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A guest blogger's report of discussions at a Max Foundation-IRC event.
In a context of penny-pinching governments, withdrawing donors, and a growing consensus that trade is more effective than aid, the question of ‘how to leave’ becomes increasingly pressing for all involved in the development sector. On the 31st of May, the Max Foundation and IRC co-organised an event that aimed to deepen understanding and share experiences on the reality of leaving sites where WASH (Water, Sanitation and Hygiene) programmes have been implemented. The event, consisting of a panel discussion and question round, aimed to inspire and inform different actors on pathways towards sustainability and domestic resource mobilisation when aid ends. For those not working in WASH, this thematic focus is, I think, not a reason to stop reading. On the contrary! This since WASH is just one example of a sector dealing with, and adapting to changing circumstances, and these circumstances apply to all parties working in the development sector.
The vocabulary of leaving: exit, transition or phasing out?
On the panel were Pim van der Male, Kate Pearson and Patrick Moriarty. Mr. Van der Male is Senior Policy Officer Water Management at the Dutch Ministry of Foreign Affairs. Ms. Pearson joined The Max Foundation in April 2017 as Director of Business Development and Partnerships. Mr. Moriarty is CEO of IRC. In brief, a great diversity of views that made for an animated discussion.
The main point of disagreement concerned (no less than) the meaning and relevance of the concept ‘exit’. One of the panellists embraces it, one transforms it into ‘transition’ and one wholeheartedly rejects it. “The Max Foundation fully embraces the concept of exit”, explains Ms. Pearson. “Max is all about effectiveness, about effective altruism. In maximizing impact, it is essential to focus on how and when we can move on”. An important part of the work of Max consists of contracting local organisations to provide access to water and latrines. Educating local parties in managing facilities is a key objective from the start. This to allow the transfer of management of the facilities to local communities as soon as possible. “From the beginning we ask if, and when we can leave.” In brief, for Max, the exit strategy is not a necessity that flows from ending aid. It is an integral part of the business model.
In his position as civil servant, Van der Male’s relation with leaving has been more ambivalent. The necessity to think about and define exit strategies has been a political reality; the result of changes in the Dutch political landscape. Concretely, by and around 2020, the Netherlands will have largely left Ghana, Kenya and Indonesia. For Van der Male, the real challenge is to respect the political agenda without putting the achievements of the past and goals for the future at risk. He prefers speaking of ‘transition’ rather than ‘exit’. Transition puts an emphasis on the process of withdrawal rather than the act of leaving. It implies a process in which, over time, responsibilities are transferred to local or international partners. A process that, as Van der Made stresses, “only works if it is flexible, and refrains from being overly rigid, both in terms of time and budget. A transition strategy that is too rigid does not work. It is vital that our decisions are flexible and sensitive to local circumstances”.
Patrick Moriarty, CEO of IRC, is even more critical of the concept of exit. He explicitly questions the relevance and usefulness of an ‘exit strategy’. For Moriarty, development is not an industry of short-term wins but of long-term commitments. A focus on leaving is hard to match with this conviction. “Exit puts emphasis on the wrong aspects of development and change. We should focus on the mission, the goals we aim to reach, and adapt our presence accordingly.” Focusing on exit is like putting the cart before the horse.
Yet, Moriarty’s scepticism towards exit strategies may perhaps be best understood in the light of IRC’s changing organisation. Over the last decade IRC has drastically transformed its organisation, essentially from a project organisation into a social enterprise. Since 2007, IRC identified 6–7 focal countries where local country offices were opened. Slowly scaling down on project management and reducing their staff in the Netherlands, while increasing their involvement locally by permanently hiring local experts. While doing so, IRC is becoming a global network of ‘knowledge hubs’ that consist of, and are consulted by local parties.
The fact that all three organisations differ strongly in their approach towards exit does, I think, not mean that there is nothing to generalise or nothing to learn. What stands out is that for all three panellists, thinking about exit starts with awareness of the nature of their organisation. The ‘who are we’ defines the ‘if and how we exit’.
Apart from more stringent financial conditions and growing credibility of the market in achieving development, sustainability is another reason to take exit (or transition) strategies seriously. When the plan is to stay, a programme aims at dependency and cannot be reconciled with sustainability. Both Mr. Van der Male and Ms. Pearson clearly embrace this argument. “It is crucial, already during the implementation, to think of a transition strategy and thus to focus on sustainability. When the decision is taken to leave a site, an area or a country, it is crucial to look for synergy with other programmes. In this context, it is essential to look for synergies between programmes, which alleviate the impact of exit”, Van der Male argues. “One way of doing so is by agreeing on a sustainability clause with contracted partners. That means that from the start, transition is already an integral part of the programme.”
Yet the approach of IRC proves that staying does not imply building dependency and that sustainability does not presuppose exit. Exit is no longer an issue when the organisation is turned into a locally rooted social enterprise.
Local sources of capital
Despite disagreement over the concept of exit, there was broad consensus among the panellists that more work needs to be done to tap into local sources of capital. For both the success and sustainability of WASH programmes, it is essential to join forces with local entrepreneurs or citizens who are willing take initiative and responsibility.
One important factor that hinders local investment is a lack of access to financial instruments. When local ownership is a precondition of transition, the lack of access to financial resources can stifle the process. Finding local sources of capital is also integrally connected with sustainability. “The WASH sector is still highly dependent on foreign investment and donors, which makes programmes vulnerable. For example, a change in the political landscape of a donor country can easily put access to WASH facilities at risk. Second, there still is an enormous funding gap in the WASH sector, and one method to push for closure is by realising local investments.” Improvements in economic conditions may be a reason why donors decide to phase out, and at the same time provide the potential for domestic sources of financing. This is a point Mr. Moriarty wholeheartedly affirms. “The sources of local philanthropy are growing and IRC is increasingly shifting towards local sources of funding.”
Refining our understanding of trade
Another important matter in a context of exit is the way in which we understand trade. Where transition implies reducing income through transfer, trade must serve as an alternative source of income. “We (still) tend to focus on trade with donor countries”, Van der Male argues. “Yet naturally, the most important and promising trade relations are those with surrounding regions and neighbouring countries. Building sustainable independence through trade must therefore focus on strengthening local and regional economic systems.”
For more information on the event, including the presentations and a video, see the blog "Should I stay or should I go?".
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