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Africa: "Aid" Gaps & Questions, 2

AfricaFocus Bulletin
Sep 7, 2008 (080907)
(Reposted from sources cited below)

Editor's Note

"An exit strategy from aid dependence requires a radical shift both in the mindset and in the development strategy of countries dependent on aid, and a deeper and direct involvement of people in their own development. It also requires a radical and fundamental restructuring of the institutional aid architecture at the global level." - Benjamin Mkapa, President of Tanzania 1995-2005

The issue about "aid," almost everyone agrees, is not just quantity, but quality. But what determines quality, and who should make those judgments? Answers to these questions, argues Yash Tandon in a new book, require rethinking the "aid" system fundamentally. As noted by civil society organizations at a parallel session to the official OECD "High Level Forum on Aid Effectiveness" (http://tinyurl.com/6z3rog), the "donors" are still tinkering with superficial changes rather than confronting these fundamental issues.

This AfricaFocus Bulletin contains excerpts from the preface to Tandon's book Ending Aid Dependence, by President Mkapa, and from the final chapter of the book. It also contains excerpts from civil society statements at Accra.

Another AfricaFocus Bulletin sent out today contains excerpts from a report to the UN Secretary-General on gaps in meeting international commitments to development.

For previous AfricaFocus Bulletins on aid and global public investment, visit http://www.africafocus.org/aidexp.php

For additional background, see
http://www.choike.org
http://www.pambazuka.org
and
http://betteraid.org

For an earlier article raising similar issues, by William Minter and Salih Booker, see http://www.africafocus.org/editor/aid0207.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

Aid: Rethinking Old Concepts

Benjamin W. Mkapa, President of Tanzania 1995-2005

Pambazuka News 394: Effectiveness of aid or ending aid dependence?

http://www.pambazuka.org/en/issue/394

The following is the foreword to Yash Tandon's new book, Ending Aid Dependence, published by Fahamu Books, September 2008. For more information please visit, http://www.fahamu.org/publications.

The primary and long-term objective of this monograph is to initiate a debate on development aid, and to lay out a doable strategy for ending aid dependence. An exit strategy from aid dependence requires a radical shift both in the mindset and in the development strategy of countries dependent on aid, and a deeper and direct involvement of people in their own development. It also requires a radical and fundamental restructuring of the institutional aid architecture at the global level.

A more immediate objective is to start a dialogue with the OECD's Paris Declaration on Aid Effectiveness, which forms the basis of a high level meeting in September 2008 in Accra, and to caution the developing countries against endorsing the Accra Action Agenda (the 'Triple A') offered by the OECD. If adopted, it could subject the recipients to a discipline of collective control by the donors right down to the village level. And this will especially affect the present donor-dependent countries, in particular the poorer and more vulnerable countries in Africa, Asia, Latin America and the Caribbean. ...Beyond the Paris Declaration, there is still the question: What then? There has to be a strategy for ending aid dependence, to exit from it.

There are countries in the South that have more or less graduated out of aid, such as India, China, Brazil and Malaysia, and there are others which will soon self-propel themselves out of aid dependence. In fact, aid was never a strong component in the development of either India or China. They have been reliant on their own domestic savings and the development of a domestic market through the protection of local enterprises and local innovation. They have opened themselves up in recent years to the challenge of globalisation and foreign competition only after ensuring that their own markets were strong enough. Brazil, on the other hand, was an aid-dependent country until only recently. Both Brazil and Malaysia have succeeded in ending their aid dependence through strong nationally oriented investment and trade policies. These included supporting and protecting the domestic market and export promotion, as well as the currency, fiscal and monetary policies that go with them.

In an earlier period, during the 1960s and 1970s, the so-called tiger economies of Korea, Singapore, Taiwan-China and Hong Kong ended their aid dependence mainly in the context of the Cold War. These countries were able to use the opportunity provided by the Cold War not only to draw substantial capital from the West, mainly the US, but also to build their production, infra-structural facilities (banking, finance, transport, communications, etc) and export capacity. They took advantage of the relatively open US market to export the products of their early manufacturing growth. They benefited from the fact that the US needed them to fight communism in that part of the world. This enabled them to initiate state-supported industrialisation without having to account to institutions such as the World Bank and the IMF, to import technology without having to pay huge fees for intellectual property rights, and to build strong reserve funds.

This book is not about them, although valuable lessons can be learnt from them. We are now living in a different period of history. This book is about countries that were neither able to take advantage of the Cold War period, nor had the benefit of a large domestic market and entrepreneurial class to develop an endogenous development strategy. We are therefore talking largely about the hundred or so countries that fall within the classification of least developed countries (LDCs), the middle-income countries that are not LDCs but are still struggling to become economically independent from foreign aid, and the vulnerable, small and island economies. Geographically, these countries occupy the huge land mass of Africa, large parts of Asia and Latin America, the Caribbean and the Pacific islands.

The message of this book needs to be seriously considered and debated by all those that are interested in the development of the countries of the South. If this means the rethinking of old concepts and methods of work, then let it be so.


The Future of Aid

Yash Tandon

*Yash Tandon is the executive director of the South Centre, Geneva, an intergovernmental think tank of the developing countries.

http://www.pambazuka.org/en/issue/394

The following is an excerpt from the concluding chapter of Yash Tandon's new book, Ending Aid Dependence, published by Fahamu Books, September 2008. For more information please visit, http://www.fahamu.org/publications. The book is not yet in stock at Amazon or Amazon.uk, but can be ordered from Fahamu or from the Africa Book Centre (http://www.africabookcentre.com).

For far too long the debate on development aid has been constrained by conceptual traps and the limitations of the definitions provided by the donors. If the recipients or beneficiaries of aid are to own the process, as present trends in the development literature sug gest, then the conceptual reframing of the issues must itself change its location from the North to the South.

The conceptual starting point is not aid but development. The horse of development must be put before the cart of aid. Growth, admittedly, is an important aspect of development ,,,

The most critical aspect of our definition of development is its political economy and historical context. The developing countries have gained their political independence, but in most cases they are still trapped in an asymmetrical economic, power and knowledge relationship with the former colonial powers that continue to dominate the process of globalisation, and the institutions of global governance (the IMF, the World Bank, the WTO, WIPO, WCO, OECD, EU Commission, etc). The developing countries are making heroic efforts to disengage from this lock-in situation (demanding policy space, for example). Some of them (the so-called newly emerging industrialised countries of the South) have indeed succeeded or partly succeeded, but the bulk of the developing countries are still trapped in the shackles of history. Africa, especially, is identified as a continent that has not fared well. From this trap, Africa and others can liberate themselves only if they take matters of development into their own hands and do not leave it to aid and its delimiting and colonising conditionalities, such as the structural adjustment programmes of the IMF and the World Bank, and now the Paris Declaration on Aid Effectiveness.

In other words, the national project, the project for self-determination, is still on the agenda of political action for developing countries. Its counter, the imperial project, is also still alive, but gradually weakening. Its ideology the Washington consensus and globalisation crafted after the dominant paradigm of free market liberalism and Western systems of governance, democracy and the rule of law, has lost credibility and legitimacy.

This is not to undervalue the importance of democracy or the rule of law. Without these there would be anarchy and oppression. But these values cannot be imposed on the developing countries from outside ...

It is argued here that the present aid and development architecture at the international level is an obstacle to the realisation of the national project. Three power asymmetries - economic power, political power and knowledge power - are deeply embedded in the existing structures. It is a continuing battle for the developing countries to try and secure policy space within the constraints imposed by these asymmetrical structures. ...

At the end of the day, we need a truly heterogeneous, pluralistic global society that is based on the shared values of our civilisation, and the shared fruits of the historical development of the productive forces of science, technology and human ingenuity. Only on this basis can we build a global society that is free from want, exploitation, insecurity and injustice.


Civil society statement in Accra warns urgency for action on aid

1st September 2008

[Excerpts. For full statement and extensive additional background on the Accra meeting and related issues, visit http://betteraid.org]

Introduction

2008 is an important year for development financing and an opportunity to move the international community to a more equitable, people-centred and democratic governance system. Today 1.4 billion people live under the new poverty line of US$1.25, and the majority of them are women. The current financial, food, energy, and climate change crises make evident the urgency for action.

Accra is an opportunity to advance towards a broader agenda of development effectiveness. The High Level Forum in Accra will be followed by major United Nations meetings in New York and Doha that will confirm the huge gap between what has been promised and the lack of progress in the achievement of the internationally agreed development goals.

Development aid is only one part of the equation, and has to be analysed in the broader context of its interactions with trade, debt, domestic and international resource mobilisation and the international governance system. When donors and governments met in Paris three years ago, technical debates masked deeper political differences around the broader vision for aid. Some donors wanted to hand a lot more power, a lot more quickly to developing country governments. Other donors didn't. What was achieved was a compromise and has been criticised for its narrow technical approach.

It is urgent that human rights, gender equality, decent work and environmental sustainability are made explicit objectives of aid.

We call on officials present in Accra to respond with urgency. What we need in Accra are clear time-bound commitments to deliver real results for people on the ground, towards the eradication of poverty, inequality and social exclusion. This is a political not a technical challenge, and should be treated as such.

What is our 'bottom line' for Accra? So far, the Paris process looks like a failure. The 2008 Paris Survey shows that donors in particular have a long way to go in delivering what they pledged. Accra must deliver a major change in implementation and change how "effectiveness" is measured by setting new targets and indicators. All donors must set out detailed plans and individual targets showing how they will meet their commitments.

But the Accra High Level Forum must also deliver real measurable and time-bound commitments to address some of the problems which are not adequately dealt with in the Paris Declaration. Donors must take responsibility for improvements which only they can deliver (e.g. untying aid and improving medium-term predictability of aid) and all governments must increase the democratic accountability and transparency of their use of aid resources, policies and activities. ...

Who are we?

Over 600 representatives from 325 civil society organisations and 88 countries have met here in Accra to debate what actions must be taken to reform aid. 80 civil society representatives have participated for the last two days in roundtables at this Forum to communicate those messages and ensure that our voices are heard. Civil society organisations (CSOs) have engaged energetically with the preparatory processes for Accra organising consultations in every region, attending meetings of the Working Party on Aid Effectiveness and commenting on drafts of the Accra Agenda for Action. Although we have welcomed these opportunities, we are very disappointed that our views on previous drafts have not been taken into account, and that the Accra Agenda for Action as it stands promises little change. ...

Our vision for change

Our vision is of a world where aid is no longer needed; where poverty is no longer a daily reality for billions of women and men; where decent work is a reality for all; where global resources are fairly distributed; where social and gender inequalities are ended; where indigenous populations are respected; where strengthened democratic states fulfil economic, social, and cultural rights; and where global public goods including environmental sustainability are secured by multilateral international institutions with equal participation of all countries.

We believe that aid can play an important role in moving us towards this vision, and that more and better aid is urgently needed to respond to the scale of the challenges of poverty, inequality and exclusion. Aid will be effective when it can be clearly demonstrated that it is indeed addressing those challenges. The effectiveness of aid should be assessed under a universal, more democratic and representative platform than the OECD/DAC, such as within the Development Cooperation Forum at the United Nations. Effective aid must be based on the principle of democratic ownership and have poverty reduction, the fulfilment of human rights, gender equality, environmental sustainability and decent work as its objectives. When donors impose their own policies, systems and priorities, they drown out citizens' and recipient communities' voices, and they undermine the principle of alignment with developing countries' priorities and systems.

Effective aid should support democratic accountability between citizens and their governments. Democratic institutions are the result of national processes for social and political dialogue and donors should not undermine these efforts or the need for policy space. Rural development, regional integration and decentralisation processes in developing countries should be supported by donors when defined as national priorities.

Effective aid supports the development of transparent and accountable systems. It needs to be predictable to allow recipient countries to make medium and long-term plans, and then be aligned to those plans. It needs to be untied. Yet many donors continue to deliver aid in order to promote their own interests tying aid to the purchase of goods from their own national firms, or setting conditions which promote their own economic interests.

At the heart of many of these problems is a lack of accountability and transparency. There is not enough reliable and timely public information about aid flows, or the policies and conditions associated with them. There is not enough independent evaluation of donor performance or the impact of aid on the ground. There are not enough opportunities for citizen, and civil society organisations to make their voices heard in decision making processes. This constitutes a systemic obstacle for citizens to hold governments in donor and recipient countries to account.

The Paris Declaration recognises many of these problems in principle, but donors have proved unwilling to resolve them in practice. Even where developing country governments have improved their performance, donors have not met their side of the bargain. The slow progress in implementing the Paris principles should be a source of acute embarrassment and concern for the governments represented here in Accra.

Both donors and developing countries have responsibilities to make aid work. However, the process of improving aid effectiveness needs to move away from conditionality, and not introduce new ways of imposing conditions, which undermine the right to development and democratic ownership.

...


Accra Action Agenda on Aid: Little Progress in Changing Deeply Flawed Global Aid System

Written by Aid Watch Philippines

5 September 2008

http://betteraid.org

The Accra Action Agenda (AAA) endorsed by ministers at the 3rd High Level Forum on Aid Effectiveness in Accra, Ghana makes little real progress towards making aid more developmental.

The AAA fails to address the most essential concerns with the greatest impact on development in the Third World : democratic ownership of aid, policy conditionalities, tied aid and the foreign debt burden. The AAA instead gives undue attention to technical procedures in aid delivery and management to divert from its glaring inattention to the development issues that matter the most.

The Paris Declaration of 2005 raised the promise of improving the global aid regime. However the AAA supposedly aimed at deepening implementation of the declaration underscores the deep-seated resistance of donors to genuine reforms in the aid system. Donors have effectively still reserved the right to set
conditionalities. They have not committed to eliminating tied aid. They have avoided making concrete, measurable and time-bound commitments to building democratic ownership of aid and development policies. Donors have completely avoided the vital issue of crushing debt burdens.

Yet "free market" policy conditionalities have gravely harmed Third World agriculture, stifled industrial progress, and worsened poverty and unemployment. Tied aid has assured donor country benefits at the expense of local needs. Ownership has been claimed more by donors and recipient country elites than grassroots communities. And debt service by the Third World is many times the amount they receive in official development assistance (ODA)

It is an opportunity that the AAA has been compelled to at least acknowledge these issues and it is welcome that civil society organizations (CSOs) have an increased presence compared to previous years. However this opportunity will be meaningless and the CSO presence will be mere tokenism if there are no clearly defined and effective reforms in the aid system.

AidWatch Philippines and IBON Foundation are among the CSOs participating in the 3rd High Level Forum that demand clearly defined and time-bound commitments to accomplish various targets by 2010. At the minimum this includes: 1) a broad but clear definition of ownership such that citizens, CSOs and elected officials are central to the aid process at all levels; 2) measurable commitments on the predictability of aid flows by 2010; 3) elimination of tied aid by 2010, with food aid and technical assistance no longer donor-defined; 4) development and implementation of new standards for transparency by 2009 including making information available to the public; and 5) an end to policy conditionality.

ODA clearly remains donor-driven with the main objective of serving donor foreign and economic policy interests. Developmental outcomes, if any, are oftentimes just incidental and only to the extent that donor commercial, political and diplomatic interests are not threatened. In Accra for instance, the United States used its clout to dilute language on ownership and conditionalities while Japan opposed proposals to untie aid. Recipient governments in turn comply rather than jeopardize aid flows and possibly important resources for development.

The challenge remains for the people and governments of underdeveloped countries to reject false aid that does not genuinely reduce poverty, advance gender equality, uphold human rights and promote environmental sustainability. Aid must also not be a matter of charity from rich to poor countries but of people achieving their right to development with all the resources at the world's disposal.


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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