Overview of Overview of Development Development

AssistanceAssistance

Antonio Tujan JrAntonio Tujan Jr

Aid and the right to Aid and the right to developmentdevelopment

Post-war context and national struggles Post-war context and national struggles for independence and liberationfor independence and liberation

Post-war reconstruction and war Post-war reconstruction and war reparationsreparations

Right to independence and developmentRight to independence and development International community responsibility International community responsibility

for peace and development, end disease, for peace and development, end disease, famine and warfamine and war

Development cooperation and Development cooperation and aidaid

Based on common goals to end Based on common goals to end famine, disease and poverty and famine, disease and poverty and against waragainst war

Based on common principles of Based on common principles of equality, mutual cooperation, and equality, mutual cooperation, and benefitbenefit

Based on shared values and goals of Based on shared values and goals of cooperating partiescooperating parties

Covers a wide range of activitiesCovers a wide range of activities

Official Development AidOfficial Development Aid

To compensate for temporary or To compensate for temporary or consistent lack of resources for consistent lack of resources for developmentdevelopment

Different from humanitarian aid, Different from humanitarian aid, military aidmilitary aid

Material, services or financial formMaterial, services or financial form Loans or grants?Loans or grants?

Development Cooperation Development Cooperation and Aid and Aid

Development cooperation and ODA as Development cooperation and ODA as essential contribution to support essential contribution to support poverty reduction and developmentpoverty reduction and development

UN resolution 2626 of October 1970 to UN resolution 2626 of October 1970 to increase aid to 0.7% of GNP by mid 70sincrease aid to 0.7% of GNP by mid 70s

Monterrey commitmentsMonterrey commitments MDG and Millennium DeclarationMDG and Millennium Declaration Aid quantities remain seriously deficientAid quantities remain seriously deficient

DAC members' net ODA 1990-2005 and DAC Secretariat simulations of net ODA to 2006 and 2010

Components of net DAC ODA, 2000-2005

Development Aid and DebtDevelopment Aid and Debt

Grants are preferred form of financial Grants are preferred form of financial assistanceassistance

Grants are essential in context of Grants are essential in context of antipovertyantipoverty

Loans as forms economic Loans as forms economic cooperationcooperation

The issue of compounded interestThe issue of compounded interest

Neocolonial debt crisisNeocolonial debt crisis

To finance BOP deficits due to To finance BOP deficits due to neocolonial trade and investmentneocolonial trade and investment

To finance misprioritized To finance misprioritized development loansdevelopment loans

Compounded interestCompounded interest Neocolonial debt crisis and new loans Neocolonial debt crisis and new loans

for refinancing/debt servicefor refinancing/debt service

Debt crisis and Debt crisis and development financedevelopment finance

Debt crisis as counterforce in Debt crisis as counterforce in destroying development in general destroying development in general and for highly indebted countriesand for highly indebted countries

Debt crisis as determining factor in Debt crisis as determining factor in development finance strategies development finance strategies and managementand management

Debt cancellation as essential Debt cancellation as essential strategy accompanying increasing strategy accompanying increasing aid and reforming aid effectivenessaid and reforming aid effectiveness

Aid relationshipAid relationshipIs aid achieving development?Is aid achieving development?

Only 32% of aid is available to Only 32% of aid is available to recipient countries in 2004, from recipient countries in 2004, from 39% in 200039% in 2000

Problem? The bulk goes to donor-Problem? The bulk goes to donor-directed technical cooperation, directed technical cooperation, refugees in donor countries, foreign refugees in donor countries, foreign student costs in donor countries, the student costs in donor countries, the cost of tied aid, emergency relief and cost of tied aid, emergency relief and administration costsadministration costs

Development strategy and Development strategy and implementationimplementation

Is aid reducing poverty and Is aid reducing poverty and achieving development?achieving development?

Development strategies and Development strategies and program effectiveness program effectiveness – Human rights based and empowered Human rights based and empowered

developmentdevelopment Aid management and deliveryAid management and delivery

– Free for all competition, weak Free for all competition, weak country ownership, transaction costs country ownership, transaction costs and duplications, etc.and duplications, etc.

Tied AidTied Aid

Estimates that reduced aid tying to only 9% Estimates that reduced aid tying to only 9% in 2004 from 41% in 1990in 2004 from 41% in 1990

But figures do not reflect US which is But figures do not reflect US which is estimated at 72%estimated at 72%

Tying aid to foreign consultants ensures Tying aid to foreign consultants ensures results plus employment of donor staffresults plus employment of donor staff

Tying aid to donor country supplies – a Tying aid to donor country supplies – a system of export, subsidizing donor country system of export, subsidizing donor country productionproduction

Impact of tied aidImpact of tied aid

ConditionalityConditionality

Conditionality is contrary to Conditionality is contrary to ownershipownership

Conditionality is contrary to human Conditionality is contrary to human rights and sovereignty of peoplerights and sovereignty of people

Distinguish fiduciary responsibilities Distinguish fiduciary responsibilities and policy conditionalityand policy conditionality

Benchmarking as another form of Benchmarking as another form of conditionalityconditionality

Common cso position on removal of Common cso position on removal of conditionalitiesconditionalities

Structural Adjustment Structural Adjustment ConditionalityConditionality

Promotion of neoliberal strategies in 1970sPromotion of neoliberal strategies in 1970s– MonetarismMonetarism– Export promotion from import substitution Export promotion from import substitution

modelmodel Washington consensusWashington consensus

– Financial prescriptionsFinancial prescriptions– Neoliberal policy prescriptionsNeoliberal policy prescriptions

Post Washington consensusPost Washington consensus– PRSP, PRGF, PSIPRSP, PRGF, PSI– ConsultationConsultation– governancegovernance

Redefining ownershipRedefining ownership

Country ownership and not Country ownership and not government onlygovernment only

Implies accountability of government Implies accountability of government to citizensto citizens

Ownership means leadership of Ownership means leadership of government in aid partnershipgovernment in aid partnership

Capacity building for ownershipCapacity building for ownership

AccountabilityAccountability

Accountability mechanismsAccountability mechanisms Peoples participation as key elementPeoples participation as key element transparencytransparency

Development finance and Development finance and ODA AdvocacyODA Advocacy

Debt repudiation and cancellationDebt repudiation and cancellation ODA policy to increase aidODA policy to increase aid

– Monterrey commitmentsMonterrey commitments– Millennium Development GoalsMillennium Development Goals

ODA reform or effectivenessODA reform or effectiveness– Development effectivenessDevelopment effectiveness– Aid effectivenessAid effectiveness– Paris DeclarationParis Declaration

Development finance and Development finance and ODA AdvocacyODA Advocacy

OECD aid effectiveness process to OECD aid effectiveness process to Ghana 08 HLF IIIGhana 08 HLF III

UN Monterrey process (Doha UN Monterrey process (Doha meeting)meeting)

UN MDGs processUN MDGs process UN Development effectiveness forumUN Development effectiveness forum