Transformational Diplomacy after the Cold War: Britain’s Know How Fund in Post-Communist Europe, 1989-2003

This is the long awaited history of the Know How Fund (KHF) produced by the recently retired Foreign and Commonwealth Office historian Keith Hamilton. Like other FCO ‘internal histories’, it was initially written ‘to provide background information for members of the FCO, to point out possible lessons for the future and evaluate how well objectives were met.’

We are fortunate that this one has been released to the general public because it is based on official papers which would otherwise have remained classified for many years to come. For information on the contents of the book and its author, together with a preview of the first 30 pages, see here.

The ‘Know How Fund’ is short-hand for a programme of technical assistance conceived in the FCO to bring to fruition British prime minister Margaret Thatcher’s dream of transforming the countries of the former Soviet empire, including Russia itself, into free market economies with liberal-democratic political institutions. It was not, therefore, a conventional bilateral ‘foreign aid’ programme with an emphasis on economic development: instead, its chief thrust was political, the more so because of the geographical proximity of these countries to western Europe and the massive security threat they had long presented. The KHF was also driven by an anxiety not to be outdone by the Germans and the Americans in the struggle for influence in them and for commercial advantage in their new markets. It took shape in programme teams in London, inter-departmental Whitehall committees, and project teams in British embassies (some newly opened) in the region – all assisted more or less ably by an army of non-government advisers, from over-paid bankers and management consultants to police officers and employees of the BBC. It started with a focus on Poland and ended with a concentration on Russia.

Keith Hamilton’s authoritative study provides many insights into the strengths and weaknesses of the KHF and the circumstances in which it prospered and those in which it did not, and it will therefore be of great value to those with an interest in how to conceive and administer this sort of programme. It provided, he concluded, ‘a model for the later deployment of technical assistance in support of specific foreign policy objectives.’ (With the benefit of post-2008 hindsight, it might however be regarded as laughable – if in principle admirable – that so much of the British effort was put into giving advice on best practice in banking and financial services.) The book will also be very useful to students of British relations with the countries concerned over this recent period. Inevitably, it contains a great deal of administrative history (and a plethora of abbreviations). We learn how the programme was set up and about the tensions which developed over its aims between the ‘Diplomatic Wing’ of the FCO and its foreign aid wing, tensions later magnified when Tony Blair came to power in 1997 and made the latter – with its ‘pro-poor agenda’ – into a separate department (DfID). There are also many summaries of the contents of key internal documents. Some will find this sort of thing rather dull but it is all an important part of the record.

‘Transformational’ diplomacy inevitably requires the injection of some funds into a target country even if the emphasis is on technical assistance rather than direct economic assistance or financial relief. This carries a small risk of propping up its creaking conservative regime. A programme conducted in a manner too patronising in tone or clumsy and inefficient in implementation might carry a still greater risk of this sort by stimulating nationalist feelings. To avoid or at least minimise these risks requires first class local knowledge and wide-ranging local contacts – in short, suitably staffed embassies. What is their ideal role? They identify the right projects and monitor their progress; they also provide safe platforms from which experts can operate and have the professional expertise to soothe the reactionaries who might otherwise be disposed to sabotage the desired ‘transformation’. Not surprisingly, by 2002 the British embassy in Moscow had a large KHF section with locally engaged Russians among its staff. When the locally unpopular step has to be taken of running down a programme as a whole and the thoughts of those at home have already turned elsewhere, the embassy might well find actual project management delegated to it as well, as happened to the British embassies in the Baltic republics, the Czech Republic, Hungary, Poland, and Slovakia after 2001. This is the sort of interesting fact with which this important, well balanced, and predictably well written book is crammed. I salute Dr Hamilton for giving it to us.