Swiss aid head says too much focus on results could lead to risk aversion

Manuel Sager, director-general of the Swiss Agency for Development and Cooperation. Photo by: UN Economic Commission for Europe / CC BY-ND

NEW YORK — The Swiss Agency for Development and Cooperation has been pushed to adopt a more results-based focus in its work, but its Director-General Manuel Sager told Devex he was concerned the growing emphasis on outcomes could cause the agency to only look for easy-to-measure opportunities, leading to risk aversion.

The public mood and current politics mean the agency is faced with a challenge around the measurement of its work, but the constraints don’t quite align with their desire to work in some of the most challenging places in the world. About 50 percent of its budget goes to fragile countries to help tackle unemployment, provide stability and create decent jobs.

“More and more, and legitimately so, the public but also the politics demand results,” Sager said in an interview at the World Economic Forum Sustainable Development Impact Summit. “The more we work at a systemic level trying to help governments fight corruption or improve educational systems, health care systems, it’s very difficult to align with country indicators that would allow you to come up with the exact results. While I fully recognize we are spending taxpayers’ money and we need to be accountable…there are certain risks involved in that — becoming risk averse and concentrating only on things that can be measured.”

The agency’s strategy is framed by an ideology of “where can we provide solutions where other countries may not go” and how can they harness the particular skills or benefits of Swiss society, people and businesses. The agency is focused on fragile states, protecting global public goods, supporting youth skill building and employment, and humanitarian assistance, Sager said.

The agency, which has an annual budget of 2.5 billion francs ($2.58 billion), has four primary priorities. The first is working in fragile contexts where government structures and institutions are weak, primarily in sub-Saharan Africa, but generally in places that are often underserved by the public sector development community. A second is working on educational and vocational training for young people and trying to create more job opportunities for youth. It also works with the private sector in mobilizing resources in the form of finance or knowledge, often to preserve global public goods, and about 20 percent of its budget is spent on humanitarian assistance.

Outside of the humanitarian space, the agency does not implement many of its own programs but relies on NGO partners, be they Swiss, local or international.

One area where the agency is expanding its work is on youth employment. The agency intends to invest 50 percent more on youth employment issues in the next four years, Sager said. It is taking lessons and frameworks from a successful vocational education and training program in Switzerland and adapting it for programs in a variety of countries. It is also looking at how to not only provide training but how to spur hiring so there are jobs for youth.

The agency is also exploring some innovative finance products, including social impact incentives, which would help de-risk investments in social entrepreneurs and allow them to reach profitability more quickly.  

But dynamics in the aid community and in geopolitics shift they are creating some challenges. In Switzerland, civil society is concerned about a push to work more with the private sector both out of a fear that it will mean lower government financial commitments or less funding for them.

And while two-thirds of the population supports foreign aid at least at current levels, according to surveys, Sager said, and the parliament has committed to spending 0.5 percent of the gross national income on development assistance, the agency still struggles to get its budget passed.

“Budgets are always under pressure. Development finance is in competition with other budget items – agriculture, military, education,” he said, adding that the public support is “not always translated to the political realm.”

Recently the agency is also contending with a mounting pressure to frame aid as a solution to the migration situation in Europe and measure the success of its programs by the rates of migration, which Sager said was worrying.

“Politicians want to see a stronger link between migration and development policy, that our work has a direct impact on migratory flows,” he said.

While the agency does work to tackle some of the root causes of migration by helping countries to create more stable and peaceful societies and by equipping youth with job training and helping build economies, development cooperation can’t solve all migration problems, he said.  

“Our concern is that our work is measured by number migrants who come to Europe and of course that evaluation doesn’t work. It’s a lot more complex,” Sager said.

The agency today has partnerships with approximately 30 private sector companies, mostly Swiss companies, but the agency is looking to do more, particularly in the poorest countries or places where there is, or has recently been, conflict.

Most of the partnerships are focused on preserving five global public goods: water, food security, climate change, migration, and health, particularly addressing pandemics. With Nestlé, for example, the agency is working to reduce the amount of water used in its agricultural supply chains, and in India it is partnering with a cement company to reduce carbon emissions and working with reinsurance and satellite companies on improving access to and the response time of disaster insurance for smallholder farmers.

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About the author

  • Adva Saldinger

    Adva Saldinger is a Senior Reporter at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.