Global Forum Strives to Make Aid Effective

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About the Busan Forum By Katsuhro Asagiri
IDN-InDepth NewsReport

TOKYO (IDN) – Despite broad agreement that international development cooperation must become effective in order to achieve its objective of closing the rich-poor gap, the fourth High Level Forum on Aid Effectiveness (HLF-4), which kicked off on November 29 in Busan, South Korea, may fall short of marking a genuine "turning point" for the effectiveness agenda.

Some 3,000 delegates including UN Secretary-General Ban Ki-moon, high-level government officials from around the world and international non-governmental organisations (NGOs) are attending the Forum.

What should make the HLF4 a "turning point", says Shunichiro Honda from Research Institute of the Japan International Cooperation Agency (JICA), is the rapidly changing aid environment that policy makers and researchers consider the critical backdrop of the forum.

One major change, he told a joint meeting of the Korea Association of International Development and Cooperation (KAIDEC) and the Japan Society for International Development (JASID) ahead of Busan, is the emergence of the increasingly active "new" actors in development cooperation such as non-DAC donors, global funds, international NGOs, foundations and private corporations.

DAC stands for the Development Assistance Committee of the Paris-based Organisation for Economic Cooperation and Development (OECD) comprising 34 countries from North and South America to Europe and the Asia-Pacific region.

They include many of the world's most advanced countries but also emerging countries like Mexico, Chile and Turkey. OECD also works closely with emerging giants like China, India and Brazil and developing economies in Africa, Asia, Latin America and the Caribbean.

The new situation is different from when the Paris principle was premised, where traditional donors including DAC bilateral donors and multilateral development institutions were the dominant development actors. The Paris framework has not been so designed to adequately address burgeoning and increasingly fragmented development programs and projects with such diverse actors, said Honda.

In this new environment, aid should and will play more of a catalytic role in development. Another change is the emergence of "new" global challenges such as climate change and fragile states, which were not fully envisaged at the time of conceiving the MDGs (Millennium Development Goals) in the year 2000 and the Paris principle.

Effectiveness after Busan

Honda said, the review of documents including DAC official papers points to several issues with some emerging consensus, which would guide the direction of the effectiveness agenda after Busan.

"One key issue is whether the scope of the effectiveness agenda should be widened from the narrow 'aid' effectiveness to broader 'development' effectiveness. Taking cognizance of the growing call for more inclusive framework to better engage diverse actors, the shift seems to be likely," argued Honda.

The other major point of contention, he said, would be whether the principles will equally be applied to the new actors, assuming that the Paris principles continue to be maintained beyond Busan.

"A 'differentiated approach' seems to be the most probable direction forward without alienating major 'new' actors like Brazil and China, which take the position that South-South cooperation is more for solidarity than effectiveness. The approach implies a more flexible framework for new actors to work on, whereas traditional donors will be tasked to further speed up actions already agreed on the five Paris principles," said Honda.

The latter implies that issues including aid transparency, "division of labor" among donors, aid predictability and the use of country systems will continue to challenge traditional donors including Japan, he said.

How to catch fish

Reflecting views of a cross section of groups in favour of closing the rich-poor gap in international relations, The Korea Times said on November 28: "The conference on global development aid . . . is untimely in view of economic troubles worldwide. However, economic uncertainties should not be an excuse for countries to look inward. The meeting should be a productive occasion for a paradigm shift in aid methods, governance, transparency and enlargement of the pool of donors."

Korea's hosting of the three-day event bears added significance and symbolism, the national daily said. "Korea's successful transformation from an aid recipient to a donor gives a message of hope and encouragement to poor countries."

Learning from its own experience, Korea can indeed play a proactive model in aid. "Donors must give poor countries knowhow of how to catch fish, not just fish. Foreign aid should include both hardware and software. This approach will help the recipient countries go to the path of development. The development-through-aid initiative should be the new catch phrase of the international assistance program," the newspaper said.

Addressing critical points in order to make Busan and the post-Busan period a success, the newspaper said the current governance structure of the global aid body, including the OECD Development Assistance Committee DAC, must undergo change in order to enhance aid effectiveness.

The gathering should also be an opportunity for the enlargement of donor countries. So far only the rich countries have become donors. Active participation by emerging countries, including China and oil-rich Arab states, will also stimulate the program, it added.

Reports, however said that China was not ready to endorse a partnership for global development. Brazil and India have also decided to stay outside of the framework in a further blow, according to these reports.

The newspaper argued: The EU-dominated OECD-DAC might lose its luster in view of the current eurozone crisis. The OECD-DAC should enlarge engagement with emerging nonmember countries to increase foreign assistance in this time of economic uncertainty. Development aid can also stimulate world economic growth.

It added: "The UN can play an active role in initiating the new paradigm shift in the global assistance program. The UN can strength global partnership for creating inclusive space for dialogue, mutual learning and accountability.

"Improving aid quality is necessary as development assistance has been sometimes fragmentary and plagued by bureaucracy. The UN and the OECD need to build a partnership for maximizing synergy in global development aid. Donors also must strengthen partnership with the private sector for upgrading development effectiveness.

"Upgrading transparency in delivering aid is also critical. Donors have so far have not established a mechanism to ensure aid materials go to the grass roots people. Foreign assistance has sometimes spawned corruption in officialdom.

"The gathering should also be an occasion to tie aid to progress in democracy. Dictators in poor countries should not exploit aid for perpetuating power."

Reflecting the widespread mood, the newspaper said, the international aid community needs a more independent forum for embracing more emerging donors. Sticking to the current OECD model will not be attractive enough to encourage the participation of more emerging donor countries.

It called upon Koreans to stand behind Seoul's initiative to expand its foreign assistance in keeping with its economic power. From 1945 till 1999, Korea received $12.7 billion in foreign aid. Without such care from the international aid community, Korea would not have become the world's 11th largest economy, the newspaper concluded.

Park En-na, director general of the development cooperation bureau at the Korean Ministry of Foreign Affairs and Trade, told the Korean Herald that while both donor and recipient countries focused on how development aid was going from country A to country B in the past, the focus of the Busan forum was on recipient countries' "ownership" of aid – on setting a growth target on their own, setting related economic strategies and policies, matching them with investment and pursuing policy coherence.

For example, a donor country does not always have to give money to a poor country but has to offer other diverse options such as imposing no tariffs and no quotas in trade, or invest in a certain country and share consequent risks, Park explained.

In line with diverse and effective aid, the Busan forum will also seek a new dimension in promoting a partnership between the private and public sectors, she said. Normally, the corporate sector makes investment in a certain region for profit but a partnership with a government will enable them to set up a sustainable long-term goal, Park said.

"Let's say we want to build a road in a poor country. A private company, which sees a potential in the market, can finance the road construction project,” she said.

According to the Foreign Ministry, the Korean government suggested countries hold a private sector forum, as its role is important in international aid, especially when major economies, including the U.S. and European Union, are finding it difficult to expand aid during their economic downturns. [IDN-InDepthNews – November 29, 2011]

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2011 IDN-InDepthNews | Analysis That Matters

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