Capacity Development in Europe & CIS

The financial crisis: an interview with Kori Udovički - 26 March 2009

Assistant Secretary-General, Assistant Administrator of UNDP and Director of the Regional Bureau for Europe and Commonwealth of Independent States - 26 March 2009

Watch excerpts from the interview!

• The financial crisis – how UNDP can help
• Supporting governments to protect society's most vulnerable
• Each country is unique and requires specific, country-led solutions

Read the full interview!

Question: What reassurances can you give to the countries in our region regarding the current financial crisis, and how can UNDP help? How does this current crisis change our work? What state capacities have to be reinforced to enable countries to respond to the crisis? 

Answer: The current crisis is extremely worrisome, and frustrating, because now there are fewer resources to respond, and to help countries cope. 

Right now, we need to be able to shift some of our resources to make sure that we can respond to immediate needs. We also have to approach our partnerships slightly differently than before. The global response to the crisis, and the funding that comes with it, will be channeled primarily through the international financial institutions – the International Monetary Fund, the World Bank, and in our region, probably also the European Bank for Reconstruction and Development. Therefore we need to think about how to best partner with these organizations, in ways that will allow us to work in our niche areas and benefit our partner governments. 

There are two kinds of capacities that governments will need now more than ever in order to respond to the crisis. One is macroeconomic management – this is going to be a really special skill. It is much easier to stop hyperinflation and to drive forward growth than it is to respond to a reversal of capital inflow pressure that a lot of our region has benefited from until now. This is not our cup of tea. We may try to collaborate with the international financial institutions in this area but where we can really help, and where we can really line up all of our capacities to help our governments to strengthen their capacities, is in making sure that whatever funding does go now to respond macro economically to the crisis, that some of it goes to protect the most vulnerable, and in a well targeted manner – or to improve the targeting of already existing mechanisms. 

This is in general. In particular, we need to advocate and show that helping the vulnerable is not just cash transfer schemes, which tends to be the response in our region. We can, and we should show that we can, make sure that these same resources go much further, and mobilize local resources by actually putting together the effort to assure the continued flow of income of the poorest and most vulnerable by ensuring temporary employment, ensuring productive activity, ensuring even an improvement of the environment, or of infrastructure where the needy may live. This means public works projects or the strengthening of already existing employment generation programmes. From what I can tell, this is not the immediate thought and response of most governments to the current crisis. They may not feel prepared for the massive mobilization of grassroots populations and local governments that is needed to do this properly. We can help there.  

Q: How do you see UNDP changing because of the focus on capacity development? Where are we in comparison to where we need to be? 

A: The fundamental philosophy of capacity development is in the fundamental philosophy of how UNDP works, which is that development cooperation and assistance is about helping governments do what they want to do, and at the time that they need it. They usually already know what they want to do, but maybe not necessarily how to do it, and that is where we come in. 

A very fundamental difference in the capacity development approach and in what I would call the more traditional technical assistance and development assistance approach is that we don’t come with ready made views and solutions about what a country, a government, a local community, should be doing. This is very important.  We need to maintain that approach, and not bow to pressure that could move us away from that. 

In the post World War II decades, there has been this continued pressure and effort to get the right answer, and to determine what countries should be doing.  Yes, we need to understand the importance of scientific inquiry and we need to know what research shows. But it comes after the fact. We are now facing a crisis, similar to the Great Depression. When Roosevelt came with the New Deal, it was only five years later that people could analyze it, understand what he did, and why it worked. 

Analytical and scientific thought doesn’t come before the facts. It studies the facts. It studies what people did, and how policy makers responded to a situation. Sometimes we do not have the time, or the luxury or the resources to study what the right response should be. And this is one of those times. We are naïve if we think that whatever we are doing now based on the science of responding and managing a macroeconomic or financial crisis, is actually going to give us all of the answers. Only years from now will we be able to analyze what we did right, what we did wrong, what was new and why it worked. 

UNDP needs to be working on being able to help, to foster, to build capacities, given the circumstances that are actually specific and unique, to this one case – it can be the crisis, or it can be building a well known institution in a new country. Every new country is a new set of circumstances. And this institution is going to work, if it is not transplanted, if it is in fact customized, and built from scratch, on the basis of whatever the specificities of the country.