throughout the process. This arrangement has required adaptations to the Senegalese public finances but at the same time has been a partial precursor to what needs to be put into place next based on WAEMU’s decisions. Other donors, including the Member States of the EU, are following the introduction of this new arrangement with interest – it may be adopted by others. This work has enabled Luxembourg’s development cooperation to cooperate closely with the Court of Auditors and the Senegalese IGF (Inspectorate of Finances) and to see that intervention in sector-based programmes involves many more responsibilities and partnerships than the implementation of projects.

In Burkina Faso, 2014 also marked the switch from projects to sector-based programmes and joint funding. Due to its participation in the troika of donors to Burkina Faso, Luxembourg’s development cooperation has acquired increased visibility and responsibility. As a consequence of the political events at the end of October/beginning of November and the start of a phase of political transition, the implementation of the ICP slowed down a little, until it was certain that all the funds had reached their recipients. The procedure for identifying a new ICP began with the transitional authorities but will only be completed after the elections and the formation of the resulting new government.

With the other partner countries, such as Niger, Laos and Nicaragua, the implementation of the ICPs hit its stride in 2014, with no specific difficulties apart from the worsening security situation in Niger. This was when we took the fundamental decision to extend the programme with Nicaragua and to take over a major water, hygiene and sanitation project in Niger from Denmark when the latter withdrew from the country. This case demonstrated the technical and administrative complexity of delegated cooperation during the cycle of a project.

1. Kosovo has a special status, as do the Occupied Palestinian Territories