Adapting French Aid to the Challenges of a Changing World É V R E H

Adapting French aid to the challenges of a changing world é v r e H . B © Introduction

The current situation, marked by energy, evelopment assistance is undergoing encourage all components of societies to food and environmental crises, fundamental change. While pursuing marshal their ideas and resources in its traditional objectives of poverty support of investment for growth and job underscores the global nature of Dreduction and influence, it is increasingly creation. The road ahead is clear: innova- development challenges in an uncertain called on to help each developing country tion in the health sector, creation of new economic context. Given the scale of the to design and implement public policies forms of borrowing, increased participa- challenges, fresh impetus needs to be that address today’s national and interna- tion by local authorities and NGOs, and the tional challenges. In a world of limited emergence of foundations, sovereign funds given to international cooperation, resources, each country needs to find its and the private sector in the development in terms of objectives, coordination Context proper place in the “new deal” of globali- arena. The diversity of stakeholders and and innovative approaches to resources sation. Development assistance enhances instruments is an asset, on condition that Contents France fully committed and instruments. each country’s ability to capitalise on its beneficiary countries remain in control. to the development agenda p.4 own assets, taking advantage of the huge The international community has given New players, new forms of financing, progress made in research, knowledge and many commitments and set targets for new global challenges information. both funding and results. Precedence p.7 The increasing number of international aid should be given to the results-based providers requires that donor approach, which encourages the Means coordination be strengthened. parties involved to measure pro- Building countries’ capacity The time has come for inno- Development gress on a regular basis, devise p.8 vative coalitions and partner- assistance is solutions and make adjustments, Adapting cooperation to the context ships between public bilateral undergoing in order to keep their promises of p.10 and multilateral donors, local fundamental a more equitable world based on Broadening the range of aid instruments change.The p.12 government, NGOs, founda- the principles of sustainable Forging new alliances tions and private sector time has come development. These are the chal- for innovative p.14 enterprises. It is therefore lenges that will face the French aid coalitions and essential to build partner system, and the international partnerships. Key Work Strands countries’ capacity to profit community as a whole, in the key from these varied sources upcoming events on the internatio- Key Work Strands of aid. nal agenda. p.16 The official aid of the OECD countries, The purpose of this brochure is to shed In addition which stagnated in 2007, needs to be in- light on these issues by indicating the creased and reoriented to achieve the goals approach – in terms of analyses, commit- Key figures of social and economic equity and sustai- ments and resources – that will be taken by p.17 nable management of public goods. Offi- French development cooperation with Glossary p.18 cial development assistance can serve as a regard to these events. CD-Rom catalyst for other sources of financing and p.19

Context I p.3 Context

- Managing aid for results: results-oriented evaluation of France’s implementation of Official development assistance aid evaluation and notification frameworks the Paris Declaration, carried out in and development financing: to improve the decision-making and preparation for the Accra conference, found measuring resources and results monitoring processes. that this plan displayed both strengths and - Mutual accountability for the results weaknesses. The evaluation concluded that obtained: measurement of the progress the plan needed to be disseminated more Official development assistance achieved by both donors and partner actively and adapted more effectively to (ODA) consists of grants and countries towards fulfilment of their the diversity of countries and sectors subsidised loans provided by the commitments. concerned. Context governments of OECD member © P. Kabre countries to support the development The Paris Declaration gave rise to a French Also in 2005, at the Luxembourg Summit, of non-member countries. It is plan of action aimed at building capacity the member states of the European Union generally measured in net terms, in partner countries, pursuing and deepening gave a commitment to channel 50% of the i.e. less repayments received on prior the partnership approach to aid planning, increase in their aid to Africa. In addition, a ODA loans. It accounts for only a part and improving management procedures. An European consensus on development policy of the external public and private financing available to developing countries. The charter on food aid France fully committed In addition to statistical to the Sahel: a pioneering approach measurement of the resources to harmonisation to the development agenda provided, ODA institutions have mobilised to measure outcomes and The food aid charter is a collective impacts in the context of “managing commitment approved by the member for results”. In France, the Organic states of the Comité Permanent Inter-états Statute on Budget Acts de Lutte contre la Sécheresse au Sahel (Loi Organique sur les Lois de (CILSS) and the donors of the Club du Sahel in 1990. It has helped the Sahel countries The Millennium ollowing the significant decline in In 2005, at the Gleneagles Summit, the Finances – LOLF) sets quantitative and their external partners to harmonise Development Goals (MDGs) official aid during the 1990s, the G8 countries pledged to increase their targets for all public programmes. © AFD their methods for evaluating the food international community reaffirmed development assistance and to grant In this context, the ODA resources situation and requirements. It has also led itsFcommitment to development at a series further debt cancellations to the most indicator will be supplemented by Between now and 2015, take action to: to the implementation of aid in a manner Debt cancellation of international conferences. heavily indebted countries, in addition to indicators of results, which will use consistent with securing long-term food 1. Reduce extreme poverty and hunger for developing countries In 2000, at the United Nations Millennium those accorded in 1996 and 1999. in particular the tools developed security, by giving priority to the mobilisa- 2. Achieve universal primary education Summit in New York, 191 countries gave In the same year, 90 countries and by the Agence Française de tion of local and regional resources. 3. Promote gender equality and empower their support to a joint scheme on an The charter is a pioneering example international organisations signed the Développement. Two multilateral initiatives launched women enormous scale: a refusal to accept poverty through the G8 have considerably reduced of a partnership approach to seeking great Paris Declaration, in which donors on the 4. Reduce under-5 child mortality as inevitable. They pledged to achieve eight the debt of developing countries: the effectiveness, applied to a specific tool OECD Development Assistance Committee 5. Improve maternal health development goals by 2015. Heavily Indebted Poor Countries (HIPC) in a given region. Today, when the world is and partner countries pledged to increase Initiative, launched in 1996 and enhanced wondering how to cope with the food crisis, 6. Combat AIDS, malaria, tuberculosis Two years later, the international commu- the effectiveness of aid. The Declaration in 1999, and the Multilateral Debt Reduction the charter remains highly relevant, even and other diseases nity finalised the Monterrey Consensus on sets 12 quantitative targets to be met by Initiative (MDRI), launched in 2005. These as it continues to adapt to changes 7. Ensure environmental sustainability development financing, identifying six 2010 and is based on five principles: initiatives concern 41 countries. As of in the issues and in the instruments used 8. Develop a global partnership complementary avenues for maximising - Ownership of aid by developing countries: 1 March 2008, 23 of them had reached the to respond to crises. for development financial flows for development: beneficiary countries should have more completion point of the HIPC Initiative and - Mobilising national financial resources for control over the definition and manage- benefited from the MDRI.The total amount development. ment of their development policies. of debt cancelled under these initiatives - Mobilising international financial resources - Alignment of aid with national develop- exceeds $81 billion. The stock of debt was reduced by two-thirds on average, leading for development: foreign direct investment ment strategies: donors should base their to a 40% increase in the share of public and other private financial flows. support on their partners’ priorities and spending devoted to poverty reduction - Liberalising international trade. use their partners’ institutions and pro-

. over the 2000-2007 period.Today, the two i l

- Stepping up international financial and cedures. h

u main challenges lie in the participation of technical cooperation. - Harmonisation of aid activities: increased o M all creditors in the efforts called for under .

- Reducing external debt. complementarity between donors and B the HIPC Initiative and winning the ©

- Increasing the coherence of the interna- development of joint approaches in order e broadest possible acceptance of rules i D D s F i F n for proper management of public finances A A tional monetary, financial and trading to reduce the transaction costs of aid u T © © systems supporting development. provision. to avoid any further risk of debt distress.

p.4 I Adapting French aid to the challenges of a changing world Context I p.5 Context France fully committed Context to the development agenda

A results-based approach for more effective aid New stakeholders,

For a number of years, AFD has been new forms of financing, developing means of measuring the new global challenges results and impacts of its operations.This approach has several objectives: to make it possible to guide strategies and select operations; to ensure accountability (with respect to taxpayers as well as partner countries); to provide means of measuring results, as required by the new Budget Acts mechanism; and to fulfil n a context of strong global growth, In developing countries, the new genera- international commitments (the Paris developing countries exhibit different tions born since independence and better Declaration on aid effectiveness). In 2009, growth paths and rates. Today, some of educated, claim the right to take responsi- a mechanism for monitoring strategies these countries are catching up with the bility for their own development processes D I will make it possible to measure their F effects. A developed economies, having followed and would like to see new forms of © © S. Snrech original growth paths, while others are partnership with donor institutions and Indicators reported for each financing struggling to break out of a cycle of crises countries. operation constitute the key instrument and under-development. The nature of The development scene is thus profoundly for measuring development outcomes Increased financial flows between the North and different from that of past decades. It is and contributions to the MDGs, economic amounts of aid South has also changed dramatically. marked by the growing diversity of growth and global public goods.The and greater Although ODA has increased, national situations and, at the definition of these indicators is harmonised its relative share in flows of same time, by increased inter- with that of other international donors. effectiveness: The capital and know-how to dependence at the global Aggregation of the indicators allows as from 2000, development developing countries is decli- level. In this changing context, consolidated reporting of results. the international scene today community ning. Trade, private invest- international cooperation sets the priorities, principles According to the G8, Africa is profoundly By 2010, AFD will have radically renews its ment, migration and migrants’ helps each beneficiary to find and procedures for a Euro- should receive 50% of aid different from changed its evaluation mechanism. commitment remittances of savings, its own unique path to eco- pean strategy in the field increases, in addition to that of past Sectoral evaluations and evaluations for to development. though unequally distributed, nomic and social develop- of development cooperation, the pledge given in 1990 decades. purposes of knowledge development will now account for the great ment. All countries are thus based on the common va- to allocate 0.15% of the be conducted by its head office. Ex post majority of these flows. In addition, finan- contributing to solve global problems. lues of the members of the Union. It GNI of donor countries to the least advanced evaluations will be conducted systematically cial flows between developing countries are Official development assistance is not emphasises the quantity and quality of aid, countries. on completion of each project: they will increasing rapidly. charity; rather, it is an instrument of be managed locally and the results policy coherence and the need to address In 2008, increased support for develop- partnership that needs to adapt its shared with beneficiaries. a number of global challenges. It is firmly New challenges that transcend national ment is more crucial than ever. A number goals and methods to the new context: in line with the spirit of the Paris Declara- borders have come to the fore: regulation of international events will provide the the development challenges of the 21st tion on aid effectiveness and the Monter- of trade and migration, control of major occasion to take stock of these donor century require new alliances, innovative rey Consensus on development financing, pandemics and the effects of climate commitments: the Accra forum on aid partnerships and diversified tools that can two processes which the European Union change, preservation of biodiversity and, effectiveness, meetings in New York on the focus respond to the diversity of situations, played a leading role in initiating. as appears on the news every day, access needs of Africa and the Millennium Deve- needs and expectations of developing Case studies available to energy and food. These commitments relate both to the lopment Goals, the Doha conference on countries. on the CD-Rom enclosed. amount of funding provided (the G8 decla- development financing. The number of donors supporting the rations at Gleneagles, the European Union’s Cambodia development process has increased: goal of raising official development assis- emerging countries, which are still aid tance to 0.7% of GNI by 2015) and to recipients, are themselves becoming improving effectiveness (Paris Declaration important donors on the international Guinea on aid effectiveness in 2005, European scene. Philanthropy is playing an increa- code on the division of labour in 2007). sing role through foundations, as is financing provided by civil society and local authorities in the North.

h Mozambique c e r n S . S ©

p.6 I Adapting French aid to the challenges of a changing world Context I p.7 Means

function smoothly if there is to be better procurement, measurement of social and coordination of donor actions and of their environmental impacts, auditing. Suppor- alignment with partner countries’ priorities. ting the formulation and monitoring of For donor funding to flow through develo- policies and strategies also makes it ping country systems, it is necessary to possible for aid to be increasingly adjusted upgrade the economic, technical and to the activity of government in partner financial administration to the point where countries. it is capable of implementing the various D F Means stages of donor operations – design, A © © S. Snrech Morocco Cooperative Multi- stakeholder Programme (Programme concerté pluri-acteurs Support to professional organisa- negotiations on cotton production – PCPA): an innovative multi-stake- tions in the agricultural sector and trade and to give them a better holder approach to youth issues Building command of the technical and eco- Although farmers make up the largest nomic conditions required to make country capacity occupational category in developing African cotton more competitive. The Morocco PCPA brings together countries, they are not well organised - In Guinea, French cooperation has French and Moroccan governmental or represented, and thus find it diffi- supported the Fouta Djalon Growers and non-governmental stakeholders cult to participate in the debate over Federation since 1987. A technical tates have an essential role to play and social development strategies requires to address the topic of youth.The Sectoral support to Burkina Faso: economic and trade policies, in which assistance project (upgrading potato in managing interdependence and local competencies. French cooperation programme has three operational working together for education they have a vital interest. Two exam- production) quickly revealed a regulation. To accomplish this mis- supports the mobilisation and strengthe- areas: education and vocational ples demonstrate the importance of problem of market outlets. Dialogue Ssion, they need a competent, credible and ning of the know-how of developing raining, social and welfare economics, The Ten-Year Development Plan for strengthening farmers’ organisations: with the authorities led to the citizenship and access to the law. Basic Education (2002-2011) has motivated public administration. A part- countries through technical assistance and - Cotton is currently grown by establishment of import controls Special attention is given to gender been supported by the international nership between states, official develop- capacity building programmes. 2 million African producers and during the harvest. The federation parity.The first programme, which community since it was initiated. ment assistance – through its ends and Reliable data are essential in order to provides livelihoods for 16 million has grown in importance and plays lasted three years, allowed 15 projects In 2004, Burkina Faso and several of through its means – helps to strengthen the properly assess challenges; determine households. Over the last 30 years, an increasingly prominent role in to be undertaken throughout Morocco. its partners, including AFD, transfor- working of governments in beneficiary development priorities; translate them cotton production has grown setting agricultural policy. It now The programme now comprises med a plethora of projects into countries, to the benefit of all. into policies,actions and budgets; and strongly in West and Central Africa, exports its potatoes to the 64 Moroccan not-for-profit associa- budget support to the education and the region has become the sub-region. Formulating strategies for economic and measure the results. Similarly, improved tions, 33 French associations, French sector, a form of aid better aligned world’s second largest exporter. social development is rarely a simple matter. mobilisation of a country’s domestic development cooperation bodies, the with national procedures. External However, the technical and econo- In developing countries, resources and greater predic- Moroccan government (Ministry for partners’ payments (about 20% of mic progress stemming from the well-defined public policy tability of aid flows are vital Social Development, Family and the total budget) are linked to cotton sector is threatened by the and clear priorities are Development in order to enable partner Solidarity), and representatives of performance. In 2006, at the end of trend of the world market. France assistance local and regional government in both the first phase of the plan, the gross necessary conditions for countries to anticipate the helps the Association of African countries. The cooperative approach, enrolment rate had risen to 60.7% making the best use of strengthens amount of resources availa- s

Cotton Producers (AproCa), an b b directed to a specific purpose and u (an increase of almost 50%), and the scarce resources. However, governmental ble for implementing public aggregate body made up of national t S using secure financing, triggered a proportion of pupils completing the challenge is daunting, policy. The existence of y growers’ associations, to participate u

capacity for action G collective process that is being primary education had increased /

as conditions are constantly reporting systems and in international E to 34%. The objective of the second in the Southern C pursued under a second changing and needs are accurate, transparent sta- © programme. phase, covering the 2007-2010 many. Local financing is countries, for the tistical mechanisms is an period, is to raise these ratios to 78% limited and external good of the greatest important aspect of results- and 52% respectively, while at the financing is subject to based management and the same time improving quality and number. From strategy to government action: reducing disparities. conditions. Institutions duty of states to account for support for implementation of PRSPs are often fragile, and qualified human their activities. resources in short supply. Development strategies require institutio- Setting policy and making choices is the nal frameworks to enable stakeholders Developing countries prepare poverty reduction strategy papers (PRSPs) that set their priorities for economic and social development, and in particular for poverty responsibility of the countries concerned. (states, parliaments, partners in civil reduction. Donors are supposed to align their operations with the priorities laid This process must be coordinated by the society and the private sector, international down in the PRSPs. It is often difficult for developing countries to translate these authorities, with extensive involvement by technical and financial partners) to debate, priorities into their medium-term public expenditure frameworks, owing to the all interested parties, based on shared thus supporting the development of shortage of qualified human resources, which often results in a considerable o information and aiming for specific objec- technical and negotiating skills. discrepancy between the declared objectives and the actions really undertaken e z z tives. This is what policy ownership is Frameworks for coordinating implementa- a on the public budget. France and the UNDP have set up a centre of expertise on D M F .

F about. tion of development strategies at the implementation of PRSPs, located in Dakar, that supports some 20 countries in the A © Negotiating and implementing economic national, local and sectoral levels must region in their efforts to resolve these technical questions. ©

p.8 I Adapting French aid to the challenges of a changing world Means I p.9 Means Means

managing emergency situations to suppor- vulnerable groups, cultural Aid is adapted Adapting cooperation ting development. diversity and the environment, to the contexts increased contributions to efforts In low-income countries that are not of beneficiary to the context to address major global chal- directly threatened by crises, aid is more countries, lenges such as communicable clearly provided in support of the efforts whether they are diseases and climate change. of the authorities. It supports the formula- countries in crisis or tion of development policies, particularly Fair distribution of aid efforts in fragile situations, growth and poverty reduction policies, and is another challenge, as many low-income helps to finance their implementation. In countries are aid orphans. In countries these countries, where institutions work allocating limited aid resources, or emerging but are nonetheless fragile, the forms of donor countries must consider a countries. aid delivery are as important as the direct number of factors: meeting the aims of aid operations. Modes of delivery objective needs of countries and their h c e are designed to obtain operational results, populations, the quality of policy in benefi- r n S

since development needs are pressing, and ciary countries – which largely determines . S

help to build the capacity of individuals the effectiveness of the funding allocated © and institutions. For this reason, it is vital to them – and the importance of the inter- to put into practice the principles of the national issues specific to each country. For Paris Declaration, including the medium- example, the countries that receive the and long-term predictability of external most aid are countries in full-blown crisis Why cooperate with China? Training new police forces in Burundi aid, its alignment with partner countries’ situations, poor countries that nonetheless priorities and systems, measuring results have efficient institutions and a few large China is the world’s factory. It processes its In the context of a fragile transition process; and public debate over these results. emerging countries. However, many deve- natural resources in order to be able to improving security is a crucial objective © S. Snrech. The aid community is also active in loping countries still receive very little aid export and drive the growth of a vast for Burundi.With this in mind, French emerging countries. In these countries, considering the extent of their needs: for domestic market. Its rapid growth is having cooperation is supporting the restructuring institutions are generally strong, human example, countries that are fragile but not a huge environmental impact at both the and professional upgrading of the country’s capacity is well developed, and develop- in crisis, and many middle-income coun- local and global levels.To reduce the new police forces.This project, which evelopment cooperation helps ment financing stems primarily from tries, notably in Latin America. It is neces- impact of the growth of the large emerging focuses on improving training systems, partner countries to reduce internal countries on global climate change, processes internal to the societies concer- sary to consider the needs of all beneficiary contributes to long-term capacity building fragilities, particularly poverty, and dialogue with the industrialised countries for this new institution. It is aligned with the ned. Aid makes a marginal contribution to countries so that no countries are excluded involvesD them in the search for collective is needed. In China, French aid promotes partner country’s priorities and reflects a a largely endogenous development process. from the scope of international solidarity. solutions to global problems. scientific and industrial cooperation by genuine effort to harmonise aid with that It encourages and facilitates the conver- With varied forms of aid delivery, it is hosting Chinese students in France and of other bilateral and multilateral donors. For countries in crisis situations, the possible to satisfy needs in all political, gence of these countries with a set of good granting loans on near-market terms It contributes to the ongoing reform of the priority is to restore peace and stability and economic and social contexts. practices that France is helping to promote through the Agence Française de Dévelop- security sector in Burundi, to the consolida- to re-establish basic services for the benefit around the world: more attention to pement. These loans support among other tion of peace and to the reinforcement of the people, whose survival can be at things China’s efforts to combat climate of democratic governance. stake. In such countries, aid faces a two-fold change (hydraulic and wind energy, energy challenge: on the one hand satisfying the efficiency) in the construction sector basic needs of the population where s and public transport. focu domestic institutions have failed, on the Case studies available other hand helping to restore the normal on the CD-Rom enclosed. operation of these institutions. Apart from The Central African Republic: an aid orphan? Chad situations of outright crisis, many countries are in situations of economic, social or political fragility that make them vulne- After more than a decade of coups, rebellions and conflicts, both domestically and in rable to shocks. Development aid is keen neighbouring countries, the Central African Republic (CAR) displays all the characteris- Mali tics of a fragile state, and also those of an aid orphan, owing to the lack of interest or the on preventing these countries from back- withdrawal of many of its development partners. France is one of the few donors, along tracking on years of development. In these with China, to have maintained an in-country representation. French cooperation has de- difficult contexts, the main criteria of aid

e ployed a broad range of financing tools: subsidies from the Agence Française de Déve- r v

effectiveness are the flexibility of instru- b

è loppement and the Ministry of Foreign Affairs, general budget support, support to NGOs. f e

ments, local knowledge (these first two L . By participating in refinancing operations to settle the problem of the CAR’s outstanding

Mauritania F n / o

criteria ensure that cooperation will be E

r obligations to the World Bank and the African Development Bank, France has helped this C e V 2

suited to actual conditions in the country) . country to resume its cooperation with these two multilateral institutions. 0 B 0 - . 2 and the ability to make the transition from J © ©

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products. Support to micro-finance tional budgetary resources of donor coun- Facility for Immunisation (IFFIm) issues Broadening networks is another promising approach tries. For example, the solidarity tax on bonds to finance major international that harnesses local savings to serve the airline tickets, introduced by nine countries immunisation campaigns. Other mecha- the range of aid poorest groups, particularly women. In a since 2006, aims to redistribute the bene- nisms are being publicly debated or are instruments different vein, AFD’s subsidiary Proparco fits of globalisation through a small contri- being tested by a few countries, such as makes loans and equity investments to bution levied on a high-growth business. contributions based on auctioning of help finance the development of the local The proceeds of the tax go to the UNITAID carbon emission quotas and mechanisms private sector in developing countries, programme, which among other things to finance digital solidarity. Proposals have while taking care to maximising its impact makes group purchases of AIDS, tubercu- also been tabled for mechanisms to on development. France also supports losis and malaria drugs in order to obtain facilitate voluntary contributions by the efforts to tap new and sustainable sources them at lower cost (25 to 50% lower in private sector. of public financing in addition to the tradi- some cases). The International Finance

Pilot project and heavy infrastructure: Support to micro-finance: an innovative means of supplying clean water in shantytowns a vital lever for shared economic development

© CE/ Centre Jeunes Kamenge An AFD-financed project to improve water supply infrastructure in Kisumu, the third The productive sector plays a central role he diversity of development situa- in the social sectors, loans or guarantees. largest city in Kenya, introduced a novel in poverty reduction but often depends tions, issues, stakeholders and rela- Loans subsidised by the French govern- form of cooperation with NGOs. A pilot on access to financing. In sub-Saharan tionships, and the rapid pace of ment offer terms not available in commer- project tested a new approach to Africa, AFD is the leading donor to the Tchange, are confronting beneficiary coun- cial banks. Guarantees help to harness supplying drinking water to the disadvan- micro-finance sector, with 35% of total tries and donors with increasingly complex local resources. In 2007, AFD provided taged populations of shantytowns.These donor commitments. These commitments situations. In this context, French aid has €2.6 billion in loans and guarantees. AFD’s populations have little access to the public strengthen local institutions through diversified into a wide range of instruments financial innovations help to improve risk water supply network, and pay a high appropriate instruments. In Morocco, offering developing countries a variety of management. New “counter-cyclical” loans price for water of lower quality. for example, AFD Group guaranteed a €12.5 million loan granted by a local technical and financial innovations. enable the borrower to suspend repayment In conjunction with district authorities, private vendors were authorised to bank to the largest micro-credit Regional centres of expertise: in the event of external economic shocks, purchase water from the municipal water association. a revamped approach to technical French aid is provided through both bilate- such as sudden variations in world prices. © D. Richard company and distribute it through a local assistance ral and multilateral channels. French aid also participates in the network, in exchange for a negotiated fee. AFD participates in the establishment Bilateral aid includes project financing of insurance mecha- This scheme resulted in higher-quality, and development of micro-finance financing, often within sector- nisms, e.g. against climatic risk networks, by supporting them in rural Developing countries are still in need French aid less expensive water supply in the district.The experiment was extended to a second wide approaches, while general and exchange rate risk. These areas and post-crisis countries and by of technical assistance but the forms of is diversified urban district with the help of an NGO. Financing from the World Bank will make it such assistance are changing to avoid budget support provides a broa- new instruments are in keeping possible to scale up the project to cover all informal districts in the city. boosting the supply of housing loans, and uses crowding out local expertise, ensure high der means of assisting partner with the international debt sus- services for migrants and savings a wide range products. operational quality and maximise know- countries in their development tainability initiative, intended to of financial ledge transfers. For several years and efforts to achieve measurable promote responsible indebted- and technical with several multilateral partners, France results. In a context where inter- ness on the part of developing Adding a subsidy component - the co-development savings passbook instruments. has been developing the concept of national issues (negotiations, countries. to migrants’ savings (livret d'épargne codéveloppement), regional centres of expertise in specific access to financing, access to created in 2007, allows the migrant to subjects. The centres bring together accumulate savings for a minimum period markets) display increasing Traditional aid funding is To support the remittances of legal migrants specialists with complementary of three years. If the account holder then technical complexity, French research and supplemented by other financial flows, settled in France to their home countries, expertise on a given subject.These contracts a loan in order to invest in a technical assistance offer the analytical which are growing in size and importance: France has taken an innovative approach experts act at the request of national country that has signed an agreement with capacity to develop appropriate solutions, examples include aid for trade, to which by creating two financial instruments authorities and organise regional training France concerning the passbook scheme, capitalising on and strengthening local European countries have made substantial specifically for migrants: sessions that allow specialists from the interest earned is supplemented by different countries to share experiences. skills. French cooperation actively supports commitments, the co-development savings - the co-development savings account a premium paid by the state. Several of these centres are operating higher education and cultural develop- passbook (livret d’épargne codéveloppe- (compte épargne codéveloppement), These co-development savings schemes in Africa in: education (with UNESCO), ment, two vital elements for building and ment) and guarantees of future purchases. created in 2006, allows the migrant to save help investors familiar with the environment support for PRSP implementation (with up to €50,000 and to take a tax deduction diversifying local capacity. The latter encourages the pharmaceutical to start businesses that are both profitable the UNDP), rural development (with the provided these savings are invested in sector to invest in research to develop and benefit the communities. World Bank and IFAD) and health economic development projects.This AFD can deliver aid in the form of subsi- drugs against tropical diseases, by D (with the WHO). instrument is available to the nationals F dies, primarily in the poorest countries and guaranteeing a solvent market for the A of some 50 countries. ©

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and volunteer organisations be evaluated to Public-private partnerships (PPPs) Forging draw lessons and improve aid effectiveness. and the initiative in support of growth These coalitions also include foundations in Africa new alliances and Northern corporations, an increasing number of which are building new partner- Promoting synergies between public and private development financing is a ships in poor countries, as between Danone long-standing goal of French cooperation. and the Grameen Bank. By encouraging the Proparco, the AFD subsidiary dedicated to development of public-private partner- the private sector, was created in 1977 for ships, French aid enables companies to

D the purpose of adding the financing of F operate in environments where they would A businesses to the French range of develop- © not invest spontaneously, or to change their ment finance tools. Many infrastructure and practices for a greater impact on develop- social and environmental responsibility. marketable public service projects invol- ment. Business plays an important role in Lastly, France takes part in the incipient ving private partners have been supported developing economic activity and employ- dialogue with emerging donors, both through a diversified range of instruments ment, in innovation and opening up deve- bilaterally and in the G8 and OECD frame- (loans, subsidies, guarantees, venture loping countries to the outside world, but works. Apart from their financial contribu- capital investments, etc.). The lessons cipates actively in debates on changes in learned from these experiences are on its own does not seek to develop public tions, these countries – particularly India, the governance of multilateral development making it possible to extend PPPs into new services. With targeted support, French China, Brazil, Mexico and South Africa – institutions, intended to give beneficiary areas (such as training) and to take a ODA encourages private investment in can make a valuable contribution to the countries and emerging donors a stronger broader view of the dividing line between essential services (water, power, telecommu- international debate on good aid practice. voice and a better representation. It also the public and private spheres, by inclu- nication), while helping to broaden access encourages increased cooperation among ding local private agents, civil society to these services and promoting corporate organisations and local authorities. The multilateral institutions and participates in initiative in support of growth in Africa, an international mechanism to measure announced in February 2008 by the French their performance. © J.-B. Veron President (a €250 million African invest- s a complement to its evolving France also supports decentralised coope- ment fund, a €250 million guarantee fund, instruments, France is fostering ration, involving local authorities, social the doubling of AFD Group’s lending and The European Code of Conduct coalitions of stakeholders in support and economic institutions and French Alongside the United Nations, equity investment activity in the African on the division of labour Aof development. NGOs, and bringing thecitizens of donor promoting linkages between the private private sector to reach the level of sector and development on development policy France is an active member of the Euro- countries into closer contact with those of €2 billion over five years) will reinforce pean Union (EU), the world’s developing countries. France French support to PPPs aimed at foremost donor. The EU has has pledged to double the The United Nations has been working The purpose of the European Code development. French pledged substantive increases share of its ODA in support for several years to involve the private of Conduct, adopted in May 2007, is to development in its development aid and of non-governmental opera- sector in development projects. In January increase the effectiveness of aid by cooperation is allocating resources according to the coherence in its international tors. Like other cooperation 1999, at the Davos Forum, the Secretary- heavily involved General of the United Nations tabled the comparative advantages of each European The network of European policies, particularly as regards mechanisms, however, this in multilateral and idea of a Global Business Ethics Pact to donor, including the European Commission. Development Finance Institutions a strategic partnership with practice needs to be regula- EU cooperation, encourage business to contribute to The aim is to reduce the number of donors (EDFIs) Africa. By endorsing the Euro- ted to serve beneficiary which accounts development through partnerships and in saturated countries or sectors (“aid pean Code of Conduct on the populations and institutions for one-third adherence to the principles of globalisation darlings”) and increase it in neglected s division of labour in develop- more effectively. To this end, focu The EDFI network, comprising 16 Euro- of total for the benefit of all. In July 2008, in countries or sectors (“aid orphans”). Case studies available pean development finance institutions, is ment policy in 2007, EU France and the other coun- conjunction with the Agence Française de Under this Code, each donor in a given French aid. on the CD-Rom enclosed. a venue for cooperation and implementa- member countries opted for a tries of the European Union Développement, the UNDP published a beneficiary country concentrates on three tion of joint actions, notably in the form of collective approach to rationa- are preparing a development report that shows in practice how main sectors in which the donor has a Africa co-financing for the private sector. It has lising their aid and harmonising aid cooperation charter in support of local entrepreneurs can reach the poor in their comparative advantage; a lead donor introduced procedures that further delivery. governance, to be signed with local stake- role as customers, but can also integrate coordinates the aid of all donors and harmonise the practices of its members. French aid is heavily involved in multilateral holders in 2008. The charter contains four them into the working world as producers, conducts the policy dialogue with the It works on the basis of mutual recogni- employees and heads of businesses. It and EU cooperation, which accounts for headings: promotion of a national frame- partner in a given sector; and each donor is Morocco tion of operational methods. The provides examples of companies that, in one-third of total French official develop- work conducive to democratic local gover- requested to focus on a small number of procedures and working method used doing business with the poor, not only priority countries.The Commission sees ment assistance. France is a leading donor nance; strengthening democracy at the by a member of the network to prepare make profits but also create new growth this as a reaffirmation of its mission to have to the European Development Fund (EDF), local level; supporting local development a proposal are not challenged by the possibilities and improve the lives of a presence in all developing countries. the World Bank and the African Develop- and reduction of poverty and inequality ; other members. Common standards have the poor. When a donor withdraws from a sector Senegal been defined for evaluation of environment Bank, development organisations in and harmonisation of the forms of or a country, its aid may be delivered by mental and social aspects, as well as for the United Nations system and several cooperation used by European aid operators. another donor in the form of delegated the fight against money laundering. vertical funds, notably in the area of health France will propose that the implementa- management arrangements, also known and treatment of HIV/AIDS. France parti- tion of this charter with partner countries as silent partnerships.

p.14 I Adapting French aid to the challenges of a changing world Means I p.15 In addition

Key figures

French official development assistance: major contributor to several multilateral the social sectors – particularly education, key figures funds, including the European Develop- the leading item in this category, which ment Fund (EDF), the Global Fund to Fight combines aid to education sectors in AIDS, Malaria and Tuberculosis, the World developing countries with education in France’s official development assistance Bank’s International Development Agency France for these countries’ nationals. (ODA), as measured by the OECD and the African Development Fund. Geographically, France concentrates its Development Assistance Committee (DAC), Debt cancellation, which lightens the ODA on a “priority solidarity zone” compri- amounted to nearly $10 billion in 2007, burden of debt service on the budgets of sing 56 developing countries. More than or 0.39% of gross national income, making partner countries and increases their half of its bilateral aid (57%) goes to France the DAC’s third largest donor in domestic capacity to finance economic sub-Saharan Africa, followed by North real terms. and social development, accounts for about Africa and the Middle East (21%) and More than one-third of French ODA one-fourth of total French ODA, and was the Asia (6%). (36.6% in 2007, or $3.64 billion) passes leading category of bilateral aid in 2007. through multilateral channels. France is a Most of the rest of French aid is allocated to Key Work Strands © CE-Guy Stubbs Gross French bilateral aid Gross French bilateral aid by income group 2005-2006 avg., by region, 2005-2006 avg., in USD mn in USD mn

306 368 675 he increased number of donors and countries (European Code of Conduct on 1577 the major changes in the internatio- the division of labour in development nal context provide new opportuni- policy), the local level (European charter 3182 863 Tties to redesign development assistance. on cooperation in support of local gover- 935 France, the third-largest DAC donor in nance) or between European cooperation 4848 2007, is reconsidering its priorities and institutions. 739 1893 instruments to ensure that they are in - Active involvement in international and 2520 keeping with the new challenges. regional institutions and in fora on financing development and defining best The main features of French development practices: the World Bank, the Internatio- cooperation are as follows: nal Monetary Fund, United Nations - Managing for results, as measured in bodies, the Organisation for Economic focus terms not only of economic and social Cooperation and Development. Least advanced countries Case studies available Sub-Saharan Africa progress but also of strengthening the - Increased interaction with other stake- on the CD-Rom enclosed. Low-income countries Middle East & North Africa capacities of partner countries and insti- holders in development: civil society or- Madagascar Lower middle-income countries Asia & Oceania tutions. ganisations, local authorities, the private Higher middle-income countries - Putting the principles of the Paris sector, emerging countries. Latin America & Caribbean Unspecified Europe Declaration into practice through the - Active involvement in research and hi- French Action Plan on aid effectiveness, Unspecified gher education to serve development. Mozambique Source: DAC which sets three priorities: partnerships, - International promotion of innovative fi- Source: DAC capacity building and modernisation of nancing tools and mechanisms to help management tools and methods. adapt development approaches and tools Niger - A commitment to enhanced cooperation to a changing context. and coherence in the European frame- work, be it at the level of beneficiary p.16 I Adapting French aid to the challenges of a changing world In addition I p.17 In addition s b b u t S y u G / E

Glossary C ©

Agence Française de Développement (AFD): Gross national income (GNI): Organic Statute on Budget Acts – LOLF: A specialised financial institution whose task, as The sum of all income (wages, salaries and This law, which came into force on 1 January part of the French official development assis- financial income) received during a given period 2006, reformed the management of the French tance system, is to participate in the financing by economic agents residing in a country. central budget to increase transparency and to of development. Using a range of financial give parliament a larger role. In return for grea- instruments, it works to preserve global public Heavily Indebted Poor Countries (HIPC) ter autonomy in managing public programmes, goods and responds to crisis situations. Initiative: the law provides for increased accountability The HIPC Initiative is the debt relief mechanism and an indicator of performance. Cooperative Multi-stakeholder Programme – for developing countries launched by the World PCPA: Bank and the International Monetary Fund in Organisation for Economic Cooperation Programme aimed at developing closer 1996. It was reformed in 1999, becoming the and Development (OECD): cooperation among the various components “Enhanced HIPC Initiative”. The debt relief Organisation that coordinates economic policy of civil society and government in defining granted normally depends on the poverty and research among developed countries having public policy on poverty reduction. reduction efforts of the countries concerned. a democratic system of government and a market economy. In 2007, the OECD had Development Assistance Committee (DAC): International Fund for Agricultural 30 member countries. An OECD body responsible for issues relating Development (IFAD): to cooperation with developing countries. A specialised institution in the United Nations Poverty reduction strategy paper (PRSP): system, founded in 1977. IFAD serves as an Developing countries set their priorities for European Development Fund (EDF): agricultural and rural development bank for economic and social development and formalise The European Union’s main aid instrument developing and transition countries. them in a policy reduction strategy paper. for cooperation and the development of the Donors are requested to align their actions with African, Caribbean and Pacific (ACP) group of Millennium Development Goals (MDGs): the priorities laid down in the PRSP. states and to overseas countries and territories. Eight goals approved in 2000 by 191 countries, aimed at improving the situation of the most Proparco: Fast Track Initiative for Education for All: disadvantaged by 2015. A subsidiary of the Agence Française de A multilateral initiative launched by the World Développement specialising in private sector Bank in 2002 to guarantee long-term resources Multilateral Debt Relief Initiative (MDRI): financing (investment capital, loans and to beneficiary countries that undertake educa- Initiative launched by the International guarantees) in developing and emerging tional reforms, with the aim of achieving the Monetary Fund (IMF) in 2005 at the instigation countries. Millennium Development Goals concerning of the G8. The total debt relief granted by the universal primary education by 2015. IMF under the MDRI is expected to exceed $5 Public-private partnership (PPP): billion. This debt relief is intended to help the A financing method in which a public authority French Action Plan on Aid Effectiveness countries eligible for it to progress towards the calls on a private company to design, finance, - PAF: Millennium Development Goals (MDGs), which build and manage structures, public facilities Plan for implementing the commitments given aim to reduce world poverty by half by the and services contributing to provision of basic by France in the Paris Declaration in order to year 2015. services. A PPP enables such authorities to achieve the targets set by the year 2010. undertake urgent or complex projects and Official development assistance (ODA): complete them more quickly or under better G8: The term ODA designates all efforts made by conditions. The Group of Eight is a discussion forum and OECD member states to promote the develop- economic partnership consisting of eight of the ment of the least advanced countries and world’s most economically powerful countries: middle-income countries, in accordance with the United States, Japan, Germany, Russia, the the rules of the OECD Development Assistance United Kingdom, Italy, France and Canada. Committee (DAC). Bilingual CD-ROM containing: - the main official documents - Case studies

p.18 I Adapting French aid to the challenges of a changing world In addition I p.19 « Official development assistance is an investment in the future, a means of working for the stability of the planet in the coming decades.With intelligent and effective aid, we can help to achieve the Millennium Development Goals in Africa and elsewhere, we can help to bring about stronger and fairer economic growth, we can fight poverty, support job creation and reduce illegal migration, we can also combat global warming and control the spread of endemic diseases, and in so doing we help to limit the despair that so often fuels conflict and terrorism. » Alain Joyandet,

Minister of State, attached to the Minister of Foreign and European Affairs,

responsible for Cooperation and Francophony

Agence Française de Développement Ministère des Affaires Etrangères Ministère de l’Économie, des Finances (AFD) et Européennes / Direction Générale et de l’Emploi / Direction Générale du Trésor 5, rue Roland Barthes de la Coopération Internationale et et de la Politique Économique (DGTPE) 75598 Paris cedex 12 du Développement (DGCID) 139, rue de Bercy 75572 France 244, bd Saint-Germain Paris Cedex 12 Tel.: + 33 1 53 44 31 31 75303 Paris 07 SP France www.afd.fr France Tel.: + 33 1 44 87 17 17 Tel.: + 33 1 43 17 90 00 www.minefi.gouv.fr www.diplomatie.gouv.fr J u l y 2 0 0 8 - G r a p h i s m : G . G u i r a u d Cover photography: © J.-B. Veron