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How will aid fare with the financial crisis… are we also
heading for an aid crisis? Are we prepared to balance this major challenge
with other continuing hurdles, such as conflict and fragility, or promoting growth for
the poor while protecting natural resources? Do partner countries have the
capacity they need?
Go directly to: Feature article
OECD countries have pledged to abstain from trade protectionism as
part of a concerted drive to shore up the world economy and combat recession.
They also have reaffirmed their commitments on aid to developing countries. On November 24, at a meeting of the OECD’s Executive Committee in
Special Session, OECD countries agreed to sustain recent
commitments regarding open trade in support of developing nations, promising, “Within the next twelve
months… [to] refrain from raising new barriers to investment or to trade in
goods and services, imposing new export restrictions, or implementing World
Trade Organization (WTO) inconsistent measures to stimulate exports.” They also
committed to making efforts to close the Doha trade negotiations, reaching
agreements that would lead to “an ambitious and balanced outcome.” In
parallel, DAC donors responded positively to a call from OECD Secretary-General
Angel Gurría and DAC Chair Eckhard Deutscher for adherence to an Aid
Pledge designed to maintain development assistance commitments to
developing countries: “DAC Members reaffirm their exising aid commitments and
agree to maintain aid flows at levels consistent with those commitments.” The
performance of DAC donors against this pledge will be monitored by the OECD. Welcoming both commitments, Mr. Gurría commented, “We need to keep
markets open while giving help and support to those worst hit by the
financial and economic crisis. These twin agreements represent a significant
commitment on the part of governments in the face of an economic slowdown that
will lead to sharply higher unemployment in developed countries." |
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Highlights from Doha Conference The Doha Declaration fully recognises the
OECD’s key role in tracking aid flows and helping improve aid effectiveness. Discussions during the Conference outlined
the need to strengthen aid delivery practices and build the use of local capacity to improve the effectiveness of aid. The Accra Agenda
for Action (AAA) was referred to throughout as a key reference on aid
management principles and practices.
In the session on aid predictability, the
panellists highlighted the importance of the OECD-led Aid Pledge. They agreed
that there is no excuse – neither technical nor political – for failing to
meet aid commitments and fill in funding gaps. The importance of
communicating the importance of predictable aid to donor constituencies was
also emphasized. Eckhard Deutscher noted that aid commitments and incentives
would be raised during the Senior Level Meeting at the OECD, where donors
would be asked to give clear indications of what they would be delivering vis
a vis their aid commitments, and when. Panellists in the session on Mobilizing
Domestic Resource Revenues stressed the need to be equitable as well as
efficient in raising revenues if developing countries are to bolster their
legitimacy in the eyes of their own people. They noted that aid should be
increasingly channelled to improving domestic revenue, and that the political
price of failing to do so could be high. At another side event exploring the linkages
between the Accra High Level Forum on
Aid Effectiveness in Accra and the Doha meeting - From Aid Effectiveness to
Better Financing for Development (organised by Reality of Aid) the positive
outcomes from Accra in a number of key areas – e.g. transparency, use of
country systems, the inclusion of CSOs, global funds, and the focus on mutual
accountability – were noted. The panellists noted, however, that challenges
remained in areas such as conditionality, tied aid and technical assistance. It was recognized that while aid is only one
aspect of development, for countries to graduate from aid dependency the aid
effectiveness agenda is crucial. The AAA contributes by broadening the agenda
to other stakeholders, including CSOs, and to their demands for broader
development effectiveness. In this context, it is particularly important to
ensure that the links between Accra and Doha – between the quality and
quantity of financing for development – are maintained. The subject of financing for gender equality
was also on the agenda at Doha. Eckhard Deutscher reminded participants to a
special side event of the importance of mobilising women’s potential for economic
growth and development. Citing positive undertakings by several countries in
response to the Danish
Government’s call to action on MDG-3, Deutscher announced that in 2010 OECD will
produce a special report which will assess progress made in the levels of aid
focused on achieving gender equality and women’s empowerment. Official
development assistance (ODA) provided through international organisations
(often referred to as multilateral aid, in comparison to bilateral aid, most
of which is supplied by one country to another) amounted to some USD 28
billion in 2006. This figure represents around a quarter of the total gross
ODA provided by DAC member countries (USD 117 billion). An additional USD 11
billion is channelled through multilateral organisations in the form of
grants to trust funds and other earmarked contributions. In total, this puts
the multilateral system at over a third of gross ODA, reflecting bilateral
donors’ view of multilateral organisations as knowledgeable, neutral and
generally effective development actors. In
recent years, however, the multilateral aid system has become increasingly
complex, with a growing number of agencies and instruments in operation. Some
263 international organisations are now eligible to receive ODA, while in
1940, only 15 of these organisations existed. This growing complexity has
brought multilateral aid allocation processes and performance – as well as
their ability to adjust to this century’s development challenges – under
scrutiny. In
response, OECD’s Development Co-operation Directorate (DCD) has produced the 2008 Report on Multilateral Aid (available
in early 2009). This report maps out the current landscape of multilateral
aid – mainly from DAC member countries – including their financial flows and
multilateral aid strategies and policies. It also touches upon issues such as
fragmentation, multilateral effectiveness, reform processes and partner
country views. The Report aims to fill existing gaps in knowledge on the
multilateral system, guiding future policy discussions and informing dialogue
about the role the bilateral donors want the multilateral system to play. Gross ODA by DAC member countries 1987-2006 Gross
disbursements (in constant USD million)
Source:
DAC Aggregate Statistics. Some of
the key lessons emerging from the Report include: ·
The overarching aim of multilateral engagement is
poverty reduction and achievement of the MDGs. ·
Among DAC member countries there is room for
rationalisation of the number of multilateral partners and a more focused
approach to interacting with them. ·
For countries’ overall multilateral aid strategies to
be useful in allocation processes, they need to be followed up by
implementation reviews. ·
Promoting greater coherence among the ministries
responsible for different aspects of multilateral aid remains a challenge for
DAC member countries. ·
Just 5 of the 263 ODA-eligible agencies account for
two-thirds of all multilateral funding, while over 100 agencies account for
only 2% of the total. ·
There is duplication of effort in DAC donors’
multilateral assessment approaches, although work is underway to increase
joint efforts; relying more on multilaterals’ own reporting systems and
improving mutual accountability can help. ·
Reforming the multilateral system is high on DAC
member countries’ agendas, and will be for some years ahead. Supporting security
system reform: The Bolivia case In Bolivia, after months of strife and
deadlock, a new constitution is set to go to the people on 25 January 2009.
If passed, it could signal progress for the peoples of this stunningly
beautiful landlocked country. Since coming to power in 2005, Bolivian President
Evo Morales – of Aymara descent – has changed the balance of power in the
country in favour of the indigenous people (60% of the population). The
Morales government, however, has also clashed with the country’s eastern
region over economic policy and regional autonomy questions. In addition,
widespread production of coca remains a contentious issue for Bolivia and the
international community. The leaves of this tree have been chewed for
centuries in the Andes to stave off hunger and are also popular as a tea. Yet
because they are also used to produce cocaine, exports of the leaves beyond
the region have been banned since 1961 by a UN anti-drug convention. With this mix of tensions – over the
constitution, regional issues, ethnic relations and coca leaf production – a
well functioning and disciplined security system is essential to provide law
and order, fair representation and justice for all citizens. It is
encouraging to note that Bolivia has made progress in recent years in
developing its security system, in making its army, police and justice
systems more accountable and representative, and in ensuring better oversight
and representation in parliament, civil society and academia. To bolster the capacity of the security
system, the Bolivian Minister of the President, Dr. Juan Ramón Quintana
Taborga, requested that the OECD DAC conduct a capacity building consultation
in security system reform (SSR), involving relevant government ministries,
civil society and donors. Thanks to support from the Netherlands and the UK, the
consultation took place in La Paz in October 2008. In a recent letter to
the Bolivian Minister of the Presidency, DAC Chair Eckhard Deutscher noted:
“The aim of the consultation was to build SSR capacity at the country level
amongst donors and government so as to ensure that the OECD SSR norm-setting
agenda is properly transferred from headquarters to the country level.” Based on the consultation, key strategic
SSR recommendations have been shared with the Bolivian government; these
include the need to develop a Bolivian vision of security, a revised SSR
action plan (based on the Bolivian national development plan), and more
effective donor engagement, including an effective SSR donor-government
co-ordination mechanism. Issues relating to human resources needs,
legislative priorities and the role of the media were also addressed. The Bolivia exercise was the fourth such
consultation in the OECD SSR norm-setting process. Similar consultations have
been carried out in Burundi (December 2007), the Central African Republic
(January 2008) and Guinea Bissau (March 2008), actively supported by DAC
members and firmly grounded in DAC guidance:
Security
System Reform and Governance
(2005) and Handbook
on Security System Reform: Supporting Security and Justice (2007). Natural resources in a changing
context Natural resources have huge potential to
help lift people out of poverty and enhance progress toward the achievement
of the Millennium Development Goals (MDGs). Despite the current global
slowdown associated with the financial crisis, demand for natural resources
is expected to rise over the long term as emerging economies such as China
and India drive a long-lasting increase in demand for oil, minerals, metals,
timber and agricultural products. This trend offers prospects of increased
revenues for countries rich in natural resources, in particular the
low-income countries, where natural capital constitutes one-quarter of the
wealth. These nations will turn to natural resources as a potential source of
economic growth, employment and fiscal revenues. Mining, for example, already
accounts for 43% of government revenues in Peru and for 22% in Chile. Natural resources, however, have features
that can make sound management particularly difficult and undermine good
governance. For example, if these are de facto “open access” resources, like
grazing lands, fishing grounds or state-owned forests, users may have no
incentives to manage them in a sustainable way and invest in their
maintenance. Poor people, whose livelihoods depend disproportionately on
common pool resources, will be most affected by the resulting degradation.
Governments must, therefore, put in place regimes that attribute appropriate
access and user rights in order to help sustain natural resources over the
long term. In many resource-abundant countries,
highly valuable resources like diamonds and oil tend to fuel corruption, as
they can be easily controlled and monopolised by factions or elitist groups.
In these cases the benefits accrue only to a small group, without
contributing to the country’s growth, let alone helping to lift people out of
poverty. Competition over natural resources has
also contributed to social tension and violent conflict in many countries; a
recent example is the conflict that recently flared up in the Democratic
Republic of Congo, where warring parties compete for control over gold,
coltan and casserite. The situation was aggravated by dramatic rises in the
price of casserite, which is used for consumer disposables such as tin cans,
driven by increasing demand from industries in Europe, North America and
China. Conflicts also tend to arise if indigenous populations whose
livelihoods depend natural resources, for example forests and fishing
grounds, are driven out by concessionaires who have been granted exploitation
rights by the government. For these reasons, governments pursuing
broad-based economic and social development need to secure poor people’s
access and user rights over natural resources on which their sustenance and
incomes depend. Giving poor people a voice, shifting control over natural
resources to local communities, and helping them to develop capacity for
sustainable natural resource management are key approaches.
Norway: An
exemplary donor Norway
committed USD 3.7 billion to development assistance in 2007, a
substantial increase over the previous year. It now gives the world’s highest
level of official development assistance as a percentage of gross national
income (0.95%). The DAC commends Norway for budgeting to reach its 1% ODA/GNI
target in 2009 in a climate of global financial crisis. Norway is also
consistently at the forefront of donor efforts to improve the international
aid system, as well as its own development policies and programmes. It
supports aid effectiveness and its flexible approach to development
assistance enables quick reaction to changing situations and new
opportunities. Read
more when the full report is released Dec. 15. Moving forward
post-Accra: The DAC Working Party on Aid Effectiveness At the first Working Party meeting since
the Accra High Level Forum, almost 70 delegations of members and observers
exchanged comments on moving forward post-Accra, focusing on two key areas:
the work plan for the coming years, and on the renewal of the structure of
the Working Party. With regards to the work plan, the
Working Party agreed that: ·
Implementation of the Paris Declaration and the Accra
Agenda for Action at the country level is the priority. ·
Further work is needed by the Working Party on a
number of topics, most of which can be clustered into four main areas:
ownership and accountability, use of country systems, transparent and
responsible aid (including predictability and division of labour), and
monitoring and evaluation of the progress made. ·
For each cluster, one or several members were
identified to set up a team and define concrete outputs and deliverables with
deadlines. The structure of these clusters will be simple and loose, and will
be adapted to the already existing working groups. ·
Additional initiatives, such as the proposed partner
country Alliance on Capacity Development (see Feature Article) or work on
emerging South-South co-operation, are also welcome. On the renewal of the structure, it was
agreed that: ·
Membership will be extended to make the Working Party
more inclusive and diverse. In addition to the three existing categories
(donors, recipients and multilaterals), two new ones will be added: countries
that both receive and provide foreign assistance; and institutions representing
civil society organisations, local governments, private foundations and
parliamentary associations. The donor category will also be extended beyond
DAC members. ·
The Working Party must, however, be kept manageable:
total membership must not be much greater than at present. A smaller
executive committee will be set up to do the groundwork on decisions by the
larger group and to co-ordinate the work of the clusters. ·
The partner countries will organise themselves in a
fashion similar to the organization of the bilateral donors through the DAC;
new initiatives will be needed to make this operational.
The
OECD convened a meeting on Financing and Pricing Water in the
context of the recent Global Forum on Sustainable Development (1-2 December
2008) to look at the roles of government, the private sector and civil
society in managing this key resource for human and economic development.
Participants in the meeting discussed the policy conclusions and
recommendations emerging from a two-year OECD Horizontal Water Programme with
a view to preparing it to be launched at the 5th World Water Forum, which
will be held in Istanbul, 16-22 March 2009. Two
DAC-STAT products were presented at the meeting: Measuring Aid to Water
Supply and Sanitation: This note
contains statistics on Official Development Assistance (ODA) for water supply
and sanitation. It presents the key findings of the publication CRS
Aid Activities in Support of Water Supply and Sanitation, 2001-2006
which was produced by the DAC Secretariat in collaboration with the World
Water Council. Donor Profiles on Aid to Water Supply and
Sanitation:
This report contains individual donor
profiles covering both statistical and policy aspects of DAC members’ aid
to the water supply and sanitation sector. It is an extract from the
above-mentioned publication. For more information about DAC statistical work
on aid for water supply and sanitation see www.oecd.org/dac/stats/water. According
to the press release for
the event: “Though the Millennium Development Goals (MDGs) call for
the proportion of people without access to safe water and basic sanitation to
be halved by 2015, many countries, especially in sub-Saharan Africa, are not
on track to meet these goals. OECD analysis shows that aid to the water sector has risen since 2001, after a decline in the late
1990s, and now accounts for about 9% of donor aid. But much of this aid flows
to countries that are already developing well, while the share of aid to the water
sector in sub-Saharan Africa has declined from 22 to 17% during 2001-2006.” A new focus on conflict and fragility A third of the world’s poor live in countries where the state lacks
either the will or the capacity to engage productively with their citizens to
ensure security, prevent conflict, safeguard human rights and provide the
basic functions for development. The spill-over
effects from these situations are felt in countries across the globe. The DAC’s engagement in fragile situations has just been stepped up
with the launch of a new
International Network on Conflict and Fragility (INCAF), bringing
together the former Network on Conflict, Peace and Development Cooperation
(CPDC) and the Fragile States Group (FSG). The new network will focus on
‘real-time’ challenges in developing policy to help improve donor responses
to the most demanding development settings and circumstances, and to chart
results. INCAF will complement the Working Party on Aid Effectiveness, moving
beyond aid management concerns to examine policy issues of armed violence, security,
peace building and state building. In line with the spirit of the Accra
Agenda for Action, INCAF will take an inclusive approach to its work by
engaging with other key actors, such as NATO, and with southern
partners. Two specific commitments are envisaged with partner countries: Five developing countries – Afghanistan, the Central African Republic,
DR Congo, Sierra Leone and Timor Leste – will work intensively between now
and the next High Level Forum on Aid Effectiveness to benchmark the quality
of international assistance, as well as their own responsibilities, through
the lens of the DAC Principles for Good International Engagement in Fragile
States and Situations. Under the co-leadership of the DR Congo and France, the five countries
named above will be joined by Chad, Haiti, Ivory Coast, Nepal, South Sudan,
Sudan, Togo and their development partners in an international, providing a
platform for partner and donor countries to articulate and discuss priority
peace and state building concerns. INTRODUCING QWIDS! Unlocking the Mysteries of Aid Statistics 1. It is intuitive, so
even a novice user can navigate the system, make queries and extract data. 2. The system is
“intelligent” and knows where to extract the most relevant data. 3. The data and
metadata are pulled out from OECD.Stat, the repository of International
Development Statistics (IDS) data. QWIDS is designed to respond
to most queries on development statistics, offering a simplified access to
the DAC and CRS datasets. The
complete datasets remain available through OECD.Stat. NEW! Better Aid series
Natural
Resources and Pro-Poor Growth: The Politics and Economics This publication demonstrates that natural
resources can contribute to growth, employment, exports and fiscal revenues.
It highlights the importance of policies encouraging the sustainable
management of these resources. Governance,
Taxation and Accountability: Issues and Practices Not only can taxation help to promote capable
administrations; it can also be a key means to sustain accountability. In
this publication donors are encouraged to take more proactive steps to
support revenue raising activities in partner countries as a way of
strengthening their capacity and phasing out external assistance in the
medium term. Aid Targets Slipping out of
Reach Aid continued to
increase in 2007 (if exceptional debt relief is excluded from the figures).
But the increase was only 2% on 2006. This is much too slow if donors are to
meet their commitments to increase aid by 2010. In particular, most G8
countries will need to rapidly expand their aid if they are to meet the
commitments they undertook at the Gleneagles summit in 2005. Development Co-operation Report 2008 Statistical Annex Pending
the release of the Development
Co-operation Report 2008 early next year, its statistical annex has been made available on-line.
These tables cover resource flows, aid performance by DAC members, financial
flows, multilateral aid, sectoral allocation of ODA, and much more. Gender Equality
Issues Briefs The
DAC Network on Gender Equality is preparing a series of Issues Briefs
examining the connections between gender equality, women’s empowerment and
the Paris Declaration on Aid Effectiveness. Three of them can be viewed here.
They complement and expand on the entry points identified in the “Guiding
Principles for Gender Equality, Women’s Empowerment and Aid Effectiveness”
(forthcoming). Evaluating
Development Co-operation: Summary of Key Norms and Standards The
DAC Network on Development Evaluation brings together evaluation managers and
specialists from development co-operation agencies in OECD member countries
and multilateral development institutions. It has compiled a glossary of key norms and
standards for development evaluation, with a view to contributing to
harmonised approaches in line with the commitments of the Paris Declaration
on Aid Effectiveness. Four
new one-pagers on key policy topics were tabled at Doha: Aid for Trade,
Taxation, Monitoring the Paris Declaration and Future Aid Flows. |
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OECD
DAC Statistics including Aid at a
Glance charts for
DAC
members,
recipient
countries, and
by region. About Us DAC job opportunities ·
Policy Analyst, to work for OECD’s
programme on aid for trade which aims to help low-income countries maximize
the benefits of trade for economic development and poverty reduction – ref.
2979, closing date for applications is 4 January 2009. For more information on this
vacancy and how to apply, please go to OECD
job vacancies. Subscribe/Unsubscribe Archive |
