Country Portfolio Reviews: A tool for strategic portfolio analysis in German development cooperation

Abstract

Background and objectives The 2030 Agenda is making new demands on international cooperation International development cooperation is frequently criticised for being of limited effectiveness, and therefore doing little to actually promote sustainable development. It is undisputed that shortcomings in policy and institutional frameworks in partner countries, and inefficient structures and processes in international cooperation, prevent development cooperation from being more effective. In particular, partner country institutions face the challenges created by the growing fragmentation of development cooperation. More and more stakeholders are getting involved in development cooperation and playing an active role in more and more projects. In some partner countries many donors operate in the same sectors instead of complementing each other, which makes the task of coordination more complex for partner governments. In many cases, donors' working structures also act as a constraint on more effective development cooperation. Existing projects and programmes are continued for political reasons or due to the self-interest of implementing organisations, rather than in response to changing contextual factors. This means that the decisions taken are not always evidence-based. These challenges often prevent development cooperation from responding coherently and effectively to current development needs in a partner country, and prevent governments in partner countries from assuming ownership of joint development projects. Since 2015 the 2030 Agenda has provided a guiding framework for action by international cooperation. Through it the international community has agreed on a new understanding of development as well as 17 Sustainable Development Goals (SDGs). It emphasises the alignment of international cooperation with partner country priorities and needs. The Agenda aims to achieve a holistic perspective on development challenges, and to take greater account of the interactions between the social, economic and environmental dimensions of development than has so far been the case. Against this background, ensuring the relevance and ultimately also the effectiveness of bilateral development cooperation will require strategic steps to be taken on various levels. This will involve focusing bilateral development cooperation as a whole (macro level), ensuring strategic alignment and coherence at country level (meso-level), and enhancing planning and management at programme and project level (micro level). The BMZ has responded to these new demands on international development cooperation With this very much in mind, over the last few years the German Federal Ministry for Economic Cooperation and Development (BMZ) has launched processes of structural change for the strategic planning and management of its bilateral development cooperation. Alongside efforts made by the BMZ at the macro level to focus bilateral development cooperation, an increasing number of changes are being implemented at the meso-level. As also emphasised by the strategy paper Entwicklungspolitik 2030 ['Development Policy in 2030' – currently only available in German] published by the BMZ in 2018, rather than pursuing a compartmentalised focus on individual programmes and projects, it is envisaged that portfolio management will now focus on integrated and holistic country-level approaches. These changes at the meso-level reflect the understanding of development inherent in the 2030 Agenda. Be it the coherent design of country portfolios, focusing on macro-level development needs and trends in the partner country, responding to current reform momentum and government priorities, or including interactions between the social, environmental and economic dimensions of development – needed management decisions cannot be taken at the level of individual projects. They can only be made at the portfolio level. Accordingly, the BMZ has been seeking to strengthen the coherence of country portfolios through country strategies ever since 2012.