Executive summary

The political and economic context presents opportunities and risks for the Czech Republic’s (hereafter Czechia) development co-operation. This report assesses progress made since the 2016 peer review of the country. It highlights recent successes and challenges and provides recommendations for the future. The report was prepared with reviewers from Ireland and Italy and with support from the OECD Secretariat.

The Czech development co-operation strategy embraces a whole-of-government vision to development co-operation, aligned with the principles of the 2030 Agenda. With a 12-year timeframe and built-in budget flexibility, Czechia can provide long-term support to its partner countries and territories, while reacting to evolving contexts. It has also made progress in better connecting its national and international frameworks to reach the Sustainable Development Goals (SDGs), especially by strengthening links between development and sustainability. It could nonetheless better raise development considerations across the national agenda by assessing the impact of domestic policies on partner countries.

The fiscal and political situation presents a challenging context for the development co-operation policy. Czechia achieved its commitment of providing 0.33% of gross national income (GNI) as official development assistance (ODA) in 2022 only, spurred by a 167% surge primarily attributed to the costs of hosting refugees in the country. In a context of fiscal constraints, Czechia is yet to develop a long-term roadmap to sustainably maintain its ODA/GNI commitments.

Locking-in political backing for development co-operation beyond humanitarian assistance and the protection of human rights, a strong feature of Czech co-operation, is a challenge. Development co-operation is a significant policy tool with moral underpinnings as well as foreign policy and trade benefits. However, different programmes developed by ministries do not seem to complement each other or contribute to shared results, evident in the absence of unified branding for bilateral co-operation. In addition, despite progress in focusing the bilateral programme, geographic priorities only partially translate into ODA allocations. Further focusing the bilateral programme and showcasing cross-government results could help make the case for development co-operation in this context.

There is room to adjust the institutional set-up to harness the full potential of Czech co-operation. In particular, the ceiling on staff at the Czech Development Agency (CzDA), the inability of the agency to register fully-fledged country offices and a project centric approach hinder exploiting the full potential of Czech co-operation. The Ministry of Foreign Affairs (MFA) and CzDA also face limited administrative, managerial and financial capacities and the country presence could be further empowered. While the MFA has increased the number of development diplomats and local project co-ordinators, and embassies have more responsibilities through the programming cycle, the lack of delegation of authority to embassy staff adds an administrative burden to stretched resources.

Czechia can better capitalise on co-operation delegated by the European Union (EU) to reinforce the system. Czechia increasingly co-ordinates its development co-operation with European member states and the European Union to bring its programme to scale and is engaging responsibly in EU delegated co-operation. However, CzDA is unable to systematically leverage its enhanced expertise to consolidate its core capabilities.

Investing in strategic planning would help Czechia accelerate progress towards a more cohesive portfolio. Striving for an integrated approach, Czechia aims to bridge humanitarian and development portfolios, align capacity-building programmes with priority countries, and mitigate project fragmentation. Despite progress, some country portfolios remain fragmented. A more deliberate approach to integration beyond ad hoc synergies and strong investment in strategic planning would further reduce fragmentation within country programmes. Though findings from strategic evaluations inform decision-making, further investments in defining robust baselines and using results information would help increase effectiveness.

A clearer focus on poverty and inequality, and systematic mainstreaming of cross-cutting issues, would increase quality. While the 2030 development co-operation strategy strongly emphasises cross-cutting priorities, implementation varies greatly across implementing partners and countries. Checklists and standards in development are positive steps to build on.

Czechia could improve the effectiveness of its partnerships with civil society organisations and the private sector. While Czechia has a multi-annual financing task force, annual financing for implementing partners leads to a heavy administrative burden, start-up delays and shortened implementation periods. Development co-operation also remains overly tied partly due to its regulation and institutional features. There are opportunities to broaden the range of direct partners, especially local ones, which would benefit the efficiency, quality, and sustainability of its interventions.

Czechia has developed a pragmatic approach to test and improve instruments to engage the private sector. Presently, private sector actors primarily serve as ODA implementers, with significant ODA volumes directed through tenders and tied financial donations, a novel procurement tool stemming from the COVID-19 pandemic. In line with past recommendations, Czechia has also made efforts to engage with private sector actors as development partners - with uneven success. It has adjusted the Business to Business (B2B) programme to increase sustainability, but the new terms seem less attractive to private sector actors and the programme is decreasing in scale. The National Development Bank's (NDB) guarantee programme, established in 2018, holds potential for mobilising private financing but faces insufficient demand from Czech small and medium-sized enterprises and commercial banks.

A stronger development focus and greater mobilisation of private finance through the existing instruments would increase impact. Current selection criteria for tied financial donations and tenders lean towards product quality and cost rather than Environmental, Social and Governance (ESG) considerations. The B2B instrument has helped Czech businesses innovate in developing countries, but systematic local partnerships and stronger monitoring would support better development impact. Increasing outreach to private sector actors, including in partner countries, would help build more demand for the NDB guarantee. With greater expertise, NDB could gradually become an instrument for development co-operation.

The Development Co-operation Profile of the Czech Republic (https://doi.org/10.1787/2dcf1367-en) provides additional information on Czech’s co-operation. Czech practices to inspire other DAC members and development actors are described on the learning platform, Development Co-operation TIPs - Tools Insights Practices (https://www.oecd.org/development-cooperation-learning).

The DAC’s peer review recommendations to the Czech Republic

Strengthening the institutional set-up so it is fit for purpose

1. 1. Czechia should continue to focus its development co-operation to better reflect strategic priorities in its allocations and to provide a clear basis for communicating the added value of Czech development co-operation to the public and parliament.

2. 2. Capitalising on having met its national commitment of 0.33% of GNI as ODA in 2022, Czechia should agree on a long-term plan to maintain the ODA/GNI ratio at least at the level of the national target.

3. 3. Czechia should re-assess its institutional set-up and the functioning of an agency within it, including by:

   1. a. addressing constraints being faced by the Czech development agency (CzDA) in terms of number of staff and country presence and their implications for the institutional set-up

   2. b. delegating more authority to Czechia’s in-country representation

   3. c. building mechanisms to ensure that investments in EU delegated co-operation reinforce Czech bilateral development co-operation.

4. 4. Czechia should continue strengthening human resource capacities within the Ministry of Foreign Affairs and CzDA, including by investing in training programmes accessible to all staff, and optimising the balance between administrative and specialist skills, including by making use of external expertise when relevant.

Improving bilateral programming for development effectiveness

1. 5. Czechia should pursue its efforts to develop a more programmatic approach by developing country strategies that encompass all Czech instruments across government, identifying a limited number of long-term results it expects to achieve in each country, and by investing in strategic planning.

2. 6. Czechia should invest time and resources in defining robust country-level baselines and targets that can be monitored and used for decision making and communication to improve delivery of the bilateral programme.

3. 7. To strengthen the quality of its development co-operation, Czechia should bridge the gap between policy and implementation by:

   1. a. ensuring that all country strategies and development projects explicitly address poverty and/or inequality

   2. b. continuing to strengthen capacity in headquarters and use guidance to systematically consider good governance; human rights, including gender equality; and protection of the environment and climate.

Better leveraging partnerships with local and Czech CSOs and private sector

1. 8. To select the most relevant partners to achieve development objectives, Czechia should continue to make progress in untying its development co-operation across all instruments and reduce obstacles to partnering with non-Czech entities, especially local ones.

2. 9. Czechia should identify ways to provide multi-year funding, building on the work of the multi-annual financing task force and experience with humanitarian support, and to streamline procedures for multi-year projects.

3. 10. To increase the impact of its private sector engagement, Czechia should:

   1. a. strengthen the development focus of Business-to-Business (B2B) grants and create synergies between B2B grants and the National Development Bank (NDB) guarantee instrument

   2. b. mobilise private sector financing through the guarantee managed by NDB, including by increasing outreach to private sector actors, including those in partner countries

   3. c. build specific development expertise within NDB for development co-operation.