Better and more effective aid

This week, donor countries and their partners in the developing world, as well as numerous civil society organisations, are meeting in Accra in Ghana for a high-level conference addressing the vital question how aid can be made to work better.

Donor countries and agencies that have committed to improving the lives of the world’s most disadvantaged people have, over the years, become concerned at the lack of impact they are seeing when compared with the magnitude of aid poured into making this happen.

The “Third High-Level Forum on Aid Effectiveness” with over 1,000 official delegates will try to reach agreement on an important document, the “Accra Agenda for Action” on how to make foreign aid to developing states more effective. In addition hundreds of representatives of NGOs and lobby organisations are descending on Accra for the conference.

Donor states have assisted the world's poorest nations to tackle poverty for many years. Yet the results have been mixed. Low agricultural production, disease, low levels of education and high population growth combined with weak administrative and judicial systems, and in some cases corruption, continue to hold back development.

A number of different issues will be tackled during the conference. One is the confusing number of projects, which is often taxing for the weak administration of small countries.

There are sometimes hundreds of monitoring missions descending on a country. The plethora of projects is taxing governments with limited capacity and hurts their ability to take control of their own development, say development experts. The solution is to have closer co-ordination between donors.

Another key factor is ownership. OECD experts conclude that developing countries must take the lead in the process to break their dependence on aid. Externally imposed solutions will not work, but there is consensus that when international donors put their efforts behind credible, national-led plans, the results follow.

Accountability, or rather the lack of it, from recipient countries has been the cause of real concern among donors and this has been obvious as the funds pledged are not usually what are actually handed over. In 2005, donors had committed to increase economic aid to Africa by US$25 billion. However, to date overseas development aid to Africa has only increased by US$7 billion and pledges for 2008/2009 total some US$4 billion. This is despite intense lobbying done by countries, NGOs and celebrities who identify with the movement to reduce poverty and AIDS in Africa.

Participants at the conference will take stock of how much progress has been made since a 2005 aid effectiveness forum in Paris that tried to get donors to work together and support developing countries’ efforts to manage their own development.

Three years later, there has been progress, but “there is still too much inadequate coordination, fragmentation, and too much money flowing outside the budget,” says R. Kyle Peters, Director of Country Services of the World Bank. “The question is how can we work together more efficiently to support developing countries’ capacity to plan and direct their own development as well as lower the transaction costs on them.”

There are some successes to record: since 2000, three million more children survive each year, two million people receive treatment for HIV and Aids and millions more children are in school.

However, with the existence of over one billion of the world's inhabitants under threat due to rising fuel and food prices and the impact of climate change, a re-doubling of efforts will be needed if the goals are to be achieved. This is a key challenge.

There are also critics of the process who fear that the Accra Agenda for Action (AAA) will be watered down to almost nothing. The critics claim that the latest draft of the AAA has been stripped of any specific time-bound commitments to which donors can be held to account and the document has being seriously watered down.  The Ministerial Communiqué is discussed by a so-called “Consensus group” made up of a mixture of representatives from donor countries, developing countries and multilateral organisations.

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