Interview with Anno Galema about the role of the public P, its challenges and positive developments

Anno Galema has the last years worked intensively on the policy side of the Facility for Sustainable Entrepreneurship and Food Security (FDOV) and with internal capacity development on PPPs at the ministry of Foreign Affairs of the Netherlands at the so called PPP Expertise center. He is also one of the initiator of PPPLab. When talking to him he has just started in his new function as First Secretary Food Security & Private Sector Development at the Dutch embassy in Kampala, Uganda.

What are you proud of having achieved as coordinator PPPs?

We as Ministry of Foreign Affairs have been able to enter new areas of PPPs in which we are more closely involved, and which better reflects the aid and trade agenda. From only having a set-up for business to business development (PSI) we now have an instrument (FDOV) which supports PPPs where business cases are integrated in value chain development, strengthening service structures and capacity development, as joint effort with NGOs, knowledge institutes, and public partners. Doing business in this way is changing the business environment in a way that I like. A lesson we have drawn from the earlier PPP’s of the Schokland Agreements is to be much more critical about who and what type of projects we get on board. FDOV is currently in that regard a much more focussed programme. We aim at initiatives that can substantially contribute to sustainable economic development.

How have you experienced the double role DGIS has in FDOV, both as a donor and partner in the PPPs?

We have indeed been sitting at both sides of the table which has made us realise that this hybrid role is sometimes difficult for others to understand. We believed that being a partner, next to being a financier has a lot of potential and that we can contribute more than just paying the bill. For example, we have an extensive network in the countries with donor agencies, multi-lateral organisations, NGOs, and government institutions. The ministry can also apply (economic) diplomacy at country level to address constraints that hinder partnerships or to look for supportive measures or policies. We tried to institutionalize this double role in such a way that it would not lead to too much confusion, but we noticed that many people are still a bit uncomfortable with our role. It has a lot to do with that ministry staff have different perceptions of what this role holds and the lack of capacity. A solution could have been to be stricter in assigning staff to a certain partnership in combination with more guidance but capacity might always be the most limiting factor. Despite very good examples where it worked out well, I think that we have not been able to live up to the expectation. Therefore it is likely that the partner role of the ministry will be revised and that we find other ways to be supportive to partnerships without being a formal partner.

The local public partner seems to have a small role in many of the project, so if the Ministry of Foreign Affairs is no longer a partner, how will the public role be fulfilled?

That is indeed a good question. There was also a more practical reason for taking up the public partner role as several partnerships had difficulty, at least at the beginning, to attract local public partners. Some PPPs would therefore not fulfill the definition of public-private anymore and we would miss an important stakeholder in the project. If we as the ministry of Foreign Affairs decide not have the public partner role anymore it would imply that the partnering organisations need to do more efforts in finding another public stakeholder to be involved. The public partners could be found among local government, national government, semi-governmental institutions and other public agencies. This will not be easy as many non-public partners consider the public sector as complicated and sometimes threatening. Also on the side of the local or national governments there can be legal limitations to become a partner and many governments are hesitant to sign papers like MoUs in the beginning of a project. Since this is a challenging issue we need to find a proper solution to this in the new FDOV calls.

What do you think are key challenges to achieve the potential of PPP’s and of FDOV?

As a government we have to be more supportive and clearer on what we want to achieve through the interventions and what impact we expect on the wider environment beyond the direct project boundaries. In terms of procedures, a challenge is the tension between what is required for a proposal and the unpredictability and complexity of the reality during implementation. For that reason we have shifted some analytic and preparatory work to the so called inception phase. However, we have noticed that the inception cannot make up for bad homework during the project preparation period. We have had too many aborted project that could have been avoided in case the preparatory work had been done more thoroughly. These experiences mean that we will be more critical, if is not good enough it does not pass. On the other hand, the criteria should not be too extensive and difficult to assess. It is better to have a few hard criteria that we believe are determining in the success of a PPP. One of the key criteria is to my opinion the implementing capacity of the leading partner. The leading partner needs to be locally present, with considerable experience on the ground. It is also important that the conceptualisation of the ideas takes place in the targeted country. Therefore, the quality of the partners and the partnership should be prioritised.

Another challenge that we experienced is the difference between NGOs and businesses in understanding and planning long term activities and results. We noticed that many businesses have the approach of what you can call ‘management on the spot’, while we ask for a multi-annual plan, a log frame with results and activities for 5 years. NGOs are used to this and are able to make a nice proposal with a proper log frame. Business plans are often more intuitive and stepwise. When needed businesses make a decision whether to go right or left and this clash with being constraint with pre-assessed plan and frameworks. Some of the businesses that are in the PPPs have had a hard time with what we were expecting in terms of long term planning. You therefore need to be able to combine these two worlds in a financial instrument like FDOV.

In what way do you think PPPs and perceptions about PPPs have changed and developed in the past years?

In working with the private sector in partnerships on their business terms instead of CSR, I think you can say that we were a bit ahead of the pack. The NGOs were not yet that far in working with the private sector and developing their business cases. Therefore a lot of noise came with complains about the subsidies going to the private sector at the expense of the NGOs. In the debate they were defending their position, following the changes that were going on the sector. At the same time several NGOs were moving ahead, they were already looking at contacts in the private sector, some were even further than we were. Now we are seeing more balance and that organisations are starting to re-orient themselves. It is important to create more space for the right NGOs to play a role. Some companies still have difficulty working with NGOs, their natural partner is more the knowledge institute than NGOs. But slowly, slowly they see that many of the NGOs are good partners for the job.

How did the perceptions and policy change within the ministry?

There is a more concise effort to look for quality, added value of PPPs and impact. We are beyond the stage where we promote the importance of partnerships, that message is accepted. Now is rather the time that we look at what we can reach with a certain partnerships. If we cannot achieve certain things, we need to reconsider if we should become partners. This is to my opinion a healthy development and it puts more emphasis on the importance of evaluations. If partnerships are so important and central; what have they actually achieved? Has the partnerships been the most important way to realise the result? What is the added value of a partnership and what makes them effective? The coming years increasingly more information will become available, from impact evaluations and from the work of PPPLab which goes deeper into certain aspects of the partnerships. We will in this way create a knowledge base which can show evidence regarding what we can and cannot reach in terms of PPPs.

What is your personal view on the development of PPPs and of FDOV?

I look at partnering as a natural development. In my function in The Hague my job was to design an instrument with guidelines and criteria which are partly politically driven. You hope that the design can lead to implementation of the right type of interventions and partnerships. I am now in my new function on the receiving side where local dynamics prevail. What I see is that inclusive business initiatives of companies, enter new markets in developing countries, and they have difficulty in reaching the lower end of the market, the small producers and consumers. To get help with this they start looking for partners. This is what I see as a natural flow of partnering, first experience the need and then look for partners rather than from a pre-determined structure which has as goal ‘we want to have partnerships’. It would be better if you can incorporate this kind of natural partnering need in the design of the instrument. It can partly be addressed by building in some flexibility into the instrument. For example in the application process there is now the requirement that there should be an established partnership and that this partnership is thereafter fixed for the subsidy. It might however be more interesting to identify one strong lead partner and through the process this organisation will find the right other partners. Additionally to this you should have the flexibility to allow partners to leave and enter throughout the project. In this way you are be able to respond to developments that were not foreseen.

What will be your focus in Kampala? Will we still see you ‘around PPPs’ and PPPLab?

My work here is very much related to the ideas behind FDOV, to food and nutrition security and private sector development. Uganda is a so-called ‘from aid to trade country’ and we are gradually phasing out with aid and increasingly moving towards a trade and investment relation. You can say that the ‘from aid to trade’ approach is to a large extent something that is determined by us because I do not expect that in 4 years’ time all systems and institutions in Uganda are in place to ensure a pure trade relationship which also benefits the poorer part of society. However, Uganda is doing reasonably well and there are more and more opportunities for the private sector. We work with businesses, for example in dairy, with local processors and Dutch companies by organizing and training farmers in using new technologies, stimulate service provision to farmers etc. These efforts are done to develop the value chain. Generally, we have made the shift to work with farmers that want to be a farmer because they see opportunities and not because of a lack of opportunities, as a default. This does not mean we have to move away from the smaller farms, because they can be very innovative and entrepreneurial. But there is also a group of farmers that will not pick up on developments. Some of them will find employment in the expanding sector but not all. Our policy of ‘leave no one behind’, present us therefore with a great challenge.

Any last words?

When it comes to PPPs, people should not see the PPPs as a way of funding but as a way of working in order to achieve things that you can otherwise not achieve.