REALITY OF AID 2018 REPORT
The Changing Faces of Development Aid and Cooperation: Encouraging Global Justice or Buttressing Inequalities?
The Reality of Aid The Changing Faces of Development Aid and Cooperation The Reality of Aid 2018 Report Published in the Philippines in 2018 by IBON International IBON Center, 114 Timog Avenue, Quezon City 1103, Philippines
Copyright © 2018 by The Reality of Aid International Coordinating Committee Writer/Editor: Brian Tomlinson Managing Editor: Erin Ruth Palomares Copy Editor: Lyn Angelica Pano Editorial Assistant: Neriza Gueta Layout and Cover Design: Jennifer Padilla Cover Photos: UN Photo/Igor Rugwiza UN Photo/Arpan Munier UN Photo/Marco Dormino Printed and Bound in the Philippines by Zoom Printing Co. Published with the assistance of:
Coalition of the Flemish North-South Movement
All rights reserved ISBN: 978-971-9657-15-6 i Contents
1 The Reality of Aid Network 3 Acknowledgments 5 Preface 7 Political Overview
The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities? The Reality of Aid Network International Coordinating Committee 31 Chapter 1: ODA, IFIs and the Private Sector 33 Development Finance Institutions: The (in)coherence of their investments in private healthcare companies Benjamin M. Hunter, King’s College London; Anna Marriott, Oxfam GB
45 ODA and private sector resources to achieve the SDGs: The Ugandan case Juliet Akello, Uganda Debt Network
53 The Shortcoming of Blended Financing in Development Cooperation within the Energy Sector in Cameroon: Show-casing the Dibamba Thermal Power Project Charles Linjap, Investment Watch
63 International Finance Institutions: A focus on the private sector in North East India’s development challenges Jiten Yumnam, Centre for Research and Advocacy, Manipur
79 The World Bank in Africa: An analysis of World Bank aid and programmes in Africa and their impact Nahashon Gulali, ITRD Consulting Group and the Lending for Education in Africa Partnership Programme 93 Chapter 2: ODA, Security, and Migration 95 Rising Militarism: Implications for Development Aid and Cooperation in Asia Pacific The Reality of Aid - Asia Pacific 118 Aiding Militarization: Role of South Korea’s ODA in “Peacekeeping” Activities in Asia Youngah Lee, People’s Solidarity for Participatory Democracy – South Korea
126 Militarization of Palestinian Aid Nora Lester Murad and Alaa Tartir, Aid Watch Palestine 134 Development Cooperation, Militarism and Conflict in the Contiguous Areas of Bangladesh, North East India and Myanmar Jiten Yumnam, Center for Research and Advocacy Manipur 149 Development Ground Zero: Philippines, Cambodia, Myanmar Council for People’s Development and Governance 156 Migration and Integrity of ODA as a Resource in Sub-Saharan Africa David Ugolor and Leo Atakpu, ANEEJ 167 Chapter 3: ODA and responding to the acute challenges of climate change 169 The Need for a Climate-related Official Development Assistance (CODA) Framework to Improve Climate Finance Status Quo S. Jahangir Hasan Masum, Coastal Development Partnership, Bangladesh 178 Off the tracks: Lack of climate finance could derail developing world’s ability to adapt to changing climate Jon Sward, Bretton Woods Project 186 EU Should reconsider its approach to climate finance Mattias Söderberg, Dan Church Aid 195 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports 197 Global Aid Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs 293 BRICS Reports
293 Brazil Measuring Brazilian South-South cooperation through a participatory approach Luara Lopes and Juliana Costa, ASUL – South-South Cooperation Research and Policy Center 302 One step forward, two steps back: Brazil’s impact in aid and international cooperation Ana Cernov, Human Rights Activist and Independent Consultant, Brazil China 309 The Case of China’s Development Co-operation in Infrastructural Development in Angola and Kenya Vitalice Meja, Reality of Aid Africa 324 OECD Reports 324 Belgium More with less Griet Ysewyn, Lien Vandamme, Emma Bossuyt, 11.11.11; Antoinette Van Haute, CNCD-11.11.11 332 Canada Challenged by Ambition Gavin Charles and Fraser Reilly-King, Canadian Council for International Co-operation 341 European Union The modernisation of European development cooperation: leaving no one behind? Alexandra Rosen, CONCORD Europe 348 France Will Emmanuel Macron Make French Aid Great Again? Michael Siegel, Oxfam France Germany 352 Germany’s Engagement in Development: Struggling with ODA, migration and security interests at the European level Dr. Martina Fischer, Bread for the World Italy 361 Development cooperation to the test in a new political reality Luca de Fraia, Action Aid Italy Japan 365 Emphasizing SDGs but Increased Instrumentalisation Under the New Development Cooperation Charter Akio Takayanagi, Japan NGO Center for International Cooperation (JANIC) 352 The Netherlands A mixed message on ODA Daniela Rosche, Oxfam Novib
384 Norway What next for the long-standing champion of high aid levels? Irene Dotterud-Flaa, Save the Children Norway Switzerland 393 Decreasing ODA funds, increasingly spent on migration and public-private partnerships Eva Schmassmann and Jürg Staudenmann, Alliance Sud United Kingdom 399 “Aid in the national interest” – in the interest of the poorest? Mike Green, Bond USA 405 The challenges and opportunities of US Foreign Assistance under Trump Tariq Ahmad, Marc Cohen, Nathan Coplin, Aria Grabowski, Oxfam America
415 Glossary of Aid Terms
423 RoA Members Directory
The Reality of Aid Network
The Reality of Aid Network exists to promote national and international policies that contribute to new and effective strategies for poverty eradication built on solidarity and equity. Established in 1993, the Reality of Aid is a collaborative, non-profit initiative, involving non-governmental organisations from North and South. It is in special consultative status with the United Nations Economic and Social Council (ECOSOC).
The Reality of Aid publishes regular, reliable reports on international development cooperation and the extent to which governments, North and South, address the extreme inequalities of income and the structural, social and political injustices that entrench people in poverty.
The network has been publishing reports and Reality Checks on aid and development cooperation since 1993.
These reports provide a critical analysis of how governments address the issues of poverty and whether aid and development cooperation policies are put into practice.
The Reality of Aid International Coordinating Committee is made up of regional representatives of all participating agencies.
REALITY OF AID NETWORK International Coordinating Committee (2018)
Leo Atakpu Chairperson Africa Network for Environment and Economic Justice (ANEEJ) 39, Oyaide Street, Off Benoni Road, GRA, Benin City, Edo State, Nigeria Tel. +2348023457333, +2348039718335 Email: [email protected] www.aneej.org
Fraser Reilly-King Vice Chairperson/Representing non-European OECD Country CSO members Canadian Council for International Cooperation (CCIC) 39 McArthur Avenue, Ottawa, ON, K1L 8L7 Canada Tel: +01 613 2417007 Fax: +01 613 2415302 Email: [email protected] www.ccic.ca
1 Vitalice Meja Reality of Aid Africa Wanandege Flats Apt 4D Kirichwa Road Kilimani P.O.Box 36851 - 00200 Nairobi Kenya Tel: + 254 202345762/ 254 704353043 Email: [email protected] www.roaafrica.org
Coordinator The Reality of Aid – Asia Pacific 114 Timog Avenue Quezon City 1103, Philippines Tel: +63 2 9277060 ext. 201 Telefax: +63 2 9276981 Email: [email protected] www.realityofaid.org
Polly Meeks Representing European Country CSO members European Network on Debt and Development (EURODAD) Rue d’Edimbourgh 18-26 1050 Brussels, Belgium Tel: +32 2 8944645 Fax: +32 2 7919809 Email: [email protected] www.eurodad.org
Lyn Angelica D. Pano Global Secretariat Coordinator 3/F IBON Center, 114 Timog Avenue Quezon City 1103, Philippines Tel: +63 2 9277060 ext. 204 Telefax: +63 2 9276981 Email: [email protected] www.realityofaid.org
2 Acknowledgments
The Reality of Aid 2018 Report is written by authors from civil society organisations worldwide whose research draws on knowledge and expertise from aid agencies, academia, community-based organisations and governments. We would like to thank those who have generously contributed their knowledge and advice.
Overall editorial control of the Reality of Aid 2018 Report lies with the Reality of Aid International Coordinating Committee, but the views expressed in the reports do not necessarily reflect the views of the International Coordinating Committee, or of IBON International that published this Report.
The International Coordinating Committee was assisted by Brian Tomlinson as Content Editor, and Erin Ruth Palomares as Managing Editor.
This Reality of Aid 2018 Report is published with support from 11.11.11-Coalition of the Flemish North-South Movement.
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Preface
Since its inception in 1993, the Reality of Aid (RoA), has been consistent in the annual production of a report monitoring performance of development aid and cooperation from the lens of poverty reduction and human rights. It remains the only southern- led global advocacy network on aid.
The 2018 Reality of Aid (RoA) Report has the theme “The Changing Faces of Development Aid and Cooperation: Will new directions and forms of aid benefit the poor?” Authors of the different chapters examine in closer detail current narratives and trends in Official Development Assistance (ODA), which risk undermining the unique contribution that it can make to the elimination of poverty and inequality in developing countries. It also answers the following questions: How are these debates manifested at the country level? To what extent are ODA initiatives contributing to the fulfillment of human rights-based sustainable development for people living in poverty in the global South? What do current trends and practices say about the future of aid?
Ending poverty and the achievement of the Sustainable Development Goals (SDGs) need dedicated resources to support economic, environmental, and social investments that benefit the poorest people and countries. The 2018 Reality of Aid Report takes stock of the current debates and narratives on the role of ODA and examines how these debates are translated at the national level. The report focused on maximizing contributions of ODA to poverty eradication, within a framework that is defined by human rights standards, including strengthening gender equality and women’s empowerment, and ensuring that members of marginalized groups are not left behind. The Report draws lessons and conclusions from both positive and problematic practices, which in turn inform key messages on the role and future of ODA in financing for development. It addresses fully the role of ODA in meeting the financing needs of Agenda 2030.
The 2018 Report sets out a narrative in support for the integrity of ODA as a dedicated resource that contributes directly to the eradication of poverty and the reduction in all forms of inequality.
The Report examines these “changing faces of aid” in five major areas: 1. ODA and private sector resources to achieve the SDGs 2. ODA, security, migration and options for development 3. ODA and response to the acute challenges of climate change 4. South-South Cooperation in development finance 5. Safeguarding ODA as a public resource for reducing poverty and inequalities: Recommendations for the future deployment of aid
5 This Report has 29 contributions comprising 15 country chapters, 14 thematic articles and a Global Aid Trends chapter. The opening Political chapter brings together the various themes in the contributions of the different authors of the Report.
Remarkably, the Report sets out 10 areas for future direction and recommendations for transforming the aid regime towards one based on solidarity, human rights, feminist principles, reducing poverty and tackling inequalities.
Mr. Leo Atakpu Chairperson The Reality of Aid Network
6 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
The Reality of Aid International Coordinating Committee
Introduction: Setting the the planet would, ” address decisively the [global] threat posed by climate change Context and environmental degradation.”2
On September 2015, the UN General Achieving Agenda 2030 requires a Assembly adopted the 2030 Agenda focused commitment by all the world’s for Sustainable Development. Member countries, including the transformation of states agreed to a unique Agenda for development cooperation as a dedicated people, planet and prosperity, one that source of finance. While not the largest recognizes “eradicating poverty in all its international resource, ODA is a unique forms and dimensions, including extreme and crucial public resource for the SDGs, poverty, is the greatest global challenge as it can be deliberately programmed and an indispensable requirement for as a catalyst for reducing poverty and 1 sustainable development.” The question inequalities. Other resource flows may is whether the international community be important for the SDGs, but by their has provided sufficient and quality nature, they are often driven by other resources to realize the Agenda’s vision purposes. The credibility for increased and promises. ODA is not its ability to mobilize other flows, but its coherence with efforts to This 2018 Reality of Aid Global Report transform the living conditions of people examines recent changes in the direction affected by poverty, marginalization and and prospect for international aid in discrimination. the context of Agenda 2030, as well as the persistence of poverty and growing What are the accomplishments to date? inequalities within and between countries. Are the current directions in ODA helping What role can and should Official or hindering the realization of Agenda 2030 Development Assistance (ODA) play in and the SDGs? These questions are the meeting the financing needs of Agenda reference point for the Report’s thematic 2030? Is ODA fit for this purpose? chapters and case studies contributed by civil society activists in the North and Agenda 2030’s comprehensive and the South. Unfortunately, they provide transformative vision aims for “a world overwhelming evidence that aid resources of universal respect for human rights are woefully insufficient and often and human dignity.” It is a universal misdirected. They are increasingly being Agenda for a world in which all forms of deployed in ways that exacerbate rather inequalities between and within nations than eradicate poverty. Instead of following are reduced. Gender equality and the dictate to ‘leave no one behind,’ aid may women’s empowerment are given priority. be contributing to the increase, rather than New paradigms for the stewardship of the reduction of inequalities.
7 The Reality of Aid 2018 Report
Development cooperation must In this “Beyond Aid” context, many providers now focus on opportunities be transformed in support of presented by 1) a growing diversity of Agenda 2030 development actors, largely outside the traditional aid system, including middle- We live in a world with unacceptable levels income country providers; 2) a diversity of poverty and inequalities. The Reality of of financing modalities available to Aid Network has strongly advocated for the retooling of ODA, to make it an essential developing countries, including various resource to address and challenge these forms of private financial flows; and 3) conditions. This goal requires answers to the broadening of public policy goals complex questions. What should be ODA’s whereby ODA is positioned to meet the central purpose? Under whose direction challenges of climate finance, security and should these objectives be implemented? migration or public/private partnerships What are the implications for people living for infrastructure development. The DAC in poverty or otherwise marginalized? affirms, at least on paper, that ODA will Governments, civil society and the private continue to play a key, but updated, role in sector often have widely different views development finance. on these issues; aid and development cooperation is a contested terrain. The Reality of Aid Network, and the authors of this Report, acknowledge and respond to “Beyond Aid” is an unhelpful discourse the complexities inherent in current trends in development cooperation. However, Mainstream development advocates civil society organizations (CSOs) are not so and many governments are increasingly quick to dismiss aid. Rather, they strongly promoting a discourse of moving “Beyond promote it as a fully concessional resource Aid” to progress from “billions to trillions” uniquely positioned to tackle poverty and 3 to fully finance the SDGs. They focus inequality. It is highly relevant across a on the deployment of a wide variety of wide range of country contexts: Agenda resources, some concessional, but mostly 2030’s directive “to leave no one behind” non-concessional, in the implementation calls for actions in both poor and middle- of the SDGs. In this scenario, ODA is income countries, although priorities and viewed as a diminishing and somewhat modalities may differ. irrelevant resource. While it is recognized that the poorest countries may still require ODA, its proposed role in many Poverty is not just concentrated in the contexts is limited to that as a catalytic poorest countries; it also is a reality agent in the mobilization of private for hundreds of millions of people in finance for development. At the OECD’s middle-income countries. As noted in the Development Assistance Committee Report’s aid trends chapter, almost 47% (DAC), providers are discussing terms of the population in lower middle-income for the “modernization of ODA,” and the countries are living in poverty, as defined development of incentives whereby ODA by World Bank poverty lines. An estimated will facilitate other forms of development 2.4 billion people, or 40% of developing finance. countries’ populations, are living inside
8 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
serious conditions of poverty and suffer poverty.” No longer should Northern from various forms of exclusion.4 agencies be using their own experts to promote models of “good governance” Marginalizing aid as a development and required “economic reforms,” as resource raises questions about the a precondition for “partnerships” with 6 commitment of aid providers to take developing country counterparts. action against poverty and inequality. The level of ODA provided is also a major Clearly aid must be substantially increased issue of concern. Report authors, from to effectively meet these challenges in both both developed and developing countries, least developed and lower middle-income stress the moral, if not legal, obligation to countries. To be consistent with Agenda allocate aid at the level of the long-standing 2030’s vision, aid practices must also be ODA target of 0.7% of providers’ Gross vigorously examined and reformed in National Income. The reality is that ODA terms of its geographic priorities as well as growth is very modest at best, with Real its modes of delivery. ODA increasing from $102.7 billion in 2013 to $125.5 billion in 2017. It grew by only 3% An expanded and reformed ODA is an from 2016 to 2017.7 If the 0.7% target had essential resource for ending poverty been met, $325 billion in aid, almost three times the actual 2017 level, would have Rather than side-lining and been provided – a substantial contribution instrumentalizing aid for broad foreign towards the realization of the SDGs. policy purposes, The Reality of Aid authors seek a re-conceptualization of The expansion of a reformed ODA would development cooperation, seeing it as deliver a significant resource for catalyzing fundamental to international solidarity, action for more equitable and sustainable an approach that responds to the broad development. As a public policy choice, challenges of ending poverty and tackling provider governments can, and should, inequalities. choose to devote it exclusively to reducing poverty and inequalities. As noted above, This reconceptualization requires that this would make ODA invaluable, as it is development cooperation move away a unique development finance resource. from the traditional aid paradigm defined For the least developed, and most middle- by charitable and short-term donor- income countries, ODA’s concessionality determined results. It recognizes that this and grant form is also crucial as it allows latter approach can exacerbate the “us/ them to build, from low levels of revenue, them” global dichotomies between and their own capacities to finance sustainable within countries, and thus may perpetuate development. poverty and inequality. Civil society activists have long seen traditional notions of aid as ODA is a critical resource for the United 5 “antiquated, if not outright neo-colonial.” Nations as well as a range of other They challenge the current reality whereby multilateral institutions and CSOs, the latter Northern governments impose their act as independent actors for development priorities and allocate relatively small and accountability. Assuming rigorous amounts of aid to “fight against extreme levels of transparency, ODA is currently
9 The Reality of Aid 2018 Report
the only international development flow ownership of development priorities whose impact is traceable and accountable in developing countries. A mountain of in the public realm. evidence, including prior global Reality of Aid Reports, backs the essential value of As summarized in this Reality of Aid this principle. Report, Reforming Aid and the Global “The importance of ODA is not Partnership for Effective determined by its ability to combine Development Cooperation with other resources for development, however important they may be. (GPEDC) Rather, its legitimacy is derived from The 2005 Paris Declaration was a major, its maximum coherence with efforts but largely unsuccessful, five-year effort to transform the living conditions and to reform aid practices. Its current enhance opportunities for people manifestation is the Global Partnership for affected by poverty, marginalization and Effective Development Cooperation (GPEDC). discrimination.”8 GPEDC brings together traditional providers, developing country partners, ODA will be needed in vastly increased CSOs, parliamentarians, foundations quantities, and with significantly and business associations around a improved effectiveness, over the next broad agenda for effective development several decades. While it may never be cooperation.10 Southern providers the largest resource for development finance ODA can be, and must be, a of development cooperation, such as leading and essential component of China and India, have largely excluded poverty eradication. This renewal is themselves as they claim that it continues essential if the global community has any to be dominated by a Northern aid chance of turning around the triple crises paradigm. of out-of-control inequalities, threats to planetary survival, and growing attacks At the 2011 Busan High Level Forum, the on democracy. GPEDC adopted four key principles to guide the reform of their development The governments of developing countries cooperation practices. These were must set the course for determining their understood to be consistent with own development priorities through international commitments on human processes that include the full participation rights, decent work, gender equality, of citizens and their organizations. If environmental sustainability and disability: substantially reformed, ODA could be a resource to facilitate these processes, • Ownership of development priorities one that developing countries could apply by developing countries; to different elements in defining and • Focus on results, aligned with the implementing SDG strategies. The first priorities and policies set out by principle for guiding effective development developing countries themselves; cooperation, as established in the 2005 • Inclusive development partnerships; and Paris Declaration and the 2011 Busan High • Transparency and accountability to Level Meeting,9 is national democratic each other.
10 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
Parties to the Busan Forum also agreed potential to undermine its very essence to “deepen, extend and operationalize the as a concessional resource dedicated democratic ownership of development to human rights and the eradication of policies and processes” at the country poverty. level.11 The GPEDC was charged with the responsibility to monitor progress in These concerns revolve around an extensive implementing these principles. To date increase in the use of ODA as an instrument the results have been disappointing, in to advance Northern providers’ economic ways similar to those following the Paris interests and foreign policy priorities. The Declaration.12 authors document a major paradigm shift in not only the discourse about ODA (reflecting Civil society actors in the Global the ‘Beyond Aid’ paradigm), but also in its Partnership have advocated for a human practices. These shifts are being strongly rights-based approach as the foundation contested by civil society at both the country for implementing the Busan principles13 and global levels. – something which has also largely gone ignored. Many questions must be asked and answered. Do the new modalities for aid The Reality of Aid Network understands delivery meet the needs of populations that the many challenges for development living in poverty? How are these debates in the 21st Century require both a human manifesting in developing countries? rights-based and feminist approach to What do these new trends say about the development cooperation.14 Such an future of aid? approach is one in which the priorities and practices in providing aid, as well as Chapters in this Report examine these other forms of development finance, are “changing faces of aid” in five major areas: thoroughly informed by human rights standards, inclusive policy dialogue 1. ODA and private sector resources to that takes into account the interests of achieve the SDGs people living in poverty or otherwise 2. ODA, security, migration and options marginalized populations,15 and that for development puts in place comprehensive measures 3. ODA and responding to the acute to ensure gender equality and women’s challenges of climate change empowerment. 4. South-South Cooperation in development finance Is the international community 5. Safeguarding ODA as a public resource upholding its commitments? for reducing poverty and inequalities: Recommendations for the future This Reality of Aid Report questions deployment of aid whether the international community is truly upholding its commitments to ODA and private sector aid and development effectiveness, as resources to achieve the SDGs agreed in Busan and in various United Nations fora. It raises points about the There is a general recognition that current uses of aid, ones that have the considerable financial resources are
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required to meet the financial requirements Recently the World Bank’s Development of the SDGs – although the best way to Committee adopted a new and aggressive source these resources is highly contested. private sector approach. Titled “Maximizing Many powerful actors have argued that Finance for Development,” it directs this objective is best accomplished by staff to implement a cascade approach, instrumentalizing ODA as a resource prioritizing “private solutions” in project to mobilize private sector finance for finance, with public funding deemed to development through various Private be the choice of last resort. According to Sector Instruments (PSIs), including those recent reports, the UN Secretary General, used by specialized Development Finance Antonio Guterres, is convening a high level Institutions (DFIs). UN meeting in September 2018 to set out a new private investment strategy to finance Chapters from provider countries confirm the SDGs. This strategy will aim to mobilize the active efforts of all major providers in public, private and domestic resources, developing and implementing strategies but with an emphasis on the private to use ODA resources as a catalyst for sector.16 In the words of CSOs closely private sector financing of development: monitoring the UN and the private sector, “the United Nations is embarking on a new • According to the Netherlands’ chapter, era of selective multilateralism, shaped more than 10% of Dutch ODA in 2017 by intergovernmental policy impasses was allocated to the country’s private and a growing reliance on corporate-led sector oriented programming. This solutions to global problems.”17 was up from 4% in 2010. Half of these funds were made available to As the United Kingdom contemplates its Dutch businesses to promote Dutch aid programs post-Brexit, the Minister for commercial interests abroad. Development postulates that: • Canada has just launched its DFI as FinDev Canada, one of many across “as we leave the European Union, the donor world. we will scope new instruments and institutions to sit alongside CDC • The United States is expanding the role [Commonwealth Development of the Overseas Private Investment Corporation], our private sector Corporation in a range of development investment arm, to provide loans finance instruments, many of which or guarantees to ensure a better will involve ODA. It is one of few aid offer to developing countries as they initiatives that has support from the transition out of extreme poverty Trump Administration. but before they’re fully reliant on international capital markets.” This support for the private sector’s “engagement in development” includes The not-so-implicit assumption in the direct public loans to the private sector, Minister’s statement is that most developing equity investment, investment and countries, once having “transitioned out trade insurance and guarantees, and of extreme poverty” (based on national participation in mezzanine finance. averages), will have no further need for
12 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
concessional aid resources, irrespective relied on foreign technicians, technology of often large and persistent pockets of and spare parts, making it difficult for extreme poverty and continued inequalities Cameroon to “own” and sustain the that they may still exist. project. It collaborates concerns raised elsewhere by civil society, that private The global allocation of ODA reflects these sector instruments and blended finance trends. Using a “private sector proxy,” the will be associated with an increase in aid trends chapter estimates that 26% informally tied aid. of ODA in 2016 was allocated to sectors oriented to the private sector, up from 21% A second case study examines the role of in 2010. Some of the largest donors, for Development Finance Institutions (DFIs), in instance Germany (35%), France (35%) and bringing together ODA and private finance Japan (55%), show a heavy concentration in the health sector. While currently a in these sectors, alongside major regional small segment of health finance, this development banks such as the Asian approach is expected to grow substantially Development Bank. in coming years. The study identifies a number of issues, beginning with the lack What do we know about the country level of transparency due to complex corporate outcomes and impact of private sector structures. These investment funds have finance through PSIs? The short answer provided few, if any benefits to poor and is “not enough.” A recent report by the marginalized populations. The combination OECD recognises that the evidence base of user fees and profit motives has driven on the impact of blended finance is not such investments towards expensive, yet persuasive: “Little reliable evidence high-end urban hospitals that cater to has been produced linking initial blending African countries’ wealthier citizens and efforts with proven development results.”18 expatriates. This report points to the gap in systematic evaluations and assessments of this finance In another case study, an author analyzes in relation to development. a range of blended finance initiatives in the natural resource and agricultural The Reality of Aid Report highlights several sectors of North-East India, which have case studies that point to some clear been financed by DFIs and multilateral directions. The Dibamba Thermal Power banks. Albeit with much controversy, Project in Cameroon, which was partly these initiatives have played a leadership financed through ODA/blended finance role in the privatization of development mechanisms, is one of them. The author in the region. Government has facilitated reports limited local development impact these investments by modifying policy to on rural poverty. create an enabling environment for the private sector. The chapter documents In contravention of requirements under the significant negative impact these Cameroon law, the project implementers projects have had on the environment. largely ignored the need to address local Water resources to support small- community services. At the broader scale agriculture of the rural poor have economic level, the project has heavily been greatly compromised. Project
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implementers have also failed to take into The aid trends chapter also describes a account Indigenous Peoples’ patterns of range of issues relating to blended finance land ownership and have been carried institutions that have been raised by forward without free, prior and informed both the OECD DAC Secretariat and CSOs consent from these communities. including:
The Uganda chapter urges providers to • Weak transparency and accountability give priority to micro, small and medium- for the use of aid resources and sized enterprises (MSME) in their private private finance as a development sector policies rather than large-scale resource and its corresponding projects financed through blended finance impact on poverty, with the added mechanisms. According to the author, observation that gender issues were MSMEs employ 2.5 million people in rarely targeted; Uganda and contribute 75% of its GNP. • Scant evidence on whether private There is a strong female presence in finance is truly financially additional informal sector employment, set against a (i.e. would not have happened in backdrop of continued abuse of women’s the absence of public resources or rights in Uganda. The author suggests guarantees). The OECD observed that that providers’ private sector support, “be there was a tendency for this finance to blended with gender attitude change tools go towards sectors where the business for communities to appreciate the benefits case is clear and commercial gains of women’s economic power.” apparent, which are often not high-risk poverty-oriented sectors; and, The aid trends chapter points to the growth • The potential for non-concessional of more than 167 provider mechanisms for blended finance to exacerbate the pooling of public finance with private growing debt issues for some poor capital. The OECD estimates that these and middle-income countries, along mechanisms mobilized $81.1 billion in with the potential for increasing private finance between 2012 and 2015, but formal and informal tied aid through provides no estimate of public resources the engagement of providers’ private invested for this result. sector companies.
While providers in the DAC have agreed There is a strong case for increasing the to a set of principles to guide blended poverty focus of ODA through engagement finance, the principles do not do justice with the private sector in development, but to some of the concerns associated with in ways that: the stress on blended finance. A key risk is that ODA will be diverted from 1. Strengthen a wide range of small and other modalities and purposes, which medium -sized enterprises in many could achieve more for the reduction of poor and middle-income countries, poverty and inequalities. Furthermore, including women-led enterprises; providers in the DAC have failed to reach 2. Improve social dialogue, overall labour a consensus on how to operationalize standards, working conditions and these principles or the ground rules for environmental standards in different reporting this finance as ODA. sectors;
14 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
3. Create resilience, sustainable practices priorities has been apparent in bilateral and reliable markets for small scale aid allocations to Afghanistan, Pakistan agricultural producers; and Iraq, countries of major geo-strategic 4. Deploy untied aid to increase local interest to northern providers. developing country private sector capacities; and At its peak, in 2005, bilateral aid to 5. Reduce, and above all never Afghanistan, Pakistan and Iraq comprised exacerbate, existing inequalities 23% of total Real Bilateral Aid. For three prevalent in the local context. providers (the United States, the United Kingdom and Japan) aid to these countries Unfortunately, these are rarely priorities represented 35% of their Real Bilateral Aid. for providers’ Private Sector Instruments While the overall share has declined in in their efforts to mobilize private finance recent years, as late as 2013 the share of for development. The likely consequence Real Bilateral Aid to Afghanistan, Pakistan of further investment by ODA in these and Iraq stood at 10%. (It declined to 8% mechanisms will be to move it away from in 2016.) its core goal of reducing poverty and inequalities. More recently, wars in the Middle East have required a high level of humanitarian There are major concerns that PSIs assistance, sometimes at the expense of will contribute to increased economic other, long standing humanitarian crises. inequalities and social marginalization in The Middle East’s share of DAC provider targeted countries. Finally, as the DAC humanitarian assistance increased changes its rules relating to PSIs, the from 14% in 2012 to 33% in 2016, driven opportunities expand for providers to mainly by the conflicts in Syria and artificially inflate levels of aid reported surrounding countries. These important to the DAC - for example, counting humanitarian priorities have affected investment guarantees as ODA, even not only the aid allocations of traditional, though most guarantees will never be paid Northern providers but also South-South out and these “aid resources” never leave Cooperation flows. The aid trends chapter the provider’s country. confirms that almost 75% of South-South Cooperation flows are from Middle East ODA, security, migration and providers and that they are primarily options for development directed to humanitarian crises in the region, including the war in Yemen. Turkey The militarization of ODA alone has provided over $6.4 billion in aid to refugees camped along its borders. The Reality of Aid Network is increasingly concerned that current trends in the Despite long-standing DAC principles that allocation of ODA will deepen the ODA should not support financing of military “militarization of aid” and its diversion equipment or services, The Reality of Aid to countries and purposes linked to authors describe the diversion of aid to the strategic security interests of major military and security spending. The Korean provider countries. For example, since chapter documents support to Provincial 2002, a movement towards security Reconstruction Teams in Afghanistan. This
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assistance combined aid purposes with of ODA activities relating to police and military objectives in the country’s rural military training, counter-terrorism and pacification schemes. This chapter also the prevention of extreme violence, as describes a five-fold increase in the use of well as support for military forces in UN Korean ODA to support police training by mandated peace operations.19 To date, the Korean National Police Agency in several however, there is no clear assessment of Asian countries. The authors suggest that the degree to which ODA is being used “South Korea’s protest-management skills for these purposes. According to DAC training and Korean-made equipment data, in 2016 providers spent $2.9 billion [may be used] to quash dissent and quell in the conflict, peace and security sector, democratization rallies, as has been or about 4% of sector allocated bilateral increasingly true in South Korea itself.” ODA. This share is largely unchanged since Training police forces with ODA resources 2010. However, coding for this sector likely has been a growing area of provider only captures a fraction of spending for activities in implementing international these purposes, as it may often be coded security policies. to other development purposes.
A chapter by The Reality of Aid – Asia Pacific ODA, refugees and migration control examines providers’ strategies to deploy aid to shore up their geo-political and security All the European provider chapters discuss interests, using several case studies. For the impact that the recent influx of so- example, Japanese aid has supported called “irregular migrants” and refugees coastal patrol vessels and operations in to Europe has had on their country’s aid Vietnam and the Philippines, in the context priorities. In the first instance, there has of a growing territorial dispute with China been an artificial expansion of European in the South China Sea (see also the Japan aid as providers can include the first year chapter). This chapter also scrutinizes of refugee support in the provider country a recent DAC casebook on ODA eligible as part of their ODA, and most do so. In activities in conflict, peace and security. The several countries, such as Denmark, these authors raise concerns about the vague funds have been taken directly from their limitations on the use of ODA in support ODA budgets. European providers have of “routine police functions” and the use also been looking to ODA for quick fixes to of “non-lethal equipment and training.” limit the flow of migrants. In another example, the casebook fails to define key terms such as “investigatory” There is a push to enter into “re-admission and “countering transnational crimes” in agreements” with migrants’ countries ODA-supported police activities. In their of origin. These agreements include view, “there is a risk that ODA could be used “migration management” and “migration for intelligence work that is more aligned control” mechanisms in countries of to donor national security priorities than origin as well as measures to support the to a development or poverty-reduction reintegration of returned migrants. The EU agenda.” established the Emergency Trust Fund for Africa for the explicit purpose of managing In 2016 the DAC members reached an migration, with members investing more agreement to expand the definitions than €3 billion of ODA in this Fund (see
16 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
the EU chapter). CSOs worry that the pay the bills for change in developing restructuring of the EU development countries (but also in developed countries budget framework into one instrument, such as the United States and Australia). the Neighborhood, Development and From a developing country perspective, International Cooperation Instrument, is in the answer is clear: the obligation lies on part intended as a way to direct additional those who caused the problem over the funds to European neighbours to address past century. This “polluter pays” principle “irregular migration.” Expansion of French requires that the North make major aid is also linked to resources to fund contributions to the solutions. border control management and the return of migrants to their countries of origin. The At the 2009 Conference of the Parties (COP) election of “populist” governments in Italy to the UNFCCC, developed countries agreed and Hungary, along with the potential for a to a target of $100 billion in annual finance changing balance in the EU parliamentary by 2020 for both climate change adaptation elections, will accentuate these trends and mitigation directed to developing to use aid to buttress restrictive political countries. Of this target, $37.3 billion is to be reactions that undermine the rights of sourced from bilateral developed countries, migrants and refugees. with the balance coming from multilateral banks (from their own resources) and from The Reality of Aid Network will be closely the private sector. The explicit commitment monitoring the increased prioritization of (COP 13 [2007] in Bali and COP 15 [2009] in ODA for foreign policy, security and counter Copenhagen) was that this provider finance terrorism interests. An essential question would be “new and additional” to what is is whose interests are being served in this being provided as ODA. use of aid. How do these programs affect the prospects of marginalized and excluded Under DAC rules for ODA, public peoples and promote human security concessional climate finance for and the sustainable development of their developing countries are eligible aid communities? resource transfers, and can be reported to the DAC as such by all providers. Using this ODA and responding to the DAC data, the aid trends chapter estimates acute challenges of climate that only $18.7 billion was allocated by change developed countries in 2016, just half of what is needed to meet their share of the Against a backdrop of often-fraught $100 billion commitment. This amount has 20 climate diplomacy in on-going negotiations not increased substantially since 2013. within the UN Framework Convention for Climate Change (UNFCCC), the World Bank Developing countries and CSOs insist that estimates that $4 trillion in incremental climate finance should be measured as investment across the globe is required a distinct and additional resource flow to keep the average temperature to ODA, primarily because of the urgent increase below 2oC. Agreements on a need to address climate change impacts concerted response quickly evaporate on poor and vulnerable people. Existing when negotiations focus on who should ODA levels for purposes beyond climate
17 The Reality of Aid 2018 Report
change are stagnant and vastly insufficient “According to the UN Environment even for those purposes. Program for adaptation alone, “the costs could range from US$140 If bilateral climate finance were recognized billion to US$300 billion by 2030, and as a distinct flow (i.e. additional to ODA between US$280 billion and US$500 commitments), provider ODA would have billion by 2050”.” been 14% less in 2016, going from $132.3 billion to $113.8 billion when climate After years of political disagreements, a finance projects are taken to account. When consensus on the importance of covering climate finance commitments are removed developing country “Loss and Damage” (L from ODA, Real ODA commitments have & D) from climate change was reached, actually declined since 2014. but parties to the UNFCCC are no closer to agreeing on crucial additional finance These amounts are only for projects for L & D beyond the $100 billion. L & totally dedicated to climate finance. They D requires approximately $50 billion in do not include projects where adaptation annual additional finance by 2022 (Bretton or mitigation is mainstreamed as one Woods Project chapter). among several project objectives. The latter goal is not included in the directive Contributions from Bangladesh and for new and additional finance for climate Denmark on the climate finance / ODA change initiatives. nexus identify several unresolved issues in the unequal balance between adaptation Going forward, the impact of increased and mitigation. There is a definite bias climate finance on ODA is likely to be towards the latter, which has had, and will substantial. Providers must double their continue to have, an adverse effect on the bilateral climate finance commitments in lives of millions of vulnerable people in the order to meet the $100 billion target by South. 2020. These are likely to take place in the absence of real and substantial overall These chapters analyze the extreme growth in ODA. In this scenario, it is likely fragmentation of funding windows in that climate finance will reduce developing the existing climate finance architecture, countries’ access to ODA for other purposes, where most funding windows pay almost as developing countries and CSOs fear no attention to impacts on women, girls would happen in Bali and Copenhagen. and gender equality. This gap is particularly evident in climate mitigation infrastructure These impacts do not take into account sectors such as energy and transport. the imperative to scale up climate finance The quality of climate finance is also an beyond $100 billion in future climate issue. Loans form a considerable portion negotiations where such finance will be a of current climate finance (particularly for crucial part of reaching agreements with France and Japan), something that is highly developing countries. The Bretton Woods problematic for developing countries. As Project chapter on climate finance notes noted, in practice loan mechanisms will that the finance need will be much greater mean that developing countries will be than the Copenhagen commitment of paying themselves for the climate impacts $100 billion by 2020: on their countries.
18 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
With the imperative to scale up climate The global aid trends chapter estimates finance after 2020, all countries and that in 2015/2016, SSDC contributed stakeholders must make new and $27.6 billion, down from $32.2 billion in concerted efforts to agree on new targets 2014/2015. These numbers come with beyond the $100 billion and to consider a caveat as current sources may miss new and innovative sources for climate important non-financial contributions. finance. Examples of the latter include SSDC is about 40% of DAC providers’ carbon pricing for aviation, a financial combined country programmable aid transaction tax or an equitable fossil fuel and humanitarian assistance (see global extraction levy. Developed countries must aid trends chapter). It is also important honour their previous commitments to to note that almost 75% of this SSDC new and additional public resources for originates from Middle East providers international climate finance, while also and is directed to humanitarian crises in increasing their ODA for other purposes. this region.
South-South Development Brazil has been recognized to be at the Cooperation in development forefront of SSDC. Its involvement in finance development cooperation as a provider has been innovative, as is documented In both the United Nations Development in a chapter by ASUL (South-South Cooperation Forum (DCF) and the Global Cooperation Research and Policy Partnership (GPEDC), South-South Center). While affirming its importance Development Co-operation (SSDC) is to Brazil’s changing global roles, another promoted as a growing development contribution from Brazil (Ana Cernov) resource for Agenda 2030. At its May 2018 points out that SSDC can have a fragile Biennial Forum, the DCF affirmed “the economic foundation in several emerging importance of South-South cooperation countries. She suggests that the country’s in adapting the 2030 Agenda and current economic and political crisis may internationally agreed development goals have yet to be determined impacts on to local circumstances.”21 SSDC initiatives.
For over four decades emerging Another contribution from Kenya analyzes developing countries have been engaging China’s SSDC in Kenya and Angola, which in SSDC, primarily through technical responds to African countries’ need for exchanges and the sharing of knowledge infrastructure, but is largely driven by in addressing development challenges. China’s economic interests, companies But SSDC can also take many other forms and technologies. The author observes: – direct project support, the engagement of partner countries through UN agencies, “Issues relating to human rights [such as technical cooperation, or contributions to labour rights] or people’s empowerment peacekeeping efforts. As such, it is difficult remain aspirations that are alluded to, but to be precise on the full extent of its value are not tackled directly by either side of as a financial resource for development. the cooperation.”
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He also maintains that a detailed and Providing $325 billion (0.7% of providers’ accurate analysis of the impact of SSDC GNI) in concessional finance would go a is frequently hindered by a lack of long way in addressing the SDG financing transparency. gap relating to poverty and inequalities and to catalyzing national development Given the long and varied development efforts. But with only $125 billion in Real experience of developing countries, SSDC ODA in 2017, (and even this amount is has a major role to play in supporting not all available for poverty reduction) national development strategies. This can this resource is alarmingly inadequate. occur through equitable partnerships, Aid is expected to respond to increasing knowledge sharing, capacity building, and numbers of acute challenges, such as an affirmation of respect for the sovereign the growing humanitarian crises in areas rights of developing countries. SSDC often of endemic conflict and severe climatic does not require rigid frameworks, but rather impacts, with fewer resources. In recent encourages innovative forms of cooperation. years the increase in aid devoted to long- term development efforts (i.e. Real Aid less But to fulfil this promise, CSO activists in humanitarian assistance) has been growing the South emphasize that SSDC must be at a slower rate than overall Real ODA. held to standards that are embedded in SSDC principles. It is essential to In reading the chapters in this Report, one strengthen capacities to support inclusive can be overwhelmed by the accumulation partnerships, greater transparency, and of trends that are driving the international people’s rights. While recognizing SSDC community away from the agreed upon as an invaluable resource, it must also be principles of aid and development emphasized that it is not an alternative effectiveness. to fully transformed and substantially increased North-South development ODA has become a deeply compromised cooperation. resource.
Safeguarding ODA as a public In providers discourse and policies, in resource for reducing poverty recent years, there are few initiatives for new aid strategies or programs that and inequalities focus on strengthening democratic national ownership, expanding inclusive The convergence of different trends in the enabling partnerships with civil society, deployment of ODA suggests that many or respecting developing country policy Northern providers have already moved space to carry out their own development “Beyond Aid.” Recognizing this, the Report strategies and plans. documents ways in which this move is seriously jeopardizing the integrity of ODA There is little doubt that providers are devoted to the reduction of poverty and moving to tie aid initiatives to their inequalities. As has been stated above, foreign policy priorities as well as their it is a distinct resource that can focus on commercial and business interests. Of “leaving no one behind” and strengthening course, there are positive exceptions to the rights of billions of people who live in these developments. The Report highlights poverty or are otherwise marginalized. some of these, such as Canada’s feminist
20 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
international assistance policy, the US the 0.7% of GNI UN target for ODA Congress resistance to Trump’s plans to must set out a plan to do so without cut US aid, or parliamentary support in further delay. These are the minimal Norway for the integrity of ODA focused resources required for effective efforts on poverty reduction. But these seem to to eradicate extreme poverty and reduce be ‘the exceptions that prove the rule’. other forms of poverty and inequalities. This ODA target should be separate In the context of Agenda 2030, aid providers from in-donor support for refugees and must live up to their promise that aid is students, debt cancellation and principal a resource devoted to reducing poverty purpose projects for climate finance. and inequalities. They must transform New resources for ODA alone will not their allocations and aid practices in ways transform development cooperation; that support collaborative initiatives as they must be accompanied by actions well as equal and inclusive partnerships to “do development differently” along for these purposes. They must work the lines set out below. within the framework of development effectiveness principles, human rights and Increased allocations for ODA do not feminist approaches. National democratic preclude the necessity for additional ownership of development strategies, development finance beyond ODA, plans and action in developing countries concessional or otherwise, whose should be confirmed in practice as the main purpose lies outside the scope foundation for effective development of directly tackling poverty and cooperation. inequalities. ODA is vital and distinctive complement to other public sources of A Reality of Aid Action Agenda: finance such as domestic revenue and Transforming Development South-South co-operation. Cooperation In this regard, the aid trends chapter The Reality of Aid Network is putting notes DAC’s work to develop a new forward an alternative perspective and metric, Total Official Support for vision for aid as a resource that is relevant Sustainable Development (TOSSD) to global trends in the 21st Century. which aims to capture all relevant flows for sustainable development. Given A Ten-Point Action Agenda for retooling ODA the serious methodological issues in for this transformation of development a metric such as TOSSD and the risks cooperation includes the following ten of over-estimating official support for action areas. They are complemented by sustainable development, the DAC more specific recommendations in the and all providers should continue to “Trends in the Reality of Aid 2018” chapter reference ODA as the headline metric and in the various thematic and country to measure provider support for chapters in the Report. developing country SDG priorities.
1. Achieving the 0.7% Target – DAC 2. Addressing the needs of the least providers that have not achieved developed, low income, fragile
21 The Reality of Aid 2018 Report
and conflict-affected countries – rights-holders. It acknowledges peoples’ As DAC donors move towards the rights as development actors, not as 0.7% target, they must also meet “affected populations” or beneficiaries the long-standing commitment to of charity. Central to this approach allocate up to 0.2% of their GNI to is an understanding of the unique Least Developed Countries (LDCs). human rights challenges of poor LDCs, as well as countries experiencing and vulnerable populations in each chronic conflict and fragility in country. Programming approaches governance, face acute development work with local partners to assess challenges. The DAC estimates that the changing power dynamics faced by 2030, 80% of the world’s extreme by these marginalized population. poor will live in fragile contexts. These Women’s / girl’s empowerment and settings demand a higher level of gender equality as well as the means adaptability in provider initiatives with for achieving these goals through a diversity of partnerships that may support to women’s rights activists, challenge more rigid provider policies. organizations and movements is central to a human rights based approach.22 3. Establishing a rights -based framework – The allocation of all 4. Mainstreaming gender equality forms of development finance, and women’s empowerment – but particularly ODA and other Providers of ODA and other forms of concessional sources, must be concessional development finance designed and measured against (e.g. SSDC) must demonstrably four development effectiveness mainstream gender equality principles, human rights standards. and women’s empowerment in The four development effectiveness all dimensions of development principles are 1) Ownership of cooperation projects, programs development priorities by developing and policies. Mainstreaming entails countries and their people; 2) A focus explicit objectives designed to on results, aligned measures to reduce analyze and address gender-related poverty and inequalities, and with inequalities in all development the priorities and policies set out by initiatives; decision-making based developing countries themselves; 3) on consultation with affected people Inclusive development partnerships; and on gender disaggregated data; and 4) Transparency and accountability and explicit terms of reference to to each other. monitor impacts on gender-related issues in all development cooperation A human-rights-based approach projects, programs and policies. to development cooperation takes Massive increases in support for into account core human rights developing country women’s rights principles and standards. It recognizes organizations and women’s human accountability of governments, IFIs/ rights defenders as agents of change DFIs, and private sector and other is the critical sine qua non for achieving actors as duty-bearers to people as real mainstreaming of gender
22 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
equality in development cooperation. (international, national and local) CSOs Transformative gender relations can help strengthen accountability requires attention to the structural at all levels of society. As such they barriers to gender equality, multiple are critical allies for those seeking forms of identity, and the myriad the transformation of aid practices of ways in which different women consistent with democratic ownership, are marginalized and discriminated inclusive partnerships, and human against based on these identities. rights standards.23
5. Addressing other identity-based 7. Implementing clear policies inequalities – Providers of ODA for ODA to improve its quality must develop strategies to guide as a development resource - increased efforts to tackle all forms Development and aid effectiveness of inequalities, such as those based principles require practical reforms on economic marginalization, to strengthen partner ownership to disabilities, sexual orientation, achieve the priorities of ODA.24 race, ethnicity or age. Such These areas include: strategies are consistent with the • Reversing the declining levels of Agenda 2030’s promise “to leave no country programmable aid that is one behind” and its goals for social directly accessible to developing and economic inclusion. They must country partners; respond to irrefutable evidence of the “vicious circle” that perpetuates • Strengthening mechanisms growing disparities in wealth and for inclusive dialogue and marginalization in almost all countries. accountability relating to Providers should make every effort to development cooperation in ensure that development cooperation developing countries; never exacerbates such inequalities. • Reversing the trend of the increased use of loans as an aid modality, 6. Reversing the shrinking and closing with grants as the default option; space for CSOs as development actors – All actors for development • Reforming technical cooperation – governments, provider agencies, practices to respect the principle of parliamentarians, INGOs – demand-led technical cooperation must proactively challenge the (see Reality of Aid 2016 Global increasing regulatory, policy and Report); physical attacks on civil society • Reversing the trend towards organizations, human rights increasing informal and formal tied defenders, indigenous groups aid by eliminating formal tied aid and environmental activists. The for all countries and sectors, while transformation of development reducing the major barriers facing cooperation will be highly contested. developing country partners in Civil society can directly engage receiving contracts to implement people living in poverty or otherwise aid programs and technical marginalized. In their work assistance;
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• Increasing support for domestic settings, the majority of which are likely resource mobilization efforts by to be women. developing country governments through the promotion of Non-concessional PSI operations and progressive taxation and the investments should complement ODA, reduction of illicit flows and but should avoid using ODA resources transnational modalities for to capitalize their Development Finance externalizing profits; and Institutions (DFI). The private sector • Strengthening the responsiveness can make important contributions to of the multilateral system through poverty reduction and sustainable reducing donor-led special funds development. As a growing source of and increasing core resources for finance for development, the efforts of key UN development agencies such DFIs to engage private finance for the as UNDP, UNICEF, UN Women and SDGs should: the UN Human Rights Council. • Be guided by development effectiveness principles; 8. Deploying ODA to support private sector initiatives and catalyze • Target appropriate initiatives in LDCs private sector funding –ODA should and LMICs; only be deployed for provider • Produce evidence on the financial Private Sector Instruments (PSIs) and development additionality of in projects/activities that can be private sector resources in blended directly related to building capacities mechanisms; of developing country private sector • Have clear environmental, social, actors to demonstrably improve governance, regulatory and the situations of people living in poverty.25 In developing countries, transparency policies, which affirm the majority of people that make up the human rights principle of ”free, the working poor are employed in prior and informed consent” for micro, small and medium enterprises. private sector projects financed According to World Bank statistics on with public resources through income-poverty levels, close to half the these Instruments; population of both Least Developed • Boost the human rights obligations (LDCs), Low-Income and Lower Middle- of government to ensure key Income Countries (LMICs) live in social services such as health care, conditions of poverty. ILO statistics water or education, which should document that close to 70% of working remain a central responsibility of people in developing countries live government; and precarious lives on daily incomes of less than $3.10 (World Bank poverty level for • Be informed by systematic LMICs). Given this context, ODA should evaluations and assessments be deployed to country private sector of private sector instruments, initiatives that support the livelihoods of including DFIs, in relation to people who are working in small-scale development purposes and enterprises in both rural and urban development effectiveness .
24 The Changing Faces of Aid: Encouraging Global Justice or Buttressing Inequalities?
9. Rejecting the militarization and development co-operation and human securitization of aid – In responding rights principles are paramount. to humanitarian situations and the Providers should not use the promise development needs of countries of aid to create conditionalities for with high levels of poverty, conflict migration control and resettlement in and fragility, providers should avoid countries of origin of migrants. shaping their strategies and aid initiatives according to their own 10. Responding to the acute and foreign policy, geo-political and growing challenges from climate security (migration and counter- change – All Parties should reach terrorism) interests.26 Trust and agreement on a post-2020 climate- local ownership, which is essential financing framework for developing to development initiatives, are often countries that meets the growing undermined in fragile situations by challenges they face in adaptation, approaches that combine aid with mitigation as well as Loss and military objectives in zones of conflict. Damage. While concessional Aid should not be an instrument for climate finance meets the criteria responding to geo-political threats for ODA, the DAC should account perceived by the provider country. for principal purpose climate Other foreign policy and defense finance separate from its reporting resources are available for these of ODA, acknowledging the UNFCCC purposes. While often challenging principle of “new and additional.” to do, peace-building processes The UNFCCC should develop clear should be informed by democratic guidance for all Parties on defining participation, with the involvement of finance for adaptation, mitigation local communities affected by conflict and Loss and Damage. Authors of as well as civil society actors, and this Report have documented the aimed at addressing the root causes scale of finance needed beyond the of poverty, conflict, and fragility. The current commitment of $100 billion DAC should set clear guidance for any annually, post-2020. Developing use of ODA in programs to counter countries, particularly the LDCs and extremism, military and police training LMICs, should not be forced to pay or intelligence gathering. Appropriate themselves for adapting or mitigating monitoring and safeguards are climate change impacts through essential, to ensure that the rules are diminished ODA and/or the provision not being stretched and that effective of loans for these purposes.
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ENDNOTES
1 “Transforming our world: the 2030 Agenda for 10 See the framework for the Global Sustainable Development,” Resolution of the Partnership at http://effectivecooperation. UN General Assembly, September 25. 2015, A/ org/. RES70/1, accessed August 2018 at https:// 11 Global Partnership for Effective Development sustainabledevelopment.un.org/content/ Cooperation, Paragraph 11 and 12, accessed documents/7945ageing.pdf. August 2018 at http://effectivecooperation. 2 Ibid. org/wp-content/uploads/2016/03/ OUTCOME_DOCUMENT_-_FINAL_EN2.pdf. 3 See for example, German Development Commitments were further elaborated Institute, “’Beyond Aid’ and the Future of at a High Level Meeting of the GPEDC in Development Cooperation,” Briefing Paper Nairobi in 2016 (http://effectivecooperation. 6/2014, accessed August 2018 at https:// org/wp-content/uploads/2016/12/ www.die-gdi.de/uploads/media/BP_6.2014_. OutcomeDocumentEnglish.pdf). pdf, Richard Cary, “The ‘Beyond Aid’ agenda 12 A GPEDC monitoring of the implementation of – what, who and for whom?” August 9, 2018, these four principles in 2016 concluded that African Center for Economic Transformation, there has been only very modest progress. accessed August 2018 at http://acetforafrica. The Civil Society Platform for Effective org/media/the-beyond-aid-agenda-what-who- Development (CPDE), the representation and-for-whom/, and Prizzon, A, Greenhill, R., of CSOs in the GPEDC, highlighted the and Mustapha, Shakira, “An age of choice many challenges yet to be overcome, for development finance: Evidence from which were apparent in the outcomes of country case studies,” ODA, April 2016, the monitoring. A third monitoring round accessed August 2018 at https://www.odi.org/ is underway in 2018. See CPDE, Highlight publications/10390-age-choice-development- the Progress, Face the Challenges: CPDE finance-evidence-country-case-studies. Reaction to the Result of the GPEDC 2cd 4 See Brian Tomlinson, “Trends in the Reality Progress Report, November 2016, not of Aid 2018: Growing diversions of ODA and a available on the web, Brian Tomlinson, diminished resource for the SDGs,” in this Report. “Reflections on the Global Partnership’s Second Progress Report,” November 2016, 5 See Dhananjayan Sriskandarajah, “’The accessible at http://aidwatchcanada.ca/wp- Donors’ Dilemma’ – From charity to social content/uploads/2017/02/Reflections-on- justice,” Global Policy Journal, February 24, the-Second-GPEDC-Progress-Report.pdf. 2014, accessed August 2018 at https://www. globalpolicyjournal.com/blog/24/02/2014/ 13 13See the CSO Partnership for Effective donors%E2%80%99-dilemma-charity-social- Development (CPDE), Building a CSO justice. Partnership for Effective Development, 2012, accessed August 2018 at http:// 6 See The Reality of Aid 2016, Technical csopartnership.org/cpdecoredocuments. cooperation as an aid modality: Demand- led or donor driven?, IBON, 2016, accessed 14 See Reality of Aid 2010: Aid and Development at http://www.realityofaid.org/roa_report/ Effectiveness – Towards human rights, social technical-cooperation-as-an-aid-modality- justice and democracy, 2010, accessible demand-led-or-donor-driven/. at http://www.realityofaid.org/roa_report/ aid-and-development-effectiveness- 7 Real Aid is reported ODA less in-donor towards-human-rights-social-justice-and- refugee and student costs, debt cancellation which is counted at full value in the year it is democracy/ cancelled, and interest paid on ODA loans, 15 For an overview of human rights based which is not deducted from net ODA. approaches in aid delivery see Brian 8 Brian Tomlinson, “Trends in the Reality of Tomlinson, “Implementing a Human Aid 2018,” in this Report. Rights Based Approach: Lessons from the experience of providers of international 9 See OECD DAC page on aid reform at assistance,” August 2017, accessed http://www.oecd.org/dac/effectiveness/ August 2018 at http://aidwatchcanada. parisdeclarationandaccraagendaforaction. ca/wp-content/uploads/2017/11/Final- htm. Implementing-a-HRBA-by-Providers.
26 27 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
pdf, published by CSO Partnership for 2018 at https://www.un.org/ecosoc/en/ Development Effectiveness (CPDE),Policy node/996604. Research on the Implementation of a Human 22 For more on a human rights based approach and Rights Based Approach in Development development cooperation see the chapters Partnerships, IBON Institute, January 2018 and Reality of Aid recommendations in the accessed at http://www.csopartnership.org/ 2010 Global Report, Aid and Development edc-resources-hrba. Effectiveness: Towards Human Rights, Social 16 Global Policy Watch,“How to finance SDGs Justice and Democracy, accessible at http:// to be discussed at UN next September www.realityofaid.org/roa_report/aid-and- 24”, July 30, 2018, accessed August 2018 development-effectiveness-towards-human- at https://www.globalpolicywatch.org/ rights-social-justice-and-democracy/ blog/2018/07/29/how-to-finance-sdgs-to- be-discussed-at-un-next-september-24/. 23 See the section on civil society and the recommendations in “Trends in the Reality 17 Barbara Adams and Jens Martens, Fit for of Aid 2018” for more specific details. The Whose Purpose? Private Funding and Brazilian chapter (Ana Cernov) for an corporate influence in the UN,” Global Policy interesting discussion of the changing Watch, September 2015, accessed August dynamics in development cooperation for 2018 at https://www.globalpolicywatch. Brazil and it impact of Brazilian civil society org/blog/2015/09/22/is-the-un-fit-for-the- as social actor for accountability. ambitious-new-sustainable-development- agenda/. 24 For more recommendations and case studies see the 2008 Global Reality of Aid Report, Aid 18 See http://www.oecd.org/dac/making- Effectiveness: Democratic Ownership And blended-finance-work-for-the-sustainable- Human Rights world poverty, accessible at development-goals-9789264288768-en.htm. http://www.realityofaid.org/roa_report/aid- 19 See Sarah Dalrymple, Investments in Peace effectiveness-democratic-ownership-and- and Security, A Report for Development human-rights-world-poverty/ Initiatives, March 2016, accessed 25 For more recommendations and case August 2018 at http://devinit.org/post/ studies relating to the private sector and investments-in-peace-and-security/#. development cooperation, see the 2012 20 Unfortunately there are no agreed rules, Global Reality of Aid Report, Aid and the similar to the rules governing ODA, for what Private Sector: Catalysing Poverty Reduction providers report as climate finance. Many and Development?, accessible at http:// observers argue that providers present www.realityofaid.org/roa_report/aid-and- inflated amounts to the UNFCCC in their the-private-sector-catalysing-poverty- biannual reports. See Tomlinson,” Trends reduction-and-development-2/ in the Reality of Aid 2018,” in this Report for 26 See the 2006 Global Reality of Aid Report, more details and the methodology used to Focus on Conflict, Security and Development determine the $18.7 billion. world poverty, accessible at http://www. 21 Sixth Biennial High Level Meeting of the realityofaid.org/roa_report/focus-on- Development Cooperation Forum, United conflict-security-and-development-world- Nations, 21-22 May 2018, accessed August poverty/
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Part 1
Reports
Chapter 1 ODA, IFIs, and the Private Sector
Development Finance Institutions: The (in)coherence of their investments inprivate healthcare companies Benjamin M. Hunter, King’s College London; Anna Marriott, Oxfam GB
ODA and private sector resources to achieve the SDGs: The Ugandan case Juliet Akello, Uganda Debt Network
The Shortcoming of Blended Financing in Development Cooperation within the Energy Sector in Cameroon: Show-casing the Dibamba Thermal Power Project Charles Linjap, Investment Watch
International Finance Institutions: A focus on the private sector in North East India’s development challenges Jiten Yumnam, Centre for Research and Advocacy, Manipur
The World Bank in Africa: An analysis of World Bank aid and programmes in Africa and their impact Nahashon Gulali, ITRD Consulting Group and the Lending for Education in Africa Partnership Programme
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Development Finance Institutions: The (in)coherence of their investments in private healthcare companies
Benjamin M. Hunter, King’s College London Anna Marriott, Oxfam GB
Introduction totalling more than US$1.1 billion to healthcare companies since 2013. Three European DFIs – Germany’s DEG, France’s Development finance institutions (DFI) are PROPARCO and the UK’s CDC1 – have playing an increasingly prominent role together committed another US$425 in the spending of official development million. (See the list of commitments in assistance (ODA). They are at the forefront appendix). The wholescale transformation of attempts to ‘leverage’ private investment of Turkey’s healthcare system through for development, with a particular large private finance initiatives has focus on supporting the expansion of attracted particularly large loans. DFIs businesses and hence economies in the such as DEG, PROPARCO and Canada’s Global South. Interest in accommodating Export Development Corporation ‘private sector instruments’ to finance the have backed the Turkish Ministry of Sustainable Development Goals is likely to Health’s private finance initiatives with encourage further growth of DFIs. loans, but these have been dwarfed by loans from the USA’s Overseas Private Some development agencies and their DFIs Investment Corporation (OPIC) and the claim, in the absence of publicly financed universal access to healthcare, the European Bank for Reconstruction and private healthcare sector should become Development (EBRD), totalling US$750 a priority area for their investment. million and US$630 million respectively. Private investors are encouraged by the potential for rapid growth in the size and DFI health investments are often value of healthcare markets - people are channelled via intermediary funds. These willing to pay substantial amounts to try are more challenging to track than direct to achieve good health for themselves investments, but for some DFIs they and others. The rising burden of chronic, can be significantly larger than their non-communicable diseases globally is direct investments. There is a range of intensifying this demand for healthcare investment funds taking on greater roles services. in the healthcare sector (World Economic Forum, 2016), including some funds Several DFIs have provided technical focused entirely on making investments assistance and made large direct and in health-related companies. These funds indirect (through a financial intermediary) include the Africa Health Fund (US$105 commitments to healthcare companies million), Investment Fund for Health in recent years. The World Bank’s in Africa (US$66 million) and follow-up International Finance Corporation Investment Fund for Health in Africa II (IFC) has made direct commitments (US$137 million). The largest to date is
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Abraaj Group’s Growth Markets Health Concerns with policy coherence Fund, which aimed to attract US$1 billion for investment in health companies. It Commitments by development finance received investments from IFC, OPIC, institutions in private healthcare PROPARCO, CDC, African Development companies have seen an expansion Bank and the Bill and Melinda Gates of infrastructure that can be broadly Foundation, amongst others. categorised into two groups: 1) corporate chains and 2) private finance In some cases DFI investments have been initiatives. DFI technical assistance can accompanied by financing from private also play a key role. A series of concerns sources. Investment funds have attracted with the sustainable development commitments from a range of commercial policy coherence for these projects are banks, pension funds and pharmaceutical outlined below. companies. The Turkish Ministry of Health’s private finance initiatives have Corporate healthcare, user fees and received loans from commercial banks poverty reduction and technology companies. The Abraaj Group has been a key private investor A recent report by the World Bank Group alongside DFIs, for example in Narayana and World Health Organization (2017) Health in India (with CDC) and in North estimated that almost 100 million people Africa Hospital Holdings (with the EBRD, were pushed into extreme poverty DEG and PROPARCO). (US$1.90 a day) by out-of-pocket healthcare expenditure in 2010. At the $3.10 poverty The scale of DFI investment in private line, the figure was over 120 million people. healthcare companies remains relatively Healthcare user fees are one of the key small compared to overall development drivers of descents into poverty (Krishna, aid for health committed annually 2010), and are widely acknowledged to be – estimated at $36 billion in 2015 a regressive form of financing healthcare. (Dieleman et al., 2016). But it is a rapidly Affordability remains a key reason why growing area and the vision for future half the world’s population still does not expansion is grand. The IFC aims to reach have full coverage of essential services 1.2 billion users through its healthcare (World Bank Group and World Health investments by 2030 (IFC, 2017). Not all Organization, 2017). DFI investments are classified as ODA, however there is a growing trend whereby Nonetheless, corporate chains that governments are using ODA to leverage are being expanded with DFI support private finance via DFIs. DFIs also have invariably use fee-based payment systems. stated aims to promote poverty reduction These fees can be extremely high. Fees and development. The remainder of may be waived with chains that provide this chapter examines some of the key ‘free’ services to low-income households, concerns related to development policy cross-subsidised by fees paid by the less coherence of these investments, including poor, but such packages are often limited an illustrative case study. The chapter to particular services, with limited follow- concludes with policy recommendations. up, and are made at the discretion of the
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34 Chapter 1: ODA, IFIs, and the Private Sector
administering hospital. Health insurance to and North African countries; and Apollo cover the costs of services at these private Hospitals, Max Healthcare and Fortis facilities is often either unavailable or Healthcare in India. Turkey’s private unaffordable for much of the population. finance initiative healthcare campuses, These user fee systems undermine the which are supported by loans from DFIs right to health and do little to assuage fears and private investors, were promoted by as to whether households are protected President Recep Tayyip Erdoğan as part of from both direct and indirect costs of care. an effort to make Turkey ‘one of the top five countries in the world for medical Segmented healthcare and inequality tourism’ (Rosca, 2016).
There are important issues related to This international approach to health segmentation in healthcare systems. infrastructure development does little to Corporate chains fit one of two models: address the health needs of low-income 1) high-cost chains targeting wealthier groups and risks exacerbating inequality groups and 2) high-throughput, of access, especially if such private health ‘affordable’ chains targeting less wealthy investments lead to further brain drain from groups – the so-called ‘base of the already under-staffed public health services. pyramid’. In reality, the ‘base of the pyramid’ model is usually out of reach Public funding and sustainability for the poorest groups, as noted in an IFC-commissioned report on ‘inclusive’ Much of the healthcare infrastructure business models for healthcare (Deloitte, expansion that is taking place with DFI 2014). DFIs appear to be promoting a support is predicated on a future of public broadly three-tiered healthcare system subsidies for private profit. Corporate whereby 1) the poorest rely on whatever healthcare chains are looking to secure informal, charitable or public healthcare revenue streams from the government services are available; 2) those who can insurance schemes being rolled out in are expected to purchase healthcare the name of ‘universal health coverage’, from high-throughput chains; and 3) the but largely providing services for salaried wealthiest groups access care in private workers, middle-classes and, in some tertiary and specialty hospitals, often cases, the informal sector. Commercial using private health insurance (see Health motivations within public healthcare in Africa case study below). are likely to provoke inflation, ‘cream- skimming’ and provider attrition. Public This segmentation is exacerbated by subsidies to commercial providers risk growing interest in creating destinations leaving governments rationing services for international medical tourism. and diverting funds from more progressive Examples of hospitals that have received public health activities. IFC support and compete in global healthcare markets include: Bumrungrad Private finance initiatives allow Hospital in Thailand; Asian Hospital and governments to transfer risk in hospital Medical Center in the Philippines; Saudi- development to construction and German Hospitals in Middle-Eastern management consortia. While the terms
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of payment are often generous and are categorized as high risk, based on long-term, they lock current and future environmental and social risk. However, governments into significant and inflexible this reporting is patchy and does not interest payments. Lesotho’s IFC-brokered appear to include supposedly lower risk Queen Mamohato Hospital provides a sub-projects. clear warning of how these private finance initiatives can considerably distort public In addition to transparency concerns, some finances (Marriott, 2014). Because of external managed funds are registered in these impacts, there are growing calls for ‘tax havens’, which undermines domestic development banks to stop promoting tax and resource mobilisation efforts these models (Eurodad, 2017). in countries where they have their core business operations, weakening the Fund managers, transparency and funding base needed to achieve universal tax avoidance health coverage. For example, the two iterations of the Investment Fund for The use of intermediary funds makes it Health in Africa attracted US$200 million difficult to track certain DFI investments from DFIs and private investors, including (Romero, 2014). Although DFIs publish the Bill and Melinda Gates Foundation, details of investments with external fund and the fund used Mauritius as a base for managers, they do not necessarily report its investments. The Abraaj-managed (and 2 the companies receiving investment IFC-backed ) US$100 million Africa Health from those funds (sub-projects). For Fund did likewise. Abraaj’s US$1 billion example, investment by IFC in the Ambit Growth Markets Health Fund is registered Pragma Fund was reported in the IFC in the Cayman Islands. Both Mauritius project database, but the Ambit Pragma and the Cayman Islands utilise harmful Fund’s subsequent investments in Beams preferential tax measures (Chardonnet Hospitals and Vidal Healthcare were and Langerock, 2017), depriving other not. This practice obstructs effective countries of access to tax revenue from monitoring of DFI activities by both civil investment profits. society and governments and undermines country ownership. There have been some positive, but so far insufficient, steps to ensure The IFC’s Compliance Advisor Ombudsman responsible tax practices to increase the (2012) found that, due to the lack of availability of public resources for critical transparency and paucity of information, investments, including healthcare. Of the IFC was unable to claim its investments note is the European Union’s recently via intermediary funds resulted in agreed list of counter-measures against development benefits, or to provide tax havens, both those which appear on assurance that these same investments its blacklist of tax havens, and potentially caused no harm to poor people or the those on its ‘greylist’ (including Cayman environment. In a positive step, IFC (also Islands and Mauritius). Countermeasures OPIC and CDC) now aims to report sub- include prohibiting European Investment projects of private equity funds that Bank investments being routed through
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listed tax havens, and working with other realise impacts for poor people across development organisations to implement all Health in Africa’s work streams (ibid.). these measures more widely. The review documented failure to analyse how to reach poor people effectively via Health in Africa case study the private sector, failure to implement direct investments for the benefit of poor In 2008, the IFC launched the Health in people and failure to measure whether Africa initiative, a US$1 billion investment poor people were being reached. Health project whose objective was to ‘catalyze in Africa’s analytic work was found to sustained improvements in access to have completely failed ‘either by omission quality health-related goods and services or design’ to ‘engage with the single in Africa [and] financial protection against most important global controversy with the impoverishing effects of illness’, regard to the role of the private sector with ‘an emphasis on the underserved’ in health in Africa: the role – if any – that (World Bank Group, 2013, p. 1). Health in the private health sector can and should Africa’s strategy was to utilise three main play in achieving development impacts’ (p. investment mechanisms: 1) a US$300 18). The mid-term review concluded that million equity vehicle; 2) a US$500 million the failure of the IFC to define or assess debt facility mobilising loans from local its anticipated results meant that it was banks for private healthcare actors; and ‘difficult to assess the extent to which 3) US$200 million in technical assistance Health in Africa has had any real impact’ (IFC and World Bank, 2010). This initiative (p. 4). included the Africa Health Fund and Investment Fund for Health in Africa In 2014 Oxfam conducted a desk-based mentioned previously. portfolio review of Health in Africa’s investments (Marriott and Hamer, 2014). Health in Africa’s official literature implied It found that a large proportion of these adherence to the World Bank Group’s investments were made in expensive, overarching goals to end extreme poverty high-end, urban hospitals offering tertiary and promote shared prosperity. There was care to African countries’ wealthiest repeated attention to Health in Africa’s citizens and expatriates. For example, intended focus on benefiting ‘underserved’ Health in Africa’s largest direct investment populations in sub-Saharan Africa. The was a US$150 million equity investment Health in Africa plan, presented to the World in South Africa-based corporate chain Life Bank board for approval in 2007, emphasised Healthcare. Corporate healthcare in South improving the ‘availability of health care to Africa is unaffordable, even for many Africa’s poor and rural population’ (Brad comparatively wealthy South Africans with Herbert Associates, 2012, p. 11). health insurance, let alone the 85% who lack insurance (McIntyre, 2010). However, an independent mid-term review of Health in Africa, conducted by Other examples of Health in Africa- Brad Herbert Associates in 2012, found linked investments that appear to clear evidence of systematic failings to disproportionately benefit elite groups
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rather than providing healthcare for Strategis Insurance, or in Nigerian health people living in poverty include: maintenance organisation, Hygeia, are unlikely to contribute meaningfully to the • A US$1.5 million loan to Clinique La achievement of equitable universal health Providence in Chad to make available coverage (Averill, 2013). ‘locally, health care services for which Chadians are currently travelling Private health insurance is a notoriously abroad’ (IFC, 2014); regressive form of healthcare financing as it • A US$1.7 million investment in Clinique excludes the poor through high premiums Biasa in Togo, which described itself and co-payments. One Hygeia pilot scheme as ‘one of Lomé’s top three private in Lagos, for example, explicitly set out to hospitals’ (Private Equity Africa, 2012); target low-income workers, but ended up excluding approximately 80% of the • A US$2.7 million investment in Nairobi working population as it required enrolees Women’s Hospital, which had an to work in the formal sector (Marriott and average reported in-patient cost of Hamer, 2014). With a US$93 premium per US$845 in 2011, equivalent to the person, an expansion of this scheme into entire annual income for two-thirds of the informal sector could be expected to Kenyans (World Bank Group, 2012); exclude people living in poverty unless • A US$5 million investment in West there was a very high level of government Africa’s first IVF centre in Nigeria that or donor subsidy. aimed to ‘provide world-class infertility treatments’ (Abraaj, 2012), at a cost The use of intermediary funds to manage of over US$4,600 for one cycle of IVF Health in Africa investments complicates (Bridge Clinic, 2014); and the task of examining development • At least US$7.7 million in loans and impact. The two Health in Africa equity investments for Hygeia’s Lagoon funds that were operational in 2014 – Hospitals in Nigeria which offer ‘luxury Africa Health Fund and Investment Fund accommodation’ and claim to perform for Health in Africa – were assigned the job operations ‘using techniques that are of ‘investing in socially responsible private only possible at very few specialised health companies serving underserved hospitals in the United Kingdom and and low-income people’ (IFC and World USA’ (Lagoon Hospitals, 2014). Bank Group, 2011). However, the Oxfam study found no evidence that either fund targeted low-income users in practice or Health in Africa has also contributed to measured their attempts to do so. the expansion of health insurance models that disproportionately benefit the non- Managers for the Africa Health Fund poor, but which can provide users and reportedly claimed to have developed revenue for the types of private hospitals an innovative incentive framework to and clinics being expanded with Health reward portfolio companies for reaching in Africa support. Investments made by patients at the ‘base of the pyramid’ (Kholi the Investment Fund for Health in Africa and Wanjiro, 2013). However, the income in Tanzanian private health insurer, threshold used as a ceiling for the ‘base of
38 Chapter 1: ODA, IFIs, and the Private Sector
the pyramid’ was set so high that it included almost impossible to verify impact claims up to 95% of earners in sub-Saharan Africa. using publicly available information.
The Investment Fund for Health in Conclusions and recommendations Africa requested that its portfolio companies voluntarily complete a While DFIs claim to be motivated by questionnaire on environmental, social poverty reduction, their investments in and development impact. On the basis of healthcare projects suggest significant this data, fund managers made a series policy incoherence. User fee models have of unsubstantiated claims, notably that been widely acknowledged as inequitable extension of insurance, telemedicine and poverty-causing. Yet they continue and other products and services would to be rolled out with DFI support. Many automatically lead to increased, equitable healthcare corporates backed by DFI access to healthcare. investment do not attempt to provide services to the poor, or do so only on an Concerns with Health in Africa’s impact ad hoc basis. The lack of a clear framework on poverty have never been sufficiently in attempts to evaluate Health in Africa’s addressed. Health in Africa’s 2012 mid- developmental impact is symptomatic of a term review noted that a results framework policy myopia in DFIs. had ‘finally been developed.’ However, this framework has not been made publicly Comments emphasising the profitability of available and there is no evidence available the healthcare sector do little to assuage in the public domain to confirm it has been these concerns. For example, in a recent put into practice (Marriott and Hamer, 2014; article, an IFC principal equity specialist author communication with IFC, 2018). highlighted healthcare as a lucrative area for its investments. But there was just one The IFC recently developed a new mention of poverty, which suggested that Anticipated Impact Measurement and health services would improve ‘human capital’ Monitoring system (AIMM) to define and and thereby reduce poverty (Mirza, 2018). measure the development impact of its direct investments, financial intermediary DFIs operating in the commercial healthcare investments and advisory services. The sector frequently fail to reach the poor or IFC’s efforts in this direction are a welcome even measure poverty reduction impact. development. But it remains to be seen if Moreover, their activities risk widening this new system will consider who ultimately social segmentation and inequalities. benefits from IFC investments and who is Their investments allow the expansion left out. A second question is whether it of healthcare models that exclude the will go far enough to monitor health and poorest and legitimise a separation of health care system outcomes to ensure the ‘base of the pyramid’ from wealthier the IFC is meeting its obligation to reduce groups. Widespread use of ‘tax havens’ poverty and promote shared prosperity. for DFI investments weakens the domestic Furthermore, unless the IFC improves resource mobilisation needed to support transparency and disclosure practices for equitable models of universal access to intermediary fund investments it will be healthcare. A lack of transparency and
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accountability undermines development • Introduce robust, transparent and effectiveness principles. Urgent changes accountable frameworks to ensure their in the practices of DFIs are needed to healthcare investments benefit, rather 3 address these concerns. Development than exclude, the poor and do no harm; organisations should certainly refrain • Enhance transparency and from directing valuable ODA through this accountability in reporting healthcare route until and unless DFIs: investments and their impacts via intermediary funds; • Undertake a full, transparent and • Demonstrate a strengthening rather accountable review of the pro- than undermining of the public poor impact of current and historic healthcare sector due to investments health investments via DFIs. Such a in private healthcare; and review should include an analysis • Support efforts to prevent tax of the broader impact of increased avoidance and mobilise domestic private sector healthcare activity resources for universal health on health inequalities and the right coverage. This should be applied to to health; existing as well as new investments.
40 Chapter 1: ODA, IFIs, and the Private Sector
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Abraaj. 2012. Press Release: The Africa Health IFC and World Bank Group. 2011. Health in Africa Fund managed by Aureos invests in Togolese Initiative – Factsheet. Available from: https://www. private hospital. Available from: http://www. wbginvestmentclimate.org/advisory-services/ abraaj.com/news-and-insight/news/press- health/upload/FINAL-HiA-factsheet.pdf release-the-africa-health-fund-managed-by- aureos-invests-in-togolese/ Kohli, J and Wanjiro R. 2013. Private Sector Opportunities in Developing Country Averill, C. 2013. Universal health coverage: why Healthcare. PROPARCO. Private Sector & health insurance schemes are leaving the Development, 17:21–24 poor behind. Oxfam. Krishna. 2010. One illness away. Oxford University Brad Herbert Associates. 2012. Health in Africa Press Mid-Term Evaluation – Final Report. IFC Lagoon Hospitals. 2014. Lagoon Hospital Bridge Clinic. 2014. The Bridge Clinic | Pricing. Performs First Metallic Replacement Available from: http://176.32.230.1/ of whole arm bone and joints in Africa. thebridgeclinic.com/pricing.php Available from: http://www.lagoonhospitals. Chardonnet, A., Langerock, J. 2017. Blacklist or com/news_3.php whitewash? What a real EU blacklist of tax Marriott, A. 2014. A Dangerous Diversion: Will the havens should look like. Oxfam IFC’s flagship health PPP bankrupt Lesotho’s Compliance Advisor Ombudsman (CAO) for Ministry of Health? Oxfam the International Finance Corporation, Marriott, A. and Hamer, J. 2014. Investing for Multi Investment Guarantee Agency the Few: The IFC’s Health in Africa Initiative. (MIGA), and Members of the World Bank Oxfam Group (2012). CAO Audit of a Sample of IFC Investments in Third-Party Financial McIntyre, D. 2010. Private sector involvement Intermediaries. Available from: http://www. in funding and providing health services in cao-ombudsman.org/documents/Audit_ South Africa: implications for equity and Report_C-I-R9-Y10-135.pdf access to healthcare. Equinet Discussion Paper 84 Deloitte. 2014. Landscape of Inclusive Business Models of Healthcare in India: Business Mirza, 2018. Analysis: returns and impact from Model Innovations. IFC healthcare investment in emerging markets. Health Investor Asia Dieleman, JL, Schneider, MT, Haakenstad, A. et al. 2016. Development assistance for health: Oxfam 2017. Private-Finance Blending for past trends, associations, and the future Development: Risks and Opportunities. of international financial flows for health. Oxfam Lancet, 387: 2536-44 Private Equity Africa, 2012. ‘Aureos in $1.7m Eurodad. 2017. “Public-Private Partnerships: Clinique Biasa deal’, 4 July. Available from: Global Campaign Manifesto.” Eurodad. http://www.privateequityafrica.com/wp/ uncategorized/aureos-in-1-7m-clinique- IFC. 2014. ‘Chad Clinic – Summary of Investment biasa-deal/ Information. Accessed Dec 2014. Available from: https://ifcndd.ifc.org/ifcext/ Romero, M. 2014. A Private Affair: Shining a light spiwebsite1.nsf/78e3b305216fcdba85257a8 on the shadowy institutions giving public b0075079d/fb9298fb97103a0885257b5d00 support to private companies and taking 5f5948?opendocument over the development agenda. Brussels: Eurodad IFC, 2017. “Issue 5.” Private Healthcare in Emerging Markets: An Investor’s Perspective, Rosca, O. 2016. “EBRD, Canada’s EDC and OPIC December. of US Finance Izmir Hospital in Turkey.” Available from: http://www.ebrd.com/ IFC and World Bank Group. 2010. The Business of news/2016/ebrd-canadas-edc-and-opic-of- Health – Policy Notes, Issue 1 us-finance-izmir-hospital-in-turkey-.html.
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Shah, A. 2018. Livemint | Insurance companies World Bank Group. 2013. The Health in Africa shares jump after Arun Jaitley boost to health Initiative: Improving the Role of Private insurance in Budget 2018 speech. Available Sector in Healthcare. from: http://www.livemint.com/Politics/ World Bank Group and World Health Organization. j1WqBgL5kq9WWrdmsy5TJM/Insurance- 2017. Tracking Universal Health Coverage: companies-shares-jump-after-Arun-Jaitley- 2017 Global Monitoring Report boost-to.html World Economic Forum. 2016. Insights from World Bank Group. 2012. World Bank Data | Blended Finance Investment Vehicles & Poverty headcount ratio at $2 a day (PPP) Facilities. Available from: http://www3. (% of population) | Kenya 2005. Available weforum.org/docs/WEF_Blended_ from: http://data.worldbank.org/indicator/ Finance_Insights_Investments_Vehicles_ SI.POV.2DAY/countries/KE?display=graph Facilities_report_2016.pdf
ENDNOTES
1 DeutscheInvestitions-und Entwicklungsgesellschaft their core business, received 84 percent of (DEG), Société de Promotion et de the IFC’s investments in the region. Participation pour la Coopération 3 The UK’s CDC recently commissioned impact Economique (PROPARCO) and CDC Group assessment of private providers on health (formerly the Colonial Development and health systems is a welcome first step Corporation). in this regard. It is not yet clear however, 2 An Oxfam analysis revealed that 51 of the whether CDC will conduct such impact 68 companies in sub-Saharan Africa that the assessments for investments ex ante and/ IFC invested in used tax havens (Jespersen, or whether it will use assessment outcomes as a condition for investment. 2016). Together these companies, whose 4 Black Sea Trade and Development Bank. use of tax havens has no apparent link to 5 Islamic Development Bank.
42 Chapter 1: ODA, IFIs, and the Private Sector
APPENDIX: A LIST OF DIRECT DFI COMMITMENTS FOR HEALTHCARE COMPANIES, 2013-2017, IN US$ Year Company Country DFI Amount ($ m) Source 2013 Rainbow Hospitals India CDC 17.5 Annual report 2013 AAR Clinics Kenya Swedfund 3.0 Media 2013 Ivy Health and Life Sciences India DEG 13.0 Press release 2013 Medica Synergie India Swedfund N/D Media 2013 Medica Synergie India DEG N/D Media 2013 Concord Medical China IFC 50.0 DFI website Hospital Metropolitano de 2013 Dominican Rep. PROPARCO 10.0 DFI website Santiago 2013 Fortis Health India IFC 100.0 DFI website 2013 Bilkent Health Campus Turkey OPIC 250.0 DFI website 2013 STS Holdings Limited Bangladesh IFC 28.5 DFI website 2014 Intermed Mongolia IFC 10.0 DFI website 2014 AAR Holdings East Africa IFC 4.0 DFI website 2014 SalaUno Mexico IFC 2.2 DFI website 2014 Nephroplus India IFC 7.0 DFI website 2014 AIDS Healthcare Foundation Sub-Saharan Africa OPIC 7.5 DFI website 2014 Hospital Metropolitano Nicaragua IFC 4.4 DFI website 2014 Adana Health Turkey IFC 48.7 DFI website 2014 Adana Health Turkey EBRD 121 DFI website 2014 Adana Health Turkey DEG 36.3 Media 2014 Adana Health Turkey PROPARCO 36.3 Press release 2014 Kayseri Health (YDA Group) Turkey IFC 45.7 DFI website Centro Hospitalario Serena 2014 Colombia IFC 20.0 DFI website del Mar 2014 Rede D’Or Brazil IFC 50.0 DFI website 2014 Rede D’Or Brazil PROPARCO 62.2 DFI website 2014 Asia Heart China IFC 35.0 DFI website 2015 ESIP EyeQ India IFC 5.4 DFI website 2015 Conclina SA Ecuador IFC 15.0 DFI website 2015 Clinique La Providence Chad IFC 1.4 DFI website 2015 Etlik Health (Astaldi) Turkey IFC 88.0 DFI website 2015 Etlik Health (Astaldi) Turkey BSTDB4 67.2 DFI website 2015 Etlik Health (Astaldi) Turkey EBRD 140.0 Media 2015 Etlik Health (Astaldi) Turkey DEG 33.6 DFI website 2015 Konya Hospital PPP Turkey EBRD 72.7 Press release 2015 Konya Hospital PPP Turkey BSTDB 53.8 Press release 2015 Konya Hospital PPP Turkey IDB5 72.7 Press release 2015 North Africa Hospital Holdings North Africa PROPARCO 15.0 Media 2015 North Africa Hospital Holdings North Africa EBRD 25.0 DFI website
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Year Company Country DFI Amount ($m) Source North Africa Hospital 2015 North Africa DEG 15.0 Media Holdings 2015 Narayana India CDC 48.0 Media 2015 Eagle Eye Echo-Scan Nigeria IFC 11.6 DFI website 2015 Hygeia Nigeria Nigeria IFC 12.4 DFI website 2015 Ciel Healthcare SSA IFC 6.8 DFI website 2015 Portea Medical India IFC 7.0 DFI website 2015 UFH Guangzhou Loan China IFC 60.0 DFI website 2015 ADK Hospital Maldives DEG 12.0 DFI website 2016 Apollo Speciality India IFC 33.3 DFI website 2016 Kocaeli Hospital Turkey OPIC 250.0 DFI website 2016 Kocaeli Hospital Turkey EBRD 22.4 Press release 2016 Kocaeli Hospital Turkey EDC 58.0 Media 2016 Izmir Bayrakli Hospital Turkey EDC 69.0 Media 2016 Izmir Bayrakli Hosptial Turkey EBRD 96.3 DFI website 2016 Izmir Bayrakli Hospital Turkey OPIC 250.0 DFI website 2016 Elazig Hospital Turkey PROPARCO 42.9 DFI website 2016 Elazig Hospital Turkey IFC 87.6 DFI website 2016 Gaziantep Hospital Turkey EBRD 90.0 DFI website 2016 Gaziantep Hospital Turkey EIB 134.8 Press release 2016 Medlife Romania IFC 11.1 DFI website 2016 Iso Health Ltd Kenya IFC 5.7 DFI website STS Hospital Chittagong 2016 Bangladesh DEG 17.5 DFI website Limited 2016 Evex Georgia PROPARCO 25.0 DFI website 2016 Evex Georgia IFC 25.0 DFI website 2016 HCG India IFC 19.9 DFI website 2016 Care India CDC N/D DFI website 2016 Regency Hospital India IFC 9.1 DFI website 2017 Max Healthcare India IFC 75.0 DFI website 2017 Rede D’Or Brazil IFC 130.0 DFI website 2017 Intermedica Brazil IFC 75.0 DFI website 2017 AHG Bulgaria Bulgaria IFC 16.1 DFI website 2017 Cameroon Cataract Loan Cameroon OPIC 2.0 DFI website 2017 Axa Hospital Nigeria IFC 8.5 DFI website 2017 Bursa Turkey DEG 23.3 Press release 2017 Bursa Turkey PROPARCO 17.5 Press release 2017 Bursa Turkey EBRD 64.2 Press release 2017 Bursa Turkey EIB 174.8 Press release
Note. Non-US$ values have been converted into US$ using historical conversion rate on xe.com for date of investment. N/D – not disclosed
44 45 ODA and private sector resources Year Company Country DFI Amount ($m) Source to achieve the SDGs: The Ugandan case North Africa Hospital 2015 North Africa DEG 15.0 Media Holdings Juliet Akello, Uganda Debt Network1 2015 Narayana India CDC 48.0 Media 2015 Eagle Eye Echo-Scan Nigeria IFC 11.6 DFI website 2015 Hygeia Nigeria Nigeria IFC 12.4 DFI website 2015 Ciel Healthcare SSA IFC 6.8 DFI website 2015 Portea Medical India IFC 7.0 DFI website 2015 UFH Guangzhou Loan China IFC 60.0 DFI website DPs have continued to remit aid resources, Donor respect for aid and but their limited participation is hardly 2015 ADK Hospital Maldives DEG 12.0 DFI website development effectiveness coordinated or aligned to NDP priorities. 2016 Apollo Speciality India IFC 33.3 DFI website principles when funding private This has affected its performance, which 2016 Kocaeli Hospital Turkey OPIC 250.0 DFI website actors in Uganda in turn, has undermined the effectiveness 2016 Kocaeli Hospital Turkey EBRD 22.4 Press release of development cooperation through Aid effectiveness to ensure the realization 2016 Kocaeli Hospital Turkey EDC 58.0 Media ownership. DPs have been actively of sustainable development outcomes involved in providing technical assistance, 2016 Izmir Bayrakli Hospital Turkey EDC 69.0 Media is highly dependent on three main which can be useful but this also creates 2016 Izmir Bayrakli Hosptial Turkey EBRD 96.3 DFI website factors: i) donor and recipient motives; possibilities for externally designed 2016 Izmir Bayrakli Hospital Turkey OPIC 250.0 DFI website ii) alignment of the aid objective/s; and conditions to be attached to aid releases 2016 Elazig Hospital Turkey PROPARCO 42.9 DFI website iii) policy effectiveness in a recipient and how these funds should be spent. It country. Effectiveness principles should be 2016 Elazig Hospital Turkey IFC 87.6 DFI website is therefore important to establish the interdependent and mutually supportive, degree of ownership by government, and 2016 Gaziantep Hospital Turkey EBRD 90.0 DFI website and breaching any of them affects the also to identify the level of intervention 2016 Gaziantep Hospital Turkey EIB 134.8 Press release success of development assistance. Several by donors on project policy design, 2016 Medlife Romania IFC 11.1 DFI website issues on adherence to aid effectiveness implementation and coordination. 2016 Iso Health Ltd Kenya IFC 5.7 DFI website principles are still outstanding. STS Hospital Chittagong Harmonization: DPs have committed 2016 Bangladesh DEG 17.5 DFI website Limited Ownership of development priorities: Aid to ensuring that there is an increased 2016 Evex Georgia PROPARCO 25.0 DFI website conditionalities may be tightened if harmonization between their policies 2016 Evex Georgia IFC 25.0 DFI website development cooperation best practices and procedures with those of recipient 2016 HCG India IFC 19.9 DFI website and principles are not implemented. governments in managing aid resources. The National Development Plan (NDP) I 2016 Care India CDC N/D DFI website However, they often create individual 2010/11 - 2015/16 was reportedly initiated instruments, tools and guidelines for the 2016 Regency Hospital India IFC 9.1 DFI website by USAID with the objective of guiding the execution of development assistance. This 2017 Max Healthcare India IFC 75.0 DFI website Ugandan government in its economic is a major constraint for governments 2017 Rede D’Or Brazil IFC 130.0 DFI website development.2 In practice its performance as they are forced to manage several 2017 Intermedica Brazil IFC 75.0 DFI website was unsatisfactory, partly because of lack aid delivery mechanisms. Development 2017 AHG Bulgaria Bulgaria IFC 16.1 DFI website of ownership by many stakeholders and assistance managers have to spend their readiness/agreement to implement significant time producing multiple reports 2017 Cameroon Cataract Loan Cameroon OPIC 2.0 DFI website the plan.3 or attending several meetings to respond 2017 Axa Hospital Nigeria IFC 8.5 DFI website to DP governments’ and agencies set 2017 Bursa Turkey DEG 23.3 Press release While the participation of development priorities. Inconsistences in the remittance 2017 Bursa Turkey PROPARCO 17.5 Press release partners (DPs) in the formulation of the of aid resources can distort public 2017 Bursa Turkey EBRD 64.2 Press release NDP I (2010/2011 – 2014/15) was rated financial management and the execution inadequate,4 and it improved with NDP II of funds, which significantly reduces aid 2017 Bursa Turkey EIB 174.8 Press release (2015/16 – 2020/21), challenges remain. effectiveness.5
44 45
45 The Reality of Aid 2018 Report
Aid alignment with government systems: The in the utilization of aid resources. need to increase the coherence between 9 While DPs constantly demand that foreign aid spending and a recipient governments account for expenditures country’s priorities is well recognized.6 of aid resources, there is no clear Use of government systems is strongly mechanism and guidelines for holding linked to issues in aid alignment. In the donors accountable for their non- past DPs have raised concerns regarding adherence to aid effectiveness principles. the capacities of government procurement The result is that accountability between and accounting systems. This has resulted DPs and Government is out of balance. in many individual donor support units to On the other hand, weak governance administer their aid projects. It is ideal for practices in government institutions, donations to be remitted through general including the poor enforcement of budget support. But because of reduced regulations, have constrained DPs’ donor confidence in government systems, adherence to transparency principles.10 in 2013, for example, about 50% of total A close examination of adherence to aid ODA to Uganda was channeled through effectiveness principles by both donors off-budget modalities, and funding and recipient countries is crucial. to Non-Governmental Organizations (NGOs), Community Based Organisations ODA support to private entities (CBOs) was directly implemented by DPs. Remittance of external resources outside The Accra Agenda for Action (2008) government structures exposes it to identified the private sector as an donor determination of implementation important channel for achieving the modalities, and defeats the certainty of SDGs. ODA remains a crucial part of total inflows to the country. development co-operation, especially for low income countries.11 In Uganda, Predictability: Timely aid disbursements the majority of private sector enterprises are essential for effective planning and are not registered and few receive ODA. budgeting by a recipient government.7 In addition, there is limited access to the Reports by the Ministry of Finance Aid Management Platform (AMP)12 to help Planning and Economic Development track those that do receive ODA. At the (2011)8 and Economic Policy Research same time Uganda implements a Public- Centre (2017) confirm that unpredictable Private Partnerships (PPPs) Policy,13 which aid flows undermine effectiveness guides some private sector operations.14 since this constraints the forecasting of inflows, compounds the management The Private Sector Foundation Uganda of liquidity, activity planning and project (PSFU), founded in 1995, is an umbrella implementation of development priorities. body for advancing private sector Aid resources are more volatile than activities. Government and other DPs have government revenues. implemented several projects through PSFU to strengthen the private sector. Mutual accountability and transparency: Most of these projects have been financed There has been very little progress on through loans and grants. But, according mutual accountability by all stakeholders to the World Bank (Report, 2018),15 private
46 Chapter 1: ODA, IFIs, and the Private Sector
sector funding through foreign direct a fixed address. This makes it difficult for investment for Uganda declined from them to access information and financial US$1.1 billion to US$0.8 billion between FY services to help their business grow and 2014/15 and FY 2015/16. survive in competitive markets. The small number of SMEs that are registered can Increase in debt burden: The Ugandan receive aid through the PSFU’s programs. government is contracting loans to develop its private sector and channeling Government, DPs and the private sector them through the PSFU. There is a high have come up with several initiatives to probability that the tight conditionalities promote and develop the sector. However, on grant aid will force the government to these efforts have been generally borrow more funds. By 2015, Uganda’s debt scattered, uncoordinated, conflicting portfolio was already underperforming and isolated.22 A range of factors have with loan absorption levels below 50%.16 further stifled MSME growth, including Public sector debt rose from 34.6% of the high level of informality, over GDP in FY 2015/1617 to the current level protection of foreign investors, long of 38%,18 accounting for only disbursed procedures for starting a business, debt stock. The cost of servicing this debt low innovation and productivity, is increasingly straining Uganda’s national and credit access challenges.23 budget - it took 3rd priority in FY2017/18 Government support has been minimal (12.2%) compared to 4th priority in despite the sector’s size.24 In fact, the FY2015/16. In FY 2018/2019, debt servicing government’s domestic borrowing is the 2nd priority and makes the 1st call on has actually undermined MSMEs as it domestic revenue. This is reducing budget has contributed to crowding out the allocations to public service delivery. sector from access to funds as well as fueling competition within the sector.25 Ensuring that aid is used to Consequently, private sector credit has support local economies and declined for the last 3 years because of build the capacities of Ugandan rising interest rates. Commercial banks Micro, Small and Medium have attached stringent conditions Enterprises (MSMEs) on the sectors’ access to credit,26 a practice that will continue to suppress Uganda’s private sector is largely defined innovation, capacity, productivity and by Micro, Small and Medium Enterprises. competitiveness of MSMEs. In fact, they account for 90% of private sector production19 and contribute Shaping the use of ODA in approximately 75% of the GDP.20 supporting the private sector
The informal sector is dominated by Mutual accountability for expenditures of aid MSMEs.21 The majority are less than 5 years resources: As noted above, all stakeholders old. MSMEs typically have a high mortality must develop mutual accountability rate with 90% operating for less than 20 mechanisms with clear guidelines. Just years. Many informal small enterprises as important is reference documentation are family owned and often do not have that determines the type and quantity
47 The Reality of Aid 2018 Report
of aid required in support of the private show that poverty has persisted partly sector and in which areas. Improvements due to poor governance and policy in planning could help reduce aid inflow implementation.27 The deep roots of fluctuations, late or varied disbursements poverty are clearly evident at household against commitments and conditionalities. and community levels and Government has the responsibility to eradicate poverty. Donors need to publish information However, some other stakeholders such as on projects they fund in order to the private sector may only be interested improve transparency, monitoring and in playing supplementary roles to achieve accountability. Currently, few citizens are this common goal. Interventions should able to access and use aid information. focus on poverty reducing sectors at the A better functioning Aid Management macro level, with effective programming Platform (AMP) would help in information and suggested solutions for the household dissemination on aid resources. level. The result should be programs accountable for their action plans on The Office of the Prime Minister (OPM) is fighting poverty. responsible for tracking and evaluating results pertaining to aid flows and Projects/enterprises that focus on implementation of Government programs. Uganda’s niche and competitiveness The office oversees the implementation are viable. One example would be a of the “Baraza strategy,” a presidential development/overhaul of the agriculture initiative adopted in January 2009 to sector, which concentrated on the re- create space for citizens’ participation in designing of agro-industry. It might the development cycle through effective include an examination of possible monitoring of the public service providers economic returns from investments in and demanding public accountability to food processing enterprises that target enhance transparency. To this effect, ready markets such as South Sudan. The DPs should liaise with OPM to share aid Uganda government’s concentration on information relating to the private sector infrastructural development, especially through the “Baraza strategy” in order to roads, can be enhanced by supporting the enhance openness. This information will growth of private construction companies. empower citizens to engage in monitoring The result would have long-term benefits, aid resource utilization within the sector, as roads would enhance possibilities for but also provide feedback to enable delivering business to neighboring nations. evaluation on resource effectiveness. The private sector can help generate Mechanisms to ensure private sector more jobs. MSMEs currently employ support is coherent with policies and approximately 2.5 million people, approaches for poverty reduction contributing 75% of the GDP28. The “Buy Uganda, Build Uganda Policy”, which was The Ugandan government has spent first established in 2014,29 could have the considerable resources in fighting poverty potential to boost growth and improve through program development and incomes of MSMEs if it’s well blended with implementation. However, evaluations programs to support the private sector and
48 Chapter 1: ODA, IFIs, and the Private Sector
implemented effectively. It is also important Initiatives must deal with cultural constructs that it is consistent with the East African to ensure gender attitude change: The community customs protocols. As well, its growth of enterprises owned by women effect on other member states should be is constrained because of cultural closely examined. DPs and the Ugandan constructs and stereotypes that limit Government need to partner in localizing their economic empowerment. In many interventions that affect private sector rural communities discrimination against productivity growth if the poverty reduction women leads to a loss of self-esteem, multiplier effect is to be realized.30 which jeopardizes their capacity to realize their economic potential. The use Orientation of private sector of mechanisms to support the private support to benefit stronger roles sector should be blended with gender for women and girls in creating attitude change tools for communities to appreciate the benefits of women’s sustainable family livelihoods economic power. Gender attitude change can take a considerable amount of time, Gender should be a crucial consideration especially in communities that have long- in all trade issues as well as any strategies standing traditions that are prejudiced to promote socio-economic growth and against women. The involvement of sustainable development with the private several stakeholders, such as private sector. A strong female presence is evident sector agencies, women, girls, boys, men, in informal sector employment, with local, clan, elders, opinion and cultural/ women represent 84% of this work force in traditional leaders, is instrumental in Sub-Saharan Africa (World Bank, 2014).31 facilitating the transformation process of Despite these roles and the existence of unlearning these discriminatory practices. a good legal and policy framework,32 the abuse of women’s rights is still widespread Economic empowerment of women is due to persistent norms and stereotypes. crucial. Because the majority of Ugandan As noted by Unilever: women are centered inside a home care economy, they do not have access to “We believe that women’s business knowledge or the use of updated empowerment is the single greatest ICT. The relatively low female literacy level enabler of human development and is also a factor. For the last 10 years, the economic growth – and that changing female literacy level has averaged 65.4% the norms and stereotypes that hold compared to the male level of 77.1%.34 women back will enable society and These conditions have undermined our business to transform for the women’s ability to effectively participate 33 better.” in the market economy. There are also other practical obstacles: many women Recognizing these challenges, initiatives to have inadequate start-up capital; limited enhance the role of women in the private access to information and credit, and lack sector should be integrated into all sectoral property or commensurate collateral, all policies and strategies and oriented along of which are important foundations for the following lines. business growth.
49 The Reality of Aid 2018 Report
To promote women’s economic support. The fragmentation of aid projects empowerment, women cooperatives makes them considerably less valuable need to be established and existing ones because of the costs and piece-meal strengthened. These organizations would benefits. Instead, joint collaborative efforts be in a position to understand and address based on a division of labour amongst DPs gender-specific risks and challenges,35 should be pursued as this approach can including confidence building. Mentoring consolidate aid outcomes for beneficiary through activities such as guest speaking by communities. Project funding that is not successful business women or commercial harmonized amongst donors can lead to trainings are other useful strategies. Both overlapping efforts, making development would empower entrepreneurs, through cooperation management costly and the knowledge and skills provided by inefficient. experienced business women. Enhancing market linkages using ICT in order to make Adequate consultation and prioritization connections with high-tech e-commerce/ by beneficiaries in designing aid funded business should also be encouraged in projects, which are aligned to national order to move towards gender equality in development policies, is likely to reap the business environment. the best results.36 When there is good transparency, aid benefits earmarked for Denial of property inheritance for women either the productive or social sectors can be and girls, which can be understood as easily traceable. These approaches should a form of economic violence. In many be integrated into development strategies, rural communities in Uganda, women’s plans and monitoring frameworks of local contribution to property accumulation is government, NGOs, CSOs, and DPs. A not considered and widows are disentitled project needs effective implementation, to property. Women lack access to, and monitoring and evaluation processes to ownership of productive resources. This achieve the desired results. limits their economic contributions to development of both themselves and their The practices that propel Illicit Financial communities. Flows (IFFs) deprive Uganda from mobilizing Implications of poor safeguards enough revenue for public service provision. The NDP II notes that by 2030, IFFs should and regulatory frameworks for be significantly reduced to promote communities in developing countries economic justice for all and inclusiveness for sustainable development.37 Records The volatility and limited predictability of losses to other countries are uncertain. of aid financial flows makes it difficult If DPs indulge in IFFs practices, income to maintain its quality and benefits for inequality and the unequal distribution communities. Programs to strengthen the capacity and competitiveness of of power will increase. Any sustainable MSMEs at the community level so that development approach for Uganda must they can transition to bigger businesses curtail mechanisms that facilitate illicit can be frustrated by poor safeguards and financial flows. This will mobilize domestic regulatory frameworks for private sector resources for long-term development.
50 Chapter 1: ODA, IFIs, and the Private Sector
ENDNOTES
1 The Uganda Debt Network is a policy advocacy 11 DAC High Level Meeting, 15-16 December organization that was formed in 1996 2014, OECD Conference Centre, Paris, to campaign for debt relief for Uganda Paragraph 6 under HIPC Initiative of the WB/IMF. The 12 The AMP was launched in 2014 and is hosted organization promotes and advocates in the Ministry of Finance and is expected to for poor and marginalized people to manage and monitor aid resources. participate in influencing poverty-focused 13 Expected to take advantage of private sector policies, demand for their rights and efficiency in the delivery of public goods and monitor service delivery to ensure prudent, services accountable and transparent resource 14 MoFPED, A competitive Economy for generation and utilization. UDN engages National Development, Strategic Plan 2016 with various Government MDAs at national – 2021, Pg 5 level, and through partnerships with Local 15 World Bank (2018), Uganda Economic Governments and nurturing Community Update; From Small Budgets to Smart Based Organizations at Sub national Levels. Returns: Unleashing the Power of Public 2 https://paanluelwel.com/2016/03/30/the- Investment Management, 7th Edition role-of-usaid-private-sector-in-uganda- 16 Auditor General’s Report, 2015. how-the-private-sector-supports-ugandas- 17 MoFPED (2017), Debt Sustainability Analysis economic-growth/ Report 3 EPRC (2017), Linking Budgets to Plans in a 18 MoFPED, Budget Speech, FY 2018/19 Constrained Resource and Institutional 19 MoFED (2017), National Strategy for Private Environment: The Case of Uganda, Pg 23 Sector Development: Boosting Investor 4 Aid effectiveness (2011). Progress in Confidence for Enterprise Development and Implementing the Paris Declaration. Volume II Industrialization, 2017/18-2021/22, Pg 3 Country Chapters, pg 3 20 Ministry of Trade, Industry and Cooperatives. 5 EPRC (2017), Linking Budgets to Plans in “Buy Uganda, Build Uganda Policy” 2014 a Constrained Resource and Institutional 21 Financial Sector Deepening Uganda (2015), Environment: The Case of Uganda, Pg 23 National Small Business Survey of Uganda, 6 Ellmers B. (2010), Tapping the Potential? pg 1 Procurement, tied aid and the use of country 22 Ministry of Trade, Industry and Cooperatives systems in Uganda, pg. 12 (2015), Uganda Micro, Small and Medium 7 Article 26, section (b) of the AAA (2008) Enterprise (MSME) Policy, pg 1 emphasized that, “…donors will provide full 23 i) World Bank (2015), Doing Business Survey, and timely information on annual commitments pg 2 ii) MoFPED (2017). National Strategy and actual disbursements so that developing for Private Sector Development, 2017/18- countries are in position to accurately record 2021/22, Pg 11 all aid flows in their budget estimates and their 24 PSFU (2014), An Analysis of Private Sector accounting systems. Also available at: http:// Growth Challenges and Proposals for Policy siteresources.worldbank.org/ACCRAEXT/ Reform, pg11 Resources/4700790-1217425866038/AAA-4- 25 i)MoFPED (2017), Debt Sustainability SEPTEMBER-FINAL-16h00.pdf Analysis ii) Bank of Uganda (2018), State of 8 MoFPED (2011), Report on External the Economy Report, March 2018 Assistance to Uganda 26 MoFPED (2017). National Strategy for Private 9 DPs, recipient Governments, International Sector Development, 2017/18-2021/22, Pg 14 Organizations, Civil Society, Parliamentarians, 27 The Rural Farmer’s Scheme (1987), Entandikwa Local Governments and citizens. scheme (1996), the Poverty Eradication 10 MoFED (2012), Summary of Project Support Action Plan (PEAP) with lots of programmes Managed Outside Government Systems, FY for the poor, the current Prosperity for All 2012/13, Pg 5 Programme (2008), Plan for Modernization
51 The Reality of Aid 2018 Report
of Agriculture –(NAADs/Operation Wealth no. 6888, Pg 7 http://documents.worldbank. Creation which has no legal basis) org/curated/en/416741468332060156/pdf/ 28 Ministry of Trade, Industry and Cooperatives WPS6888.pdf (2014), “Buy Uganda Build Uganda Policy 32 Articles 32 provides for Affirmative Action 29 The policy is expected to spur domestic and 33 on the rights of women. consumption of local products while 33 https://www.unilever.com/sustainable- Government is responsible for creating an living/enhancing-livelihoods/opportunities- enabling business environment for private for-women/ sector growth 34 Uganda Bureau Of Statistics, Statistical 30 Poverty level declined from 56% in 1992/93 Abstracts – 2015, pg 24 & 2017, pg 29 to 24.5% 2009/10. By 2014, it reached 19.7 35 Eg verbal violence, harassment, gender % but increased to 27% by 2016, according based and sexual abuse etc to respective Uganda National Household 36 Like Private Sector governing policies, trade Surveys (UNHS). and investment 31 World Bank (2014), Informal Economy and the 37 National Planning Authority, NDP II 2015/16 World Bank, Policy Research Working Paper – 2019/20, Pg 278
52 The Shortcoming of Blended Financing in Development Cooperation within the Energy Sector in Cameroon: Show-casing the Dibamba Thermal Power Project
Charles Linjap, Executive Director-Investment Watch
Summary policy formulation. It provides an appraisal of blended financing inside the context of issues in Cameroon’s energy policy. The Dibamba Thermal Power Project (DTPP) of Yassa, Douala, Cameroon was The study provides an assessment of funded through a Blended Financing (BF) the DTPP with respect to development mechanism, which supported both the effectiveness principles. Its focus is construction and operational phases since development results; an appraisal of 2008 to the present. The following case compliance with social, environmental, study of DTPP examines the development labour and human rights standards; and outcomes as well as the limitations using the development of objective criteria to BF resources in a large project. engage with the private sector through the use of ODA funds. This €240 million project was funded through a debt-financing package from two Development Finance Institutions It concludes with strong actionable (DFIs) -- the German Investment and recommendations to roll back core issues Development Corporation (DEG) and affecting the use of BF in the future. The the French PROPARCO – as well as from study maintains that there must be a four Multilateral Development Banks paradigm shift in the use of ODA funds (MDBs)--the African Development Bank when engaging with private actors. It asks (AfDB), the Central African Development civil society to strategically promote the Bank (BDEAC), the International Finance implementation of effective development Corporation (IFC) and the Multilateral cooperation policies when ODA funds are Investment Guarantee Agency (MIGA). blended to support private actors. They The IFC and MIGA have had special roles can do so through multi-stakeholder as Private Sector Instruments (PSIs) of the dialogue in multilateral and bilateral policy World Bank Group to develop 86MW of arenas in their countries as well as at electricity to prevent load shedding during regional, continental and global levels. Cameroon’s dry season. 1. Context: Based on well-researched evidence this case study evaluates issues affecting the Development cooperation partners have use of Official Development Assistance made many attempts to define Blended (ODA) to crowd in additional private capital Financing (BF) within the landscape of the through BF mechanisms. It analyzes Sustainable Development Goals (SDGs). development outcomes and shortcomings Thus far, the Organization of Economic of a project as a means to leverage ODA Cooperation and Development (OECD)
53 The Reality of Aid 2018 Report
has defined Blended Financing as the This case study relies on key informant strategic use of development finance for interviews and focus group discussions as the mobilisation of additional finance well as a desk review of DTTP literature. towards the SDGs in developing countries, Prior to analyzing the outcome of with ‘additional finance’ usually referring case study proper, it is vital to present to commercial finance.1 This is a growing Cameroon’s energy policy and context. practice with 17 of the 30 DAC members carrying out blended finance activities as of Since 1998, Cameroon has witnessed 20 January 2018 and more donors are looking years of transformational energy policy to enter this field. Official development reforms that have focused on the building finance plays an important role in unlocking of a pro-private sector, investment-friendly an additional US$81 billion in private finance energy climate. In practice, that has meant for development over four years (2012 to that Cameroon’s energy management 2015) based on recent OECD analysis. has transitioned from a state electricity monopoly corporation (SONEL) into In January 2018, the OECD DAC published a mixed public-private energy policy five elaborate principles to guide the investment model. The government of implementation of BF by its member Cameroon participates at multiple levels in countries in the Global South: the energy value chain as a regulator, equity investor, energy producer and transmitter The use of Private Sector Instruments in partnership with private corporations. (PSIs) and the increasing use of BF in the Global South has prompted the OECD After 2006, the government accelerated its DAC to encourage the implementation of energy policy reforms towards this mixed projects using the BF model to adhere to public-private energy policy investment the aforementioned principles. To date, no model. The energy value chain has been best practices examples exist but there are overhauled into five main operators: documented case studies from the Global South that clearly outline the shortcomings • Energy production operator: The of BF in development cooperation, Cameroon’s government drive to particularly in the energy sector. harness untapped hydropower (second
Table 01 OECD DAC Principles on Blended Finance2
54 Chapter 1: ODA, IFIs, and the Private Sector
in Africa after the Democratic Republic and industrial demand for electricity and of Congo) prompted the creation of the to avoid load shedding during the dry Electricity Development Cooperation season. As noted in the introduction, (EDC) in 2006. The intention has been this case study assesses the development to sell energy within Cameroon and to outcomes and shortcomings of the DTPP, neighbouring countries; a project that has been funded through a • Energy transmission operator: In Blended Finance (BF) mechanism. an attempt to resolve the unequal urban-rural electricity access divide, Funders for DTPP have included the government was obliged to create concessional ODA loans from two a National Energy Transmission Development Finance Corporations Corporation (dubbed SONATREL) in (DFIs) – the German Investment and 2013 to modernize its electricity grid Development Corporation (DEG) and the and to accelerate rural access; French PROPARCO. It was also financed by four Multilateral Development Banks • Energy distribution operator: The (MDBs)-the African Development Bank British owned electricity distributor (AfDB), the Central African Development corporation Energy of Cameroon Bank (BDEAC), the International Finance (ENEO Cameroon) is responsible for Corporation (IFC) and the Multilateral selling finished energy products and Investment Guarantee Agency (MIGA). The services in Cameroon; DTPP project was approved for funding by • Independent Power Producers the above-mentioned DFIs and MDBs in (IPPs) were accepted in 2001 to alignment with Cameroon’s development pull in additional private capital priorities within the energy sector. for energy: Cameroon is currently witnessing a surge in IPP investments. As a private partner AES SONEL received a including the Dibamba Thermal €240 million debt-financing package from Power Project (DTPP), Kribi Power the DEG, PROPARCO, AfDB, BDEAC, IFC and Development Cooperation (KPDC), MIGA.3 The table below shows the amounts and other natural gas-fired IPPs; and each contributed. Not all the figures are available due to the limited disclosure • The Rural Electricity Development policies on the part of some donors. Agency created in 2002: This Agency has as a mandate to accelerate rural On 16 June 2014, Globeleq, a British Owned access to electricity by ensuring company took over the assets of the DTPP an additional 20% rural access in with the Republic of Cameroon retaining Cameroon by 2030. its minority shares of 44%. Globeleq is wholly owned by Actis, the British owned In a bid to accelerate energy access in emerging markets fund manager, which Cameroon, a subsidiary to AES SONEL has also acquired a majority stake in ENEO was awarded to the Dibamba Power Cameroon4. Development Corporation (DPDC) in 2008. They were given the right to develop 86 MW The DTPP was consolidated in 2014 with the of energy dubbed the Dibamba Thermal receipt of a €23.3 million guarantee from Power Project (DTPP) as an IPP. The DTPP MIGA to cover the investment by Globeleq was designed to meet the growing public Energy Holdings and guarantee its future
55 The Reality of Aid 2018 Report
earnings for a period of up to 20 years During the construction phase, the DTPP against the risk of breach of contract.5 plant and equipment were imported via the port at Douala, and then transported It is important to recognize that there are to the site by the Douala-Edea road. serious reporting challenges in a project Most of the electricity equipment and like this one, where multiple donors are spare parts were produced outside involved. For instance, the DTPP still lacks a Cameroon during the construction and published, harmonized report that has been operational phase. Also, specialized staffs, endorsed by all the donors. As well, there is primarily engineers and technicians, little harmonized reporting on the DTPP’s were contracted externally. Both factors key project outcomes, making it difficult to reduced technological transfer and made access vital data. The practice of financial it difficult for Cameroon to replicate and secrecy and limited sharing amongst sustain the project without dependence donors has greatly reduced the availability on foreign expatriates, technology and of information related to the real impact spare parts. Only non-specialized staff, of projects like DTPP, which are funded such as security personnel and cleaners through BF mechanisms, both at the micro and were employed locally. and macro levels of the economy. Development cooperation should help 2. The Case Study Outcomes empower people to claim their rights and promote social inclusion
2.1 Analyzing the DTPP project The DTPP focused on stimulating and outcomes according to development sustaining industrial growth during effectiveness principles: Cameroon’s dry seasons rather than increasing rural access to energy. Development cooperation should Therefore, its capacity to reduce rural promote national self-reliance poverty was limited. Community social
Table 2 Lists of donors regarding amounts blended and kind support towards the DTPP
NO DONORS TYPE OF DONOR AMOUNTS BLENDED KIND OF SUPPORT The African Development Bank Infrastructural A MDB € 26 million6 (AfDB) development The Central African Infrastructural B MDB Not available Development Bank (BDEAC) development The German Development and Infrastructural C DFI Not available Investment Corporation (DEG) development Technical support The International Finance D MDB €22 million7 and Infrastructural Corporation (IFC), development Infrastructural E PROPARCO DFI Not available development Guarantee against The Multilateral Investment risks-breach of F MDB €23.3 million Guarantee Agency (MIGA) contract and future earnings.
56 Chapter 1: ODA, IFIs, and the Private Sector
services, such as health facilities, schools, a public hearing is a vigorous process that football fields, potable water, markets requires the involvement of civil society and paved roads were not included in actors with strong background in the area the Environmental and Social Impact and issues, and the consultation must be Assessment (ESIA). They were completely documented with a public report validating left out as a social development package it. To date, none of such report exists. for the Dibamba neighboring communities. Development cooperation should The list of those affected by land adhere to and implement the expropriation, resettlement and crop highest standards of openness and compensation were not published. Lack of transparency transparency on these aspects could open the door to bad practices by state civil Vital data on the DTPP’s key project administrations that can negatively affect outputs and development results was the local communities.8 highly protected with some data being classified as confidential. The World Bank During the operational phase of the DTPP as of December 2015 had declassified very approximately 34 jobs were created to little information about the DTPP. Also, ensure the power station operates 24 the reporting process for donors involved hours/day.9 in the DTPP was never harmonized and put in the public realm. Monitoring and Development cooperation should reporting were based on self-reporting promote policy dialogues on as per the contractual arrangements of development strategies, policies and each partner. There is no independent programs monitoring and reporting of the DTPP.
While this project was able to consolidate Another difficult aspect is the financial a Public-Private Partnership (PPP) in secrecy and the opaque nature of project Cameroon’s energy sector, it failed to management. For example, the lump sum integrate the voices of civil society and for the entire project was publicly shared, social partners, such as trade unions. but there is no breakdown of specific There was limited involvement of civil financial operations or the investment society or grassroots communities during vehicles used. Strong levels of transparency the process of undertaking the ESIA, as is and accountability are critical to control required by Cameroon’s ESIA Law. and avoid illicit financial flows.
According to the operational procedures In June 2016 the Cameroonian government established by the Ministry of Environment jump-started a tax reform capacity (MINEF), civil society and affected building program with the Organization for grassroots communities must actively Economic Cooperation and Development participate in validating the launching of (OECD). This is a positive move as its the ESIA report through a public hearing objective is to mitigate illicit financial meeting. Due to the limited information flows in Cameroon by Multinational disclosure policies by DTPP partners, it is Corporations.10 There is still much to not possible to confirm whether a public be done in order to achieve the desired hearing had taken place. The process for results of transparency and accountability.
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2.2 Private sector compliance with and expropriation law, but also social, environmental, labour and happened without due consideration human rights standards of the long term damaging to health by electromagnetic waves as well as To date, there has been no independent the risk of electrocution, as noted in monitoring of the DTPP or an evaluation the ESIA study. The government civil to verify the effectiveness of the ESIA administrator of the Yassa district mitigating measures that were predefined area, and particularly the board chair in the ESIA. Among these ESIA mitigating of the land tenure committee is aware measures, from construction to the of these illegal occupations and has operational phase, it is worth noting that done virtually nothing to prevent the a good number of issues have not been ongoing encroachment as required by addressed, namely: 1974 land law. • According to the ESIA of the DTPP, • The entry and exit road to the project green belts must be developed in site was not completely paved to order to shield communities from the ESIA benchmark of 800 meters encroaching closely into the DTPP beyond the second gate from the main facility. Today, community members road. Integrating public fire safety and industrial complexes are building protection measures into the DTPP very close to the project site without a project requires that the entire project due consideration for fire safety and site is constructed with entry and exit sewage disposal mitigation measures. paved roads. There is a lack of gutters and green belts, which can limit the • It was first predicted that the facility impact of soil erosion and potential oil would transition from an oil-powered spillages from the DTPP facility. system to a natural gas powered system. This came with the discovery • The legal occupants and property of commercial quantities of natural gas owners of land designated for the 10 kilometers southwest of the project high-tension grid were resettled and site at Logbaba and was seen as one compensated in an opaque manner measure to mitigate global warming prior to the launching of the DTTP. effects. This measure is still pending. But regrettably, a few years later, there was gradual encroachment by • The complaint redress mechanism former settlers and illegal occupants implemented by the donors was too into the high-tension grid area beyond complex and inaccessible for the the 15 meters space limit required barely literate project site workers and by law. The building of houses and the affected grassroots communities. businesses under high-tension grid The IFC Compliance Advisor lines without respecting this 15 Ombudsman (CAO) allows for a civil meters security border can be partly society entity to submit a report on attributed to the non-involvement of behalf of an individual or communities the civil society in the implementation through a confidential procedure. The of the ESIA. Building directly under complaint redress mechanism for the high-tension grid line is not only in the DTPP was not well known by the violation of the 1974 land resettlement affected communities and workers,
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making it an ineffective mechanism and readily addressed through mitigation for addressing development results. measures.12 For the AfDB, a Category 1 Proper compensation for workers who project shall be disclosed to stakeholders are fired is difficult to address because for 120 days for public sector projects of the complexity of the Mechanism. and at least for 60 days for private sector This has been further affected by operations13. Unlike the IFC for the same corrupt malpractices in filing legal project, according to the AfDB, Category complaints in Cameroon.11 1 Projects have significant impacts, which require detailed field reviews and 2.2.1 Limited Reporting of the an Environmental and Social Impact 14 Environmental and Social Impact Assessment (ESIA) . Assessment (ESIA) Aspects of the DTPP The ESIA study15 of the DTPP was done The DTPP is classed as a Category B Project in compliance with the domestic 2005 under the IFC Project Categories and Cameroon-ESIA law. It also adhered Category 1 under the AfDB. to the international best practices from the IFC Performance Standards, According to the IFC, Category B projects IFC Environmental, Health and Safety entail business activities with potentially Guidelines and the World Bank Operational limited adverse environmental or social Policy (OP) 4.01. This law requires that AES risks. The impacts from Category B project SONEL make the ESIA’s report publicly are expected to be few in number, and be available in a place that is accessible to the generally site-specific, largely reversible, affected groups and local CSOs.16 To date
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it is not possible to confirm whether such civil society and affected communities an event has taken place. There are no should be undertaken to ensure that the documented reports to attest to a public concerns of grassroots communities are consultation, and it is difficult to find a integrated into a BF project; reliable informant who can corroborate on • Donors should adopt a public behalf of the affected community. disclosure policy for all aspects affecting grassroots communities, including key Significant long-term ESIA impacts project outputs, development results have been identified from an analysis and compensation packages; of the proposed DTPP construction and operational phases. However, no • Civil society should be involved as an independent third party has been assigned independent third party evaluator to report on the core ESIA outputs. The regarding ESIA mitigating measures in result is that there is primarily a voluntary the short and long term; engagement on social and environmental • A holistic social development model impacts, rather than a mandatory reporting should be created for all projects for greater transparency, as is required by funded through BF as a means to development effectiveness principles. mitigate inequality and extreme poverty. Social services such as In terms of other limitations, key issues potable water, schools, markets, regarding Illicit Financial Flows (IFFs) were not access to energy and sporting facilities highlighted as major long-term impact for should be included; the DTPP and no mitigating measures were recommended to fight against illicit flows. • Decent jobs for youth and women should be protected by ensuring that it is a key 2.3 Develop objective criteria for performance dimension of the ESIA; private sector engagement with • An enabling workplace policy with ODA funds as derived from the DTPP transparent complaint redress mechanisms should be created. This Engaging ODA funds to catalyze will guarantee the protection of trade commercial capital from the private sector unions and the designation of labour requires the development of guidelines representatives to defend worker rights; to ensure that the desired development • Vital information on private sector results are achieved. Equally important is contributions in projects funded need to make certain that these results through BF should be disclosed. This are sustained over time by all relevant will ensure that private actors are development actors without abusing held accountable in case of breach of the rights of individuals and affected commitments; and communities. In this regard, it is necessary to consider the following criteria upon • A robust and transparent financial/ awarding BF contracts to private actors: tax declaration system for private corporations benefiting from blended • As recommended by the World Bank finance funding resources should be Group,17 a thorough consultation with developed and implemented.
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3. Recommendations • Integrate a Human Rights Based Approach in the implementation of ESIA by “obtaining the prior Recommendations to the recipient and informed consent of affected government: communities” through consultations • Recipient countries should develop with affected grassroots communities a mandatory ESIA compliance and the civil society; regulatory framework for all private corporations funded through BF. A • Ensure that every donor is required specific ESIA regulatory agency should to have an independent complaint be established for this purpose. redress mechanism. Civil society and trade unions should be included as • Mandatory disclosure policies and open an independent entity to carry out data practices should be developed systematic monitoring and evaluation that require both donors and private of BF projects; actors to publish development results and ESIA mitigating measures. • Publish the financial contributions of private sector actors as well as the • To prevent corruption, bad practices developmental added-value before a and exclusion, the names of final project begins; beneficiaries earmarked for land expropriation, resettlement and crop • Establish a transparency model to compensation must be published and fight against illicit financial flows made publicly available. The law that by ensuring that this concern is guaranteed fair compensation must incorporated into the ESIA as a likely be respected, but the issue is implicit long-term impact that requires special corrupt practices of adding of ghost monitoring; and names for private gains by government • In situations where multiple donors civil administrators. are funding one project through BF, • The recipient country should create ensure a harmonized reporting system the necessary enabling environment is set up to report on key project to ensure the participation of civil outputs and development results. society actors, including trade unions, Recommendations to private in the independent monitoring and corporations: evaluation of ESIA mitigating measures. • Develop internal complaint redress • To ease sustainable technology mechanisms for workers so that transfer and decent jobs for local conflicts are promptly resolved; and workers, the recipient countries • Mobilize additional resources to build should provide reasonable tax technological training facilities and spare incentives to private actors. parts production units in the recipient Recommendations to donors: country to ease technology transfer. • Strengthen transparency and Recommendations to the civil society accountability policy frameworks by • Accompany and support affected developing an elaborate disclosure policy communities by ensuring that the for projects funded through BF to ease the compliant redress mechanisms as process of holding actors accountable; well as ESIA outcome and mitigating
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measures for projects funded through BF are in the public realm. 4. Conclusion
• Develop the capacities of beneficiaries so Civil society must seize this opportunity they can file admissible complaints in case to undertake strategic advocacy with of abuse and breach of commitments; key stakeholders across ODA policy- • Provide monitoring and evaluation making arenas ranging from bilateral to on the ESIA mitigation measures as multilateral donor agencies, including a way to fight against poor reporting effective development cooperation standards; and platforms. It is absolutely vital for • Develop a detailed scorecard to measure civil society to develop an elaborate the development effectiveness of BF blueprint on how to effectively projects and to appraise private sector implement the key recommendations added-value in their construction and that resulted from this study in both the operational phases. short and medium term.
ENDNOTES
1 OECD DAC Blended Finance Principles for 11 For instance, since 2014 there has been a Unlocking Commercial Finance for the complaint of a worker who was abusively Sustainable Development Goals, January fired. It it took more than two years to engage 2018, page 3. in mediation and seek lasting remedies 2 Ibid page 5 with the CAO of the IFC. This lengthy, formal 3 Multilateral Development Banks’ process discourages potential complainants. collaboration: infrastructure investment In this case, the complainant did not obtain an project briefs, Cameroon: Dibamba adequate redress from Cameroonian and was Power Plant, overview-page 1, https:// bound to make recourse to the CAO of the IFC. library.pppknowledgelab.org/ 12 IFC,ENVIRONMENTAL AND SOCIAL documents/2881?ref_site=kl CATEGORIZATION, http://www.ifc.org/ 4 Globeleg acquires Cameroon generation wps/wcm/connect/topics_ext_content/ifc_ assets, https://www.globeleq.com/globeleq- external_corporate_site/sustainability-at-ifc/ acquires-cameroon-generation-assets/, policies-standards/es-categorization April April 03, 2018. 03, 2018. 5 World Bank 2016: http:// 13 AfDB launches revised version of its documents.worldbank.org/curated/ Environmental and Social Assessment en/701211468186859142/Cameroon- Procedures for 2015, 17/11/2015, https:// Dibamba-power-plant www.afdb.org/en/news-and-events/ 6 Cameroon - AfDB Approves Euro 26 Million afdb-launches-revised-version-of-its- Senior Loan to Dibamba Power Project, environmental-and-social-assessment- https://www.afdb.org/en/news-and- procedures-for-2015-15013/ . events/cameroon-afdb-approves-euro- 14 AfDB Business Bulletin January 2011, page 26-million-senior-loan-to-dibamba-power- 4, https://www.afdb.org/fileadmin/uploads/ project-6645/ afdb/Documents/Procurement/Project- 7 Dibamba oil-fired power plant, Cameroon related-Procurement/ADB%20Business%20 8TH JULY 2011 BY: LINDIWE MOLEKOA, Bulletin%20of%20January%202011.pdf , http://www.engineeringnews.co.za/print- April 04, 2018. version/dibamba-oil-fired-power-plant- 15 Dibamba Power Project,88MW Thermal cameroon-2011-07-08, sourced online-April Power Plant & 90kV Transmission Line, 03, 2018. Environmental and Social Impact Assessment 8 Outcome from FGDs. Final, January 2008, Scott Wilson. 9 Ibid page 6 16 Idid page 7 10 The Director of North South Cooperation- 17 Mr. Abel Bove, Governance and Civil Society Ministry of Economy, Planning and Regional Office, World Bank, Cameroon Program Development (MINEPAT). Office, April 02, 2018.
62 International Finance Institutions: A focus on the private sector in North East India’s development challenges Jiten Yumnam, Centre for Research and Advocacy, Manipur
US$44.6 million in 2008 to US$123.6 Introduction: DFIs and million in 2011, almost exclusively through development financing in BIO-Invest, the Belgian DFI.2 Since 2001, India’s North East USAID has supported over 1,000 private sector partnerships with more than 3,000 The increased role of Development partners. IFIs are directly promoting Financial Institutions (DFIs) and other private sector led growth in their policy International Financial Institutions (IFIs) prescriptions and specific sectoral lending in shaping the development discourse in sub regional economic groups and at in Manipur and across India’s North East country levels. states has become a dominant factor. It is consistent with India’s adoption of a The framework for financing by DFIs and neoliberal model of development and the IFIs has focused on development processes aggressive push for the “Act East Policy,” oriented toward a completely liberalized geared to the consolidation of India’s environment and trade rules imposed trade and commerce with South East Asian by the World Trade Organization (WTO). countries. Privatization is a major thrust This includes the removal of all barriers for all these financing programs. to trade and business and an emphasis on private sector oriented development, Bilateral DFIs such as Agence Francais De reasoning that the private sector has Development (AFD) of France, German superior efficiency and experience. Development Bank (DEG) / KFW of Germany, and the Japan International Cooperation Privatization in India: Agency (JICA) are extensively involved in The context India’s North East (NE) supporting the private sector mainly through equity In India, privatization received a investments, long-term loans and tremendous boost with the introduction guarantees. The Asian Development of a new economic policy (NEP) in 1991 Bank (ADB), European Investment Bank that allowed relicensing, relaxing entry (EIB), International Finance Corporation restrictions and equity funding. In June (IFC) and the Islamic Development Bank 1991, India launched a comprehensive (IDB)1 are some of the multilateral DFIs economic policy reform program, with financing across India’s NE. World Bank support of US$500 million under its structural adjustment operations. Globally, IFI investments with the private After becoming a member of the WTO in sector exceeded US$40 billion in 2010 and 1995, India initiated rapid privatization of were expected to surpass US$100 billion almost all sectors. Privatization and private in 2015. In Belgium, donor investment in sector participation was vigorously pursued private sector development grew from through structural adjustment programs of
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the World Bank and other IFIs. Deregulation competitiveness to create more and in India has also been facilitated by previous better jobs, providing inclusive access to laws, such as the Industries (Development infrastructure networks and services and & Regulation) Act, 1951 (IDRA), Monopolies addressing climate change and resilience. & Restrictive Trade Practices Act, 1969, ADB’s annual lending to India is projected (MRTPA) and the Foreign Exchange to be raised to a maximum of $4 billion. Regulation Act, 1973 (FERA). ADB’s country operations business plan (COBP) 2018–2020 for India also aims to Over the years NEP has morphed into a support the government’s endeavor to compendium of economic liberalization achieve faster, inclusive and sustainable strategies, privatization and the opening up growth with the private sector role.6 of international trade. The National Water Policy of 2002 proclaims, “private sector Both bilateral and multilateral DFIs have participation should be encouraged in increasingly entered into collaborations to planning, development and management promote private sector roles and financing of water resources projects.”3 in development processes in developing countries. JICA entered into an agreement NEP has come to be viewed as strategy with ADB on partnership for quality to combine India’s entry into a globalizing infrastructure on 15 December 2017 world with its adoption of a neoliberal to establish a trust fund for supporting model of economic development—a public-private and other private sector brainchild of the International Monetary infrastructure projects as well as a co- Fund (IMF) and the World Bank.4 financing framework for supporting the governments of developing countries to India is the largest recipient of loans from promote public infrastructure7. The ADB the World Bank, amounting to $102.1 entered into an agreement with JICA on 30 billion, between 1945 and 2015 (as of March 2016 to establish a new fund, the 21 July 2015). The International Bank for Leading Asia’s Private Infrastructure, to Reconstruction and Development (IBRD), support private infrastructure investments a part of the World Bank group, has across Asia and the Pacific with JICA lent $52.7 billion and the International capitalizing 1.5 billion in equity, but to Development Association (IDA), a be managed by ADB’s Private Sector multilateral concessional lender of World Operations Department.8 On 8 May 2017, Bank, has loaned $49.4 billion to India JICA also signed an agreement with the over the last 70 years. As of 31 December IFC for promoting co-financing by both 2015, India’s loans from the World Bank agencies to the private sector in developing stood at $104 billion (IBRD—$54 billion countries.9 These agreements will intensify and IDA—$50 billion).5 the DFIs’ roles in leveraging the private sector financing and financing development The ADB’s Country Partnership Strategy projects in India and across its NE region, (CPS) 2018–2022 for India aims to support especially in infrastructure, energy and the government’s goal of faster, inclusive climate change related projects. and sustainable growth accompanied by rapid economic transformation and job Across India’s North East, the Asian creation. The new CPS articulates ADB Development Bank and the World Bank assistance through boosting economic have assumed a leadership role in the
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privatization of development. Privatization setting for private sector investment and can be defined as the transfer of ownership thus an increased participation in global and control of public sector units to and regional markets.11 Unfortunately, private individuals or companies. With the this has not proven to be the case. structural adjustment programs imposed by IMF, it becomes almost inevitable. The ADB’s technical assistance (TA) India’s North East region has already for the northeast power development recorded the establishment of several project, prepared in 2004, outlined private sector led development processes, the development of locally available albeit with much controversy. These resources, including hydropower, natural processes have included a range of service gas and renewable energy sources.12 The provisions, direct consultancy services, aim was to provide critical transmission direct supply and procurement works, the and distribution facilities and to assist privatization of essential services and the in institutional strengthening in the direct role of the private sector in pursuing power sector by prioritizing private extractive industries. sector participation. It argued for a favorable environment for private sector Role of IFIs in pursuing the investments13 and for the need to increase privatization agenda in India’s NE the capacity and productivity of NE India’s private sector in order to meet the ADB- Multilateral and bilateral IFIs are defined challenges and issues facing the 14 aggressively promoting a privatization sub region in international markets. agenda in India. The Asia Development Bank’s private sector development The ADB maintained that North East strategy in India’s North East promotes the Region had unexploited natural resources private sector and mitigates risks for this and stressed that the creation of its action sector. The ADB rationalizes its aggressive plan would enhance the conditions for private sector promotion by maintaining private sector led growth. The plan also that private sector involvement will reduce envisaged the need for a policy framework financial pressure and demands on a that enabled competition, an institutional poorly resourced and inefficient public setup with an open, competitive level sector. The government’s spending on playing field among sectors and the social sectors has declined, at both the establishment of a support mechanism national level and in Manipur. India’s for private sector development. The 2015 budget reduced the Ministry of implementation of this TA advice in the Agriculture’s allocation from Indian Rupees trade sector has resulted in the integration (Rs) 19,852 crore in the year 2014 to just of private sector-led growth in all policy Rs 17,004 crore. Similarly, funds for the priorities and initiatives for development. Women and Child Development Ministry have been slashed to Rs 10,382.40 crore The technical assistance programs of IFIs from Rs 18,588.39 crore.10 The ADB insists uniformly uphold the approach promoted that its trade and investment initiatives in by the WTO and other global financial the North East are necessary to improve institutions. This framework includes the region’s market environment. The privatization and free trade as the implementation of these measures, the essential parameters for development in ADB claims, will result in a favorable the NE region.
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On June 24, 2016 the World Bank Board 2017 to execute infrastructure building approved a US$ 470 million loan to support projects such as connectivity and road six states in the North Eastern region of network development as well as electricity India to augment their transmission and generation. An agreement was also signed distribution (T&D) networks. The loan, from at the bilateral summit to combine the the International Bank for Reconstruction aims of Japan’s Free and Open Asia-Pacific and Development (IBRD), has a 5-year strategy and India’s Act East Policy.17 grace period and a final maturity of 24.5 years. The project’s objective is to improve From 2007 till 2017, JICA has provided India the power supply in the North Eastern with soft loans worth US$23.36 billion for region and to reverse commercial losses infrastructure projects such as transport by corporate bodies15. (55 percent or US$11.37 billion), water (16 percent or US$4.67 billion), energy Manipur is one of the states targeted for a (13 percent or US$12.07 billion) and US$300 million loan agreement that was agriculture and forestry (seven percent or signed between the Government of India US$3.63 billion). and the ADB on March 2015. The two new roads in Manipur planned for construction In April 2017 the JICA signed an agreement under the project are Imphal-Kanchup- with the Union government in New Delhi to Tamenglong Road and Imphal Ring Road. The provide over 67 billion yen (US$610 million) loan is the first under a US$425-million multi- for Phase I of the North East Road Network tranche SASEC Road Connectivity Investment Connectivity Improvement Project. Phase Programme approved by the ADB in 2014, 1 will see the enhancement of National due to be completed by December 202116. Highways 54 and 51 in Mizoram and Meghalaya. The improvement of NH-54 will Bilateral donors are also strongly pushing enhance connectivity of the Kaladan Multi- for the privatization of water, electricity, Modal transport corridor, which seeks to education, health and all essential social link India’s northeastern states with the services through their development rest of India via Myanmar by roads, inland aid agencies. France, Britain, Australia, water transport and marine transport.18 Japan and United States are aggressively involved in fostering the privatization of JICA has funded the Imphal Water Supply water and sanitation across Manipur and Augmentation Project (IWSP) in support India’s North East states. of the Mapithel dam. This initiative will not only lead to privatization of its water Japan is a leading country that is providing supply, it will also legitimize the violation extensive financial support in NE, which of community rights and the deprivation of is supported by a close relationship people’s livelihood, due to flooding of their between India and Japan. Setting up the agriculture lands, forests and settlement India-Japan Act East Forum was one of the areas by the dam. major agreements signed during Japanese Prime Minister Shinzo Abe’s visit to India Other bilateral DFIs, such as the DEG for the 12th Indo-Japan annual summit of Germany, have co-financed the on 3rd August 2017. The India-Japan mining operations in Meghalaya by Coordination Forum for Development French mining company, Lafarge. KFW of North East was also established in financed the Pare Hydroelectric project
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in Arunachal Pradesh and is also involved Policies on the privatization of services in financing climate change mitigation and the changing of existing laws to foster and adaptation projects across the North greater privatization of services, such East States. KFW signed a €15 million as the enactment of India’s 2011 Public loan agreement with the Government of Private Partnership (PPP) Policy, have India on 4 December 2017 for the project been pursued. The PPP is a key modality ‘Community based sustainable Forest for promoting private sector participation. Management — Component I in Manipur’ Most PPP projects followed the BOO model to restore degraded forests in upper (Build-Own-Operate), with the private watersheds, reclamation of abandoned sector managing the infrastructure. Section shifting cultivation areas and biodiversity 4 of the PPP Policy deals with the facilitation conservation.19 Lack of community of quick mobilization of financial resources consultation and the absence of impact and the development of new innovative assessment has marred the financing of financial instruments for the PPP projects. these initiatives by JICA & KfW. In this regard the government also intends to interface with banks, financial institutions An enabling environment for and the private sector.20 the private sector The Mining and Minerals (Development and The creation of an enabling environment Regulation) Amendment Bill was passed for Manipur’s private sector is much in by both India’s houses of parliament on 29 evidence with the increased financing by November 2015. This amendment is deeply DFIs. One of their key objectives has been flawed. It does not recognize the community’s the establishment of the unhindered and rights over their land and minerals or the full-fledged functioning of the private need for the community’s consent on any sector. Central to these efforts has been mining operations. It does not contain a the creation of legal, policy and institutional clause requiring “forest” or “environment mechanisms to leverage private sector roles clearances” in mining operations. The and responsibilities in defining, consulting amendment advances the interests of and managing development financing and mining companies through measures such the implementation of projects. Policies as an automatic extension of mining leases on mining and oil exploration have been to 50 years from the previous 30 as well as diluted to make way for greater rights and the extension of the limit of a mine from 10 roles of corporate bodies. Environmental square kilometers to an undefined amount policies are being weakened to remove without community consent.21 all safeguard provisions to allow for the unhindered operation of the private Recently, several additional measures sector. The formulation of the North East were implemented to support the private Hydrocarbon Vision 2030 in January 2016, sector in India. For instance, the Indian for instance, will lead to the expropriation Government introduced a new Draft of land and natural resources through Energy Policy in July 2017. It supports the drilling of oil and gas in Manipur and the establishment of energy projects all over the North East. Both the Water throughout India, with an enabling Resource Development Policy, 2000 environment for the private sector to and the Industrial Policy, 2004-09 have further their commercial interests. A promoted water privatization in the region. key intention of the Finance Act, 2017
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is to curb the powers of the National enhance Mizoram and other Northeastern Green Tribunal, established to monitor states’ road links with Bangladesh, Nepal, the violation of “forest clearance” Bhutan and Myanmar. The Mizoram State and “environment clearances” in Road project, financed by the World Bank development projects that have potential from 2002 till 2009 and implemented by environmental consequences such as big RBM Tantia (part of RBM Road Builders of dams or oil exploration.22 India’s Ministry Malaysia), Baghareetha Private Limited, of Environment, Forests and Climate CCAP Limited and Termat Engineering/ Change introduced the Draft Wetlands Infrastructure Private Limited, has Rules in 2016, which is a watered down also met with controversy. Issues have version of the Wetland (Conservation and included project delays, problems with Management) Rules of 2010.23 There is an compensation and the rehabilitation 25 on-going process to weaken the Forest of affected communities. The Rights Act of 2006 and the Land Acquisition implementation of the road project has also Act of 2013.24 The Government of India been marred by substantial delays, poor is currently drafting the Draft National contract management and a failure to pay Forest Policy 2018 that will further weaken compensation to families of two employees 26 community rights over forests. who died in an accident in April 2016.
Loan agreements between the Government Examples of specific cases of India and ADB were signed for the Northeastern States Road Investment Infrastructure Road Projects: Primary Program in July 2012 (Tranche I) and for the infrastructure projects supported by DFIs tranche II in February 2014 at a total cost are road projects which are part of the of US$200 million.27 The implementation South Asia Sub Economic Cooperation’s of the Tranche II is in progress in NE states, objective to link countries in South and while the roads projects from Tupul to South East Asia. The World Bank, ADB Bishnupur and from Thoubal to Kasom and JICA have complemented each other’s Khullen in Manipur have also been taken initiatives in financing these road projects, up.28 On 31 March 2017, JICA signed which are implemented by multinational an agreement with the Government of road building companies. They have India to provide 67,170 million Japanese often involved privatization of access to Yen (approximately INR 4,000 crores) in the roads, such as along the Gauhati to ODA for the North East Road Network Shillong Road. The World Bank is directly Connectivity Improvement Project (Phase involved in financing road projects in I).”29 JICA later signed an agreement with Mizoram while ADB and JICA have financed the Government of India in April 2018 to road projects all across NE states. provide an ODA loan of 38,666 million Japanese Yen (approximately Rs 2,500 In June 2014 the World Bank approved a crore) for the North East Road Connectivity US$107 million credit to the Mizoram State Project (Phase 2).30 Roads II – Regional Transport Connectivity Project. The objective of this project is Several communities affected by the to improve transport connectivity for ADB financed Imphal Ring Road project the landlocked state of Mizoram and to in Manipur have expressed objections
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to the road widening plan because of investigate and take appropriate and its multi-faceted impact and the lack of suitable actions relating to those most a holistic assessment consultation and affected by this project. The CAO found the consent of affected communities. In a complaint eligible for assessment and has meeting on the proposed eviction plan initiated the investigation process.33 held on 21 September 2014 residents of Kongba Makha Nandeibam Leikai in Water and sanitation and privatization: Manipur resolved to oppose the project Water supply and sewerage projects, as its implementation and land acquisition which are primarily financed by DFIs. JICA, processes had failed to obtain their AFD and ADB in India’s North East, have consent.31 Villagers affected by the ADB all insisted on the privatization of services financed Imphal Moreh road pressed for and an increase in tied aid. adequate rehabilitation and resettlement measures and protested both the lack JICA funded the Imphal Water Supply of information and transparency on the Augmentation Project (IWSP) in support actual project works and impacts. of the Mapithel dam. JICA’s pre-feasibility study for IWSP recommended a policy DFIs co-financing Lafarge mining in change in the Manipur Water Supply Act, Meghalaya: The ADB, EIB, IFC, several 1992 (Manipur Act No. 1 of 1993) that other bilateral DFIs and the German would privatize water supply services. This Development Bank (DEG) have co-financed Act requires that the state government of the limestone mining operations in the Manipur adopt a flat rate for their water state of Meghalaya with the Lafarge Group supply services. The project financing of France and Cementos Molins of Spain. will not only lead to the privatization of The Lafarge Surma Cement (LSC) Project, the water supply; it will also legitimize run by the French multinational Lafarge, the violation of community rights and received a loan of US$45 million from the the deprivation of people’s livelihood, IFC in 2003. The violation of India’s forest through the flooding of their agriculture laws, the Forest Conservation Act, 1980 and lands, forests and settlement areas by the the Forest Rights Act, 2006 is evident in this Mapithel dam. project. In 2008, a confidential report by an ADB mission highlighted shortcomings, In the case of the water supply project particularly the lack of transparency in for Guwahati city in Assam, funded by the purchase or lease of land belonging JICA, Louis Burger International Inc, a US to indigenous peoples.32 In January 2014, based consultancy firm, has been found the Khasi people affected by the IFC and to have bribed officials of the Assam the ADB funded limestone mining filed a Government in order to win contracts. complaint with the Compliance Advisor Directed by the Gauhati High Court, the Ombudsman (CAO), the IFC’s accountability Central Bureau of Investigation (CBI) of mechanism. The Khasi people complained the Government of India has taken up that Lafarge has infringed on their land the Louis Berger corruption case and is without consent, while also causing filing an FIR against unknown officials environmental destruction. Their claim of the company for allegedly bribing states that that they had been denied the former Assam government. The justice and have invited the CAO to investigation is ongoing.
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Technical support for the French funded distribution networks will further facilitate Imphal Sewerage Project in Manipur the construction of more than 200 mega (under construction) has been undertaken dams by corporate bodies across the by the French company, Degremont, a region with wide social and environmental subsidiary of Suez.34 This is consistent with implications. The Government of India the requirements of French aid, which tie sought financial assistance from the JICA the provision of ODA to the procurement in early 2018 to fund the 66 MW Loktak of services of French technical and Downstream Hydroelectric Project that consultancy firms. The project also will be utilizing waters discharged from the foresees the privatization of its services. controversial hydropower project, the 105 MW Loktak Multipurpose Hydroelectric Energy projects: The financing of energy project in Manipur. Communities affected projects and related infrastructure is a by the Loktak project fear that the Loktak major focus of the DFIs. The World Bank Downstream project will undermine is currently financing the High Voltage their livelihood. They also cite the lack of Transmission and Distribution Lines across accountability by the project proponents.35 NE states. The JICA and KFW are funding the Tuirial Hydroelectric Project in Mizoram and Issues with the privatization the Pare Hydroelectric Project in Arunachal agenda in Manipur and across Pradesh respectively. The JICA has also financed the renovation of Umiam Stage NE India IV in Meghalaya. The ADB is extensively engaged in power sector reform towards a) Non-recognition of indigenous privatization of energy provisions. peoples’ rights
The 60 MW Tuirial Hydroelectric Project, A significant challenge in road projects financed by JICA in Mizoram, landed financed by the Asian Development Bank in extensive controversy due to its and JICA has been a lack of recognition inadequate rehabilitation and resettlement of indigenous peoples’ pattern of land processes. Project work stopped in 2004 ownership. There has been a failure to because of these issues. The Tuirial Crop conduct detailed impact assessments Compensation Claimant Association with the rightful participation of these claimed that the project failed to provide communities. These assessments compensation for crop losses from the land are extremely important as they help that was forcibly acquired. The project was determine the best possible measures for also marred by inordinate delays and cost affected indigenous peoples’ rehabilitation overruns, leading to high costs for power and resettlement. that had to be purchased by the Mizoram Government from project developers. The biggest challenge is to find ways to reduce the impact of infrastructure The financing of the 400 KV high voltage projects on indigenous communities. A transmission and distribution lines by clear illustration of these issues in seen in the World Bank across the North East the Heirok to Khudengthabi road project, states and the continued approval of which is to be financed by the Asian the WB to finance the transmission and Development Bank, and the Imphal Moreh
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Road project, to be financed by ADB.36 In resolution refusing all oil exploration in both cases, non-adherence or absence of the Khaidem area. Residents of Kambiron, strong safeguard measures for respecting Sibilong and Oinamlong villages as well as environmental integrity are significant others from Tamenglong District rejected problems. In the Imphal Moreh project the efforts of Asian Oilfield to seek ‘No there is the added ethical challenge Objection’ Certificates (NOC) for surveys. of recognizing indigenous peoples’ The latter did not provide sufficient development rights. The impact on the information. These community actions livelihood of indigenous communities due were partly in response to previous to road cutting, failure to rightfully involve experiences of malpractices by Alphageo affected communities in conducting and Jubilant Energy in 2012. impact assessments or the adoption of rehabilitation and resettlement measures c) Roads and natural resources that are acceptable to them, are significant extraction by corporate bodies: problems. The extensive financing of roads by Where bilateral financial institutions, such bilateral and multilateral DFIs are clearly as the JICA, are involved, they often do organized to pursue corporate interests not have policies to promote indigenous towards expropriating the land and natural peoples’ rights or to integrate the UN resources of indigenous peoples. Declaration on Indigenous Peoples, 2007. There have been questions whether the b) Failure to implement free, prior main reason for the financing of roads by and informed consent ADB and JICA in Manipur and India’s NE region is primarily to facilitate extraction This relates to the pursuance of of minerals and building of dams. JICA has infrastructure and energy projects or diverted from directly funding mega dams extractive industries financed by the DFIs, and is now focusing on infrastructures such as the Lafarge Limestone mining in to aid such large scale, unsustainable Meghalaya, the Pare Hydroelectric Project and exploitative development projects in Arunachal Pradesh, the Imphal Ring across India’s North East. Both the Pare Road the, Imphal Water Supply Project to hydroelectric project with KFW financing be financed by the ADB, IFC, KFW or JICA. in Arunachal Pradesh and the proposed The ongoing oil and gas exploration and 66 MW Loktak downstream envisaged for drilling by Jubilant Energy Private Limited JICA financing in Manpur have met with and Oil India Limited in the Manipur area wide opposition. ADB makes an explicit provides a clear example of a company reference in its TAs to the promotion that has failed to obtain the consent of of infrastructure projects towards local communities. enhancing private sector roles in tapping the unexplored natural resources in On 17th May 2017, villagers of Khaidem India’s NE. Oil companies such as Jubilant stopped the company, Asian Oilfield, from Energy, Canoro, Oil India Limited and conducting surveys in their village. A day Asian Oilfields have been involved in both later, the community met and passed a exploration and drilling.
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d) Emphasis on profit oriented sectors of India acknowledges, but for which it has taken no action. IFIs have been forcibly endorsing the The limestone mining by Lafarge in privatization of services. Corporations Meghalaya, supported by financing from focus on profit and commercial interests that often link with the economic interests ADB and IFC, is afflicted with severe of developed or other developing countries. forest rights violations to the point This private sector motive raises many that complaints have even reached the questions, particularly on the implications Supreme Court of India. One of the main for addressing and advancing the real needs, complaints is the use of heavy explosive wishes and aspirations of communities. materials in blasting hills for limestone. Because the priorities for the private sector Due to blasting, cracks have appeared on are commercial, they are more likely to the earth causing drinking water sources focus on infrastructure that will advance from spring water to stop and dry up in the 37 their business prospects and returns in Shella region of Meghalaya. the nearest foreseeable future. Thus the pursuance of large infrastructure projects f) Increased presence of private relating to oil exploration, hydropower, companies in contract works mining roads or railways by the private sector often fail to take into account One clear concern regarding the communities’ social issues and non profit- implementation of ADB’s road projects is related concerns in their development. its overwhelming focus on the privatization of development. Multinational private e) Environment impacts companies have carried out the entire consultancy and civil works. The Environmental impacts are a significant Management Services Value (MSV), and growing concern. For example, private AECOM Asia Company Limited, (USA), companies, involved in the railway works Egis International, (France), Roughton in Tamenglong District have blatantly International Ltd, (UK), Rodic Consultants disregarded the devastating impact this Pvt. Ltd, Aarvee Associates Architects project has had on the environment. These Engineers & Consultants Pvt. Ltd, (India) impacts have included the destruction are some of the construction supervision of forest areas and the discharging of consultants for the ADB road projects contaminated and chemical laden liquid in the North East Region. Accountability waste in Ejei, Barak and Irang rivers. As for damage resulting from the work well, direct dumping of earth excavated conducted by these private companies from hills from tunneling and road cutting remains an unaddressed issue. are major concerns in the Tamenglong district of Manipur for which neither the The extensive sand and stone mining of companies or the Government of Manipur the Ejei River by ABCI company, as part of have assumed responsibility. The railway the construction of the ADB financed road works are being carried out in clear conflict project from Bishenpur to Tupul and the with the Forest Rights Act, 2006, something Bishenpur to Tupul road has led to massive the Ministry of Environment and Forest soil erosion, receding of water levels and Climate Change of the Government and loss of fish habitat. The companies
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have failed to take responsibility for the steep tariff increases. There was a 328% destruction of the environment and the increase for domestic consumers after social impact inflicted by these projects on privatization – Rs 1.37 per unit in 2002 to Rs indigenous peoples. Indeed, communities 5.87 per unit in 2013. Privatization has also have been compelled to resort to the courts caused the devaluation of public assets. and to approach the ADB directly to address A report by Comptroller and Auditor these violations. Communities affected by General of India stated that the assets of the ADB-financed road project in Kasom the Delhi Vidyut board were undervalued Khullen, Ukhrul District, have challenged by a whopping Rs 3,107 crores. In addition, the ADB’s violations and impacts through the Delhi government paid the private the Manipur High Court, seeking redress companies 10 times more in the form of and justice for violations, but to no avail.38 a subsidy – 3,500 crores – than what they brought in as equity. g) Corruption The privatization of drinking water services Corruption is another major concern, in Nagpur in a PPP project financed by the primarily because of some of the World Bank presents a model of complete controversial processes found in failure. The tariff for water has increased development projects implemented by the fourfold. Earlier, Nagpur Municipal Council private sector. Several examples, such as (NMC) signed a concession agreement with the Louis Burger International case, have the Orange City Water Private Ltd (OCWL), been provided earlier in this chapter. a joint venture of Vishwaraj Environment Pvt Ltd and Veolia Water (India) Pvt Ltd. The JICA financed Guwahati City water However, the privatisation process did not supply project is marred by allegations bring down the water leakages nor did the that Louis Burger International, based in private company ensure sufficient water the United States, has been bribing Assam supplies to the residents.41 Government officials to win contract. An investigation is underway by the Central Agriculture in India landed in a deep crisis Bureau of Investigation, Government following broad reforms resulting from of India.39 The World Bank funded road the implementation of the country’s neo- project in Mizoram faced accusations of liberal policies of 1991. These reforms corruption and favoritism to politicians were marked by the gradual withdrawal of Mizoram when the contract for road of the state from its responsibilities in building was awarded to Sunshine agriculture, such as the regulating of Overseas.40 markets. The World Bank, which has promoted the privatization of agriculture, h) The impact of privatization on has recommended the stopping of all forms water supplies and agriculture of agriculture subsidies. The Agricultural Produce Marketing Committee Act, 2003 Privatization in the North East has had has made way for the setting up of private a profound impact on both citizens’ markets, allowing contract farming and water supplies and the development of legalizing direct purchase from farmers. agriculture in the region. The privatization Corporate and multinational agencies of India’s power sector has resulted in have gained spaces in procurement,
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wholesale trade and retailing, much to and resettlement in limestone mining in the detriment of small-scale farmers. Meghalaya. Similarly, there are concerns Rationalization of input subsidies, with the non-application of safeguard downsizing of incentive pricing, a decline policies, relating to indigenous peoples in public investments, shrinking public and involuntary resettlement in the extension services and the contraction of Imphal to Moreh or the Wangjing to institutional credit availability in rural areas Khudengthabi road projects financed by after with the 1991 policy reforms have ADB in Manipur. There are also questions all contributed to a widespread agrarian of whether many DFIs such as JICA crisis, and indebtedness among the rural actually have safeguard provisions or communities.42 policies to promote indigenous peoples rights affected by JICA funded projects. Since 1995, when India joined the WTO, Policies to promote human rights in there has been a surge in imports of development are missing in most DFIs in agricultural commodities, which have their development project financings. been dumped by developed countries in the international market below their k) Militarization and HR violations cost of production. This has led to a deep decline in domestic agriculture prices Militarization and the reliance on security and has compounded the agrarian crisis. forces by railway works, oil exploration, One tragic result has been suicides by dam building and other infrastructure 43 desperate people living in rural India. projects are major human rights issues for indigenous peoples and rural folk. i) Problems with implementation Security forces have targeted human rights defenders for seeking adequate The JICA financed Tuirial hydroelectric rehabilitation and resettlement and to project in Mizoram is afflicted with undue end contamination of their lands, rivers delays leading to cost overruns and high and forests. This was seen in the case of costs for power units. Similarly the World Marangjing village where human rights Bank financed road project in Mizoram defenders resisted the violations of the is afflicted with significant delays. The railway works. French support Imphal sewerage project continues to be delayed even after fifteen j) Undermining development years. The Government of Manipur has effectiveness principles set December 2018 for its completion. French companies such as Degremont The majority of donors have separate have received contracts to supply essential policies on aid effectiveness. A few, parts for this project even though it such as Spain and New Zealand, make remains a non-starter. The project is specific reference to the Paris or almost considered a failed project. Busan commitments in their policies on the private sector. Private sector j) Undermining DFI’s safeguards projects should be required to adhere to the development principles agreed DFIs’ non-application or violation of to at High Level Forums --- such as safeguards are major issues. Lafarge the Paris Declaration (2005) and the has failed to adhere to ADB’s policies Busan outcome (2011) as they provide on indigenous peoples or rehabilitation guidelines on effective CSO engagement
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as development actors. The decision example, communities affected by the making processes and priority setting to ADB-financed road project in Kasom involve the private sector need to involve Khullen in Ukhrul District, Manipur civil societies and communities to ensure challenged ADB’s violations and impact in sensitivity to the way of life and intrinsic the Manipur High Court seeking redress survival dependence of communities and justice for violations but to no avail.44 over their land and resources. It is critical that any development be appropriate Conclusion: for them. However, the IFIs’ funding strategies are oriented to creating DFIs insisted on massive privatization across enabling environment for the private India’s NE. Private sector development is sector, not for CSOs and communities. central to the poverty reduction strategy of ADB. The ADB claims that given the limited k) Lack of accountability standards capacity and mixed track record of the public for the private sector sector, the private sector must become the “engine of growth.” The ADB advocates Private companies involved in railway expanding the role of the private sector works and oil exploration have failed from its present involvement in physical to assume any responsibility for the infrastructure projects like energy, water and violations of community rights, for not transport into the domain of public goods and taking into account the free, prior and services, economic and social infrastructure, informed consent of affected communities, and basic services such as education, health, and for the violations of existing social, nutrition, water and sanitation. environmental and human rights legislation. Mechanisms and policies to The government simply does not have clear ensure accountability of corporate bodies, and strong accountability mechanisms so particularly those in the private sector, is that communities challenged by large-scale still a distant dream. While the government development processes can seek redress. targets civil society leaders and their The question is: How can the basic values organizations, ready to brand them as of development be advanced, whereby the “terrorists”, it provides a clear hand to needs and aspirations of communities are those who would suppress communities in given due consideration? The determination their weakest moments. Corporate bodies of alternatives and development strategies must uphold development effectiveness should be based on people’s intrinsic values as well as human rights principles relationship with land and survival as well and practices. As long as the entire state machinery is reduced to just facilitating as the promotion of ecological integrity. business operations and is silencing voices detrimental to business interests, ADB has also stated that it will use its to the extent of employing emergency and public sector assistance window to security laws/ forces, accountability from enforce a macroeconomic, policy, legal the private sector or corporate bodies will and regulatory environment for the remain a major concern. “flourishing” of the private sector. This may include measures such as more Indeed, communities are compelled to open trade and investment policies, resort to courts of law and to approach deregulation of pricing, and other market the ADB to address these violations. For favoring interventions.45
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The overwhelming emphasis on privatization indigenous communities. In several and the role of corporate entities in India’s instances the IFC has failed to take Act East Policy, complemented by IFI’s appropriate steps to ensure compliance stand on project financing and objectives, of human rights standards by corporate has ushered in an economy defined and bodies. Several bilateral DFIs do not have controlled by corporate interests. Such policies to promote indigenous peoples’ a focus leads to uncontrolled plunder of rights as per the UN Declaration on natural resources in the region, adversely Indigenous Peoples, 2007. The adoption affecting the physical and spiritual survival of a human rights based approach to of indigenous peoples. Rather than freeing development is a challenge with private up resources for social sector spending, sector focused development processes. governments entering into ADB designed Transparency and accountability should be public-private partnerships have confronted at the heart of all private sector engagement increased debt and liabilities and measures and development with full public access to all that reduce social spending. project documentation. Affected populations
need to have a voice and the power to If development projects are to include the hold private sector actors accountable for involvement of the private sector, there are development results. Companies should certain measures that must be put into place. report on their financial affairs, including tax and procurement procedures, on a Corporations investing in developing country basis. The formal and informal tying countries should promote human rights of aid and aid-supported investments must under existing international agreements and end. Corporations involved in developing conventions. They should not collude with countries, should define a code of conduct for a partner country government in human their role in development projects and follow rights violations, such as forced evictions or these standards irrespective of the laws forced labour. Governments should issue of the country concerned. All corporations enforceable human rights and environmental involved in developing countries, should guidelines for corporations. International carry out a fair, inclusive and transparent financial institutions and bilateral donors environmental and social impact assessment should ensure the formulation and before a development project is launched. compliance of social, environmental and human rights safeguards for their And finally, it is critically important investments with the private sector and in to formulate a “policy framework for project implementation, with appropriate managing business and human rights and accessible complaints mechanisms, and based on three pillars: the state duty in accordance with prevailing development to protect against human rights abuses best practice standards. by third parties, including business; the corporate responsibility to respect human There are clear challenges in seeking rights; and greater access by victims to justice for DFI financed projects affecting effective justice remedy.”46
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ENDNOTES
1 Development finance institutions and private 12 ADB: TAR: IND 38312, December 2004, TA sector development http://www.oecd.org/ to India for preparing the Northeast Power dac/stats/development-finance-institutions- Development Project private-sector-development.htm 13 ADB: Technical Assistance to India for 2 “Belgium: Qualitative Reforms, Despite Preparing North Eastern States Trade and declining Aid Expenses”, Bart Teirens, Wiske Investment Creation Initiative, TAR: IND Jlt, Thijs Van laer, Jan Van, 11.11.11 – The 37407, October 2004. Coalition of Flemish North South Movement, 14 ADB: TAR: IND: 37407: Technical Assistance The Reality of Aid, 2014 to India for Preparing the North Eastern 3 “Water privatization has a history of failure in States Trade and Investment Creation India. Let’s free our waters”, Makarand Purohit, Initiative. Your Story, 23rd February 2017. https:// 15 World Bank Approves US$ 470 Million yourstory.com/2017/02/water-privatization / to Improve Electricity Supply in the 4 After 25 years of liberalization, India’s rich are North Eastern Region, India World Bank growing richer and the poor poorer, Quartz Press Release, June 24, 2016 http:// India, July 21, 2016 https://qz.com/737196/ www.worldbank.org/en/news/press- after-25-years-of-liberalisation-indias-rich- release/2016/06/24/world-bank-approves- are-growing-richer-and-the-poor-poorer/ usd470million-improve-electricity-supply- 5 India largest recipient of loans from World the-north-eastern-region-india Bank for 70 years, says lending report, By 16 “Manipur to benefit from ADB loan, - Ring Chaitanya Mallapur, First Post, 13 January road part of project” the Telegraph, 27 2016 https://www.firstpost.com/world/ March 2015 http://www.telegraphindia. india-largest-recipient-of-loans-from- com/1150327/jsp/northeast/story_11074. world-bank-for-70-years-says-lending- jsp#.VxjhRHonI2w report-2581900.html 17 Japan’s Investments in India Unveil Growing 6 “India and ADB”, official site of Asian Economic Partnership By Melissa Cyrill, India Development Bank https://www.adb.org/ Briefing, September 19, 2017 countries/india/main 18 JICA Press Release, April 2, 2018 JICA to Invest in 7 “Signing of Cooperation Memorandum with Improving Transitability by Extending ODA Loan the Asian Development Bank: Promoting of Approximately INR 2,500 Crore for the North high-quality infrastructure investment in East Road Connectivity Project- Transforming Asia”, JICA Press Releases, December 17, Infrastructure in North East India - 2015 https://www.jica.go.jp/english/news/ 19 “India, Germany seal various loan press/2015/151217_01.html agreements”, The Hindu, 4 December, 2017 8 “ADB, JICA Establish $1.5 Billion Fund to https://www.thehindubusinessline.com/ Invest in Private Infrastructure“, ADB, 30 news/national/india-germany-seal-various- March 2016 https://www.adb.org/news/ loan-agreements/article9981611.ece adb-jica-establish-15-billion-fund-invest- 20 National Public Private Partnership Policy, private-infrastructure 2011, developed by Ministry of Finance, 9 Signing of Cooperation Memorandum with Government of India. the International Finance Corporation: 21 “Ordinance to facilitate auction of minerals Promoting co-financing for the private sector gets green signal from Cabinet”, The in “developing countries”, JICA Press Releases, Economic Times, Jan 6, 2015 http://articles. May 8, 2017 https://www.jica.go.jp/english/ economictimes.indiatimes.com/2015- news/press/2017/170508_03.html 01-06/news/57748032_1_indian-mineral- 10 “Humongous Cut in Government Social industries-mining-sector-mining-companies Sector Spending”, By Cithara Paul and 22 Green activists oppose Finance Act 2017, Santwana Bhattacharya, 2 March 2015, say it curtails NGT’s independence, The Live http://www.newindianexpress.com/ Mint, 5 July 2017 http://www.livemint.com/ nation/Humongous-Cut-in-Government- Politics/X4R0eZMQ5R6i5SlW0oGjoL/Green- Social-Sector-Spending/2015/03/02/ activists-oppose-Finance-Act-2017-say-it- article2693462.ece curtails-NGT.html 11 ADB: Technical Assistance to India for 23 Centre prepares to dilute wetland protection Preparing North Eastern States Trade and rulesNitin Sethi, the Business Standard, May Investment Creation Initiative, TAR: IND 27, 2016 http://www.business-standard. 37407, October 2004. com/article/economy-policy/centre-
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prepares-to-dilute-wetland-protection- 37 Proceedings of the Environmental Public rules-116052601606_1.html Hearing in Respect of the Proposed Mining 24 PMO Wants to Sidestep Gram Sabha’s of Shale and Siltstone of M/S Lafarge Umiam Consent for Underground Mining By Ajoy Mining Pvt. Ltd, held at Shella, East Khasi Ashirwad Mahaprashasta, the Wire, 04 Hills District on 18th January 2006 prepared May 2016 https://thewire.in/33774/pmo- by D.P Wahlang, Deputy Commissioner, East wants-to-exempt-gram-sabhas-consent-for- Khasi Hills District, Meghalaya underground-mining/ 38 Construction of Thoubal-Kasom Khullen 25 Insidious Financial Institutions in India’s road: Asian Development Bank served notice, North East”, by Jiten Yumnam and R. The Sangai Express, 18 August 2014 http:// Wangkheirakpam, ICR & FIPA, April 2006 www.thesangaiexpress.com/construction- 26 Bank warns Mizoram on tardy project of-thoubal-kasom-khullen-road-asian- pace”, Roopak Goswami, The Telegraph, 25 development-bank-served-notice/ February 2017, https://www.telegraphindia. 39 “CBI Takes Over Louis Berger Corruption Case com/1170225/jsp/northeast/story_137587.jsp After Gauhati High Court Order”, The Wire, 5 27 Loan 3073-IND: North Eastern State Roads October 2017 https://thewire.in/government/ Investment Program cbi-takes-louis-berger-corruption-case-per- 28 Loan agreement, LOAN NUMBER 3073- gauhati-high-court-order IND, PROJECT AGREEMENT (North Eastern 40 “Scroll investigation: Mizoram CM gave road State Roads Investment Program –Project 2) contracts to firm in which his brother held shares” between ADB and Government of Manipur M Rajshekhar, The Scroll, Jun 29, 2015 https:// with MDONER, 17 February 2014 scroll.in/article/736549/scroll-investigation- 29 JICA Extends ODA Loan of approximately mizoram-cm-gave-road-contracts-to-firm-in- INR 4,000 Crores for the North-East Road which-his-brother-held-shares Network Connectivity Improvement Project 41 Nagpur’s water privatization gets dubious (Phase I), JICA Press Release, March 31, 2017 international recognition Anjaya Anparthi https://www.jica.go.jp/india/english/office/ | TNN | 3 Dec , 2013, the Times of India topics/press170331_01.html https://timesofindia.indiatimes.com/city/ 30 JICA signs Rs 2,500-cr loan pact for NE nagpur/Nagpurs-water-privatization- road projects The Shillong Times, 4 gets-dubious-international-recognition/ April 2018 http://www.theshillongtimes. articleshow/26758657.cms com/2018/04/04/jica-signs-rs-2500-cr-loan- pact-for-ne-road-projects/ 42 Over 50,000 Farmers Protest Against WTO in 31 ADB’s Imphal Ring Road Controversies, by India”, October 3, 2005, Indian Coordination Jiten Yumnam, Imphal Free Press Committee of Farmers Movements, India 32 “Lafarge’s India-Bangladesh cement project Resource Centre, http://www.indiaresource. remains frozen”,Julien Bouissou, The Guardian, org/news/2005/2017.html 20 Aug 2010 https://www.theguardian.com/ 43 “Over 50,000 Farmers Protest Against WTO in world/2010/aug/13/india-bangladesh India”, October 3, 2005, Indian Coordination 33 Complaint filed against IFC funded Committee of Farmers Movements, India Lafarge mining operation, Bretton woods Resource Centre, http://www.indiaresource. Project, 26 February 2014 http://www. org/news/2005/2017.html brettonwoodsproject.org/2014/02/ 44 Construction of Thoubal-Kasom Khullen complaint-filed-ifc-funded-lafarge-mining- road: Asian Development Bank served notice, operation/ The Sangai Express, 18 August 2014 http:// 34 “Sloppy sewerage project gets final thrust”, www.thesangaiexpress.com/construction- The Sangai Express, 28 May 2015 http://www. of-thoubal-kasom-khullen-road-asian- thesangaiexpress.com/page/items/39181/ development-bank-served-notice/ sloppy-sewerage-project-gets-final-thrust 45 “Creating Poverty: The ADB in Asia”, The 35 NHPC’s Untimely Push for 66 MW Loktak ADB: Shape Up or Ship Out, By: S Guttal, Downstream Project, by Jiten Yumnam, What’s New at the ADB? Imphal Free Press 46 “Policy framework for managing business 36 “Cabinet Nod For Imphal-Moreh Highway and human rights challenges”, proposed Expansion”, Bhanvi Arora, Bloomberg. 12 by the United Nations Secretary General’s July 2017 https://www.bloombergquint. Special Representative (SRSG) on Business com/business/2017/07/12/cabinet-okays- and Human Rights, John Ruggie. https:// 2000-crore-project-to-widen-imphal-moreh- www.ihrb.org/pdf/Ruggie-protect-respect- section-of-national-highway-39#gs.cReWxLc remedy-framework.pdf
78 The World Bank in Africa: An analysis of World Bank aid and programmes in Africa and their impact
Nahashon Gulali,ITRD Consulting Group and the Lending for Education in Africa Partnership Programme, a pilot programme of Volta Capital.
Introduction Post-Independent development trajectories and World Bank aid Conceptualizing development in Africa
There is a considerable amount of Africa did not begin to experience literature that examines the complex meaningful development until the post and highly contested components independence era. Development processes of development and development in Africa have been characterised by assistance. To date, no single definition diverse trajectories, making for a complex of development has been agreed and heterogeneous continent. Few upon by academics or policy analysts. initiatives have actually achieved much However, there is general agreement that in terms of development impact, largely development is multidimensional and because development has never been the requires a multidisciplinary approach. main agenda. According to Ake, Competing and related ideas that most thinkers associate with development “the problem is not so much that include economic growth, modernisation, development has failed as that is was progress and westernisation. These never really on the agenda in the elements are necessary, but not sufficient, first place. By all indications, political conditions for development. conditions in Africa are the greatest impediment to development” (1:1996). Development is more than growth, progress and modernisation. In its World Post-independence, most of the vital sectors Development Report (1998) the World Bank needed immediate state attention and states development includes economic, heavy investments. All states have failed to social and political attributes. This respond to the aspirations, real issues and translates into a sustainable increase in demands of the majority of African people. people’s standard of living, which allows State controlled development and planning for consumption, education, health and in agriculture, healthcare, industrialization, environmental protection, equality of education, energy generation, transmission opportunity and liberties as well as political and distribution, import substitution, inter freedom. These are the fundamental alia, failed to bear results in large swaths attributes of development, ones that make of Africa. Consolidation of political power the process of development concrete and became the pet obsession of a majority measurable. of African leaders.
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Various leaders adopted different developing countries were not a priority approaches. Some of the most promising for the World Bank. Instead of a wide ones, such as President Kwame Nkrumah, definition of development, it concentrated became outright despots. Others, like on increasing production and incomes. Kenneth Kaunda of Zambia and Jomo Africa started receiving development Kenyatta of Kenya, performed no better. support later, once the post-war Jomo Kenyatta became a diabolic dictator reconstruction had been completed. The and one of the wealthiest men in East and World Bank’s development objectives also Central Africa. President Julius Nyerere of evolved to include a deeper understanding Tanzania moved away from a capitalistic of poverty, resulting in a more complex approach, implementing instead the approach to development assistance. ujamaa ideology which was initially a success but failed to fortify the country Various Western governments, against poor agricultural development development agencies, and multi-lateral and food insecurity. The Democratic development banks (MDBs) have been Republic of Congo has failed to build an deeply involved in Africa's postcolonial effective government to date, largely due development. They have provided generous to the ongoing violence and divisions in assistance, pouring in more than $400 the country. Without a lasting peace it has billion since 1960. According to Richard L. been impossible to pursue development. Sklar and C.S Whitaker. (1991): Angola, the Central African Republic, and South Sudan, among others, have also “Even in 1965 almost 20 percent of had to contend with major drawbacks to the Western countries’ development sustainable development. assistance went to Africa. In the It is important to note that human 1980s, Africans, who are about 12 aspirations have always been percent of the developing world’s transcendental, and this is also true for population, were receiving about 22 the people on the African continent. The percent of the total, and the share per international ‘development merchant person was higher than anywhere system’ has found room to grow inside else in the Third World - amounting African countries, which have been to about $20, versus about $7 for experiencing the results of stagnated and Latin America and $5 for Asia“(p.60). failed development. For many African countries’ economies, their dismal The World Bank has provided over $50 performance has led to the need for billion to various projects and programs, external development assistance. Such particularly structural adjustment assistance was first provided in the form initiatives, over the past 30 years. of technical assistance, financial, physical Unfortunately, its project failure rate has infrastructure development, economic been over 50% in Africa, which is greater planning, and governance. than the 40% failure rate in other poor regions of the world. In an independent The World Bank initially focused its aid rating, the Independent Evaluation on the reconstruction of the war-torn Group (IEG) claimed that 39% of World economies of Europe and Japan. According Bank projects in 2010 were unsuccessful to Kanbur R. (2000), Africa and other (Chauvet et al., 2010). There is a general
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consensus that the World Bank’s programs reality is that Africa's development in Africa have failed in reducing poverty, challenges run very deep and change will the greatest challenge affecting the not come easily. There are no quick fixes. continent. In 1994, the Bank evaluated the performance of 29 African countries where it had provided more than $20 billion in Why has the World Bank failed? funding to sponsor structural adjustment The World Bank has admitted that programs (SAPs) from 1981-1991. Its report, some of its projects have performed Adjustment Lending in Africa, released dismally and failed to address poverty in March 1994, concluded that only six and development issues in developing African countries had performed well: The countries. This failure can’t be blamed Gambia, Burkina Faso, Ghana, Nigeria, entirely on the Bank. It is also partly Tanzania, and Zimbabwe. This makes for a the fault of aid recipient countries. On failure rate of over 80 percent. Despite this dismal record, it is also true that aid has the Bank’s side, perhaps the biggest produced some spectacular successes. For contributor to the failure of western aid instance, in the health sector World Bank to Africa is the culture of doublespeak and development aid has made a significant inconsistencies in policy actions that have contribution towards an increase in the life resulted in a confusing and overlapping expectancy in the developing world from array of objectives. (Rondinelli, 1976). 40 to 65 years the eradication of diseases Despite being cloaked in “development” such as smallpox and the reduction of garb, economic development assistance infant mortality (CGD, 2004). to Africa has been used as an instrument by donors to achieve a variety of non- Proponents of aid such as Professor Jeffrey economic (geopolitical and political) Sachs argue that many poor countries are objectives, including the containment of caught in a poverty trap and so the best democratization, the promotion of human strategy is for rich countries to increase aid rights and communist expansion in Africa. flows and work closely with aid recipients Foreign aid allocations have often been in order to eradicate extreme poverty by smothered in bureaucratic red tape and 2025: “Aid is actually working albeit not shrouded in secrecy. Many programs lack perfectly, and with provision of more aid, transparency and the people being helped the turnaround in terms of development are seldom consulted. (Calderisi, 2007). will be seen” (Sachs, 2005). Easterly (2006) sharply opposes this approach According to Santiso (2001), most western and maintains that if Africa continues to governments and development agencies receive aid for development, there will be have failed to exercise prudence in granting little good to show for it since the continent aid and loans to African governments. continues to be immersed in a dark In his view, a considerable amount of cloud of poverty. According to another aid has been used to finance grandiose analyst, Moyo (2009), aid itself is part of projects, which have little economic value, the problem, as it has contributed to low impose many conditionalities, and have development and poverty in Africa. She been created to underwrite economically argued that it should either be cut by half ruinous policies. More often than not or done away with entirely. The sobering these projects have ended up producing
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little or no meaningful economic gains – a cross between unexpected events with to the recipient countries. One example terrible consequences and problems visible is the financing of $250 million for the to everyone, yet no one wants to address it. construction of the Garoe-Bosaso road in Examples of the misuse of aid includes times Somalia which stretches 450 kilometers when African countries have spend large across a barren desert and is only crossed amounts of aid on consumption, either to by nomads by foot. finance recurrent expenditures such as civil servants’ salaries or to purchase consumer Donor governments and the World Bank goods. For example, during the 1980s have often allowed themselves to be duped more than half of Tanzania’s imports were by shrewd and corrupt African despots. financed by loans from foreign governments. The structural adjustment programs have This included buying arms and ammunition. failed because of design flaws, sequencing, Ethiopia received $924.9 million from the pedagogical inanities and weak World Bank, more than two-thirds of it in commitment to reform. Foreign loans and 1998 after a first round of fighting. Eritrea, aid programs in Africa have been badly a much smaller country, received less. The monitored and monies have frequently World Bank never threatened to stop the been stolen by corrupt bureaucrats. The money. An example of “black elephants” World Bank itself estimates that “nearly occurred in Zaire (now the Democratic 40 percent of Africa’s aggregate wealth Republic of the Congo) where half of its has fled to foreign bank accounts.” foreign debt of $6 billion went to build two Despite this reality, the Bank considers big dams and Inga-shaba power line, as well these same bandit African governments as a $1 billion double-decked suspension as “partners in development.” The bridge over the Congo River. The upper level World Bank has sponsored structural is for a railroad that does not exist. Had the adjustment programs in failing regimes money been invested in visible productive such as Angola. If the World Bank had ventures, it could have contributed to better insisted on SAP agreements with only livelihoods. democratic countries and those at peace, the course of history in Angola might have Critics have long maintained that foreign been different. The very act of signing an assistance has been wasted by bloated existing SAP agreement was an admission aid agencies pouring money into the of failure. pockets of corrupt African governments. Nigeria, for example, does not know the Failure has also been caused by actions on true amount of its foreign debt. Back the recipient countries side. While it is not in 1990, while Nigeria sank deep into necessarily wrong for countries to borrow, debt, its former military rulers amassed the borrowing should be used productively huge personal fortunes. General Ibrahim to generate a net income over the required Babangida acquired an estimated fortune amortization. However, many times this of $8 billion and General Sani Abachahad has not been the case. Aid has been used a personal fortune of $5 billion after to finance reckless spending, to establish only four years in office. (West Africa, grandiose losses and to purchase weapons. Sept 25 – Oct 1, 1990; p.1614). In Kenya, Aid dollars have been squandered, creating a the former Nairobi Mayor, Abdi Ogle, phenomenon known as the “black elephant” demanded the resignation of the World
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Bank’s country director for Kenya, Harold in Africa. This has been caused by a lack Wackman, accusing him of turning a blind of local community involvement/ local eye to embezzlement of an emergency integration as well as bad governance, loan of $77.5 million in July 1998 to repair corruption and double standards. infrastructure damaged by heavy rains. “Not a single cent has come to the City Case studies: Council because it has disappeared into private pockets within the Ministry of Local The Chad Cameroon Pipeline Project Government,” he fumed. (The Washington post, Nov 25, 1999; p.A31). The Chad Cameroon Pipeline Project demonstrates the consequences of In summary, it would be true to say that corruption, double standards, a lack of community engagement, and failed • • The programs and policies of the attempts to beat the resource curse. World Bank to tackle poverty have not been evenly successful, particularly The existence of oil in Chad has been known in Africa. The World Bank’s projects for many years. Production agreements have overwhelmingly failed to reduce have been negotiated since 1973, but poverty. There have been various with no signed agreements to date. In causes for this outcome, including the early 1990s Chad was recognized for immature state systems as well as peace and relative stability. This gave birth rigid adjustment packages imposed to new negotiations and, ultimately, the by the World Bank onto African involvement of the World Bank in an oil governments. (Ika et al, 2012). exploration project. The World Bank was • • All too often, World Bank project engaged as a ‘moral negotiator’ to enhance failures have been the result of a poor project viability, something that was understanding of local cultures and needed as Chad was considered too high gender norms, insensitivity towards a risk by foreign investors to inject capital local needs, the imposition of donor into the project. The World Bank’s other projects, structures and values, and interest was to transform the initiative into a lack of maintenance frameworks to a development project to substantially ensure project sustainability. reduce poverty in one of Africa’s poorest • • These pitfalls have resulted from region. the failure of donors to engage in consultative dialogues with local people, The World Bank strongly believed that this causing projects to fail and considerable project would promote Chad’s growth and resources going to waste. change people’s lives for the better. In 2004, investments in the project increased to • • Internal country structures of $4.2 billion, with the World Bank providing governance, despotism and corruption $93 million. The International Financial have also contributed to the failure of Corporation (IFC), which is a member of various donor funded programmes. the World Bank, added $100 million in form of direct loans to the consortium The next section describes case studies and mobilized a further $300 million from where World Bank projects have failed commercial banks.
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In the beginning the program exhibited “Oil for war and war for oil” is a deeply a high element of transparency and ingrained reality in Chad’s popular political accountability, including the adoption consciousness. Nadji Nelambaye, the of a legal framework to ensure prudent coordinator of a Chadian NGO, snapped management of oil revenues and a “Are you trying to provoke me?” when asked prioritization on poverty reduction. if he thought there was a link between Eight-five percent (85%) of the dividends oil and war in the country. In September from direct revenues were allocated for 2008, the World Bank finally terminated its poverty reduction in five priority sectors of operations on the pipeline project due to education, health and social services ,rural Chad’s continuous failure to comply with development, infrastructure, as well as the guidelines set up under the revenue environment and water resources. In 1999, management plan. At this point, oil is oil extraction became a reality. However, still being pumped and revenues, to an one year later, in 2000, problems started increasing extent, continue to be spent on cropping up when the Chad government military operations, a clear sign of lack of channeled $4.5 million of the $25 million prioritization. bonus from oil proceeds i.e.; into buying weapons. Even though bonuses were Marred with corruption and not part of the World Bank revenue misappropriation allegations, the 5% of management plan, it was perceived as oil revenues promised to residents of a broken promise which resulted in the the oil-producing zone is being spent Bank and the IMF threatening the Chad on “presidential projects.” One of these government by cancelling its debt relief projects is an already crumbling football program. stadium. Local residents claim that the more than $74 million dollars spent on Three years later, in 2003, the construction development projects in the region have of the pipeline was finalized and there was produced no evident changes. an increase in revenues. In 2006 however, the Chad government amended the 1999 For President Idriss Deby, oil revenues revenue management plan to make have served as a means to prolong abusive more room for unrestricted government and undemocratic rule. He has changed spending. This move allowed the the country’s constitution to allow him to government another purchase of weapons be president for life. Over 30% of the oil to the extent that it spent 4.5 times more revenues have been used on war. Money on military than on health, education and allocated for development in “priority other social projects combined. These sectors” has instead been used to grant priorities angered the World Bank, which non-transparent, no-bid public contracts proceeded to block all oil revenues by to a variety of colleagues. It is little wonder freezing Chad’s offshore escrow accounts that Chad’s civil society has declared the and suspending all its programs in the pipeline’s inauguration a day of national country. The World Bank thought it had mourning. guarantees based on a model framework for oil led development. In practice, Many displacements have taken place for however oil has been used to fuel war with residents living near the oil exploration civilians being the primary victims. zone. A woman in Bero Village, one of
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the oil producing zones, tells how Exxon increased social spending. But the truth is displaced her whole family, promising no one knows where the $25 million has to find them new land and to build them been spent (or if that’s the true amount) new houses equipped with furniture. as there is no accountability for the use of Although the houses were built, there was the revenues. Today, Cameroonian NGOs no furniture provided and the work was have documented hundreds of cases so shoddily done that Exxon was forced in which compensation was never paid, to return two years later to rebuild them. partially paid, or paid in kind with shoddy In theory, everyone displaced by the materials. Chad Cameroon Pipeline Project received some form of compensation, but the Neither Chad nor Cameroon has seen reality is considerably different. In fact, a rise in their population’s standards the compensation has not been sufficient of living as a result of this project. This to restore their standard of living. Exxon is due to poor governance, corruption and the project planners claimed that and misappropriation of oil resources. compensation would be paid to displaced The majority of Chad’s population still people, but that “self-resettlement” would survives on less than one dollar a day. take place naturally whereby villagers They continue to live in mud shanties with would find/purchase new land for farming limited access to water and sanitation. from a “village land pool.” A recent Chadian The project is regarded as a great failure report notes that this has not happened in its own right, largely because of internal and that many farmers have not found land problems rather than because of the or enough land. Agricultural production is World Bank’s actions. continually declining, which will ultimately have consequences for the entire country. The Lesotho – South Africa Water This project covers two countries so project the harsh reality has also not spared According to research conducted by the Cameroon. Almost 900 kilometers of the pipeline pass through Cameroon, which International Consortium of Investigative is receiving only minimal revenues from Journalists, a large percentage of projects Chad’s oil. However, the pipeline’s social financed by the World Bank have been and environmental impact has been harsh, responsible for threatening the livelihoods particularly for Cameroonians living along of more than 3.4 million people, pushing its route with 248 villages being directly them out of their homes and off their lands. impacted by the pipe. Dozens more have The Lesotho Highlands Water Project, been affected by the roads, operations which included the construction of two centers, and employee living bases all large dams (Katse and Mohale) between built for the project. Unlike neighboring 1989 and 2007, has been earmarked as Chad, no oil revenues have been set aside one of these projects. It is an irony that for development spending in the affected the World Bank, which was the primary villages. The Cameroonian government financer, also critiqued this project. claims it only receives $25 million per year in revenues and some of this money has The Lesotho Highlands Water Project been returned to impacted villages via (LHWP), which began in 1986, is one of
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Africa’s largest hydroelectric projects. of water from the headwaters of the The project’s objective was to supply water Gariep River (called the Senqu in Lesotho) to South Africa and electricity to Lesotho. to the Vaal river catchment in South Another goal was to reduce environmental Africa and the provision of hydroelectric degradation, which for decades was power to Lesotho. Phase 1A, costed at considered to be one of the worst approximately R20 billion, concentrated problems of soil erosion of any country on major construction. This included the in the world (Showers 2005). The project building of a large dam at Katse on the entailed the building of several large Malibamatso river (the highest dam in dams and other support infrastructure Africa at 180 million Rand), a 45 km transfer including roads, bridges and power lines. tunnel to ’Muela hydropower station and ’ All this required the relocation of the local Muela tail-pond, and a further 37 km delivery population. The World Bank provided tunnel to the Ash River in South Africa. Phase funding of US$45,000,000, approximately 1B included the construction of the Mohale 3% of the total project cost. Other funders Dam, the highest rock-filled dam in Africa at included the government of Lesotho, the 145 million Rand, the Mohale Reservoir, a 32 Development Bank of Southern Africa km tunnel connecting the Mohale Reservoir (DBSA), the European Investment Bank to the Katse Reservoir, and a 5.6 km transfer (EIB), the African Development Bank, and tunnel to the Katse Reservoir. various commercial banks and institutions. The project, which was implemented from According to the Lesotho Highlands 1986 to 2009, provided compensation, Development Authority and the Lesotho resettlement and development initiatives Highlands Water Commission, it was to affected populations with the aim of important to include the World Bank in ensuring that project-affected people the project in order to encourage other would maintain a standard of living funders. Because Lesotho is categorized equivalent to what they had at the time of as one of the World Bank’s lowest income first disturbance (Government of Lesotho countries, with 55.1% of its population and Government of South Africa [1986] living below US$2 a day, it was able to Lesotho Highlands Water Project Treaty, qualify for a loan. It was also believed Article 7, paragraph 18). that, having the Bank on board would generate goodwill from stakeholders such The World Bank had comprehensive as non-government organizations as well guidelines on the resettlement process as communities concerned about social, and approaches to ensure environmental economic, and environmental issues. In and social protection during the short, the view was that the World Bank’s implementation of development participation would help guarantee its projects (World Bank 2001, 2005). These success. guidelines called for the restoration of affected people’s livelihoods, not The project was intended to bring benefits to the improvement of their standard of both South Africa and Lesotho by supplying living. Although the World Bank sees the much-needed water to Johannesburg and project’s compensation policies somewhat easing poverty in Lesotho. It had two positively, it has criticized the emphasis phases: Phase 1 focused on the transfer on payments rather than helping people
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to secure their livelihoods. The World into permanent aid recipients. The World Commission on Dams (2000) argued for Bank has insisted that in future, any the need to improve the livelihoods of compensation program must be set up project-affected people as well as those together with those affected instead of a downstream from the project. While top-down approach. non-government organizations such as International Rivers (formerly International As indicated in Table 1, a total of 573 Network, IRN), the Highland Church Action households were affected directly and an Group (HCAG), and the Transformation additional 20,000 indirectly affected. Resource Center (TRC) as well as members of the Panel of Environmental Experts The project also had several unintended for the Lesotho Highlands Water Project consequences. It clearly stands out as an all called for improvement in the living example where planners concentrated standard of resettled people, the two on restoring homes to the affected rather governments claimed that they were only than restoring the means of production willing to restore living standards to what (especially land, grazing resources, and they had been before the first disturbance. wild resources on which people depended for subsistence and income). Another As the LHWP progressed, other issues major problem was that in nearly all cases, emerged that had consequences for the the degree of impact on populations was affected population. One of these issues is seriously underestimated, particularly related free, prior, and informed consent in terms of cultural, social, spiritual and (FPIC). The Bank argued that free, prior, personal losses. While they were able and informed consultation was necessary, to get cash compensation and have but not consent. People in the highlands of their dead relatives moved to their new Lesotho, who were being affected by the locations, affected people felt that their project, argued that just consultation was new lives were seriously lacking compared not enough. They also wanted to have a to what they had experienced prior to say in issues such as whether or not the the project. According to some resettlers, project should go forward, what kinds and there were fewer traditional ceremonies levels of compensation should be provided being conducted in the new locations, to project-affected people, and what kinds and people had to go long distances to of land they should receive in exchange take part in cultural activities. The Lesotho for the land that they lost in the project Highlands Water Project, they maintained, area. None of these arguments held sway represented a serious threat to Basotho with the two governments, the Lesotho culture. Such losses are irreparable and Highlands Water Commission, or the cannot be made good by monetary means World Bank. In most dam related projects, of compensation. the affected populations are often moved to upland areas that are less productive. Secondly, the project led to the drying up of This greatly affects their incomes and their springs in several catchment areas. These agricultural productivity as well as having areas included the village of Ha Mensel to cope with various social, psychological near Katse, close to the Katse Township and physiological stresses. Some of those and administrative offices that were built to affected by the project have been turned oversee the project. It was ironic, villagers
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Table 1: Families Relocated or Resettled by Destination and Stage in LHWP Phase 1A and 1B Stage Destination Foothills Maseru Total 1 A Katse Katse basin 71 (25 in cash 0 0 71 program in 1995) 1B Mohale Mohale Basin Stage 1 (1996-1998) 37 38 24 99 Stage 2 (2002-2006) 27 177 18 222 Stage 3 (post inundation, 103 (165) 4 0 169 2006-present) People who lost over 72 74 50% of their land under stage 3 Total 298 233 42 573 relocated, resettled or affected directly
Note: Data obtained from the Lesotho Highlands Development Authority (LHDA). In the Stage 3 (Residual Resettlement) category of Phase 1B, project affected households that lost over 50% of their arable land were allocated fields in two areas in the Mohale basin, Ha Nthakane and Ha Kopor said, that there was a large water tank built certain that the LHWP itself is responsible by LHDA in the village to provide water to for the increase in HIV/AIDS. The World the engineers and dam workers and their Bank says it has no concrete data linking families in Katse, but they themselves had the LHWP and the spread of HIV-Aids in less access to water now than they had the country, but admits that there maybe before the project began. Springs also a connection between the two. Today, dried up in Ha Lejone, Ha Theko, Ha Soai, one fourth of Lesotho’s population is HIV Kholontsho, Mphoroshane, and Mapaleng, positive, and as one of the world’s least all in the catchment area of Phase 1A (the developed countries, the kingdom’s medical Katse Dam and Reservoir). services are unable to cope.
Thirdly, there was an increase in the spread Lastly, the LHWP had a major corruption of HIV/AIDS amongst the populations scandal in the early 1990s. Forensic audits living in the highlands of Lesotho. Some revealed problems in the accounting of organizations say that the dam construction the Chief Executive of LHDA, Mr. Masupha workers, most of whom came from South Sole, as well as several large private Africa and lived in make-shift camps, companies involved in the project’s contributed to the spread of HIV-Aids in infrastructure construction. The project Lesotho. In the late 1980s, HIV prevalence has done little to help Lesotho’s people. amongst the population was 0.9%. Recent Without controls and regulations on how figures point to 22% (Human Sciences the funds were distributed, large sums Research Council 2009; AmusaaInambao, of money have disappeared into a black personal communication, 2014). It is not hole (R. Hoover, 2001).
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Conclusion Third, it is necessary to have a policy environment that is appropriate and A bucket filled with holes can only hold positive for all concerned, one which takes water for a short amount of time. Pouring into careful consideration international, in more water makes little sense as it will regional, national, and local level policies just drain away. To the extent that there and practices and places significant are internal leaks in Africa – corruption, emphasis on local culture, heritage, civil wars, wasteful military expenditures, and traditions. According to Ika et al, capital flight and government waste - (2012), parties that are involved in any pouring in more aid makes little sense. infrastructure projects including the World Instead, priority should be placed on Bank, must pay close attention to the social, plugging the holes to ensure that the political, economic, and environmental little aid that comes in stays in and has situations in the project areas. a positive impact. As Maritu Wagaw wrote: “Let Africa look inside Africa for Fourth, no matter how good a development the solution of its economic problems. policy is, it is likely to fail if it goes against Solutions to our predicament should the interests of the local populations and come from within not from outside” (New if local people are not involved in decision- African, March 1992; p.19). making and planning. Public participation, therefore, is crucial to the success of any There are a number of lessons to be donor funded projects (Lancaster. C, 1999). learned from both the Chad-Cameroon Free, pior, and informed consent (FPIC) Pipeline project and the Lesotho Highlands should include not just consultation but Water Project experiences that are meaningful information dissemination, applicable to other development partners local-level discussion, and real consent. and donors’ infrastructure projects other than the World Bank. Fifth, one of the areas where significant progress has been made in the past was First, the success of any infrastructure in the rules and procedures relating to project or any aid funded project depends involuntary relocation or resettlement on transparency, openness, accountability resulting from the establishment of and flexibility. large infrastructure projects (World Bank 2001; Scudder 2005). An issue Second, in order to determine whether currently with the World Bank is that the communities, households, and individuals Bank is reducing their safeguards when are better off, the same, or worse off asa it comes to environmental, social, and result of project activities, it is necessary to resettlement issues, in line with some obtain detailed baseline data against which current thinking on being less regulatory changes can be monitored and measured. and more market-oriented (Chavkin et Social impact assessments done as part al 2015). Given the experiences of large of safeguards policies should ensure that dam projects in Africa, Asia, and Latin various categories of people are interviewed America, this will have a negative impact and monitored, breaking the population on people and habitats around the world. down along gender, age, class, ethnic, Involuntary resettlement policies of the occupational, vulnerability and other lines. world’s agencies doing resettlement must
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be improved and strengthened, as must particularly in large infrastructure projects. the performance standards for social and The World Bank’s actions on corruption environmental sustainability. The scholarly issues in Lesotho had a relatively good community should be consulted in this effect. However, the companies involved in effort along with states, non-government the corrupt practices should have received organizations, and institutions engaged in greater sanctions. The World Bank, the partnerships on development. International Finance Corporation, the European Union and other institutions need Finally, much greater attention must be paid to pay greater attention to corrupt practices to issues of corruption and misdirection of states, project authorities, consultants, of finance in donor funded programmes, and transnational corporations.
REFERENCES
Ake, Claude. 1996. Democracy and Development Ika, L. A., Diallo, A., &Thuillier, D. (2012). Critical in Africa. Washington, D.C.: The Brookings success factors for World Bank projects: An Institution. empirical investigation. International Journal of Project Management, 30(1), 105–116. Ayittey, G. 1992 Africa betrayed St. Martin’s Press, New York Kanbur, R. (2000) "Conditionality and Debt in Africa" in Tarp, F. (ed) Foreign Aid and Calderisi, R. (2007). The trouble with Africa: Why Development: Lessons Learnt and Directions for foreign aid isn't working. New York, NY: the Future, London: Routledge, pp.409-422 Palgrave Macmillan. Lancaster, C. (1999). Aid effectiveness in Africa: Chauvet, L., Collier, P., &Duponchel, M. The unfinished agenda. Journal of African (2010). What explains aid project success in Economies, 8(4), 487–503. post-conflict situations? (World Bank Policy Research Working Paper 5418). Lesotho Highlands Development Authority, (1997). An Overview of the Lesotho Highlands Easterly, W. (2006). The white man's burden: Why Water Project, Maseru: the West's efforts to aid the rest have done so much ill and so little good. New York, NY: Maritu W. (1992). Let Africa look inside Africa Penguin. for the solution of its economic problems. Solutions to our predicament should come Guyer, Jane L. (2002):Briefing: the Chad-Cameroon from within not from outside” (New African, petroleum and pipeline development project, March 1992; p.19). African Affairs 101, 402 Moyo, D. (2009). Dead aid: Why aid is not IAG (International Advisory Group) (2009):Chad- working and how there is a better way Cameroon Petroleum Development and for Africa. Vancouver, BC, Canada: D&M Pipeline Project – Final Report. International Publishers. Advisory Group IAG Secretariat, 5 Place VilleMarie, Suite 200, Montreal (Quebec) R, Hoover. 2001. ‘Pipe Dreams: The World Bank’s CANADA. September 3, 2009 failed efforts to restore lives and livelihoods
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of dam affected people in Lesotho,’ Santiso, C. (2001) "Good Governance and International Rivers Network, 2001, p 7 Aid Effectiveness: The World Bank and Richard L. Sklar and C.S Whitaker. (1991). African Conditionality", The Georgetown Public Policy Politics and problems of Development New Review, pp.1-22 ed. edition World Bank. (1997). Adjustment lending in Sub Rondinelli, D. A. (1976). Why development Saharan Africa: An update projects fail: Problems of project World Bank. (1998). Assessing aid: What works, management in developing countries. Project what doesn't and why. Oxford, England: Management Quarterly, 7(7), 10–15. Oxford University Press
Sachs, J. D. (2005). The end of poverty: Economic World Development Report (1991), vol.20, possibilities for our time. New York, NY: No.10, pp.1481-1488 Penguin.
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Chapter 2 ODA, Security, and Migration
Rising Militarism: Implications for Development Aid and Cooperation in Asia Pacific The Reality of Aid - Asia Pacific
Aiding Militarization: Role of South Korea’s ODA in “Peacekeeping” Activities in Asia Youngah Lee, People’s Solidarity for Participatory Democracy – South Korea
Militarization of Palestinian Aid Nora Lester Murad and Alaa Tartir, Aid Watch Palestine
Development Cooperation, Militarism and Conflict in the Contiguous Areas of Bangladesh, North East India and Myanmar Jiten Yumnam, Center for Research and Advocacy Manipur
Development Ground Zero: Philippines, Cambodia, Myanmar Council for People’s Development and Governance
Migration and Integrity of ODA as a Resource in Sub-Saharan Africa David Ugolor and Leo Atakpu, ANEEJ
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Rising Militarism: Implications for Development Aid and Cooperation in Asia Pacific
The Reality of Aid - Asia Pacific
Introduction two decades of a sustained and costly war on terror (both in financial and social As one of the key mechanisms of global terms), supposed new and worse terror development cooperation, foreign threats have emerged. The most notable assistance has long been captured by of these is the rise of the Islamic State of the security agendas of donor countries, Iraq and Syria (ISIS), which is reportedly which has become especially pronounced expanding into Southeast Asia. since the 9/11 terror attacks on the United States. For the US and other top donors, aid All these developments feed into the is not just a simple act of altruism, but also intensifying of militarism and war, which an essential instrument of foreign policy. has serious implications for global aid and Development aid is strategically used to the campaign against poverty. The United contribute to the global war on terror and Nations (UN) is embarking on an ambitious counterinsurgency interventions. “Smart Sustainable Development Goals (SDGs) power” – the combination of “soft” (e.g. campaign that promises to be inclusive development aid) and “hard” (e.g. military) and to maximize development finance power – has become a foreign policy including aid. buzzword. As the foreign policy priorities of the major donors have shifted to the The continued and perhaps even security agenda, the implications have heightened prominence of donors’ been significant in terms of aid flows, and security interests is a legitimate concern global attempts to reduce poverty and the for development advocates and the promotion of development. world’s impoverished communities. It also poses a challenge to the longstanding This trend has not slowed down. In issue of inadequate Official Development fact, recent political and economic Assistance (ODA) to sustainably address developments are driving even greater worldwide poverty and its various militarization of foreign assistance dimensions. The drive, for instance, of despite the fact that the global economy the Development Assistance Committee remains in the grip of a prolonged crisis. (DAC) of the Organization for Economic Conditions for higher levels of instability Cooperation and Development (OECD) and militarism have been created as the to supposedly modernize ODA and allow US, Japan, and the European Union (EU) — for the inclusion of increased military traditional centers of the world economy and police-related spending presents and donor community — are feeling the potential risk of diverting already threatened by the rise of China as a major insufficient ODA resources from poverty global and regional power. After almost reduction.
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While it is true that development spending, private sector investment and is not possible without peace and aid (Reuters, Jul. 2015). security it is important to ask how the peace and security agenda is defined. Despite this enormous financial Whose interests are prioritized and requirement, aid donors have not made served so that development aid can (or any new pledges to increase development cannot) help to establish peaceful and assistance aside from the same, and still prosperous societies? Without clarity on unfulfilled, commitment of 0.7% ODA/ this fundamental issue, the heightened GNI. As The Reality of Aid (RoA) has noted, emphasis on peace and security by DAC this is important because ODA continues donors and the general international to be a relevant and essential resource community (i.e. UN SDGs) will only further even though the SDGs will need to rely undermine the effectiveness of ODA and on a variety of sources, including from development cooperation at the expense the private sector and domestic tax of responding to the needs of the world’s resources (See Box 1) ODA can play a most vulnerable people. key role in realizing the SDGs because of its uniqueness as a dedicated resource for development shaped by public policy Aid Trends in Asia Pacific in the choices. “Unfortunately, signs indicate a context of Militarism and War continued pattern of levelling off of ODA and an increasing diversion of this ODA to A longstanding issue for advocates of provider self-interests” (Tomlinson, 2016). effective development cooperation is Among the most prominent of these self- that donors have consistently failed to interests by donors is the security agenda. deliver sufficient levels of ODA necessary for reducing poverty in developing These trends are worrisome for all countries. Donors have often fallen short developing countries that require much of stated commitments, most notably the needed development finance, but more 0.7% ODA/GNI (Gross National Income) especially for regions where people living target that was first agreed in 1970 and in extreme poverty are found. Based on has been repeatedly re-endorsed at the World Bank estimates, there are 768.5 highest levels at international aid and million people globally who subsist on less development conferences. than US$1.90 a day as of 2017. More than half (50.7% or 390.2 million) of them are When the UN adopted the 2030 Agenda in Sub-Saharan Africa while 32.4% (249.1 for Sustainable Development with its million) are in South Asia and 9.6% (73.9 17 SDGs and 169 targets for “people, million) are in East Asia and the Pacific planet, prosperity, peace and partnership” (Ferreira, Oct. 2017). in September 2015, the international community committed to mobilize the Overview of rising militarism in required resources to achieve these goals and targets over the next 15 years. Asia Pacific Estimates vary but analysts say that the SDGs would need as much as US$2.5 Global instability and the prospects of war, trillion to US$4.5 trillion annually in state an ever-present threat in a global regime
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of competing interests amid periodic 2018), which followed the release of the and worsening economic crises, have NSS, and which stated that “the central intensified in the 21st century. The most challenge to U.S. prosperity and security visible expression of global instability is the re-emergence of long-term, strategic is the worldwide increase in militarism. competition” from “revisionist powers” Militarism refers to a state’s predominant China and Russia. Both the NSS and NDS use of military approaches in its domestic have identified North Korea and Iran as and foreign policies. It is often linked to “rogue regimes”. aggression and intervention by one state over another. Although the stated primary focus of its defence and security strategy is global To grasp militaristic trends in Asia Pacific power competition, the US has not dropped and the implications on development its anti-terror campaign. The latter used cooperation, it is important to understand to provide a needed legitimacy for what the agenda and actions of the US, and by some describe as US military intervention extension, its long time “junior partner” in the Middle East as well as South and Japan. Both are leading powers in Asia Central Asia, where it intends to maintain Pacific and are top sources of foreign its presence. It also gives justification for assistance that shape aid flows and trends. its continued and expanded military role in Southeast Asia. The Trump administration, Recent developments point to Asia Pacific for instance, launched Pacific Eagle – – where “the future of politics will be Philippines to fight extremist groups, decided” – as a major theater of conflict and including those reportedly affiliated militaristic competition. Under the Trump with ISIS. This mission is an Overseas administration, the US has aggressively Contingency Operation (OCO), making the pursued the so-called “pivot to Asia”, first Philippines eligible for the same funding announced by the Obama presidency in used to finance the long-running wars in 2011. The goal of the pivot is to contain Afghanistan and Iraq (Donati and Lubold, the rise of China, which together with Jan. 2018). It is important to note that the Russia, is deemed as the biggest threat Philippines has become a strategic area and challenge to US interests. of US-China rivalry when the incumbent Duterte government strengthened ties This focus represents a departure from with China. a focus on terrorism, which occupied the United States for the most part of At the same time, Japan’s own (and first) the past two decades. The US now sees National Security Strategy (NSS/Dec. “great power competition” as the primary 2013) has acknowledged a challenge to its focus for its national security (Reuters, national interests in the “unprecedented Jan. 2018). In its latest National Security scale” of the changing balance of power in Strategy (NSS/Dec. 2017), Washington the international community, with China declared that “China and Russia challenge (as well as India) being identified as primary American power, influence, and interests, drivers. In particular, Japan noted China’s attempting to erode American security and “rapidly advancing military capabilities” and prosperity”. The same theme is echoed in its “attempts to change the status quo by the National Defence Strategy (NDS/Jan. coercion based on their own assertions,
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which are incompatible with the existing Reversing decades of state pacifism, Japan order of international law, in the maritime has begun to establish military ties with and aerial domains, including the East Southeast Asian countries to “build their China Sea and the South China Sea.”1 security capabilities to deal with unilateral, dangerous and coercive actions in the South In what could be one of the first concrete China Sea”. These measures involve the steps to implement its new defence and provision of direct military aid as well as the security strategy, the Pentagon plans to conduct of joint military exercises (Reuters, reposition its forces from the Middle East Jun. 2016). In June 2017, Japan lifted its ban to East Asia. This shift includes the Marine on giving away surplus military kit to other Corps Expeditionary Units (MEUs) that have countries, paving the way for deals that been involved in US wars in Afghanistan, will allow it to provide second-hand patrol Iraq and Syria. MEUs are composed of aircraft, ships and other military equipment some 2,200 marines in amphibious assault to allies (Kelly and Kubo, Aug. 2017). In South ships and typically are equipped with Asia, Japan has recently forged a deal with aircraft, helicopters, tanks as well as other India, which has its own territorial dispute weapons and combat-support resources with China, to develop their armed forces (WSJ, Feb. 2018). through robotics and artificial intelligence (RT, Jan. 2018). Even before the pivot and planned increases in US military presence in Asia Militarism and aid flows came about under Trump, the US had A key feature of militarism is the way public already implemented a significant “boot resources are gobbled up by the military print” in the region. According to one and defence sectors at the expense of estimate, nearly 200,000 American troops spending for social and development have been deployed in approximately programs. Its impact on the public budget 800 US military bases in 177 countries directly undermines efforts to end poverty worldwide. Of this figure, 39,345 are based and promote lasting development. in Japan and 24,468 in South Korea on top of so-called rotational deployment of several According to an estimate by the Asian hundreds to thousands of US troops in the Development Bank (ADB), the Asia Pacific Philippines, Thailand, Singapore, Australia, region would need over US$1 trillion a etc. (Desjardins, Mar. 2017). year to meet the SDGs. As militarism and conflict heat up in the region, an increasing In addition to the deployment of troops, portion of public sector budgets are being the US also installed its THAAD (Terminal devoted to military spending, including High Altitude Area Defence) anti-missile payments for military aid and imports. It is defence system in South Korea in 2017. estimated that in 2016, Central and South The intent was supposedly to counter Asia, East Asia (excluding North Korea) and North Korea’s nuclear threat. This Southeast Asia collectively spent US$423.2 deployment has worried Russia and billion for the military. China, which believe that the THAAD could monitor its missile capabilities and Between 2007 and 2016, military spending by undermine its nuclear deterrent (Connor, East Asia grew by 74% and China’s spending Apr. 2017). ballooned by 118 percent. As Southeast
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Asian states have been arming themselves, In Vietnam, for instance, US economic including through assistance from donors aid grew by only 0.2% yearly from 2011 like the US and Japan, the region’s military to 2016 while its military aid to Vietnam spending has jumped by 47% with Central expanded by a whopping 31.4 percent. In and South Asia increasing by 51% during the same period, US economic aid to the the same period. Five of the world’s top 15 Philippines grew by 2.2% a year while US military spenders are in Asia and Oceania, military/security aid grew by 12.9 percent. namely China, India, Japan, South Korea and Consequently, military aid has been Australia (Fleurant, Apr. 2017). steadily eating up an increasing portion of total US bilateral assistance in the region, Donor military spending easily dwarfs ODA most notably among ASEAN and SAARC (South Asian Association for Regional spending. To illustrate, in 2016, the top five Cooperation) states, even though the global bilateral DAC ODA donors disbursed a total trend indicates a small annual reduction in of US$72.38 billion in bilateral ODA while the share of military aid in recent years (See spending US$802.20 billion for military. Chart 2). The US alone spent US$611 billion. US’s military spending is more than 21 times Military aid, of course, is a legitimate form its bilateral ODA disbursement; Japan’s is of foreign assistance, just like economic almost seven times (See Chart 1). or development aid. It reputedly helps recipient countries to modernize and Military assistance is also outpacing better equip their armed forces under economic aid. Looking at the world’s largest the stated objective of fostering peace donor of ODA and military aid, the US, and stability in the country and/or region. shows that every year its military assistance However, donors of military aid can also has been growing twice as fast as its use these funds to realize their foreign bilateral aid. From 2011 to 2016, US military policy objectives and advance certain aid expanded by 3.9% annually while security and political interests. Because bilateral economic aid grew 1.9 percent. military aid promotes a very different This trend is most pronounced in Asia, agenda than the supposed economic especially in countries that are crucial to development/welfare and humanitarian Washington’s agenda of containing China. objectives of ODA, military aid is excluded
Chart 1 Military spending of top 5 DAC ODA bilateral donors, All amounts as of 2016 (in US$ billion)
Source: OECD Qwery Wizard on International Development Statistics (QWIDS) and Stockholm International Peace Research Institute (SIPRI)
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Chart 2 Share of US Militry aid to total US Assistance, 2010-2015 (in %)
Source: Congressional Budget Justification, Foreign Assistance - Summary Tables, Fiscal Years 2012 to 2017, US State Department from being reported as ODA under the private sector economic engagement, and longstanding policy of OECD-DAC. strengthen justice systems in targeted countries” (CGD, Mar. 2017). From 2010 Even more alarming than the fact that ODA to 2016, ESF accounted for more than a spending is being displaced and outpaced quarter (26.2% annual average shares) of by donors’ military spending (including US bilateral economic assistance globally. the provision of military aid) is the fact In Asia, ESF comprised an even larger share that ODA itself is being systematically (40.6% yearly average from 2012 to 2015) used to promote donors’ military and of US aid. The Middle East (mainly Syria, security objectives. This phenomenon, Iraq and Jordan) and South and Central which is referred to as the militarization of Asia (overwhelmingly Afghanistan and to a development aid, will be discussed later in lesser extent Pakistan) comprise about two- this chapter. thirds of total US ESF assistance worldwide.
A significant portion of what the US This trend may continue and even worsen in classifies as “bilateral economic assistance” the coming years. With the US gearing up for is being directly used to support its strategic an increased military presence, particularly military and security agendas. One example in Asia, the Trump administration has is, the Economic Support Fund (ESF) that is been pushing for significant increases in managed and implemented by the State military spending while cutting back on aid Department/USAID and is counted as spending. For its 2019 budget proposal, the bilateral economic aid. Its mandate is to Administration is asking the US Congress to “promote[s] US interests by addressing increase the Defence Department budget political, economic, and security needs in by 14% (an additional budget of US$80.1 countries of strategic importance”. It is “used billion) to allow it to add 16,400 more troops. to finance both short and long-term efforts It proposes that some of this increased to counter terrorism, encourage greater allocation will be absorbed by reductions
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in the State Department and USAID, whose 0.3% and Asia had a negligible 0.9% annual 2019 budget would contract by 29% (about growth. Asia’s growth was actually due to US$16.2 billion) under Trump’s proposal the rapid 9.6%yearly expansion in DAC ODA (TWP, Feb. 2018). disbursements in the Middle East (which could be attributed in part to the donors’ In general, the increase in ODA provided security interests taking over development by the DAC members of the OECD has cooperation). Disbursements to South and substantially slowed down in the 2010s. Central Asia fell by 0.8% a year, largely due to The annual growth rate of disbursement declining disbursements for Afghanistan, a in DAC ODA for all developing countries declining security interest for some donors, (bilateral) and multilateral recipients this and by 5.3% a year in Far East Asia, the decade is 2.8% compared to 9.1% in the largest reduction amongst all global regions. 2000s. In the last six years (2010 to 2016), the average yearly disbursement is pegged Where ODA has increased, it is usually due at US$ 134.22 billion, of which US$ 94.21 to the militarist agenda of major donors billion or about 70% represents bilateral rather than the targeting of the poorest ODA to developing countries. According to regions where development aid is most OECD data, the average annual expansion needed. For example, the substantial in ODA disbursement in the period 2010- expansion in DAC ODA disbursements to 2016 is the second lowest average yearly the Middle East in the 2010s as opposed to growth since the 1960s. the contraction in other Asia sub-regions is the result of the increased engagement of In terms of regional distribution, Africa the US in Syria, where it has been involved (31.1%) and Asia (25.9%) together have in a military campaign since 2013 against accounted for over half of the total DAC both Pres. Assad and the terror group ISIS. ODA disbursements to all developing countries in the past six years (2010-2016). The US is the world’s undisputed top aid During that period, total DAC bilateral donor, accounting for 29% of total DAC disbursements reached US$659.47 ODA bilateral disbursements from 2010 to billion of which US$205.21 billion went to 2015. Syria, with US$4.88 billion in DAC ODA Africa and US$170.99 to Asia. In Asia, the disbursements in 2015, is now the top ODA majority or 53% (US$90.69 billion) of the recipient globally, eclipsing Afghanistan regional total went to South and Central (another country where the US has been Asia while the Middle East accounted for involved militarily as part of its war on 26.9% (US46.04 billion) and the Far East terror since 2002), which received US4.24 Asia, 16.7% (US$28.52 billion). billion. Prior to the US campaign, the annual average in ODA disbursements to Syria was If Africa and Asia have received the largest a negligible US$148 million (2001 to 2009). portions of DAC ODA disbursements, the This has ballooned to US$2.57 billion in the overall slowdown in the annual expansion 2010-2015 period, with figures pegged at in the 2010-2016 period has also affected US$3.57 billion in 2013; US$4.19 billion in these regions the most. While bilateral ODA 2014; and US$5.52 billion in 2015. Much of to all developing countries grew annually this aid relates to humanitarian assistance by 3.1% during the 2010 - 2016 period, in contrast to Afghanistan where donors Africa experienced a yearly contraction of were using aid more directly to support
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their security interests in the country’s war multilateral military alliances such as the with the Taliban. North Atlantic Treaty Organization (NATO) are not captured by CPS data. This point Before Syria, the same pattern was is illustrated in the “ODA Casebook on observed in Afghanistan and Iraq when Conflict, Peace and Security”, released by the US launched its global war against the DAC in 2017 with the expanded scope terror and large-scale counter-insurgency of ODA. This casebook, which was created campaigns in 2002. From just US$338 to guide DAC donors, provides sample million in yearly ODA disbursements in cases of the activities that are now eligible the 1990s, Afghanistan’s ODA from DAC to be counted as ODA. donors led by the US jumped to US$3.19 billion in the 2000s. In the 2010-2015 period Based on DAC classification or purpose Afghanistan averaged US$5.81 billion in codes (i.e., the CRS), activities considered annual ODA disbursements, but has been as CPS are limited to security system declining since 2012. Similarly, in Iraq and management reform, civilian the annual average ODA disbursements peacebuilding, conflict prevention and were US$342 million in the 1990sbut then resolution, participation in international skyrocketed to US$6.81 billion in the early peacekeeping resolutions, reintegration 2000s. During the 2010 – 2015 period they and SALW (small arms and light have declined to US$1.66 billion as the weapons) control, removal of land mines Syrian conflict has gained more attention and explosive remnants of war and and resources from the US and other prevention and demobilization of child major donors. soldiers. However, based on the ODA CPS Casebook, other activities involving Conflict, peace and security ODA military and security actors, which are not classified as CPS, can fall under One way to measure the extent to which other purpose codes. Such activities aid donors are increasingly prioritizing include relief coordination, material relief their security interests is by examining assistance, water transport, human rights, detailed categories of the various activities health personnel development, disaster that they fund with ODA. Unfortunately, at prevention and preparedness, legal the aggregate level, this is very difficult. In and judicial development, public sector the DAC’s Creditor Reporting System (CRS) policy and administrative management, military and security-related spending is waste management/disposal and medical not reflected in a single category. Instead education, among others (See Table 1). it is inserted in other sectors. The only category that can be easily distinguished as It is useful to examine ODA CPS data to military and security-related is the Conflict, identify overall trends on donor priorities. Peace and Security (CPS) sector but this only There has been a general upward trend shows a small part of the whole picture. in ODA CPS disbursements to initiatives involving conflict, peace and security Many projects and programs involving since 2002. These disbursements peaked military and police forces of donor and at US$2.99 billion in 2010 before steadily recipient countries that are implemented going down until 2015 when it picked up or overseen by the ministry of defence or again to US$2.67 billion in 2016. While
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total bilateral ODA disbursements grew by expanding at a faster rate (3.3% per year) 2.8% a year from 2010 to 2016, ODA CPS compared to total bilateral ODA (2.6%). actually fell by 0.9% annually during the same period. Comparing absolute figures After 2010, Asia, including the Middle since the global war on terror was launched East, obtains the lion’s share of ODA CPS indicates that ODA CPS disbursements in in countries where the US and major 2016 were more than four times greater European donors (i.e. United Kingdom, than 2002 figures, while total bilateral ODA Germany) are involved in various internal disbursements were just 2.5 times greater. conflicts. Examples are Afghanistan, Iraq, More recently (2013 to 2016), ODA CPS is Pakistan and Syria, among others. From
Table 1. Sample cases of ODA-eligible activities involving the military/security sector but not classified as CPS (amount in units indicated) Project Amount Donor Recipient Purpose code Activities involving donor country military Snowdrop training Belgium Africa, regional Not applicable Transport of humanitarian No data Belgium Africa, regional Relief co- goods provided ordination; protection & support services Humanitarian aid to Fogo 0.66 M euros Portugal Cabo Verde Material relief Island assistance and services Combating outbreak of Ebola 14,000 euros Portugal Guinea Material relief assistance and services Support to the São Toméan 42,000 euros Portugal São Tomé and Water transport coast guard organization Principe Activities involving recipient country military Training on law of armed No data Austria South Sahara, Human rights conflict provided regional Training on construction No data Belgium Congo Not applicable engineering provided Education on removal of No data Belgium Tunisia Not applicable explosive ordnance provided Exchange of expertise in the No data Belgium Rwanda Health personnel domain of tropical disease provided development Training of military experts to 16,000 USD Hungary Iraq Not applicable counter improvised explosive devices Comprehensive disaster risk 18,000 USD Japan Turkmenistan & Disaster reduction other Central Asia & prevention and Caucasus countries preparedness
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Activities involving donor and recipient country police Capacity development of the 4.70 M USD Sweden Colombia Legal and judicial Colombian police development Support to transnational 14.5 M USD Austria Côte d’Ivoire, Narcotics control crime units in West Africa (c/o Austria Guinea, Guinea- 0.99 M USD) Bissau, Liberia, Sierra Leone Maritime security in the Gulf 2.23 M USD Denmark Africa, regional Legal and judicial of Guinea development Contribution to the financial 0.10 M USD Hungary Afghanistan Legal and judicial sustainment of the Afghan development national defense and security forces: police component Preventing violent extremism Building rule of law 3.80 M USD Denmark Somalia Legal and judicial institutions development Strengthening resilience to 6.52 M USD EU Pakistan Public sector violence extremism (STRIVE institutions policy and Pakistan) administrative management Strengthening resilience to 2.18 M USD EU Kenya & Somalia Public sector violent extremism (STRIVE institutions policy and Horn of Africa) administrative management Transition support program 1 M USD US Mali Public sector policy and administrative management Activities by the North Atlantic Treaty Organization (NATO) Ukraine medical 2.25 M USD Various Ukraine Medical rehabilitation trust fund* NATO education members training Ukraine disposal of 0.95 M USD Various Ukraine Waste radioactive waste trust fund NATO management/ members disposal and Greece *partially ODA-eligible See Annex 2 for additional description of the activities considered as ODA-eligible or partially eligible Source: ODA casebook on conflict, peace and security activities, Development Co-operation Directorate, Development Assistance Committee
2010 to 2016, ODA CPS disbursements in the regional total. With the conflict in Syria, Asia made up a total of US$7.39 billion or ODA CPS in the Middle East expanded by 40.8% of the total. Africa is a distant second an average of 13.5% annually from 2010 to with US$4.82 billion (26.6%). In Asia, South 2016 even as the regional total contracted and Central Asia accounted for 62.1% of by 2.5%. Other sub-regions also posted
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yearly declines during the same period (See a major recipient of bilateral ODA CPS in Table 2). the Middle East. It received 20.4% of the regional total in 2010-2016, of which 68.4% ODA CPS disbursements in South and came from the same top three donors – US Central Asia are heavily concentrated in (34.3%), Germany (18.4%) and UK (15.6%). Afghanistan. From 2010 to 2016, 72.8% or US$3.34 billion of the US$4.59 billion in In Far (South) East Asia, 85.6% of ODA total ODA CPS disbursements in the region CPS disbursements are distributed in five went to Afghanistan. Of this, 78.4% came countries – Myanmar (22.2% of the regional from just four bilateral donors – the US total), Cambodia (20.8%), Laos (16.8%), the (34.9%); UK (16.6%); Germany (16.3%); and Philippines (15.7%), and Indonesia (10.1%). Japan (10.7%). Japan is a major ODA CPS donor in the region and also has significant bilateral The double-digit annual expansion in ODA disbursements in some countries in South CPS disbursements in the Middle East has and Central Asia. been primarily driven by Syria, which saw its yearly average balloon from a meager Table 3 summarizes the top donors and US$2.39 million in 2010-2012 to US$152.95 recipients of ODA CPS disbursements in million in the 2013-2016 period. From Asia’s sub-regions for the period 2010-2016. 2010 to 2016, ODA CPS disbursements in Syria reached a total of US$618.96 million ODA Modernization or Greater or 31.1% of the Middle East total. Just three Aid Militarization? bilateral donors accounted for 80.6% of Syria’s total, namely the UK (37.8%), US In their 2012 High Level Meeting (HLM), (26.1%), and Germany (16.8%). Iraq is also the OECD DAC Ministers embarked on a
Table 2. Selected indicators on ODA CPS disbursements, 2010 to 2016 (figures in units indicated) Region Annual average Total Annual Share to (US$ million) (US$ million) growth (%) total (%) Asia, of which: 1,055.72 7,390.06 (2.46) 40.82 South & Central Asia 655.61 4,589.28 (7.77) 25.35 Middle East 284.29 1,990.04 13.54 10.99 Far East Asia 106.68 746.73 (0.61) 4.12 Asia, regional 9.14 64.01 (5.03) 0.35 Africa 688.69 4,820.86 (1.03) 26.63 Europe 177.72 1,244.06 (1.36) 6.87 America 256.19 1,793.31 19.44 9.91 Oceania 13.89 97.25 9.12 0.54 Unspecified 394.09 2,758.62 (1.88) 15.24 All regions 2,586.31 18,104.16 (0.86) 100.00 Figures may not add up to total due to rounding Source of data: OECD Query Wizard on International Development Statistics (QWIDS)
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multifaceted work program that aimed Discussions leading up to this modernization to “modernize” the DAC statistical system were preceded by the endorsement of and the ODA concept. The overall objective the New Deal for Engagement in Fragile was to enhance the system’s “relevance in States during the 2011 Fourth High-Level a changed international landscape” and Forum on Aid Effectiveness. This meeting to improve its capacity in meeting the declared that peacebuilding, state-building financial requirements of the SDGs. (DAC, and security are essential foundations for Mar. 2016) As noted by Development sustainable development in fragile and Initiatives (DI), DAC’s ODA modernization conflict-affected countries. Building on the process can be divided into two key areas. New Deal, a goal of “promoting peaceful and The first focuses on updating, clarifying inclusive societies” was included in the SDGs and “streamlining” existing ODA reporting. (Global Goal 16). As DI noted, this “marked This covers ODA loans and debt relief, a further positioning of peace and security in-donor refugee costs (IDRCs), and data at the heart of the global development changes including purpose codes, channel agenda” (Dalrymple, Mar. 2016). codes, and finance types. The second one concentrates on bringing in new activities, The DAC made a series of decisions in its flows and financing instruments not 2014 and 2016 meetings to implement its previously eligible as ODA. This comprises ODA modernization efforts. Specifically, private sector instruments (PSIs) such as on reforms related to peace and security equity investments, guarantees and other expenditures, the DAC reported at its 2017 “market-like” instruments as well as peace High Level Meeting that the updated ODA and security initiatives (Development rules were already being implemented Initiatives, Sep. 2017). for the member ODA reporting (i.e., the
Table 3. DAC ODA CPS disbursements in Asia, by sub-regional top recipients and donors, 2010-2016 total (in units indicated) Region/country 2010-2016 Donor share to national total (%) tot. (US$ M) US UK Germany Japan Others South & Central Asia Afghanistan 3,345.19 34.86 16.63 16.27 10.68 21.56 Pakistan 288.89 31.12 17.05 14.46 16.87 20.50 Sri Lanka 229.96 29.63 10.26 11.46 11.46 37.19 Nepal 186.72 21.10 25.46 10.54 4.55 38.35 India 17.12 18.45 28.16 24.61 - 28.78 Middle East Syria 618.96 26.07 37.75 16.76 0.16 19.26 Iraq 406.66 34.27 15.64 18.45 1.85 29.78 West Bank & Gaza 343.58 14.42 11.13 10.70 2.16 61.69 Lebanon 288.26 30.06 24.96 5.89 1.08 38.01 Yemen 53.93 20.79 29.39 15.15 1.23 33.44
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Far East Asia Myanmar 176.99 20.05 13.89 6.45 3.58 56.03 Cambodia 165.83 14.32 8.11 8.82 41.60 27.15 Laos 133.70 29.11 6.63 3.72 27.38 33.16 Philippines 125.00 18.07 0.85 23.13 21.47 36.48 Indonesia 80.43 40.49 4.21 3.97 0.26 51.07 Source of data: OECD Query Wizard on International Development Statistics (QWIDS)
Statistical Reporting Directives) and that ODA reporting; the revised “ODA Casebook on Conflict, 2. Development co-operation should not Peace and Security” has been issued (DAC be used as a vehicle to promote the Communiqué, Oct. 2017). provider’s security interests; 3. The supply of equipment intended to In accordance with the updated reporting convey a threat of, or deliver, lethal directives, the DAC published a final version force, is not reportable as ODA; and of the casebook in October 2017. It listed 4. Financing activities combating specific examples in order to illustrate the terrorism is generally excluded from applicability of the ODA-eligibility rules ODA (DAC, Mar. 2016). in relation to peace and security that the DAC members had agreed upon. The But at the same time, the DAC justifies stated intention of the casebook was/is to changes described earlier, saying they are facilitate the assessment of the eligibility long overdue. It also maintains that while of future cases (DAC Casebook, Oct. 2017). issues of conflict and fragility can be seen from a variety of viewpoints, there are important challenges that must be addressed Table 3. DAC ODA CPS disbursements in Asia, by sub-regional top recipients and donors, 2010-2016 total According to the DAC’s updated directives, in reducing poverty and promoting economic (in units indicated) all peace and security-related activities growth (DAC, Mar. 2016). Region/country 2010-2016 Donor share to national total (%) should be guided by the main objective tot. (US$ M) US UK Germany Japan Others of ODA, which is the promotion of the For the DAC, these changes clarified South & Central Asia economic development and welfare of ambiguities in reporting rules on peace developing countries. In practice this means and security-related expenditures and Afghanistan 3,345.19 34.86 16.63 16.27 10.68 21.56 that any review of ODA eligibility of activities help to ensure uniform, consistent Pakistan 288.89 31.12 17.05 14.46 16.87 20.50 in the peace and security sector must use statistical reporting. They have approved Sri Lanka 229.96 29.63 10.26 11.46 11.46 37.19 this objective as a central reference point. the ODA-eligibility of development-related Nepal 186.72 21.10 25.46 10.54 4.55 38.35 The DAC Secretariat has confirmed that training for military staff in limited topics. “the long-standing rules which govern According to the DAC these changes are India 17.12 18.45 28.16 24.61 - 28.78 the ODA-eligibility of peace and security- “minor” and should not have a significant Middle East related expenditures remain intact.” Aside impact on ODA volumes as peace and Syria 618.96 26.07 37.75 16.76 0.16 19.26 from upholding ODA’s stated principle of security-related expenditures represent Iraq 406.66 34.27 15.64 18.45 1.85 29.78 promoting economic development and only 2% of bilateral ODA (DAC, Mar. 2016) welfare of developing countries, DAC (See Box2). West Bank & Gaza 343.58 14.42 11.13 10.70 2.16 61.69 members have also reaffirmed that: Lebanon 288.26 30.06 24.96 5.89 1.08 38.01 Despite the assurances and safeguards Yemen 53.93 20.79 29.39 15.15 1.23 33.44 1. Financing of military equipment or in the new DAC guidelines, there are services is generally excluded from legitimate concerns that the supposed
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Box2. Summary of changes in DAC reporting rules on peace and security initiatives
Limited engagement with partner country military in the form of training
An adjustment has been made to allow limited and specific training of partner country military employees. This will only be permitted: (1) under civilian oversight, (2) with a clear development purpose for the benefit of civilians and (3) to help address abuses, prevent violence against women, improve humanitarian response and promote good governance.
Using the military as a last resort to deliver development services and humanitarian aid
The new text clarifies that in some circumstances support for the additional costs (e.g. beyond running costs such as salaries, maintenance, etc.) where military are used as delivery agents of development services or humanitarian aid are ODA-eligible. But this is limited by the requirement that it can only be accepted by last resort, and reporting countries and institutions can be asked by the Secretariat to justify this was actually the case.
Preventing violent extremism
The new directives clarify the rules by spelling out ODA-eligible activities (education and research, community-based efforts, rule of law, capacity of judicial systems, etc.) to prevent violent extremism. They state that such activities should be led by partner countries and that their primary purpose must be developmental: activities targeting perceived threats to the donor country, as much as to recipient countries, rather than focusing on the economic and social development of the partner country are excluded. This clarification is made in the spirit of the recommendations in the 2016 UN Secretary General’s Plan of Action to prevent violent extremism.
Added safeguards:(1) Humanitarian principles are now integrated as a key referent point (humanity, neutrality, impartiality, and independence); (2) The Secretariat has the possibility to question the use of the military as a last resort; and (3) The Secretariat can request justification for exception- ally using ODA to finance development of humanitarian activities that are delivered through the military of the partner country.
Source: DAC Secretariat (March 2016). “The scope and nature of 2016 HLM decisions regarding the ODA-eligibility of peace and security-related expenditures” 108 Chapter 2: ODA , Security, and Migration
modernization of ODA will pave the way based on deep historical, religious or for donors’ security agenda to take over cultural grounds enjoy massive support the development purpose of ODA and from local communities. However, the interests of the people of recipient they can be branded as terrorists or countries are further marginalized. Before extremists by established governments the reforms, DAC guidelines categorically or political powers. Conversely, political stated that “activities combating terrorism establishments that are actually are not reportable as ODA, as they generally responsible for human rights abuses and target perceived threats to donors, as poverty are seldom branded as terrorists. much as to recipient countries, rather Instead they are only labelled as such only than focusing on the economic and social when their foreign policy contradicts that development of the recipient. ”However, of the donors. For aid to be effective it the inclusion of activities related to the should truly focus on the welfare of the prevention of “violent extremism” among people and never be used as a weapon ODA-eligible activities has opened the by those in power and/or their foreign door for reporting activities that could be patrons. seen as clearly supporting donor security interests, even with the safeguards and As Saferworld, has noted, “attempts to restriction listed above and with the get aid agencies to take sides are often DAC’s reconfirmation that ODA’s primary dangerous and counter-productive, because purpose should be developmental. they can lead to aid that ignores important conflict drivers, reinforces bad governance, A fundamental question is whether it is gets diverted, looks biased, alienates the necessary to frame these activities inside local population, and exposes aid agencies the context of preventing violent extremism to attack.” (Saferworld, Feb. 2016) if the primary purpose is developmental. OECD defines violent extremism as Under the new DAC guidelines, donors “promoting views which foment and will be able to report an expanded incite violence in furtherance of particular array of military expenditures in the beliefs, and foster[ing] hatred which might name of development assistance and lead to inter-community violence”. There humanitarian efforts. While previous are concerns about potentially using ODA guidelines allowed for the additional costs resources for specific, politically-driven entailed in the use of military personnel activities that go against the established to deliver humanitarian or development basic principle of aid working impartially services to be counted as ODA, the to advance the well-being and rights of updated guidelines also permit the use people in the face of violence and abuse by of military equipment to deliver these all conflict actors. (Saferworld, Feb. 2016) services. In situations of intense conflict, military personnel and equipment are Another question focuses on who defines primarily deployed for combat purposes, violent extremism and who identifies the not for the delivery of development or extremists. In some cases, rebel groups humanitarian assistance. Because of this, that are waging civil wars against foreign it is inappropriate for the costs of using intervention, for national independence these military assets to be allocated as or autonomy from central power ODA, even when it is to deliver aid. As
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well, in many cases, civilian distrust of the transnational crimes” in the casebook, military is so pervasive that their use and there is a risk that ODA could be used for presence severely undermines effective intelligence work that is more aligned to development or humanitarian work. donor national security priorities than to a development or poverty-reduction agenda Some critics have pointed out that the ODA (Dalrymple, Nov. 2017). Casebook on Conflict, Peace and Security has failed to provide practical guidelines Even more alarming is the fact that the on which activities can be counted as aid casebook has failed to spell out concrete and has also fallen short of providing parameters to safeguard against abuse clarification on the rules. This lack of clarity and misuse of ODA for supposedly opens the reporting of ODA to misuse development or civilian purposes within and abuse by donors and recipients. For the context of a military or security agenda. instance, some activities deemed eligible If anything, the casebook actually appears as ODA involve “routine police functions” to legitimize such possible abuse and and the use of “non-lethal equipment and misuse. There are many cases cited in training. ”These activities can be broadly the Casebook where assistance from DAC defined and in the context of public safety members to directly support the police could inflict physical harm to the public in and military establishments of recipient fragile and conflict situations. To illustrate, countries are deemed ODA-eligible or at “routine police functions” may include least partially ODA-eligible. Often, ODA coercive law enforcement measures while eligibility is justified by referencing activities “non- or less lethal training equipment that supposedly benefit civilian participants and training” could cover weapons such and/or civilian aspects of an otherwise as tear gas, pepper spray and sleep gas. military or counter-terrorism initiative. While their use may not be deadly, they still inflict serious harm on civilians. One example of this approach is the This contradicts basic ODA principles NATO-led Resolute Support Mission (Dalrymple, Nov. 2017). (RSM), a military operation that provides training, advice, and assistance to Afghan Another loophole in the guidelines security forces and institutions. Launched that can be abused and that is not in 2015 with 13,000 troops from NATO clarified in the casebook relates to members and partner countries, the RSM intelligence activities that are considered maintains a presence at Afghan airports, “development focused” and thus can be which are primarily meant to support counted as ODA. While the guidelines military operations but supposedly are say that intelligence gathering on political also being used to stabilize and modernize activities is not ODA-eligible, the collection the country’s civilian aviation sector. Part of data for development purposes, or of the mission is the training of Afghans preventative or investigatory activities by law enforcement agencies in the context on operating airfields and managing of routine policing to uphold the rule of airspace. According to the DAC, the law, including countering transnational training in these areas will help sustain organized crime, is eligible as ODA. In the civil aviation sector once NATO’s the absence of a definition of key terms military presence has ended. DAC donors such as “investigatory” and “countering such as Greece contribute to the RSM by
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deploying maintenance advisors from of law which is included in ODA” and that their air force. This support is deemed while “the project also includes a special cell ODA-eligible because it is theoretically for block for terrorists”, it is supposedly “not a civilian purposes and will contribute to the primary objective.” sustainment of the civil aviation sector in Afghanistan. The provision of basic social services such as medical, health services and water Security sector reform programs of services, is also being used to advance recipient countries are being implemented donors’ security agendas. Several cases supposedly to improve the capacity and deemed ODA-eligible or partially ODA- effectiveness of military and police forces eligible cited in the revised DAC Casebook in carrying out their mandate, including illustrate such linkages. anti-terrorism and counter-insurgency campaigns, ones that are often directed One example is the US$2.25-million Ukraine by western powers. These activities are medical rehabilitation fund that several supported with ODA resources without members of the NATO are supporting. a clear development purpose or direct, The fund provides medical rehabilitation evidence of impact on poverty reduction. and long-term medical services to active and discharged Ukrainian servicemen and A case cited in the Casebook is the US$36- women as well as civilian personnel from million security sector reform in Guatemala the defence and security sector. According that was bankrolled and implemented by to the DAC the initiative is considered the USAID. Among the program’s activities partially ODA-eligible because the medical is support for the passage of a new Organic services are accessible to civilians. Law for the Police and the implementation of However, in practice, these civilians are a career development program for officers not ordinary civilians but actually work in and officials of the National Civilian Police. the defence and security sectors. The casebook justifies its ODA-eligibility as assistance that involves non-lethal Another example is Hungary’s contribution equipment and training and is designed of US$350,000 to support the Afghan to address criminal activity and promote National Defence and Security Forces public safety. In Somalia, a US$3.8-million (ANDSF). Part of this contribution is being Denmark-funded project and implemented used to supply the uniforms for the by the UN Office for Drugs and Crime members of the Afghan National Army (UNODC) is considered ODA eligible even (ANA), which is not reportable as ODA. as its activities include the “construction However, the funding of the outfitting of of Mogadishu Prison and Court Complex. the Shorab Regional Hospital, which is ”The prison includes a special cell block to primarily a medical facility for the ANA, deal with “high risk offenders” specifically could be ODA-eligible. In Mali, where the country’s declared terrorist group the USAID’s US$1-million ODA-eligible Al Shabaab. Other activities involve the transition support program to “prevent continued management of prisons in future radicalization and recruitment by Somaliland and Puntland. According to violent extremists” in targeted communities the casebook the project is ODA-eligible, involves the provision of potable water and because it “relates to support to the rule other urgent needs “in order to gain entry into the community and build trust.”
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“Proactive Contribution to Peace”) Aggravating conflict flash whereby Japan has linked its peace and points in Asia Pacific security to regional and global stability and security(Parameswaran, Nov. 2016). The redefinition of development assistance to include more peace and security In Japan’s previous ODA charters, military initiatives at both the level of the DAC and of or defence-related activities were kept individual major donors has the potential to outside the aid zone. With the revision, contribute to the aggravation of key conflict new possibilities are emerging that its flash points, thus spurring instability. aid budget will be mobilized for non- combat military purposes in the name of A case in point is the South China Sea maintaining global peace (Jain, Jul. 2016). where China and several Southeast Asian For Japan, this could include the promotion countries are involved in a longstanding of the rule of law and the strengthening of maritime territorial dispute. Top ODA maritime security through cooperation, donors, most notably the US and Japan, support and assistance in its so-called have been drawn in as they see China’s “Vientiane Vision,” Japan’s first defence rise and its assertion of sovereignty over initiative with members of the Association practically all of the South China Sea as a of Southeast Asian Nations (ASEAN). direct threat to their own national interests. Japan also has its own maritime territorial In its 2016 White Paper on Development dispute with China in the East China Sea. Cooperation, Japan reported that “to establish and promote the ‘rule of law’ at As part of their strategy to counter China, sea, Japan would be utilizing tools such as Japan and the US have revved up their ODA to seamlessly support improvement defence cooperation with key Southeast of the law enforcement capacity of Asian countries. An integral component maritime security agencies, etc. in ASEAN of this cooperation is the strengthening of countries through the provision of patrol their allies’ maritime security capabilities vessels, technical cooperation, human to defend their territorial integrity and resources development, etc.” (MOFA promote freedom of navigation. It is in this Japan, Sep. 2017) The strategic orientation area where some Japanese and American of Japanese ODA to promote maritime development aid resources are being used rule of law, could benefit countries such or at least potentially could be mobilized. as Vietnam and the Philippines which are both embroiled in territorial disputes with Even before the DAC expanded the China over various areas of the South definition of ODA, Japan has started its own China Sea (See Box 3). aid reform program through the revision of its ODA Charter in 2015. The revision is Under the revised reporting guidelines of seen as part of Japan’s efforts to confront the DAC, support for recipient country’s what its political leadership deems as maritime security and coast guard can be a “security environment (surrounding counted as ODA. In the Casebook, DAC Japan) becoming more severe.” Observers cited examples of ODA-eligible activities have noted that the revision has allowed supported by Portugal’s Ministry of Japan to use development aid to support Defense to develop the functional, logistic its first national security strategy (called and administrative aspects of São Tomé’s
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Box 3. Japan ODA and promoting “rule of law in the South China Sea”
In Vietnam, Japan completed the provision of six used vessels in 2015 and is currently advancing preparations for the additional provision of used vessels and the provision of newly-built patrol vessels. Japan and Vietnam also signed a new US$350-million aid package in June 2017 to upgrade Vietnamese coast guard vessels and their patrol capability.
Meanwhile, in the Philippines, Japan provided 10 newly-built patrol vessels in 2013 through financial cooperation using ODA loans. At the Japan- Philippines Summit Meeting in October 2016, financial cooperation using ODA loans was signed for the provision of two large patrol vessels.
Japan is providing not only the vessels but also the relevant equipment related to maritime security to these two countries. In addition, it is proceeding with human resources development through training, the dispatch of experts, etc. for coastal countries near the sea lanes such as Indonesia, and Malaysia.
Sources: MOFA, Sep. 2017; Associated Press, Jun. 2017
Coast Guard and Maritime Authority in also in peace building and the fostering order to reinforce maritime security in of long-term stability. In worst cases, the the country. Amongst other activities, the so-called “smart power” can fuel greater renovation and maintenance of maritime conflict, undermine people’s rights, and signaling equipment is counted as ODA. set back development goals.
Another example cited in the Casebook The well-documented experiences of donor is the US$2.23-million maritime security interventions in massive counterinsurgency program (2015-2018) in the Gulf of campaigns such as Afghanistan and Iraq Guinea that is supported by Denmark. It as well as smaller operations in countries is being implemented by the EU and the like the Philippines attest to these International Maritime Organization (IMO). consequences. From 2003 to 2016, total The program provides maritime security ODA disbursements to Afghanistan and training, the facilitation of information Iraq from all donors stood at US$136.13 sharing, and capacity development to billion. About US$121.03 billion of this ensure the implementation of international came from bilateral DAC donors, of which conventions among states in the region. half was US aid. That represents almost two and a half times the size of the total Aid and Counter-Insurgency DAC ODA disbursements during the same period to the world’s 10 poorest countries. The use of development assistance in the It is nearly five times the amount of US ODA context of a military or security agenda is provided to these same countries, which not effective aid. This is true not only for are less strategic in terms of US geopolitical the promotion of lasting development but interests. (See Chart 7)
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Despite this huge amount of funding, have been implemented with the direct Afghanistan and Iraq continue to remain participation of donors’ military forces (see unstable. As a commentary published by Box 4 below). This has not been limited to the Center for Strategic and International contesting terrorist groups, but has also Studies (CSIS) noted: “Military and civilian included legitimate rebel forces such as veterans of the past 15 years of engagement the communists and Moro separatists. with Afghanistan and Iraq associate the term [‘stabilization’] with frustration and As recent events in the country bitterness, dashed hopes, and unmet demonstrate, these campaigns have expectations” (Dalton and Shah, Jun. largely failed. One example of this is the 2017). One assessment of the campaign attempt of an alleged ISIS local network to “win hearts and minds” in Afghanistan to build a caliphate in a Mindanao city and concluded: “There was little concrete the subsequent Martial Law imposition evidence from this or other studies that aid in the entire southern Philippines. A vast led to stability in Afghanistan” (Fishtein and portion of the country, especially in the Wilder, 2011). Afghanistan, already one of rural areas, remains restive with grinding the world’s poorest countries even before poverty. In a 2017 submission to the UN the war, saw its poverty and joblessness High Commissioner on Human Rights worsen. According to the World Bank (May the local human rights group Karapatan, 2017), “absolute poverty is increasing, reported that “peace and development” with about 39% of Afghans now poor”. operations of the Philippine armed forces The official unemployment rate is now had resulted in massive human rights at a staggering 22.6 percent. In 2007, abuses such as military occupation of poverty in Afghanistan was 36.3% while schools and forcible evacuations affecting unemployment in 2001 was 4.5 percent about 103,337 civilian victims. Such alleged (CSRS, May 2017). The latest reports atrocities fuel the continuing resentment of estimate that more than 31,400 civilians local communities against the government have already been killed in the Afghanistan and its forces, making lasting peace even war with “no clear end in sight” (Westcott, more elusive while the displacements due Nov. 2017). In Iraq, the estimated number to military operations aggravate poverty. is 180,000 civilian deaths (McKay, Jun. 2017). Challenging aid militarization There are many examples of recipient and militarism countries where counter-insurgency campaigns have been modelled after Various researchers and scholars have tried or copied from post 9/11 US Army to explain why the use of development aid counterinsurgency manuals whereby in conflict situations has failed. Some point “development work” is an integral part to ineffective aid delivery; others cite the of national internal security plans. In inadequate addressing of the main drivers these situations, reports of human of conflict. They describe how corruption rights violations allegedly committed by by local bureaucrats or strong men in military forces abound. In the Philippines, the provision of aid services can alienate for instance, many foreign funded the population and thus undermine development projects have been tied to counterinsurgency’s campaigns to win military campaigns. In some cases they the hearts and minds of the people. Thus,
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instead of socioeconomic projects, these makers and the international donor experts would maintain that development community seem oblivious to the lessons aid should shift its focus to governance of the past two decades. Instead they and the rule of law. In addition, they seem to be moving – in the context of maintain that better coordination between “strategic power competition” reminiscent the international donor community and of the Cold War era – towards even more national governments in designing and systematically integrating development implementing a shared strategy and a aid in their pursuit of security/military and common reform agenda in promoting geopolitical interests. better governance should be put into place (Fishtein and Wilder, 2011). The thinking of aid as a weapon system and the policy direction that favors smart power While these observations provide useful must be continually challenged at every insights on practical issues in aid delivery level – from local projects and programs to in situations of conflict, they fall short national and international guidelines and in addressing the more fundamental polices, including that of individual donors contradictions arising from the use of and at the level of the DAC. development aid in pursuing a security or military agenda. Pointing out that “there The basic and long-proven principles of is considerable evidence” on the positive effective aid and development cooperation benefits of development aid in Afghanistan must be upheld and operationalized. This (e.g., improvements in mortality rates, includes the need to – school enrollment rates, infrastructure, etc.), Fishtein and Wilder (2011) reflected that: • Promote ownership of development “One consequence of viewing aid resources by communities and ensure the first and foremost as a stabilization tool alignment of aid intervention under or ‘a weapons system’ is that these major national or local development plans development gains have often been or programs that respond to the under-appreciated because they did not specific needs of these communities. translate into tangible security gains. US Among other approaches, this can be development assistance in Afghanistan achieved by delinking development aid has been justified on the grounds that it from the security or military objectives is promoting COIN [counterinsurgency] of the donors and/or national or stabilization objectives rather than governments. Local ownership is development objectives”. undermined and people are alienated when development work is carried In conflict situations there are out with the intention, for instance, of questions whether there are beneficial gathering intelligence from or isolating socioeconomic impacts from aid rather perceived enemies of the state within than just concrete security/military gains. the target communities. Observations such as the ones above on Afghanistan validate the legitimacy of • Establish reliable mechanisms that concerns long raised by development hold donors and recipient governments workers, aid effectiveness advocates and accountable for the impact on civil society organizations on militarizing poverty reduction of their aid projects development aid. Unfortunately, policy and programs through verifiable
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development outcomes. Whether in • Specific parameters to protect human the context of counterinsurgency or rights must be established. Such power competition, such mechanisms safeguards are crucial as the new can help challenge the practice of DAC guidelines allow activities such as allocating aid resources for military support for “routine police functions”, and security objectives without due the use of “non-lethal equipment regard to their long-term development and training” by state forces, and impact or with regard to actual intelligence gathering for development development needs. purposes to be classified as ODA. • Encourage genuine democratic There must also be a clear set of participation in the development guidelines that will help ensure donor and peace building process, by local accountability when cases of human communities as well as of independent rights violations involving supported development actors from civil society. state forces arise. This is difficult to achieve when the • As an additional safeguard, guidelines overarching goal of development and on defining ODA eligibility must peace building is security or military include concrete and specific ways (e.g., defeating the state’s declared on how certain activities contribute to enemy) instead of addressing the anticipated development outcomes. drivers and root causes of conflict • DAC should implement a reliable and (e.g., lack of economic opportunities, credible monitoring system that will marginalization and displacement, foreign intervention, etc.) determine whether these safeguards Communities and development actors are executed and whether the working independently of the military, guidelines are followed on the ground, for instance, can be easily distrusted accompanied with enforceable or targeted as state enemies. accountability mechanisms. • Conflict and insecurity as currently In relation to the revised guidelines of framed by the donor community is the DAC, some of the specific issues that oversimplified. The primary focus is should be addressed are: on the presence of “extremists” (whom the donors define) or on competition • As the scope of ODA is expanded to for spheres of influence and power. include various activities to counter These preoccupations often pay lip violent extremism, clear and strict rules service, or entirely ignore, deeper must be set out to help ensure that social, economic, political and cultural ODA will not be used simply to promote contexts that give rise to conflict and the security interests of donors at the insecurity. An effective challenge to expense of development and poverty the rising tide of militarism and the reduction. While sample activities are renewed push to further militarize cited in the Casebook, there are no development aid requires aid reforms concrete standards at the DAC on how pursued inside a framework of peace such activities will be defined as having advocacy and social justice, and of the development or civilian purpose and people’s rights to development and thus be eligible as ODA. sovereignty.
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Center for Global Development/CGD (22 March Development Initiatives (September 2017). “ODA 2017). “Foreign assistance agency brief: modernization: Background paper” United States Department of State”, https:// www.cgdev.org/publication/foreign- Donati, Jessica and Lubold, Gordon (19 January assistance-agency-brief-united-states- 2018). “US military escalates war efforts department-state in the Philippines”, The Wall Street Journal, https://www.wsj.com/articles/u- Center for Strategic and Regional Studies/CSRS s-military-escalates-war-efforts-in-the- (13 May 2017). “Poverty and unemployment philippines-1516357801 in Afghanistan: The two main challenges”, http://csrskabul.com/en/blog/poverty- Fishtein, Paul and Wilder, Andrew (2011). “Winning unemployment-afghanistan-two-main- hearts and minds? Examining the relationship challenges/ between aid and security in Afghanistan”, Fishtein International Center, Tufts University, Congressional Budget Justification, Foreign Gerald J. and Dorothy R. Friedman School of Assistance - Summary Tables, Fiscal Years Nutrition Science and Policy 2012 to 2017, US State Department Ferreira, Francisco et. al (16 October 2017). Connor, Neil (25 April 2017). “US begins moving “The 2017 global poverty update from the THAAD anti-missile defence system to South World Bank”, Let’s talk development, The Korea site as military chiefs brief entire World Bank, http://blogs.worldbank.org/ Senate on escalating tensions with North”, developmenttalk/2017-global-poverty- The Telegraph, https://www.telegraph. update-world-bank co.uk/news/2017/04/25/us-military- reportedly-begins-moving-thaad-missile- Fleurant, Audeet. al. (April 2017). “Trends in world defence-south/ military expenditure, 2016”, Stockholm International Peace Research Institute DAC (20 October 2017). “ODA casebook on (SIPRI) Fact Sheet conflict, peace and security activities” Jain, Purnendra (11 July 2016). “New thinking DAC (31 October 2017). “A new DAC: Innovations redefines Japan’s foreign aid policy,” Asian for the 2030 Agenda”. DAC High Level Currents, Asian Studies Association of Communiqué Australia, http://asaa.asn.au/new-thinking- redefines-japans-foreign-aid-policy/ DAC Secretariat (March 2016). “The scope and nature of 2016 HLM decisions regarding the Johnston, Patrick B., Oak, Gillian S., and Robinson, ODA-eligibility of peace and security-related Linda (2016). “US special operations forces in expenditures” the Philippines, 2001-2014”, RAND Corporation
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Rights for the 27th Session of the Universal article/us-usa-military-china-russia/u-s- Periodic Review in the United Nations Human military-puts-great-power-competition-at- Rights Council in May 2017 heart-of-strategy-mattis-idUSKBN1F81TR
Kelly, Tim and Kubo, Nobuhiro (10 August RT (23 January 2018). “India & Japan combine 2017). “Exclusive: Japan seeks Southeast defense forces in AI, robotics to curb Chinese Asia clout with chopper parts for ambitions”, https://www.rt.com/news/416746- Philippines military – sources”, Reuters, india-japan-ai-robotics-defense/ https://www.reuters.com/article/us- japan-defence-philippines-exclusive/ Saferworld (25 February 2016). “Redefining ODA: exclusive-japan-seeks-southeast-asia-clout- What does it mean for peace?” with-chopper-parts-for-philippines-military- sources-idUSKBN1AQ0W3 Stebbins, Sam (4 December 2017). “25 poorest countries”, 24/7 Wall St., https://www.msn. Louis Berger (undated). “Growth with Equity com/en-us/money/markets/25-poorest- in Mindanao | Philippines”, http://www. countries-in-the-world/ss-BBFYCst#image=1 louisberger.com/our-work/project/growth- equity-mindanao-philippines The Associated Press (6 June 2017). “Japan, Vietnam to bolster maritime security McKay, Hollie (18 June 2017). “More than 180,000 cooperation,” ABC News, http://abcnews. Iraqi civilians killed since 2003, report”, go.com/amp/International/wireStory/ Fox News, http://www.foxnews.com/ japan-vietnam-bolster-maritime-security- world/2017/06/18/more-than-180000-iraqi- cooperation-47860760 civilians-killed-since-2003-report.html The Washington Post (16 February 2018). Ministry of Foreign Affairs (MOFA) of Japan “What Trump proposed cutting in his 2019 (5 September 2017). “White paper on budget”, https://www.washingtonpost. development cooperation: Japan’s com/graphics/2018/politics/trump-budget- international cooperation”, Chapter 2: 2019/?utm_term=.41d5d14079fe Specific initiatives of Japan’s development cooperation, http://www.mofa.go.jp/ Tomlinson, Brian (2016). “Global aid trends files/000286321.pdf 2016. Financing Agenda 2030: Where are the resources?”, The Reality of Aid 2016: An Parameswaran, Prashanth (26 November 2016). independent review of poverty reduction “Japan reveals first ASEAN defense initiative and development assistance with ‘Vientiane Vision’”, The Diplomat, https://thediplomat.com/2016/11/japan- US Department of Defense (2018). “Summary of reveals-first-asean-defense-initiative-with- the 2018 National Defense Strategy of the vientiane-vision/ United States of America: Sharpening the American military’s competitive edge” Philippine Daily Inquirer/PDI (13 September 2016). “In the know: Joint Special Operations Wall Street Journal/WSJ (9 February 2018). “US Task Force Philippines”, http://newsinfo. boosting Asia forces with special marine inquirer.net/814848/in-the-know-joint- units”, https://www.wsj.com/articles/u-s- special-operations-task-force-philippines considers-boosting-asia-forces-with-special- marine-units-1518195306 Reuters (17 July 2015). “UN conference agrees on plan to finance development goals”, Westcott, Ben (1 November 2017). “Afghanistan: https://www.reuters.com/article/us-africa- 16 years, thousands dead and no clear development/u-n-conference-agrees- end in sight”, CNN, https://edition.cnn. on-plan-to-finance-development-goals- com/2017/08/21/asia/afghanistan-war- idUSKCN0PQ21D20150716 explainer/index.html
Reuters (4 June 2016). “Japan pledges support for World Bank (8 May 2017). “Afghanistan poverty Southeast Asia security to counter coercive status update – Progress at risk”, http://www. China”, https://www.reuters.com/article/us- worldbank.org/en/country/afghanistan/ asia-security-japan/japan-pledges-support- publication/afghanistan-poverty-status- for-southeast-asia-security-to-counter- update-report-2017 coercive-china-idUSKCN0YQ02N ENDNOTES Reuters (19 January 2018). “U.S. military puts 'great power competition' at heart of 1 See https://www.cas.go.jp/jp/siryou/ strategy: Mattis”, https://www.reuters.com/ 131217anzenhoshou/nss-e.pdf
118 Aiding Militarization: Role of South Korea’s ODA in “Peacekeeping” Activities in Asia
Youngah Lee, People’s Solidarity for Participatory Democracy – South Korea
In February 2016, the OECD Development There is a growing concern that ODA Assistance Committee (DAC) agreed to update expenditures for military and security will and modernize the Official Development increase and that the role of military and Assistance (ODA) reporting directives on police in ODA execution will expand. peace and security expenditures. Accordingly, peace and security expenses for military Dispatch for Korean Troops for and police training to ensure public safety in partner countries, including the supply of the Afghan PRT military equipment and activities preventing South Korea dispatched the ROK PRT force, violent extremism, are now included as part Ashena Unit to Charikar, Parwan, Afghanistan of ODA. in July 2010. The Korean government sent around 2,500 PRT soldiers in total for about Civil society organizations (CSOs) are deeply concerned as the aid mandate is, four years until the end of June 2014 when once again, being shifted to the field of the final withdrawal was made. The amount peace and security, thereby potentially of ODA put into the region was very large. promoting the geopolitical interests of the Since 2009 when the PRT was not yet started, donor countries, while risking the already Afghanistan already became the country small amount of ODA intended for poverty that received the biggest part of the Korean eradication and social development of government’s ODA budget. Then, what was developing countries. the effect of this development aid? A recent government review, when Korean troops South Korea is also not exempt from criticism were removed last year, praised the program of its use of its ODA for militarization and whereby Korea shared its development securitization purposes. The Republic of experiences directly with Afghan people Korea (RoK) Armed Forces have been active through public-private partnerships. in dispatching troops for reconstruction and emergency relief. South Korea has allocated However, it is very unlikely that the ROK nearly half of Korea grants to the Provincial PRT Force resolved issues with the PRT Reconstruction Teams (PRT) in Afghanistan model, commonly faced by the US and for a considerable period of time,1 and the other NATO members. The Afghan PRT government has recently sent troops for was designed not as a direct occupation disaster relief in addition to the inter-ministerial policy, but as one to win the support of the team for overseas emergency relief. local population. The initiative was largely in response to international politics, As the field of peace and security has and proper development strategies or increasingly becoming part of ODA plans were not prepared in advance. mandates, it is likely that the militarization This fact is also seen in the country of South Korea's ODA will also intensify. assessment report presented by the Korea
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International Cooperation Agency (KOICA), Dispatch of Disaster Relief: an organization in charge of the national Araw Contingent in the grant aid. Philippines “Even if the Korean government sent The dispatch of troops for emergency relief a research group and underwent and disaster response has been gradually procedures of specifying the budget increasing. The first overseas dispatching of input size and support areas and strategies in making annual plans, RoK Armed Forces for disaster recovery and when deciding to implement the humanitarian aid occurred in November Afghan reconstruction support 2013. The Araw Contingent was sent to project, it is hard to make a goal-based the Philippines, following the deadliest assessment as the performance Philippine typhoon in history. Unfortunately, index was incomplete and the county the activities of the Araw Contingent in program was not set.”2 the Philippines raised concerns about the appropriateness of this deployment for the The ROK PRT, similar to other donor PRTs, purpose of emergency relief. was also repeatedly attacked by armed forces. Concerns over the PRT personal The Araw Contingent’s main tasks safety were always present. It is widely included: (1) restoring public facilities known that active participation of local and cleaning up disaster stricken areas, populations in development aid projects (2) providing free medical services and implemented by military forces can activities to prevent epidemics, (3) running hardly be expected, especially when the vocational schools and Korean language PRTs become legitimate military targets. programs, (4) providing feeding programs Sustainability and effectiveness of PRT and (5) screening movies. Some activities development projects is very limited. A were implemented through NGOs on the domestic researcher who had personally request of the Araw Contingent. In addition to these tasks, the troop also performed visited a Korea-Afghanistan vocational activities that had nothing to do with school casted doubt on why they decided reconstruction and relief. These included to build such a huge school where threats the construction of the Araw Memorial of war and attacks are still present. This Park honoring the dispatch of the RoK review observed Armed Forces and the building of a statue “Even as trainees could get a commemorating the joint operation. considerable sum of training allowance and go through a The appropriateness of Korean language vocational course in luxurious training in the context of an emergency facilities, many of them failed to should also be questioned. Although the complete one-year training period or Philippines is a country with a high demand dropped out and gave up. And even for learning the Korean language, it is hard those that were invited to Korea and to believe that the troop's running Korean received training often did something classes was a priority immediately after else or gave up teaching in the school the disaster. Korean classes, vocational after they came back to Kabul.”3 training and as they were out of the scope
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of emergency relief and were irrelevant Forces. The US military has wanted to to the restoration and recovery work, and station rotating forces in the Philippines fail to meet the criteria for development since 2013. In the meantime, the country effectiveness. suffered from damages wrought by typhoon Haiyan. South Korea sent troops Prior to sending the Araw Contingent, the to the Philippines along with the United South Korean government had dispatched States, Japan and Australia. Later, the US the Korea Disaster Relief Team (KDRT) to government evaluated that its military's the Philippines. This was consistent with aid for typhoon relief was a great help in its Overseas Emergency Relief Act, which enhancing military cooperation between mandates RoK to organize an overseas the United States and the Philippines.5 emergency relief team in specialized areas, conduct rescues and emergency medical It is unavoidable that political, diplomatic, service, health care, and international and military factors for both the country development. Under the Act, RoK Armed sending the troops and the country Forces can also respond to calls for urgent accepting their presence are part of the needs such as military transport aircraft equation. The dispatch of troops to a non- or carriers and the rapid transport of conflict region should be done with careful personnel or supplies for emergency consideration of intended and unintended rescue and relief, upon the request of consequences. Without due consideration the Public and Private Joint Council for based on solid principles, such deployments Overseas Emergency Relief. Despite this, can result in arbitrary and unforeseen the Ministry of National Defense decided ripple effects in and out of the country. For to send troops separate from the Korea these reasons, it is difficult not to be critical of including the mobilization of military Disaster Relief Team. This is against the support for humanitarian activities in the Guidelines on the Use of Foreign Military scope of ODA. and Civil Defense Assets In Disaster Relief (Oslo Guidelines), which states that "military and civil defense assets Police Training Program: should be seen as a tool complementing "K-Police Wave" existing relief mechanisms" and "should be employed as a last resort only in the As the scope of South Korea’s ODA absence of any other comparable civilian expanded last year, financing for routine alternative."4 civil policing functions - the promotion of public safety and preventing and Some evaluations have claimed that addressing criminal activities - police diplomatic and military considerations training became part of ODA. Beginning in of the South Korean government had 2014, South Korea has been introducing an influence on the decision of dispatch more and more programs through troops. When the Philippines faced ODA that are related to reforming the growing tensions with China relating to police system and enhancing officers' territorial sovereignty over Scarborough capabilities in partner countries (Figure Shoal in South China Sea (Huangyan 1). ODA statistics for the past decade Dao in Chinese), it resumed joint military show that the amount spent in the public exercises with the United States Armed safety sector rose fivefold –US$3 million
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Figure 1 ODA Statistics on the Management and Improvement of the public safety system (2006-2015)
Source: South Korea’s ODA Statistics (2016), ODA Korea in 2006 to US$16 million in 2015. The national security systems is considered Korea International Cooperation Agency to be an important part of development (KOICA) and the Korean National Police cooperation and the use of ODA. But Agency (KNPA) signed a memorandum of whether training provided through understanding for grant aid in the field ‘K-Police Wave’ satisfies human rights of public safety in developing countries standards remains a question for the in October 2014 and have expanded international community. these projects ever since. KNPA has implemented KOICA Fellowship Programs According to Korean media reports, from 2005 to the present, and have shared training provided by the South Korean the knowledge and know-how on public police focuses on public safety techniques 6 safety system with developing nations, by to repress protesters. The demands are providing equipment to police officers and high for water cannon trucks and a human sending technical experts. The number of barricade for female police officers. In the fellowship programs carried out by 2013-2014 South Korean firms sold US$60 KOICA in cooperation with the KNPA for million of gear to Oman, including 57 water the past six years (2010-2015) has been cannon trucks and riot shields. They also on a rapid increase, reaching 54 programs exported US$16 million of water cannon as of 2015. They call this police-training trucks to Indonesia in 2010. program “K-Police Wave”. Countries involved in the Police While some Korean partner countries, Training Program: "K-Police such as Oman, are not eligible for ODA, in general, from a perspective of improving One fear is that undemocratic leaders governance, support for the reform of could use South Korea’s protest-
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Figure 2 Countries involved in the Police Training have been in a gradual regression in South Program: “K-Police Wave,” 2015 Korea for the past few years. He expressed concern over police tactics used against Country Areas of Export demonstrators during rallies, such as water Automatic vehicle number Indonesia cannons and bus barricades. Of particular recognition note is the case of Mr. Baek Nam-gi, a farmer 112 Report Center, Forensic activist, who was left in a comatose state Laos Science Investigation & Crime after being pummeled by water cannons at Prevention a demonstration in Seoul on 14 November Protest-management skills, Cambodia 2015. He passed away after 317 days in a Cyber Crime Investigation coma. With these cases in mind, it is hard Guatemala Cyber Crime Investigation to ensure that the police of the partner Mexico Protest-management skills countries, which have been trained in public safety and protest-management skills shared Kenya Protest-management skills under the name of ‘K-Police Wave’, would not violate the rights of their fellow citizens. Source: Compiled by the Author management skills trainings and Korean- Providing the equipment used to made equipment to quash dissent and suppress demonstrations is not the only quell democratization rallies, as has been issue. With funding of US$6.6 million, increasingly true in South Korea itself. When KOICA has also implemented ‘The Project MainaKiai, UN Special Rapporteur on the for Enhancing Criminal Investigation rights to freedom of peaceful assembly and Capability of the Philippines National of association, visited South Korea in January Police (2016-2018)’. The scope of 2016, he said that the rights to freedom this project includes providing police of peaceful assembly and of association equipment worth US$4 million (e.g. patrol
Figure 3 Export Details of Police Equipment
Amounts Year Company Product Exported To (in USD) 2005 Jino Corporation 24 water cannon trucks Bangladesh 5 million 2010 Daeji P&I 70 water cannon trucks Indonesia 16 million 2012 - 1 water cannon truck Thailand 0.88 million Police communication 2012 - Indonesia 7 million network build-up 2013 Daewoo International 800 patrol cars Peru 30 million Police communication 2014 Daewoo International Indonesia 72 million network build-up CCTV and police 2015 - Papua New Guinea 3.5 million communication network 2015-2016 Kyungbong CCTV system build-up Honduras 3.5 million CCTV for vehicle number 2015-2016 Kyungbong El Salvador 2.3 million recognition
Source: Compiled by the author
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cars, patrol motorcycles, investigation These examples reinforce the importance devices), dispatching some 60 South of close monitoring and evaluation of the Korean experts, and inviting some 50 effects of equipment and training provided local officers to South Korea for training. by a donor country to another, partner country. It also demonstrates the fact The Philippines suffers from poor public that police training support for a partner safety. Its police corruption is so rampant country can be harmful to the rights of that officers are often involved in violent people seeking their rights as in the case crime such as murder, kidnapping, of the Philippines. extortion, robbery, and drug dealing. A local media outlet, Manila Standard, Conclusion released a report that claimed that the Philippine National Police and the Armed With the extension of aid to include Forces of the Philippines are the most more peace and security costs, there is corrupt government agencies7 deep concern that this may greatly risk negative impacts on poverty eradication Another serious concern is the repression and development efforts. It may also be of human rights by the Philippine police, a difficult to ensure that the human rights result of the abuse of its authority. President of residents in partner countries and their Duterte proclaimed a “War on Drugs” shortly neighboring countries will be protected. after his inauguration and authorized the As seen in South Korea's case, when aid police to execute 4,075 people (according to was used for political and military means, the government figures, as of March 2018) aid can move far from its original goals. In in a summary sentence. South Korea’s case, this outcome has been confirmed by a long history of failure in Extra-judicial killings by police are development cooperation. Misuse of aid serious crimes against humanity which for peace and security agendas is highly International Criminal Court (ICC) can likely to result in disputes and conflicts. It launch investigation and international therefore would seem absurd to expand communities including the UN are highly the scope of ODA so that it can be used concerned. Also, in April 2016, Philippine as military and diplomatic tools, despite all police opened fire at a protest of thousands the side effects mentioned above. of rice farmers who were demanding government assistance after a severe The Sustainable Development Goals drought. The result was three people being adopted by the international community killed and dozens wounded. In October are based on values of democracy, human 2016, as the police broke up a large-scale rights and peace. In keeping with Agenda anti-US rally outside the American embassy 2030, the South Korean government should in Manila, a police van (made in Korea) carefully examine the possible impact of rammed protesters. Nonetheless, the ODA on the democracy, human rights and South Korean government has continued peace of partner countries, and ensure to provide training and equipment to the monitoring and participation of civil society Philippines police. in the process of ODA policy-making.
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ENDNOTES
1 The dispatching of provincial 3 Lee Tae-joo, "Going after a project: International reconstruction teams (PRT) to Afghanistan Development and Anthropological and Iraq is a clear example of postwar Participation", Cross-Culture Study 17th Series reconstruction aid by the military. This 1st edition, 2011 can be seen as a kind of an appeasement 4 Seehttps://www.unocha.org/sites/unocha/ policy to win the hearts of local people files/OSLO%20Guidelines%20Rev%20 instead of a direct occupation policy that 1.1%20-%20Nov%2007_0.pdf. depends on advanced military technology. It is one of the civil affairs operations 5 Congressional Research Service, Typhoon that the United States created to address Haiyan (Yolanda): U.S. and International specific circumstances and environment Response to Philippines Disaster. 2014.2.10 of each region. International NGOs and emergency relief officials in the United 6 The Jong-angIlbo, October 10, 2015http:// Nations have frequently maintained that news.jtbc.joins.com/article/ArticlePrint. aspx?news_id=NB11056565 the Afghanistan PRT is fundamentally unfit for development aid and that it is difficult 7 PNP, AFP still most corrupt govt agencies, to ensure effective implementation. Manila Standards, March 08, 2016 http:// thestandard.com.ph/news/-main-stories/ 2 KOICA, "Country Assessment Report on the top-stories/201180/-pnp-afp-still-most- Afghan Reconstruction Support Project", corrupt-govt-agencies-.html. 2007
125 Militarization of Palestinian Aid
Nora Lester Murad and Alaa Tartir, Aid Watch Palestine
Israel, making it the largest cumulative “Aid” in Context of Israeli recipient of U.S. foreign assistance since Violations World War II (Sharp, 2015: summary). American aid to Israel is an integral part of Palestinians’ need for aid is a direct result its military strategy in the Middle East and of a decades-long military occupation and American investments have helped Israel conflict with Israel. Aid to both Israel and develop one of the most technologically Palestine is militarized, which is furthering sophisticated militaries in the world (Sharp, and prolonging this conflict rather than 2015: 1). In contrast, the United States has addressing its root causes. provided approximately US$5 billion in aid to the Palestinian Authority (PA) since its At the macro level, aid to Palestine is establishment. militarized because it is a function of most western governments’ unqualified support Critics of American military aid to Israel for Israel. The latter includes impunity for argue that it is violating US domestic law. Israeli violations of Palestinians’ rights. The In their review of policy implications and provision of military aid, military trade, options, the US Campaign to End the and other forms of economic, cultural Israeli Occupation quotes the US Foreign and political exchange strengthens Israel’s Assistance Act as saying, ability to occupy, colonize, and dispossess Palestinians. Aid directly subsidizes the “No assistance shall be furnished under costs of Israel’s militarized aggression this chapter or the Arms Export Control to Palestine, while international political Act [22 U.S.C. 2751 et seq.] to any unit of support protects it from the consequences the security forces of a foreign country of non-compliance with international law, if the Secretary of State has credible thus making aid actors complicit in Israel’s evidence that such unit has committed violations of Palestinian rights (Murad, gross violations of human rights.” 2014). Ruebner (2012: 18-19) goes on to say, One of the great ironies of these aid mechanisms is the widely adopted “The Arms Export Control Act (AECA) (P.L. approach to see it as “normal” for the 90-629), which conditions and restricts United States to provide military support the sale and leasing of U.S. defense to Israel while also providing “aid” to articles and services, limits the use of U.S. Palestinians to mitigate the impact of Israeli weapons solely for internal security, for military action. In fact, the United States legitimate self defense, for preventing or government has provided US$124.3 billion hindering the proliferation of weapons in bilateral (mostly military) assistance to of mass destruction and of the means of
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delivering such weapons, to permit the technologies that have been ‘field tested’ recipient country to participate in regional on the occupied Palestinians. (Wearning, or collective arrangements or measures 2015: 3).” consistent with the Charter of the United Nations.” Even in the best-case scenario, the net effect of international aid to Palestinians American military aid to Israel may is questionable. Its value is greatly also violate Common Article One of the undermined by the fact that Israel’s military Geneva Conventions, which obligates third action has been subsidized by the United states to ensure respect for international States and others and these actions have humanitarian law in all circumstances been granted political immunity by the (Dörmannand Serralvo, 2015). Others note international community. Palestinian critics that arms sales to Israel may be illegal of aid therefore maintain that Western because Israel, which is widely recognized donors are complicit in Israel’s violations of as a nuclear power, has not signed the Palestinian rights, despite efforts by donor Treaty on the Non-Proliferation of Nuclear governments to distinguish their political Weapons (Treaty, 1968). actions from their aid policy, suggesting that aid policy is somehow “neutral.” Finally, aid channeled to the Israeli settlements in the occupied West Bank Fragmentation and Militarized Aid violates basic rules of international law and thus hinders possibilities for a lasting Israeli policies have fragmented the peace. Palestinian community into several different legal/institutional components, Palestinian civil society has called for a all of which are in some way militarized. military embargo on Israel. This appeal is Because of this fragmentation, aid to not limited to the United States; the United Palestine is also politicized and militarized Kingdom has also been under scrutiny in different ways. Aid policies and practices for trading arms with Israel, including contribute directly to this political weapons that evidence confirms have fragmentation and social disintegration been used in human rights violations: between the West Bank and Gaza Strip.
“In the six months prior to the attack Palestinians, who make up 20% of the on Gaza in the summer of 2014, the population of Israel, are essentially UK government granted licenses worth colonized in a state that officially £6,968,865 for military-use exports and designates them as having fewer rights £25,155,581 for dual-use equipment. The than the Jewish population. Western aid licensed items included combat aircraft to Palestinian citizens of Israel, which is components, drone components, anti- limited and subject to Israeli restrictions, armor ammunition and weapon night generally focuses on strengthening sights. Meanwhile, the UK’s Watchkeeper Palestinian ability to claim their rights as surveillance drone has been developed minorities. This focus reinforces Palestinian under a £1 billion joint venture contract citizens’ ties to Israel while simultaneously awarded by the Ministry of Defense to weakening their connections to the rest Thales UK and Israel’s Elbit Systems, of the Palestinian community in the allowing the UK military to benefit from Arab world. By entrenching Palestinians’
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identity in this way as a “minority” rather access to their own natural resources and than as an indigenous people, western to their right to development (Diakonia, aid to Palestinians strengthens Israel’s 2013). By being unable or unwilling to territorial claims. In this way, aid to challenge Israeli militarization in Area C, Palestinian citizens of Israel is politically international donors are contributing to and institutionally part of western support the sustainability of the status quo. for Israel’s vision, regardless of what those same countries may say rhetorically about While discussion of the political status their support for Palestinian rights in of Jerusalem was postponed by the Oslo international law. process, the practical reality of Israeli annexation of Jerusalem and forced The three million Palestinians in the West transfer of Jerusalem’s native Palestinian Bank also experience politicized and population has been largely ignored militarized aid. But these mechanisms are by international aid policy. The virtual more complicated. The Oslo Accords (1993) collapse of the Palestinian economy in and the Paris Protocol (1994) established East Jerusalem renders the city essentially a hegemonic political and economic unlivable for Palestinians (Arafeh, 2016). model within which all “development” in Effectiveness of both humanitarian aid the occupied Palestinian territory takes (e.g. to Palestinian families whose homes place. Researchers Tartir and Wildeman have been demolished by Israel) and have explored the neoliberal interests development aid, which is limited by that underpin the World Bank framework Israel’s explicit Judaization policy, is totally guiding Western aid policy toward the undermined. occupied Palestinian territory. They note that World Bank prescriptions “… Aid policies and implementation in the do not take into account the history and Gaza Strip is another and different case. human reality of Palestinians struggling The Israeli blockade, which is now ten to survive for decades under a violent years old, makes the Gaza Strip nearly military occupation” (2012: 1). Tartir and totally dependent on international aid. Wildeman also maintain that the World No materials or people can enter or Bank over-estimates the capacity of the exit Israeli checkpoints without Israeli Palestinian Authority (PA) to engage in military permission. The system of aid is demanded reforms, given that the PA lacks increasingly controlled by Israel, not the sovereignty. United Nations, thus adding aid to the arsenal of weapons through which Israel In the West Bank, aid policy has distinct can increase its power and control over implementation plans according to three Palestinians in the Gaza Strip. In fact, the areas designated by the Oslo Accords lack of adequate reconstruction after the – Area A (under Palestinian Authority 2008-9, 2012 and 2014 Israeli attacks is due control), Area B (under joint Israeli- to the militarized and securitized nature of Palestinian control, and Area C (under the aid and the context within which it is Israeli control). The greatest controversy delivered (or not). Notably, having this aid is in Area C where Israel enforces (and delivered in a highly securitized context most donors comply with) an illegal makes it easier for donors to cover their planning regime that denies Palestinians failures using the excuse of “security.”
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Approximately five million registered the oppressor. Tartir also notes that both Palestinian refugees also receive aid Amnesty International and Human Rights through a dedicated United Nations Watch have documented the Palestinian agency, the United Nations Relief and Authority security forces' excessive use Works Agency for Palestine Refugees in of force and noted PA limits on freedom the Near East (UNRWA, 2016). According of speech, political participation and to critics, UNRWA’s ambiguous protection mobilisation (Tartir, 2016). mandate has prompted debate about the extent to which UNRWA protects So, on one hand, there is Israeli occupation Palestinian rights or weakens their ability and colonization that receives militarized to claim their rights through other bodies aid. On the other, there is the Palestinian and mechanisms (Farrah, 2010). Authority, which receives ODA and spends it in a highly limited space within Bilateral Aid to the Palestinian a securitized “development” process. So, Authority aid in the Palestinian context is driven by a hegemonic security rationale, Military assistance to Israel is not the only designed to address Israeli security way that international actors subsidize concerns, in ways that make Palestinians the Israeli occupation of Palestine. increasingly insecure (Tartir, 2015). The European donors, the United States power asymmetry between the colonized and Canada provide significant bilateral and colonizer translates into benefits to assistance to the Palestinian Authority. In the more powerful actor and therefore a scathing critique, Tartir says about 30% sustains an anti-peace status. Mandy of international aid is directed to the $1bn/ Turner has suggested that the intention year Palestinian security sector, which is of Western “peacebuilding” interventions not accountable to the Palestinian people includes counterinsurgency. In other and is increasingly authoritarian. words, aid seeks to pacify Palestinian national liberation aspirations in Israel’s Since 2005, the United States and the interest (Turner, 2014). European Union have supported sector reform, but “…the central tenet of this Investigations into the militarization of project has been the entrenchment aid highlight two main questions: (1) of security collaboration between the PA What should be done when a liberation and Israel,” not the security of Palestinians movement is forced to transform itself (Tartir, 2016). That the PA and Israel into a subcontractor to the colonizer work together on security means that as a result of this militarized aid? and a substantial amount of aid to the PA (2) Is it possible that militarized aid can security sector is as much for Israel as it is result in authoritarian tendencies giving for Palestine. Aid also makes it easier and dominance to security establishments and cheaper for Israel to provide security for personnel at the expense of other sectors its settlements - illegal under international (e.g., health, education, manufacturing) law and in the eyes of the world and the and at the expense of democracy? In the US. The aid thus compromises the security case of Palestine, aid has not only failed of Palestinians by funding the interests to address the poverty, employment and of their occupier. "Collaboration" under empowerment gaps, but has also help occupation in reality means dominance of create new insecurity and illegitimacy.
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Aggression is a Crime That The report of the UN Secretary General on the World Humanitarian Summit takes Should Not Be Funded By Aid a predictably diplomatic tone. However, a careful reading reveals acknowledgement The use of aid to promote or support that lack of political will is at the heart of aggression is not only inappropriate and aid ineffectiveness. It says: “…Addressing counter-productive, but arguably illegal. The people’s humanitarian needs requires purpose of our global governance system, i.e. more than increasing levels of assistance. the United Nations, is, first and foremost, “to It necessitates a far more decisive maintain international peace and security, and and deliberate effort to reduce needs, to that end: to take effective collective measures anchored in political will and leadership to for the prevention and removal of threats to prevent and end conflict.” (UNGA, 2016: 1). the peace, and for the suppression of acts of aggression or other breaches of the peace, There is ample evidence in literature and and to bring about by peaceful means, and in practice of the relationship between aid conformity with the principles of justice and and the perpetuation of conflict. Palestine international law, adjustment or settlement of offers one of many examples of how aid international disputes or situations which might violates the principle of “Do No Harm” that lead to a breach of the peace” (Charter of the is fundamental not only to the credibility United Nations, 1945: Chapter 1, Article 1.1) of aid, but also the post-World War II Three basic humanitarian principles – humanity, international system. neutrality and impartiality– are enshrined in General Assembly resolution 46/182 (1991) Aid must not promote or enable and have been reaffirmed in innumerable UN aggression either actively or passively. In resolutions and declarations (OCHA, 2009: 4). Palestine, aid for ostensibly “purely good” purposes such as food, health, education, While many Palestinians and internationals and water and sanitation, is implemented consider Palestine an exception to aid inside a complex aid regime that serves norms, the problem of militarized aid is the expansionist political interests of Israel widespread. The New Deal for Engagement and its allies among donor countries. A in Fragile States says that 30% of Official recent study by Aid Watch Palestine found Development Assistance is spent in that 78% of aid to the occupied Palestinian fragile and conflict-affected contexts territory ends up in the Israeli economy (IDPS, 2011:1). The European Parliament (Hever, 2016), thus subsidizing between reported that in 2013 over-two thirds of 18-30% of the costs of the occupation. the humanitarian assistance recorded Tartir and Wildeman also note that forced by the OECD was directed to long-lasting economic integration with Israel makes crises (European Parliament, 2016: 3). This the Palestinian economy vulnerable. Israel data raises significant questions about aid. has often withheld funds (with American Either international aid is having no effect support) as punishment for Palestinian on the perpetuation of conflict (and failing policies it dislikes, including Palestinian to stem the increase in humanitarian pursuit of internationally enshrined rights need), or, alternatively, international aid through United Nations mechanisms contributes to increasing conflict. (2012: 1.)
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In one blatant example, international impunity granted Israel by international aid utilizing the Gaza Reconstruction actors has had the effect of empowering Mechanism, to which the United Nations its aggressive policies, resulting in what is a party, has been criticized as giving appears to be a shocking hypocrisy: legitimacy to the illegal Israeli blockade donor governments and aid actors on the Gaza Strip (Murad, 2015/16) and allowing Israel to deny Palestinian rights assisting Israel by giving international while providing aid to Palestinians in cover for Israel’s promotion of its own ways that ensures Israel’s continued economic and military interests. dominance.
Conclusion Reclaiming Aid for Human Rights: Policy Recommendations Aid to Palestinians is militarized on at least four levels: The militarization of aid to Palestinians invalidates the legitimacy of aid as a 1. Military aid and military trade with credible humanitarian or developmental Israel has been normalized, despite intervention. For international aid to proof that such assistance is being reclaim its potential as a contributor used to violate Palestinian rights to the realization of human rights, it under international law; must be aligned with effective political 2. The Oslo two-state framework, within accountability mechanisms that pressure which Western aid is implemented, all parties to comply with international law reflects the political and military and respect human rights. interests of the United States, Europe and the World Bank-led neoliberal The global civil society boycott, divestment consensus, instead of democratically and sanctions (BDS) campaign has determined Palestinian interests; had a demonstrable impact on Israel’s 3. Development and humanitarian aid ability to pursue unaccountable military to Palestinians, whether it is funneled development (Juma’ and Mantovani, through international or Palestinian 2016). All concerned parties should study Authority institutions, is structured the potential of strategic sanctions as to protect Israel’s colonial monopoly a way to pressure Israel to comply with at the expense of Palestinian security international law. The most immediate and self-determination; and and obvious action is to demand for a 4. Humanitarian aid through civil society, total military embargo on Israel and all both international and Palestinian, is parties until this has been achieved. conditioned by anti-terrorism policies that exacerbate internal conflict, This securitized and militarized aid has including armed conflict, in violation of a dramatic impact on the everyday life principles of impartiality and neutrality. of Palestinian people and their quest 5. Aid supporting Israel would not for freedom and self-determination. inherently violate Palestinian rights if Evidence suggests that this form of aid actors (in their political and aid roles) aid is anti-developmental, especially in held Israel accountable for compliance situations of foreign military occupation. with international law. However, In the case of Palestine, it has limited
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rather than enhanced the capacity of Israeli settler colonial rule and enhancing Palestinian people to claim their right to their capacities for solidarity, resilience self-determination. The long-term effect is and steadfastness. International aid increased instability and the likelihood of actors must recognize and accept that further militarism and violence. development under military occupation and colonization means first and foremost Empowering Palestinians means a process of confrontation to realize rights, equipping them with the tools to resist including the right to self-determination.
REFERENCES
Arafeh, Nur. (November 2016). Economic at http://www.pbsbdialogue.org/media/ Collapse in East Jerusalem: Strategies for filer_public/07/69/07692de0-3557-494e- Recovery. Al-Shabaka: The Palestinian Policy 918e-18df00e9ef73/the_new_deal.pdf Network. Available at https://al-shabaka.org/ briefs/economic-collapse-east-jerusalem- Juma’, Jamal and Maren Mantovani. (August 24, strategies-recovery/ 2016). “The ‘S’ in BDS: Lessons of the Elbit Systems Campaign,” Al-Shabaka policy brief Diakonia International Humanitarian Law available at https://al-shabaka.org/briefs/s- Resource Centre. (2013). Planning to Fail: bds-lessons-elbit-systems-campaign/. The planning regime in Area C of the West Bank: An International Law Perspective. Murad, Nora Lester. (2017 forthcoming). “For Available at https://www.diakonia.se/ Palestinians, All Donor Commitments are globalassets/documents/ihl/ihl-in-opt/ ‘Unfinished Business’” Aid Watch Palestine planning-to-fail.pdf for the IBON Global Synthesis Report.
European Parliament. (May 2016). Funding gap: A Murad, Nora Lester. (2015/16). “Gaza challenge for the World Humanitarian Summit Reconstruction Mechanism: Smoke and (WHS), Briefing. Available at http://www.europarl. Mirrors?” Journal of Palestinian Refugee europa.eu/RegData/etudes/BRIE/2016/582030/ Studies, pp. 59-66. EPRS_BRI(2016)582030_EN.pdf Murad, Nora Lester. (2014, October). “Donor Farah, Randa. (December 2010). Uneasy Complicity in Israel’s Violations of but necessary: The UNRWA-Palestinian Palestinian Rights.” Al-Shabaka Policy Brief. Relationship. Al-Shabaka: The Palestinian Available at https://al-shabaka.org/briefs/ Policy Network. Available at https://al- donor-complicity-in-israels-violations-of- shabaka.org/wp-content/uploads/2010/11/ palestinian-rights/. uneasy-necessary-unrwa-palestinian- relationship_0.pdf Office for the Coordination of Humanitarian Affairs, Policy and Studies Branch. (2009). Hever, Shir. (2016). “How Much Aid to Palestinians Compilation of United nations Resolutions on Reaches the Israeli Economy?” Aid Watch Humanitarian Assistance. Available at http:// Palestine. Available at http://www.aidwatch. www.refworld.org/pdfid/4a8e5b072.pdf.å ps/content/how-much-aid Ruebner, Josh. (2012). “U.S. Military Aid to Israel Dörmann, Knut and Jose Serralvo. (2015). Policy Implications & Options,” US Campaign International Review of the Red Cross, 96 to End the Israeli Occupation. Available (895/896), 707–736. Generating respect for at http://www.endtheoccupation.org/ the law doi:10.1017/S181638311400037X downloads/Policy_Paper_print.pdf. Sharp, Jeremy M. (June 10, 2015). “U.S. Foreign Aid International Dialogue on Peacebuilding and to Israel.” Congressional Research Service, Statebuilding (IDPS). (2011). The New Deal 7-5700, RL33222 at https://fas.org/sgp/crs/ for Engagement in Fragile States. Available mideast/RL33222.pdf.
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Tartir, Alaa. (2 December 2016). “How US Turner, M. (2015) ‘Peacebuilding as security aid to PA sustains Israel's counterinsurgency in the occupied occupation,” in Aljazeera at http://www. Palestinian territory’, Review of International aljazeera.com/indepth/features/2016/11/ Studies, 41(1), pp. 73–98. doi: 10.1017/ security-aid-pa-sustains-israel- S0260210514000072. occupation-161103120213593.html
Tartir, Alaa, (2015). The Evolution and Reform United Nations General Assembly (23 August of Palestinian Security Forces 1993- 2016). “Seventy-first session 2013. Stability: International Journal of Item 70 (a) of the provisional agenda* Security and Development. 4(1), part. 46. Strengthening of the coordination of DOI: http://doi.org/10.5334/sta.gi humanitarian anddisaster relief assistance of the United Nations, including special Tartir, Alaa. (2015). Securitised development economic assistance: strengthening of and Palestinian authoritarianism the coordination,” A/71/353. Available at under Fayyadism, Conflict, Security https://www.worldhumanitariansummit. & Development, 15:5, 479-502, DOI: 10.1080/14678802.2015.1100016 To link to org/sites/default/files/media/A-71-353%20 this article: http://dx.doi.org/10.1080/14678 -%20SG%20Report%20on%20the%20 802.2015.1100016 Outcome%20of%20the%20WHS.pdf
Tartir, Alaa and Jeremy Wildeman. (October UNRWA. “Palestine Refugees,” https://www. 9, 2012). Persistent Failure: World Bank unrwa.org/palestine-refugees (accessed 20 Policies for the Occupied Palestinian December 2016). Territories. Al-Shabaka Policy Brief. Available at https://al-shabaka.org/summaries/ Wearing, David. (July 2015). Arming Apartheid: persistent-failure-world-bank-policies-for- the-occupied-palestinian-territories/ UK Complicity in Violations Against the Palestinian People. London, War on Want. Treaty on the Non-Proliferation of Nuclear Available at https://www.caat.org.uk/ Weapons. (July 1, 1968). Available at http:// resources/countries/israel/2015-07-02. disarmament.un.org/treaties/t/npt/text arming-apartheid.pdf
133 Development Cooperation, Militarism and Conflict in the Contiguous Areas of Bangladesh, North East India and Myanmar
Jiten Yumnam, Center for Research and Advocacy Manipur
Geopolitics and Legacy of determination. Many of these conflicts Conflict have been based on the state’s military efforts to subdue indigenous peoples’ The history of the contiguous areas of struggles for self-determination over their North East India (NE India), Bangladesh lands and resources. (South Asia) and Myanmar (South East Asia) has been afflicted with conflict The persisting conflicts are fueled by the that has often been induced by colonial increasing efforts of powerful countries powers and emerging powers. Until to control lands and resources. The 1947, countries in these regions were strategies of the three regions - India’s colonies of the British Empire. Touching Act East Policy, China’s One Belt One Road the Bay of Bengal and at the crossroads (OBOR) and Japan’s Free and Open Asia of South, South East and East Asia, their Pacific strategy - are balanced against the strategic nature and abundance of natural Asia Pacific strategies of the United States resources has continued to evoke much (US), European Union (EU), Russia, etc. interest from powerful countries seeking China is expanding its OBOR initiative in economic and political dominance. South and South East Asia with initiatives in roads, railways, oil pipelines and other Another shared characteristic of Myanmar, infrastructure financing. India and Japan NE India and Bangladesh is the persistence are increasingly combining their strategies of armed conflict and their related social to counter China’s OBOR with strategies implications. These conflicts, which are to control land, resources and important multi-dimensional and multi-layered in locations with similar initiatives. nature, have been intensified by the move for economic and political domination Development cooperation and the tacit by powerful countries. Two main factors involvement of International Financial account for the major forms of conflict in Institutions (IFIs) in financing development these regions: 1) the competition amongst processes to control land and natural powerful countries for dominance and 2) resources in situations of armed conflict the conflict between governments and have spurred greater conflict and fragility indigenous peoples (specifically in Manipur in all three regions. Multilateral and and Assam in NE India, Chittagong Hill bilateral development financial institutions Tracts (CHT) in Bangladesh and Rakhine such as the Asian Development Bank and Kachin State in Myanmar).. (ADB), the World Bank (WB) and the Japan International Cooperation Agency (JICA), The indigenous populations in these as well as financing from emerging regions are comprised of ongoing economies, such as India and China, are movements and struggles for self- actively financing connectivity projects
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to tap the natural resources from these improve transport connectivity to enhance regions. Multinational companies and Mizoram and other northeastern states’ IFIs are aggressively pursuing oil and gas road links with Bangladesh, as well as exploration in these regions. with Nepal, Bhutan and Myanmar.3 JICA is preparing to fund the Kaladan multi-model The ADB’s Country Partnership Strategy transportation mode in Mizoram State of for Myanmar, 2017–2021, aims to support India. The World Bank is funding the high the government in laying the foundations voltage transmission and distribution lines for sustainable and inclusive economic across India’s NE region. development for poverty reduction. The ADB focus for connectivity in Myanmar will Meanwhile, the China-led Asian complement its connectivity financing in Infrastructure Investment Bank (AIIB) is India’s North East and Bangladesh, under investing in the adjoining areas of South the South Asia Sub Economic Cooperation and South East Asia Region. In 2016, (SASEC).1 Myanmar is also part of the AIIB approved loans amounting to ADB’s Greater Mekong Sub Economic US$500 million for power, housing and Cooperation (GMS), under which ADB transportation projects in four countries financed a portion of the Greater Mekong in the region. In a meeting in September Sub Region East-West Economic Corridor 2016, the AIIB approved US$300 million for Highway Development Project in Myanmar. the Myanmar’s Mingyan project, among others.4In Bangladesh, the World Bank, ADB pursued financing of road building ADB and JICA are working together to through the South Asia Sub Economic finance infrastructures geared to control Cooperation (SASEC) under the North East strategic resources like natural gas as well India Strategic Plan (NEISP) to promote a as strategic locations. business friendly environment and to tap the natural resources in India’s North East. This process of defining the priorities and In April 2017, the JICA signed an agreement areas of development cooperation is being with the Union government in New Delhi to pursued in an environment that excludes provide over 67 billion yen (US$610 million) indigenous peoples and denies their rights. for Phase I of the North East Road Network Official Development Assistance (ODA) is Connectivity Improvement Project. Phase increasingly being utilized to advance the 1 will see the enhancement of National strategic economic and political interests of Highway 54 and National Highway 51 in donors in the region. India is cementing a Mizoram and Meghalaya.2 strong relationship with Japan for strategic reasons whereby Japanese ODA is utilized The DEG of Germany co-financed the for strategic purposes while also deepening mining operation in Meghalaya by military cooperation.5 The efforts of IFIs the French mining company, Lafarge. and dominant countries for their economic The German development bank KFW and political influence also involves close financed the Pare Hydroelectric project in coordination with concerned governments Arunachal Pradesh. On 12 June 2014 the to suppress indigenous peoples’ rights and World Bank approved a US$107-million limit their democratic space to seek effective credit for the Mizoram State Roads II – development cooperation and genuine Regional Transport Connectivity Project to development process.
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Development Cooperation & Militarization has intensified because Militarism in India’s North East of the aggressive push for large infrastructure projects. This has India’s North East region, which comprises included extractive industries (mining, eight states bordering Myanmar and oil exploration, etc.) under the Act East Bangladesh, is projected as the corridor Policy as well as key infrastructure projects for connecting South East Asia under financed with development cooperation India’s Act East Policy. Development from multilateral and bilateral financial cooperation and militarism in India’s North institutions. The Indian armed forces East needs to be understood in the context deployed counter insurgency operations in of indigenous peoples’ movements for NE India, which are involved in protecting self-determination. Two examples are hydroelectric projects, mining sites, and the movements for greater autonomy in other key infrastructure projects financed Tripura and for full self-determination in by the ADB, World Bank, JICA, etc. Manipur both of which have been subjected to military responses from the Government The Indian armed forces have launched of India. The Revolutionary Peoples Front, numerous military operations. In Manipur the United National Liberation Front, and this included Operation Summer Storm related groups are battling the Indian (2009), Operation Khengjoi (2006), Operation Armed forces in Manipur in a low intensity Somtal (2007), and Operation Tornado conflict, while the United Liberation Front (2005). The objective of these missions has of Assam has led the armed struggle for been to not only clear armed liberation self-determination in Assam. groups but also to control indigenous areas already designated for Tipaimukh including The Armed Forces Special Powers Act, dam construction, oil exploration and the 1958 (APFSA, 1958), was introduced to mining of chromium and limestone. More counter the armed liberation movements than 50,000 Indian armed forces units in Manipur and across India’s North have been deployed to military camps in East region. The APFSA 1958 derogates Manipur. As well, over 1,500 security forces fundamental rights, specifically their from different paramilitary units are also right to life, justice and remedy while confirmed to be deployed for the protection legitimizing the intense militarization. of the Trans Asian Railway works under 7 The militarization has led to extra judicial construction in Manipur. executions, arbitrary killings, enforced disappearances, sexual harassment, and Military equipment purchased externally other abuses with complete impunity is being used in these counter insurgency being conferred to the relevant Indian operations. Unmanned aerial vehicles Army officials under AFSPA, 1958. The (UAVs), hovercraft and other arms Supreme Court of India continues to hear purchased from Israel, US, and Russia a Public Interest Litigation (PIL) seeking have been used during counter insurgency an investigation into 1,528 cases of extra operations to subdue the indigenous 8 judicial executions from 2000 to 2012 resistance movement in Manipur. Sukhoi committed by the Indian security forces Jet fighters purchased from Russia have and Manipur police.6 been deployed to the Tezpur Air force
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base in Assam, close to the Chinese and movement of Indian armed forces closer to Myanmar borders.9 India’s effort to militarily the borders with China, where there have suppress self-determination movements been long-standing tensions over territorial has also involved military cooperation disputes between India and China. between Burma and Bangladesh in joint military operations against the insurgents Development cooperation for infrastructure or liberation groups operating in their financing, primarily road projects in India’s respective territories. Work in economic North East, could stir up another dimension cooperation at the regional level has of conflict. The potential for intense conflict emphasized the suppression of voices of in NE India is a real issue with the JICA resistance, using the pretext of counter supported infrastructure projects, primarily terrorism. For instance, the India and road projects in Arunachal Pradesh. This ASEAN Free Trade Agreement included has met with stern objections from China explicit references and a focus on efforts to as it claims Arunachal Pradesh is part of jointly fight terrorism. South Tibet. There has been an on-going conflict between India and China over the The extensive road building across India’s control of Arunachal Pradesh. Indeed, a war North East, with financing from the ADB, between India and China broke out in 1962 WB and JICA, serves both economic and over China’s claim to this state. In 2009, military purposes. The road building under China protested the inclusion of a water various connectivity projects is envisaged management project in Arunachal Pradesh, to support the construction of over two which was part of a $2.9 billion loan ADB hundred (200) mega dams across the had promised India.11 More currently, China Brahmaputra – Barak River system. These has denunciated the September 2017 dams will facilitate the exploration and statement by Japan and India, which outlines drilling of oil and gas and the mining of their plans to cooperate on infrastructure minerals in the NE region. JICA and KfW projects such as road connectivity and are directly involved in this work. In 2016 electricity in India’s NE States.12 With an eye the World Bank approved a US$470-million on China's OBOR initiative, in October 2017, loan to support six states in the NE India the US Government called for increasing to augment their 400 KV high voltage connectivity in the South Asia region.13 The transmission and distribution networks. tensions and conflict are likely to escalate This will also support the exploitation of in NE India with the continued efforts by energy potentials of rivers in the NE region India in oil and gas exploration as well as through the construction of mega dams.10 their plans to build hydropower projects and road infrastructure projects. NE India’s massive road construction plans are also designed to help the Indian Armed Efforts to exploit NE India’s natural Forces to confront its internal and external resources have been another source of security challenges. For instance, the roads tension in the region. The Government’s will ease the movement of Indian armed plan to mine uranium in Meghalaya has forces and intensify its counter insurgency been met with strong resistance from offensives in Manipur, Assam and other indigenous communities. There are parts of North East. Additionally, the road concerns that India’s agreement with building in Arunachal Pradesh will assist the Australia, Japan and Germany for peaceful
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nuclear cooperation will also facilitate mining. They are often branded as anti- the mining and exploitation of natural development, anti-national or insurgents resources in Meghalaya. At the North and have been subjected to human rights East Business Summit in November 2017 violations. Community leaders in Burma, agreements between the Government of NE India and in Bangladesh’s CHT have Manipur and corporate bodies were signed been killed, jailed and tortured. to commence mining and oil exploration in Manipur, much to the objection of Development cooperation involving the indigenous groups. military is an emerging phenomenon in NE India. The underlying objective seems to be Transnational companies such as Jubilant to counter Chinese influence in both South Energy Private Limited and big Indian Asia and South East Asia. In the Annual companies like the Oil India Limited, India – Japan Ministerial Defense Dialogue and Oil and Natural Gas Corporation (September 2017), India and Japan agreed are advocating for comprehensive to step up their defense cooperation, exploitation of oil and gas in NE India. The including anti-submarine exercises and ADB, European Investment Bank (EIB), counter terrorism measures.15 In July 2017, the World Bank’s International Finance the US, India and Japan conducted joint Corporation (IFC), and other bilateral naval exercises demonstrating increased finance institutions (eg. Germany’s DEG) defense cooperation in the Indo-Pacific have co-financed limestone mining region. This has included the deployment operations in Meghalaya with the Lafarge of front-line warships, submarines and Group of France and Cementos Molins of aircraft as part of the tri-nation Malabar Spain. The Lafarge Surma Cement (LSC) exercises in the Bay of Bengal.16 Project, which is run by Lafarge, received a loan of US$45 million from the IFC in In early May 2018, military cooperation 2003. The Lafarge mining is in violation between India and the US was enhanced of the Forest Conservation Act, 1980 and with the Trump administration’s the Forest Rights Act, 2006.14 In January agreement to supply long endurance high- 2014, the indigenous Khasi people who altitude surveillance armed UAVs to India. are affected by the IFC- and ADB-funded India has supported Japan’s position, limestone mine, filed a complaint with the which is opposed to China’s claims in the Compliance Advisor Ombudsman (CAO), South China Sea. In a joint statement in the IFC’s accountability mechanism. The July 2016 on the South China Sea, India Khasis maintain that Lafarge has illegally and Japan asked parties involved in the infringed on their land without their territorial disputes to “show utmost consent or recognition of their rights. respect” for the UN Convention on the Law of the Sea (UNCLOS).17 India also joined the Community leaders striving for the defense quadrilateral alliance with Japan, Australia of their lands and natural resources are and US to counter China. rejecting the current exploitative and unsustainable development models that Conflict in Rakhine and Kachin include dam building, oil exploration and State in Myanmar
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Myanmar is afflicted with multiple layers to control the rich natural resources of conflict, which are intensifying in scale and geographically strategic locations of and geographic scope. One major factor the two States, one of which has access is that external countries are increasingly to the Bay of Bengal (Rakhine) and the eager to control its land and resources, other access to the mighty China (Kachin). economy and polity. Myanmar is at the Myanmar’s best potential hydro-power, oil confluence of South, East and South East exploration and drilling sites are primarily Asia and hence extremely strategic for in conflict prone areas such as Rakhine economic and political reasons. Indeed, the and Kachin. country has experienced intense efforts by powerful countries to exert their influence. The conflict in Rakhine State has ethno - Myanmar has become a last Asian frontier religious dimensions rooted in historical for current modes of development – political realities of conflict between the plantation agriculture, mining, and water Myanmar Buddhist and Muslims, the extraction. Myanmar lies between China latter being perceived as ‘Bengali’ migrants and India, both of whom are hungry for from Bangladesh by majority populace its natural resources and to gain influence of Myanmar. The ethnic conflict also is a over the country. continuation of the tensions that appeared during the Second World War, where each As a major provider of financial and military side were situated against each other, one aid, China has aggressively pursued road with the British forces and the other with building and the laying of oil and gas the Japanese imperial forces during their pipelines. It is also heavily involved in occupation of Myanmar.19 mining and attempts to build mega dams in Myanmar. China is establishing a foothold The ongoing tensions caused by the in the Rakhine State with its promise to forced displacement of indigenous people develop a deep-water port at Kyaukphyu in Rakhine State is also perceived as an at the staggering cost of US$7.3 billion. Oil attempt to regain control of areas which and gas exploration by Chinese companies are strategic for extractive industries. This in Rakhine is still progressing, along includes oil and gas exploration as well as with investments by Indian and Korean the establishment of trading points, such companies. With its access to the Indian as in the Sittwe Port. There is an interest in Ocean, Myanmar remains a critical pillar in opening up lands to foreign corporations. China’s regional plans and energy security, Since major foreign investors have entered as it would allow China to circumvent the the country under the new legal regime, Straits of Malacca by importing oil from demand for land has become a major the Middle East on a quicker route.18 The factor in the conflict. effort of countries such as India, Japan, US and the EU to challenge China’s dominance The persecution and expulsion of the is a key factor in Myanmar’s evolving and Rohingya from their land is a strategy of multilayered conflict. the Myanmar Government to free up land and water for future use by corporations The conflict between the ethnic Rohingyas from outside countries.20 An estimated and Kachin with the Myanmar State is 655,000 Rohingya Muslims are believed interpreted as fallout from ongoing efforts to have crossed into Bangladesh since
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the Myanmar army launched a crackdown the UN Special rapporteur on Myanmar, in August 2017 on suspected Muslim “Innocent civilians are being killed and insurgents who were blamed for attacks injured, and hundreds of families are now on security outposts in the Rakhine State. fleeing for their lives.”24 The escalating There have been many reports that civilians battle between the Myanmar military have been tortured, women raped and and the Kachin Independence Army has homes burnt by the military.21 The State driven thousands of residents in northern repression in Rakhine led to the formation Kachin State from their homes, creating of the Arakan Rohingya Salvation Army in new refugees for a country already under January 2018. The establishment of this criticism for the Rohingya crisis. armed ethnic group has deepened the crisis and armed conflict in Myanmar. The conflict in Kachin State is The displacement caused by the conflict predominantly based on a fight for control in Rakhine has also led to the exodus of of its geography (wedged between South refugees in Mizoram and Manipurin NE Asia, South East Asia and East Asia) and rich India, which may become another source natural resources.25 Fighting erupted again of tension. in early 2018 in amber-rich Tanai region in Kachin state and near the jade mines Kachin State is one of the most conflict- of Hpakant, with both sides jostling for afflicted areas of Myanmar. The Kachin control of these strategic areas. Jade sales Independence Army, which has been primarily line the pockets of businesses, demanding self-determination from military elites, drug lords, armed groups, Burma since the early 1960s, clashed with and Chinese business groups.26 the Burmese military in June 2011, ending a 17-year ceasefire agreement.22 The The conflicts in Rakhine and Kachin State construction of Myitsone Dam, which was have led to the exodus of refugees to to be financed by China, contributed to the several parts of Bangladesh and NE India, anger and resistance of the Kachin people. unleashing other forms of human rights In the end the Government was forced violations. The provincial governments to cancel the dam. The controversial and various civil society groups have Myitsone dam project was first signed voiced their concerns and objections to between Myanmar’s previous military the increased presence of refugees in government and the state-backed China places such as Manipur and Mizoram. The Power Investment in 2005. Construction provincial governments have criminalized formally commenced in 2007 but was and jailed several refugees attempting formally suspended in September 2011.23 to enter Manipur, which has further complicated the situation. In recent years the Myanmar military has increased airstrikes and attacks in the Several powerful countries have a strong Kachin State, forcing about 3,000 civilians to interest in influencing the conflict in evacuate to churches in the Kachin capital Myanmar, partly through the provision of Myitkyina. Approximately 2,000 people of military aid. According to 2011 figures have fled to the jungle. This means that from the Stockholm International Peace there is an estimated 5,000 newly displaced Research Institute (SIPRI) Arms Transfers people in the Kachin State. As noted by Database, China has been the major
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supplier of military hardware to Myanmar completely sidelined in such processes. since 1988. It has supplied over 90% of For instance, in November 2016 Japan Myanmar’s military transport and has announced nearly US$8 billion in aid, loans also provided warplanes and ships. In and investment to promote development early 2018 China announced its plan to and reconciliation in Myanmar after talks increase military aid and cooperation with with Daw Aung San Suu Kyi in Tokyo. The Myanmar. India is also trying to influence announcement failed to denounce the Myanmar through the supply of artillery military violence in Rakhine State.30 guns, radars and night vision devices to Myanmar’s army. India seeks Burmese There are major concerns that the military support for its counter-insurgency substantial aid and increased loans by operations against armed liberation Japan and China to Myanmar are primarily groups in NE India, which are operating to strengthen business interests and to along the borders with Myanmar.27 give them a distinct economic and political advantage at the regional level. In March China, Japan and India are competing for 2018, JICA signed loan agreements with influence in the peace process between the Government of Myanmar for four the Myanmar Government and the ethnic projects in Nay Pyi Taw. This included rebel groups. In November 2016, Japanese a commitment to provide Japanese Prime Minister Shinzo Abe held talks with ODA loans of up to 117.04 billion yen Myanmar leader Aung San Suu Kyi and (approximately US$1.04 billion). The loan pledged 40 billion yen (US$390 million) agreements envisaged comprehensive in aid to back Myanmar Government’s socio-economic development in Myanmar peace process with ethnic minorities including: 1) an 30.469 billion-yen (US$271 amid growing international concern about milliion) agriculture income improvement human rights violations in Rakhine State.28 project; (2) a 14.949 billion-yen (US$133 The Japanese support is also an attempt million) project for the development to compete with China’s growing political of finance for small and medium-sized and economic influence.But at this point enterprises (Phase 2); (3) a 15 billion-yen China remains the most influential (approximately US$133 million) housing player in Myanmar’s peace process. finance development project; and (4) Beijing has its own peace envoy, Sun a 56.622 billion-yen (US$504 million) Guoxiang, the Special Envoy for Asian Yangon-Mandalay railway improvement Affairs, who regularly visits Myanmar project (Phase 2).31 for talks with all the peace actors. China has pledged $3 million in financial China is providing humanitarian assistance support for the peace process.29 to the refugee crisis in Rakhine, while also giving aid for education, infrastructure and Development aid has been used by agriculture projects in this state as well powerful countries to supposedly facilitate as other parts of Myanmar. In February conflict resolution but is in fact meant 2018, a “model project” for rural poverty to influence recipients and create a reduction with financial and technical favorable political environment to serve assistance from China was launched in their commercial interests. The human Lewe and Tatkon townships in Nay Pyi rights dimension of conflict situations is Taw, Myanmar. China provided 33.33
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million yuan (US$5.31 million) for the humanity.33 Though a peace accord was project, which includes social infra- signed in 1997, it has been marred by structure development, vocational training violations and continued human rights and income-generation assistance for abuses by the Bangladeshi Army. residents. In March 2018, China provided aid to Myanmar for the new Kunlong bridge China and Bangladesh cooperated to project in the northern Shan State. China connect East and South East Asia with is working with the Myanmar government South Asia under the aegis of the BCIM to support the China-Myanmar economic (Bangladesh, China, India and Myanmar) corridor, which extends from Yunnan Economic Corridor. In making strategic in China to Mandalay, Yangon and the investments in Bangladesh, China has Kyaukpyu Special Economic Zone in faced competition in the Bay of Bengal from Myanmar. The initiative is considered one regional and global powers, particularly of the flagship projects of China’s Belt and the US, Japan and India. Japan has Road Initiative.32 increasingly tried to leverage ADB and JICA to finance key infrastructure that would Development cooperation and deter Chinese investments and interests Conflict in Bangladesh while consolidating its own interests in Bangladesh. In CHT, the ADB, World Bank Connecting South and South East Asia, and JICA are also financing infrastructure Bangladesh is center stage of disputes projects. Indigenous people’s lands between economically and politically and their traditional decision-making dominant countries for control of the processes have been undermined by the Bay of Bengal and Bangladesh’s strategic World Bank funded Bangladesh Regional and economic importance. This has been Connectivity Project, which is meant to marked by increased competition between connect CHT with Mizoram in NE India. China on the one hand and India, Japan and the US on the other hand. Bangladesh Financing of extractive industries and is also affected by internal political the exploitation of natural resources contradictions between the indigenous are another source of conflict. Japan nationalities in the Chittagong Hills has already approved US$1.18 billion in Tract (CHT) and adjoining areas, and the loans to build the coal-fired Matarbari 34 Bangladesh Government over the control power plant. The Phulbari Coal mine, of land, resources and polity. funded by the World Bank and ADB, has met with wide objections in Bangladesh.35 The CHT is one of the most heavily Several activists were killed and tortured militarized zones in the world. According for addressing the impact of the project. to the CHT Commission, CHT has been JICA isproposing to build a port, a liquefied under a de facto Bangladeshi military natural gas (LNG) terminal, four 600-MW rule codenamed “Operation Uttoran” coal-fed power plants, as well as rail lines, (Operation Uplifting) since the early 1980s. roadways, and electrical systems. This is The Bangladeshi military is responsible for part of an infrastructure package deal, gross human rights violations against the under which JICA will provide a loan of $3.7 indigenous people of the region, including billion to Coal Power Generation Company 13 major genocides and crimes against Bangladesh Ltd. This project, as well as
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others from Japan is likely to restrict the modernize Chittagong Port, following influence of China in Bangladesh as it has intense political pressure from India and increasingly opted for financial assistance the United States, both concerned over from Japan, rather than China. The ADB, China’s growing influence in the Indian JICA and WB financing of infra-structure Ocean region, including Bangladesh, with and coal-fired power plants will facilitate its Belt and Road Initiatives.36 JICA offered the exploitation of natural resources in a loan to cover US$3.7 billion of the total Bangladesh such as natural gas and coal US$4.6-billion price tag for this project.37 as well as the use of port facilities to trade Since 2014, there are indications that with other countries. The Chakma people Bangladesh and Japan are committed to of CHT are concerned with the impact of deepen their bilateral relationship through extractive industries being developed in the Bay of Bengal Industrial Growth Belt, their lands. something that is key to Japan’s strategy for South Asia.38 China’s efforts to control strategic locations in the Bay of Bengal as well as Military aid from China is a source of tension its plans to build sea ports have caused in Bangladesh as it undercuts the efforts of considerable tension in Bangladesh. India and Japan to deter Chinese influence A proposed Chinese-backed seaport in the country. China has been the biggest construction project in Bangladesh has military aid provider to Bangladesh.39 been abandoned in favor of Japan after When Bangladesh’s military purchased India, the US and Japan pressured the two Ming-class type 035B submarines Bangladesh Government to turn down the from China, costing around $203 million, Chinese financing plan. Earlier, Bangladesh India and Myanmar were alarmed. While approved Japan’s proposal to finance and Myanmar had no official reaction, it started build a seaport in Matarbari, located some to speed up its own submarine purchasing 25 kilometers from Sonadia, where Beijing program. India, on the other hand, openly had offered to construct the country’s first showed its displeasure by sending a high- deep water port. JICA also offered 80% profile government representative to financing on easy terms to build four coal- Bangladesh.40 India also operationalized a fired power plants of 600 MW each and a US$4.5 billion line of credit, its third and port complex in Matarbari. largest ever, to Bangladesh in October 2017 as part of its strategic efforts to wean In 2010, China was publicly invited by the Dhaka away from China.41 Government of Bangladesh to participate in the expansion and modernizing of Development cooperation in indigenous Chittagong port, and the country pledged territories, which does not respect their US$9 billion for the endeavor. This rights over their land and resources, plan paves the way for China’s broader is another major source of conflict. ambitions to build an overland corridor With funding support from the World from Yunnan province to a port on the Bank, the Bangladesh Government Bay of Bengal, bypassing Southeast Asia. commenced work on the “Chittagong In February 2016, the China Harbour Hill Tracts Connectivity Project” in early Engineering Company project was 2016.42 The main objective of this road scrapped by the Dhaka government to construction project, which is to be built
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by the Engineering Core of the Bangladesh Conclusions army, is to expand trade with the Mizoram State of India.43 The CHT Regional Council The contiguous South Asian region has not given any level of consent for of North East India, Bangladesh and the Thega Mukh land port, which is part Myanmar in South East Asia presents a of the World Bank project, because of its continuing legacy of efforts by colonial possible adverse impact. Nonetheless the powers and newly emerging powerful government has begun to implement the countries to pursue their economic and project, ignoring the opinion of the CHT political interests. The process has led Regional Council.44 The road building plan to considerable conflict that has been of the World Bank would further facilitate triggered by competition for the control the control and suppression of indigenous of resources, for key/strategic locations. people’s right to and movement for self- Corporations from foreign countries have determination in the CHT. been eager to expand into this region.
Japan has been using its ODA to leverage China’s influence, through its One Belt its influence in Bangladesh, including One Road initiatives and also through the in the conflict in Rakhine. In May 2018 financing from the AIIB, has caused many Japan announced that it would provide tensions. India, along with Japan, the US, around US$1.8 billion in loans to finance and Australia, has tried to keep China infrastructure and other development at bay and limit its influence in South projects in Bangladesh to repatriate the Asia, particularly in terms of controlling Rohingyas refugees in the country.45 On strategic geographical locations. By 29 June 2017, JICA and the Government of cooperating with India and Bangladesh, Bangladesh signed a loan agreement to and also with Myanmar, to develop provide ODA loans of up to 178.225 billion connectivity projects in South and yen (approximately US$$2.05 billion) to Southeast Asia, Japan has an opportunity fund six major infra-structure projects. to accomplish its objective of countering The ADB has commenced a financing Chinese economic and strategic plan for development of the Chittagong expansion in the region. Japan’s use of Port to improve the inter-modal transport ODA as a tool of economic statecraft systems and to expand regional trade. seems to be directed toward reinforcing The Japan Fund for Poverty Reduction its dominance as an aid donor while is providing technical assistance for this counterbalancing China’s expansion. ADB project.46
The pursuit of these policies and alliances Human rights violations, threats on the has been developed with a recognition of survival of indigenous communities, the the strategic nature of the land, geography, continued impunity of the military and and resources. At the same time, the the unaccountability of corporate bodies indigenous peoples in these contiguous are deliberately ignored in the pursuit areas are perceived as threats and of political and economic dominion of obstacles to these ambitions. Increased Bangladesh by powerful countries. militarization, suppression of community
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rights and voices and the restriction of civil of Myitsone Dam in Myanmar illustrates society space while insisting on economic this point. and counter–terrorism cooperation figure large throughout the region. Development cooperation should be founded on a response to the development The human rights implications for concerns and needs of affected indigenous peoples include displacement, communities. It should assist in the extra judicial executions, and sexual advancement of democratic development harassment, to name just some of processes, and encourage the meaningful the consequences. All are the direct participation of indigenous communities consequence of military operations by in defining and implementing projects these three states against their indigenous affecting their rights, land and resources, peoples. Another factor is the rising and their future as a people. tension created by the military build- up and cooperation amongst powerful Development cooperation, including countries in pursuit of their political and the provision of aid, should insist on economic agendas for NE India, Myanmar strong compliance to standards of and Bangladesh. indigenous people’s rights, environmental protection, sustainable development The pursuit of unsustainable and and corporate accountability to uphold destructive development processes human rights’ principles and practices. has pushed indigenous peoples to the Donors’ involvement in and financing of periphery of survival, compelling them peace building processes should not be to consolidate and deepen their struggle manipulated to advance their political for their self-determination, for defense objectives or the interests of their multi- of their land and livelihood, and for their national companies at the expense of the rights and dignity as a people. Their resolve recipient countries and their people. is fueled by the increased militarism unleashed on their lives and land. Governments should stop all forms of militarization and human rights’ violations The massive loss of land and livelihood of indigenous communities. All emergency by indigenous communities and the and security laws employed to repress destruction of their environment and indigenous peoples such as the AFSPA, 1958, culture due to militarization is likely to or the National Security Act, 1980, should be intensify the resistance of indigenous repealed. Indigenous peoples’ right to self peoples and exacerbate existing armed determination over their lands and resources conflicts. The opposition to dam building as outlined in the UN Declaration on Rights of in Kachin State along with increased Indigenous Peoples (UNDRIP) should be fully conflict situation and the cancellation recognized and implemented.
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ENDNOTES
1 Myanmar: Country Partnership Strategy hovercrafts-conscripted-into-manipur- (2017-2021), Asian Development Bank, police-force/ March 2017 https://www.adb.org/ documents/myanmar-country-partnership- 9 Sukhoi-30 warplanes to be deployed in strategy-2017-2021 Tezpur by Oct, PTI | Sep 13, 2009 https:// timesofindia.indiatimes.com/india/Sukhoi-30- 2 JICA to Invest in Improving Transit Ability warplanes-to-be-deployed-in-Tezpur-by-Oct/ by Extending ODA Loan of Approximately articleshow/5005619.cms INR 2,500 Crore for the North East Road Connectivity Project- Transforming 10 World Bank Approves US$ 470 Million to Infrastructure in North East India - JICA Improve Electricity Supply in North Eastern Press Release, April 2, 2018 Region, India World Bank Press Release, June 24, 2016 http://www.worldbank.org/ 3 “$107 Million World Bank Project to Connect en/news/press-release/2016/06/24/world- Mizoram with Bangladesh and Myanmar via bank-approves-usd470million-improve- Roads”, World Bank Press Release, June 12, electricity-supply-the-north-eastern-region- 2014 http://www.worldbank.org/en/news/ india press-release/2014/06/12/107-million- world-bank-project-to-connect-mizoram- 11 “Japan Agency to Finance Projects in with-bangladesh-and-myanmar-via-roads Arunachal”, North East Today, 8 June 2015 https://www.northeasttoday.in/japan- 4 “AIIB Looks Forward to Promoting agency-to-finance-projects-in-arunachal/ Infrastructure in Myanmar: President”, The Global Times, 1 November 2016 https:// 12 “No third-party meddling in North East: China consult-myanmar.com/2016/11/01/aiib- on Japan FDI plan”, Apurva | September 16, looks-forward-to-promoting-infrastructure- 2017, Indian Express https://indianexpress. in-myanmar-president/ com/article/world/no-third-party-in-india- north-east-states-n-e-china-on-japan-fdi- 5 “Toward Strategic Economic Cooperation plan-shinzo-abe-narendra-modi-4845773/ between India and Japan,” Darshana M. Baruah, Carnegie India, 1 December 13 “US calls for increasing connectivity 2016,https://carnegieendowment.org/files/ in South Asia”, PTI|, Economic Times, Darshana_Baruah_India_and_Japan.pdf. 18 October 2017 //economictimes. indiatimes.com/articleshow/61135171. 6 Supreme Court orders CBI probe into extra- cms?utm_source=contentofinterest&utm_ judicial killings in Manipur, PTI | 14 July medium=text&utm_campaign=cppst 2017 https://timesofindia.indiatimes.com/ india/supreme-court-orders-cbi-probe- 14 “Lafarge's India-Bangladesh cement into-extra-judicial-killings-in-manipur/ project remains frozen”, Julien Bouissou, articleshow/59591193.cms The Guardian, 20 Aug 2010 https://www. theguardian.com/world/2010/aug/13/india- 7 “Jiribam-Tupul-Imphal rail link: How Indian bangladesh Railways is working on big Manipur project amid militant threats”, PTI, The 15 “India, Japan to Step up Defense Financial Express, 11 May, 2018 https:// Cooperation”, Deccan Herald News Service, 6 www.financialexpress.com/infrastructure/ September 2017 https://www.deccanherald. railways/jiribam-tupul-imphal-rail-link-how- com/content/631725/india-japan-step-up- indian-railways-is-working-on-big-manipur- defence.html project-amid-militant-threats/1163847/ 16 “US, India and Japan begin naval exercises, 8 Three American made hovercrafts as China looks on”, By Steve George and conscripted into Manipur police force, Huizhong Wu, CNN, 12 July 2017 March 8, 2011, The Morung Express http:// morungexpress.com/three-american-made- 17 “India, Japan Call on China not to Use Force
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in South China Sea Disputes”, Franz-Stefan 26 “Slow genocide: Myanmar’s invisible war on Gady, The Diplomat, 15/7/2016 https:// the Kachin Christian minority”, Libby Hogan, thediplomat.com/2016/07/india-japan-call- The Guardian, 14 May 2018 https://www. on-china-not-to-use-force-in-south-china- theguardian.com/world/2018/may/14/slow- sea-disputes/ genocide-myanmars-invisible-war-on-the- kachin-christian-minority 18 “Beijing’s Stake in Myanmar’s Peace Process”, China US Focus, May 05, 2017https://www. 27 “China eyes closer military cooperation chinausfocus.com/foreign-policy/beijings- with Myanmar as it looks to expand stake-in-myanmars-peace-process sphere of influence near India’s borders”, 23 November, 2017, South China Morning 19 “Myanmar's Religious and Ethnic Conflicts: Post http://www.scmp.com/news/china/ no end in sight”, Heinrich Boell Foundation, diplomacy-defence/article/2121298/china- Report by Mirco Kreibich, Johanna Goetz, eyes-closer-military-cooperation-myanmar- Alice Muthoni Murage Published on24 May it-looks 2017 https://reliefweb.int/report/myanmar/ myanmars-religious-and-ethnic-conflicts- 28 “Japan pledges $390mn to boost Myanmar no-end-sight peace”, Emirates Business, 2 November, 2016 http://emirates-business.ae/japan- 20 “Is Rohingya persecution caused by business pledges-390mn-to-boost-myanmar-peace/ interests rather than religion?”, Saskia Sassen, The Guardian, 5 Jan 2017 https:// 29 “Myanmar’s peace process attracts www.theguardian.com/global-development- increasing Western interest”, Larry Jagan, professionals-network/2017/jan/04/is- South Asian Monitor, 17 January 2018 rohingya-persecution-caused-by-business- http://southasianmonitor.com/2018/01/17/ interests-rather-than-religion myanmars-peace-process-attracts- increasing-western-interest/ 21 “Japan’s Myanmar Diplomacy – Analysis”, Dr. Rajaram Panda, Eurasia Review 18 30 “Japan announces a nearly $8 billion package January, 2018 https://www.eurasiareview. for Myanmar”, AFP and Chan Mya Htwe, The com/18012018-japans-myanmar- Myanmar Times, 3 Nov 2016. https://www. diplomacy-analysis/ mmtimes.com/national-news/23451-japan- announces-a-nearly-8-billion-package-for- 22 “Dams on Myanmar’s Irrawaddy river could myanmar.html fuel more conflicts in the country”, The Conversation, 10 October 2017 https:// 31 Signing of Japanese ODA Loan Agreement theconversation.com/dams-on-myanmars- with Myanmar: Comprehensive support irrawaddy-river-could-fuel-more-conflicts- for socioeconomic development, JICA in-the-country-84386 Press Release, 29 March, 2018,https:// www.jica.go.jp/english/low/news/ 23 “China, Myanmar Face Myitsone Dam press/2017/180329_02.html Truths”, Yun Sun | 21 Feb 2014, | Vol 2 Issue 9, Business Today https://www. mmbiztoday.com/articles/china-myanmar- 32 “China’s poverty alleviation efforts face-myitsone-dam-truths in Myanmar help ease Rakhine State situation” By Zhang Yiqian, Global Times, 24 “Thousands flee Myanmar's ethnic conflict in 2 April 2018 http://www.globaltimes.cn/ Kachin”, YUICHI NITTA, Nikkei Asian Review, content/1096305.shtml 10 May, 2018 https://asia.nikkei.com/ Politics/Thousands-flee-Myanmar-s-ethnic- 33 Chittagong Hill Tracts is one of the most conflict-in-Kachin2 heavily militarized zones in the world, johntripuraRights, 25 May, 2016 https:// 25 Kuang, Ka. “Burmese President Halts johntripura.wordpress.com/2016/05/25/ Myitsone Dam Project.” The Irrawaddy, chittagong-hill-tracts-is-one-of-the-most- 30 September 2011. http://irrawaddy.org/ heavily-militarized-zones-in-the-world/ article.php?art_id=22172
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34 “Bangladesh Juggles Chinese, Japanese thediplomat.com/2018/01/bangladeshs- Interest”, By ASMG Kibria, The Diplomat, ambitious-military-modernization-drive/ January 05, 2015 https://thediplomat. com/2015/01/bangladesh-juggles-chinese- 41 India extends $4.5 billion loan to Bangladesh”, japanese-interest/ Live Mint, 05 Oct 2017 https://www.livemint. com/Politics/PJNGy9mN1sOLFqVTKKdI5L/ 35 “ADB Pulls Out of Controversial Coal Project”, Bangladesh-signs-45-billion-loan-deal-with- 4 April 2008 https://www.banktrack.org/news/ India.html adb_pulls_out_of_controversial_coal_project 42 36 “Geopolitics hamper modernization of Bangladesh ports”, Turloch Mooney, Senior 43 CHTTimes24.com, 4 January, 2016 Editor, Global Ports, 19 October, 2016 https://www.joc.com/port-news/asian- 44 “World Bank funded-project kicks off ports/geopolitical-wrangling-impedes- in Chittagong Hills without meaningful development-modern-bangladesh- consultation with the Chittagong ports_20161019.html Hills institutions and indigenous peoples”, By: Kapaeeng Foundation, 37 “Bangladesh's Deep Sea Port Problem”, 8 February 2016, Land Portal By Wade Shepard, The Diplomat, June 07, https://landportal.org/news/2016/04/ 2016https://thediplomat.com/2016/06/ aipp-world-bank-funded-project-kicks- bangladeshs-deep-sea-port-problem/ chittagong-hills-without-meaningful- consultation 38 “Bangladesh Juggles Chinese, Japanese Interest”, By ASMG Kibria, The Diplomat, 45 “Japan & Bangladesh agree to help realize 5 January, 2015 https://thediplomat. early return of Rohingya refugees”, The com/2015/01/bangladesh-juggles-chinese- Japan Times, May 15, 2018 https://www. japanese-interest/ japantimes.co.jp/news/2018/05/15/ national/politics-diplomacy/japan- 39 “FOUR DECADES OF BANGLADESH-CHINA bangladesh-agree-help-realize-early-return- RELATIONS, What next?” The Daily Star, 2 rohingya-refugees/#.Wvq-SH_VDX4 October, 2015 https://www.thedailystar.net/ op-ed/politics/what-next-150247 46 Bangladesh: Strategic Master Plan for Chittagong Port (Sovereign Public Project 40 “Bangladesh's Ambitious Military | 45078-001) https://www.adb.org/ Modernization Drive”, By Shakil Bin Mushtaq, projects/45078-001/main#project-pds the Diplomat, 9 January 2018 https:// Sovereign (Public) Project | 45078-001
148 Development Ground Zero: Philippines, Cambodia, Myanmar
Council for People’s Development and Governance
In the aftermath of World War II, foreign its work and development investment aid was used for the reconstruction of portfolio in its former colony Myanmar: states allied with the US and to establish “DFID’s programme is part of a wider UK US neocolonial influence over many strategy for Burma to become a stable, countries in the “third world”. Determined prosperous, democratic, and like-minded to maintain political control, donors led ally that champions human rights, plays a by the US used foreign loans, technical positive role in the world, and that supports assistance and grants to help douse UK interests and bilateral trade.” anti-colonial and national independence struggles taking place in the 1940s in Development aid has been an effective the region, including in the Philippines, tool to assure donors of markets that will Cambodia and Myanmar. absorb their surplus goods and capital. They have accomplished this through using Given such historical background of aid as leverage on recipient governments to using aid to advance donors’ economic, implement free trade, labor flexibilization, political and military agenda, development public-private partnership (PPP), and cooperation reforms must be persistently promotion of foreign investments, among espoused to ensure that the potential of aid others, as supposed drivers of progress to foster development is truly maximized. and prosperity as well as of stability and peace. Recipient governments are often Major bilateral development agencies more than willing to abide by these policy such as the US Agency for International conditionalities not just because of the Development (USAID), the UK’s Department ‘development’ that aid supposedly brings for International Development (DFID) and but also because aid helps prop up their Japan International Cooperation Agency own political power. Unfortunately, (JICA), as well as multilateral institutions many projects funded by aid are rarely like the Asian Development Bank (ADB) aligned with and determined by the and the World Bank, have designed and sovereign people’s demand for genuine implemented aid strategies that merely development. As such, violence against promote the interests of donors. For local communities, including through example, the US frames its development militarization, often accompany the assistance as an opportunity to “support implementation of these projects. America’s national interests” through “collaboration with aspiring partners Over the past decades, official development that are aligned with US interests and assistance (ODA) has faced several development investments where [it] can challenges. Apart from the continuing have the most impact”. A similar position struggle over donor countries’ 0.7% ODA/ is expressed by the UK when describing GNI (gross national income) commitments,
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effective development advocates have as source for its “much-needed natural also been vigilantly monitoring the resources and a market for Chinese increasing use of development aid to manufactured goods, including weapons.” legitimize counter-terrorist and other security-related initiatives in recipient The increasing tendency of prioritizing countries. Dwindling development aid conflict, peace and stability as preconditions spending vis-à-vis increased trend of for development is realized not just in the military spending observed in the Asia individual donor development strategies Pacific is also becoming a cause for alarm. being implemented in countries like the In 2016, the top five bilateral DAC ODA Philippines, Cambodia and Myanmar but donors—US, Germany, UK, Japan, and also in the very efforts of the Development France—disbursed a total of U$72 billion in Assistance Committee (DAC) of the bilateral ODA while spending U$802 billion Organization for Economic Cooperation for military, with the US military spending and Development (OECD) to “modernize” amounting to more than 21 times of its ODA that allow for military and police- bilateral ODA disbursement. related spending in relation to maintaining peace and security and prevention of This worsening condition is observed in violent extremism in recipient countries. developing Southeast Asian countries such as the Philippines, Myanmar and This increasing trend is observed in the Cambodia where military force is being development rhetoric perpetuated for used to forcibly convert vast tracts of land instance by USAID in the Philippines when for aid-funded ‘development’ projects in it proposes in its current development communities where protracted disputes strategy how instability “brought about over land, food security, human rights and by poverty, marginalization and conflict justice have long been taking place. has impeded development in many areas throughout the region” without taking Development aid for donors’ into consideration what conditions have military/security agenda created conflict in the first place. The similar narrow focus of development is Intense militarism and wars of aggression also noticeable in DFID’s work in Myanmar in recipient countries have created serious that is oriented towards “help[ing] Burma implications on the global aid regime continue on a path to being a better and overall campaign for sustainable governed, fairer and more peaceful society, development. Especially since the US-led through working with the government global war on terror in the wake of the towards increased wealth and better 9/11 attacks, aid has been increasingly public services shared by all of its people.” utilized as an instrument to protect donors’ national security and promote Continuing underdevelopment their foreign policy such as the US’s recent amid repression preoccupation of containing competitors like China. This use of what some refer to Increasing ODA disbursements have been as ‘smart power’ is not limited to traditional noted in the Philippines and Myanmar (with world powers. China, for instance, played Cambodia experiencing a decline even the most important role in boosting as absolute figures show it still corners a Myanmar’s post-1988 economy through substantial amount of aid) over the period foreign investment that utilized Myanmar of 2010 – 2015 (Table 1). A significant
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portion of people in these countries live communities and indigenous populations in below the national poverty line (Figure 1) the rural areas of the Philippines, Cambodia amidst increasing reports of human rights and Myanmar where decades of conflict violations committed among marginal and and dispute over control of rich natural vulnerable communities. resources have been taking place.
In Myanmar, for example, the persecution In the Philippines, for instance, human and displacement of the Rohingyas through rights violations, including violations against state-supported military violence have indigenous people’s rights to ancestral resulted in the forced evacuation of more domains are rampant in regions such as than 650,000 Rohingyas to Bangladesh in Cordillera where government promotes on top of an estimated 120,000 internally large-scale foreign-funded mining projects, displaced people in the central Rakhine hydropower and geothermal plants, State. Meanwhile in the Philippines, an irrigation dams, and cash-crop plantations average of 1 farmer is killed every five (Figure 2). In Mindanao, an April 2018 days since President Rodrigo Duterte international fact finding and solidarity assumed office in 2016. These killings mission led by the Kilusang Magbubukid exclude the estimated 5,000 drug-related ng Pilipinas (Peasant Movement of the killings under the Duterte administration Philippines or KMP), Karapatan Alliance reported by media outlets and human for the Advancement of People’s Right rights organization. In Cambodia, while and other groups recorded around 2,945 international development agencies have human rights violations in land-contested lauded the creation of jobs facilitated areas in the said region. Note that by development projects and foreign Mindanao has been put under Martial Law investments—bringing its unemployment by Pres. Duterte since May 2017 while big- rate to 0.2 per cent (ILO 2018)—51percent ticket infrastructure projects are planned of jobs in Cambodia are actually considered for implementation there as part of the as “vulnerable” jobs or jobs where people administration’s flagship program, ‘Build, work but do not receive a salary. Build, Build’ financed mainly through ODA. It is said that about 70% of the country’s Militarization, land grabs and aid military and security forces are currently deployed in Mindanao. There is an increasing trend in the region of corporate land grabs enforced through In Cambodia, rampant land grabs state security forces often in collusion with and violation of human rights among big foreign corporations and supported by indigenous and peasant communities foreign aid. have been prevalent in areas under the government’s Economic Land Concession A growing number of military encampments have been reported and observed by peasant Table 1. Registered ODA Commitments for Philippines, Myanmar and Cambodia for period of 2010 -2015 2010 2015 Philippines USD 14 billion USD 32 billion Cambodia USD 72 billion USD 67 billion Myanmar USD 7 billion USD 63 billion Source: OECD Creditor Reporting System Aid Activity Database
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Figure 1Population living below poverty line in South East Asia The Reality of Aid 2018 Report
Figure 1 Population living below poverty line in South East Asia Share of Population below the National Poverty Line (%)
Source: Asian Development Bank, Basic Statisticds 2018 (ELC) program. ELC is a long-term lease from displacement, destruction of the arrangement allowing a concessionaire livelihood, dispossession and harassment. to clear land to develop industrial-scale The Cambodian government granted agriculture. As of 2017, about one-fourth of 42,000 hectares of land in Preah Vihear the country’s agricultural and forest lands to Chinese company Hengfu Group Sugar are already under the control of Chinese Industry Co., Ltd in 2016. companies of which almost a million hectares have been acquired through ELCs. It’s no Meanwhile, donors such as Japan and coincidence that emerging power China is the UK continue to provide loans, grants, not only Cambodia’s top foreign investor but and technical assistance to Myanmar also its top contributor of aid, accounting for amid the ongoing reported genocide of more than 70% of the aid they receive. almost 800,000 Muslim Rohingyas. For instance, while the UK’s DFID seems to be The intensifying repression of rights related careful in distancing itself with the central to these investments is being experienced, government by channeling its aid through for instance, by the Kuy people in the multilateral institutions as well as local and province of Preah Vihear where tens of international NGOs, it still does not hesitate thousands of indigenous people suffer to express the “UK Government’s enduring
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Figure 2 Military encampments and development projects in Cordillera Region of the Philippines
support for Aung San Suu Kyi [and] Emerging discourse among development provid[ing] good foundations to influence and peasant scholars have begun to re- and help her government to succeed.” examine the religious/ethnic persecution
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of the Rohingyas as mere smokescreen to land, food, justice, and self-determination whitewash the state-supported corporate as violent extremism. Such rhetoric as land grabs taking place in resource and perpetuated by the US and other top mineral rich regions of Myanmar. In his bilateral donors not only undermines the research, Sakia Sassen notes the massive people’s struggle for real democracy but land grabs of vast stretches of land from also delegitimizes the very root causes of smallholders enforced by state military their struggles—unequal distribution of forces since 1990s; enforced without wealth, landlessness and state-sponsored compensation and threats against fighting land grabs, rural underdevelopment, back. “This land grabbing has continued lack of access to basic social services, across the decades but has expanded etc. Instead of helping address these enormously in the last few years. At the underlying issues, aid initiatives for time of the 2012 attacks, the land allocated conflict, peace and security programs to large projects had increased by 170% focus more on civic engagement, technical between 2010 and 2013. By 2012 the law skills training, economic participation governing land was changed to favour and restoring law and order as solutions large corporate acquisitions.” to prevent radicalization and spread of extremist ideology in conflict areas. Sassen adds that aggressive persecution of the Rohingya and other minority The current practice of ODA delivery, use groups is possibly motivated by less of aid, and influence over what constitutes by religious/ethnic issues more than development outlined in this essay military-economic interests given how illustrate how the use of state-sponsored expelling Rohingya from their land is military and security influence to oversee “good for future business.” This coincides the implementation of development goes with the government’s allocation of 1.3 far and beyond diverting critical financial million hectares of the Rohingya’s area resources to military expenditure of top for corporate rural development, a sharp foreign powers. What with the increasing increase from the previous allocation of land grabs and forced conversion of lands just 7,000 hectares in 2012. in rural areas of the Philippines, Myanmar and Cambodia is ensured through state Making aid work for development supported deployment of security and military in these areas. When peace-keeping Structural adjustments and other and stability are framed as main drivers conditionalities that come with loans, of development, protracted wars and technical cooperation and grants aggravate emergency are becoming less an exception the conflict and social unrest in already but rather a norm of development. And conflict-riddled areas. Organized resistance where the norm for addressing poverty against destructive ‘development ’projects and premise for development is economic pushed by governments and funded growth that involves bending towards by foreign aid are suppressed, often by neoliberal orientation the use of state- military force. supported militarized force to guarantee ‘development,’ how can aid function into As donors and governments promote the anything but aggression? How can aid be view that “peaceful and inclusive societies” transformed to serve the people’s need are precondition to development, they also and champion the people’s guaranteed dismiss legitimate people-led struggles for rights?
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In the last 20 years, civil society The potential of ODA as an essential and organizations have used their combined relevant resource for achieving sustainable position to engage high-level political development goals (SDGs) cannot be space and unique knowledge and overlooked. When utilized according to the grasp of grassroots realities faced by principles of democratic country ownership, marginalized communities around inclusive development partnership, and the world to counter the prevailing transparency and accountability, aid has development rhetoric, challenge the immense potential to steer economic and practice and conduct of development aid, political policies that are truly beneficial and advocate for overall development to the people. Development effectiveness reform. Civil society and people’s advocates maintain that it “could play a organizations, as representatives of the key role in realizing the SDGs because of people, are uniquely placed to hold donor its unique characteristics as dedicated countries to their historical obligations resources for development shaped by to assist poor countries recover from public policy choices.” Most importantly, the aftermath of colonial aggression. the participation of the people through CSOs and people’s organizations must organized political actions, people’s continuously push for key reforms that organizations and civil society is critical in will realize the transformative potential ensuring that aid is driven by the demands, of development aid in helping change needs and aspirations of the people who the lives of the people. stand to benefit from it.
REFERENCES
Asian Peasant Coalition, “APC condemns Heng Japan International Cooperation Agency, “Japan’s Fu’s land grabbing in Cambodia, expresses ODA,” 2017. firm support to indigenous Kuy people’s struggle for land,” https://asianpeasant.org/ Kilusang Magbubukid ng Pilipinas, “International apc-condemns-heng-fus-land-grabbing-in- Fact-Finding and Solidarity Mission Report cambodia/, 2018. for Northern Mindanao,” May 2018.
Chen, Daphne, “Cambodia’s low rate of Reality of Aid, “Rising Militarism: Implications unemployment doesn’t tell whole story, report for Development Aid and Cooperation in finds,” The Phnom Phen Post, 22 May 2018. Asia Pacific,” Manila: CSO Partnership for Development Effectiveness, 2018. Communication Network in Action (CNA), Ponlok Khmer, GRAIN, Cambodia Indigenous Seekins, Donald, 2015. “Japan’s Development Association (CIYA) and Asia Indigenous Amibitions for Myanmar: The Problem People Pact (AIPP), "REPORT Cambodia: of “Economics before Politics”, Journal of Communities in Protracted Struggle Against Current Southeast Asian Affairs 2/2015: 113- Chinese Sugar Companies' Land Grab", 2015. 138.
Dela Cruz, Deewa, 2018. “South-South Land Grabs: UK Department for International Development, A desk study on Chinese land concession “UK in Burma” 2017 projects as economic investment cooperation with Laos and Cambodia,” Policy Research United States Agency for Development, “Country on Operationalizing People-Oriented South- Development Strategy April 2013 - April South Cooperation, CSO Partnership for 2018, (Extended thru April 2019) Development Effectiveness and Reality of Aid. https://www.phnompenhpost.com/national/ Ibon International, “Primer on ODA and cambodias-low-rate-unemployment-doesnt- Development Effectiveness”, 2009. tell-whole-story-report-finds
155 Migration and Integrity of ODA as a Resource in Sub-Saharan Africa
David Ugolor and Leo Atakpu, Africa Network for Environment and Economic Justice (ANEEJ)
also states that “fourteen of the 30 most 1. Introduction aid dependent countries in 2000 reduced their dependence by more than 20% of Increasingly, there have been debates expenditure by 2009.” on the integrity of Official Development Assistance (ODA) to recipient countries. Some of the reasons are not hard to While many see the need for reforms discern. Aid dependent governments are to improve the integrity of ODA, others in danger of losing the space they need believe that recipient countries should to design and implement home-grown introduce national and regional agendas development policies. Loss of policy space to move beyond aid dependence. can occur as a direct consequence of aid, because donors can insist, that recipient Given global economic inequalities and countries implement donors’ policy harsh realities of many Sub-Saharan priorities through tied aid. African countries, including Nigeria, there are numerous challenges affecting When services are funded largely through millions of citizens, particularly the youth aid, it can undermine relationships population. Aside from the obvious issues whereby citizens hold their governments of widespread poverty, insurgency, youth accountable for delivering services such as unemployment, the migration of millions education, health or water. Governments of youth to Europe in search of greener are less accountable to people, switching pastures has globally assumed worrisome their attention to relations with aid donors proportions. Sadly, it has even been an rather than their own citizens. avenue for the re-introduction of slave trade, hundreds of years after it was In 2008, The Economist nevertheless abolished.1 suggested that, despite manifold and persistent problems of poor performing There has been some evidence which governments and erratic climates, Africa point to the fact that recipient countries has a chance of rising.3 The increasing are depending less on aid. In fact, aid interest in Africa by emerging economic dependency has fallen on average by a giants such as China and India is connected third in the poorest countries in the first with new market opportunities opening up decade after 2000, according to a report by in the continent. This is a sign that Africa Action Aid.2 In Ghana aid dependency has is being seen as a continent of interesting dropped from 47% to 27%, in Mozambique promises. from 74% to 58% and in Vietnam from 22% to 13%. Although aid levels have The quest for self-reliance is seemingly increased, economic growth and countries’ undermined by the ever-increasing ability to mobilise their own resources has commitments for more and better aid increased faster. The Action Aid report accountability that donor countries
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make at every international summit. Development, also show that, while donors Many recipient countries are beginning have increased aid budgets, much of this to pose two questions: Does Africa new spending is being directed toward in- need more aid? And if so, why is this, donor refugee costs. given the promising economic trends the continent is registering? Does Africa ODA spent on hosting refugees inside need aid to stem the slave trade in Libya donor countries has jumped by 27.5% in and stop the hundreds of thousands of real terms since 2015. In 2016 it reached deaths in the Mediterranean and Sahara $15.4 billion. That equates to 10.8% of total desert? net ODA, up from 9.2% in 2015 and 4.8% in 2014. Many donor countries have seen 2. Aid and migration unprecedented inflows of refugees in the last two years. The DAC is working to clarify Migration has always been an integral its ODA reporting rules to ensure that part of human life. Escaping natural and refugee costs do not eat into funding for human threats, as well as harsh economic development. Humanitarian aid rose by 8% conditions, are the most important in real terms in 2016 to USD 14.4 billion.7 motivations of those leaving their home countries.4 The recent flow of refugees These overall increases are largely due to around the world evokes diametrically increased contributions by countries such opposed reactions by the host countries’ as Germany, which is the second-largest citizens. Many people are willing to help donor country, spending $23.8 billion on refugees, whereas many others are not.5 net official development assistance in 2017 (in 2016 prices). This corresponds to 0.66% Yet, the underlying mechanisms that lead of GNI. Germany achieved the 0.7% target to refugee helping versus rejection are for the first time in 2016, largely driven by not well understood. Robert Böhm, Maik refugee-related expenditures ($6.6 billion M. P. Theelen, Hannes Rusch, and Paul in 2016). A decrease in the ODA-reportable A. M. Van Lange (2018) reckon that costs costs for hosting refugees in Germany associated with refugee helping are a key (US$5.9 billion in 2017, an 11% decrease) determinant of citizens’ willingness to do explains the lower overall ODA level in so. It is especially people with a higher 2017. When excluding these, net ODA only degree of solidarity that are willing to bear marginally decreased (-1% between 2016 the personal cost of helping. Emphasizing and 2017). the neediness of refugees as well as their integration efforts increases the willingness The DAC set up a temporary working among citizens to provide help.6 group to reassess the rules for what in-house costs can be counted as aid. The proportion of ODA spent on hosting Over the past year, they have worked to refugees inside donor countries has “improve the consistency, comparability, reportedly risen steeply, to 10.8 percent of and transparency of reporting of ODA- total ODA in 2016, up from 9.2% in 2015 eligible, in-donor refugee costs.” The group and 4.7% in 2014. The latest figures on ODA was billed to meet for the last time on July spending by the Development Assistance 10, before new rules, likely to come into Committee, released by the Organisation effect in 2018, are announced in October. for Economic Co-operation and Abby Young-Powel (2017) posits that while
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some countries are pushing for a broader In this context, Germany has established definition of what counts as ODA, a number a migration consulting centre in of aid organizations are now campaigning Lagos, Nigeria. The global program, for tighter limits. They also want greater “Programme Migration for Development” transparency around the reporting is commissioned by the German Ministry process — OECD data currently just has of Economic Cooperation (BMZ) and is one headline for “in-donor refugee costs,” being implemented by the Centre for with no further details of what exactly is Migration and Development (CIM) as a spent and how. joint operation.
The overarching objective of the Shifts in Spending migration program is to strengthen the development-relevant contributions of Abby Young-Powel further notes that migrants in their countries of origin and some $15.4 billion in DAC countries’ ODA improve the conditions for legal migration was spent domestically in 2016 — an in selected partner countries. It handles amount that has nearly quintupled since returning migrants as well as citizens who 2010, when it was just 3.25 billion. For are interested in emigrating.9 the first time, DAC donors spent more on domestic costs — about $1 billion — than However, the quality and integrity of aid on humanitarian assistance. as a resource for poverty reduction is increasingly being challenged by CSOs. Ten European countries spent over 15% The inclusion of first year refugee costs of their ODA on domestic refugee costs in in the donor countries has raised many 2016, with Austria (37.7 percent) spending questions. There is concern that ODA is the most, followed by Italy (34.3%) and being undermined by European countries Germany (25.2%). Four DAC-donors — that are taking advantage of rules in the Australia, Japan, Korea and Luxembourg OECD-DAC guidelines for development — did not count any refugee costs as ODA. cooperation. While support for refugees is a human rights obligation in donor According to Julie Seghers, the rules countries, these resources as ODA are self- on what can be classed as ODA are serving for the donor governments. currently vague and unclear, and some donor countries have used this to their It is also important to examine this 8 advantage. question of aid and refugees from the perspective of the forces that are Germany intends to deepen its focus on driving migration from African countries. Africa. During its G20 presidency, Germany Migration is a long-standing phenomenon. spearheaded discussions on increased However, as Guma el-Gamaty has noted public and private investments through “the issue has accelerated sharply in the two major initiatives: the ‘Compact past five years, and migration from mainly with Africa’, launched in 2017, and the sub-Saharan African countries to Europe ‘Marshall plan with Africa’, which focuses across Libya and other North African on stimulating private investments in countries can be traced back to the year Africa and supporting countries which 2000.”10 According to the International implement good governance reforms. Organisation for Migration (IOM), which
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monitors checkpoints, some 270,000 3. Emerging trends in ODA people passed through Agadez on their way towards Libya between February and allocation and displacement the end of September 2016. Foreign aid serves a multitude of Libya is not the only route for migration. objectives. For some donor states, the Morocco and Tunisia are also used, though allocation and type of aid is largely shaped to a much less extent. Libya is sadly caught by concerns for the development needs in the middle of an international migration of recipient countries, while other states web and a trafficking model that starts use aid rather as an instrument of foreign and stretches across the whole of sub- and commercial policy interests. Since the Saharan Africa to the south and beyond to early 1990s, the criteria for bilateral aid Bangladesh. allocation decisions have shifted towards some new objectives (Hjertholm & White, Migrants come from many countries such 2000). Czaika M. (2009) notes that one as Nigeria, Gambia, Mali, Senegal, Sudan, of these new goals of development Somalia, Eritrea , Ethiopia and others. policy is mitigating the root causes of Recently migrants from Bangladesh the heightened migration pressure from travelling through Libya have also increased refugees and other migrants coming in numbers. Migrants naively believe that from developing countries to Western by reaching Europe they will land jobs, industrialized countries. The prevention money and a quality of life that they could of refugee movements and the cessation only have dreamt of achieving back home.11 of long-lasting refugee situations have gained priority in international politics Migrants who risk their lives through as primary development and foreign thousands of miles of hazardous desert policy objectives, although bilateral donor routes and dangerous sea crossings on governments have, as yet, been rather very crowded small boats are driven by slow in implementing these objectives poverty, lack of jobs and persecution (UNHCR, 2006b).12 in their countries of origin. There are recruiters inside the sub-Saharan countries There are several emerging trends in of origin who make money from recruiting the distribution of ODA for development potential migrants. The city of Agadez in initiatives that relate very directly to northern Niger is a famous hub used by donor reactions to the increasing number African traffickers. However, the dreams of migrants attempting to cross over to of the majority of these people are often Europe. Germany, for example, frames its shattered. Europe refers to these migrants development policy under an overarching as "illegal" migrants, but seeking asylum narrative of “fighting the root causes of for political or humanitarian grounds, displacement.” The 2017-2021 German including economic reasons, is a legal right government coalition treaty focuses on fair according to international human rights trade, Africa, gender and education, social conventions and laws. and health systems, poverty, and climate change, but with particular attention to the Looking forward, costs of hosting refugees Middle East and North Africa, a source of in Germany are expected to decrease refugees coming to Europe. further, bringing the ODA/GNI share to 0.52% in 2018. Also, new aid rules allow for the inclusion of
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a wider set of peace and security activities. However, these governments are not Sarah Dalrymple (2016) posits that investing the time or resources required ensuring transparency and illustrating the to create a permanent solution by tackling development impact of funding decisions the root causes of the migration problem. will be critical to ensuring that the needs of vulnerable people are met. At the High-Level One of the root causes of the problem Meeting of the Organisation for Economic is the huge gap in human development Co-operation and Development (OECD) attainments between sub-Saharan Africa Development Assistance Committee (DAC) and Europe. According to the Washington held in 2016, governments agreed to new think-tank, Centre for Global Development, rules that allow for a wider set of peace and the flow of Africans risking everything to security activities to be counted as official achieve a better life in Europe is likely to development assistance (ODA).13 This continue. The centre argues that as poor decision was obviously taken because most countries develop, migration rates tend to migrants are from conflict riddled nations. rise until GDP per person reaches $7,000 to $8,000 per year. Most African countries Dalrymple is also of the opinion that there are far below this level of per capita is a risk that for some donors, depending income. For example, per capita income in 14 on how the wording in the communiqué the Gambia is about $500 per annum. For for the High-Level Meeting is interpreted, Nigeria, which is one of the highest in the 15 these changes to aid rules may result region, per capita income is $2,144. The in resources being diverted away from GDP per Capita, in Ghana, when adjusted activities with a greater development by Purchasing Power Parity is equivalent to and poverty-reduction focus in favour 24 percent of the world's average. GDP per of those that align to national security capita PPP in Ghana averaged $2,711 from 1990 until 2017, reaching an all time and political priorities. The new focus on high of $4,227 in 2017 and a record low ‘preventing violent extremism’ through of $1,919 in 1990.16 ODA, which aligns closely with many donor governments’ foreign policy The first systematic quantitative priorities on counter-terrorism, does assessment of the global average effect validate this concern. As a result, the direct of aid on emigration is the gravity model impact of ODA on people facing acute in Berthelemy et al. (2009).17 They find poverty and insecurity would be reduced, that aid raises net emigration from the undermining efforts to meet the ambition average poor country to high-income set out in the 2030 Agenda on Sustainable OECD countries: When aid rises by 10% of Development to “leave no one behind” GDP this raises the average emigrant stock as a share of population by 1.5 percentage 4. Impact of programmes that points. They also find that aid shifts the address the root causes of composition of emigration toward low-skill forced migration migrants, and that the share of bilateral aid raises emigration about twice as much Europe has been searching for quick fixes as aggregate aid. to deal with its huge migration issues. Unpopular governments are trying to One complication in interpreting these mitigate their migration policy failures. results, a complication common to many
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cross-country findings, is the possibility of presents perhaps what could be one way over-controlling—that is, holding portions of having a positive impact on channeling of the relevant causal pathway constant. ODA to deal with migration challenge. The regressions used by Berthelemy et al. (2009) control for the aid recipient’s 5. Case Study Of Edo State, GDP per capita, population, and trade Nigeria with the migrant destination country. This is a sensible empirical choice because Nigeria is one of the countries in Sub- all of these factors can affect migration Saharan Africa with the greatest migration independently of aid. But it has the crisis issues. Over 70 per cent of migrants drawback that all of these factors can from Nigeria are from Edo State. likewise form part of the causal pathway from aid to migration. Thus the coefficient The European Union (EU) Unit is estimates on aid itself show the responsible for the coordination of all EU relationship between aid and migration supported programs/projects, including other than any effects that aid might the returning of irregular migrants. The have via any effects on economic growth, Ministry of Budget and National Planning population growth, or trade. In principle, is responsible for the administration of EU aid could affect these other factors in projects, as well as the monitoring of EU ways that reduce migration, or increase it programs. Migration is handled under the even more. Ministry’s Special Projects and Programs Contribution to Non-focal Areas.19 The broad finding of Berthélemy et al. has been challenged by a small, recent A review of the situation for returning literature. Lanati and Thiele (2017), also in refugees to Africa confirms that the a gravity model, find no effect of bilateral International Organization on Migration aid on migration, and a negative effect of and the Federal Government hold co- 18 aggregate aid on migration. responsibility for returning Nigerian refugees who are held in Libya. This has In sum, the few cross-country studies been orchestrated by the European Union, testing the overall relationship between aid which made €100 available for every and migration fail to offer clear evidence Nigerian returnee under the IOM returning that aid has substantially deterred program. When a refugee arrives at either migration on average. The only study to the Murtala Muhammed or Port-Harcourt date published in a peer-reviewed journal Airport, he/she is to receive N41, 000 which finds that aid typically raises emigration. is given to them in Lagos.
However, the European Union, and the From available records, Nigeria’s federal International Organisation on Migration government, which signed the deal, has (IOM) have continued to seek ways to not been providing funds for rehabilitation better channel aid and other development of returnees. The sub-national Edo State assistance to countries of the south to Government has been providing some minimise the impact of migration on their cushioning funds for returned citizens to countries deploying the instrumentality enable them to visit their relatives. of overseas development assistance. The case study of Edo State, Nigeria, West Africa Out of deep sympathy for the plight
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of returnees, the Benin Monarch, NAPTIP, Ms. Okah-Donli, stated that their His Royal Majesty, Omo N’Oba N’Edo investigation revealed that some local Uku Akpolokpolo, Oba Ewuare II, the witch doctors have been involved in the Chairman of traditional rulers in Edo trafficking of persons to Europe. Their State, bestowed a N20,000 payment research confirmed that, once a victim’s for returnees from his kingdom who consent to be trafficked was obtained by registered at his palace. His foundation fraud or coercion, this person would be also promised to make payments to taken to a shrine to swear to an oath of beneficiaries for three months to help secrecy and allegiance before a local juju them to begin a new life. man. NAPPTIP’s Director General has partnered with the traditional institution in As the repatriation of Nigerian Edo, particularly the Benin Kingdom, to try refugees living in Libya continued, Edo to eliminate the tide of human trafficking State Governor, Mr. Godwin Obaseki in the state and Nigeria in general.20 approved the release of 150 hectares of land and N100million seed capital Dan Owegie stated that “it was quite for victims of human trafficking as well interesting to note that the cursing as 150 returnees. The money and land ceremony at the palace, which had in were given to those who completed attendance, priests, priestesses, native skills acquisition training at the Edo doctors, traditional religious worshippers, Agricultural Development Programme Bini chiefs, dukes, village heads, market (ADP) office in Benin City, the Edo state women, shrine worshippers, directors capital. Over 2,000 Edo citizens have and officials of the National Agency returned from Libya to Edo State. for the Prohibition of Trafficking in Persons (NAPTIP) as well as members Since he came into office a year and of the diplomatic community in Nigeria half ago, Governor Godwin Obaseki has and security agencies heralded the been working to end human trafficking of unprecedented step taken by the Benin females from 13 – 35 years of age to various monarch in combating the ugly menace of destinations in Europe. Aside from the great human trafficking in the state.”21 pain and misery to these individuals and their families, these violations have placed Through the odionwere (clan leaders), the the state in bad light, not only nationally Oba Ewuare II placed curses on all the but also internationally. The Governor had pastors, churches, individuals, groups, approached the palace for support. families and parents who promote, indulge, contract, participate or encourage Nigeria’s National Agency for the perpetrators in any vices associated with Prohibition of Trafficking in Persons human trafficking. Native doctors who (NAPTIP), had pleaded with the Oba of had been holding the perpetrators of Benin, Oba Ewuare II, to prevail on Juju the heinous crimes to oaths of secrecies priests to stop administering oaths on were also cursed as were cultists and victims of human trafficking. violators of the order banning community development associations and others During an advocacy visit to the Benin whose businesses have been initiating monarch the Director-General of the sons and daughters of the ancient kingdom into various cult groups.
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poverty reduction and empowerment by For NAPTIP, this ceremony and the the Sub-Saharan African governments partnership were most welcome, as all and development partners would go a other strategies had been exhausted, with long way in reintegrating them into the no success. Although many juju priests society and using their stories to deter had assured the Agency that they would others who would want to embark on stop administering oaths on the victims similar lethal trips to reconsider such this practice had continued unabated. plans and look inwards. These measures are fundamental to truly addressing During this period, the Edo State Governor and ending the migration challenge. sent an Executive Bill to the State House The European Union and other OECD of Assembly to ban all human trafficking countries interested in the migration activities in the state. The House quickly challenge should, therefore target the passed the Bill and the Governor has deployment of ODA such as the Assisted assented. The signing ceremony whereby Voluntary return Programme as well as the Edo State Trafficking in Persons providing support for policy reforms that Prohibition Law 2018 was passed into law help to curb human trafficking, disruption had in attendance the Ambassador of of traffickers’ cartels and prevention of European Union to Nigeria, Ketil Karlsen, as migration of young people to produce well as the Chief of Mission, International more success stories as recorded in Edo. Organisation for Migration, Enira Krdzalic.22 5. How integrity of ODA as The law established the Edo State Task a public resource can be Force Against Trafficking in Persons, which improved and preserved in the is headed by the Attorney General and context of migration Commissioner for Justice. It provides an effective and comprehensive legal and Increasing domestic pressure in many institutional framework for the prohibition, donor countries to stem migration from prevention, detection, prosecution and developing countries is putting ODA at risk punishment of human trafficking and of being instrumentalised for the benefit related offences in Edo State. of donor countries. With migration- related activities becoming more and Since these concerted actions, several more predominant in many donors’ human trafficking cartels and ‘king-pins’ development policies, it is critical that the have collapsed locally as well as across DAC strengthen its oversight and reporting Europe. Only recently, a Benin City High tools to monitor how this translates at the Court convicted a Human Trafficker to level of donor programs and projects, and several years in prison in accordance to ensure that these indeed “promote the with the provisions of the new anti- economic development and welfare of human trafficking law. The deterrence developing countries” and do not “pursue level for human trafficking and irregular first and foremost providers’ interest (e.g. migration is high in Edo to combat the restricting migration).”24 high rate of this crime.23 Of great significance is how ODA’s integrity Providing returnees with programs on can be improved and preserved. This
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chapter advocates the following: discussed targeting Libyan smuggling vessels, and arrests smugglers when 1. The purpose of ODA should be refined they arrive in Italy. But for logistical and to explicitly focus on poverty reduction legal reasons the former would be very and to leaving no one behind. DAC hard to do in practice, and the latter should continue reporting on projects targets only low-level pawns rather aiming at ending trafficking in humans, than key players. The EU has pushed especially women and children, under to make smuggling illegal in the parts existing codes 15160 and 15180 in of Africa where it is rampant – such order to ensure alignment with the as in Niger, the door to Libya from text and context of SDGs 5.2, 8.7 and West Africa. But smuggling continues 16.2. They should promote proper unabated because low-paid police take guidance, informed by development substantial kick-backs from the trade, objectives and human rights, not and because there are no other major migration control. sources of income for locals.
2. Policymakers in rich countries are right 5. What this context suggests is that to view foreign aid as an appropriate the use of ODA to improve greater instrument to curb the flow of economic activities in smuggling migrants, but it will be important for communities, which would provide them to act collectively, because of the local people with an alternative to the heterogeneous impacts of different smuggling trade, might be the best types of foreign aid. For instance, ODA long-term policy and would ultimately can help safeguard the integrity of reduce the migration crisis. borders and optimize administrative processes in countries of the south. 6. Continuation of the use of ODA to support reintegration plans particularly 3. In-donor refugee costs (IDRCs) should in Voluntary Return Programmes is not be counted as ODA, rather they crucial to addressing migration crisis. should be considered as donor Reintegration is critical in optimizing countries’ domestic costs. OECD migrants’ chances of a successful member countries should live up to and sustainable return to their home country. In 2016, the International their 1970 commitments of dedicating Organization for Migration (IOM) 0.7% of their GNI to ODA. provided almost 100,000 migrants with 4. Rethinking EU policy on smuggling is support in the form of subsistence key to ending migration crisis in Sub- allowances, accommodation, medical support or economic livelihood Saharan Africa. The EU should deploy support through its Assisted ODA to target economic alternatives in Voluntary Return and Reintegration smuggling communities. Realistically, Programme.25Donor governments also it’s hard to end people smuggling provide various types of reintegration because the demand for it is so high, support, for example, the Swedish as are their passengers’ extraordinary government offers approximately tolerance for danger. The EU has €3,200 per adult (up to a maximum
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of €8,100 per family) in reintegration from the perspective of the receiving 26 assistance. Reintegration support is communities and their absorption critical to address the considerable capacity. This is to prevent returning challenges faced by migrants upon migrants to worse case scenarios such return to rebuild their livelihoods. as contributing to social vices as was Reintegration also must be seen seen in the cases of some returned
migrants who upon return take to armed robbery and prostitution. libya-italy-numbers-smuggling-dhaka-dubai- ENDNOTES turkey-detained-a7713911.html 12 Czaika M. (2009) Refugee Movements 1 On 25 March 1807, the abolition of Slave and Aid Responsiveness. In: The Political Trade Act entered the statute books of Britain. Economy of Refugee Migration and Foreign The Act made it illegal to engage in the slave Aid. Palgrave Macmillan, London trade throughout the British colonies. 13 Sarah Dalrymple, “New aid rules allow for 2 http://www.actionaid.org/sites/files/ the inclusion of a wider set of peace and actionaid/real_aid_3.pdf security activities,” an article published in Development Initiative, February 29, 2016. 3 The Economist, There is Hope, October 8, 2008. http://devinit.org/post/new-aid-rules-allow- 4 Schoorl J, Heering L, Esveldt I, Groenewold G, van for-the-inclusion-of-a-wider-set-of-peace- der Erf R (2000) Push and pull factors of and-security-activities/ international migration: A comparative 14 http://www.economist.com/news/ report. Available at https://www.popline. international/21709019-flow-africans-libya-italy- org/node/180911. now-europes-worst-migration-crisis-travelling 5 Debating the rules: What in-house donor 15 https://guardian.ng/news/why-nigerias-per- costs count as aid? https://www.devex.com/ capita-income-will-remain-at-2144 news/debating-the-rules-what-in-house- refugee-costs-count-as-aid-90602 16 https://tradingeconomics.com/ghana/gdp- 6 Robert Böhm, Maik M. P. Theelen, Hannes per-capita-ppp Rusch, and Paul A. M. Van Lange (2018) 17 Berthélemy, Jean-Claude, Monica Beuran, Costs, needs and integration efforts shape and Mathilde Maurel, “Aid and migration: helping behavious towards refugees. Substitutes or complements?,” World 7 http://www.oecd.org/development/ Development, 2009, 37 (10), 1589–1599. development-aid-rises-again-in-2016-but- 18 In the regressions of Lanati and Thiele (2017) flows-to-poorest-countries-dip.htm the coefficient on bilateral aid is similar in 8 Julie Seghers is OECD Policy and advocacy absolute value but opposite in sign to the advisor at OXFAM. coefficient on aggregate aid. Because an increase in bilateral aid also raises aggregate 9 https://ngcareers.com/job/2017-12/ aid, this implies that the estimated effect of administrative-and-research-intern-at- bilateral aid is indistinguishable from zero. deutsche-gesellschaft-fur-internationale- zusammenarbeit-giz-gmbh-926 19 http://www.nationalplanning.gov.ng/2017/ index.php/about-us/cabinet-ministers/2- 10 Guma el-Gamaty, Migrant Crisis: Europe uncategorised/111-international- should stop using Libya as dumping ground, corporation-2 November, 2017.http://www.middleeasteye. net/columns/libya-geopolitics-migration- 20 http://dailypost.ng/2018/02/19/human- and-failed-european-polic-290797703 trafficking-naptip-tells-oba-benin-juju-priests/ 11 http://www.independent.co.uk/news/world/ 21 Dan Owegie, “Libya Returnees: Beware europe/refugee-crisis-migrants-bangladesh- of Edo PDP,” an article published in the Nigeria Observer, May 2018. https://
165 nigerianobservernews.com/2018/05/libya- on-the-DACs-new-code-on-migration- returnees-beware-of-edo-pdp/ January-2018.pdf
22 https://www.vanguardngr.com/2018/05/ 25 International Organization for Migration, obaseki-signs-anti-human-trafficking-law- 2017. Assisted voluntary return and intl-community-pledges-support/ reintegration – 2016 key highlights. Available from https://www.iom.int/sites/default/ 23 ANEEJ Report on Crime rate in Benin City, 2017 files/our_work/DMM/AVRR/AVRR-2016- Key- Highlights.pdf 24 CSOs recommendations on DAC new purpose for code for the facilitation of 26 Parusel, 2016. Sweden’s Asylum orderly, safe, regular and responsible Procedures. Available from https://www. migration and mobility, Jan 2018. https:// bertelsmann-stiftung.de/fileadmin/files/ coordinadoraongd.org/wp-content/ Projekte/28_Einwanderung_und_Vielfalt/ uploads/2018/01/CSO-recommendations- IB_Studie_Asylum_Procedures_Sweden_ Parusel_2016.pdf Chapter 3 ODA and responding to the acute challenges of climate change
The Need for a Climate-related Official Development Assistance (CODA) Framework to Improve Climate Finance Status Quo S. Jahangir Hasan Masum, Coastal Development Partnership, Bangladesh
Off the tracks: Lack of climate finance could derail developing world’s ability to adapt to changing climate Jon Sward, Bretton Woods Project
EU Should reconsider its approach to climate finance Mattias Söderberg, Dan Church Aid
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The Need for A Climate-related Official Development Assistance (CODA) Framework to Improve Climate Finance Status Quo
S. Jahangir Hasan Masum, Coastal Development Partnership, Bangladesh
Introduction ODA mechanisms and 3) the use of market-based instruments, such as international emission trading (Buchner Official Development Assistance (ODA) is the et al. 2011) or domestic emissions trading flow of concessional financial and technical systems within the developing countries assistance from developed countries to (Flachsland et al. 2009). developing countries. The Paris Agreement on Climate Change, the 2030 Agenda, the Developing country parties of the UN Sendai Disaster Risk Reduction Framework Framework Convention on Climate Change and the Addis Ababa Action Agenda have (UNFCCC) maintain that climate finance is all recognized the importance of ODA in the responsibility of developed countries. supporting sustainable development in Without new and additional finance, many developing countries. developing countries will not be able to meet their adaptation needs after 2020 While development assistance is an (UNEP, 2016). Despite this, there is still no important priority, so are urgent climate common agreement on what qualifies as actions. The global economy will need adaptation finance or how it should be around $4.1 trillion in incremental measured (UNFCCC, 2016). Only 16 percent investment between 2015 to 2030 to of total climate finance (public and private) keep the temperature rise below the is currently being spent on adaptation internationally agreed limit of 2°C (World (Oxfam, 2015). Without new and additional Bank, 2015). To limit global warming to 2oC, finance, many developing countries will the world economy needs to decarbonize not be able to meet adaptation need after at a rate of 6.3 % every year (PwC UK, 2015). 2020 (UNEP, 2016). Yet the majority of These urgent climate actions, particularly international climate finance is supporting immediate adaptation actions, should be climate mitigation (UNEP, 2014). considered a priority and key measures to eradicate poverty and increase resilience By 2014, there were 50 international (World Bank, 2016). public funds, 60 carbon markets, 6000 private equity funds (Vandeweerd, et al., Climate finance is dedicated to supporting 2014) as well as 99 multilateral & bilateral the mitigation and adaptation actions climate funds currently in operation (OECD needed to address climate change. 2015). Although this increase in climate Climate finance can be delivered through finance sources has boosted funding a variety of mechanisms: 1) non-market opportunities, it has also contributed to approaches based on direct concessional the severe fragmentation of the existing transfers to recipient governments; 2) climate financing landscape (Jakob et.al., private sector initiatives using existing 2015). Dedicated climate funds account
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for only a small component of the global the OECD, 16 percent of the total global climate finance flows. Yet, they are very ODA budget was climate finance in 2012,18 important to ensure developing countries’ percent in 2013, and 20 percent in 2014. access to current and future climate Japan, Germany, France and the EU have finance (OECD, 2015c). Currently, climate provided two-thirds of all climate finance finance under the UNFCCC is delivered from 2010–2015. Since 1998, the DAC has through the Green Climate Fund (GCF) and defined aid targeting the objectives of the the Global Environment Facility (GEF), both Rio Conventions as climate-related ODA, of which serve as the operating entities of and has been monitoring it through the the Convention. The GCF is recognized as Creditor Reporting System (CRS) using the the primary climate finance instrument ‘Rio markers’. globally and is expected to be the major funder of future adaptation initiatives. The Rio markers indicate climate finance Adaptation Fund (AF) is the only dedicated objectives within every development source of climate adaptation finance cooperation activity. Such activities can though it is not fully dependent on ODA. be marked as either principal climate There are also funds that operate outside objective, a significant climate objective, or the UNFCCC such as the climate investment not targeting any climate objective. At least funds and national climate funds. two-thirds (66%) of all bilateral climate financed marked principal purpose in In response to the UNFCCC COP 15 the DAC has been offered through loans decisions in 2009, developed countries (Tomlinson, 2017). Less than 25 percent of pledged that, by 2020, they will mobilize at reported climate finance in 2013–14 was in least $100 billion per year climate finance the form of grants. Around 8.5% of climate- from both public and private sources to help specific finance was channeled through developing countries mitigate and adapt the UNFCCC funds and multilateral climate to climate change. According to Article 9 of funds in 2013-2014. the Paris Agreement, developed country parties will provide financial resources Climate-related ODA has been increasing for continuing their existing obligations since 2002 (Shine and Campillo, 2016). The to support country-driven strategies to number of countries that received climate- achieve balance between adaptation related ODA increased in 2012 to 114, from and mitigation. Furthermore, developed 41 in 2002. Climate-related ODA targeting country parties must communicate mitigation was officially introduced in quantitative and qualitative information 2002 while climate-related ODA targeting biennially in regard to the levels of public adaptation began in 2010. Climate-related financial resources that has been provided ODA is primarily focused on mitigation to developing countries. (OECD, 2011). During the period 2013– 2014 (OECD, 2015b), only 16 percent of Trends in climate change- climate-related ODA was allocated to related Official Development adaptation, 67 percent to mitigation and Assistance (ODA) 17 percent was cross-cutting. Mitigation is the main focus of climate-related ODA in ODA that is dedicated to funding climate the energy, transport and storage sectors. finance in developing countries could be Adaptation finance is more prominent labeled climate-related ODA. According to in the agriculture, forestry and fishing,
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general environmental protection, and transport. The public climate finance is water supply and sanitation sectors. In expected to grow to $67 billion in 2020 2014-2015, the energy sector received with the level of mobilized private climate the largest share (29%) of climate-related finance for the year 2020 estimated to ODA, followed by the transport and stand at $24.2 Billion (OECD 2016). storage (16%) as well as the agriculture, forestry and fishing (11%) sectors. Across Understanding the challenges all sectors, the highest share of climate- linked with climate-related ODA related ODA was delivered through loans (69%) in 2014-2015 (OECD, 2016a). Climate change can hamper development results and development choices can also In 2014-15, Least Developed and other Low change the Earth’s climate by controlling Income Countries (LDCs and other LICs) or releasing the carbon emissions in the received around 8% of total mitigation- atmosphere. The international community related climate finance and 29% of total has been facing many issues in managing adaptation-related climate finance, while climate change, while also pushing to Lower Middle Income Countries (LMICs) achieve the Sustainable Development received 32% of total adaptation-related Goals by 2030. The fragmented nature climate finance. In 2013–2014 only 18 of the global climate finance landscape percent of climate-related ODA went to increases the challenges associated with LDCs (OECD, 2015b). accessing finance and reduces overall efficiencies (Sachs & Schmidt-Traub, 2013). Between 1998 and 2000, bilateral climate- related ODA was $2.7 billion (OECD/DAC While a number of internationally agreed 2002), which reached $29.0 billion per documents and treaties use the terms year in 2014-15 (OECD 2016). In the last climate finance, there is still no internationally five years, bilateral climate-related ODA agreed definition of climate finance, even targeting adaptation has increased 6% within the OECD DAC. This lack of rules while the share of finance allocated to provides room for each developed country mitigation has decreased 9%. The share to define climate-related ODA in their own of activities that address both adaptation way and according to their interests. While and mitigation has increased 3% in the last discussions are underway within the OECD, five years. Gender equality was targeted the legitimacy of the OECD in defining as principal objective in 3% of bilateral “climate finance,” largely in the absence climate-related development assistance of developing countries, has been widely while 26% targeted it as a significant questioned (Kowalzig, 2015). Methods are objective (OECD, 2015b). still to be developed for reporting on climate finance or climate-related ODA (Kharas, Support for gender equality in climate- 2015). The inadequate clarity in regards to related ODA has increased from $4.4 the different definitions of climate finance billion in 2010 to $6.9 billion in 2013. Of limits comparability of data (UNFCCC, 2016). climate-related ODA focused on gender equality, 46% targeted adaptation Most developed countries use the OECD and 19% targeted mitigation. Gender DAC Rio marker methodology to report to equality is poorly addressed in economic the UNFCCC Secretariat on their financial infrastructure sectors such as energy and commitments to developing countries.
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However, this methodology was not (De Sépibus, 2015). Developing countries originally intended to monitor financial within the UNFCCC perceive climate flows, but rather overall purposes of adaptation finance as compensation for different ODA flows (OECD, 2012). Projects damage caused by developed countries in marked significant are counted at their full their industrialization process. Conversely, budget, even though only one objective developed countries can consider may relate to climate adaptation or adaptation financing as a business mitigation. Because the Rio marker system opportunity (Nafo 2012). Poland, Australia, relies exclusively on developed countries’ South Korea and Japan are promoting the self-reporting, climate-related ODA can be idea that new, high-efficiency, coal-fired prone to overestimations (Weikmans et power plants are realistic and effective al., 2017). A modified or even cancelled aid approaches to address climate change. project can appear as unchanged in the Rio Japan allocates most of its climate-related marker system if the DAC countries have ODA to funding coal projects in Asia. not reported this project (OECD, 2013). OECD DAC members are not required to International negotiations are struggling remove projects that were listed in one to define the expanded nature of climate year but cancelled in subsequent years finance and its relationship to aid (Tirpak et.al., 2010). (Stadelmann, et. al., 2011) in scaling up international climate finance. There is still When OECD DAC countries report no consensus on the methods for reporting to the UNFCCC on climate finance, new and additional climate finance and some countries only include a share financial instruments (Donner et al., of significant-purpose climate-related 2016). Consequently, OECD DAC members finance. As a result, in the cases of Austria, have defined new and additional climate Finland, Luxembourg, New Zealand, and finance as they see fit. Australia, Belgium, Spain, the amount of the bilateral ODA Norway, Spain, Sweden, Switzerland, and climate finance reported to OECD was the United States consider funding to higher than the amount reported to the the Global Environment Facility (GEF) as UNFCCC. In their reports the majority of part of new climate-related financial flow, ODA donors apply a flat percentage to whereas Canada, Finland, France, and the determine the amount of climate finance, United Kingdom count their flows to GEF ranging from 20 percent to 100 percent for as partially new and additional. Denmark significant purpose projects. The Climate and Germany do not consider their Finance Shadow Report 2018 by Oxfam contribution to GEF as something new or highlighted that the current practices of as an additional part of climate finance many donors either overvalue the net (Szabó, 2016). amount of money transferred to recipient countries or overestimate the “climate Many developing countries have expressed finance” element. concern that ODA is increasingly being diverted from essential services to pay Donors tend to mobilize a significant for climate actions (IIED, 2015; Bird, 2014). portion of their climate finance The share of climate-related ODA has contributions outside the UNFCCC financial grown from 4% of total bilateral ODA in mechanisms (Buchner et. al., 2017) to 2005 to 19% in 2014 (OECD, 2016a). If the serve their own interests and visibility share of climate-finance in ODA continues
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to rise and be directed to middle income be achieved just by concentrating on countries, then low-income countries improving readiness, because access to may well see a reduction in their ODA. climate related ODA is highly influenced Over the last decade, the amount of by donor interests. the annual climate-related ODA has increased significantly; from around The quest for a new Climate- $5 billion in 2003–2004 to $25 billion in related Official Development 2013–2014. Although climate finance goes to a wide range of governmental, Assistance (CODA) Framework private and non-governmental entities in Climate finance has been a central element recipient countries, reporting on recipient of the UNFCCC negotiations since 1992 institutions has been incomplete. (Hicks et.al., 2008). Climate finance plays a pivotal role in the implementation of In recent years, increasing attention has the Paris Agreement. ODA is increasingly focused on private climate finance. The devoted to funding climate change US$100 billion roadmap by developed mitigation in developing countries (OECD countries makes it clear that one-third 2011), rather than supporting vulnerable (33%) of mobilized climate finance will communities’ adaptation to the negative come from the private sector by 2020. effects of climate change (Ayers and Huq CSOs worry that public climate finance 2009). To enhance adaptation finance to leverage private sector investments in in developing countries as well as to developing countries will give priority to contribute to the implementation of the incentivizing private finance, rather than Paris Agreement through ODA, a dedicated funding for real climate action. Private Climate-related Official Development investments center on delivering a financial Assistance (CODA) Framework is required. return and thus are not always designed Since UNFCCC has yet to develop a robust to bring sustainable development benefits accounting framework for climate finance (OECD, 2015a). (Romain& Roberts, 2017), the CODA could also contribute in this area. According to the Global Climate Fund (GCF), developing countries will need to Prior to 2009, ODA did not distinguish demonstrate their “readiness” for direct between adaptation and mitigation access to the climate funds. To be “ready”, (Brown et. al., 2010). Since that time a country has to demonstrate capacity donors have distinguished mitigation and for planning, managing, delivering, adaptation finance in their reporting to the monitoring and reporting climate finance DAC. The share of climate-related bilateral expenditures. Readiness is becoming a ODA has been dramatically increasing, but pre-requisite for access to predictable mainly for mitigation purposes. On the and quality climate finance, a move other hand, the non-climate related share that may create a divergence from the of ODA has been rising very slowly and original objective of climate finance under ODA for LDCs has been falling since 2010 the UNFCCC. The readiness approach (Steele, 2015). narrowly focuses on the readiness of the institutions, not the readiness of While climate-related ODA may accelerate the country (Jale and Jeremy, 2018). the mainstreaming of climate change Effective access to climate finance cannot into the development agenda (Klein et
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al. 2005), it can also divert ODA from To date, many developed countries have its original objective of halving world failed to be either transparent or complete poverty (particularly mitigation finance) in their reporting to the UNFCCC (UNFCCC, (Michaelowa and Michaelowa 2007). If 2017). The Paris Agreement stresses climate-related ODA rises faster than the important role of public finance in overall ODA budgets, it could squeeze supporting climate action and stresses the other critical areas of ODA spending. need for public and grant based resources Developed country parties have agreed on for adaptation in LDCs and SIDS (Article mobilizing at least 100 billion USD annually 9.4). CODA could directly contribute to the for climate actions in developing countries implementation of the Paris Agreement beginning in 2020. However welcome by developing a baseline of climate this initiative, there is still the worry that related ODA. In principle, CODA could donors will take several years to fulfill draw on climate finance to meet UNFCCC this commitment, as has often been the obligations as new ODA commitments case with other funding pledges in the from 2020 and onwards. past. Climate change adaptation requires urgent and immediate public finance. The Country systems and country plans CODA Framework could play a catalytic are the central drivers of climate- role in providing momentum for donors’ related development action (Amin et al, commitments. 2014). However, international political economy continues to drive decisions As a framework for climate aid, CODA could about climate finance (Stewart et. al., be seen as part of developed countries’ 2009). CODA should integrate recipient acknowledgement of their responsibility country strategies for utilizing climate for contributing to the vast majority of aid. By acknowledging climate change greenhouse gas emissions that have been as a common concern of all humankind, affecting the planet’s climate over the CODA would be consistent with past 150 years. For the least developed international agreements on finance, countries, climate finance is primarily gender equality, human rights, disability about climate change adaptation. Private and environmental sustainability. CODA sources of climate finance can be used for would also include the option to channel mitigation to supplement public finance climate finance through civil society under strict regulations (BCSF, 2011). organizations (CSOs) to address urgent climate issues identified by vulnerable The current Rio marker system helps populations that require immediate action. OECD DAC members to judge whether assistance contributes to climate-related The principal purpose of CODA would be or development-related issues. Because to deliver climate aid for urgent actions to of this they tend to interpret originally address negative climate change impacts development-related ODA as climate- in developing countries. In the CODA related ODA according to their individual framework, adaptation finance would aim policies and best interests. To stop such a to increase the resilience of human and DIY (Do-It-Yourself) approach, a new CODA ecological systems while mitigation finance Framework within the OECD DAC system would focus on reducing emissions and is necessary. enhancing sinks of greenhouse gases.
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Conclusion countries, and in particular adaptation finance, should be provided as grants. OECD DAC members should only report Climate finance should be treated grant equivalent transfers to developing differently than normal ODA. Climate countries as part of their UNFCCC related development needs and obligations. opportunities must be consistent with climate science for mitigation and on Although there has been a continual the ground evidence for adaptation. The increase in the volume of climate related Climate-related Official Development ODA since 2011, adaptation’s share of Assistance Framework should mobilize overall climate finance has remain more or new and additional ODA for climate less the same. CODA should provide grant- finance. based support for adaptation in vulnerable countries. Mitigation aid is also important Developed countries have been ignoring for low carbon development in vulnerable the UNFCCC’s call to provide new, countries that are not in a position to additional, adequate and predictable compete for mitigation finance with other climate finance to developing countries. countries. Climate-related ODA should The OECD DAC & UNFCCC should work exclude coal and other fossil fuels that are together to create mutually agreed responsible for global warming. Although guidelines for the definition of climate it is challenging for the international finance, additional climate finance as well community to rearrange the current ODA as the reporting of CODA. system to include CODA, it should be done to build a transparent and efficient climate Loans are a significant modality for finance regime. Consistent, comparable the delivery of climate finance through and transparent statistics on climate- ODA. Given UNFCCC’s commitment to related finance through the proposed differentiated responsibilities and country CODA approach could deliver greater capacities, climate finance for the poorest accountability and results.
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177 “Off the tracks: Lack of climate finance could derail developing world’s ability to adapt to changing climate”
Jon Sward, Bretton Woods Project
Section 1 Smoke and mirrors: claimed loans (both concessional and non-concessional) at their face value. In Accounting methods obscure acute practice this means that the ‘net transfer’ climate finance shortfall to developing countries from this climate finance instrument, “obscures the level of At the Conference of the Parties (COP15) in assistance developing countries receive Copenhagen (2009) developed countries, by a huge margin” (Oxfam 2018:10). Some under the United Nations Framework countries have also been including the Convention on Climate Change (UNFCCC) full amount of finance for development process, pledged to deliver $100 billion projects that contain some climate sub- in ‘new and additional funds’ annually projects in their climate finance reporting to developing countries’ climate change (Oxfam 2018). adaptation and mitigation efforts by 2020 (Weikmans and Roberts 2017:1). With public funds being relatively scarce, This commitment was re-affirmed in 2015 developed countries have also increasingly under the Paris Climate Agreement, albeit included ‘mobilizing private sector funds’ without specific reference to ‘new and as part of their climate finance reporting. additional’ funds. According to the plan laid out in the roadmap, up to 25 per cent of climate In 2016, developed countries produced a finance is anticipated to come from funds Roadmap to US$100 Billion detailing how ‘mobilized’ from the private sector (Oxfam this climate finance would be mobilized. 2018: 22). With less than two years left to achieve this commitment, developed countries’ As Oxfam (2018) argues, these accounting progress on mobilizing climate finance practices have led to an inflated calculation has fallen well short of the promises of developed countries’ contributions made in Copenhagen. Saying this, the full towards the goal of mobilizing $100 billion extent of developed countries’ collective by 2020. Oxfam maintains that when failure to make adequate progress on instruments such as loans are taken into climate finance has been obscured by a account, net financial flows from developed lack of transparent accounting methods. countries to developing countries are Currently, the UNFCCC framework does not lagging far behind reported figures: include a firm agreement on how to define ‘new and additional funds’ and climate “Using OECD data, we estimate finance accounting methods are murky. In net climate-specific assistance to addition to grant funding, countries have be significantly lower than $48bn
178
“Off the tracks: Lack of climate finance could derail developing world’s ability to adapt to changing climate” Jon Sward, Bretton Woods Project
“Off the tracks: Lack of climate finance could derail developing world’s ability to adapt to changing Section 1 – Smoke and mirrors: Accounting methods obscure acute climate finance shortfall climate”
Jon Sward, Bretton Woods Project At the Conference of the Parties (COP15) in Copenhagen (2009) developed countries, under the
United Nations Framework Convention on Climate Change (UNFCCC) process, pledged to deliver Section 1 – Smoke and mirrors:$100 Accounting billion methods in ‘new obscure and additional acute climate funds’ finance annually shortfall to developing countries’ climate change adaptation and mitigation efforts by 2020 (Weikmans and Roberts 2017: 1).This commitment was At the Conference of the Partiesre- affirmed(COP15) inin 2015 Copenhagen under the (2009 Paris) d Climateeveloped Agreement countries,, albeit under without the specific reference to ‘new United Nations Framework Conventionand additional’ on Climate funds . Change (UNFCCC) process, pledged to deliver $100 billion in ‘new and additional funds’ annually to developing countries’ climate change adaptation and mitigation effortsIn 2016by 2020, developed (Weikmans countries and Roberts produced 2017: a 1)Roadmap.This commitment to US$100 was Billion detailing how this climate re-affirmed in 2015 under the financeParis Climate would Agreementbe mobilized, albeit. With without less than specific two year references left to to achieve ‘new this commitment, developed and additional’ funds. countries’ progress on mobilizing climate finance has fallen well short of the promises made in Copenhagen. Saying this, the full extent of developed countries’ collective failure to make adequate In 2016, developed countries progressproduced ona Roadmap climate finance to US$100 has Bbeenillion obscureddetailing by how a this lack climate of transparent accounting methods. finance would be mobilized. WCurrentlyith less than, the two UNFCCC years frameworkleft to achieve does this not commitment include a firm, developed agreement on how to define ‘new and countries’ progress on mobilizingadditional climate funds’ finance and has climate fallen finance well short accounting of the methods promises aremade murky in . In addition to grant funding, Copenhagen. Saying this, the fullcountries extent ofhave developed claimed countries’ loans (both collective concessional failure to and make non adequate-concessional) at their face value. In progress on climate finance haspractice been thisobscured means by that a lack the of ‘net transparent transfer’ to accounting developing methods countries. from this climate finance Currently, the UNFCCC frameworkinstrument, does not “obscures include athe firm level agreement of assistance on how developing to define countries ‘new and receive by a huge margin” (Oxfam additional funds’ and climate finance2018: 10)accounting. Some countriesmethods haveare murky also . been In addition including to grant the full funding, amount of finance for development countries have claimed loans projects (both concessional that contain some and non climate-concessional) sub-projects at in their their face climate value finance. In reporting (Oxfam 2018). practice this means that the ‘net transfer’ to developing countries from this climate finance instrument, “obscures the levelWith of assistance public fundsdeveloping being countries relatively receive scarce, by developeda huge margin countries” (Oxfam have also increasingly included 2018: 10). Some countries have‘mobilizing also been private including sector Chapter the funds’ 3: full ODA amountandas Respondingpart of of to their financethe Acute climate Challenges for developmentfinance of Climate Changereporting . According to the plan laid projects that contain some climateout sub in - theprojects roadmap in their, up climate to 25 finance per cent reporting of climate (Oxfam finance 2018). is anticipated to come from funds ‘mobilized’ from the private sector (Oxfam 2018: 22).
With public funds being relativelyFig 1: Estimated scarce, climate finance developed flows by 2020 countries (OECD) (2016: have xiii), also for increasinglyadaptation alone, includ “theed ‘mobilizing private sector funds’Fig as 1:part Estimated of their climaclimatete finance reportingflowscosts…could by 2020. A ccordingrange (OECD) from to US$140 the plan billion laid out in the roadmap, up to 25 per cent of climate finance isto anticipated US$300 billion to by come 2030, and from between funds US$280 billion and US$500 billion by ‘mobilized’ from the private sector (Oxfam 2018: 22). 2050.” The UNFCCC Bonn meetings (April 2018) made fragile progress on climate Fig 1: Estimated climate finance flows by 2020 (OECD) finance, albeit with a number of concerns remaining.
Countries are now set to agree to the Paris Agreement’s ‘rule book’ at COP24 in Poland in December 2018. However, African countries have threatened to withhold their agreement to a deal at COP24 unless there is progress on climate finance (Carbon Brief 2018). BASIC countries (Brazil, South Africa, India and China) have also highlighted climate finance as a critical issue (IISD 2018). This fraught climate diplomacy is taking place against a backdrop of an increasingly severe need for climate finance, with the effects of climate change beginning to bite in poor As Oxfam (2018) argues, these accountingcountries with practices increased have storm led intensity, to an in flated calculation of developed countries’ contributions towards thesea-level goal rise, of droughts,mobilizing and $100 other impactsbillion by 2020. Oxfam maintains that already leading to significant fiscal (and Source: OECD (2016) social) impacts.1 (aggregated donor reports): between 1 | Page As Oxfam (2018) argues, these$16bn accounting and $21bn practices per year, ofhave which led to anSection inflated 2 calculationKey trends: of developed countries’ contributions towardbetweens the just goal $5bn of and mobili $7bnz pering year $100 billionfragmented by 2020. multilateral Oxfam maintains funds that is for adaptation.”(Oxfam 2018: 8) and the rise of private finance
This analysis underscores the startling In addition to the relative scarcity1 | Pageof funds gap between the climate finance needs relative to developing countries’ needs, of developing countries and the types of climate finance is also hampered by a funding that have been made available by highly fragmented funding landscape, donor countries to date, especially with with mobilized funds being allocated respect to adaptation finance. through a patchwork of different sources. The developed countries’ Roadmap to $100 To make matters more urgent, the need Billion (2016: 19) gives a frank assessment for climate finance is now understood to of the challenges faced by developing be greater than was estimated at the time countries in accessing funding for climate of Copenhagen’s $100 billion commitment. change and mitigation activities in this According to the UN Environment Program convoluted climate finance environment:
179 The Reality of Aid 2018 Report
“[D]eveloping countries can face a The GCF has been criticized for not number of barriers and challenges disbursing funds quickly enough: in accessing and attracting climate “As of December 2017, the fund has finance. … Applicants need to only released roughly $150 million, or less navigate between numerous than 6 percent of the nearly $3 billion it bilateral and multilateral financing had committed up to that point” (Devex, institutions – often with varying 2018). Although the GCF has a mandate to application procedures and funding have a 50-50 split between mitigation and criteria. A second challenge relates adaptation finance, the fund’s definition to limited readiness. Even after of these, as well as its attempts to parse a particular funding source is adaptation from development finance identified, applicants may lack the more generally, remains a work in progress technical expertise and capacity to (Devex 2017). The GCF’s most recent board design and implement investment proposals for low carbon technology meeting in July 2018 ended with the Fund’s and climate resilience”. board unable to agree how to proceed on the Fund’s replenishment, and failing to The main multilateral climate finance approve any of the $1 billion in developing mechanisms that developing countries countries’ proposed climate projects that can access under the UNFCCC and other were potentially under consideration multilateral fora are discussed below. during the meeting (Bose 2018). Beyond the questions about aggregate totals of climate finance, as outlined above, The Adaptation Fund, which was created these multilateral mechanisms through under the Kyoto Protocol, is a relatively which climate finance is dispersed also small fund, but is politically significant face significant institutional challenges as it is devoted specifically to adaptation and constraints. efforts. It was agreed at COP23 (2017) that the Adaptation Fund will be administered The Green Climate Fund (GCF) and under the Paris Agreement, although Adaptation Fund (AF), which sit inside the negotiations continue on the technical wider UNFCCC umbrella, are overseen changes needed to embed it inside the on an interim trustee basis by the Paris Agreement’s framework (Carbon World Bank. The GCF was created under Brief 2018). To date, it has committed the UNFCCC process in 2010 to serve $439 million in adaptation finance to developing countries’ needs. It has faced projects in developing countries (World considerable growing pangs. In May 2017, the Trump Administration announced Bank 2018). that the US would withhold its final pledge of $2 billion as part of its announced The Climate Investment Funds (CIFs) withdrawal from the Paris Agreement. are two World Bank-hosted climate This has made a significant dent in GCF’s investment funds, which according to the $10 billion in pledged funds to date (see Bretton Woods Project’s CIFs Monitor 14 Friends of the Earth 2017). (2016: 4), are:
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“financing instruments designed “as trustee of GEF funds [the World to pilot low-carbon and climate- Bank] organizes most [of the]direct resilient development through control and funding, and must sign multilateral development banks off on all financial aspects. This (MDBs). They comprise two trust has resulted in some ideological funds – the Clean Technology Fund wrangling over the extent to which (CTF) and the Strategic Climate Fund the Bank’s economistic vision (SCF)2.… As of end June 2016, donor should be applied to areas of UN pledges amounted to a total of $8 environmental protection.” billion to the CIFs: $5.4 billion to the CTF and $2.6 billion to the SCF.” In Bruce Rich’s critique of the GEF, he stated that the clear imprint of the World When founded in 2009, the CIFs were Bank was evident on the GEF governance conceived as temporary funds designed structure: “The formulation of the GEF was to pave the way for a larger fund to serve a model of the bank’s preferred way of developing countries, via the UNFCCC. doing business: Top-down, secretive, with However, in May 2016, the CIFs joint a basic contempt for public participation, committee decided not to instigate the access to information, involvement of so-called ‘sunset clause’, which requires democratically elected legislatures and the CIFs to close. Instead the committee informed decisions of alternatives” (cited agreed to continue to monitor “the in Newell 2012: 130). One critique of GEF- developments in the international climate funded projects is that they have acted as finance architecture to inform a discussion a sweetener in order to entice developing on the sunset clause in December 2018 countries to accept wider World Bank at the earliest, and take a decision on finance packages rife with conditionalities this issue in June 2019” (BWP CIFs Monitor (Newell 2012: 131). 14, 2016: 4). Critics suggest that the CIFs’ continued operation is evidence of the World Bank trying to impinge on the Private finance: further UNFCCC financial framework, with more muddying the waters of “what than 100 civil society organizations calling counts” as climate finance for the CIFs to close at the time of decision to extend their sunset clause (Bretton Oxfam (2018: 22) noted that 15 countries Woods Project 2016: 4). and EU institutions “claimed to have mobilized private finance” in their 2015/16 The Global Environment Facility (GEF) was biennial reports to the UNFCCC, but that set up prior to the 1992 Earth Summit. With a donor countries “have accounted for budget of $1.3 billion, it was established as a this finance in very different ways.” For global fund to finance agreements emerging example, Canada only includes private from these meetings. According to Newell finance mobilized through its contributions (2012: 127), although the World Bank runs to MDBs, while France and Japan report the GEF along with UNDP and UNEP, overall estimates (without granularity
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on how they generate the figures). The Section 3 Ways forward: Netherlands, meanwhile, provides specific figures for some projects and rough transparent accounting and estimates for others. innovative financial instruments urgently needed Oxfam (2018: ibid) maintains that an agreement on how to account for the Given the challenges described in the private sector stream of climate finance preceding sections, the mobilization is urgently required. Increasingly, MDBs, of climate finance that delivers a just led by the World Bank, have placed an outcome for developing countries, rather emphasis on mobilizing private finance as than a world with heightened inequities part of efforts to kick-start climate action. in the face of climate impacts, is an For example, the Invest4Climate platform acute challenge. This concluding section – which includes MDBs, the GCF and other highlights the urgent need to both clarify actors, puts ‘green growth’ at the centre of climate finance accounting norms and its efforts to fight climate change by: to develop innovative climate finance streams to complement existing flows. “Developing new solutions and knowledge to “crowd-in” private capital, Modalities to account for climate finance know-how, and mobilizing resources have been politically contentious since the to accelerate and scale early-stage $100 billion pledge in 2009 by developed climate entrepreneurship in frontier countries. As Weikmans and Roberts markets, creating jobs and stimulating (2017: 4) summarize: green growth” (World Bank 2017). “Eight years after Copenhagen, the In this vein, the World Bank has sought question of ‘what counts’ as climate to mobilize $13 billion annually in private finance is still not internationally climate finance by 2020 (World Bank 2016: agreed, even between OECD 25). This overall approach is consistent Development Assistance Committee with the wider “Maximising Finance for (DAC) countries or European Union Development” agenda being led by the (EU) member states. At an even World Bank, which sees the private sector as more fundamental level, to assess being the first port of call for development the “newness and additionality” of projects (see Green 2018). There are serious financial contributions, negotiators questions about whether the efforts of should have determined a developed countries and MDBs to ‘crowd baseline against which any claim in’ the private sector through de-risking of additionality could be stated investment opportunities can be aligned (Stadelmann et al., 2011). Such a with the goals of climate finance. This is of baseline still does not exist.” particular concern when meeting the needs of the poorest countries and individuals, Estimates of climate finance have been as the profit motives of private sector politically fraught. An initial report, which actors may be particularly hard to satisfy was co-written in 2015 by the OECD and without creating hidden debt liabilities for the Climate Policy Initiative at the request developing country governments (see, for of the COP21 presidency, provided example, Romero 2017).
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a global estimate of climate finance. concrete financial instruments to address These findings were presented with no L&D. It remains sidelined, emblematic consultation of developing countries on of unresolved climate finance issues in the question of ‘what counts’ (Weikmans general. and Roberts 2017:2) putting questions about fairness and transparency at As Singh (2018) noted at the Suva Expert the heart of this thorny issue. Thus, an Dialogue in Bonn (May 2018), “Civil agreement on the post-2020 framework society experts called for the provision for climate finance accounting is key of at least US$50 billion per year by 2022 to getting parties to make progress on for loss and damage, which they said must overall Paris Agreement implementation be over and above the annual target of at COP24, with the end of 2018 being the US$100 billion a year for climate finance.” deadline for parties to agree to the Paris However, developed countries have thus rulebook that will govern implementation far expressed little appetite to engage with of the Agreement. mobilizing finance for Loss and Damage, apart from making ‘climate insurance’ The lack of transparency on climate finance more available to developing countries. accounting on the part of developed One such initiative is InsuResilience, a countries remains a primary stumbling G20-backed program that aims to provide block: “The most severe problem …lies in ‘access’ to climate insurance to 400 million the fact that many developed countries people in developing countries by 2020 have so far failed to be transparent and (Bretton Woods Project 2017). complete in their reporting to the UNFCCC on the methodologies that they used to With the post-2020 Paris Agreement account for climate finance” (Weikmans implementation fast approaching, there and Roberts 2017:5). As predicted, is an urgent need not only clarify climate developing countries have been unable to finance accounting norms, but to identify ensure that developed countries honour new and innovative financial instruments their commitment to ‘new and additional’ that can help to augment existing climate climate finance (i.e. separate from official finance flows. As Oxfam (2018:20) has development assistance– ODA), as agreed noted, climate finance urgently needs to under the Copenhagen commitments be scaled up: “New innovative sources of (Weikmans and Roberts 2017: 3). climate finance, such as carbon pricing for shipping and aviation, a financial With progress slow on mobilizing finance transaction tax and an equitable fossil fuel for adaptation and mitigation, other areas extraction levy, are crucial to help address of need in climate finance are in danger the large and growing gap between existing of falling off the map completely under levels of finance and growing needs.” the UNFCCC Paris Agreement. After years A climate polluters’ tax initiative was of political wrangling, there was finally an proposed at COP23, with advocates seeking acknowledgement of developing countries’ to have the tax embedded in UNFCCC need for climate finance to cover “Loss and framework (Climate Home 2018). However, Damage” (L&D) from climate change under such innovative measures, though urgently Article 8 of the Paris Agreement. Still, there needed, are yet to enter into the firmament has been little progress on identifying of the UNFCCC process.
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REFERENCES
Acevedo, S. (2017) “Gone with the Wind: Assessing wrong-in-his-attack-on-green-climate-fund- Hurricane Costs in the Caribbean”. IMF: f9463de087a1 Washington DC. Accessed online 12 July: Green, D. (2018) “How to decode a UN Report https://blogs.imf.org/2017/02/07/gone-with- on Global Finance (and find an important the-wind-assessing-hurricane-costs-in-the- disagreement with the World Bank on caribbean/ private v public)”. From Poverty to Power Bose, I. (2018) “Climate Fund fails to reach blog. Accessed online 13 June: https:// agreement on replenishment process”. Third oxfamblogs.org/fp2p/how-to-decode-a- World Network website. Accessed online 12 un-report-on-global-finance-and-find-an- July: http://www.twn.my/title2/climate/info. important-disagreement-on-private-v- service/2018/cc180702.htm public/ Bretton Woods Project (2016) CIFs Monitor IISD (2018) “BASIC Ministers call for balanced 14. London: BWP. Accessed online 13 outcome on Paris Agreement work June: http://www.brettonwoodsproject. programme at COP 24.” Accessed online org/2016/11/climate-investment-funds- 13 June: http://sdg.iisd.org/news/basic- monitor-14/ ministers-call-for-balanced-outcome-on- Bretton Woods Project (2017) “COP 23 puts Bank- paris-agreement-work-programme-at- backed climate insurance in the spotlight”. cop-24/ London: BWP. Accessed online: http://www. Newell, P. (2012) Globalization and the brettonwoodsproject.org/2017/12/cop- environment: capitalism, ecology and power. 23-puts-bank-backed-climate-insurance- Polity, Cambridge. spotlight/ OECD (2016) Projecting climate finance to 2020. Carbon Brief (2018) “Bonn climate talks: key Oxfam (2018). Climate finance shadow report: outcomes from the May 2018 UN climate Assessing progress towards the $100 billion conference”. Accessed online 13 June: commitment. Oxford: Oxfam International. https://www.carbonbrief.org/bonn- [link] climate-talks-key-outcomes-from-the- Roadmap to US$100 Billion (2016). [link] may-2018-un-climate-conferenceClapp, J. Romero, M.J. (2017) “De-risking or risk shifting: and P. Dauvergne (2011) Paths to a Green The World Bank’s proposed bridge to World: The Political Economy of the Global the ‘infrastructure gap’”. London: BWP. Environment , 2nd edn. Cambridge, MA: MIT Accessed online 13 June: http://www. Press. brettonwoodsproject.org/2017/10/de- Climate Home (2018). “UK Labour supports call risking-risk-shifting-world-banks-proposed- for ‘climate damages tax’ on oil companies”. strategy-bridge-infrastructure-gap/ Accessed online 13 June: http://www. Singh, H. (2018) “Expert Dialogue underscores climatechangenews.com/2018/04/16/ finance gap to address climate induced uk-labour-supports-call-climate-damages- 'Loss and Damage'”. Third World Network. tax-oil-companies/Devex (2017). “Green Accessed online 13 June: https://twnetwork. Climate Fund urged to embrace development org/climate-change/expert-dialogue- links”. Accessed online 12 July: http://www. underscores-finance-gap-address-climate- climatechangenews.com/2017/06/29/green- induced-loss-and-damage climate-fund-urged-embrace-development-links/ UNEP (2016) The Adaptation Gap Report 2016: The Devex (2018) “The Green Climate Fund commits adaptation finance gap. Nairobi: UNEP. [link] billions, but falls short on disbursements”. Weikmans, R., and Roberts, T.J. (2017) Accessed online 13 June: https://www. “The international climate finance devex.com/news/the-green-climate- accounting muddle: is there hope on the fund-commits-billions-but-falls-short-on- horizon?” Climate and Development, DOI: disbursements-92648 10.1080/17565529.2017.1410087 Friends of the Earth (2017). “Five things Trump’s Wilkinson, E. (2017). “Towards a more resilient Paris Climate Speech got wrong in his attack Caribbean after the 2017 hurricanes.” on Green Climate Fund”. Accessed online London: ODI. Accessed online 12 July: 13 June: https://medium.com/@foe_us/five- https://www.odi.org/sites/odi.org.uk/files/ things-trumps-paris-climate-speech-got- resource-documents/12114.pdf.
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World Bank (2016) World Bank Group Climate Accessed online 13 June: http://www. Action Plan 2016-2020. Washington DC: worldbank.org/en/topic/climatechange/ WBG. Accessed online 13 June: https:// brief/mobilizing-finance-for-climate-action- openknowledge.worldbank.org/bitstream/ through-the-invest4climate-platform handle/10986/24451/K8860.pdf \World Bank (2018) “Adaptation Fund”. Accessed \World Bank (2017) “Mobilizing finance for climate online 13 June: http://fiftrustee.worldbank. action through the Invest4Climate Platform”. org/Pages/adapt.aspx
ENDNOTES
1 To cite just one example, recent IMF research 2017), will likely increase Caribbean countries’ has found that the cost to island nations of damages from tropical storms. tropical storms in the Caribbean has been drastically underestimated, accounting for an 2 The SCF is an overarching fund aimed at average of 5.7% of countries’ GDP over the piloting new development approaches. It last 65 years (Acevedo 2017). Increased storm consists of three targeted programmes: intensity, as witnessed in the 2017 hurricane Pilot Program for Climate Resilience (PPCR), season when the Caribbean suffered an Forest Investment Program (FIP) and Scaling estimated $130 billion in damages from up Renewable Energy Program in Low Hurricanes Irma and Maria alone (Wilkinson Income Countries (SREP).
185 EU Should Reconsider its Approach to Climate Finance
Mattias Söderberg, Dan Church Aid
Emissions, from our use of energy, our The debate about climate consumption and production, transport, finance agriculture and waste, have a dramatic effect on our climate. The impacts are Climate change is a global challenge, demonstrated through erratic and and there is a broad agreement of the extreme weather such as droughts and need for climate action. These actions flooding. In accepting the link between were formalized through the Paris our way of life and its effect on growth Agreement, adopted at the UN climate and development, we also acknowledge summit, COP21, in Paris in 2015. The our responsibility. Agreement emphasizes that all countries must take action, to reduce emissions; The responsibility for global warming to strengthen our resilience and can be analyzed and interpreted in possibilities to adapt to the effects of many different ways. There is no formal climate change, and to deal with losses agreement that makes the link between and damage caused by climate change. responsibility and the need to offer support or to take action. However, there While there is agreement on the need to is a general recognition that developed engage, this quickly evaporates as soon countries should support developing as the discussion turns to the actions countries. From a developing country that need to be implemented and perspective, this obligation is directly determining who should pay the bill. linked to discussions on responsibility. Countries who cause the problem For many years, climate finance has should also contribute to the solution. been a core part of the UN climate talks. This is the “polluter’s pay principle”, and Currently, this debate is very fractious a logic which most people around the and is blocking progress on many world probably accept. negotiations’ streams. However, some With this logic in mind, the Paris agreements have been established on Agreement reaffirms the commitment of finance, and these should be guiding developed countries to mobilize US$100 developed countries in their assistance to billion annually from 2020 and beyond, developing countries. Before presenting as financial support for developing these agreements, it is important to countries to take climate action. understand the context that has shaped these discussions. The Paris Agreement also states that new financial targets should be set Scientists have shown that global for 2025 and beyond. This decision is warming is linked to human activities. based on the recognition that global
186 Chapter 3: ODA and Responding to the Acute Challenges of Climate Change
temperatures are likely to continue to interpretations, which will add additional rise and the need for mitigation and perspectives to this debate.2 adaptation is also increasing. In the UN climate talks, there is a general Apart from financial targets, there are understanding that climate finance should also a number of more or less concrete be used to support poor and vulnerable agreements on how climate finance countries. Firstly, this is justified because should be mobilised and used. There is these countries, which have limited a general agreement that funds should emissions, and thus responsibility, are be balanced between mitigation and in urgent need of assistance as they are adaptation and that climate finance already affected by climate change and should be “predictable”. The latter is lack of resources to take action. Secondly, important, both for the possibility for these countries have been the most vocal developing countries to plan, but also in the debates on climate finance, and the for building trust and confidence. current agreements are in large part due to their work in bringing these issues to Another principle, which has been the world’s attention. And finally, listening contested, but is still on the agenda, is to developed country rhetoric and its calls that climate finance should be “new and for emerging economies to contribute additional”. This principle, which has been to climate finance (finance ministers of part of the climate change debate since EU member states, has, in their council Bali in 2007, is built on the understanding (ECOFIN) also made this call formally),3 it is that climate change has created additional easy to believe that these countries do not challenges for developing countries. need climate finance themselves. Apart from ongoing work to fight poverty, improve food security, education and Despite the existence of many formal healthcare, and to build infrastructure and informal agreements, there is a lack and institutions, developing countries are of rules on how to count and mobilise now also facing complex issues due to climate finance. According to the existing climate change. These crises are primarily wording in the Paris Agreement and linked to emissions caused by developed earlier agreements, countries are only countries, so the argument is that support committed to mobilise climate finance. should be on top of existing commitments No guidance is provided on the types for development aid. of financial flow required and their modalities for developing countries. In This logic may seem easy to grasp, but it is practice, a significant part of climate important to note that there is no agreed finance is currently offered as loans, both definition of the meaning of “new and concessional and non-concessional. A few additional”. In the recent “biennial reports” countries include export credits, and many from developed countries, different donor countries, as well as the EU, are definitions of the concept were offered looking into ways of including funding from with obvious differences in interpretations private investors. A considerable part of and viewpoints.1 Definitions presented climate finance is also provided as grants, by the Standing Committee on Climate either through bilateral arrangements, Finance, a UN body where developing or via multilateral banks and initiatives. countries participate, have also provided Donors usually count these funds as
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development aid in their DAC reports. It climate talks. While some have strategies makes up part of their commitments to on ways to honour their commitments, give 0.7 of their GNI as development aid to others deliver very little and are generally developing countries. not active in debates on climate finance. The differences amongst EU member states Developing countries are frustrated with this becomes clear when their contributions to interpretation of climate finance. In political climate finance is compared to their GNI. statements and negotiations, developed This is a commonly accepted method to countries have promised support; but when assess donor performance with ODA, and the support arrives it is not what developing it can also be used as a method to assess countries expected, neither in terms of size climate finance. or allocations. However, in the absence of established rules or guidelines, all kinds of A few countries, such as Luxemburg and funds can be counted, and perhaps even Germany donate considerable amounts double counted. The target to mobilize in relation to their GNI (0.35% and 0.23% US$100 billion per year from 2020 may respectively). Other countries, such as become an empty promise unless more Bulgaria and Croatia, do not seem to strict rules are adopted. prioritize climate finance at all (0.00% and 0.00% respectively).5 EU member states EU is a vocal actor in the debates on have a range of economic capacities, and climate finance. There is a genuine wish to there is no doubt that some countries provide support, but there are also strong have substantial domestic challenges. But concerns on how this support should be compared to most developing countries, given and used. they are rich and they have signed the Paris Agreement, which included commitments The next section examines EU climate by developed countries to provide finance finance, and how it relates to the points for poor and vulnerable countries. made above. A recent report from ACT Alliance EU, “An Analysis of the Climate In 2016, the total amount of climate Finance Reporting of the European Union,” finance mobilized from EU member which includes technical information states was approximately €15.4 billion. on calculation methods, provides an This represented an increase from 2014, important foundation for this discussion.4 when the amount was about€11 billion.6 There have been fluctuations where some Flows of climate finance from countries like Germany have increased the EU their contributions while others such as Denmark have decreased. However, the overall trend is increasing support. Climate finance from EU takes various forms. It should first be noted that there The climate finance derived from EU is a difference between finance that is institutions encompasses three institutions: delivered directly by EU member states and 1) the European Commission (EC), 2) the that which is delivered by EU institutions. European Development Fund (EDF), and 3) There are also significant differences the European Investment Bank (EIB). The in how EU member states interpret the EC and EDF are both controlled by formal commitments that were made in the UN
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EU structures. The EIB is an investment A closer examination reveals some positive bank, owned by EU member states, which developments. Among the EU institutions, also sit on the board. EDF and EC have increased their focus on adaptation. Among EU member states, Commitments made by EU Institutions7 a few countries, for example, Italy and Spain have also increased their focus on Millions 2013 2014 2015 2016 of € adaptation, but the increase has not been EC+EDF €964 €677 €1,517 €2,730 big enough to change the total balance. EIB €2,047 €2,098 €2,276 €1,948 Despite these small increases in adaptation Total €3,011 €2,775 €3,793 €4,678 finance, the overall picture remains the same with the EU favoring mitigation. Total climate finance from EC, EDF and EIB Considering the different actors, this is has increased from 2014 to 2016, largely due to greater contributions by the EC and EDF. unlikely to change. The main reason for this bias is the EIB, which makes up a Adaptation vs. Mitigation significant part of EU climate finance. As a bank, EIB will always favor mitigation, which As mentioned above, there is agreement will make it challenging for the EU to fulfill that climate finance should be balanced the Paris commitments to adaptation. The between mitigation and adaptation. only possible solution would be if EC and Unfortunately, this commitment has EDF, and/or member states compensate always been difficult to reach with EU by shifting their focus to adaptation. climate finance. For instance, in 2013, 80% of climate finance from EU institutions Who receives the support? went to mitigation. In 2016, the focus on adaptation increased as a smaller Climate finance from EU institutions is share (66%) went to mitigation – an directed to a range of countries. The EC improvement, but still not a balance. The and EDF generally favor the LDCs, while balance in climate finance allocations from EIB focuses on emerging economies. This the EU member states has more or less is linked to the fact that EIB is a bank, and stayed the same. In both 2014 and 2016, so it is most interested in investments that 71% was directed to mitigation projects. are likely to deliver a return.
Table 1 Shares of adaptation and mitigation8 2014 2016 % Adaptation % Mitigation % Adaptation % Mitigation EC+EDF 49% 51% 45% 55% EIB 3% 97% 4% 96% EU member-states 29% 71% 29% 71% Total EU 26% 74% 30% 70%
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Figure 1 Top 10 recipients of climate finance from EU institutions between 2013 and 20169
Overall, EU institutions seem to favour praise, can meet with disappointment middle-income countries in their climate from developing countries. Developing finance contributions. For example, from countries continue to ask where the climate 2013 to 2016, Turkey received almost finance is, while developed countries the same amount of climate finance as respond that it has been disbursed. A lack the total provided to Least Developed of clarity leads to a lack of trust, which Countries. makes it difficult to move forward with international negotiations. While there are no formal rules requiring that climate finance goes to the poorest and Luckily, the development of rules and most vulnerable countries, this is a general increased transparency is on the agenda assumption in climate negotiations. So of the current climate talks. There is when such a big part of EU climate finance potential that an agreement will be is directed to countries that EU often argue adopted at the climate summit, COP24, should be contributing to climate finance, the in Poland in December 2018. From an EU EU faces a political problem. This issue could perspective, these talks are important. affect possibilities for EU to reach agreements Depending on the outcome, there may be with poor and vulnerable countries on other new requirements for mobilization and elements in the climate debate. reporting of climate finance, and the effect could be significant. Accounting rules and practice One example of potential impact relates A lack of rules and transparency makes to the widespread practice of using loans debates on climate finance difficult. in climate finance. In 2016, 94% of the Parties have different interpretations and French climate finance was in the form of expectations. Allocations by developed loans, and 16% of these loans were non- countries, which they may expect merits concessional. Such loans are not eligible
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as ODA and cannot be included in DAC targets and existing targets for climate reports. If current DAC practice were to finance. However, in relation to this debate be applied to climate finance, the French it is important to take note of the fact that climate finance would decrease from €3.3 only few developed countries actually billion to €2.8 billion. EIB also includes deliver on the existing target to allocate non-concessional loans in their climate 0.7% of GNI as ODA. finance. According to the DAC approach to aid, the EIB support would decrease The issue is linked to present accounting by 15%. None concessional loans could practices of most OECD countries. When have an important role to play, especially they mobilise climate finance from their for mitigation projects in upper middle- domestic budgets, they are not allocating income countries. However, from a new and additional funds with a specific developing country perspective, following focus on climate change. Instead, they the same logic as applied in DAC, these assess existing ODA based on so-called loans could be counted on top of the Rio markers,10 to see if there are projects existing commitments for climate finance. and programs that could be reported, From a developing country perspective, to a bigger or smaller degree, as climate the use of loans in climate finance is finance. This approach gives a good highly controversial. They maintain that impression of how climate finance is the root causes of climate change dictate mainstreamed into ODA, which, of course, that finance should be provided largely as is an important focus. But it does not grants and not as loans. The current use necessarily show that there is a new focus of loans means that developing countries on climate change, and if there is a focus, are paying over time for climate finance it does not safeguard other development themselves. A recent proposal is to count areas from being sidelined. the grant equivalent amount of loans. This is consistent with developments in DAC, The use of Rio markers for accounting where donor countries have to report is also problematic in other ways. The on the grant equivalent amount of their assessment of a specific project is made support. by staff that may not know much about climate change and in most countries with The principle of “new and additional” a fixed scale (in several countries 0% 40% is also being advocated by developing or 100%). As a result, assessments can be countries in talks on accounting rules. misleading. One example is from Uganda They are concerned that an increase in where Danish ODA support to a water climate finance will lead to a decrease in project was reported as 100% climate ODA to meet other development needs, finance, but in fact, only had an element 11 unless climate finance is earmarked as an that could be eligible as climate finance. additional flow. If this principle is adopted as an accounting rule, it could have big Scaling up effects on existing climate finance flows. If the mentioned developing country The current level of climate finance concern was considered, developed contributions from all developed countries countries would have to mobilise more is still far from the US$100 billion funds to live up to both existing ODA commitment for 2020. In addition, the
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United States has announced that it will possibilities are explored. They include reconsider and cut its climate finance, the facilitation of private investments’ putting a lot of pressure on EU. A failure contributions to climate action through to deliver on this commitment will have incentives offered by governments and a major impact on the EU’s relationships government institutions. However, an with developing countries. increased focus on private finance does not automatically lead to an increased amount As noted above, there are some positive of climate finance. Again, it depends on signs as some EU countries and institutions accounting and reporting rules, which UN have increased their climate finance. Climate talks are currently negotiating. If But there is still much work to be done, developing countries have success with and the current negotiations on rules of their positions, there will be strict rules for accounting and reporting are important how to count private climate finance. as they also may effect which funds can be reported as climate finance. Turning money into action
A main priority should be to increase There is an urgent need for action, to both grant support from EU member states reduce emissions and to help people and and institutions. This shift is needed to communities to adapt to climate change. both delivery on commitment to increase UN agreements on climate finance climate finance, and to reach a balance should be turned into action as quickly between mitigation and adaptation. Grants as possible. The ongoing negotiations are needed for adaptation, while mitigation about accounting and reporting of climate can be more easily funded through loans finance may be technical and complex. and private investments, particularly for However, in reality, they are crucial for the upper middle-income countries. success of the Paris Agreement.
The current approach where Rio markers To ensure that money begins to flow and is are used to identify how much climate effectively used, it is essential to have clear finance is to be reported is a bottom-up and transparent rules. There are currently approach, and is not linked to an increase many possibilities for developed countries of grants in climate finance. To scale up the to secure the funds they have promised to amounts of grants, or climate finance in mobilize. It is true that the Paris Agreement general, there is need for political decisions refers to the commitment to “mobilize to ensure that more funds are allocated to resources” without specification to the mitigation and adaptation projects. nature of these resources. However, this wording should not become a loophole Another important consideration is the for avoiding commitments to maximize identification of instruments to mobilize concessional resources for climate private finance. This question will receive adaptation and mitigation, particularly for much attention from the EU as different the poorest and most vulnerable countries.
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ENDNOTES
1 Interpretations of the term “new and additional” The report can be found at the ACT Alliance EU can be found in the third Biennial Reports from website https://actalliance.eu/ developed countries, Section 7.1.2. The reports can be found on the UNFCCC webpage www.unfccc.int/ 6 Figures taken from the report from the ACT Alliance “An Analysis of the climate finance reporting of the 2 The Standing Committee on Finance has made European Union.” The report can be found at the a list with possible interpretations of the term ACT Alliance EU website https://actalliance.eu/ “new and additional.” It can be found in their 2016 Biennial Assessment and Overview of 7 The table is based on calculations by an INKA climate finance flows report, Section 3.2.3, and consultation and includes data from the Annex Q. The report can be found at the UNFCCC second and third biennial reports from the webpage www.unfccc.int/ EU to UNFCCC.
3 ECOFIN conclusions on climate finance 8 The table is based on calculations by INKA consult has several times stressed that emerging and includes data from the second and third economies also should contribute with biennial reports from the EU to UNFCCC. climate finance. See for example conclusions from 2015, §4 http://www.consilium.europa. 9 The figure is taken from a report from the ACT Alliance eu/en/press/press-releases/2015/11/10/ EU “An Analysis of the climate finance reporting of the conclusions-climate-finance/ European Union”. The report can be found at the ACT Alliance EU website https://actalliance.eu/ 4 The research was carried out by INKA consult at http://www.inkaconsult.dk/ and the report can 10 “OECD DAC Rio Markers for Climate” handbook can be found on the ACT alliance EU website https:// be found at the OECD website www.oecd.org actalliance.eu/ 11 Report from DanChurchAid, CARE Denmark and 5 Figures are based on calculations by INKA consult in OxfamIbis, about Danish climate finance. The a report from the ACT Alliance “An Analysis of the report can be found on the webpage of the Danish climate finance reporting of the European Union.” 92 group https://www.92grp.dk
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Chapter 4 Global Aid Trends, BRICS Reports, OECD Reports
Global Aid Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs Brian Tomlinson, AidWatch Canada
BRICS Reports
The Case of China’s Development Co-operation in Infrastructural Development in Angola and Kenya Vitalice Meja, Reality of Aid Africa
Measuring Brazilian South-South cooperation through a participatory approach Luara Lopes and Juliana Costa, ASUL – South-South Cooperation Research and Policy Center
One step forward, two steps back: Brazil’s impact in aid and international cooperation Ana Cernov, Human Rights Activist and Independent Consultant, Brazil
OECD Reports
Belgium More with less Griet Ysewyn, Lien Vandamme, Emma Bossuyt, 11.11.11; Antoinette Van Haute, CNCD-11.11.11
Canada Challenged by Ambition Gavin Charles and Fraser Reilly-King, Canadian Council for International Co-operation
European Union The modernisation of European development cooperation: leaving no one behind? Alexandra Rosen, CONCORD Europe
France Will Emmanuel Macron Make French Aid Great Again? Michael Siegel, Oxfam France
Germany Germany’s Engagement in Development: Struggling with ODA, migration and security interests at the European level Dr. Martina Fischer, Bread for the World
Italy Development cooperation to the test in a new political reality Luca de Fraia, Action Aid Italy
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Japan Emphasizing SDGs but Increased Instrumentalisation Under the New Development Cooperation Charter Akio Takayanagi, Japan NGO Center for International Cooperation (JANIC)
Netherlands A mixed message on ODA Daniela Rosche, Oxfam Novib
Norway What next for the long-standing champion of high aid levels? Irene Dotterud-Flaa, Save the Children Norway
Switzerland Decreasing ODA funds, increasingly spent on migration and public-private partnerships Eva Schmassmann and Jürg Staudenmann, Alliance Sud
UK Aid in the national interest – in the interest of the poorest? Mike Green, Bond
USA The challenges and opportunities of US Foreign Assistance under Trump Tariq Ahmad, Marc Cohen, Nathan Coplin, Aria Grabowski, Oxfam America
196 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Brian Tomlinson, AidWatch Canada
A. An Introductory Summary • ODA is a core resource for catalyzing In 2015, the international community sustainable development. The adopted Agenda 2030, accompanied by central purpose of ODA is to achieve an ambitious set of seventeen Sustainable sustainable development goals. Other Development Goals (SDGs). Together they resource flows may be important for point the way towards a better future for achieving the SDGs, but they are often all. The promise was to “leave no one linked to other purposes. Addressing behind.” The challenges are substantial, the SDGs may be one of them, but not least in maximizing development would rarely be the primary driver that resources towards these ends. sustains and directs this resource flow. • ODA’s purposes and activities are Yet, some three years later, the trends set by public policy. ODA’s priorities elaborated in this chapter suggest that and modalities are exclusively a public a positive momentum, particularly for policy choice. Governments can the poorest and most vulnerable, is choose to fully devote ODA to activities diminishing. The development landscape related to the reduction of poverty and is rapidly shifting. These trends are inequalities, reaching marginalized undermining development efforts that communities, focusing on gender give priority to reducing poverty and equality and women’s empowerment, inequalities, addressing conflict and and leaving no one behind. increasing displacement, and supporting • Resource flows are concessional democratic space for people to secure by definition. ODA, as either their rights. a grant or concessional loan, can be intentionally directed to Aid as a unique resource specific countries or marginalized communities within countries. Many Official Development Assistance (ODA) is of the poorest countries are not able a unique and crucial public resource for to raise other resources to finance the SDGs. In comparison with other types their development (whether public or of financial flows for developing countries, private, international or domestic). It these resources can be deliberately is an essential support for non-profit programmed for purposes that reduce oriented sectors such as health and poverty and inequalities. Where appropriate, education. they can be combined with government and other resources for these purposes. What • ODA is a flexible resource. ODA are some of the unique qualities that give can be fully applied, with strong meaning to ODA for the SDGs?1 predictability, to support developing
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country-level national SDGs strategies. An unfavourable geopolitical Consistent with the Busan principles of development effectiveness,2 it environment for poverty-focused aid can act as a catalyst to country-led Unfortunately, the trends documented in and country owned development this chapter suggest that ODA is becoming a initiatives. Where relevant, it can also diminished resource for poverty eradication. be devoted to global public goods, such Instead, it is increasingly instrumentalized as the coordination of humanitarian for donors’ narrow economic and political responses or monitoring global health purposes. In the short term, the political trends, which are directly related to landscape in several major donor countries, human rights and poverty reduction. is not propitious for reversing these trends. • ODA is a key resource for sustaining multilateral institutions and What are some of the conditions that are partnering with CSOs. ODA is determining aid decisions? a primary resource for financing multilateral institutions, particularly a) Neo-liberal policies within donor core contributions to UN organizations, countries calling for significant which play leading roles in promoting reductions in public sector and implementing Agenda 2030. expenditures are in resurgence, Similarly, ODA is a crucial contributor either through governments or major to CSOs, matching substantial private oppositional pressures on these efforts, which are fully devoted to governments. Reducing taxes and achieving the SDGs. public sector programs, sometimes • ODA is an accountable resource. As linked to a growing distrust of a public resource, with robust levels government among vocal citizens of transparency, ODA is currently the groups, is a common refrain from the only development flow whose impact United States, France, the Netherlands may be traceable. Citizens and and Australia. parliaments can hold governments to account for their policies, The impact of these policies on ODA practices and allocations choices, levels differs, depending on the based on agreed-upon principles political circumstances of individual for development effectiveness and donor countries. By and large, human rights norms. however, the result has been an overall stagnation in the growth The importance of ODA is not determined by of ODA as a development resource its ability to combine with other resources (See sections 1 and 3). Real ODA for development, however important (discounting in-donor costs for refugee they may be. Rather, its legitimacy is support and students) has grown by derived from its maximum coherence with only 2% annually since 2010, from $109 3 efforts to transform the living conditions billion to $126 billion in 2017. With an and enhance opportunities for people overall ODA/GNI performance of 0.27% affected by poverty, marginalization and for Real ODA in 2017, the international discrimination. community is a long way from
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honouring the UN target of 0.7%, which and multilateral organizations seek should have amounted to $325 billion to use ODA as a means for attracting in aid in 2017. ODA at $325 billion many billions of dollars from the could have driven a rigorous effort to corporate sector. A counter-narrative, eradicate extreme forms of poverty one that significantly increases ODA and reduce inequalities in developing achieving the UN 0.7% target, might countries. be more effective and crucial to realizing the SDGs in ways that “leave ODA is concentrated and influenced no one behind”. But this is not even a by five donors. The United States, the consideration. United Kingdom, Japan, Germany and France together accounted for 70% of At the United Nations, the emphasis ODA in 2017, slightly up from 68% in is on “multi-stakeholder partnerships” 2010. (See section 2) Germany, France involving large global corporations in and Japan have been responsible for a all fields of development.4 The World significant part of the increases in Real Bank’s recent policy, ‘Maximizing ODA since 2014, but with much worse Finance for Development’, prioritizes quality issues (see below). The future private finance as the default modality for ODA in US foreign policy and a post- in project finance. According to this Brexit UK creates deep uncertainty for view, the Bank should only promote future directions for global aid. a public sector solution after all other possibilities are exhausted. Similarly, There is some evidence that DAC donors are ramping up and increased aid on the part of several diverting ODA towards Development large donors have been the result Finance Institutions (DFIs) for of the inclusion of climate finance “Blended Finance” initiatives that within ODA reported to the DAC. It combine ODA with various means of is estimated that climate finance has supporting (subsidizing) private sector accounted for between $15 billion investments. (See section 16). and $20 billion in reported ODA disbursements for all DAC donors All of this focus on engaging the each year since 2012. (See section 7) corporate private sector is taking place in the absence of meaningful b) Stagnation in the growth of ODA safeguards that establish clear as a development resource is alignment to specific SDGs, human rights accompanied by an all-pervasive norms and development effectiveness donor discourse that relies on principles (country ownership, inclusive the market as the main driver partnerships, a focus on results for of development and poverty eradicating poverty, transparency reduction. In this narrative, the and accountability). Progress on ODA mobilization of trillions of dollars transparency and accountability is from investments by the private experiencing a setback as many financial corporate sector has been identified intermediaries make it difficult to trace as the solution for financing the SDGs. DFI projects. The rights of affected ODA is no longer a development communities are often invisible with resource in its own right, as donors little recourse to respond to negative
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impacts. Donor engagement with (CSSF), created in 2015, was recently domestic corporations through blended criticized for using aid money to fund finance is likely to further expand formal military and counter-terrorism projects and informal levels of tied aid. (See as well as security forces in several section 18) countries involved in human rights abuses.7 After considerable debate, rules at the DAC for expanding the reporting of such finance have not yet been Focusing ODA on reducing poverty finalized. Nevertheless, the DAC agreed to give donors wider discretionary Diversions of aid resources to donor scope for reporting ODA as blended economic, security and foreign policy finance. This will affect the quality of concerns are happening at the same time aid reporting starting in 2018. (See as levels of poverty in developing countries section 16) is becoming increasingly invisible in donor discourse. The fact that approximately 800 million people continue to live in extreme c) ODA priorities for poverty destitution in developing countries is a reduction are being eroded by moral outrage that must be addressed. increased allocations to the short- The commitment to end extreme poverty term security and foreign policy by 2030 is the acid test for the SDGs. preoccupations of major donor Meeting donor commitments to Least countries. Several European donors, including the EU, are considering aid Developed Countries (LDCs) is essential conditionality with African countries for this goal. that is linked to migration control. The EU-Ethiopian Partnership, for example, Rationalizing the very limited ODA growth is conditional on making progress in since 2015, recent donor policies on the area of migrant returns and re- poverty and aid propose that ODA should admission. Given domestic policy be concentrated on countries and sectors pressures, these initiatives, supported affected by extreme poverty. Inside by billions of euros, may devolve into this recommendation is the implication, “quick-fix projects with the aim to stem whether explicit or not, that using ODA migratory flows to Europe.”5 (See to mobilize private sector growth and section 5) investments will address broad issues of poverty. The most recent US National Security Strategy (2017) suggests that “US The eradication of extreme poverty alone development assistance must support will not be sufficient to achieve the SDGs. America’s national interests,” which SDG1 on poverty reduction acknowledges very much include security interests. this reality with calls not only to eliminate The strategy is quite explicit: “We will extreme poverty, but also to half the number give priority to strengthening states of people living below national poverty lines. where state weaknesses or failure would magnify threats to the American Corporate private sector initiatives are homeland.”6 Along similar lines, a UK usually not designed to directly affect Conflict, Stability and Security Fund conditions for the millions of people living in
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poverty. (See section 16) Serious conditions While attention to domestic resource of poverty are highly dynamic, affecting the mobilization is growing and important, life opportunity of billions of people in many most of these efforts have been with ways. Generally they are outside the formal Middle-Income Countries. (See section 23) economy. The impact of large corporate investments are often at best benign, but Clearly, aid is vitally important for Low increasingly have had serious environmental Income Countries, especially given that or socio-economic impacts. Vulnerable and they have structurally lower tax bases and poor people are the ones most in need of very low levels of public resources. But aid targeted and expanded public interventions as a focused resource for catalyzing action from governments and donors, not for poverty reduction must not ignore very corporate private sector investments. (See high levels of poverty in Middle-Income section 8) Countries, also with limited domestic resources. Maximizing aid for this purpose Using the World Bank’s poverty lines, in these countries may take different which are differentiated by country forms, but will be required for many years income groups, an estimated 2.5 billion to come. people, or 40% of the population of developing countries, are living in The focus and quality of aid as a poverty. In Low Income Countries, 46% resource for poverty reduction is of the population (300 million people) deteriorating live in extreme poverty. But people living in poverty also include nearly half of the In 2017, the level of Real ODA was $126 population (47% or 1.4 billion people) of billion, which was reported ODA less in- Lower Middle Income Countries (LMICs), donor refugee and student costs, debt of which 16% live in extreme poverty cancellation and interest on ODA loans. At ($1.90 a day). As well, more than 30% of $126 billion, Real ODA was 13% less than the population (800 million people) of reported ODA of $144 billion for that year. Upper Middle Income Countries (UMICs) How effectively has this $126 billion been are considered very poor. While progress allocated towards poverty-oriented goals? has been made over the past several This chapter reviews some indicators that decades with respect to extreme poverty, convey worrying trends. particularly in China, complex poverty continues to be endemic to developing • Just over a third (36%) of Real ODA countries. (See section 8) is directed to 12 sectors that serve as a proxy for donor attention to Almost all LDCs and most LMICs have conditions affecting poverty. This less than $3,000 in annual per capita level has remained largely unchanged revenue available to the government for since 2010. (See section 12) all government expenditures, including dealing with the consequences of poverty. • As an unprecedented number of Many UMICs have per capita revenue of people are affected by conflict or less than $6,000. The comparable figure extreme climate events, humanitarian for DAC countries is more than $15,000, assistance is increasing as a share and these countries are still challenged by of Real ODA, but at a rate far below significant poverty and social inequalities. what is required. Real ODA growth has
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been very modest. As a consequence, programming (excluding humanitarian aid resources available for long-term assistance) increased from 31% to 39% development initiatives have been in these seven years. Aid to Upper declining as a share of total Real Middle Income Countries for long-term ODA. Even the share of humanitarian development was constant at 11%. investment in reconstruction and Humanitarian assistance for Syria, disaster preparedness has been Lebanon, Iraq and Turkey accounted declining from 18% of humanitarian for most of the overall increase in assistance in 2010 to 15% in 2016. aid (from 14% to 17%) to this income group. (See section 9) • Aid directed to gender equality and women’s empowerment, central to On the quality of aid, the following making progress on all SDGs, shows only indications point to an overall deterioration modest improvement since 2010. In since 2010: 2015 (the last year for data), a shocking 65% of Real ODA had no objectives • A proliferation of donor-directed relating to these crucial purposes. special funds within the UN (See section 11) Other identity-based seriously affects the capacities of UN inequalities are currently invisible in aid organizations to mount coherent and reported to the DAC, which suggests sustained programs to support the that donors are likely to be giving them SDGs. In 2016, donor support for little attention. There is a proposal to core budgets remained constant, at introduce a marker on disability from about 33% of Real ODA. But including 2019 onwards, but its adoption will be special funds, the multilateral system voluntary, making it hard to get a full administered more than 50% of Real picture of this crucial issue. ODA, up from 44% in 2010 and 36% in • The value of aid directed to Sub- 2005. (See section 13) Saharan Africa for long-term • The commitment to country development (excluding humanitarian ownership is declining. Country assistance) has increased by only 6% Programmable Aid (CPA), which is since 2010. In 2016, Sub-Saharan the DAC’s measure of aid that can be Africa received 33% of total Real ODA, programmed by partner countries, a share that has not changed since has declined from 47% of Gross 2010. This continent has the highest Bilateral ODA in 2010 to 36% in 2016. proportion of population (42%) living Aid delivered as budget support in extreme poverty. (See section 10) and sector-wide programming has declined from $5.2 billion in 2010 to • ODA (net of debt cancellation) for $4.1 billion in 2016, almost all of which Least Developed Countries and was sector-wide programming in 2016 Low-Income Countries was 44% of (support for particular ministries). (See total ODA in 2016, down from 46% section 14) in 2010. Excluding humanitarian assistance, aid to LDCs for long-term • The use of concessional loans has development programming was 30% been increasing since 2010. The of total ODA in 2016, down from 34% increased use of loans has been almost in 2010. On the other hand, regional 45% in dollar value between 2010 and
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2016. As a share of Real ODA, loans in 2016 back to 12%. Informal tied increased from 26% in 2010 to 29% in aid is much higher. In 2015 (the last 2016, down from 31% in 2015. (See year for data) more than 60% of the section 15) value of aid contracts was awarded • Increasing numbers of donors have in OECD countries. (See section 18) concentrated their ODA in mobilizing While all donors share many of these the private sector. A proxy selection trends, the chapter points to the of DAC sectors indicates a strong focus particularly poor performance by three on the private sector, with an increase of the largest donors – Germany, France from 21% in 2010 to 26% in 2016. and Japan – which together made up This trend is likely to heighten with more than 30% of Real ODA in 2017. concerted donor attention to financing Trends in these donors need to be development through blended finance taken into account when reviewing the (noted above). (See section 16) projection of average trends for DAC • Tied aid has fluctuated in recent donors as a whole. years, from 21% of bilateral ODA in 2013, to 24% in 2015, and The purpose of this chapter is to explore back to 20% in 2016. For LDCs, a the performance of ODA in-depth as a pronounced increase from 11% in strategic resource for Agenda 2030, with a 2013 to 17% in 2015 was reversed detailed examination of seven areas:
AID QUALITY INDICATORS FRANCE GERMANY JAPAN ALL DONORS 1. Climate Finance as % age of Gross Real ODA 42% 24% 30% 9% (7-year average between 2010 to 2016) (section 7) 2. Disbursements to proxy poverty-focused 15% 21% 13% 36% sectors, %age of Sector Allocated ODA (2016) (section 12) 3. Disbursements to LDCs/LICs, %age of Gross ODA 19% 18% 25% 36% allocated by income group (2016) (section 9) (DAC Donors only) 4. Disbursements to UMICs, %age of Gross ODA 36% 35% 17% 23% allocated by income group (2016) (section 9) (DAC Donors only) 5. Principal purpose gender equality marker, %age 0.3% 1.5% 2.2% 5.9% of Real Bilateral ODA (2015) (section 11) 6. Bilateral ODA channelled through special 2% 17% 15% 26% multilateral funds, %age of Real Bilateral ODA (2016) (section 13) 7. Loans as a Percentage of Gross Bilateral ODA 54% 35% 59% 18% (2016) (section 15) 8. Private sector proxy indicator, %age of Sector 35% 35% 55% 22% Allocated ODA (2016) (section 16) 9. Technical Cooperation as %age of Real Bilateral 42% 38% 37% 20% ODA (2016) (section 17) 10. Percentage of Bilateral Aid that is Tied (2016) 4% 14% 23% 20% (section 18) Source: Author’s calculations based on statistics from OECD DAC Stats.
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1. Determining ODA as a resource for At $146.6 billion in net disbursements in achieving the SDGs 2017 in current dollars, growth in Official 2. Distorting the levels of ODA Development Assistance (ODA), as reported 3. The purpose of ODA and poverty by the DAC, has effectively stagnated reduction since 2016 ($145.0 billion). ODA in current 4. Is aid being allocated for poverty dollars represents the actual dollar value of reduction? donors’ ODA, ignoring the effects of dollar 5. Undermining the quality of ODA inflation and changes in donor exchange 6. Measuring official resource flows for rates with the US dollar. the SDGs 7. Other sources of development Reported aid disbursements are affected cooperation finance by rules agreed upon by donors at the DAC. These rules allow for the inclusion in A number of conclusions are drawn for ODA of in-donor costs of settling refugees policy directions that are key if ODA is to for their first year in donor countries, in- be an effective and dedicated development donor imputed costs for students from resource for poverty eradication. developing countries studying in the donor country, and the charging of the full B. Determining ODA as a value of cancelled debt in the year that it Resource for Achieving the is cancelled. SDGs While these measures are legitimate in 1. DAC aid disbursements are their own right, most CSOs have long increasing, but at a slow-moving pace advocated that they should not be included in the measurement of ODA, which is a resource intended to materially The value of Real Official Development benefit developing countries. Assistance, i.e. aid that is broadly available for initiatives in poverty • Support for refugees in donor reduction, was $125.5 billion in 2017. countries is a human right obligation, It has increased modestly since 2010, but it does not fit the definition of growing by 3% between 2016 and 2017. ODA, as its purpose is not to support This modest growth is far from what is developing countries. required if ODA is to make an effective contribution to the ambitions of Agenda • Imputed student costs involve no real 2030. If the UN target of 0.7% of GNI for cash contribution as they represent ODA had been achieved in 2017, $325 a share of existing expenditures in billion would have been available for donor country education institutions. development assistance in concessional • Debt cancellation is charged to ODA finance. It will be apparent in the in its full value in the year that it is analysis that follows that not even this cancelled. But the actual benefit to modest $125.5 billion is truly available the finances of developing countries, as an effective development resource which are important, are in fact for eradicating poverty and reducing spread over several decades (and for inequality. heavily indebted countries may never
204 205 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 1.2 Trends in the Value of Real ODA, 2016 dollars, 2005 to 2017 Real ODA is Total ODA less in-donor refugee and student costs, debt cancellation & loan interest payments Billions of Constant 2016 US Dollars; OECD DAC1 and DAC2a; © AidWatch Canada April $150.0 $145.0 $144.2
$140.0 $131.0 $130.0 $123.5 $125.5 $120.6 $120.0 $115.1 $121.5 $121.8 $116.1 $109.2 $110.0 $112.5 $112.1 $114.1
$100.0 $103.9 $102.7 $96.9 $90.0
$80.0 $83.9
$70.0
$60.0 2005 2008 2010 2012 2013 2014 2015 2016 2017
ODA (2016 US dollars) Real ODA (2016 US dollars)
have been repaid). A considerable The value of ODA for developing countries amount of debt relief actually relates is also affected by changes in annual price to export credits, so the debt did not inflations (the changing price of a basket of have a purely development purpose goods that US dollars can buy each year) as in the first place. 8 well as by adjustments in donor exchange rates for the US dollar. The OECD DAC Together, these additions significantly provides a conversion that takes account distort the annual value of ODA to these impacts – ODA in constant 2016 US developing countries. Furthermore, dollars – that is the value of ODA in a given under current DAC rules, donors that year converted into 2016 dollars. Because provide loans must deduct the annual of price inflation, the value of ODA in 2016 principal repayments on these loans, but dollars for earlier years tends to be higher not interest payments, which can also be than its nominal value in current dollars. substantial. The value of Real ODA in 2017 was $125.5 The analysis of ODA in this chapter, except billion (in 2016 dollars). Since 2013, when when indicated, removes these charges to the level was $102.7 billion, it has been ODA, in order to calculate Real ODA. The increasing steadily, but it grew by only annual level of Real ODA provides a basis 3% between 2016 and 2017. Importantly, for understanding actual trends directly the value of Real ODA in 2016 dollars has being experienced by developing countries increased modestly by about 2% annually and ODA recipients. over the seven years between 2010 ($109.2
204 205 The Reality of Aid 2018 Report
billion) to 2017 ($125.5 billion). (Chart 1.1) commitments, ones that will contribute Nevertheless total aid disbursements are to social and economic programming to far removed from what is required and transform the structural underpinnings what has been repeated committed over of poverty and inequality. The balance the past decade (the UN target of 0.7% of between these two imperatives is becoming Gross National Income). increasingly complex and challenging.
If all donors had met the UN ODA target What has been the trend in ODA available of 0.7% of GNI in 2017, ODA would have for long-term development initiatives, been $325 billion, compared to $125.5 excluding humanitarian assistance? billion. Such a level would have made Up until 2013, such assistance closely a substantial contribution to long-term followed the trend line for Real ODA. investment in achieving the SDGs. In 2013, these trend lines began to diverge. Real ODA increased by 19% Humanitarian assistance, an essential from 2013 to 2016, but Real ODA for component of development cooperation, long-term development only increased has been increasing in recent years (see by 14%. ODA available for long-term Section 3 below). Of course, ODA dedicated development programming is declining to humanitarian emergencies will escalate as a share of total ODA. Despite DAC- in active conflicts, natural disasters or reported ODA at $145 billion in 2016, dramatic climate events. However, future developing countries have received only progress in sustainable development slightly more than $100 billion for long- requires an increase in long-term ODA term development efforts. (Chart 1.2)
Chart 1.2 Trends in the Value of Real ODA, 2016 dollars, 2005 to 2017 Real ODA is Total ODA less in-donor refugee and student costs, debt cancellation & loan interest payments Billions of Constant 2016 US Dollars; OECD DAC1 and DAC2a; © AidWatch Canada April $150.0 $145.0 $144.2
$140.0 $131.0 $130.0 $123.5 $125.5 $120.6 $120.0 $115.1 $121.5 $121.8 $116.1 $109.2 $110.0 $112.5 $112.1 $114.1
$100.0 $103.9 $102.7 $96.9 $90.0
$80.0 $83.9
$70.0
$60.0 2005 2008 2010 2012 2013 2014 2015 2016 2017
ODA (2016 US dollars) Real ODA (2016 US dollars)
206 207 The Green Climate Fund1
In 2010 parties to the United Nations Framework Convention on Climate Change (UN- FCCC) established the Green Climate Fund as its core funding mechanism. It has been designated to implement the Paris Agreement.
As of May 2018, the Fund has raised $10.3 billion from 43 governments, including 9 devel- oping countries. These pledges include $3 billion from the United States, of which only $1 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs billion is likely to be delivered, given the impending withdrawal of the United States from the Paris Climate Agreement. But at its meeting in early 2018, the Board was deadlocked on a new call for replenishment of resources.
2. ODA levels highly dependent on individual donor ODA/GNI performance By February 2018 the Fund had committed approximately half of its $8.3 billion bud- politics in the largest donor countries ratios (see also Section 3 below), get. But projects under implementation (May 2018) totalled only $651 million, with $158 signalling an abandonment of ambitious million disbursed to date. While CSOs have praised the management of the Fund for its commitments to aid targets by several of Much of the growth in Real ODA since these donors. openness to CSO comments on projects and policies prior to their approval, they have been 2014 comes from the five largest donors critical of the very slow implementation and dispersal of funds. Part of the delay is due to – France, Germany, Japan, the United The continued engagement and contributions the fact that it took the World Bank more than a year to sign a master agreement to admin- Kingdom and the United States. Together of large donors are essential. Given this, they provided 70% of ODA in 2017. ister the finances for the Fund. political developments in the United With proposals for deep cuts by the US States are worrying, with the US President Administration, possible cuts in Germany, Of the project approved, proposing 33% cuts to US assistance. As well, and the potential impacts of Brexit developments in the United Kingdom, with 57% focus on mitigation and 43% on adaptation (dividing 28% cross cutting be- on UK aid levels, there is considerable potential reductions due to the impact of uncertainty whether even these modest tween these two purposes); Brexit, are also of concern. levels of aid will be sustained. 60% are directed to the public sector and 40% to the private sector, with no funding In the United States, counter-measures of public/private projects; How do donors compare in their by Congress have sustained US budgeted performance, between 2014, the year prior 43% are disbursed through loans and 43% grants; aid levels for 2018/19, but USAID and to the adoption of Agenda 2030, and 2017, other Departments have been required to 17% were allocated to national projects; and the most recent year in which preliminary plan expenditures based on lower figures are available? 75% were allocated to international projects. budgets proposed by the Administration. Some commentators speculate that The five top donors (United States, the The Fund has been operating for about three years and is still establishing its major guid- approved aid allocations may be United Kingdom, Germany, Japan and ance policies. It recently adopted an Indigenous Peoples Policy, recognizing that a signifi- deliberately under-spent by the Trump France) provided 70% of Real ODA in 2017, Administration.9 A 30% cut to US aid cant number of projects will be implemented in indigenous peoples’ territories, as well as up slightly from 68% in 2014. (Table 2.1) would reduce global ODA by more than an Environment and Social Policy. The latter was adopted from the World Bank’s Interna- $10 billion. Germany has also been Among the 10 donors that provided more tional Finance Corporation. The Fund has also adopted a Gender Mainstreaming Policy. sending mixed messages in terms of its than $3 billion in aid in 2014, 9 increased However, the recent resignation of the Executive future commitments. their Real ODA between 2014 and 2017, and 8 of these donors increased Real ODA 1 See Arkin, F., “The Green Climate Fund commits billions, but falls short on disbursements,” DevEx, May between 2016 and 2017. The five largest 3. Donors’ ODA/GNI measure of 9, 2018, accessed May 2018 at https://www.devex.com/news/the-green-climate-fund-commits-billions-but- donors all increased their Real ODA by a generosity flat since 2010 falls-short-on-disbursements-92648. See the Green Climate Fund at https://www.greenclimate.fund/home. cumulative $4.4 billion between 2016 and See the Indigenous Peoples Policy at https://www.greenclimate.fund/safeguards/indigenous-peoples. See the 2017. Real ODA increased by $3.7 billion A strong rhetorical commitment to Environment and Social Policy at https://www.greenclimate.fund/safeguards/environment-social. See the between these years. (Table 2.1) Agenda 2030 has not been accompanied Gender Mainstreaming Policy at https://www.greenclimate.fund/how-we-work/mainstreaming-gender. by an affirmation of ambitious aid targets Of the 23 donors reviewed, it is somewhat towards 0.7% of donor Gross National encouraging that more than half, i.e. sixteen, Income (GNI). The ODA/GNI ratio, the increased their Real ODA between 2014 measure of a donors’ aid generosity, and 2017, with 15 increasing ODA between relative to the size of their economy, 2016 and 2017, even though some of these indicates that most donor levels have been increases were very modest. (Table 2.1) declining or exceptionally weak since 2015. Five donors achieved the UN 0.7% target. The fragility of these increases is However, in the UK’s case, its Real ODA apparent in the disappointing changes in measures only 0.68% of its GNI.
206 207 The Reality of Aid 2018 Report
Table 2.1 Donor Real ODA and ODA/GNI Performance Red indicates a decline in Real ODA (2016 dollars) from 2016 to 2017 Green indicates the achievement of 0.7% target in Real ODA in 2017
REAL ODA* ODA/GNI ODA/GNI 2017 ODA/GNI (BILLIONS 2016 US 2014 PERFORMANCE 2016 PERFORMANCE (DECLINE FROM PERFORMANCE DOLLARS) 2016) Australia $3.6 0.31% $3.3 0.27% $2.8 0.23% Austria $0.79 0.21% $0.92 0.24% $0.91 0.23% Belgium $1.9 0.36% $1.9 0.41% $1.8 0.38% Canada $3.2 0.22% $3.4 0.23% $3.6 0.23% Denmark $2.3 0.78% $2.0 .62 $2.2 0.7% Finland $1.4 0.59% $0.93 0.39% $0.95 0.38% France $7.4 0.30% $7.9 0.31% $9.3 0.36% Germany $12.2 0.36% $16.6 0.47% $17.5 0.48% Greece $0.18 0.09% $0.22 0.11% $0.24 0.12% Ireland $0.73 0.37% $0.80 0.32% $0.77 0.29% Italy $2.7 0.15% $3.2 0.18% $3.6 0.19% Japan $7.8 0.16% $9.0 0.18% $10.4 0.20% Korea $1.7 0.13% $2.2 0.16% $2.1 0.14% Luxembourg $0.35 1.10% $0.39 1.00% $0.41 1.00% New Zealand $0.42 0.26% $0.43 0.24% $0.40 0.22% Netherlands $3.7 0.52% $4.5 0.58% $3.9 0.49% Norway $3.5 0.94% $3.5 0.95% $3.8 0.95% Portugal $0.33 0.17% $0.30 0.15% $0.32 0.16% Spain $1.6 0.13% $1.8 0.15% $1.9 0.15% Sweden $4.3 0.90% $4.1 0.78% $4.6 0.86% Switzerland $2.8 0.44% $2.9 0.43% $2.8 0.41% United Kingdom $16.0 0.69% $17.5 0.68% $17.9 0.68% United States $32.4 0.18% $32.7 0.18% $33.0 0.17% All Donors $112.1 0.26% $121.8 0.27% $125.5 0.27%
* Real ODA is ODA less in-donor refugee and student costs, debt cancellation and payment of interest on outstanding ODA loans. For 2017 in-donor student costs and interest payments on loans are estimates based on amounts recorded for 2016.
The ODA/GNI performance measure from 0.28% in 2010 and has hovered for nominal ODA was 0.31% in 2017. around 0.27% in recent years. (Chart 3.1) This represents less than half of the long-standing UN target of 0.7%, and is In relation to Real ODA, almost half of unchanged from 2010. The measure of the 23 donors (i.e. 11) registered their performance for Real ODA has declined performance at 0.23% of GNI or less in
208 209 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 3.1 DAC Donors' ODA Performance (UN Target of 0.7%): ODA and Real ODA as a share of Gross National Income Real ODA is ODA less in-dornor refugee and student costs, debt cancellation & loan interest repayments OECD DAC1 © AidWatch Canada April 2018 0.40%
0.38%
0.36%
0.34% 0.32% 0.32% 0.32% 0.31% 0.30% 0.30% 0.31% 0.30% 0.30% 0.30% 0.28% 0.28% 0.28% 0.27% 0.26% 0.27% 0.26% 0.25% 0.26% 0.24% 0.24% 0.24% 0.22% 0.23%
0.20% 2005 2008 2010 2012 2013 2014 2015 2016 2017 Actual ODA Performance Ratio Real ODA Performance Ratios
2017, an increase from 9 donors in 2014. 0.71% in 2010 to a low of 0.39% in 2017. (Table 2.1) The new government in the Netherlands may reverse this trend with a recent While many donors increased their ODA, coalition agreement promising annual these increases were not nearly sufficient aid increases and tying its ODA to annual to sustain higher performance ratios. Of 23 growth in GNI to achieve 0.7% during its donors, 11 had reduced ODA/GNI ratios four-year mandate. compared to their performance in 2014 and 2017. Ten (10) had reduced ratios 4. Increasing humanitarian assistance between 2016 and 2017, with another 5 for enduring conflicts and extreme remaining unchanged. (Table 2.1) climate events Even among high performing donors, Humanitarian crises are affecting weakened commitments are evident. unprecedented numbers of people According to the DAC, five donors achieved worldwide as a result of armed the UN target ODA performance of 0.7% conflicts and extreme climate of GNI – Denmark, Luxembourg, Norway, events. Approximately 87% of Sweden, and the United Kingdom. people living in extreme poverty However, when Real ODA is the are found in countries that are measure, only 4 of these donors made highly vulnerable. As a share of the grade, with the United Kingdom at Real ODA, humanitarian assistance 0.68% of its GNI. The Netherlands, which has increased from 9% in 2012 was a 0.7% donor for many years, has to 14% in 2016. In constant 2016, diminished its ODA as a share of GNI from dollars humanitarian assistance
208 209 The Reality of Aid 2018 Report
increased from $10.3 billion to The impact of climate change is increasingly $18.3 billion in 2017 (of an increase a driver of humanitarian crises and 80%). It remains far below what displacement. is required, with the overall shortfall for 2016 UN appeals In the lead-up to the 2016 World estimated at 40%, and much of the Humanitarian Summit, UN Secretary shortfall located in the poorest General, Ban Ki-Moon, was very clear. countries. The political will to His report, One Humanity: Shared implement commitments made at Responsibility, notes, the World Humanitarian Summit (2016) to reform humanitarian “More countries are slipping assistance is losing momentum. into fragility, marked by extreme For example, there is still very poverty and weak institutions and little humanitarian aid channelled compounded by natural hazards through local CSOs, despite and climate-induced disasters,” recommendations to do so at the which are becoming “more frequent summit. and intense,” and that “[c]limate change continues to cause increased Humanitarian crises in Yemen, Iraq, Syria humanitarian stress as it exacerbates and the DRC continue to escalate with no food insecurity, water scarcity, resolution in sight. In 2017, the number conflict, migration and other trends.”11 of people newly displaced exceeded 30 million, with natural events affecting 18.8 In its 2018 Global Humanitarian Assistance million people in 135 countries. Armed Report, Development Initiatives (DI) offers conflicts displaced another 11.8 million, a summary of the humanitarian context nearly doubling the 2016 number.10 in 2017, which has only intensified: Chart 4.1
210 211 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 4.2 Trend in Total Offical Humanitarian Assistance Billions of Constant 2016 US Dollars; OECD DAC2a © AidWatch Canada April 2016 $20.0
$18.3
$16.7
$15.0 $15.2
$12.6 $11.3
$11.0 $10.8 $10.0 $10.3
$5.0 2005 2008 2010 2012 2013 2014 2015 2016
Chart 4.3
“In 2017, humanitarian need was 2017 also witnessed violence and driven by continued, large-scale persecution forcing the mass conflict, with crises persisting in displacement of the Rohingya Yemen, Syria and South Sudan. population from Myanmar, while
210 211 The Reality of Aid 2018 Report
hurricanes across the Caribbean in 2012 to 33% in 2016 (Chart 4.3). Since caused large-scale destruction. … 2014, humanitarian assistance to Sub- An estimated 201.5 million people Saharan Africa has remained level, at living in 134 countries were assessed approximately $6 billion. to be in need of international humanitarian assistance. … In 2017, Even though humanitarian assistance has complex crises (involving at least been increasing, it lags far behind what is two of conflict, disasters associated required in response to UN Coordinated with natural hazards and refugee Appeals. While the volume of resources situations) occurred in 29 of the 36 for appeals increased by $2.4 billion over countries with the highest numbers 2016, the estimated shortfall in 2017 of people in need. Meanwhile six of remained at 40% of the total Appeals, these 36 countries experienced all or $10.3 billion, the largest volume ever 14 three crises types.”12 recorded. These shortfalls urgently need to be addressed if human suffering and DI estimates that 59% of people currently vulnerability is to be minimized. living in extreme poverty are found in countries affected by armed conflict, Delivering Humanitarian Assistance fragility or environmental vulnerability.13 The channel through which How is the global aid system responding humanitarian assistance is delivered to these persistent and growing has also shifted since 2010 (Chart 4.4). humanitarian crises? Multilateral channels have increased their Total Humanitarian Assistance share of total humanitarian assistance from 52% to 62%, and bilateral channels Since 2012, humanitarian assistance have been correspondingly reduced has been increasing appreciably in both from 18% to only 8%. This reduction in its share of Real ODA and its dollar value bilateral delivery of humanitarian aid has (2016 dollars). As a share of Real ODA it not affected CSOs. CSOs maintained their share of delivery of official humanitarian has increased from 9% of Real ODA to 14% assistance at 31% in 2016 (not including in 2016, and by close to 80% in 2016 dollar additional private humanitarian aid to value, from $10.3 billion to $18.3 billion these CSOs). in 2018. However, growth between 2015 and 2016 was only 3.6%, much less than DAC official channels are not the exclusive previous increases in this decade. (Chart modality for humanitarian responses.15 4.1 and Chart 4.2) In 2016, the DAC recorded humanitarian contributions from non-DAC members The geography of humanitarian assistance amounting to $6.4 billion (up from $3.2 has also shifted in recent years. In 2016, billion in 2015), including $6.0 billion from the Middle East received 33% of total Turkey alone. In addition, the United Arab humanitarian assistance, compared Emirates contributed $717 million and to 7% in 2010. By contrast, Sub- Saudi Arabia $395 million. Almost all of Saharan Africa’s share of humanitarian this humanitarian assistance was devoted assistance declined from a high of 49% to crises in the Middle East.
212 213 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 4.4
Development Initiative’s 2018 Report also in 2015, these ODA investments have shows a steady growth of humanitarian not increased in dollar value, and have assistance from private sources – declined significantly as a share of total humanitarian assistance (from 18% to individuals through CSOs, foundations 15% between 2010 and 2016). (Chart 4.5) and the private sector. They estimate a total of $6.5 billion in 2017, up from $6.0 The international community has a moral billion in 2016, which is approximately and human rights obligation to maximize a quarter of all humanitarian resources. its response to humanitarian crises and About 68% of these private resources emergencies. But without substantial came from individual contributions to increases in Real ODA and increased NGO campaigns.16 investments in the long-term foundations for sustainable development, in more Investing in Reconstruction and peaceful societies and good governance, Disaster Preparedness and in resilience to natural and climatic events, development progress and Agenda Investment in reconstruction and 2030 will be severely undermined. rehabilitation as well as disaster preparedness is an essential component Because increases in Real ODA have of humanitarian assistance in making the not kept pace with the heightened transition to longer-term development need for humanitarian assistance, sustainability in countries affected less ODA has been available for long- by human and natural emergencies. term development efforts (i.e. Real However, this component of humanitarian ODA less humanitarian assistance). assistance has taken a back seat to more Between 2012 and 2016, Real ODA immediate responses to humanitarian increased by 21%, but Real ODA for long- need. With the exception of a bump up term development increased by only
212 213 The Reality of Aid 2018 Report
Chart 4.5 Investment in Reconstruction and Disaster Preparedness as a Share of Total Humanitarian Assistance Billions of Constant 2016 US$ OECD DAC5 © AidWatch Canada April 2018 25%
20% $2.1) 20% 19% ($3.4) 18% ($2.3) 17% ($1.9
16% ($2.6) 15% 15% ($2.9)
10% 2005 2010 2012 2014 2015 2016
15%. (Chart 4.6) Moreover humanitarian that apply to them – an important ‘emergencies’ are increasingly long term feat considering the breadth of the crises. Seventeen (17) of the 20 largest initiative. But progress is uneven, recipients of humanitarian assistance in and the initially high political 2017 had received assistance over the long momentum is fading.”19 or medium term.17 Commitment areas with very little action Meeting the Commitments of the included reduced overhead and ear- 2016 Humanitarian Summit marking of donor contributions, increased engagement of affected communities and The quality of humanitarian assistance the humanitarian-development nexus. has not improved despite promises in the ‘Grand Bargain’ at the 2016 World Equally contentious has been the Humanitarian Summit. Government and commitment to channel 20% of non-governmental humanitarian actors humanitarian resources directly to local reached an agreement at the Summit, and national responders, including NGOs which included 51 commitments in 10 and CSOs. This included greater flexibility key areas to improve the efficiency and in funding in-country partners directly, effectiveness of the humanitarian system.18 more equitable partnerships with INGOs, A report prepared one year following the and greater attention to strengthening Grand Bargain concluded that: local capacities. Little progress has been made since 2016 on this commitment. “on average, [there has been] action According to Development Initiatives, on 40 per cent of the commitments local and national NGOs received
214 215 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 4.6 Recent Trends in Real ODA for Long-Term Development Purposes Real ODA less Humanitarian Assistance Real ODA is ODA less in-donor refugee and student costs, debt cancellation & interest payments on loans Constant 2016 US Dollars; OECD DAC1 & DAC2a © A $130.0 $125.5 $120.0
$110.0 $108.2
$100.0 $102.7
$90.0 $91.2
$80.0 $83.9
$70.0 $74.7
$60.0
$50.0 2005 2008 2010 2012 2013 2014 2015 2016 2017 Real ODA Real ODA for Long Term Development Log. ( Real ODA) Log. ( Real ODA for Long Term Development)
just 0.4% directly of all humanitarian poverty reduction. Allocations to private assistance reported to the UN in 2017, a sector-oriented DAC sectors have been rise of just 0.1% from 2016.20 Indeed, a increasing, much more so than to other coalition of southern CSOs is challenging donors. The EU’s disbursements to Least the actual will of CSO and government Developed and Low-Income Countries donors to address this issue with a real have sharply deteriorated since 2010, commitment to change current practices. reflecting the domination of EU foreign Donors maintain that these changes are policy and the priority of concentrating very difficult to implement in the current on countries in its immediate periphery. donor political climate, with existing Aid to African countries may also donor management and accountability increase, conditioned on acceptance regulations.21 of European interest in migration control. More aid is being directed to 5. The European Union ODA, setting preventing extremism or terrorism and worrying donor trends for Europe in controlling insurgency.
At 12% of total Real ODA in 2017, the The European Union (EU) is the third largest European Union is a unique multilateral donor (after the United States and the donor, one that is setting trends with United Kingdom). In 2017, the EU provided its member states that will affect 53% $15.6 billion in Real ODA, up from $12.7 of Real ODA in 2017. billion in 2010 (2016 dollars). The EU’s share of total Real ODA has remained Various indicators point to declining relatively constant at 11% in 2010 and attention to important sectors of 12% in 2017. As a European multilateral
214 215 The Reality of Aid 2018 Report
donor, it both reflects and influences donor appreciably less than for all donors policies in its 28 member states. The EU (including multilateral donors), which and its member states represented 53% allocated 36% of their sector-allocated aid of total Real ODA in 2017. to these proxy sectors in 2016. (Chart 5.1)
Trends in aid provided by the European Trends towards private sector- Union’s mechanisms, therefore, will have oriented ODA a major impact on emerging trends in ODA as a resource for development and the On the other hand, allocations to private SDGs. Since 2010, these trends as well as sector-oriented DAC sectors (see Section recent policy changes affecting EU aid, raise 16 below) have been increasing, much significant worries about future directions. more so than for other donors. These sectors are those that either strengthen the Trends in an Orientation towards formal private sector (formal production Poverty Reduction and finance) or engage the formal private sector in implementing ODA programs Section 12 below sets out a proxy indicator (infrastructure). As such they may have to assess the degree to which donors are only an indirect and very mixed impact orienting their ODA to poverty reduction, on poverty and inequality. In 2016, 47% based on selected DAC sectors. Since of EU ODA was disbursed to these 2010 the EU poverty sector indicator sectors, in contrast to 28% for all donors has declined from 28% in 2010 to 24% in (including multilateral donors). The 2016 of sector allocated aid. Throughout EU disbursements to these sectors have this period, its performance has been increased from 30% in 2010. (Chart 5.2)
Chart 5.1 Trends in EU Private Sector Proxy (Infrastructure & Formal Finance and Production) Private sector proxy are DAC sectors for large scale water & sanitation, transportation, communciations, energy, formal banking and finance, industry, mining, construction,
All Donors 2010 19% 5%
EU 2010 23% 7%
All Donors 2012 21% 7%
EU 2012 34% 23%
All Donors 2014 22% 8%
EU 2014 30% 20%
All Donors 2016 21% 7%
EU 2016 30% 17%
0% 10% 20% 30% 40% 50% 60% 70% Infrastucture Formal Production & Finance
216 217 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
The EU’s Multiannual Financial Framework Bilateral ODA, a mere 1.7% of EU ODA for 2021-2027 places a strong emphasis was screened for the gender equality on private sector instruments in the EU’s principal objective marker in 2015, future development cooperation plans. compared to 5.9% of Real Bilateral ODA Using various investment mechanisms for all donors. Eighteen percent (17.5%) there is an expectation that 60 billion has been screened as having a gender euros from the EU could mobilize up to equality significant objective (i.e. gender half a trillion euros from the private sector equality is one of several objectives), in this period.22 European CSOs have compared to 34.5% for all donors. raised a number of concerns relating to • With respect to the balance between the sectoral focus of these investments in humanitarian assistance and long- the context of the SDG priority to “leave term development (see Section 4 no one behind”, as well as the growing above), the EU level of humanitarian phenomena of increased aid tied to assistance is on a par with the experience European companies, and weakened human rights safeguards, transparency of DAC donors as a whole. It ranges and accountability.23 between 11% (2010) and 14% (2016). • With respect to climate finance Other indicators of ODA priorities (see Section 7 below), in 2016 the EU and quality allocated 12% of its ODA to climate finance (compared to 14% for all DAC • With respect to gender equality donors). More than 50% was allocated and women’s empowerment (see to adaptation (56%), compared to 38% Section 11 below), as a share of Real for all DAC donors.
Chart 5.2 Trends in EU ODA Poverty Sector Proxy Poverty-oriented sectors inclde Basic Education, Basic Health, Population & Reproductive Health, Basic Sanitation, Democratic Participation, Women's Organizations, Human Rights, Ending Violence Against Women, Civilian
40%
36% 35% 36% 35% 34% All DAC & Multilateral Donors 30% 28%
25% 24%
22% European Union 20%
17% 15%
10% 2010 2012 2014 2015 2016
European Union All Donors
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• With respect to EU aid to Least the Middle East and North Africa. Developed and Low-Income Together these regions accounted countries (see Section 9 below), for 45% of EU aid in 2016. the EU’s performance has sharply deteriorated since 2010 from 43% of A Focus on EU Migration and ODA allocated by income group to Security 28% in 2016 (compared to 44% for all donors). (Chart 5.3) In 2015, the EU created the EU Emergency • The EU’s poor performance in Trust Fund for Africa, with the purpose relation to LDCs is a reflection of of encouraging African countries to the changing balance in regional cooperate with the EU on improving allocations of disbursements, migration controls, migrant returns and consistent with EU foreign policy readmissions. This Fund was allocated 3.1 concerns. Allocations to ODA-eligible billion euros ($3.6 billion), of which 90% countries in Europe increased from is ODA financed through the European 18% to 29% between 2010 and 2016, Development Fund. while disbursements for Sub-Saharan Africa shrank from 42% to 27%. European and African CSOs are deeply Disbursements to the Middle East concerned about conditionalities for aid increased from 7% to 10% and for to African countries that are linked to North Africa, from 6% to 9%. These European interests in migration control. shifts clearly represent an assertion They fear the Fund will focus on quick-fix of the EU’s foreign policy interests border measures rather than longer-term in their border regions in Europe, development efforts that might address
Chart 5.3 EU Share of Gross ODA Disbursements to Least Developed and Low Income Countries ODA is net of debt cancellation and unallocated by income, but includes regional allocations OECD CRS+ © AidWatch Canada May 2018 60%
55%
50% 47% 47% 45% 45% 43% 44% All Donors 40%
35% 32% 30% 28% European Union 25% 26%
20%
15% 2010 2012 2014 2015 2016 European Union All DAC Donors
218 219 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
the drivers of migration, respecting basic “improvements in the peace and human rights and principles for effective security sector activities often lie less aid. Many of the projects supported are, in in funding top-down security sector fact, designed in member state countries, capacity building, and rather more in reflecting their national interests, with fostering CSOs, local reconciliation local partners consulted only after project or political and legal environments decisions have been made.24 in which active citizens can promote access to security and justice.”27 Beyond efforts to limit the movement of The latter is not the main orientation of migrants to Europe, the EU has also been this EU ‘aid for security’ funds. directing aid resources for the purposes of preventing extremism and terrorism, or controlling insurgency. In December 2017, C. Distorting the Levels of ODA member states committed $117 million until 2020 towards capacity building for 6. ODA has been dramatically inflated security and development of military through in-donor refugee costs actors in partner countries. 25 Since 2010, donors have used various This funding will augment the EU Instrument methods to inflate ODA through contributing to Peace and Security. While the DAC-allowable budgetary additions new funds will not be allocated from the to ODA, beyond aid transfers for Development Cooperation Instrument, as the benefit of developing countries. first promoted by Germany and resisted by These charges have increased Sweden, it is a worrying trend. It is a sign from 9.5% of ODA in 2010 to 13% that the EU and some of its members may in 2017, representing $18.7 billion be taking advantage of recent changes to in that year, with higher in-donor the DAC rules governing the use of ODA to country expenditures for refugees support military actors. These revised DAC responsible for most of this rules, agreed to at its High Level Meeting in increase. December 2016, will allow such activities to be counted as ODA in “exceptional The inflation and distortion of the actual circumstances” when non-military actors amount of ODA provided for poverty may not be sufficient.26 The definition of reduction and supporting development “exceptional circumstances” is unclear. has been a persistent issue for the past two decades. The use of aid by military and security forces for reconstruction of infrastructure, In the early 2000s, the inclusion of the mine clearing, or water infrastructure may full value of debt cancellation in ODA was align European aid actors with problematic the issue. In 2005, $24.8 billion in debt developing country institutions. Many have cancellation (2016 dollars) was a fifth of all records of deeply embedded impunity for ODA reported in that year. In 2016 and serious human rights violations, and such 2017, the use of the DAC rule permitting aid is deemed to have little impact on the inclusion in ODA of expenditures for conditions for peoples’ security. A report refugees for their first year in a donor by Concord, the European CSO platform, country resulted in almost $14 billion stated that:
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(2016 dollars) in ODA, representing 10% 7. The inclusion of climate of ODA in 2017. (Chart 6.1) finance as ODA, breaking the There is no longer a refugee “crisis” in promise that climate finance is Europe, yet its politics and public reaction additional are likely to affect European ODA for years to come. Globally, the number of people Despite the 2007 promise to displaced from their home has reached provide “new and additional 65.6 million of which 22.5 million are resources, including official refugees. More than half are under the and concessional funding for age of 18.28 Those arriving in Europe have developing country Parties,” fallen from 1.2 million in 2016 to 650,000 climate finance is buried within in 2017, comparable to the level in 2014.29 reported ODA. In the absence of an explicit target for non- With the number of asylum seekers in climate finance ODA or separate Europe falling by half between 2016 and donor funding mechanisms for 2017, there should be a corresponding climate finance, the degree to decrease in in-donor refugee expenditures which climate finance is “new in future ODA reports. Yet, as noted in and additional” to existing ODA Section 5, several European countries, as cannot be determined. The well as the European Union, have entered promised balance between into agreements with countries such as adaptation and mitigation is Ethiopia, Senegal, Mali and Nigeria to far from being realized, as little condition future ODA on the reduction of over a third (36%) was devoted to the flow of migrants from these countries. adaptation in 2016.
Chart 6.1 Donor Inflation of ODA Inflation includes in-donor student and refugee expenditures, Debt Cancellation and interest payments on previous loans, Percentage of Net ODA Billions of Constant 2016 US$ OECD DAC1 and DAC2a; © AidWatch Canada, April 2018
30.0% 27.8% $32.2 25.0% 21.4% billion $24.8 billion 20.0% Total Donor Inflation
16.0% 13.0% 15.5% $18.7 15.0% Debt 12.9% billion Cancellation 11.0% 9.8% 9.6% 9.2% 10.0% $13.8 9.2% 9.5% billion 4.7% In-Donor Refugee Costs 5.0% 2.7% 3.4% 3.5% 2.0% 2.7% 0.3% 0.0% 2005 2008 2010 2012 2013 2014 2015 2016 2017
Total ODA Inflation Debt Cancellation In-Donor Refugee Expenditures
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Total ODA-reported climate finance transparency nor rules on concessionality commitments averaged $17.6 in the reporting of loans as climate finance. billion per year from 2012 to 2016. It has largely been flat-lined at $18.7 The UNFCCC’s Standing Committee billion in 2016 (based on the author’s on Finance, the International Finance assumptions for counting different Institutions, and the DAC’s Climate Change forms of finance). DAC members Experts Group have been working, both have estimated that bilateral separately and together, to resolve these contributions to the 2020 target of outstanding issues and to come to an $100 in total climate finance should agreement on standards for reporting be $37.3 billion. While not inclusive climate finance.31 But almost nine years of donors’ non-concessional DFI after the 2009 Copenhagen Climate finance, $18.7 billion is just half of Summit, no agreement is yet in sight. the required $37.3 billion that the DAC Roadmap requires from such Climate finance as “new and sources to achieve the $100 billion additional” target by 2020. Climate finance comprises a significant part of Real More than a decade ago, at the 2007 ODA for Germany (20%), France UNFCCC Conference of the Parties (9%) and Japan (18%), the donors (COP13) in Bali, parties agreed to the that have exhibited large increases principle of new and additional resources in their ODA since 2014. As a result for climate finance. Developed countries climate finance has included a large agreed to work towards “improved access proportion of loans versus grants in to adequate, predictable and sustainable its delivery. financial resources and financial and technical support, and the provision of new An analysis of international, public-sourced and additional resources, including official climate finance is very complex and fraught and concessional funding for developing with uncertainties and confusion. There country Parties” [Bali Action Plan, 1(e)(i)]. are a wide range and a growing number But since the Bali commitment, almost of channels for this finance, including all donor international public finance for specialized multilateral funds such as climate change has been included in ODA the Global Climate Fund with the United if these resources have been concessional Nations Framework Convention for Climate and targeting developing countries. Change (UNFCCC), International Financial Institutions, bilateral development finance Several years later, at the 2009 COP15, the institutions and bilateral aid finance. Copenhagen Accord was agreed whereby developed countries agreed to urgently Compounding this fractured institutional ramp up climate finance, promising reality is the fact that there is no agreed “scaled up, new and additional, predictable definition of climate finance within and adequate funding as well as improved the UNFCCC or otherwise, and donors access … to developing countries.” and institutions currently use different Developed countries committed to a accounting rules in determining the value Fast Track Initiative for climate finance of their contributions to climate finance.30 totalling $30 billion, which was to be There is also no overarching commitment to disbursed between 2010 and 2012, and
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the achievement of $100 billion goal in private sector funds dedicated to climate annual climate finance (all sources, public mitigation or adaptation. and private) by 2020. At COP21 in Paris, 2016, this commitment of $100 billion was Given its importance for future climate finance, extended to 2025. there is a short summary of the current state of the Green Climate Fund, established under Have concessional climate funds from the UNFCCC, and financed mainly with ODA donor countries lived up to the “new and resources (see Box One below). additional” commitment? This issue has been obfuscated by the lack of a definition A donor roadmap for meeting the of “new and additional.” The question $100 billion target was further obscured at the Paris COP21 in 2016, where the language of “new and In 2016, DAC donors realized their additional resources” was removed and commitment in the UNFCCC process by the commitment weakened. The Paris developing a Roadmap for achieving $100 Agreement vaguely calls on developed billion in annual climate finance, including countries to maximize the mobilization both private sector and official public of resources from all sources, “noting the sources. The Roadmap to US$100 billion significant role of public funds,” whereby estimates that by 2020 approximately “such mobilization of climate finance should $37.3 billion will come from bilateral represent a progression beyond previous donor sources, $29.5 billion will come efforts. [emphasis added]” [Annex, Article 9] from internal resources of the Multilateral Development Banks, and at least $33.2 Under DAC rules for ODA, public billion will come from private sector concessional climate finance for investments.34 developing countries is an eligible aid resource transfer. All donors count it as In practice, most donors use the DAC data such. But without an explicit target for non- as the foundation for their biannual report climate finance ODA, or separate donor to the UNFCCC on their climate finance funding mechanisms for climate finance, (albeit with differing methodologies for the degree to which climate finance is “new projects that are said to be “main-streamed and additional” to existing ODA is virtually climate finance”). impossible to determine. Donors report to the DAC using the The analysis that follows focuses on following DAC climate finance policy climate finance that has been reported marker: as ODA. It does not include analysis of investments from multilateral institutions 1. Projects that have a sole focus on that are non-concessional or from their climate change are marked ‘principal internally generated resources.32 It also objective’; does not examine public investments from 2. Projects with an identifiable objective bilateral Development Finance Institutions for climate adaptation or mitigation are or national investments, where these marked ‘significant objective’ where this public resources do not qualify as ODA.33 is only one of the project’s objectives There is insufficient information to analyze (mainstreamed climate finance);
222 223 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
3. Projects that are screened but with no budget relates to climate mitigation or climate change objective are marked adaptation. It also only includes the zero. grant equivalency of concessional loans.37
Both principal objective and significant Climate finance and ODA: Should objective projects are counted in the DAC it be considered a development database at their full value.35 As noted resource? above, donors have different policies in reporting significant objective projects to There has been debate among CSOs about the UNFCCC – some report their full value, the relevance of climate finance to ODA while others report only a percentage. and its purpose to support transformative development, with a general agreement This chapter focuses on climate finance that priority should be given to the rights that has been reported to the DAC of vulnerable populations and those living as concessional ODA in its Creditor in poverty (which continues to be deep and Reporting System (CRS) database. The widespread across developing countries – analysis uses the ‘provider perspective’ see Section 8). This issue, particularly as for annual aid commitments (the full it relates to adaptation, has shaped earlier budget in the year that the commitment debates within the UNFCCC Green Climate is made) to climate adaptation and Fund. mitigation, for the years 2012 to 2016.36 In 2017, developed country Board The ‘provider perspective’ includes members of the Fund pushed to reject all donor bilateral commitments for submitted projects from LDCs (from climate finance, plus pro-rated donor Bangladesh and Ethiopia) claiming that non-earmarked (core) contributions to they addressed wider development international financial institutions, which objectives and were insufficiently focused can be related to climate finance. The on climate change. latter is calculated by the DAC based on the share of disbursements by these In a letter to the Green Climate Fund institutions for climate finance. These Board, 83 NGOs from both the North imputed multilateral allocations are and the South protested this narrow attributed to each donor, but are not interpretation of its mandate. The letter assigned to adaptation or mitigation states that the distinction between through the Rio Marker. development and adaptation is “largely artificial” and suggests “vulnerability to Given the absence of officially-agreed climate change impacts is highly correlated upon accounting rules for climate finance, with development deficits and capacity of this analysis adapts the DAC database people to build resilience.” It goes on to by removing double counting for both argue that “adaptation funding at its best adaptation and mitigation. It does this should be transformative, in line with the by discounting to 30% for projects with GCF mandate, and as such must go well inflated finance attributed to climate beyond addressing the most immediate purposes in significant purpose projects, climate-related impacts.”38 Relations with where only one objective of an activity CSOs have subsequently improved.
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While recognizing the importance of Global international finance institutions climate finance as new and additional (IFIs) have been assuming a larger role resources beyond existing ODA targets, in climate finance. According to the this chapter maintains that effective latest joint report by the multilateral concessional climate finance should be development banks, in 2017, these eligible to be considered ODA, and like institutions put $33 billion towards other forms of aid it must also respond climate finance projects from their to the real localized, context-specific own account (resources raised by the development needs of vulnerable people. banks themselves). This represented 25% of all resources from their own account41 The value of ODA-reported climate and already exceeds the $29.5 billion finance predicted in the donor Roadmap noted above. However, more than 80% of these IFI climate resources were provided on Total adjusted climate finance a loan basis, compounding developing commitments averaged $17.6 billion country debt for purposes largely driven by per year from 2012 to 2016, and was the high carbon practices of the developed largely flat-lined at $18.7 billion in world over the past century. 201639(Chart 7.1). While not inclusive of donors’ non-concessional DFI finance, At its spring 2018 meetings, the World Bank $18.7 billion is just half of the required announced that climate finance, as a share $37.3 billion that the DAC Roadmap of its portfolio, would rise to 30% (and for expects from such sources to achieve the the International Finance Corporation 40 $100 billion target by 2020. to 35%). This is a significant increase
Chart 7.1 Total Concessional Climate Finance (Provider Persepctive) Principal and Significant Purpose Climate Finance; Significant Purpose @ 30%; Loans included at grant equivalency Billions of Current US$; DAC CRS; AidWatch Canada © June 2018 $25.0
$19.0 $20.0 $18.5 $18.7 $17.7
$14.2 $4.0 $5.0 $15.0 $5.2 $4.9 $1.8
$10.0 $9.3 $9.6 $8.4 $8.6 $8.7
$5.0
$4.8 $5.2 $3.7 $4.4 $4.4 $- 2012 2013 2014 2015 2016
Adaptation Mitigation Imputed Multilateral
224 225 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
compared to the 2017 level of 22%. All year since 2012. On the assumption that projects will be screened for climate risk.42 climate finance should be additional to Given the Bank’s drive to promote private ODA (Bali and Copenhagen commitments), sector solutions to development issues, total ODA commitments available for it is likely there will be a high reliance on other purposes were $111 billion in 2015 the private sector in its climate finance. and $114 billion in 2016. Meanwhile, replenishments for the Global Environment Fund, also a major actor in Three donors – Germany, France, and climate finance, were less than expected Japan – contributed more than 50% of all at US$4.1 billion. This pledged amount was climate finance between 2012 and 2016. less than the previous GEF-6 ($4.4 billion These donors were also among the largest and GEF-5 ($4.3 billion).43 donors to have significant increases in their ODA during this period (See Table 2.1), with What has been the impact on climate finance likely representing a large ODA with the inclusion of climate part of this increase. In 2016, climate finance? finance made up 9% of French Real ODA commitments, 20% of Germany’s Real Chart 7.2 suggests that climate finance ODA commitments and 18% of Japanese has been slowly increasing as a share Real ODA commitments. (Chart 7.3) of total Real ODA commitments, from 11% in 2012 to 14% in 2016. Climate The influence of these three donors has finance has accounted for between $15 also affected the quality of the modalities billion and $20 billion in reported ODA for ODA climate finance, resulting in a very disbursements for all DAC donors each high level of ODA loans relating to climate
Chart 7.2 Trends in Real ODA Commitments, Less Concessional Climate Finance Total climate finance provider perspective; Significant purpose @ 30%; Loans included at grant equivalency; Real ODA less in-donor refugees and students & debt cancellation Billions of curren $160.0
$150.0 $142.8 $140.0 $133.8 $125.8 $130.0 $130.0 $132.3 $124.0 $120.0 $116.2 $113.8 $110.0 $111.7 $111.3 $100.0
$90.0
$80.0
$70.0
$60.0 2012 2013 2014 2015 2016 Real ODA Commitments ODA Less Total Climate Finance
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finance from 2012 to 2016. Fifty-seven island developing States, considering percent (57%) of all climate finance is the need for public and grant-based delivered through loans, including 33% resources for adaptation [emphasis for adaptation finance intended for low added].” [Article 9, 4] income and vulnerable countries. France uses loans for 97% of its climate finance, However, the Agreement gives no Japan 93%, and Germany 64%. definition of a “balanced” allocation.
Balancing adaptation and Since 2012, the balance between mitigation adaptation and mitigation for DAC countries as a whole has improved The Paris Agreement draws attention to slightly, from 30% in 2012 for adaptation significant imbalances in donor priorities to 36% in 2016 Chart 7.4). The allocation of climate finance to Sub-Saharan Africa and between finance for mitigation (most of the Least Developed and Small Island States has finance to date) and adaptation (a much been significant (see Chart 7.5 and Chart smaller proportion, but of significant value 7.6 below), though greater effort is needed to vulnerable people living in poverty). The to realize a more equal allocation between Agreement supports: mitigation and adaptation. The United Nations Environment Program estimates “the provision of scaled-up financial that adaptation costs for Africa alone will be resources, [which] should aim to 44 achieve a balance between adaptation close to $50 billion a year by 2025/2030. and mitigation, taking into account Sub-Saharan Africa received a mere $1.6 … the priorities and needs of … the billion per year in adaptation ODA finance least developed countries and small between 2012 and 2016.
Chart 7.3 Trends for Select Donors for Concessional Climate Finance, 2016 Provider Perspective; Commitments; Significant Purpose @ 30%; Loans included at grant equivalency DAC CRS; AidWatch Canada © June 2018
Canada Adaptation Share of Bilateral Climate Finance 54% Canada Climate Finance Share of Real ODA 11% Canada Share of Climate Finance 2.6%
Sweden Adaptation Share of Bilateral Climate Finance 66% Sweden Climate Finance Share of Real ODA 12% Sweden Share of Climate Finance 2.5%
UK Adaptation Share of Bilateral Climate Finance 53% UK Climate Finance Share of Real ODA 15% UK Share of Climate Finance 8.1%
Japan Adaptation Share of Bilateral Climate Finance 18% Japan Climate Finance Share of Real ODA 17% Japan Share of Climate Finance 18.2%
Germany Adaptation Share of Bilateral Climate Finance 25% Germany Climate Finance Share of Real ODA 21% Germany Share of Climate Finance 19.5%
France Adaptation Share of Bilateral Climate Finance 36% France Climate Finance Share of Real ODA 18% France Share of Climate Finance 8.9%
DAC Donors Adaptation Share of Bilateral Climate Finance 38% DAC Donors Climate Finance Share of Real ODA 14% 0% 10% 20% 30% 40% 50% 60% 70%
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The Green Climate Fund1
In 2010 parties to the United Nations Framework Convention on Climate Change (UNFCCC) established the Green Climate Fund as its core funding mechanism. It has been designated to implement the Paris Agreement.
As of May 2018, the Fund has raised $10.3 billion from 43 governments, including 9 developing countries. These pledges include $3 billion from the United States, of which only $1 billion is likely to be delivered, given the impending withdrawal of the United States from the Paris Climate Agreement. But at its meeting in early 2018, the Board was deadlocked on a new call for replenishment of resources.
By February 2018, the Fund had committed approximately half of its $8.3 billion budget. But projects under implementation (May 2018) totalled only $651 million, with $158 million disbursed to date. While CSOs have praised the management of the Fund for its openness to CSO comments on projects and policies prior to their approval, they have been critical of the very slow implementation and dispersal of funds. Part of the delay is due to the fact that it took the World Bank more than a year to sign a master agreement to administer the finances for the Fund.
Of the project approved, • 57% focus on mitigation and 43% on adaptation (dividing 28% cross cutting between these two purposes); • 60% are directed to the public sector and 40% to the private sector, with no funding of public/private projects; • 43% are disbursed through loans and 43% grants; • 17% were allocated to national projects; and • 75% were allocated to international projects.
The Fund has been operating for about three years and is still establishing its major guidance policies. It recently adopted an Indigenous Peoples Policy, recognizing that a significant number of projects will be implemented in indigenous peoples’ territories, as well as an Environment and Social Policy. The latter was adopted from the World Bank’s International Finance Corporation. The Fund has also adopted a Gender Mainstreaming Policy.
1 See Arkin, F., “The Green Climate Fund commits billions, but falls short on disbursements,” DevEx, May 9, 2018, accessed May 2018 at https://www.devex.com/news/the-green- climate-fund-commits-billions-but-falls-short-on-disbursements-92648. See the Green Climate Fund at https://www.greenclimate.fund/home. See the Indigenous Peoples Policy at https://www.greenclimate.fund/safeguards/indigenous-peoples. See the Environment and Social Policy at https://www.greenclimate.fund/safeguards/environment-social. See the Gender Mainstreaming Policy at https://www.greenclimate.fund/how-we-work/ mainstreaming-gender.
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What has been the geographic been heavily concentrated in Asia. focus for ODA climate finance? This region received 47% of mitigation finance and 30% of adaptation finance. Between 2012 and 2016 bilateral ODA climate finance commitments have (Chart 7.5 and Chart 7.6)
Chart 7.4 Bilateral Concessional Climate Finance for Adaptation and Mitigation Provider perspective; Commitments; Significant purpose @ 30%; Loans included at grant equivalency; Imputed multilateral not included Billion of Current US$; DAC CRS; © AidWatch Can
2012 $3.7 (30%) $8.7 (70%)
2013 $4.4 (32%) $9.3 (68%)
2014 $4.4 (31%) $9.6 (69%)
2015 $4.8 (36%) $8.4 (64%)
2016 $5.2 (38%) $8.6 (62%)
$- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 Adaptation Mitigation
Chart 7.5 Geographic Distribution of Bilateral Mitigation Climate Finance, 2012 to 2016, Share of Total Mitigation Climate Finance Provider Perspective; Principal & Significant Purpose Commitment Finance; Significant Purpose @ 30%; Loans included at grant equivalen 50% 47% 45%
40%
35%
30%
25%
20% 16% 15% 15% 13% 13%
10% 7% 5% 5%
0% Sub-Saharan North Africa & Americas Asia Middle East and Unallocated by LDCs and Small Africa Other Oceana Region Island States
228 229 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
The 2016 Paris Agreement gave special experienced a declining share of Bilateral attention to Sub-Saharan Africa, ODA Adaptation Finance. (Chart 7.8) Least Developed Countries and Small Island States for climate finance, Least Developed and Low Income countries recognizing that these countries are increased their share of Mitigation ODA highly vulnerable to the impact of Finance from 8% to 26% between 2012 climate change. The quality of climate and 2016. The share of Lower Middle- finance in relation to these country Income countries decreased from 66% priorities steadily improved between to 42% during this same period. Upper 2012 and 2016. Over the five years, Middle Income Countries received almost Sub-Saharan Africa received only 16% one-third of mitigation finance in 2016. of bilateral mitigation finance, but it (Chart 7.7) received 37% of adaptation finance. LDCs and Small Island States had a Sectoral allocation of ODA Climate similar experience, with 15% and 34% Finance respectively. (Chart 7.5 and Chart 7.6) As might be expected, the priority sectors In terms of country income groups, for mitigation finance focus on energy the share of Least Developed and Low and infrastructure. Energy allocations Income Countries in Bilateral ODA are slanted towards renewable energy Adaptation Finance has increased sources, power transmission and policy. significantly from 39% in 2012 to 56% Still, non-renewables make up 16% of the in 2016. Lower Middle-Income and sector allocation of mitigation to energy. Upper Middle-Income countries both (Chart 7.8)
Chart 7.6 Geographic Distribution of Bilateral Adaptation Climate Finance, 2012 to 2016, Share of Total Adaptation Climate Finance Provider Perspective; Principal & Significant Purpose Commitment Finance; Significant Purpose @ 30%; Loans included at grant equivalen 40%
35% 35% 34%
30% 30%
25%
20% 16% 15% 12% 10%
5% 5% 3%
0% Sub-Saharan North Africa & Americas Asia Middle East and Unallocated by LDCs and Small Africa Other Oceana Region Island States
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Chart 7.7 Mitigation Bilateral Climate Finance Allocated by Country Income Group, Percentage of Total Allocated Provider Perspective; Principal & Significant Purpose Commitment Finance; Significant Purpose @ 30%; Loans included at grant equivalency OECD DAC CRS; 70% 66%
60% 56%
50% 46% 42% 40%
31% 32% 30% 26% 26% 26% 22%
20% 16%
10% 8%
0% 2012 2014 2015 2016 LDCs & Other Low Income Countries Lower Middle Income Countries Upper Middle Income Countries
The sector allocation of adaptation finance needs and interests should not be is spread among water and sanitation sidelined in donor priorities for (22%), environmental protection (21%), ODA in responding to SDG One, agriculture (18%) and humanitarian whose target is eliminating and assistance (12%). substantially reducing poverty, particularly in the poorest D. The Purpose of ODA and countries. Poverty Reduction Using the World Bank’s 8. ODA as a dedicated resource for differentiated poverty lines Agenda 2030 – But what constitutes by country income groups, an estimated 2.5 billion people the extent and depth of poverty in are living in poverty, more developing countries? than 40% of the population of developing countries as a whole. The setting of international and Approximately 800 million of national poverty lines is a highly these 2.5 billion live in extreme politicized exercise. Current poverty. poverty lines leave hundreds of millions of people uncounted who The 2016 Reality of Aid Report argued that nevertheless are living the reality of poverty, vulnerability, and the setting of international and national marginalization in Low Income, poverty lines and their expression as SDG1, Lower-Middle Income and Upper- to end poverty in all its forms everywhere, 45 Middle Income countries. Their is highly political and contentious.
230 231 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 7.8 Adaptation Bilateral Climate Finance Allocated by Country Income Group, Percentage of Total Allocated Provider Perspective; Principal & Significant Purpose Commitment Finance; Significant Purpose @ 30%; Loans included at grant equivalency OECD DAC CRS; 60% 56%
50% 46% 42% 40% 39% 39% 35% 34% 32% 30% 24% 22% 20% 20%
12% 10%
0% 2012 2014 2015 2016
LDCs & Other Low Income Countries Lower Middle Income Countries Upper Middle Income Countries
The imperative to address extreme necessary to also tackle conditions that poverty sustain hundreds of millions who are very poor, but above $1.90 a day. These There is no reason why the global people are highly vulnerable to sudden community cannot work together to conflict, damaging climate events, sexual eradicate extreme poverty by 2030. violence, or family health calamities. Conditions of absolute destitution are Hundreds of millions of people who live morally reprehensible and development on the edge of extreme poverty will be cooperation can play a major role in its left behind if they are excluded from elimination. Over the past two decades, the development agenda, including the progress has been made on reducing strategic choices in the allocation of aid. extreme poverty, particularly in China, India and Indonesia. But it is not clear that Agenda’s 2030’s goal is ambitious – to continuing this progress is sustainable, end poverty in all its forms and “to leave as extreme poverty has become more no one behind.” While ‘leaving no one dispersed among countries, requiring behind’ relates to many of the SDGs, significant efforts to reduce poverty in including reducing inequality, it also fragile states.46 acknowledges that poverty is multi- dimensional and inter-dependent with However, a critical question is whether an other forms of marginalization. Poverty exclusive concentrated focus on extreme cannot be reduced to a minimum poverty in aid allocations will reduce standard of absolute depravation implied donor potential to strengthen broader by the poverty line of $1.90 a day income. national anti-poverty programs. It is But what measure provides an adequate
230 231 The Reality of Aid 2018 Report
assessment of national situations and The World Bank has also recently determines the appropriate allocation acknowledged that separate international of domestic government support and poverty lines are required to assess the aid priorities? Unfortunately, there is condition of poverty in countries with currently only one specific indicator for different economic circumstances. It SDG1: [the] proportion of population has consequently fixed $1.90 a day for below the international poverty line [$1.90 extreme poverty in Low Income Countries, a day], by sex, age, employment status and principally in Sub-Saharan Africa and geographical location (urban/rural).” South Asia; $3.10 a day for poverty in Lower Middle Income countries, and $5.50 Donors that make poverty a priority a day for poverty in Upper Middle Income have often focused on the objective of countries. eliminating extreme poverty as outlined in SDG1. For example, a recent UK aid review The OECD’s DAC 2017 Development situated “tackling extreme poverty” within Cooperation Report analyzed the the context of four overarching goals for weaknesses and limitations of current its ODA – (a) global peace, security and country statistics on poverty.49 The 2016 governance; (b) resilience and response to Reality of Aid Report pointed out that crisis; (c) global prosperity; and (d) tackling national poverty lines are highly politicized extreme poverty.47 and may be set artificially low to exclude millions of people from social benefits All four goals are important and are and other initiatives. One can be “lifted reflected in many recent statements by out of poverty” by crossing an arbitrarily other donors on ODA priorities. But such low benchmark for income or purchasing an approach potentially ignores the needs power of a basket of goods without a and interests of hundreds of millions of significant change in life circumstances. people, albeit not destitute, but who are living in extreme conditions of poverty In a study for the Overseas Development and vulnerability. There is an underlying Institute, Clair Hoy pointed out the assumption that “pro-poor” markets and importance of poverty lines in China, India economic growth initiatives, supported by and Indonesia for re-assessing the breadth private sector partnerships, will address of global poverty. In his words, these conditions. To date there is little “These countries would have a much evidence that this is the case. This chapter higher national poverty line today, also challenges this assumption. given their mean consumption, if they were consistent with the cross Establishing poverty lines country trend. The national poverty line would be almost four times Recent research has confirmed that the higher in China, around 2.5 times universal application of $1.90 a day as the higher in Indonesia and more than poverty line makes invisible the experience 50% higher in India. This would of poverty in many countries beyond Sub- result in around two thirds of the Saharan Africa. A more country specific population in these countries being 48 approach is required. defined as living in poverty.”50
232 233 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
The World Bank poverty line of $1.90 a of the conditions shaping and sustaining day put 325 million people in these three poverty in middle-income countries. countries currently living in conditions of extreme. But using Clair Hoy’s rough Levels of global poverty estimate that two-thirds of the population are living in poverty, this would imply that The World Bank calculates that 13% of approximately 1,950 million people live the population of developing countries under these broader conditions of poverty. live in extreme poverty on less than $1.90 As middle-income countries, at the World a day. The highest concentrations are in Bank’s $3.10 and $5.50 a day poverty lines, Sub-Saharan Africa (42% of its population) the Bank calculates that 1,390 million and South Asia (15% of its population). people are affected by poverty. Clearly Excluding China, almost a fifth (19%) of the international poverty lines are at best a population of developing countries live in vague approximation of poverty, and likely conditions of destitution. (Chart 8.1) capture only the minimum population affected by poverty and marginalization. An additional 20% of developing countries’ populations live on less than $3.10 a day, Considerations of the extent and depth of many of them functioning inside the poverty can have profound implications informal economy where they are very for country allocations of ODA. Not only vulnerable to falling back into extreme does an acknowledgement of a broader poverty. Another fifth (23%) live on a daily range of poverty mean that significantly income between $3.10 a day and $5.50 a more aid is required. It also confirms that day, which is considered to be a measure this aid must be programmed through of poverty in Upper Middle-Income partnerships that address the complexity countries. (Chart 8.1) Chart 8.1 Incidence of Income Poverty by Region Poverty Levels for Low Income Countries, Lower Middle Income Countries and Upper Middle Income Countries, Percentage of Regional Total Population World Bank PovCalnet 2011 PPP; UNDP HDR 2016 (population); ©AidWatch
East Asia & Pacific 4% 14% 25%
Latin America 5% 7% 16%
South Asia 15% 38% 31%
Sub-Saharan Africa 42% 25% 18%
Developing Countries 13% 20% 23%
All Developing Countries (No China) 19% 21% 20%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $1.90 per day (LICs & extreme poverty) $3.10 per day (poverty LMICs) $5.50 per day (poverty UMICs) More than $5.50
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According to World Bank poverty lines for majority lack decent working conditions or Low-Income, Lower-Middle Income, and basic rights or social protection. Informal Upper-Middle Income countries, people work is widespread, making up 85% of all living in poverty make up 46%, 47% and employment in Africa, 68% in Asia/Pacific, 31% of populations, respectively. Using and 69% in Arab countries.51 the latest population figures for World Bank income groups, 2.5 billion people For emerging market countries fully one- were living in poverty or more than quarter of those who are employed live on 40% of the population of developing less than $3.10 a day. (Chart 8.3) countries as a whole. Approximately 800 million of these 2.5 billion live in The ILO also calculates an index of extreme poverty. (Chart 8.2) vulnerability based on a strong correlation between the informal economy and The reach of poverty conditions in vulnerability. In 2016, 79% of the working developing countries is further confirmed population were considered to be vulnerable by statistics on poverty among the working (to unexpected economic, health or climatic population, which have been collected by shocks) in developing countries and 47% in the International Labour Organization emerging market countries. (ILO). If the primary purpose of ODA is to be a According to ILO statistics, close to catalyst for the reduction of poverty and 70% of working people in developing inequality, comprehensive donor strategies countries live highly precarious lives, for tackling poverty should be established existing on less than $3.10 a day. These across the spectrum of developing people, approximately 2 billion, earn their countries, not only in the poorest and least living mainly in the informal economy. The developed. Aid to people living in least Chart 8.2 World Bank Income Poverty Levels for Country Income Groups Percentage of the Total Population for each Income Group World Bank PovCalnet 2011 PPP; UNDP HDR 2016 (population); ©AidWatch Canada April 2018
31% Upper Middle Income Countries 2% 800 million
47% Lower Middle Income Countries 16% 1,420 million
46% Low Income Countries 300 million
0% 10% 20% 30% 40% 50% 60%
$1.90 a day (extreme poverty) $3.10 a day (poverty line for LMICs) $5.50 a day (poverty line for UMICs)
234 235 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 8.3 Extreme and Moderate Poverty in Working Population (ILO - 2016) Extreme working poverty is percentage of working poor living on less than $1.90 a day Moderate working poverty is percentage of working poor living on between $1.90 and $3.10 per day ILO World E
Developing Countries 69%
Emerging Countries 25%
Latin America and Caribbean 8%
Northern Africa 5% 19%
Sub-Saharan Africa 34% 30%
Southern Asia 17% 32%
SE Asia and Pacific 8% 17%
Eastern Asia 5% 6%
0% 10% 20% 30% 40% 50% 60% 70% 80% Extreme Working Poverty Extreme and Moderate Working Poverty
developed countries is essential. But (47%). ODA allocated to Upper- donors should not ignore the fact that an Middle Income Countries (UMICs) estimated 1.4 billion people are living in increased from 14% of Real ODA poverty in Lower-Middle Income countries in 2010 to 17% in 2016. This share and 800 million in Upper-Middle Income increased from 2014 when it was countries. ODA, as well as other cross- 15% of Real ODA. boarder flows, should also be allocated in ways that contribute to transforming the In recent years, changing country lives of these people. allocations for humanitarian assistance has mainly driven these E. Is Aid actually being changing allocations to income allocated for poverty reduction? groups. When humanitarian assistance is excluded (looking at 9. The amount of aid directed to Least aid for long-term development) Developed Countries for long-term regional programming expands development is relatively small? dramatically from 11% to 39%. Aid for long-term development In 2016, 44% of Real ODA was to LDCs and LICs has declined allocated to Least Developed from 34% in 2010 to 30% in 2016 (LDCs) and Low-Income Countries (compared to 44% including (LICs). As a proportion of allocated humanitarian assistance). ODA ODA, the share of Real ODA for long-term development in directed to these countries has Lower-Middle Income Countries declined since the high in 2010 has also declined from 24% in 2010
234 235 The Reality of Aid 2018 Report
to 20% in 2016. Aid to Upper-Middle of $4.5 billion in 2014 when it encompassed Income Countries was relatively 11% of donor support for LDCs. constant, at 11%, during these seven years. In 2015, donors financing the SDGs reiterated their commitment to deliver ODA to Least Developed and Low 0.15% to 0.20% of their GNI as aid Income Countries to the 48 least developed countries (LDCs) [Transforming Our World, 17.2, A/ Excluding debt cancellation and ODA RES/70/1,26/35]. This promise has not yet unallocated by income group (in-donor been fulfilled. DAC donors’ LDC ODA/GNI refugees and student costs), in 2016, ratio reached 0.10% in 2010, but since 44% of Real ODA was allocated to Least then has fallen back to 0.09% and that Developed (LDCs) and Low-Income ratio has remained unchanged since Countries (LICs). As a proportion of 2012. (Chart 9.5) allocated Real ODA, the share of ODA directed to these countries has declined The value of Real ODA for LDCs (in 2016 from 2010 when it stood at 47% but has dollars) has increased by 5% since 2014 not changed substantially since 2014. moving from $42.1 billion, just prior to (Chart 9.1) the 2015 launch of Agenda 2030, to $44.3 billion in 2016. (Chart 9.2) This modest Aid to Afghanistan was $4.0 billion in 2016, increase is overshadowed by the fact that or 9% of total donor aid to LDCs. This aid Real ODA increased by 12% between these is largely motivated by donor foreign policy years. (Chart 1.1) In practice, donors have interests and the war against the Taliban. ignored their commitment to substantially Aid to Afghanistan has declined from a high increase aid to LDCs. Chart 9.1 Trends in the Allocation of ODA by Income Group ODA is net of debt cancellation and unallocated by income group (an average of 23% of ODA), but includes regional allocations OECD DAC CRS+ © AidWatch Canada April 2018 60%
50% LDCs & LICs 47% 47% 45% 45% 44%
40% 37%
30% 30% 29% 29% 27% LMICs 26% 28% 26%
20% UMICs 17% 14% 15% 15% 17% Regional 10% 9% 11% 10% 11% 11% 10%
0% 2005 2008 2010 2012 2014 2015 2016 LDCs and LICs LMICs UMICs Re gional
236 237 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 9.2 Value of Bilateral & Multilateral ODA to Least Developed & Low Income Countries Billions of Constant 2016 US$; Excludes debt cancellation OECD DAC2a © AidWatch Canada April 2018 $55.0
$50.0 $44.6 $45.0 $44.3 $41.7 $41.5 $42.1 $40.0 Total ODA to LDCs/LICs $35.0
$30.0 $27.5 $26.9 $26.9 $25.9 $27.0 $26.5 $25.0
$20.0 $16.7 Bilateral ODA to LDCs/LICs $16.2 $17.6 $17.8 $14.8 $14.6 $15.0 $10.8 Multilateral ODA to $10.0 LDCs/LICs
$5.0 2005 2008 2010 2012 2014 2015 2016 Multilateral Organizations ODA to LDCs/LICs DAC Donor Bilateral ODA to LDCs/LICs Total ODA to LDCs/LICs Chart 9.3 Value of Bilateral & Multilateral ODA to Lower Middle Income Countries Billions of Constant 2016 US$; Excludes debt cancellation OECD DAC2a © AidWatch Canada April 2018 $40.0
$35.0
$30.0 $29.2 $27.4 $28.2 $25.6 $25.0 Total ODA to LMICs $23.2 $19.3 $20.0 $16.4 $15.6 $16.1 $16.8 $15.0 $12.4 Bilateral ODA to LMICs $13.5 $13.1 $11.4 $10.0 $9.2 $11.8 $6.9 $9.7 Multilateral ODA to LMICs $5.0 2005 2008 2010 2012 2014 2015 2016 Multilateral Organizations ODA to LMICs DAC Donor Bilateral ODA to LMICs Total ODA to LMICs
ODA to Lower-Middle Income Countries unchanged from 2010 to 2016, standing at 29% of allocated Real ODA. (Chart 9.1) ODA to Lower-Middle Income This aid amounted to $16.8 billion in 2016 (2016 dollars) and $16.4 billion in Countries (LMICs) has remained largely 2010. (Chart 9.3)
236 237 The Reality of Aid 2018 Report
Chart 9.4 Value of Bilateral & Multilateral ODA to Upper Middle Income Countries Billions of Constant 2016 US$; Excludes debt cancellation OECD DAC2a © AidWatch Canada April 2018 $60.0
$50.0
$20.1 $40.0
Total ODA to UMICs $16.9 $15.1 $14.4 $14.5 $30.0
$17.3 $12.5 $20.0 Bilateral ODA to UMICs $11.3 $8.7 $9.5 $9.4 $9.3 $10.0 $6.4 $4.9 $5.1 $5.6 Multilateral ODA to UMICs $- $2.8 $3.2 2005 2008 2010 2012 2014 2015 2016 Multilateral Organizations ODA to UMICs DAC Donor Bilateral ODA to UMICs Total ODA to UMICs
Chart 9.5 ODA to Least Developed Countries as a Share of DAC Donors' GNI Includes ODA allocated by multilateral organizations to Least Developed Countries OECD DAC2a and DAC1 © AidWatch Canada April 2018 0.11%
0.10% 0.10% 0.09% 0.09% 0.09% 0.09% 0.09% 0.09%
0.08%
0.07% 0.07%
0.06%
0.05% 2005 2008 2010 2012 2014 2015 2016
However, in 2016 this aid was concentrated graduated to Upper-Middle Income status in fewer countries. Lower-Middle Income received $7 billion in ODA in 2010 (56% Countries numbered 36 in 2016, down of aid to UMICs in that year) and $9.1 from 48 in 2010. The 12 countries that billion in 2016 (54% of aid to UMICs in
238 239 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
that year). (Chart 9.4) However, Iraq and billion to $16.9 billion (2016 dollars). Jordan (countries with high humanitarian The increase in value of this ODA between assistance needs) accounted for 44% of 2014 and 2016 was 17%. (Chart 9.4) this $7 billion and 47% of the $9.1 billion in 2016. Some of these increases are the result of humanitarian crises in the Middle East. Aid ODA to Upper Middle Income allocations related to the Syrian crisis have Countries had a significant share of ODA to UMICs in recent years. In 2016, of the 58 UMICs, three Section eight (8) documented that countries – Turkey, Jordan and Lebanon – significant numbers of people live in accounted for $3.5 billion or 21% of all aid allocated to UMICs in that year. If Iraq is poverty in middle-income countries, included, this share rises to 32%. particularly in lower Middle-Income countries. Allocation of ODA for long-term ODA allocated to Upper-Middle Income development by income group Countries (UMICs) increased from 14% of Real ODA in 2010 to 17% in 2016. This As noted in section four (4) above, share also increased from 2014 when it humanitarian assistance has been an was 15% of Real ODA. (Chart 9.1) increasing share of ODA. Excluding humanitarian assistance in the calculations The value of ODA to Upper-Middle has a significant impact on the share of Income countries increased by 35% ODA provided for long-term development between 2010 and 2016, from $12.5 to the different country income groups.
Chart 9.6
238 239 The Reality of Aid 2018 Report
Chart 9.7 ODA Allocations to Country Income Groups for Long Term Development (No Humanitarian Assistance) Percentage of Total Allocated, excluding Debt Cancellation OECD DAC2a © AidWatch Canada April 2018 45%
40% 39% 36% LDCs & LICs 35% Regional 35% 34% 30% 33% 30% 31% 32% 30%
25% 24% LMICs 24% 23% 21% 22% 23% 20% 20% UMICs 15% 14%
10% 11% 11% 11% 10% 5%
0% 2005 2008 2010 2012 2014 2015 2016 Least Developed & Low Income Countries Lower Middle Income Countries Upper Middle Income Countries Regional Programs Chart 9.8 ODA Allocations to Country Income Groups for Long Term Development (No Humanitarian Assistance) Billion of 2016 US$, excluding Debt Cancellation OECD DAC2a © AidWatch Canada April 2018 $50.0 $48.6 $45.0 Regional $43.4 $40.0 $35.8 $36.2 $36.2 $37.1 $35.0 $37.6 LDCs & LICs $31.9 $32.0 $30.0 $26.3 $23.1 $24.7 $25.4 $25.0 $24.7 $19.0 $21.9 $20.0 LMICs $17.9 $18.0 $14.2 $15.0 $12.5 $11.9 $13.4 UMICs $10.0 $11.9
$5.0
$- 2005 2008 2010 2012 2014 2015 2016 Least Developed & Low Income Countries Lower Middle Income Countries Upper Middle Income Countries Regional
Notably, the share of ODA devoted to Chart 9.1) Regional allocations have been regional programs rises dramatically to 39% increasing significantly in dollar terms (2016 in 2016 (compared to 11% if humanitarian dollars) from $31.9 billion in 2010 to $48.6 assistance is included). (Chart 9.7 and billion in 2016. (Chart 9.8)
240 241 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
ODA for long-term development in Least while countries have changed, the Developed and Low-Income Countries actual number of Lower Middle-Income has been declining since 2010, from 34% Countries has remained constant. of long-term development ODA in that year to 30% in 2016. (Chart 9.7) This share Changing income status affects the compares to 44% for ODA if humanitarian eligibility for concessional finance from the assistance is included. In 2016-dollar World Bank’s International Development terms long-term development assistance Association (IDA) as well as other programs for LDCs and LICs has been flat over these such as GAVI, the Vaccine Alliance. It seven years. (Chart 9.8 and Chart 9.1) is expected that a further 9 countries, including Pakistan, Sudan and PNG will be ODA for long-term development in Lower- graduating from IDA in the next cohort. Middle Income Countries has also declined Concerns have been raised about the high from 24% in 2010 to 20% in 2016 (compared level of debt servicing obligations in this cohort as well as the quality of governance to 28% including humanitarian assistance to manage impacts on health systems and in 2016). In the case of Upper-Middle programs that address continued levels of Income Countries, this share has remained poverty in these countries.52 constant at approximately 11% (compared to 17% including humanitarian assistance in 2016). (Chart 9.7 and Chart 9.1) 10. Aid directed to Sub-Saharan Africa for long-term development is also low. Noting the large differences if humanitarian assistance is or is not Sub-Saharan Africa has the largest included, it is clear that changing proportion of people (42%) living in allocations for humanitarian assistance destitution, at less than $1.90 a day. An have been a main driver for changes additional 25% live in poverty with between in overall ODA allocations to income $1.90 a day and $3.10 a day, many of whom groups. are highly vulnerable to slipping back into extreme poverty.
Graduation of Countries to Middle 11. Aid directed to gender equality Income Status and women’s empowerment shows modest improvement, but is Chart 9.6 summarizes the changing status for countries graduating upwards unacceptably low. to a new income level. There has been Given the centrality of women’s a significant decline in the number of rights and gender equality for Low-Income Countries outside of Least making progress in the SDGs, it Developed Countries, from 18 in 2005 to 4 is alarming that 65% of all Real in 2016. At the other end, there has been ODA in 2015 still does not have a dramatic increase in Upper Middle- any objectives relating to these Income Countries from 36 in 2005, to purposes. In 2015, as a share of 43 in 2010, and 58 in 2016. Notably, the Real Bilateral ODA, only 6% of number of Least Developed Countries projects had gender equality as is largely unchanged – 50 countries in their primary objective. 2005 and 48 countries in 2016. Similarly,
240 241 The Reality of Aid 2018 Report
Chart 10.1 Growth in Value of ODA to Sub-Saharan Africa Billions constant 2016 US$; Excludes debt cancellation OECD DAC2a © AidWatch Canada April 2018 $55.0
$41.0 $45.0 11% growth $41.5 since 2010 Total ODA to $37.9 $39.5 Sub-Saharan Africa $37.0 $34.9 $35.0 $35.5 6% growth $33.0 $32.9 $33.4 since 2010 $25.0 Total ODA, $25.0 $23.3 $23.7 $23.8 No Humanitarian $22.6 $22.0 8% growth $17.8 since 2010 $20.4 Bilateral ODA $16.2 $15.0 $15.3 $15.0 $17.2 $14.9 Multilateral ODA to 15% growth $10.1 Sub-Saharan Africa since 2010 $5.0 2005 2008 2010 2012 2014 2015 2016 Bialteral Allocations Multilateral Allocations Total ODA to Sub-Saharan Africa Total ODA to Sub-Saharan Africa, No Humanitarian Assistance
Chart 11.1 Gender Equality and Women's Empowerment Marker: Share of Real Bilateral ODA Principal marker: Gender equality is the main objective of an activity Significant marker: Gender equality is one of several objectives of an activity Real Bilateral ODA - Bilateral 50.0%
40.0%
34.0% ($22.5) 34.5% ($26.7)
30.0% 30.6% ($21.4) 31.4% ($25.3) 27.6% ($20.0)
20.0%
10.0% 5.7% ($4.0) 6.4% ($4.2) 6.1% ($4.9) 4.1% ($3.0) 5.9% ($4.6)
0.0% 2011 2012 2013 2014 2015 Principal Purpose Gender Marker (%age of Screened) Significant Purpose Gender Marker (%age of Screened)
Donor support for women’s empowerment. While the value rights organizations is a key of this support (in 2016 dollars) catalyst for sustainable progress has increased by more than 50% in gender equality and women’s since 2011 reaching a total of $479
242 243 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
million in 2016 (Chart 11.2), as a 2015). Nonetheless, in 2015 only 6% of share of ODA marked “principal projects by value had gender equality gender purpose,” it declined from as their primary objective, as a share 11% to 9% between 2011 and 2015. of Real Bilateral ODA. Projects, where gender equality was one of several explicit The DAC monitors donor intentions and objectives were 35% of Real Bilateral ODA commitment to gender equality and in that year. (Chart 11.1) women’s empowerment through its gender policy marker. Donors screen and Most donors have set out explicit policies score their projects according to three relating to gender equality in development criteria: 1) Gender equality is the principal cooperation. Canada recently adopted a objective of the project (gender equality feminist international assistance policy is the stated primary goal); 2) Gender and Sweden has set out a feminist foreign equality is a significant objective (gender policy.54 Other donor countries have equality is one of several objectives of put some emphasis on gender equality the activity); or 3) There are no gender in development cooperation, but have equality objectives in the activity. The DAC resisted the implications of feminist produces an annual report on progress policies.55 A feminist international using this marker as its reference point.53 assistance policy implies not only strong commitments to gender equality as a cross- Projects with gender equality as cutting concern, but also implementation principal and significant objectives have of a gender analysis for all program areas, demonstrated modest improvement over as the basis for determining funding the past five years (between 2010 and priorities.
Chart 11.2 Value of DAC Donors' Support for Women's Equality Organizations and Institutions Millions of Constant 2016 US$; Gross Disbursements; OECD DAC CRS+; © AidWatch Canada April 2018 $550.0
$500.0 $479.1 $470.7 $450.0
$407.1 $400.0
$369.0 $350.0 $344.7 $354.7
$306.2 $300.0
$250.0 2010 2011 2012 2013 2014 2015 2016
242 243 The Reality of Aid 2018 Report
Chart 11.3 Share of Women's Rights Organizations in Donor ODA Marked Principal Gender Purpose OECD DAC CRS; © AidWatch Canada June 2018 14%
13% 13%
12%
11% 11%
10% 10%
9% 9% 9%
8% 8%
7%
6%
5%
4% 2010 2011 2012 2013 2014 2015
In 2015 several donors committed humanitarian assistance projects significant resources to projects and accounted for only 2% of these projects. programs with gender equality as a principal objective(Sweden – 17% of Donor support for women’s rights screened projects; Spain – 12%; Belgium organizations is a key catalyst for – 12%; Netherlands – 11%; Norway – 9%; sustaining progress in gender equality United Kingdom – 9%.) As part of its and women’s empowerment. This Feminist International Assistance Policy, support made up only a small proportion Canada has set a target, whereby 15% of of donor aid and donor commitments to its bilateral programs are to have gender gender equality. While its value (in 2016 equality as a principal objective by 2020. dollars) has increased since 2011 by In 2015 only 3% of its screened projects more than 50% to a total of $479 million were designated with this marker. in 2016 (Chart 11.2), as a share of ODA marked “principal gender purpose,” In terms of sector priorities, in 2015 it has declined from 11% to 9%. (Chart health and population/reproductive 11.2 and Chart 11.3) health made up 42% of all projects marked gender equality principal In 2015, almost half (44%) of ODA to purpose, democratic participation women’s rights organizations was and civil society, 10%, and education, channelled through NGOs/CSOs. 9%. Given the importance of women in Another 33% was channelled through agricultural production, it is surprising that multilateral organizations (including only 4% of all projects were marked gender contributions to UN Women) and only 8% equality principal purpose. Similarly, through the public sector.
244 245 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Given the centrality of women’s rights and largely unchanged since 2010, at gender equality for the SDGs, the overall 36% of sector allocable ODA in weakness apparent in donor performance 2016. Significantly less than half of on the gender marker is troubling. donor ODA that has been allocated Combined with other trends, such as by sector is devoted directly to increased attention to engagement of sectors of primary importance private sector actors through blended for people living in poverty. This finance (see section sixteen [16] below), proportion has been unaffected this performance may worsen. Recent by the rhetoric of Agenda 2030 analysis of blended finance demonstrates with the commitment to “leave no weak targeting of gender equality and the one behind.” Several of the largest potential to exacerbate other forms of donors, the EU (24%), France (15%), inequalities such as conditions for people Germany (21%) and Japan (13%) 56 living with disabilities. have poor performance on this indicator. 12. Proportion of aid directed to sectors important for poverty reduction is The DAC does not measure the degree largely unchanged. to which poverty reduction is a focus in the allocation of DAC ODA. Given the A review of DAC donors’ importance of several key sectoral areas disbursements, including multilateral that directly affect the prospects for disbursements, indicates a modest people living in poverty, it is possible to priority for sectors of importance create a proxy indicator and apply it to to poverty reduction. This is donor aid disbursement. These twelve
Chart 12.1 Poverty Orientation Proxy for ODA: Channel share of sector allocable ODA for that channel Poverty-oriented sectors inclde Basic Education, Basic Health, Population & Reproductive Health, Basic Sanitation, Democratic Participation, Women's Organizations, Hu 90%
80%
68% 70% 66% 68% 68%
60% 60%
50%
40% 36% 35% 34% 35% 36%
30%
20% 2010 2012 2014 2015 2016 Poverty Oriented ODA, CSO Channels Poverty Oriented ODA, All Channels, DAC & Multilateral Donors
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(12) DAC sectors for this poverty-focused levels of aid to these sectors. Other ODA proxy include: (select) donors also tended to perform well with this indicator. (Table 12.1) • Basic Education (DAC sector 112: I.1.b) • Basic Health (122: I.2.b) Despite the overall failure of donors to • Population and Reproductive Health substantially improve their profile in (130: I.3) poverty-oriented sectors, some of these • Basic Water and Sanitation (14030, sectors have exhibited modestly positive 14031, 14032) trends. • Democratic Participation and Civil Society (15150) Table 12.1 Share of Sector-Allocable Bilateral ODA to • Women’s Rights Organizations (15170) Poverty-Sector Proxy • Ending Violence Against Women Donor 2010 2014 2016 (15180) France 19% 16% 15% • Civilian Peace-building (15220) • Agriculture (310: III.1) Germany 23% 18% 21% • Informal Finance (24040) Japan 15% 11% 13% • Small and Medium Enterprises (32130) United Kingdom 35% 41% 41% • Cottage Industries (32140) United States 53% 58% 62%
There has been a very modest priority Canada 55% 50% 54% for these sectors, largely unchanged Denmark 48% 48% 48% since 2010, at 36% in 2016, including Netherlands 28% 54% 49% multilateral aid. (Chart 12.1) This Norway 39% 38% 45% proportion of donor ODA that has been Sweden 47% 51% 50% allocated by sector has been largely unaffected by the rhetoric of Agenda All Donors 35% 36% 37% 2030, with the commitment to poverty eradication, reducing inequality and “leave Specific Sector Allocations no one behind.” While the value of ODA to the basic Civil society organizations are very education sector remained constant important channels in the allocation of at $4.7 billion (2016 dollars) between aid resources to these key sectors. As 2010 and 2016, its share of Real ODA a share of aid delivered by CSOs, poverty has declined from 4.3% to 3.8%. (Chart sector allocations have increased from 12.2) Global funding for basic education 60% in 2010 to more than two-thirds, or is woefully short of what is required. An 68% in 2016. (Chart 12.1) estimated 260 million children are still not enrolled in school and 330 million face a Donor bilateral disbursements for poverty- school environment in which they learn oriented sectors varied considerably, with very little. It is estimated that the funding large donors such as France, Germany gap to achieve the SDG for education is $39 and Japan, having a poor performance. billion (including domestic investments).57 In contrast, both the United States and Nevertheless, donors only committed $2.3 the United Kingdom provided significant billion for the replenishment of the Global
246 247 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 12.2 Disbursements for Basic Education as a Share of Real ODA Basic education is the basic education sector plus half of education level unspecified Real ODA is ODA less in-donor refugee and student costs, debt cancellation & interest paid on loans (Billions of C 5.5%
5.0% 4.9% ($4.7)
4.6% ($4.8) 4.5% ($5.1) 4.5% 4.3% ($3.6) 4.3% ($4.7) 4.0% 3.8% ($4.7) 3.9% ($4.4) 3.5%
3.0%
2.5% 2005 2008 2010 2012 2014 2015 2016
Partnership for Education, in relation to 2017 the Trump administration re-instated a target of $3.1 billion for the 2018 – 2020 and expanded the “Global Gag Rule,” which period.58 effectively bans US funding to any family planning institution or CSO that promotes Since 2005, donors have made basic health or performs abortions using funding from and reproductive health sectors a priority. any source, not just the United States The value of investments in these sectors government. Human Rights Watch has doubled from $9.6 billion (2016 dollars) in estimated that the implementation of this 2005 to $20.6 billion in 2016. However, broad financing criterion by the United with the exception of 2015, as a share of States has expanded the impact on Real ODA, disbursements to these sectors international funding for family planning have changed little since 2010, remaining from $575 million (with just US financing) more or less at 17%. (Chart 12.3) In 2015, to an estimated $8.8 billion in global health a large disbursement by the Global Fund assistance.59 to Fight AIDS, Tuberculosis and Malaria accounted for the significant increases In addition, the US Center for Disease in2015. Unfortunately, this disbursement Control is expected to implement was an anomaly. Levels increased from $2.6 massive cuts to its overseas operations billion in 2014 to $6.7 billion in 2015, but then in 2019. The Centre plays a critical role returned to $2.8 billion in 2016. in global disease surveillance and early identification of illnesses such as HIV, TB Recent developments in the US political or Zika virus. The cutbacks will severely scene have had major consequences for limit its work as a result of plans to reduce women’s reproductive health programs. In country offices from 124 to 10.60
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Chart 12.3 Basic Health, Population & Reproductive Health as a Share of Real ODA Basic health includes Basic Health Sector, plus half of Health General Real ODA is ODA less in-donor refugee and student costs, debt cancellation & interest paid on loans (Billions of Cons 30%
25%
22% ($24.6)
20% 18% ($18.3) 17% ($16.6) 17% (20.6) 15% 16% ($17.3) 16% ($18.1)
11% ($9.6) 10%
5% 2005 2008 2010 2012 2014 2015 2016
Sustained investments of ODA in since 2010. While amounts (in 2016 dollars) agriculture, a key sector for marginalized varied between 2010 and 2016, the value of women and people living in poverty has ODA for this sector is $1.4 billion higher in grown by only 0.5% as a share of Real ODA 2016 than 2010. (Chart 12.4) Chart 12.4 Disbursements for Agriculture as a Share of Real ODA Real ODA is ODA lessin-donor refugee and student costs, debt cancellation & interest on ODA loans (Billions of Constant 2016 US$) OECD DAC5 © AidWatch Canada April 2018 10.0%
9.0% 8.4% ($8.7)
7.9% ($9.1) 8.0%
7.0% 6.9% ($7.8) 6.9% ($8.4) 6.3% ($6.1) 6.4% ($7.0) 6.0%
5.0% 4.7% ($3.9)
4.0% 2005 2008 2010 2012 2014 2015 2016
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F. Undermining the Quality of ODA these organizations to mount a coherent and sustained program. 13. Instrumentalizing the United Nations multilateral system Donor support for the core budgets and programs of multilateral organizations, Donor support for the core particularly within the UN system, can be budgets of multilateral a quality development resource. These organizations has been relative organizations, which are governed by constant at 33% of Real ODA. UN members, tend to allocate their But donors have increasingly development resources in response to the relied upon donor-controlled expressed needs of developing country special purpose funds within governments (country ownership). They multilateral organizations to are often able to rise above individual reduce their own transaction donor political and foreign policy interests costs. In 2016 these funds that can drive the allocation of bilateral amounted to $20.7 billion. The assistance.61 multilateral system administered more than 50% of Real ODA in Donor support for core budgets of 2016, up from 36% in 2005. The multilateral institutions has been proliferation of dedicated funds, relatively constant at 33% of Real ODA with their own separate and since 2010. But, in 2016, donors also different governance and policies channelled an additional $20.7 billion in for allocation, have a significant bilateral aid through these multilateral effect on the capacities of organizations, in addition to $41.8 billion in
Chart 13.1 Trends in Value of Bilateral and Multilateral Channels Billions of Constant 2016 US$; Other Real Bilateral as Percentage of Total Real ODA Real ODA is ODA less in-donor refugee & student costs, debt cancellation and interest on ODA loans OECD DAC1 ©
2005 $3.6 $26.3 $54.0 (64%)
2008 $12.9 $31.3 $52.7 (54%)
2010 $13.8 $34.6 $60.9 (56%)
2012 $14.8 $34.3 $54.8 (53%)
2014 $17.7 $37.6 $56.8 (51%)
2015 $18.0 $37.0 $59.0 (52%)
2016 $20.7 $41.8 $59.3 (49%)
$- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Bilateral ODA Channelled through Multilateral Multilateral ODA Other Real Bilateral ODA
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assessed core contributions. Together, the noted above, this trend has profoundly multilateral system administered more affected the capacities of multilateral than 50% of Real ODA in 2016, up from organizations to mount a coherent and 44% in 2010 and 36% in 2005. (Chart 13.1) sustained program.63
Bilateral ODA channelled through 14. Declining commitment to multilateral organizations is generally developing country ownership in directed to special-purpose donor funds. development cooperation These funds are administered by UN organizations, but the donors retain Despite repeated commitments degrees of control over the terms and to the importance of developing conditions for their allocation. Examples countries “owning” their own of non-core funding mechanisms include development priorities, aid that multi-donor trust funds (e.g. UNDP’s is available to support these South Sudan Humanitarian Fund), special purposes is declining. Country thematic funds (e.g. support for victims Programmable Aid (CPA) was 36% of sexual abuse by UN peacekeepers), of Gross Bilateral ODA in 2016, or donor earmarked funds dedicated to down from 47% in 2010. Direct 62 specific projects. budget support or sector-wide programming with government These bilateral/multilateral non-core ministries is also declining. funds have grown by more than 50% since Support for these mechanisms 2010, from $13.8 billion to $20.7 billion in declined from a mere $5.2 billion 2016. Many donors are taking advantage in 2010 to $4.1 billion in 2016. of the capacities of the various multilateral organizations to manage development Declining Country Programmable Aid resources, while significantly reducing their own administration and transaction The DAC has developed a measurement costs. Essentially they make one electronic of aid that is available to be programmed transfer in order to declare a large fund by developing country partners. ‘Country spent by the donor, but then they still Programmable Aid’ (CPA) is the proportion maintain a high degree of control over the of bilateral aid disbursements where policies that govern their delegated funds. partner countries can have a significant say in defining the priorities for its use. As These non-core funds have grown quickly a concept it goes beyond the notion of ‘Real for the UN system, and less so with Aid’ and excluded donor administration, multilateral banks. In 2016, assessed core humanitarian assistance, and other forms contributions to the UN system (over which of aid that is unavailable at the country the UN system controls their allocation) level.64 were $5.9 billion, while special bilateral funds administered by the UN system Country Programmable Aid, as a share totalled $13.5 billion. By comparison, of Gross Bilateral ODA, was 36% in 2016, assessed contributions to the World Bank declining over the decade from 47% Group were $8.8 billion, but delegated in 2010. (Chart 14.1) Less and less aid is donor funds only totalled $2.6 billion. As actually available to developing countries
250 251 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 14.1 Bilateral Country Programmable Aid: Percentage of Real Gross Bilateral ODA LDCs/LICs in Bilateral CPA OECD DAC CPA; DAC5a: © AidWatch Canada April 2018 60%
50% 47% 47% 47% 45% 45% 45% 44%
39% 40% 38% 38% 35% 36% 34% 34% 33%
30%
20%
10%
0% 2010 2012 2014 2015 2016 CPA as Percentage of Gross Bilateral ODA LDCs/LICs as share of Real ODA LDCs/LICs in Bilateral CPA
for partner-initiated programming (with sector ministerial budget. Donors then the optimistic assumption that all CPA is agree, in the context of policy dialogue available for this purpose and is not being and capacity development, to support programmed by the donor). For Least these budgetary priorities with either Developed and Low-Income Countries, general budget support or support for line much less CPA is available to partner ministries. countries than is apparent in LDCs/LICs share in Real Bilateral ODA – 33% (CPA) While budget support and SWAPs compared to 44% (share of Real ODA) in were recognized as an important aid 2016. mechanism in the 2000s, donors have substantially reduced their commitment to Declining Budget Support this approach since 2010. From a peak of Mechanisms $5.9 billion in 2011, aid through budget support and SWAPs reached a low of The provision of aid to developing $4.1 billion in 2016 with the EU providing countries as direct budget support or half of this budget support ($2.1 billion). sector-wide programming (SWAP) has been an important mechanism for Issues of fungibility have plagued general advancing a country’s ownership of its budget support, particularly where the development priorities through aid. With recipient government was able to use budget support, a developing country general budget support intended for government have the authority to establish one area to offset higher expenditures its budgetary framework for development in another. Sector-wide programs were initiatives within the national budget or a understood to be more effective, as
250 251 The Reality of Aid 2018 Report
it promoted collaboration with line 15. Priority for loans increasing ministries to build capacity and strengthen poverty-oriented expenditures.65 Aid for among some donors. sector-wide mechanisms has remained Concessional loans have been constant over this decade, albeit at a a growing form of aid delivery modest level. A recent German review of since 2010. In dollar value (2016 budget support evaluations concluded that there was strong evidence for the positive dollars), ODA loans have increased impacts of budget support as a funding by almost 45%, from $28 billion in modality. It called on donors to reassess 2010 to $40.4 billion in 2016, with their withdrawal from this modality of a large number of loans related support.66 to climate finance included as ODA. Growth in loans is also The project modality for aid delivery apparent for LDCs/LICs and LMICs, is still the dominant form of bilateral countries that are vulnerable to a assistance. In 2016, $58.4 billion of return of a debt crisis that existed gross bilateral assistance, or 61% of Real in previous decades. Gross Bilateral Assistance, was in the form of projects. [DAC CRS+ Database] For While concessional loans have been developing country partners, particularly in a component of DAC bilateral and the poorest countries, the proliferation of multilateral ODA for many decades, they projects across many sectors is extremely have been growing in importance since difficult to manage within a coherent 2010. ODA loans have increased from country development strategy. $28 billion in 2010 to $40.4 billion in
Chart 14.2 Trends in the Value of Budget Support, 2010 to 2016, Billions of Constant 2016 US Dollars Source: OECD DAC1a © AidWatch Canada, April 2018 $7.0
$5.9 $6.0
$5.1 $5.0 $5.2 $4.7 $4.6
$4.0 $4.1 $3.4 $3.3 $3.5 $3.0 $3.1 $2.7 $3.0
$2.4 $2.0 $2.1 $2.0 $1.7 $1.2 $1.0 $1.3
$- 2010 2011 2012 2014 2015 2016
General Budget Support Sector Budget Support Total Budget Support
252 253 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
2016 (in 2016 dollars). (Chart 15.1) This 2016. (Chart 15.2) A very large part of this represents an increase of almost 45%. As increase in loans is due to the extensive a percentage of Gross Real ODA, the share use of loans in climate finance by France of loans grew from 26% in 2010 to 29% in Germany and Japan.
Chart 15.1 Value of Bilateral and Multilateral Gross ODA Loans Billions of Constant 2016 US4; OECD DAC2a; © AidWatch Canada April 2018
2005 $9.4 $12.7
2008 $11.5 $12.5
2010 $13.9 $14.1
2012 $12.7 $18.7
2013 $16.0 $20.6
2014 $16.3 $21.6
2015 $17.5 $23.8
2016 $17.3 $23.1
$- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 DAC Bilateral Gross Loans Multilateral Gross Loans
Chart 15.2 Total Bilateral and Multilateral Loans as Share of Real Gross ODA Real Gross ODA is Gross ODA less in-donor refugee & student costs, debt cancellation & loan interest repayments OECD DAC2a; © AidWatch Canada April 2018 35%
33% 31% 31%
29% 29%
27% 28% 26% 26% 27% 25% 24% 23%
22% 21% 21% 19%
17%
15% 2005 2008 2010 2011 2012 2013 2014 2015 2016
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Japan, France, Germany, Korea and An emerging (renewed) debt crisis the European Union are responsible for almost all ODA loans. Chart 15.3 Increasing use of ODA loans, particularly documents the current share of loans in for LDCs and LMICs, is a worrying trend, their respective Real Gross Bilateral ODA particularly in light of evidence of the re- for 2016, which range from 59% for Japan emergence of unsustainable debt levels in to 28% for the EU. an increasing number of countries. The lingering effects of the 2008 financial crisis Somewhat surprisingly the share and the recent collapse in commodity of loans for both Least Developed prices have given rise to increased debt and Lower Middle-Income countries stress in some of the poorest countries. An has also been growing since 2010 official with the IMF recently pointed out, (Chart 15.4). For Lower Middle Income “our debt sustainability analyses indicate Countries, loans made up 46% of Gross that 40% of Low-Income Countries are ODA directed to these countries (up from currently at high risk of or already in debt 40% in 2010). Similarly, loans have grown distress. It doubled in five years.”67 The from 14% in 2010 to 23% in 2016 as a expanded use of Development Finance share of Gross ODA to Least Developed Institutions for aid delivery and to catalyze and Low Income Countries. These are the private sector may add to the debt countries with very low government burden of vulnerable countries. revenues and high vulnerability to economic shocks so they can ill-afford to While ODA loans have been provided at take on substantial debt. concessional rates, developing country
Chart 15.3 Share of Loans in Real Gross Bilateral ODA in 2016: Select Donors Real Gross Bilateral ODA is total ODA less in-donor refugee and student costs and debt cancellation OECD DAC2a © AidWatch Canada April 2018
EU 28%
Korea 39%
Japan 59%
Germany 35%
France 54%
0% 10% 20% 30% 40% 50% 60% 70%
254 255 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Chart 15.4 Trend in Share of Loans in Gross ODA by Income Group Percentage of Gross ODA for each Income Group OECD DAC2a © AidWatch Canada April 2018 60%
50% 50% 49% Lower Middle-Income Countries 46% 41% 41% 40% 42% 40% 41% 42% Upper Middle-Income 35% Countries 30% 28% 22% 23% 23% 20% 21% 14% 17% Least Developed & Low 10% Income Countries
0% 2010 2011 2012 2013 2014 2015 2016
Least Developed and Low Income Countries Lower Middle-Income Countries Upper Middle-Income Countries
governments sent $25.6 billion back LMICs it is 7%, and for UMICs t 6%. The to donors in principal and interest minimum reportable grant element for payments on previous loans in 2016, up LDCs is 45%, for LMICs, 15%, and for from $19.0 billion in 2010, an increase of UMICs it is 10%. This policy is intended to 35% in 2016 dollars. Of this $25.6 billion in promote concessional lending to LDCs.69 2016, $16.9 billion was received from Least Developed and Low-Income and Lower Development Initiative calculates that the Middle-Income Countries. net effect of these rules, if applied to 2016 data, would have been a 1% increase in Changing the DAC rules for loans ODA for that year or $1.8 billion. However, for some donors there may be greater DAC members have agreed to change the differences. Japanese aid would have reporting rules relating to ODA loans after been 33% higher in 2016 under the new 2018. At that point only the grant element rules, and Germany 7% lower (due to the of a concessional loan will be included as different levels of consessionality in the ODA.68 On the other side, the repayments current loan portfolio).70 of the principal from previous loans will no longer be deducted from nominal ODA, 16. Catalyzing or subsidizing the as is the current practice. In addition, private sector? there will be a differential discount rate for calculating concessionality of the loan All donors are calling for the based on a country’s income status. For increased use of ODA to mobilize LDCs, the discount rate (which determines private sector investment in the concessionality) has been set at 9%, for SDGs. An ODA private sector
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proxy indicates that the share of For both bilateral and multilateral aid sector-allocated ODA related to actors the overwhelming focus is on the private sector has increased instrumentalizing ODA to leverage private from 21% in 2010 to 26% in 2016. sector capital, often to the detriment Germany, France and Japan have of cost-effective public solutions or a heavy concentration in these alternative finance. Much more attention sectors. The promotion of public- should be put to ways for expanding private partnerships, particularly cutting-edge innovative financing (such as for infrastructure, ignores well- taxes relating to private use of the global documented assessments that commons), which could be dedicated to challenge the notion that they the SDGs. In addition, effective measures are an efficient and effective to stop tax evasion and illicit private capital means of finance for the public flows out of developing countries are sector. Equally, the recent urgently needed. emphasis on “blended finance” is fraught with issues relating Private finance is allocated in ways that to transparency, development are guided by profit maximization, with effectiveness and additionality, rules and principles that are different, the potential for increased tied and cannot be assumed to serve the aid, and a lack of agreement on public interest. When donors engage rules to report ODA support for with the private sector in development Private Sector Instruments (PSIs) cooperation, these partnerships must to the OECD DAC. be informed by human rights norms and development effectiveness principles. Since the adoption of Agenda 2030 in ODA, even when used to catalyze other 2015, there has been a seeming consensus development resources, should be among donors that the SDGs can only be preserved as a resource to advance realized if major private sector investments bilateral and multilateral partnerships are attracted to fill a funding gap which to reduce poverty and inequality and the the World Bank estimates is $2.5 trillion. realization of the SDGs. Instrumentalizing Donor narratives are consumed by the aid to mobilize private sector investment challenge of moving from billions in aid to has the potential to divert aid in ways that trillions in investments.71 In the words of undermine these core goals. the OECD DAC, In October 2017, the Development “Smart and strategic use of Committee of the World Bank adopted development finance to catalyse a new private sector-centric approach to private capital is an emerging development finance, ‘Maximizing Finance frontier and a growing priority for for Development’ (MFD). Along with other most the international development development banks, they agreed, to increase community. Development co- private sector finance for SDGs by 25% to 35% operation providers are increasingly by 2020. This approach is to be implemented working with the private sector to through partnering with Bank projects, loan mobilise and target commercial guarantees and equity finance. Through finance …”72 MFD, the Bank now intends to:
256 257 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
“consistently [be] testing—and of ODA across all sectors. In order to advising clients on—whether a project estimate trends in the engagement of is best delivered through sustainable the private sector, a “private sector proxy private sector solutions (private indicator” has been developed, which finance and/or private delivery) while aggregates ODA in a number of DAC limiting public liabilities, and if not, sectors in which the private sector plays whether WBG [World Bank Group] a major role and/or aligns with private support for an improved investment sector interests in development (see the environment or risk mitigation could list of sectors in Chart 16.1).75 The long- help achieve such solutions.”73 term trend for this proxy is clearly an increasing share of sector-allocated The Bank is pursuing a so-called “cascade” ODA, from 21% in 2005 to 26% in 2016. approach in which public funding is the But this share has declined from a high of last resort: 28% in 2014.
“When a project is presented, ask: Table 16.1: Share of Private Sector Proxy (see “Is there a sustainable private sector Chart 16.1) in Donor Sector-Allocated ODA solution that limits public debt and Donor 2010 2013 2016 contingent liabilities? France 11% 30% 35% • If the answer is “Yes” – promote such Germany 31% 30% 35% private solutions. Japan 45% 56% 55% • If the answer is “No” – ask whether it is United Kingdom 15% 12% 10% because of: • Policy or regulatory gaps or weaknesses? United States 13% 12% 7% If so, provide WBG support for policy and DAC Donors 20% 23% 22% regulatory reforms. Multilateral 24% 33% 32% • Risks? If so, assess the risks and Donors see whether WBG instruments can address them. As indicated in Table 16.1, a number • If you conclude that the project requires of large donors have given a large public funding, pursue that option.”74 and increasing share of their sector- allocated ODA to those favouring the With this approach, developing countries private sector. France, Germany and may be facing the emergence of new Japan are notable among these donors. 1990s-style aid conditionality pushing An increase in the multilateral donors’ uncritically broad privatization across share to these proxy-related sectors is essential development areas for aid- a reflection of changing priorities by the dependent countries. development banks.
Growth of sectors with implicating Public Private Partnerships private sector partnerships Public-Private Partnerships (PPPs) The OECD DAC does not track private have been a high-profile catalyst for sector partnerships in the implementation private sector investment through ODA,
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Chart 16.1 Trends in the Private Sector Proxy: Share of total sector allocated ODA OECD DAC CRS+ © AidWatch Canada, April 2018 35%
30% 28% 27% 27% 26% 25%
20% 21% 21%
15%
10% 2005 2010 2012 2014 2015 2016 Private Sector Proxy (Large Scale Water & Sanitation, Transport, Energy, Formal Financial Intermediaries, Business Services, Industrial, Minerals, Construction, Trade Policies) particularly in support of infrastructure project’s cost to the public sector.”78 While projects. ODA allocated to sectors that are these assessments are related to PPPs in likely to be involved in infrastructure projects these countries, the critique is consistent was approximately 25% of sector-allocated with other such projects implemented in ODA in 2016.76 These projects often developing countries. combine major private sector investments with small amounts of public sector funding. Felix Dodd has summarized some of the In most cases the public sector assumes the main overarching concerns with an uncritical majority of the short and long-term risks in expansion of PPP in developing countries:79 the implementation of the project and the recovery of the original investment. • The distortion of the public agenda; • Loss of local control over critical PPPs have been heavily criticized, not just infrastructure and services, and co- by NGOs and civil society, but also by the option of government or civil society UK National Auditor and the European partners; Court of Auditors. The latter commented, • Commoditization of the commons; “the PPP option was chosen without any • Lack of strong legal/regulatory frameworks; prior comparative analysis of alternative options (…) thus failing to demonstrate • Lack of transparency and accountability that it was the one maximising value- - including hidden or off-the-books for-money and protecting the public accounting treatment of PPP debt; interest.”77 A similar 2015 review by the • The displacement of public employees; UK’s National Audit Office found that and “investment through PFI [Private Finance • Lack of engagement with stakeholders Initiative] schemes more than doubles a throughout.
258 259 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
Eurodad has also analyzed the impact agreement on either the definition of blended of PPPs, looking at various factors. One finance or the range of modalities that could of the most critical is the crowding out be used in support of private finance. government fiscal space for SDG finance, particularly where government revenue is OECD has adopted the following definition: tied into large PPP investments. A second “Blended finance is the strategic use of concern is the inequitable burden of user development finance for the mobilization fees on poor populations for essential of additional finance [where additional services financed through PPPs. And, finance = commercial finance] towards finally, Eurodad has voiced concerns sustainable development in developing regarding the potentially large and countries.”47 Other definitions also stress unexamined environmental and social the inclusion of philanthropic capital. With consequences.80 respect to modalities, the OECD’s analysis of blended finance includes the use of In 2016 DAC donors invested only $704 syndicated loans, credit lines, direct share million in PPPs, slightly more than the investment, investment guarantees, and seven-year average of $600 million since shares in investment vehicles.84 2010. This represented less than 1% of Real ODA in that year. The Netherlands, According to the OECD, 17 DAC members the United States and the United Kingdom now employ various forms of blended were responsible for more than half of finance. Since 2000, DAC members have these investments. created 167 mechanisms for pooling public finance with private capital. The majority While PPPs make up a relatively small of these initiatives were established after proportion of DAC ODA, they may be 2010 and many are Development Finance associated with large private capital Institutions (DFIs).85 investments. The Reality of Aid’s 2016 Aid Trends chapter noted that US PPPs were The OECD estimates that these highly associated with the commercial mechanisms mobilized $81.1 billion in interests of the business partner, which private sector finance between 2012 and could be considered an informal modality 2015. But such estimates inevitably involve for tying US aid to US corporate interests.81 a level of subjectivity since they are shaped While the direct use of ODA in PPPs may by various assumptions.86 As well, there is be light, there is strong indication that no estimate of related amounts of public ODA-funded technical advice and ODA- resources invested for this result.87 This related conditionalities play a strong role gap in statistics is part of a larger issue, in promoting PPPs.82 where DFIs are being implemented in a policy and evaluation vacuum. Of the 17 Advancing the donor private sector donors involved in blending, only 6 have agenda: Blended finance donor guidance policies governing these operations, and only 4 monitor blending Current donor pre-occupations focus on a finance activities as a separate activity.88 dramatic expansion of ODA engagement with ‘blended finance.’ Despite this In 2016, DAC members agreed to a set of attention and priority, there is no common principles to guide blended finance.89 But
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to date, members have failed to reach a • Are DFIs only a donor priority, with consensus on rules to operationalize these limited interest on the part of the principles. Development effectiveness and private sector? To date, “the share human rights standards must be integrated of commercial investors is still into these rules to guide the inclusion of quite limited when compared with official contributions to these private sector development investors.” (page 26) instruments as reported ODA. To date, there • The diversity of 167 mechanisms has been no agreement on the interpretation creates a highly fragmented of development-oriented private sector development finance environment, projects or safeguards to protect the integrity with potential partners having to deal of ODA in these arrangements. with a diversity of modalities, terms and conditions. (pages 27-28) Despite this lack of consensus, the DAC High Level Meeting (October 2017) agreed to • More work is required “to understand allow reporting of “development-oriented” how blended finance can work in LDCs transfers to private sector instruments. and LICs,” which alongside LMICs are Reported ODA could be in the form of high priorities for “leaving no one total public finance to DFIs (institutional behind,” (page 27) approach, which was formerly not allowed) • Most blended finance is concentrated or on a transaction basis approach (finance in the formal finance and energy for specific identifiable activities of a DFI). sectors. (page 26) The former has the potential to inflate aid as it may include public finance for DFI activities • Monitoring and evaluation systems for that could be ineligible as ODA. In both blended finance are weak, something that approaches, the issue of concessionality, has been compounded by multiple layers as a core value of ODA, is potentially of private financial inter-mediation for compromised. The absence of clear specific projects. (page 30) guidelines and rules will further undermine the quality of DAC data on ODA, already The OECD’s detailed analysis of the weakened by inclusion of in-donor refugee $81 billion of private sector funding by costs etc. (see sections 6 and 7 above). DFIs confirms many of the OECD DAC observations: 91 The OECD study on blended finance90 makes a number of observations, which • Least Developed and Low-Income raise questions about its relevance as Countries benefitted from only 10% a complementary resource for ODA’s of this private finance, while Upper purposes in poverty reduction: Middle-Income Countries received 43%, and Lower Middle-Income Countries, 34%. Another 13% was • “There is a tendency for blended unspecified. finance to go towards sectors for which the business case is clearer and • In terms of the origins of the private the potential for commercial gains sector funds, 62% originated in OECD more apparent” (page 27), which are countries and 38% in developing often not high-risk poverty oriented countries (excluding those with sectors. multiple sources). This raises
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questions about tied aid, development health or education. If increased amounts effectiveness and country ownership. of ODA are to be directed towards private • In terms of public finance instruments sector blending institutions, there is a clear used to mobilize private finance, danger that scarce ODA will be diverted 40% were investment guarantees from its central purpose of support for (in which potentially no public global public goods, poverty reduction funds were transferred), 27% were and reaching populations that have been 92 syndicated loans, 16% were credit excluded. lines, 10% were shares in Collective Investment Vehicles, and 6% were Nevertheless, the expansion of DFIs is direct investments. The high-level proceeding quickly. The US Congress is of guarantees has the potential to presently considering a measure to create inflate ODA as they are only financed an International Development Finance when the investment or loan fails. Corporation, which would expand the Following the DAC’s 2017 High-Level current activities of the Overseas Private Meeting, the door is now open for Investment Corporation and USAID in donors to report guarantees as ODA private sector engagement.93 The proposed under the institutional approach. This institution will likely meet with the approval is a serious anomaly, since no rules from the Trump Administration. Canada for reporting guarantees under the has just launched its DFI, but its initial capital instrumental approach have yet to be of Cdn$300 million will not be drawn from agreed upon. the country’s ODA. The UK government, • Multilateral DFIs were responsible for on the other hand, through its 0.7% aid 64% of the capital mobilized; bilateral program, has been significantly increasing providers accounted for 36%. The ODA resources for the Commonwealth 94 latter was heavily concentrated with Development Corporation. the top five bilateral providers making up close to 90% of the total (The United CSOs involved in development States:54%, the UK: 13%, France: 9%, cooperation have been critical of DFIs, Germany: 7% and Denmark:6%). while also acknowledging that certain carefully targeted private sector initiatives • Investments were sectorally may benefit poor and marginalized concentrated in (mostly formal) populations.95 banking and financial services (33%), energy (25%), and industry, mining • The OECD DAC is clear that only private and construction (21%). finance that is additional “to what • Investments related to climate would have been available without change accounted for 26% of the total blending” is considered mobilized investments, with 89% of these funds finance.96 But the methodology for devoted to mitigation and only 11% to determining whether such finance is adaptation. additional or a mere subsidy for the private sector is not spelled out, nor Blended finance is clearly no panacea for is it clearly a yes/no answer. A project closing the finance gap for SDGs, particularly may go ahead with adjustments, in relation to poverty reduction, inequality, without the public resource of a
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DFI, confusing what is “additional”. tax avoidance by the corporations Eurodad’s analyst, Polly Meeks, quotes involved.100 a 2016 European Union evaluation of • There are major confusions and its blended finance program noting lack of agreement on the rules in that half the cases from 2007 to reporting DFI-related ODA to the OECD 2014 had no clear added value for DAC. How will the DAC determine blending.97 whether such activities are sufficiently • Development additionality is equally ‘development-oriented’ to count as important in determining the fit with ODA? How will the DAC resolve the Agenda 2030. With few evaluations, anomalous treatment of guarantees there is little evidence about blended under the institutional approach, finance impact on development which currently risks inflating ODA? outcomes. The EU evaluation noted How far will the final reporting rules above, found that “the projects deviate from the concessionality selected for blending did not principles applied to public sector emphasize the pro-poor dimension” loans? and “gender was rarely targeted.” • There is a strong risk that donors will DFIs often have scant policy guidance increase tied aid through engagement on labour, social and environmental of donor private sector companies in standards. There is also little evidence DFI initiatives. This outcome has been that DFIs are supporting projects documented for US PPPs. consistent with development effectiveness principles, such as strengthen country ownership or 17. Demand-Driven Technical inclusive partnerships at the country Assistance? level.98 • Concessionality of finance is not a After a sharp decline from 2005 to DFI condition for blending, but it is 2010, technical cooperation has a crucial condition for Low-Income been a large but constant share of Countries and those facing a growing Real ODA, averaging 15% to 17% potential debt crisis. from 2010 to 2017. It currently exceeds 20% of Real Bilateral ODA. • Weak transparency plagues any Among donors, France, Australia, assessment of projects supported Germany and Japan have heavily through blended finance. Improving relied on technical cooperation in aid accountability is a challenge where their bilateral aid. Much of this these resources cannot be traced in technical cooperation continues the multiple layers of DFI financial to be donor-driven in relation transactions with intermediaries. to financial management, • Activities funded through PSIs have infrastructure development, and the potential to erode finances trade agreements. available for developing country governments, as they can be a factor Demand-driven technical assistance can in introducing unsustainable levels of be an important modality for meeting public and private debt,99 or through technical needs and improving capacities
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in developing countries, which partners Following a sharp decline from 2005 to define and seek cooperation. 2010, technical cooperation has become a large and constant share of Real ODA, At the Accra High-Level Forum (2008) averaging 15% to 17% from 2010 to donors pledged their support “for capacity 2017. (Chart 17.1) As a share of DAC Real development [that] will be demand- Bilateral ODA, it has averaged just over driven and designed to support country 20% since 2010. Technical cooperation ownership.” The theme of the 2016 was 16% of multilateral ODA in 2016. Global Reality of Aid Report was ‘Technical Cooperation as an aid modality: Demand- Table 17.1 demonstrates that technical driven or donor-driven?’.101 Contributions cooperation as a share of individual donor, and evidence collected for that Report ODA has varied considerably. France, suggest that technical assistance is still Germany and Japan made up 51% of all largely responsive to donor-perceived bilateral technical cooperation in 2016 needs for capacity development, (combined these donors represent 26% of infrastructure requirements, and advise all Real Bilateral ODA). to governments linked to approval of World Bank loans, financial management Almost all of the donors listed below have and trade agreements. It is often been a reduced the proportion of ODA devoted to resource to embed donor country interests technical cooperation since 2010. The two and orientations within their aid programs exceptions are the Netherlands and the United and ensures direct accountability to Kingdom - both have increased their reliance donors.102 on technical cooperation in recent years.
Chart 17.1 Free Standing Technical Assistance as a Share of Real ODA Real ODA is ODA less in-donor refugee and student costs, debt cancellation & interest received on loans Billion of constant 2016 US$; DAC1 & DAC2a © AidWatch Canada April 2016 35%
30% 29% ($24.1)
25%
20% 18% ($17.2) 17% ($18.3) 17% ($17.2) 15% ($17.0) 15% ($16.8) 15% 15% ($18.1)
10%
5%
0% 2005 2008 2010 2012 2014 2015 2016
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many cases it not aligned to a recipient Table 17.1 Technical Cooperation Share of Real country’s needs and can raise project Bilateral ODA* costs by as much as 30%. In 2001 the DAC Donor 2005 2010 2016 agreed to fully untie aid to Least Developed France 101.5% 55.8% 41.7% Countries. This was extended to Highly Australia 54.7% 50.4% 39.0% Indebted Poor Countries (HIPC) in 2008, against which progress reports are to be Germany 105.0% 67.4% 37.5% issued each year. At the 2011 Busan High- Japan 48.9% 53.0% 37.1% Level Forum, providers agreed to develop United Kingdom 18.2% 8.6% 23.1% a plan for accelerating the untying of aid Austria 73.5% 63.4% 20.9% by 2012. At the Global Partnership’s 2016 Netherlands 18.8% 9.9% 16.8% High-Level Meeting in Nairobi, all providers of aid agreed to “accelerate untying of aid, Belgium 64.3% 50.5% 14.6% and promote development cooperation Norway 16.2% 9.2% 6.6% that supports local businesses throughout United States 42.9% 4.7% 3.1% the supply chain” [Nairobi Outcome §42(g). All Bilateral DAC Given all these initiatives, how much 40.8% 22.5% 19.6% Donors progress has there been?
Note: Real Bilateral ODA is Bilateral ODA less in- The overall trends in tied aid since 2010 donor refugee and student costs, debt cancel- lation and interest repayments on ODA loans. are mixed. Notably, tied aid increased Percentages greater than 100% indicate that in recent years, from 21% of bilateral technical cooperation was larger than bilateral ODA in 2013 to 24% in 2015. This trend ODA after the above deductions were made. was reversed in 2016 when tied aid went down to 20%. For LDCs there was a 18. Renewed attention to tied aid pronounced increase from 11% in 2013 to 17% in 2015, but back to 12% in 2016. Tied aid has fluctuated from 21% (Chart 18.1) of bilateral ODA in 2013 to 24% in 2015, and back to 20% in 2016. For Donors are required to report to the DAC LDCs, a pronounced increase from on the formal status of their aid contracts, 11% in 2013 to 17% in 2015 was whether these contracts legally oblige reversed in 2016 to 12%. There is procurement in the donor country or not. indirect evidence that many donors But irrespective of legal requirements, it have practiced a high level of is clear from DAC procurement statistics informal tying of aid. For example, that a high level of informal tying of aid on average more than 60% of aid is common. A measure of this informal procurement contracts have been untying is captured by the DAC through awarded in donor countries since donor reporting the actual country where 2010. each aid contract is awarded.
It has been repeatedly demonstrated Chart 18.2 paints a picture of aid untying that the tying of aid disbursements to in practice with a considerable contrast commercial purchases in donor countries to that provided by the formal aid reduces the effectiveness of this aid. In tying recommendation data. While the
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Chart 18.1 Trends in Share of Bilateral ODA that is Tied: DAC Untying Recommendation and Total Bilateral Tied Aid The DAC Recommendation for Untying aid to LDCs/HIPCs does not include free standing technical assistance and food aid Report on DAC Untying Recommendation 30%
25% 25% 26% 24% 24%
21% 21% 20% 20%
17% 15% 15% 14%
13% 12% 11% 11% 10% 2010 2011 2012 2013 2014 2015 2016 ODA Reported as Tied for LDCs/HIPCS (DAC Untying Recommendation) All DAC Bilateral ODA Reported as Tied
Chart 18.2 Aid Contract Procurement: Location of primary contracted organization Percentage of Total Contracts Awarded by the Value of Contracts Report on the DAC Untying Recommendation, Table 5/6; © AidWatch Canada 2018 80%
71% 72% 70% 65%
62% 60% 61% 53% 50%
47%
40% 38% 38%
35% 30% 29% 28%
20%
10% 2010 2011 2012 2013 2014 2015 Awarded in an OECD Country Awarded in Developing Countries
proportion of aid contracts awarded in on average more than 60% of these OECD countries, rather than a developing contracts have been awarded in donor country, has varied from year to year, countries since 2010.
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The formal and informal experience of will include cross-border flows of individual donor is mixed. With respect ODA, there could be strong political to formal legal untying of bilateral aid, incentives to substitute TOSSD in Austria (36% untied in 2015), Greece (15% donor discourse on development untied), European Union (62% untied), cooperation, ignoring the crucial Japan (75% untied), and the United States role of ODA for the SDGs. This will (56% untied) are outliers from the DAC be particularly true for donors norm of above 80%. With respect to with weak performance on ODA. informal tying through the awarding of aid contracts, Canada (83%), the United As part of the response to the vast scope Kingdom (96%) and the United States of financing required for Agenda 2030, DAC (96%) were highly skewed towards OECD donors initiated discussions in 2012 on a country contractors in 2015 (the last year new measurement of development finance. for data).103 As noted above, increased This measure is now called ‘Total Official use of Private Sector Instruments will likely Support for Sustainable Development’ increase the levels of both formal and (TOSSD). TOSSD is intended to be a new informal tied aid. international statistical standard within the Agenda 2030 and SDG framework. F. Measuring Official Resource Flows for the SDGs According to the DAC, this metric will purportedly capture the full array of official 19. Total Official Support for development cross-border flows relevant Sustainable Development (TOSSD) – A to sustainable development. TOSSD is flawed new metric. meant to complement ODA, going beyond dedicated DAC concessional flows to The current framework for TOSSD include other “resources provided through is unclear and deeply flawed. It South-South cooperation, triangular may include commercial private cooperation, multilateral institutions 104 sector flows beyond official and emerging and traditional donors.” flows, which would substantially TOSSD will also include humanitarian undermine donor accountability assistance and ODA cross border flows, for official financing of the SDGs. which essentially correspond to Country Programmable Aid (see section 14). The The establishment of clear inclusion of ODA will be a major incentive developmental criteria, including for donors to substitute TOSSD for ODA the SDG norm that no one is to be in public discourse when profiling their left behind, is essential for TOSSD’s commitment to SDGs. This move away credibility. These criteria must be from ODA as the measure of “aid” will be transparent and applied across particularly tempting in the case of donors the different financing modalities. with weak performance on ODA alone. To date, there is no elaboration of pillar two for TOSSD – the flow of The current working definition for TOSSD is: donor resources for a broad range of global public goods, including “[TOSSD] includes all officially- those related to security and supported resource flows to peacekeeping. Given that TOSSD promote sustainable development
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in developing countries and to Direct private capital flows may not be support development enablers included in the metric, but published as a and/or address global challenges at parallel set of data on private sector support regional or global levels.”105 for SDGs. While not disputing that the private sector has an important role in The implementation of this definition, achieving the SDGs, along with other particularly with respect to inclusion of private stakeholders such as CSOs, these “officially-supported resource flows,” is contributions should be monitored and moving in seriously worrying directions. measured separately. Given the rationale TOSSD will include not only flows by that drives large-scale private investment, official agencies, but also by “state- one focussed on maximizing profits, the owned companies and enterprises under value added of private sector support for government control” (an addition to attract the SDGs needs to be clearly identified China to report), and by “other enterprises and measured against human rights and under significant government influence” development effectiveness norms. - a very vague notion. In relation to the latter, the draft DAC rules suggest that it The reporting of non-concessional will be at “the discretion of the reporter flows from state institutions and donor to determine whether companies under discretion as to what it chooses to include significant government influence should presents major challenges. Such an be included.” Even more troubling is that approach could well create a TOSSD metric possibility that TOSSD may also include that will only confuse and undermine “private resources mobilized by official donors’ accountability, as governments, to interventions, where a direct causal link the SDGs. There is great potential that it between the official intervention and the will lack the rigour to allow for data to be private resources can be demonstrated.”106 comparable amongst donors, and TOSSD, How that causal link will be determined is therefore, will have low credibility. not elaborated. For whom is this metric being developed? Even though the DAC expects to To date, the sole actors have been implement TOSSD in 2019, they are far donors embedded in the DAC, with a from finalizing a comprehensive draft few representatives of partner country proposal for the metric. In particular, to governments on the TOSSD Taskforce. date there has been no elaboration of Consultations with other stakeholders for pillar two in the metric – resources that in-depth discussions of the issues and the are “development enablers” and dedicated form of the metric have been perfunctory. to “global challenges”.107 Details on what CSOs are deeply concerned that donors constitutes a ‘development enabler’ and are creating a public tool for themselves the scope of global challenges will not be that will remove current pressures to elaborated before September 2018. Pillar increase levels of ODA to meet the 0.7% two is certain to be controversial as there is target for poverty-oriented financing for strong possibility that it will likely be broad SDGs.108 This concern is compounded and include problematic areas related to by the measurement of resource flows security, peacekeeping and support for leaving donor countries, and not based trade and investment. on cross-border flows actually received
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in developing countries, which could be a be counted only in cases where meaningful tool for partner countries. these guarantees are legitimately drawn upon. What are some of the key concerns? -- Unlike ODA, there is no requirement for TOSSD flows • Despite the notion that TOSSD to be grants or concessional resources must demonstrably loans. Because it is open to promote sustainable development, many types of flows, the degree it is not clear how this criterion will of concessionality of flows is an be met. Many of the official flows essential consideration and must that providers intend to include be transparent. Concessionality – such as loan and investment is particularly relevant for both guarantees, equity, credit lines or debt-stressed Least Developed pooled investment funds – are often and Low-Income Countries determined purely on commercial and many Lower Middle- grounds. Establishing some clear Income countries. Providers developmental criteria, including are committed to maximizing the crucial SDG norm that no one is resources for countries least able to be left behind, is essential for the to achieve the SDGs. All providers, credibility of TOSSD. These criteria including those from the South, must be transparent and applied should be held accountable to the across the different financing ways they address the needs of modalities. countries with limited resources • For flows that will be included, such to service debt. as those coming from South-South -- What is to be counted? Inclusion Cooperation, global challenges of official resources for the SDGs and multilateral organizations, or within a TOSSD measure must take alternative finance mechanisms in into account official measures donor countries, the scope and terms that continue to undermine of these resource transfers, and the achievement of these goals. their impact on SDG implementation Loans should be included on a in developing countries, are an grant equivalency for concession essential consideration. loans or on a net basis, accounting -- The scope of resource transfers for return flows. Financing climate to be included in TOSSD change mitigation measures, for should be determined by the example, need to account for access of developing countries official support for measures, to these resources. Loan and such as fossil fuel subsidies, that investment guarantees, for undermine movement towards a example, may reduce risk for carbon-free global economy. private sector investors, but -- Transparency about the degree seldom are translated into real of formal and informal tying demands on the provider’s to provider country commercial budget. Such guarantees should interests, which may be inherent
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in many TOSSD flows, is essential. In summary, a credible TOSSD metric will Tying of resources undermines be one that is substantially informed by developing country ownership Agenda 2030, including the overarching in shaping and supporting their goal of leaving no one behind. The rules development priorities. Currently governing the inclusion of flows should be there are no safeguards in TOSSD determined by the application of strong to ensure a focus on recipient- development criteria. There should be driven development. How will an exclusive focus on official resources the metric limit the inclusion of that are clearly and transparently linked resources that are mainly driven to cross-border transfers to developing by donor foreign policy interests? countries. It should exclude ODA to ensure • The scope for the inclusion of flows that it is truly complementary to ODA and “to support development enablers its purposes. Inclusion of transfers for and/or address global challenges global public goods should be determined at regional or global levels” [TOSSD by their direct relevance to achieving definition] has not been defined. the SDGs. As an expansive measure Presumably, these flows would of development cooperation, TOSSD relate to areas of global public goods resource transfers should be guided by demonstrably and directly aligned to development effectiveness principles the SDGs. However, this area still is and human rights norms, and should be largely undefined and potentially open monitored accordingly. to inflated reporting. Unfortunately, the current framework for • As a development resource for the TOSSD is deeply flawed in several respects. SDGs, TOSSD resource transfers It has not been confirmed how it will include should be clearly aligned with the commercial private sector flows beyond Busan development effectiveness official flows (perhaps as a parallel metric). It principles – country ownership, may be open to substantial donor discretion, inclusive partnerships, a focus on and thereby substantially undermines clear development results, transparency donor comparability and accountability. No and mutual accountability. CSOs development criteria have been elaborated would add that such principles must be and there is no reference to issues and informed by human rights standards principles affecting the effectiveness of and norms. TOSSD resource transfers development cooperation. should be guided and monitored in relation to these principles. They For some donors, especially those with should be subject to review by weak ODA performance, there will be strong partner country-driven mutual political incentives to use TOSSD in their accountability forums that include discourse on development cooperation. In all development stakeholders. Finally, this scenario, the international community in order to assess the relevance of will surely fail the SDGs, as substantially TOSSD resources for development increasing ODA is a critical resource for outcomes, it would be important to poverty eradication, gender equality, disaggregate TOSSD in the GPEDC bi- resilience to climate change, and the annual partner-country monitoring reduction of growing socio-economic exercise. inequality.
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G. Other Sources of Concessional South-South Cooperation Development Cooperation South-South Cooperation (SSC) Finance concessional finance for development declined in 2015/16 by 14% from an 20. South-South Cooperation – Heavily estimated $32.2 billion in 2013/14 to concentrated among a few providers an estimated $27.6 billion in 2015/16.109 (Table 20.1) The main reasons for this South-South Cooperation decline is a substantial decline in estimated (SSC) concessional finance for assistance from Saudi Arabia ($13.6 billion development is estimated at $27.6 in 2014 to $6.8 billion in 2015) and from billion in 2015/16, down 14% from China ($3.4 billion in 2014 to $2.3 billion an estimate of $32.2 billion for in 2015). The decrease in Chinese aid was 2013/14. This decrease is mainly due mainly to the availability of carryover due to declining flows from Saudi funds from previous years.110 Arabia and China. Almost 75% of SSC flows are from Middle Of the $27.6 billion in SSC, $20.3 billion East providers and are directed (74%) is estimated to come from toward the humanitarian crises providers in the Middle East. Much of in the region. A growing South- this aid is allocated to humanitarian South sharing of experience and crises in that region. Several donors have knowledge, which sometimes exceeded the UN target of 0.7% of GNI, takes the form of technical including Turkey at 0.95% of GNI and UAE assistance and exchanges, is at 1.31%. These providers are responding probably not fully captured in the to the wide-spread humanitarian headline amount for SSC finance initiatives in the region. In April 2018, it was announced that Saudi Arabia and the UAE In addition to concessional together were donating $930 million, a finance, China and other third of the $2.96 billion current UN appeal BRICs have been developing a for Yemen, This is a conflict characterized parallel Southern-led financial by significant human suffering and architecture in the BRICS New humanitarian blockades. Saudi Arabia and Development Bank and China’s its allies are directly engaged in the conflict new Asian Infrastructure and bear a huge responsibility. They have Development Bank. China’s been strongly criticized by human rights launched its Belt and Road and humanitarian organizations.111 Initiative (BRI) in 2013 as a highly ambitious umbrella for Chinese At $3.9 billion, India and China investment in infrastructure accounted for 14% of SSC in 2015/2016. across 65 countries in Asia, the Much of India’s SSC is directed to Bhutan South Pacific, Africa and Europe. and regional partners for hydro and Current projects total more other infrastructure projects. But in than $1.8 trillion, but many of early 2018, India announced $50 million these are still very much in the for a Commonwealth Window for Least planning stages. Developed and Small Island States,
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augmenting its 2017 $100 million India- which is managed by the UN Office for UN Development Partnership Fund, South-South Cooperation.
Table 20.1 Estimates of South-South Cooperation Concessional Flows for Development (DAC ODA-like flows) Concessional Aid Provider Assistance Notes (millions US$) a) SSC Providers Reporting to the DAC United Arab Emirates $4,241 2016 (DAC Table 33a) Turkey $6,488 2016 (DAC Table 33a) Russia $1,258 2016 (DAC Table 33a) Kuwait $1,060 2016 (DAC Table 33a) Israel $351 2016 (DAC Table 33a) Chinese Taipei $326 2016 (DAC Table 33a) Romania $269 2016 (DAC Table 33a) Nine (9) Other providers $322 2016 (DAC Table 33a) b) SSC Providers Not Reporting to the DAC Saudi Arabia $6,758 2015 (DI) China $2,253 2016 (See Sources) India $1,600 2015/16 Budget (See Sources) Qatar $1,400 2016 (Estimate – See Sources) Brazil $500 2010 (Brazil) Mexico $251 2013 (DI) South Africa $148 2014 Hungary $156 2015 (DI) Four (4) Other Providers** $175 2014 Total SSC Providers 2015/2016 $27,556 (estimate) $11,952 in 2012, $27,325 in 2013, $32,240 in 2014/15 (same sources) Percentage of DAC Real ODA (2016) 23% 26% in 2014-2015 Percentage of DAC Country Programmable Aid, including 40% 46% in 2014-2015 Humanitarian Assistance (2016)
Sources: Providers reporting to the DAC: OECD Dataset DAC1a (2016 current prices); Providers not reporting to the DAC: OECD DAC Table 33a: Estimates of concessional finance for development (ODA-like flows) of key providers of development cooperation that do not report to the OECD-DAC, accessed April 2018 at http://www.oecd. org/development/stats/statisticsonresourceflowstodevelopingcountries.htm; For India, DevEx, “India’s Foreign Aid Budget: Where is the money going?,” March 9, 2015, accessed April 2018 at https://www.devex.com/news/india-s-2015-16-foreign- aid-budget-where-the-money-is-going-85666. For China, John Hopkins China-Africa Research Initiative, Chinese Global Foreign Aid Expenditures, accessed at http://www.sais-cari.org/s/ForeignAid_v2-tfwt.xlsx, April 2018. Qatar is an estimate based on “Qatar’s annual development aid stands at $2bn, says minister,” November 19, 2017, http://www.gulf-times.com/ story/571701/Qatar-s-annual-development-aid-stands-at-2bn-says-, with 70% from government sources. DI indicates that the source is Development Initiatives, Datahub: http://data.devinit.org.
** The four providers are Chile, Colombia, Costa Rica and Indonesia
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SSC is approximately 40% of DAC donors contrast, for the same time period, the US combined Country Programmable Aid government spent over $400 billion, but and humanitarian assistance, down 93% could be counted as ODA. The top from 46% in 2014-15 (Table 20.1). SSC five recipients of China’s aid during this continues to be an important, albeit period were Cuba, Cote d’Ivoire, Ethiopia, modest, resource for achieving the SDGs. Zimbabwe and Cameroon.115 Its importance may lie less in the amount of finance, and more in its expression of Along with the other BRICS (Brazil, Russia, solidarity across developing countries. India, China, and South Africa), China There is a growing South-South sharing is leading in the development of a new of experience and knowledge, which Southern-initiated architecture for financing takes the form of technical assistance and development. The BRICS launched its New exchanges, but not fully captured in the Development Bank in July 2015. Base in headline amount for SSC finance.112 Shanghai, its main purpose is to mobilize finance for infrastructure and sustainable SSC is also becoming an increasing factor in development in the BRICS. It expects to climate finance. In a review of developing reach a loan portfolio between $10 billion to 116 countries Nationally Determined $15 billion by 2021. Contributions (NDCs), 15 countries referred to SSC as an important part of China also launched an Asian Infrastructure these contributions. Brazil has reported Development Bank (AIDB) in January 2016, that it is supporting developing country which currently has 86 approved member efforts in forest monitoring, reforestation states. Up to 2018, the AIDB had lent and climate resilient agriculture. Similarly, about $4.4 billion, with the expectation China is reporting financing for climate- that its total multi-year loan portfolio smart agriculture, low carbon urban would grow to between $10 billion and development renewable energy, and $15 billion in the coming years. As a point disaster risk reduction. In 2015 China of reference, the Asia Development Bank established a South-South Climate lends about $18 billion a year. Many of Cooperation Fund.113 This new Fund its early projects are co-financed with complements earlier Chinese promises other finance institutions such as the Asia 117 of new investments of $500 million in its Development Bank and the World Bank. The AIDB maintains a strong focus on Asian South-South Cooperation Fund to benefit infrastructure development closely related sustainable development and respond to China’s One Belt One Road Initiative. to humanitarian crises in developing countries.114 In 2013 China launched its Belt and Road Initiative (BRI), a highly ambitious umbrella South-South Cooperation beyond for Chinese investment in infrastructure concessional finance projects across 65 countries in Asia, the South Pacific, Africa and Europe. Current China’s 15-year investment in government- projects total more than $1.8 trillion, funded projects, between 2000 and though many are still very much in the 2015, could be as high $354 billion in 140 planning stage. 118 The Initiative is closely countries. But only 23% of this amount linked to China’s external export strategy would qualify as concessional aid. By for rail, hydroelectric power, technology
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and industrial goods. It has been standing agencies for this work, such as suggested that the BRI strengthens China’s Brazil’s ABC or TIKA in Turkey. Others, political influence in the region through such as India and South Africa, are in the the “connectivity power” of these projects, process of establishing such an agency. which are implemented by the Chinese In April 2018 China launched the State government and its large state-directed International Development Cooperation corporations.119 Agency to facilitate and coordinate its international cooperation efforts, There is growing concern that several of with Wang Xiaotao, an experienced these Chinese projects have entrenched internationalist, as its first director. “connections” through high debt loads for recipient countries. Chinese loans for Previously billions of dollars of international BRI projects are collateralized through assistance, including concessional finance, the project or natural asset investment. were allocated from several government They have already created a debt trap for ministries without an overarching plan. In several countries (Sri Lanka, Namibia, Laos), future, the Agency will work under the State where several large projects proved to be Council. It will coordinate and increase the economically unviable.120 profile of China assistance programs, with particular emphasis on overseeing the Chinese SSC received mixed reviews implementation of policy and monitoring from African CSO representatives polled the One Belt One Road Initiative. The new by the Belgian NGO 11.11.11. While Agency will also better integrate Chinese there was great appreciation for the SSC aid into its foreign policy objectives. But principles of solidarity, non-interference, the actual implementation of these aid and respect for sovereignty, there were programs will remain with the current doubts that these principles actually line ministries involved in delivering aid informed practice. Recipient countries programs.122 appreciated cost-effective investments in infrastructure, telecommunications 21. Civil Society Organizations – and access to scholarships. However, Focused on poverty reduction and there were significant concerns about the impact on local economies, unable partnerships in LDCs/LICs, in a to compete with China’s cheap imports deteriorating enabling environment and exploitative natural resources deals, and often undermining efforts to improve Including both private and accountability and fight corruption.121 government funds channelled through CSOs, these organizations contributed at least an estimated Institutionalizing South-South $52 billion in 2014 in development Cooperation – China’s new aid cooperation. Ten of the largest agency international NGO families collectively provided approximately Increasingly, South-South Cooperation $10.5 billion in 2016. providers are institutionalizing their SSC within a dedicated agency of their While the value (in 2016 dollars) government. Some providers have long- of ODA channelled through CSOs
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by DAC donors has increased by for eight of these large NGO families more than 12% between 2012 and (excluding ACT Alliance and CARITAS) 2016 (from $18.3 billion to $20.6 indicates that their total revenue increased billion), the actual share of this by 50% between 2006 and 2011, but then ODA has been relatively constant fell by 20% from 2011 to 2016, from $8.7 at 17% of Real ODA. This ODA billion to $7 billion. has been concentrated (79%) in eight out of twenty-eight donors While the value (in 2016 dollars) of -- the United States, the United ODA channelled through CSOs by DAC Kingdom, the European Union, donors has increased by more than and Germany, along with Sweden, 12% between 2012 and 2016 (from $18.3 Canada, the Netherlands, and billion to $20.6 billion), the share of this Norway. ODA has been relatively constant at 17% of Real ODA. (Chart 21.1) CSOs are highly invested in sectors associated with poverty Donor-funded partnerships with CSOs reduction (68% in the 12 proxy whereby they serve as a delivery sectors for reducing poverty) and channel for aid, is particularly
are concentrated in LDCs and concentrated among several donors. Four donors together make up close to LICs (52%). two-thirds (62%) of all ODA channelled through CSOs – the United States (35%), Civil Society Organizations (CSOs) are the United Kingdom (11%), the European essential actors in development in their Union (10%) and Germany (6%). Four own right. As peoples’ organizations other donors – Sweden (5%), Canada (4%), and agents of democracy, they not only the Netherlands (4%) and Norway (4%) – deliver programming on the ground, provide approximately 17% of their ODA they also monitor human rights and hold through CSOs. governments and other stakeholders to account. They provide significant financing for development partnerships. In terms of the delivery of ODA with and through CSOs, certain donors Civil Society financing for stand out. Seven (7) donors provide development more than 20% of their Real ODA in CSOs partnerships – Denmark (20%), the Netherlands (22%), Norway (22%), In 2014 (the last year for comprehensive the United States (22%), Canada (22%), data), CSOs managed an estimated $52 Ireland (23%), Sweden (24%), and billion in development assistance123 Switzerland (28%). The average for all including both privately raised funds and donors is 17%. (Chart 21.2) donor resources channelled through CSOs in OECD DAC countries. A study of the ten (10) largest international NGOs In terms of their practices as donors the and NGO families confirmed that these European Union and the United Kingdom organizations raised an estimated $10.5 have strong commitments to work with billion in 2016 (including both privately- and through CSOs. The uncertainty raised funds and government-channelled surrounding Brexit has created an funds).124 Comparable revenue figures insecure future for UK CSOs as they draw
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Chart 21.1 Trends in the Value of CSOs as a Delivery Channel for DAC ODA Billion of Constant 2016 US$; Real ODA is ODA less In-Donor Refugee and Student Costs, Debt Cancellation and Loan Interest Repayments; OECD DAC CRS+; © AidWatch Canada April 2018 $30.0 30%
$25.0 25%
$20.4 $20.6 $19.5 $20.0 20% $18.7 $17.9 $18.2 $18.3 18% 18% 18% 17% 17% 17% 16% $15.0 15%
$10.0 10% 2010 2011 2012 2013 2014 2015 2016 CSOs as a Delivery Channel Percentage of Real ODA
Chart 21.2 CSOs as a Delivery Channel: Selection Donors, Share of Donor Real ODA Real ODA is ODA less In-Donor Refugee and Student Costs, Debt Cancellation and Loan Interest Repayment OECD DAC CRS+ © AidWatch Canada April 2018
France 2% Japan 3% Italy 6% Germany 8% Australia 10% United Kingdom 12% Spain 16% Denmark 19% Netherlands 20% Nor way 22% United States 22% Canada 22% Ire land 23% Sweden 24% Switzerland 28%
0% 5% 10% 15% 20% 25% 30%
considerable resources from the EU for by the Agency, may be affected by the their work. Similarly, CSOs that work potential massive cuts in US aid and closely with major governance programs changes in aid priorities by the Trump funded by USAID, or are contracted Administration.
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Priorities in CSO Development CSOs have been less involved in the Cooperation delivery of climate finance, representing only 5% of total ODA climate finance from As noted earlier (Chart 12.1) CSOs are 2010 to 2016, and 15% of adaptation particularly focused on sectors that are climate finance. strongly associated with priorities for poverty reduction. In 2016, 68% of CSO sector- While many donors have a general allocated ODA focused on the 12 proxy commitment to civil society’s roles as sectors that directly affect the prospects development actors, this commitment for people living in poverty (compared to has not been reflected in their support 36% for official donors). CSOs are more of women’s rights organizations. It is concentrated in the least developed and true that allocations to women’s rights low-income countries than DAC bilateral organizations have increased since 2011 ODA as a whole, with 52% of ODA for (see Chart 11.2). But as a share of total CSOs, and 43% for bilateral ODA in 2016. financing to and through CSOs, this (Chart 21.3) funding is a very small percentage, ranging between 0.9% and 1.6% of CSOs have also been strongly involved sector-allocated ODA to and through in the delivery of humanitarian CSOs.125 (Chart 21.4) assistance. Since 2010, CSO-delivered ODA humanitarian assistance has averaged The OECD DAC collects disaggregated 30% of total humanitarian assistance, not statistics on ODA finance through different including any privately raised funds for types of CSOs. While International CSOs these purposes. have increased their share of ODA that
Chart 21.3 Share of ODA to Least Developed and Low Income Countries: CSO Delivery Channel and DAC Bilateral ODA ODA Excludes debt cancellation; OECD DAC2a & DAC CRS+ © AidWatch Canada April 2018 60%
58%
56% 55%
54% 53% 53% 53% 52% 52%
50% 48% 48% 46% 46% 45% 44% 44% 43% 42%
40% 2010 2012 2014 2015 2016 CSO ODA to LDCs/LICs DAC Bilateral ODA to LDCs/LICs
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is channelled to and through them, the of threats of violence and intimidation, as share of Developing Country-Based well as legal and regulatory obstruction or CSOs has not changed and stands at a harassment, in their work with vulnerable mere 6% of total CSO finance.126 (Chart and poor populations. 21.5) In recent years, governments across the A Deteriorating Enabling Environment globe have implemented a contagion in for CSOs hundreds of restrictive laws against CSOs. These actions have ranged from onerous Civil society organizations (CSOs) are legal requirements for registration and crucial actors for achieving progress operation to severe restrictions on foreign for Agenda 2030. However, a global funding and limitations on the freedom crackdown on civil society is growing more to peaceful assembly. There has been prevalent in both non-democratic and widespread repression of trade unions, democratic countries, in the South and in indigenous rights organizations, women’s the North. CIVICUS reports that as many rights organizations and other human as 109 countries currently have closed, rights defenders. Many governments are repressed or obstructed civic space. This indiscriminately using existing laws and reality sets a disturbing context for citizen’s regulations to harass organizations that participation in local development in which raise uncomfortable issues for government. no one is left behind.127 Along with human rights activists, women’s rights promoters, A free and open civil society is essential in and environmentalists, civil society order to hold governments accountable, organizations are facing increasing levels and to give voice to marginalized
Chart 21.5 Allocation of DAC ODA through CSOs by Type of CSO Share of total development assistance to and through CSOs DAC, Aid for Civil Society Organizations, January 2018; © AidWatch Canada May 2018 90%
80% 77%
70% 69% Donor Country-Based CSOs 60%
50%
40%
30% International CSOs 25% 20% 17% Developing Country-Based CSOs 10% 6% 6% 0% 2010 2014 2016 Donor Country-Based CSOs International CSOs Developing Country-Based CSOs
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populations seeking to realize their rights, Countries. According to the study, India, regardless of the circumstances. Mexico, China, Brazil and Turkey were among the top 10 recipients of foundation 22. Philanthropic Foundations – Role in funding. These allocations meant that development cooperation growing, but the distribution by income group puts dominated by the Gates Foundation a strong emphasis on Upper Middle- Income Countries (29%) compared to 17% Philanthropic Foundations provide for ODA from donors and multilateral an average of $8 billion in organizations. The share for LDCs and development cooperation a year. LICs was 33% (compared to 44% for ODA). The Gates Foundation provides Foundations allocated 38% to Lower half of these contributions and Middle Income Countries (compared to is the third largest contributor 28% for ODA). to the health and reproductive health sectors. The study also noted that several developing countries have a growing The role of large philanthropic foundations domestic philanthropic sector, with has received an increasingly high profile domestic flows representing 83% of in development cooperation. From 2013 philanthropic finance in Turkey, 60% in to 2015 an OECD DAC study of more Mexico and 35% in China. than 130 foundations documented an average of $8 billion in philanthropic 23. Domestic Resource Mobilization – initiatives in developing countries.128 Limited government revenue to invest The US-based Bill and Malinda Gates in SDGs, with modest donor support Foundation dominates this engagement, providing almost half of the $8 billion total. for domestic resource mobilization In 2016, the Gates Foundation disbursed Almost all LDCs/LICs and $3.7 billion to developing countries, up from $3.0 billion in 2014. many LMICs have a per-capita government revenue of less In 2016 the majority of the assistance than $3,000. Revenue per capita from foundations (79%) concentrated in OECD DAC countries is more on the health and reproductive health than $15,000, which is five times sectors. The $2.7 billion for these sectors the revenue capacity of most was close to 20% of the total support developing countries. In countries provided by all bilateral donors for health with less than $3,000 per capita and reproductive rights, with foundations government revenue, 59% of the being the third largest donors. When population are living below the the Gates Foundation is removed from $3.10 a day World Bank poverty the analysis, the top sector is education, line. Even among UMICs, close to followed by health, government and civil one third (29%) are living on less society, population and reproductive than $5.50 a day. health, and environmental protection. While there is clear scope for Philanthropic foundations allocate most increasing domestic revenue of their resources (67%) to Middle-Income generation in many developing
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countries, it is also clear that these This 2018 analysis looks at government countries will require various revenue and poverty statistics for 101 levels of budget support and other developing countries (based on available forms of concessional assistance if data, current at least to 2010), of which 43 they are to meet the SDG targets. were LDCs or LICs, 25 were LMICs, and 33 Increased levels of ODA will be were UMICs. The following observations can essential for many years to come. be made:
Donor support for domestic • For the 49 countries with less than resource mobilization is $3,000 in per capita revenue (all but increasing, but in 2016 only a one is LDC/LIC or LMICs), 59% of the quarter of this investment (26%) population were living on less than was made in Least Developed and the $3.10 a day poverty line. Low-Income Countries, where it is • Of the 22 countries (out of 25) that most needed. are classified as LMICs, 39% of the population were living on less than Per capita revenue available to $3.10 a day. government • Among the 28 UMICs with more The 2016 Reality of Aid Report ‘s Global Aid than $3,000 per capita government Trends chapter examined the domestic revenue, 29% were living on incomes revenue available for governments to of less than $5.50 a day, the poverty meet their commitments, across a range line for these countries as set by the of developing countries.129 This revenue World Bank. Within this share of the included not only expenditures for health population consider poor, there was and education and other social and 12% who were living on less than economic support programs, but also for $3.00 a day. managing the rule of law, infrastructure investment, foreign policy, defense and While there is scope for increased other legitimate government expenses. domestic revenue generation in many developing countries, increased levels Updating this analysis for 2018, the of ODA will be essential for many years conclusion remains the same. Almost all to come, if these gross inequalities Lower Middle-Income Countries, Least in government capacities to meet Developed and Low-Income Countries the needs of hundreds of millions of have per capita government revenue of poor and vulnerable people are to be less than $3,000. The comparable per overcome. capita government revenue for OECD DAC Countries is more than $15,000. In OECD Domestic revenue generation countries, social spending by government has an impact on inequalities. However, The World Bank suggests that countries the limited government revenue of with tax revenues below 15% of their most developing countries leaves little Gross National Product will have difficulty besides spending on broken health and funding “basic state functions.” They education systems.130 observe that:
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“tax revenues in over one-third out of five countries “the net effect of taxes of IDA countries (36 percent) and and transfers is to increase the number 70 percent of fragile and conflict- of people living below the World Bank’s affected countries are below that extreme poverty line” and in Tanzania threshold, and tax revenues are “poverty is nearly 20 percent higher due to lowest in countries where most of taxes and transfers.”135 the very poor live.”131 Donor support for domestic resource Domestic resource mobilization in the mobilization (DRM) remains modest, poorest countries is falling behind needed but is growing.136 Gross disbursements expenditures. A recent IMF report on for projects dedicated to DRM almost global economic prospects concluded, doubled, going from $191 million in 2015 to $365 million in 2016. Unfortunately, “while lower commodity prices since only a quarter of this investment (26%) 2014 have dragged on revenue in was made in Least Developed and Low- commodity exporters, the broader Income Countries. The majority - almost pattern across low-income countries 60% - was devoted to Lower Middle Income of worsening fiscal positions Countries.137 suggests that domestic revenue mobilization efforts have generally The 2016 Reality of Aid analysis also fallen short of rising expenditure pointed to the importance of international requirements.”132 initiatives to stem the flow of illicit capital flight from developing countries as well as In Sub-Saharan Africa, where the collection the loss of revenue to developing countries of tax revenue is weakest, another IMF as a result of “profit sharing techniques” study pointed out that the maximum rate by transnational companies. The IMF of personal income tax has fallen from 44% estimates this to be between $100 billion to 32% since 2000, while the collection of and $300 billion.138 indirect value added taxes has increased substantially.133 H. Conclusions
Many CSOs, including the Reality of Aid In the face of converging global crises network, have called for donors to support of widespread poverty, increasing measures of fair taxation in developing concentrations of wealth and power, countries, ones which focus on progressive and the prospects of environmental taxes on assets such as income or land. catastrophe, ODA is a deeply compromised These taxes take into account the ability resource to help realize Agenda 2030. 134 of taxpayers to pay their share. Value- Yet ODA also remains the only resource, added taxes are easier to collect, but under government direction, which has place a heavy burden on poor people the potential to be a catalyst for truly and the hundreds of millions of working transformative and collective action. Donor poor who may live just above the poverty reforms in policies and practices could give line. A study of several African countries real priority to measures that directly support discovered that value added taxes are poverty eradication, reduce inequality, and actually contributing to poverty. In four build resilience to climate change.
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Aid effectiveness for Agenda 2030 requires poverty and the many expressions of donors to move beyond short-term inequality, including those relating to commercial and foreign policy interests gender and disability. Such policies are that currently drive aid allocations and rooted in an ethic of global solidarity, partnerships. Aid providers must return working for a sustainable planet and a to the reduction of poverty and inequality meaningful future for all. as the driving purpose of aid, collaborate in transformative partnerships towards 3. Donors must commit to greater ODA these ends, and reform their practices in transparency through a reform of support of developing country priorities. current DAC rules for aid reporting, consistent with an exclusive focus What are some benchmarks and directions on public concessional resources that indicate a determined donor for poverty reduction. Such reforms commitment to shape ODA as an effective require DAC agreement to remove in- resource for the SDGs? donor refugee and student costs and the full value of debt cancellation from 1. Donors must immediately set out their reported ODA. DAC members specific fiscal plans to increase must also revisit the expansion of concessional Real Aid volumes to these rules in the area of security and meet the UN ODA target of 0.7% military training. Aid is increasingly of their GNI. . Realizing this goal being used to backstop donor interests would have produced an additional in the deployment of military in fragile $200 billion in 2017, which is the order situations and migration control, of investment required to make a their use in anti-terror security sector difference for poverty eradication. reform, and as subsidies to donor Without substantial and sustained country-based corporations. increases in aid volume, the urgent demands of increasing humanitarian 4. Donors must ramp-up resources for crises, which must be met, will continue climate mitigation and adaptation to reduce aid resources available for finance to achieve, and hopefully sustainable long-term development. exceed, the $100 billion global climate finance target by 2020 2. The policy foundation for aid (of which $37 billion is expected increases requires well-defined to come from individual donor donor aid strategies that focus funding). Resilience and adaptation ODA on partnerships in developing to the impact of climate change is an countries, or in global public essential screen for all aid projects. goods, with a clear demonstration At the same time, donors must live of a positive impact on poor and up to their commitments in Bali vulnerable populations. These (2007) and Copenhagen (2009) that policies must not only respond to climate finance resources are to be emergency humanitarian needs. additional to current aid obligations. Instead, they must also give priority This commitment requires that attention to long-term structural climate resources be added to donor changes affecting all dimensions of schedules to achieve the 0.7% ODA
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target (noted in #1 above). This goal essential in the context of the SDGs’ can only be monitored if there are “leave no-one behind” commitment. clear aid and climate finance targets, or separate funding mechanisms 6. Donors must tackle quality issues for through which climate finance can be ODA, including the implementation of the tracked. 2011 development effectiveness principles that inform the Busan commitments 5. Poverty-focused ODA requires of the Global Partnership for Effective particular attention to overarching Development Cooperation. These includes: country and gender manifestations of poverty and inequality: • Increase country partner ownership over the priorities of ODA and other • Donors must address the expressed development flows intended for needs of Least Developed and Low- country development. While this core Income Countries by meeting the development effectiveness principle long-standing commitment that implies changes in donor practices at up to 0.2% of donor GNI is devoted the country level (see human rights to LDCs as part of increasing aid based approaches below), it also means budgets. Meeting this commitment reversing the declining levels of Country in 2017 would have resulted in more Programmable Bilateral Aid (CPA) than $90 billion for partnerships in accessible to country partners. these countries. • Strengthen country-led inclusive • Donors must return to the priority mechanisms for policy dialogue given to Sub-Saharan Africa in the and mutual accountability for 2000s, a strategy that resulted in more development cooperation at the than doubling the ODA to that region country level. Mechanisms should over the decade. There is an urgent include an institutionalized review of need for an emphasis on strengthening progress in donor practices promoting the capacities of Sub-Saharan African development effectiveness, ones that partners to address poverty where 42% are open to a diversity of development of the population are estimated to live in actors, including civil society, and be destitution and extreme poverty. fully transparent. • Donor support for programs focusing • Reverse the trend towards increased on gender equality, including use of loans as a modality in ODA, women’s rights organizations, particularly for Low-Income and must be dramatically increased. Lower Middle-Income Countries. Currently, 65% of Real ODA has no There is increasing concern that debt gender equality objectives – this unsustainability is returning for several is untenable. Advancing women’s of the poorest countries, particularly rights and gender equality are central in Africa. to making progress on all of the • Where ODA is partnered with the SDGs. Support for programs tackling corporate private sector, or used to other dimensions of identity-based mobilize such financing (blended inequality, though not currently finance and DFIs), all stakeholders tracked in DAC statistics, is also should be assured that initiatives 1)
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are driven by poverty and inequality reducing donor-led special funds and/ reduction as the primary objective; 2) or allowing UN organizations to direct priorities are consistent with inclusive these funds based on organizational country-led development strategies; priorities. and 3) all initiatives take account of 7. Donors should strengthen the human rights standards at all stages. focus of ODA for Agenda 2030 by Full transparency is key to development implementing their ODA through effectiveness. partnerships that have a human • Reform technical cooperation rights-based approach (HRBA).139 (TC) practices to respect the While aid is delivered through a range principle of demand-led technical of instruments and relationships, the cooperation. These reforms imply focus of HRBAs is on ownership of country management of TC, avoiding development priorities and approaches “soft conditionality” in the deployment at the country level. Central to this of TC, focusing on mutually agreed approach is an understanding of the upon capacity development efforts to unique human rights challenges of transfer skills and knowledge, and be poor and vulnerable populations. fully transparent and accountable for HRBA approaches work with local the work of technical assistants in TC partners to assess the changing power programs. dynamics faced by these marginalized • Reverse the trend towards increased populations. While sectoral priorities tied aid. Renewed attention to tied for ODA may not shift with the aid is urgent, particularly as there adoption of a HRBA, their objectives is evidence that informal tying of and implementation may well do so. aid continues unabated. As donors Implementation of HRBAs on the part consider directing increased levels of official donors requires concerted of aid to mobilize investment from senior institutional and political the corporate private sector, there leadership as well as deliberate efforts is concern that these measures will to build institutional capacities. The lead to more and different forms latter may involve human resource of tied aid. Tied aid has long been training and tools to support country demonstrated to increase costs for programmers. developing country partners and lead to inappropriate responses to their 8. Donors must address the shrinking development needs. and closing space for CSOs as development actors. Civil society • Strengthen the effectiveness and in all its diversity is a crucial actor in responsiveness of the multilateral advancing country level accountability system to issues of poverty as well as direct engagement with eradication and the reduction of communities affected by poverty and inequality in both the priorities and discrimination. The space for CSOs delivery of multilateral ODA. This is closing, particular for human rights objective includes not only increasing and women’s rights advocates, LGBTO core resources under the control of activists and environment activists UN organizations, but also measures working with affected communities. to bring coherence to UN initiatives by Donors can support this work through
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ongoing contact with vulnerable They can facilitate flexible financial human rights activists at the country arrangements for a diversity of CSOs level. Collectively donors can raise in developing countries and provide the profile of relevant issues at the institutional support. They can help international and national level. They expand the space for engagement can also undertake human rights due with civil society in international diligence in their foreign policy and organizations and multilateral support for donor-based corporations’ negotiation processes. investments in developing countries.
ENDNOTES
1 The following characteristics of ODA with-un-mandates.html. are adapted from Box One in Brian Tomlinson, ““Global Aid Trends, 2016, 5 See Concord, Aid and Migration: Financing Agenda 2030: Where are The externalization of Europe’s the resources?,” The Reality of Aid responsibilities, AidWatch 2018, 2016, Manila: IBON Foundation, 2016, accessed May 2018 at https:// accessible at http://www.realityofaid. concordeurope.org/2018/03/19/aid- org/roa_report/technical-cooperation- migration-aidwatch-paper/’ as-an-aid-modality-demand-led-or- donor-driven/ and an unpublished CSO 6 Saldinger, A., “What the US National Working Document on TOSSD, April Security Strategy sais about global 2018, coordinated by Luca De Fraia. development,” DevEx, December 19, 2017, accessed May 2018 at https:// 2 See Busan Partnership for Effective www.devex.com/news/what-the-us- Development Cooperation, December national-security-strategy-says-about- 2011, accessible at http://www.oecd. org/development/effectiveness/ global-development-91778. busanpartnership.htm. 7 Curtis, M. et al, The Conflict, Stability 3 All figures are in US dollars unless and Security Fund: Diverting aid and otherwise stated. undermining human rights.” Global Justice Now, December 2017, 4 See Adams, B., Martens, J. Fit for Purpose: accessed May 2018 at http://www. Private Funding and Corporate Influence in globaljustice.org.uk/sites/default/ the United Nations. Global Policy Forum, files/files/resources/conflict_security_ September 2015, accessed May 2018 and_stability_fund_diverting_aid_and_ at https://sustainabledevelopment. undermining_human_rights_web.pdf. un.org/content/documents/2101Fit_ for_whose_purpose_online.pdf and 8 On export credits, debt relief and “Market discourse has captured ODA see Eurodad, Exporting Goods or the development agenda to a point Exporting Debt: Export Credit Agencies that may be incompatible with UN and the roots of developing country debt, mandates,” Interview with Barbara December 2011, accessed May 2018 Adams, Global Policy Forum, March at http://eurodad.org/files/pdf/4735- 2, 2018, access May 2018 at https:// exporting-goods-or-exporting-debts- www.globalpolicy.org/home/270- export-credit-agencies-and-the- general/53041-market-discourse-has- roots-of-developing-country-debt-. captured-the-development-agenda- pdf. The DAC has agreed to change to-a-point-that-may-be-incompatible- the rules regarding the inclusion of
284 285 Trends in the Reality of Aid 2018: Growing diversions of ODA and a diminished resource for the SDGs
ODA loans effective in 2018. These publications/books/WCMS_626831/ rule changes and their implications lang--en/index.htm. are elaborated below in the section on trends in ODA loans. 16 See Yamey, G., and Hecht, Robert. “Are tough times ahead for countries 9 See Brian Tomlinson, “Global Aid Trends, graduating from foreign aid,” Future 2016, Financing Agenda 2030: Where Development Blog, Brookings, March are the resources?,” The Reality of Aid 8, 2018, accessed April 2018 at https:// 2016, Manila: IBON Foundation, 2016, www.brookings.edu/blog/future- pp. 130 – 133, accessible at http://www. development/2018/03/08/are-tough- realityofaid.org/roa_report/technical- times-ahead-for-countries-graduating- cooperation-as-an-aid-modality- from-foreign-aid/. Also Development demand-led-or-donor-driven/. Initiatives, “Income status is no basis for aid allocation decisions,” July 3, 2014, 10 See Kharas, H., and Rogerson, Andrew. accessed April 2018 at http://devinit.org/ “Global Development and Challenges: post/income-status-basis-aid-allocation- Horizon 2025 Revisted,” ODI Report, decisions/. October 2017, page 31, accessed June 2018 at https://www.odi.org/ 17 See the latest report, DAC, Aid in sites/odi.org.uk/files/resource- Support of Gender Equality and documents/11873.pdf. Women’s Empowerment, Donor Charts, March 2018, accessible at 11 Owen Barder, “Is the UK Putting Its Own http://www.oecd.org/development/ Interests Ahead of the Poor in Its New Aid financing-sustainable-development/ Strategy?.” Center for Global Development, development-finance-topics/Aid-to- Blog, December 10, 2015, access April gender-equality-donor-charts-2018. 2018 at https://www.cgdev.org/blog/ pdf. uk-putting-its-own-interests-ahead-poor- its-new-aid-strategy. See also Germany, 18 Canada’s feminist international assistance working together to eliminate poverty policy is available at http://international. focusing on extreme poverty, http:// gc.ca/world-monde/issues_ www.bmz.de/en/issues/Poverty/index. development-enjeux_developpement/ html and USAID, https://www.usaid.gov/ priorities-priorites/policy-politique. endextremepoverty. aspx?lang=eng and Sweden’s feminist foreign policy at https://www. 12 Allen, Robert C. 2017. “Absolute Poverty: government.se/government-policy/ When Necessity Displaces Desire.” feminist-foreign-policy/. American Economic Review, 107 (12): 3690-3721. 19 See Stephanie Fillion, “As Sweden and Canada Push a ‘Feminist Foreign 13 OECD DAC, Development Cooperation Policy,’ Others Resist the Label,” Report 2017, Paris, 2017, accessed PassBlue, February 12, 2018, accessed May 2018 at http://www.oecd.org/ April 2018 at http://www.passblue. dac/development-co-operation- com/2018/02/12/as-sweden-and- report-20747721.htm. canada-push-their-feminist-foreign- policy-other-nations-resist-the-label/. 14 Clair Hoy, “Projecting National Poverty to 2030,” ODI, March 2016, accessed 20 See Meeks, P., “Mixed Messages: April 2016 at https://www.odi.org/ The rhetoric and the reality sites/odi.org.uk/files/resource- of using blended finance to ‘leave documents/10355.pdf. no one behind’, Eurodad, November 2017, access June 2018 at http://www. 15 ILO, Women and Men in the informal eurodad.org/files/pdf/1546844-mixed- economy: A statistical picture, Third messages-the-rhetoric-and-the-reality- Edition, April 2018, accessed May of-using-blended-finance-to-leave-no- 2018 at http://www.ilo.org/global/ one-behind--1511464491.pdf.
284 285 The Reality of Aid 2018 Report
21 Sophie Edwards, “Inside the battle detailed discussion of this trend and its for replenishment at the Global impact on different UN organizations Partnership for Education,” DevEx, at http://www.realityofaid.org/roa_ December 20, 2017, accessed at https:// report/technical-cooperation-as-an- www.devex.com/news/inside-the- aid-modality-demand-led-or-donor- battle-for-replenishment-at-the-global- driven/. partnership-for-education-91688. 28 The DAC defines CPA as Gross Bilateral 22 Christin Roby, “GPE replenishment Aid less: humanitarian aid and debt misses targets, but sees ‘turning point’ relief (unpredictable aid); administrative in education financing,” DevEx, February costs, imputed student costs, 5, 2018, accessed at https://www.devex. development awareness, research com/news/gpe-replenishment-misses- and refugees in donor countries (no targets-but-sees-turning-point-in- cross boarder flows); and food aid, aid education-financing-92021. from local governments, core funding to NGOs, ODA equity investment, aid 23 Nicole Gaouette, “US abortion funding through secondary agencies and aid hurting health overseas, aid groups which is not allocable by country or argue,” DevEx, March 8, 2018, accessed region (do not form part of cooperation at https://www.cnn.com/2018/03/08/ agreements between governments). politics/global-gag-early-health- See http://www.oecd.org/dac/aid- impact/index.html and Human Rights architecture/cpa.htm. Watch, “Trump’s ‘Mexico City Policy’ or ‘Global Gag Rule’, Questions and 29 Peters, D., Paina, L., Schlelmann, Finn. Answers,” February 14, 2018, accessed “Sector-wide approaches (SWAps) in April 2018 at https://www.hrw.org/ health: what have we learned?,” Health news/2018/02/14/trumps-mexico-city- Policy and Planning, Volume 28, Issue policy-or-global-gag-rule. 8, 1 December 2013, Pages 884–890, https://doi.org/10.1093/heapol/ 24 Lena Sun, “CDC to cut by 80% czs128. efforts to prevent global disease outbreak,” Washington Post, 30 See Orth, M., J. Schmitt, F. Krisch, S. February 1, 2018, accessed at https:// Oltsch (2017), “What we know about www.washingtonpost.com/news/ the effectiveness of budget support. to-your-health/wp/2018/02/01/ Evaluation Synthesis,” German Institute cdc-to-cut-by-80-percent-efforts-to- for Development Evaluation (DEval), prevent-global-disease-outbreak/?utm_ Bonn, accessed June 2018 at https:// term=.59f7836408b1. www.deval.org/files/content/Dateien/ Evaluierung/Berichte/2017/DEval_ 25 Although levels of funding and their Synthesen_Bericht_2017_EN_bffinal. programs can be affected by powerful pdf. They found “convincingly broad donors such as the United States in evidence that budget support is indeed its recent (2017) implementation of its an effective modality in promoting policies restricting US funding for any important development outcomes, organization promoting abortion within such as improvements in public its family health work. financial management and budget processes and improved provision of 26 See for example, UNDP, “Funding public goods and services. In view of Compendium 2016,” accessed June 2018 these findings it appears worthwhile at https://www.undp.org/content/dam/ for donors – including those who have undp/library/corporate/Partnerships/ largely withdrawn from budget support Funding%20Compendium%202016. – to re-assess the modality.” pdf. 31 Quoted in Larry Elliott, “Global debt 27 See the Aid Trends Chapter in the now worse than before global financial 2016 Reality of Aid Report for a more crisis, says IMF,” Guardian, April 18, 2018,
286 287 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports
accessed April 2018 at https://www. 2018 at http://www.oecd.org/dac/ theguardian.com/business/2018/apr/18/ financing-sustainable-development/ global-debt-now-worse-than-before- development-finance-topics/OECD- financial-crisis-says-imf. PF4SD-Conference-background- document.pdf. 32 For examples of the DAC calculation of grant equivalency of loans for various 37 World Bank, “Maximizing Finance donor countries for 2016 see Table for Development: Leveraging 20 at http:// www.oecd.org/ dac/stats/ the Private Sector for Growth statisticsonresourceflowstodeveloping and Sustainable Development,” countries.htm. Development Committee, September 19, 2017, accessed 33 See OECD DAC, “Note on the treatment May 2018 at https://siteresources. of loan concessionality in DAC statistics,” worldbank.org/DEVCOMMINT/ accessed May 2018 at http://www. Documentation/23758671/DC2017- oecd.org/dac/financing-sustainable- 0009_Maximizing_8-19.pdf development/development-finance- standards/concessionality-note.htm. 38 Ibid, page 2.
34 For more detail see, Rob Tew, 39 The ODA private sector proxy uses the “Accounting for ODA Loans: The effect of following DAC sectors: large scale water the new rules,” Development Initiatives, and sanitation (14020, 14012, 14022), February 28, 2018, accessed April 2018 Transport (210:II.1), Energy (230:II.3), at http://devinit.org/post/oda-loans- Formal Financial Institutions (24030), accounting/ and “Modernizing ODA Business Services (250:II5), Industry, loans: impact of new DAC reporting Minerals, Construction (320:III.2), and rules (part2),” Development Initiatives, Trade Policies (331:III.3a). March 9, 2018, accessed April 2018 at http://devinit.org/post/modernising- 40 These sectors included large-scale oda-loans-impact-of-new-dac- water and sanitation, reporting-rules-part-2/. These briefing transportation, energy a n d papers provide an estimate of the communications sectors. impact on aid levels for various affected donors. 41 European Court of Auditors, “Public Private Partnerships in the EU: 35 World Bank, “From Billions to Widespread shortcomings and limited Trillions: Transforming development benefits,” March 20, 2018, accessed May finance,” Development Committee, 2018 at https://www.eca.europa.eu/en/ April 2, 2015, accessed April 2018 Pages/DocItem.aspx?did=45153 and at http://pubdocs.worldbank.org/ also Chakravarthi Raghavan, “Europe: en/622841485963735448/DC2015- PPPs show “widespread shortcomings 0002-E-FinancingforDevelopment.pdf. and limited benefits,” South-North OECD DAC, “ See also Christian Paradis, Development Monitor (SUNS),SUNS “Turning Billions into trillions: The #8660, April 12, 2018 accessed May power of blended finance,” DevEx, May 2018 at http://www.socialwatch.org/ 14, 2015, accessed May 2018 at https:// node/18035. www.devex.com/news/turning-billions- into-trillions-the-power-of-blended- 42 National Audit Office. The choice of finance-86148. finance for capital investment. March 2015. http://www.nao.org.uk/wp- 36 OECD, “Private Finance for Sustainable content/uploads/2015/03/The-choice- Development: New Approaches in of-finance-for-capital-investment.pdf Development Finance: the need for cited in Jubilee Debt Campaign (UK). mobilization for greater transformation The UK’s PPP Disaster: Lessons on and impact,” Background Document, private finance for the rest of the world. January 29, 2018, accessed May
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February 2017, accessed May 2018 at org/publications/making-blended- https://jubileedebt.org.uk/wp-content/ finance-work-for-the-sustainable- uploads/2017/02/The-Uks-PPPs- development-goals-9789264288768- disaster-web.pdf. en.htm.
43 Felix Dodd, “Un ECE Forum on PPPs,” 50 Pereira, J., “Blended Finance: What Blog, May 7, 2018, accessed May 2018 it is, how it works, and how it is at http://blog.felixdodds.net/. used”, Eurodad/Oxfam, February 2017, accessed 29 June 2018 at 44 See Romero, M., “What lies beneath? A http://www.eurodad.org/Entries/ critical assessment of PPPs and their view/1546703/2017/02/13/Blended- impact on sustainable development,” Finance-What-it-is-how-it-works-and- July 2015, accessed June 2018 at how-it-is-used http://www.eurodad.org/Entries/ view/1546450/2015/07/09/What-lies- 51 Benn, J., Sangaré, C., and Hos, Tomáš. beneath-A-critical-assessment-of- “Amounts mobilized from the private PPPs-and-their-impact-on-sustainable- sector by official development finance development. interventions,” OECD, July 2017, accessed May 2018 at http://www.oecd. 45 Reality of Aid, 2016, “Global Aid Trends, org/development/stats/mobilisation. 2016,” accessible at http://www. htm. realityofaid.org/roa_report/technical- cooperation-as-an-aid-modality- 52 OECD Making Blended Finance Work, op. demand-led-or-donor-driven/. cit.
46 See the case of the UK in Jubilee Debt 53 OECD DAC, OECD DAC Blended Campaign, “Double standards: How Finance Principles for Unlocking the UK promotes rip-off health PPPs Commercial Finance for the Sustainable abroad,” September 2017, accessed Development Goals, January 2018, June 2018 at http://www.eurodad.org/ accessed May 2018 at https://www. Entries/view/1546808/2017/09/07/ oecd.org/dac/financing-sustainable- Double-standards-How-the-UK- development/development-finance- promotes-rip-off-health-PPPs-abroad. topics/OECD-Blended-Finance- For the role of the World Bank in Principles.pdf. promoting PPPs see Mathieu Vervynckt and María José Romero, “Public Private 54 See inter alia, OECD Making Blended Partnerships: Defusing the ticking Finance Work, op. cit. time bomb,” Eurodad, October 2017, 55 Benn et al, op.cit. accessed June 2018 at http://www. eurodad.org/files/pdf/1546817-public- 56 See Meek, P., Mixed Messages, op. cit. private-partnerships-defusing-the- ticking-time-bomb--1518706762.pdf. 57 Saldinger, A., “Bipartisan bill gives US development finance a boost,” DevEx, 47 Ibid., page 16 February 28, 2016, accessed May 2018 at https://www.devex.com/news/ 48 See Pereira, J., “Blended Finance: bipartisan-bill-gives-us-development- What it is, how it works and how it is finance-a-boost-92214. used,” Research Report, Oxfam and Eurodad, February 2017, accessed 58 Anders, M., “What more private May 2018 at http://eurodad.org/files/ investment means for UK aid,” DevEx, pdf/58a1e294657ab.pdf. December 20, 2016, accessed May 2018 at https://www.devex.com/news/ 49 OECD, Making Blending Finance work what-more-private-investment-means- for the Sustainable Development Goals, for-uk-aid-89332. Executive Summary, January 2018, accessed May 2018 at http://www.oecd. 59 See for example, Meeks, P., “Is blended
288 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports
finance a silver bullet or a double-edged 67 See Tables 5 and 6 in OECD DAC, sword?,” Eurodad, January 31, 2018, “2018 Report on the DAC Untying accessed May 2018 at http://www. Recommendation,” April 3, 2018, eurodad.org/blended-finance- DCD/DAC(2018)12/REV2, accessed blog-2018. See also Eurodad, “ODA and June 2018 http://www.oecd.org/dac/ private sector instruments: New rules financing-sustainable-development/ raise major concerns,” January 2018, development-finance-standards/DCD- accessed May 2018 at http://www. DAC(2018)12-REV2.en.pdf. eurodad.org/files/pdf/5a565415a22a1. pdf. See also Pereira, J., “Blended 68 OECD DAC, TOSSD: A New statistical Finance for Development: Background measure for the SDG era,” accessed Paper,” Inter-Governmental Group of June 2018 at https://www.oecd.org/dac/ Experts on Financing for Development, financing-sustainable-development/ October 2017, accessed May 2018 development-finance-standards/ at http://unctad.org/meetings/en/ TOSSD%20Flyer%20crops.pdf. SessionalDocuments/tdb_efd1_bp_JP_ en.pdf. 69 Ibid.
60 OECD Making Blended Finance Work, op. 70 See TOSSD Task Force, “Possible cit. page 22. Emerging excerpts of TOSSD Reporting Instructions,” January 2018, accessed 61 Meeks, op. cit. May 2018 at https://docs.google. com/document/d/1o9hCnlOfm91Co- 62 See Pereira, op. cit. SiJSNb9Kj67TmwIXdfqglhfM8aQ0M/ edit?usp=sharing 63 Romero, M., “A dangerous blend? The EU’s agenda to ‘blend’ public 71 OECD DAC, TOSSD, op. cit. development finance with private finance, Eurodad, 2013, accessed 29 72 See DAC CSO Reference Group, June 2018 at: http://eurodad.org/ “TOSSD – Submission for the Second Entries/view/1546054/2013/11/07/A- Task Force Meeting,” Costa Rica, dangerous-blend-The-EU-s-agenda- December 6-7, 2017, accessed May to-blend-public-development-finance- 2018 at https://www.oecd.org/dac/ with-private-finance financing-sustainable-development/ development-finance-standards/DAC- 64 Latindad and others, “Development CSO-Reference-Group.pdf. Finance Institutions and Responsible Corporate Tax Behaviour: where For the 2013/2014 estimate of $32.2 we are and the road ahead”, 2016, billion in SSC see Brian Tomlinson, op. cit., accessed 29 June 2018 at: http://www. Reality of Aid Global Report 2016. On the counter-balance.org/wp-content/ many issues in measuring concessional uploads/2016/11/bp-dfis-responsible- South-South Cooperation see M. Di corporate-tax101116-en.pdf Ciommo, “Approaches to Measuring and Monitoring South-South Cooperation: 65 Reality of Aid 2016, accessible at http:// A Discussion Paper,” Development www.realityofaid.org/roa_report/ Initiatives, February 2017, accessed technical-cooperation-as-an-aid- April 2018 at http://devinit.org/wp- modality-demand-led-or-donor- content/uploads/2017/02/Approaches- driven/. to-measuring-and-monitoring- South%E2%80%93South-cooperation. 66 See the recommendations on technical pdf. assistance in Reality of Aid Coordinating Committee, “Undermining Democratic 73 For the 2013/2014 estimate of $32.2 Country Ownership: Embedding billion in SSC see Brian Tomlinson, op. cit., northern development agendas Reality of Aid Global Report 2016. On the through technical cooperation?,” Ibid. many issues in measuring concessional
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South-South Cooperation see M. Di Forum Blog, September 2017, accessed Ciommo, “Approaches to Measuring and April 2018 at https://www.weforum. Monitoring South-South Cooperation: org/agenda/2017/09/brics-new- A Discussion Paper,” Development development-bank-turns-two-what- Initiatives, February 2017, accessed has-been-achieved/. April 2018 at http://devinit.org/wp- content/uploads/2017/02/Approaches- 81 Salvatore Balbones, “China’s AIIB to-measuring-and-monitoring- Expected To Lend $10-15B A Year, But South%E2%80%93South-cooperation. Has Only Managed $4.4B In 2 Years,” pdf. Forbes, January 16, 2018, accessed May 2018 at https://www.forbes.com/ 74 John Hopkins China-Africa Research sites/salvatorebabones/2018/01/16/ Initiative, Chinese Global Foreign Aid chinas-aiib-expected-to-lend-10-15b-a- Expenditures, accessed April 2018 at http:// year-but-has-only-managed-4-4b-in-2- www.sais-cari.org/s/ForeignAid_v2-tfwt.xlsx. years/#62b667ac37f1.
75 Ben Parker, “Record-breaking 82 Associated Press, “China hits some donation from Saudi Arabia, UAE political, financial potholes on its modern sets stage for Yemen aid event.” IRIN silk road,” January 11, 2018, accessed News, April 2, 2018, accessed April May 2018 at https://www.voanews. 2018 at https://www.irinnews.org/ com/a/china-potholes-modern-silk- analysis/2018/04/02/record-breaking- road/4202964.html. donation-saudi-arabia-uae-sets-stage- yemen-aid-event. 83 Goh, E., and Reilly, James. “How China’s Belt and Road builds connections,” East 76 Only some countries such as China, Asia Forum, January 4m 2018, accessed Turkey and Mexico monetize their May 2018 at http://www.eastasiaforum. technical cooperation contributions. Di org/2018/01/04/how-chinas-belt-and- Ciommo, op. cit. road-builds-connections/.
77 UN EOSG & UNFCCC, Catalysing the 84 Brahma Chellaney, “China’s Creditor implementation of National Determined Imperialism,” Project Syndicate, Contributions in the context of the 2030 December 20, 2017, accessed May 2018 Agenda through South-South Cooperation, at https://www.project-syndicate.org/ UN, 2017, accessed April 2018 at http:// commentary/china-sri-lanka-hambantota- admin.indiaenvironmentportal.org.in/ port-debt-by-brahma-chellaney-2017- files/file/ssc_ndc_report.pdf. 12?barrier=accesspaylog and Hurley, J., Morris, S., and Portelance, Gailyn, “Will 78 Associated Press, “China to Allocate China’s Belt and Road Initiative Push $500Mln to Fund to Assist South-South Vulnerable Countries into a Debt Crisis?,” Cooperation,” September 5, 2017, Center for Global Development, March 5, accessed at https://sputniknews.com/ 2018, accessed May 2018 at https://www. asia/201709051057086716-china- cgdev.org/blog/will-chinas-belt-and-road- allocate-millions-south-fund/. initiative-push-vulnerable-countries-debt- crisis. 79 Australia Broadcasting Corporation, “A new player and the effectiveness 85 Duncan Green, “What do African civil of overseas aid,” Future Tense, society organizations think of the rise of Transcript, February 18, 2018, accessed China and South-South Cooperation,” May 2018 at http://www.abc.net.au/ Oxfam UK Blog, June 3, 2013, accessed radionational/programs/futuretense/ May 2018 at https://oxfamblogs.org/ development-aid-1/9423452. fp2p/what-do-african-civil-society- organizations-think-of-the-rise-of-china- 80 Leslie Maasdorp, “As the BRICS New and-south-south-cooperation/. Development Bank turns two, what has it achieved?,” World Economic 86 See ODI, “China’s new development
290 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports
agency: five expert views,” March 14, Law, “Effective Donor Responses to 2018, accessed April 2018 at https:// the Challenge of http://www.icnl.org/ www.odi.org/comment/10624-china-s- news/2018/Effective%20donor%20 new-development-agency-five-expert- responses%20FINAL%201%20May%20 views and Lisa Cornish, “China’s new 2018.pdf Closing of Civic Space,” April aid agency: what do we know,” DevEx, 2018, accessed May 2018 at http:// April 20, 2018, accessed May 2018 at www.icnl.org/news/2018/Effective%20 https://www.devex.com/news/china-s- donor%20responses%20FINAL%201%20 new-aid-agency-what-we-know-92553. May%202018.pdf.
87 OECD DAC CRS+: CSOs channeled $18.7 92 OECD, Private Philanthropy for billion in country/regional specified Development, the Development ODA and $5.2 billion in unspecified ODA; Dimension, March 2018, accessed May $28.2 billion in private resources raised 2018 at https://www.oecd-ilibrary.org/ by CSOs in DAC countries, derived from development/private-philanthropy-for- the country methodological section development_9789264085190-en. in Hudson Institute, Index of Global Philanthropy and Remittances, 2016, 93 Brian Tomlinson, Global Aid Trends, 2016, accessed May 2018 at https:// 2016, Reality of Aid 2016, accessible at s3.amazonaws.com/media.hudson. http://www.realityofaid.org/roa_report/ org/files/publications/201703IndexofGl technical-cooperation-as-an-aid- obalPhilanthropyandRemittances2016. modality-demand-led-or-donor-driven/. pdf. This 2016 analysis and the analysis in this section is draws from the excellent 88 Author’s calculation derived from annual data base maintained by Development reports of the various organizations for Initiatives, which can be found at http:// 2016. For ACT Alliance and CARITAS, data.devinit.org/. The author is very the figures are estimates based on the grateful for the assistance provided by majority of these network’s members. Development Initiatives in accessing Caritas - $2.1 billion; MSF - $1.7 billion; and interpreting this data. He also is World Vision International - $1.6 billion; responsible for the analysis derived from ACT Alliance - $1.3 billion; Oxfam the data. International - $1.2 billion; Save the Children International - $1.1 billion; 94 Kenny, C., and Sandifur, J., “Taxing the Plan International - $0.8 billion; CARE poor to give to the bureaucrat,” Center International - $0.3 billion; Actionaid for Global Development Blog, May 15, International - $0.3 billion; Terre des 2018, accessed May 2018 at https:// Homme International – $0.2 billion. www.cgdev.org/blog/chart-week- taxing-poor-to-give-to-bureaucrat. 89 DAC, Aid for Civil Society Organizations, 2015-2016, OECD DAC, January 2018. 95 World Bank Group, Equitable Growth, Finance, and Institutions (EFI), 90 Ibid, Table A3. “Domestic Resource Mobilization (DRM) and Illicit Financial Flows (IFFs),” Board 91 CIVICUS, State of Civil Society Report, Update, February 2017, accessed May 2018, accessed May 2018 at https:// 2018 at http://documents.worldbank. www.civicus.org/index.php/state-of-civil- org/curated/en/877291492623853466/ society-report-2018. See also Young, R., pdf/IFFs-DRM-Board-Note-Master- and Echague, Ana. “Shrinking Space for vFINAL-04102017.pdf. Civil Society: The EU response,” European Parliament, Director General for External 96 IMF, World Economic Outlook, April Policies, April 2018, accessed May 2018 2018, Washington, accessed May 2018 at http://www.europarl.europa.eu/ at http://www.imf.org/en/Publications/ RegData/etudes/STUD/2017/578039/ WEO/Issues/2018/03/20/world- EXPO_STU(2017)578039_EN.pdf and economic-outlook-april-2018. International Center for Not for Profit
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97 IMF, “Sub-Saharan Africa: Domestic 101 Data from the DAC CRS data set and Revenue Mobilization and Private its sector code for domestic resource Investment,” Regional Economic mobilization. Oxfam America’s analysis Outlook, April 2018, accessed May 2018 suggests that this dataset under- at http://www.imf.org/en/Publications/ estimates DRM support as it misses REO/SSA/Issues/2018/04/30/sreo0518. significant components devoted to Eurodad suggests that this decline is DRM in larger projects. the result of a broader tax “race to the bottom,” for which donors bear some 102 Brian Tomlinson, op. cit., Reality of Aid responsibility. See http://www.eurodad. Global Report 2016. org/Entries/view/1546849/2017/11/29/ Tax-Games-the-Race-to-the-Bottom. 103 See the review of human rights based approaches in aid relationships and 98 Brian Tomlinson, op. cit. some lessons donor agencies in Brian Tomlinson, “Implementing a Human 99 Kenny et. al, op. cit. Rights Based Approach: Lessons 100 For a thorough analysis of DRM see from the experience of providers’ Oxfam America, “State of DRM: What is international assistance,” AidWatch driving DRM? And in which direction?,” Canada, August 2017, accessed May Briefing Note, December 2017, 2018 at http://aidwatchcanada.ca/ accessed June 2018 at https://www. wp-content/uploads/2017/11/Final- oxfamamerica.org/static/media/files/ Implementing-a-HRBA-by-Providers. State_of_DRM_2017.pdf. pdf.
292 Measuring Brazilian South-South cooperation through a participatory approach
Luara Lopes and Juliana Costa, ASUL – South-South cooperation research and policy center
South-South cooperation (SSC) has been knowledge-exchange activities, there is an around for a long time, but theorists underlying and identifiableSSC quality that and practitioners alike still struggle to has been systematized into principles (See agree on what it actually means. The Figure 1). Its relevance was ratified and 1955 Bandung conference is usually confirmed in the 2030 Agenda, especially considered an initial landmark, but it through SDG 17. is possible to identify similar principles of autonomy and self-determination In the early 2000s, South-South relations in international alliances going back gained a new impetus, one that disputed the as far as an analyst chooses to look. space and narratives of the international development cooperation system and Along with deeply rooted anti-colonial challenged practices and principles principles, SSC has also been linked related to the Official Development to alternative development models, Assistance (ODA) from traditional donors especially during the Cold War period, and of the Organization for Cooperation and with the overcoming of structural issues Economic Development (OECD). (such as trade and intellectual property) that have hindered competition – and The process of reaffirming SSC coincided deepened dependency. In the late 1970s, with debates about ODA effectiveness - in however, SSC also became about the fact, about what should be understood as creation and adaptation of knowledge development in the 21st century. Connected and technical expertise, through what to this rethinking was the emergence of was then known as technical cooperation strongly mobilized civil society networks among developing countries, or TCDC. and coalitions, which were advocating The 1978 Buenos Aires Plan of Action for for a people-centered and rights-based Promoting and Implementing TCDC – or cooperation, whether at the national level BAPA – highlighted capacity-building as a or in regional and multilateral forums. The key SSC dimension. In a context of military impact of these two emerging actors (CSO regimes in Latin America and the end of networks representing the interests of the détente period in the bipolar regime, impacted populations and SSC advocates) political demonstrations gave way to a was considerable – and, at least in the case more technical dimension. of the CSOs, motivated several initiatives to keep up the political momentum and to SSC has, therefore, manifested itself in develop relevant research (Bracho, 2017). many forms throughout the decades. But whether it is seen as part of political The so-called Southern providers, alliances, concerted action in the trade however, continue to struggle to regime or in technical cooperation and support their normative discourse with
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Figure 1 South-South cooperation: conferences and principles
1955 Bandung conference • human rights • respect for national sovereignty 1978 Buenos Aires Plan of Action • horizontality • economic independence 2003 High Level Conference • capacity development on SSC, Marrakech • mutual benefits • solidarity 2009 UN High level conference on SSC, Kenya • efficiency and effectiveness • non-conditionality 2013 Delhi Conference of • diversity Southern Providers • transparency and accountability
evidence-based research and analysis. disbursements quite complicated and When it comes to providing useable required a unique approach. Instead of data and developing shared tools and looking for a previously defined object, methodologies for SSC measurement, our aim was to highlight budget lines and the lack of common definitions is a major expenses that had a clear SSC narrative, bottleneck (Diciommo, 2017). which could ultimately inform a more coherent and coordinated SSC public As a contribution to these debates, this policy. The general goal, therefore, is to chapter intends to share a recent approach foster an inclusive and evidence-based to measuring Brazilian SSC, that is part debate on what Brazilian SSC is – as well of a larger initiative of dialogue between as what it can become. governmental and nongovernmental stakeholders. The initiative, supported by Oxfam Brazil, has involved several Measuring what? A search organizations and networks. It began in for SSC narratives September 2016 with a multi-stakeholder workshop followed by capacity- In Brazil, the only official report available building activities on Brazilian national regarding the country’s contributions to accounting systems. The final report on international development cooperation – implementation was published two years known as COBRADI– supplies information on later, in Portuguese, in April 2018. federal disbursements from 2005 to 2013. It includes data from more than 90 federal The methodology is the result of institutions that has been collected through collective inputs and has been inspired an electronic survey form. COBRADI’s by existing budget-monitoring initiatives methodology is complemented by additional – however, the absence of a clear-cut SSC qualitative information provided by focal policy made the search for SSC-related points in participating institutions.
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The COBRADI report was not intended for its constant delay. Another negative as a SSC report, but rather tried to aspect is that COBRADI’s database is not assess Brazilian contributions to open, so the only available disaggregation international development since its first is that which is made in the report itself, edition, published in December 2010. which limits the scope of evidence-based It was a pioneer assessment that sought analysis. to include contributions from different ministries and federal entities, collecting The development of a budget-monitoring scattered and unidentified information methodology was thought to address in a context of little awareness of SSC many of these issues. In the first workshop, – at least not by that name. Moreover, several points were raised: it offered, for the first time, an official narrative on Brazilian contributions to • By extracting information from the international development, no longer as online budget system, it would be an exclusively receiving country but as possible to have updated information an exporter of social policies and ideas. on SSC-related expenses at the federal The foreword, signed by President Lula level; da Silva, emphasized that the objective • The process would allow for strategic of Brazilian cooperation was not to policy-advice on how to improve SSC replicate vertical models of aid, but accountability and visibility; rather was based on mutual benefits and responsibilities among equals. • Proposing an open perspective on what SSC can include or exclude would The COBRADI reports became the empower different stakeholders main reference for measuring and to participate in policy debate and understanding Brazilian SSC: what it implementation; and entailed, how much was spent, which • Finally, this process could provide ministries and agencies were involved and an adjustable perspective that could where the money was allocated. In this foster dialogue and comparison with sense, it was the first reference in terms of other Southern providers. what needed to be examined in the federal budget system. Implementation began in late 2017 in the Despite being the only comprehensive main online platform known as SIOP (the report on Brazilian cooperation, Union’s integrated budget and planning COBRADI’s survey-based methodology system). The SIOP provides data from demands significant political and January 2000 and is constantly updated bureaucratic engagement and duplicates with disbursements as they are created efforts in implementation and reporting. and approved by budget authorities within Consequently, each edition takes federal agencies and ministries. It is open considerable time and effort from its and relatively user-friendly. However, publishing institutions (the Institute of in order to collect information from the Applied Economic Research – IPEA, a selected timeframe (January 2000 to governmental think-tank and the Brazilian December 2016) it was necessary to use an Cooperation Agency from the Ministry of automated program to collect information Foreign Affairs), which partially explains from the system.
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The SIOP allows for free text in input fact, results showed a significant increase fields that describe each expenditure. on the use of SSC vocabulary from 2005 This means that data is not standardized until the end of the analysed period. or easily identifiable. It has, nonetheless, allowed for increased transparency and Considerable efforts were made to ensure detailed information: a complementary that criteria were comprehensive so section created in 2011 made it possible as to include any expenditure possibly to describe each budgetary expenditure related to international cooperation. in terms of goals, specific budget lines, As expected, this resulted in tens of legal framework and, in some cases, to thousands of disbursements. The next access detailed contract information for step was to analyze these disbursements rendering goods and services. individually, classifying them according to their predominant narratives. This required The methodology implementation significant work from a dedicated team of began by filtering information from SSC experts, and motivated very fruitful SIOP according to a list of key-words, methodological debates along the way. that are linked to SSC narratives - that included the names of all countries An initial challenge was separating (regardless if North or South), as well programmatic expenses from ordinary as general terms such as “international” ones related to foreign policy. Once and “cooperation”. The automated the latter were identified and excluded, program conducted a series of searches the total number of entries diminished in every input field available in SIOP. significantly. In fact, it left only three Our hypothesis here was that a clear SSC general categories: 1) contributions to narrative for specific budget expenditures international organizations, banks and would suggest a stronger SSC awareness funds; 2) international cooperation and 3) among policy-makers and bureaucrats: in South-South cooperation (See Figure 2).
Figure 2 - ASUL Federal budget monitoring: Initial results, Distribution of Brazilian international development cooperation expenditures (2000 - 2016)
Contribution to inter- South-South national organizations, International cooperation cooperation banks and funds USD 2.32 billion USD 4.44 billion USD 0.5 billion
Source: SIOP total amounts, USD current values.
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General results were encouraging: organizations, which may impact the Figure 3 illustrates how total amounts accuracy of SSC-related numbers. resulting from the implementation of our methodology coincided with those from Brazil does not have an enabling SSC legal the official reports.1 framework.3 In fact, it has a receiving country legislation, that prevents it from sending Contributions to international resources abroad. Thus, several international organizations, banks and funds represented organizations (mostly the UNDP but also approximately US$4.44 billion, accounting WFP, ILO among others) serve as facilitators, for more than 65% of the total amount in managing resources that come from the the period. But a central question was why Union’s budget to implement Brazilian SSC these contributions should be identified as program and projects. This suggests that Brazilian cooperation for development. some portion of what has been classified as contributions to international organizations is The first COBRADI report includes Brazil’s actually SSC. However, in the absence of a contributions to international thematic clear identification linked to SSC vocabulary or multipurpose organizations (which it was not considered as such by ASUL’s was misleadingly called “multilateral methodology. cooperation”), as well as regional banks and funds.2 Although the budget-monitoring The international cooperation category methodology did coincide with the official comprises only 6% of the total amount data, it has also raised a few issues that identified in the period. It is made up need to be addressed in order to improve of budget registries that, on the one transparency. For example, budget registries hand, have a dimension of international do not discriminate between assessed and cooperation, but, on the other hand, do not voluntary contributions to international have a clear SSC narrative. They were too
Figure 3: Official Report COBRADI (2005-2013) and ASUL budget monitoring (2000-2016)
Source: COBRADI Report and SIOP
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ambiguous to fit inside the SSC category, or The SSC category only included federal they were actually disbursements related to disbursements that had clear narratives international cooperation received by Brazil. identifying it. It represented 28% of the total amount identified for the Having a dual personality as both period, but it may, as we have seen, provider and receiver in the international been underestimated. Moreover, and development cooperation system, far as it will be briefly described in the next from being an exception, is a defining trait section, it was possible to examine it of many Southern providers. Because of according to five different predominant this duality, this category of disbursements narratives: 1) defense and peacekeeping; included, for instance, payments related 2) cross-border integration; 3) science and to the development of a nuclear-powered technology; 4) cultural and educational; submarine that resulted from a “strategic and 5) humanitarian cooperation. partnership” between Brazilian and French defense ministries. Nevertheless, South-South cooperation lost and found this category may also include SSC- related disbursements that could not be According to ASUL budget-monitoring clearly identified: a generic budget line methodology, all federal disbursements for “international technical cooperation,” that had a clear SSC narrative were for example, is likely to include TCDC, classified as such. According to Figure but the lack of a clear SSC narrative or 4 they could also be divided into five the identification of the partner country predominant narratives:4 prevented it from being reclassified.
Figure 4 Distribution of Brazilian South-South cooperation disbursements (2000-2016): predominant narratives
Source: SIOP
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• Peacekeeping missions and defense: amongst Portuguese-speaking Comprising little less than US$1 billion countries as well as foreign student for the period, disbursements from grants for graduate and post- the Ministry of Defense represented graduate programs in Brazilian more than 40% of the SSC category. universities. Representing 10% of Since they were all from the same SSC disbursements, it also included institution, budget registries were expenses related to the Lusophone fairly standardized and included and Latin American Universities disbursements related to Brazil’s (UniLAB and Unila): Although they participation in peacekeeping missions were both located in Brazilian territory, in Haiti, Lebanon and East Timor, all UN their main mission was regional and mandated missions. As already stated extra-regional integration with a in the COBRADI report, a significant focus on foreign students, and they part of these expenses are reimbursed were particularly strong in upholding by the United Nations Department of the principles and rationale of South- Peace-Keeping Operation (UN-DPKO), South cooperation in culture and after a very thorough accountability education, especially in the first half of process, so they should not be the analyzed period; and considered net disbursements; • Humanitarian cooperation: The • Cross-border integration: Although internationalization of the zero- it was absent from the official reports, hunger agenda formed the base of the the budget-monitoring methodology disbursements related to South-South identified a narrative of regional humanitarian cooperation. It included integration in disbursements related support to international cooperation to infrastructure projects across and civil society participation in municipalities in national frontiers and the field of family farming, school in the MERCOSUR corridor. The latter, feeding, as well as disaster response however, despite having a clear SSC and in-country refugee support. It narrative of regional integration, consists represented 8% of SSC disbursements, largely of disbursements related to with a peak in 2010 with the Brazil’s projects within national borders; response to the Haitian earthquake. • Science and technology (space cooperation): Federal disbursements What we have not found was equally that had a clear SSC narrative within important. Brazil’s flagship cooperation the field of science and technology initiatives in agriculture and health, for represented over 20% of all SSC instance, were surprisingly absent, as well expenses in the period. Cooperation as virtually all technical cooperation. As with China for the development of mentioned, data regarding contributions the earth resources satellite was one to international organizations, which of the main disbursements in this was not included as SSC, may explain the category, along with cooperation with absence of Brazilian technical cooperation. Ukraine to develop a satellite launcher These organizations play the role of TCDC on Brazilian territory; enablers, managing Brazilian funds (and • Cultural and educational: This charging the equivalent overhead) to category accounts for cooperation implement projects and programmes in
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partner countries. Although it responds local and central governments (from both to a necessity, that is, the lack of a legal the global North and South) had adopted framework for SSC in Brazil, it also raises PB policies in their own national realities, a few questions: Is all TCDC, triangular strengthening democratic participation cooperation? What are the implications and improving accountability (Porto, of this arrangement for accountability, for 2017). The methodology we propose to instance? Since funds are managed by an measure SSC is in the spirit of participatory international organization, they are not budgeting aimed at facilitating the integrated into the national transparency engagement of multiple stakeholders in systems. This is not to say they are opaque the process of measuring and, at the same – quite the contrary, the recently launched time, conceptualizing and strengthening UNDP Transparency Portal5 offers detailed Brazilian SSC. information on these agreements, including budget utilisation and project South-South cooperation cannot be documents. But they are not visible in the measured solely through financial flows. national budget as TCDC. Nonetheless, understanding budget allocations can help enlighten practices ASUL’s methodology has highlighted and priorities of Southern providers. cases such as this and developed specific The numbers we share here are actual recommendations for better identification disbursements (or outlays) made by the Brazilian government, which were of expenditures. The team is also described in the budgetary system, by engaged in national and international official accounting authorities, using a advocacy, in order to influence a more SSC vocabulary and narrative. They offer open and participatory approach to a concrete perspective on what SSC may SSC measurement and monitoring. By entail, and a baseline for further debate identifying different manifestations of and methodological exercises. SSC in the national budget system we are encouraging the international debate Numbers may be well below expectations without advocating for a closed conceptual (and speculations), especially if compared framework. Countries that wish to report to traditional OECD references. and compare any or all of the existing Measurement, however, is different than narratives can do so, based on their own value. To understand the value of SSC national systems, and according to their we must go beyond measurement and own interests and availability. tackle the issue of SSC assessment and evaluation, while finding a way to include Towards participatory SSC domestic constituencies and impacted populations in partner countries. In the late 1980s, the Brazilian city of Porto Alegre implemented a social participation Fear that numbers may misrepresent the policy that became known as participatory national effort that is required to engage budgeting (PB). The main idea was to in SSC partially explains the resistance include a wider part of the population in the of Southern providers to openly address process of city budget allocation, through them. In this sense, some have argued an annual cycle of public consultations and for the use of corrective methodologies, deliberations. By 2012, more than 2,500 such as applying Purchase Power Parity
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or using UN-type salaries to account for an action plan to promote and implement technical hours of national professionals. technical cooperation amongst developing As valid as these exercises may be, countries - TCDC. The 1978 BAPA had they need a concrete baseline, which is already called attention to a context of what this methodology aims to provide. changes in relationships between developed Understandably, Southern providers do and developing countries and denounced not want to replicate OECD metrics and its governance as anachronistic and methodologies – however, it cannot be an unequal. Next year there will be an official excuse for being unaccountable. commemoration of its 40th anniversary, the BAPA+40, and the richness and complexity Forty years ago in Buenos Aires, of the topic cannot dispense with a broad, representatives of 138 countries agreed on participatory and evidence-based debate.
REFERENCES
CABRAL, Lidia. Brazilian technical cooperation consideraciones para lacooperación for development: drivers, mechanics mexicana. Oxfam Mexico and NeST and future prospects. Overseas Mexico, 2018. Development Institute, 2010. SUYAMA B et.al.,Monitoring and Measuring BRACHO, Gerardo. The troubled relationship of South-South Cooperation Flows In of the emerging powers and the Brazil, March 2017, effective development cooperation PORTO, Osmani. International Policy agenda: history, challenges and Diffusion and Participatory Budgeting: opportunities. DeutschesInstitut fur Ambassadors of Participation, Entwicklungspolitik, 2017. International Institutions and DI CIOMMO, Mariella.Approaches to Transnational Networks. London, 2017. measuring and monitoring South– POMEROY, M.; WAISBICH, L.; LOPES, L. Southcooperation. Development Building an agenda for the monitoring Initiatives discussion paper, 2017. MORALES, Analíliaand PEREZ-PINEDA, and evaluation of South-South Jorge. Debate sobre lamedición y cooperation for development, Policy laevaluación de lacooperaciónSur-Sur: Brief, São Paulo: ArticulaçãoSul
ENDNOTES
1 The peak in 2016 refers to a presidential 3 A study from the Overseas Development decree that authorized payment of Institute (ODI) authored by Lidia Cabral late contributions regarding Brazilian details the institutional challenges and membership in international organizations, constraints for Brazilian SSC (CABRAL, in the amount of nearly USD 1 billion. 2010). 2 Besides UN-system agencies, the Fund for Structural Convergence and Institutional 4 We have chosen to use the term “predominant Strengthening of Mercosur (Focem), the narratives” since they are not necessarily International Development Association (IDA) SSC modalities, but they do share common of the World Bank Group, the Inter-American elements that allowed them to be included in Development Bank (IDB) and the African a specific narrative within SSC. Development Bank (ADB) were the main receivers of Brazilian federal contributions 5 Accessible through the following link in the first assessed period. https://open.undp.org
301 One step forward, Two steps back: Brazil’s impact in aid and international cooperation
Ana Cernov, Human Rights Activist and Independent Consultant, Brazil
Over the past decade, there has been a that funding for development and human growing recognition that the space for civil rights is being questioned in the North society is shrinking and that restrictions has huge consequences for Southern for social movements and organizations groups, limiting their capacities to engage are affecting transparency, participation in these debates and to advocate for truly and democracy itself. It is important, democratic processes in their countries. however, to note that in the Global South, restrictions have always existed. In the early 2000s, groups in Brazil and Corporate power and clientelism, along throughout Latin America obtained with the heritage of colonialism, have considerable support and engagement to created barriers to meaningful social and rebuild democracy after their dictatorship political dialogue that have never fully periods. In 2010, the Brazilian Association opened. Many groups, such as LGBTI, Afro- of Non-Governmental Organizations descendants and indigenous people, have (ABONG using Portuguese initials) never had access or a voice in shaping prepared a profile of its 270 members,1 policies and presenting demands at both examining, amongst other issues, the the government level but also with other extent of international cooperation in sectors of civil society. its members’ budgets. Interestingly, that study confirmed that in 2003, 22.5% of What is different about this current period ABONG members had 61% to 80% of is that the threats are no longer limited to their budgets covered by foreign funding the South. Northern groups are struggling and 35.2% had 81% to 100% of their costs with change and unpredictability as much paid through international cooperation. as Southern groups. In both the South Just four years later (2007), the numbers and North, people are suffering from were more balanced: 20.6% of members the repression of protests and dissent, received 20% of their resources through growing anti-democratic legislation, international cooperation (in 2003, it was and elected leaders with little or no only 7%), 20.6% had 21% to 40%; 18.5% respect for human rights guarantees. It had 41% to 60%; 21.7% had 61% to 80%. is increasingly difficult, almost impossible Only 18.5% received between 81% and to secure funding for any resistance to 100% from international sources. these backlashes and the undermining of democratic values and practices. In the early 2000s, debates on the financial sustainability of civil society focused on On the one hand, the current situation the importance of diversifying sources of provides opportunities to promote support to avoid donor dependency. Later, equality and solidarity between groups in these discussions extended to debates the North and the South as both work to on appropriate funding models. A cycle address similar threats and support each of economic growth and improvement other in these struggles. However, the fact of social-economic indexes pushed Latin
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America and the Caribbean to adopt new overall trend has been maintained - data roles in aid –whereby they became, in from 2016 shows that the region received some instances, donors themselves but around 7.9% of total ODA resources. even more importantly, hubs for learning rather than just at the receiving end of During the 2000s, Brazil used its strong resources. economic momentum to develop policies for external technical and financial A 2010 survey2 conducted with 41 cooperation, despite remaining on the international CSOs operating in Brazil OECD list of ODA recipients. From 2011-13 indicated that several of these international Brazil provided the equivalent of US$ 1.5 organizations were preparing to leave billion to support projects in 159 countries. or re-adjust their relationship with the This support included individuals and country’s civil society. Aside from Brazil’s multilateral organizations, with the latter high level of economic development, the accounting for 53% of that assistance.5 reasoning for this decision included: Countless articles and panels have • the impact of the 2008-9 economic crisis discussed Brazil’s adjustment to its and consequent reduction of budgets; changing roles from an aid recipient to • changes in priorities and/or interest in recipient and donor, including the path other regions; to reach this status as a global player alongside its BRICS peers.6 Its claim to • changes in an organization’s strategic this space was legitimate with a strong focus; foreign policy based on South-South • the increased potential for domestic relations, defense of multilateralism and, fundraising and possibilities for the domestically, important achievements self-sustenance of Brazilian civil society. through social inclusion programs.
According to this survey, the amount But this space, one that Brazil craved, invested locally by these organizations was built on an unstable foundation. It dropped 50% from US$88 million to depended on economic success based approximately US$40 million between on high commodities prices, with a 2009 and 2010. significant portion of the funds originating in the infamous Brazilian Economic and In 2012 Brazil’s economy surpassed that of Social Development Bank (BNDES). It was the UK, making it the world’s sixth largest strongly linked to the popular and trusted economy.3 Brazil’s economic performance Brazilian leader, President Lula, and there cemented the view that a country as was no real alternative leadership after his wealthy as Brazil should not continue term ended. Brazilian civil society harshly receiving foreign aid. However, aid cuts for criticized Brazil’s lack of transparency in the government also meant international terms of the country’s foreign aid practices cooperation cuts to Brazil’s civil society. as well as the many contradictions between domestic and international policies. One Data from 2011 confirms that official example of this was seen in the embattled development assistance (ODA) dropped ProSavana project in Mozambique, a by 2.7%. In 2010, Latin America was the triangular initiative with Japan, where the recipient of only 7% of ODA in comparison development rhetoric and its practice did to 37% to Africa and 30% to Asia.4 This not match. The long term program (30
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years) was built on the assumption that through international cooperation. Local big agribusiness and family agricultural sources have been, and continue to be, models could coexist, something that scarce. One alternative sought by local has not been possible in Brazil and has groups was to deliver services through been a historic source of conflicts in rural partnerships with the government at the areas. This unequal and failed model, local and national level. Since Brazil is not a which causes Brazil to be a leader in the country used to open debate and funding of assassination of land rights defenders7 its civil society, the distrust was enormous. and use of pesticides,8 was exported to This context resulted in unpractical and Mozambique, with consequences as bad as complicated bureaucratic hurdles that hit foreseen by the Brazilian and Mozambican harder smaller organizations, with less civil societies, such as farmer’s struggle to access to international dialogue. As Soares keep their land.9 discusses in “Funding for NGOs” (O Dinheiro das ONGs in its original title in Portuguese), While the government tested its new this difficulty demonstrates the contradiction roles in foreign assistance, Brazilian civil between recognizing the importance of civil society suffered from funding cuts in society - as Brazil does in its progressive international cooperation. The strong 1988 Constitution – while not providing ways economic growth produced gains but whereby the State can support participation local philanthropy did not keep pace. A and dialogue with civil society outside of the survey conducted by a local think tank service delivery model. stated that while 77% of the Brazilian adult population made donations in 2015, only Soares’ publication, produced by 46% was in the form of financial donations ABONG and the Brazilian Civil Society to an institution.10 In fact, the estimated Observatory,11 also exposes another amount of donations was equivalent to important point. In situations where the only 0.23% of the country’s GDP. No doubt State is not ready to create mechanisms the country’s philanthropic sector has to support civil society and public opinion grown over the last decade, but it has not is not providing the necessary donations, replaced international cooperation, as was it does not necessarily follow that expected. As a middle-income country with businesses will fill the shortfall. In fact, a booming economy, Brazil still did not pay evidence shows that businesses prefer to the costs needed to guarantee that its civil lead their own projects, as confirmed by society would continue to protect acquired a census conducted by Brazilian group rights and defend policies to attend to the GIFE – Group of Institutes, Foundations poorest and most vulnerable in society. and Enterprises. Research demonstrated that in 2012, only 30% of the social “Historically, the Brazilian civil expenditure by businesses was invested in society was structured during the re- civil society groups. The remainder, 70%, democratization process, from the was used to develop their own projects. struggles to guarantee social and These numbers remain approximately the political rights and against the military same in the Census of 2016.12 One theory dictatorship, that lasted from 1964 to is that businesses have to justify their 1985.” (SOARES: 9). social spending, which requires impact measurement, and once a company This history has meant that the country’s develops its own initiative, control over it civil society has been supported primarily becomes easier.
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Funding also contains political challenges. high level diplomacy the EU can still Many have suggested that fundraising be strikingly cautious in confronting through individuals could be the answer regimes engaged in brutal civil society to acquire not only resources, but also crackdowns. The general direction program supporters, and thus greater of EU security policy often undercuts protection for civil society. However, efforts to hold the shrinking space this approach is costly because of the problem at bay,"14 structure involved and harder to become successful for causes that are advocacy- The concept of philanthropy and focused or political. Individuals in Brazil government aid is still being developed in will support charitable causes and donate many countries of the South, especially the time, but tend to back away from rights- kind that supports independent political based actions. This claim is supported by work to maintain an open civil society. So the numbers from the World Giving Index the non-controversial approach of the EU, produced by the UK-based Charities Aid its member states and many donors is Foundation – which combines data on deeply troubling. This approach has been money donations, volunteer time and duplicated in Brazil, particularly since the help provided to strangers. According country’s terrible crisis and the unjustified to this Index, Brazil ranks 75th amid 139 impeachment of President Dilma Rousseff countries overall and 85th when the list based on false accusations. focuses on financial giving.13 In August 2016, northern governments This challenging scenario is not exclusive were quick to recognize Michel Temer as to Brazil. The same report shows that the new president, despite substantial developed countries ranked in the top evidence that he had arranged his 20 most generous nations experienced predecessor’s fall in order to orchestrate a decrease in fundraising in 2016. This a neoliberal agenda of reforms that was may be partly due to poor economic not endorsed in the election. In 2016, conditions, but it can also be a reflection this illegitimate government gained the of the increased anti-foreign sentiment power to dictate the direction for national felt across EU countries. This sentiment, policies and the use of ODA to enforce aligned with the rise of populism, may these plans. In that year, Brazil received contribute to Europeans being more US$674.6 million in aid from Germany, reluctant to donate to civil society groups. the European Union, France, Norway, According to an analysis by the European Japan, the top five partners respectively, Parliament, national governments are not to implement aid programs in education, taking action to revert this trend, but are health, infrastructure, humanitarian choosing to support it instead: programs and other areas.
"uncontroversial, development CSOs. Commodity prices have not kept up with (...) In some cases this has helped the early to mid-2000s levels that allowed keep some link to civil society open; in the country to grow and create programs many cases, however, critics say it has to reduce poverty and inequality. But that inadvertently helped regimes isolate is not the only reason social indicators outspoken civil society opponents are decreasing dramatically in a country under the guise of partnering with once considered too wealthy to justify the EU on development policy. In its receiving international cooperation
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support. Beginning with President Rousseff, took the unprecedented step of and intensified by Temer’s illegitimate freezing real public spending for 20 government still in power in 2018, there years. By constitutionalizing austerity has been a series of austerity measures to in this way, any future elected dismantle social guarantees, public policies governments without an absolute and spaces for dialogue. In a short period majority will be prevented from of time, the damage has been enormous, democratically determining the size with the potential for even greater impacts of human rights investments needed as documented by UN and civil society to deal with aging populations and experts, from both Brazil and abroad. increased financing needs. The UN Independent Expert on Extreme Poverty and Human Rights considered According to a study conducted by the the EC 95 ‘a radical measure, lacking Institute for Socioeconomic Studies in all nuance and compassion’, (INESC), Oxfam Brazil and the Center for arguing that the amendment ‘has all Economic and Social Rights (CESR), the the characteristics of a deliberately country’s austerity measures have led to retrogressive measure’ (Alston, a sharp decrease in investments in social 2017). This call reinforced an earlier inclusion and human rights programs in statement by the Inter-American 15 Brazil. This has resulted in a reduction Commission on Human Rights that of 83% in youth programs, 76% for the government’s turn to harsh food security, 72% for climate change austerity measures may well be in programs, 60% for racial equality. Over violation of its legal obligations (IACHR, the same period, expenditures based on 2016). Under international law, states’ foreign debt grew 90% and the refinancing margin of discretion in responding of foreign debt has increased 344%. to economic crises is not absolute. To be in compliance with human According to the study, the poverty rights standards, fiscal consolidation reduction and social inclusion achieved by measures must: be temporary, strictly Brazil over the past decade is at risk: necessary and proportionate; non- discriminatory; take into account all “These advances are at imminent possible alternatives, including tax risk from a series of harmful and measures; protect the minimum severe austerity measures put in core content of human rights; place by the government starting and be adopted after the most in 2015. While aimed at tackling careful consideration with genuine spiking deficits, these initiatives participation of affected groups are deepening socioeconomic and individuals in decision-making inequalities in Brazilian society, processes (CESCR, 2012, 2016).”16 with particularly disproportionate impacts on those already What the Brazilian example shows is that disadvantaged. Among the most social inclusion achievements are fragile. extreme of these measures, the They require substantial, vigilant protection Constitutional Amendment 95/2016 by governments and civil society. In 2012, (EC 95), known as the ‘Expenditure Brazil was being celebrated for having Ceiling Act’, is particularly far- the sixth largest economy in the world. In reaching in its harm to human rights. 2014, its name was removed from the UN Coming into force in 2017, this act Hunger Map for the first time. Currently,
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it is battling for its name not to be put peoples. Conversely, fundamentalisms back on that map and is dealing with a have been strengthened. sharp decline in its social indicators, once celebrated worldwide. With debates on the future of aid and cooperation, it is clear that civil society has an Sadly, this trend is evident throughout Latin important role to play, as it did in the period America. Over 2.7 million people returned of re-democratization following the downfall to poverty during the period of 2014-16. of the dictatorships. It will not be easy to A decade ago, foreign aid declared most restore the path of dialogue, participation of the region wealthy enough to see a and influence on public policies that benefit reduction in partnerships. But without the all, not just a small elite. In Brazil, with its pressure provided through international size and importance in the region, it is even partnerships in funding and attached more vital for civil society to be strengthened political support, human rights have been and vigilant in order to help the country get compromised by parliaments, especially back on a track of development that, unlike for the most vulnerable groups: women, the boom experienced in the 2000s, is LGBTI, Afro-descendants and indigenous sustainable and lasting.
REFERENCES
Ana Cernov, "Civil society is not the enemy", SUR Devex. “Setting its own course, Brazil foreign aid 26 (2017), accessed July 26, 2018, http://sur. expands and evolves”, July 2, 2012. Accessed conectas.org/en/civil-society-is-not-the-enemy/ July 29, 2018. https://www.devex.com/news/ setting-its-own-course-brazil-foreign-aid- AssociaçãoBrasileira de OrganizaçõesNão- expands-and-evolves-78631 Governamentais (Abong), “CadernosAbong no 17: Bases para um novo pacto de INESC, FIAN Brasil and PlataformaDhescaBrasil. cooperação” (1997), accessed July 26, 2018. “Oral Statement to the United Nations http://www.bibliotecadigital.abong.org.br/ Human Rights Council 38th regular handle/11465/226 session”, June 21, 2018. Accessed July 30, 2018.http://www.conectas.org/wp/ AssociaçãoBrasileira de OrganizaçõesNão- wp-content/uploads/2018/06/Oral- Governamentais (Abong), “CadernosAbong no Statement-%E2%80%93C2A0Interactive- 26: As ONGs e a solidariedadeinternacional” (1998), accessed July 26, 2018. http://www. Dialogue-IE-on-extreme-poverty- bibliotecadigital.abong.org.br/handle/11465/174 %E2%80%93C2A021-June-2018.pdf
CelsoAmorim. “Brazilian foreign policy Institute for Socioeconomic Studies (INESC), under President Lula (2003-2010): an Oxfam Brazil and the Center for Economic overview”. (2010) Revistabrasileira de and Social Rights (CESR). “Factsheet: Brazilś políticainternacional, v. 53, p. 214-40. human rights advances imperiled by Accessed July 29, 2018. http://www.scielo.br/ austerity measures”(2018), accessed July pdf/rbpi/v53nspe/v53nspea13.pdf 26, 2018. http://www.cesr.org/sites/default/ files/Brazil%20Austerity%20Factsheet%20 Christian Aid UK. “The Scandal of Inequality 2: the English%20FINAL.pdf multiples faces of inequality in Latin America and the Caribbean.” (2017) accessed July 26, IPEA. Mapa das Organizações da Sociedade 2018. https://www.christianaid.org.uk/sites/ Civil 2018, accessed July 26 2018. https:// default/files/2017-08/scandal-inequality- mapaosc.ipea.gov.br/publicacao.html 2-multiple-faces-inequality-latin-america- caribbean-march-2017_2.pdf Just Associates and Fund for Global Human Christian Science Monitor, “Foreign funding Rights, “Defending Rights in Hostile dries up for Latin American NGOs”, July 22, Contexts: Understanding and Confronting 2013, accessed May 10, 2017. https://www. the Crackdown against Activists and Civic csmonitor.com/World/Americas/2013/0722/ Space” (2018), accessed June 23, 2018. Foreign-funding-dries-up-for-Latin- https://justassociates.org/en/defending- American-NGOs rights-hostile-contexts
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MainaKiai, “From funding projects to funding struggles: accessed July 26, 2018. http://observatoriosc. Reimagining the role of donors”, Open Global org.br/publicacao/o-dinheiro-das-ongs/ Rights (2017), accessed July 26, 2018. https://www. opendemocracy.net/openglobalrights/maina- TacianaGouveia and Marcelo Daniliauskas. kiai/from-funding-projects-to-funding-struggles- “Abong: Panorama das Associadas”, reimagining-role-of-donors AssociaçãoBrasileira de OrganizaçõesNão- Governamentais (Abong) (2010), accessed Mesa de Articulación de PlataformasNacionales July 26, 2018.http://www.bibliotecadigital. y RedesRegionales de América Latina y el abong.org.br/handle/11465/214 Caribe. “Estudio Regional sobremecanismos de financiamiento de lasorganizaciones de la The Brookings Institution, “Executive Summary: sociedad civil en América Latina” (2014), accessed Resilience or in decline: Current trends in July 26, 2018. http://mesadearticulacion.org/wp- Latin American democracy”, September content/uploads/2014/10/Estudio-Mecanismo- 29, 2017, accessed July 29, 2018. https:// Financiamiento.pdf www.brookings.edu/wp-content/ uploads/2018/01/fp_20170112_resilient_ NicolauSoares, “O Dinheiro das ONGs”, decline_trends_latin_american_democracy. Observatório da Sociedade Civil (2014), pdf
ENDNOTES
1 For more information on the panorama report/brazil-pesticides/ accessed August of Abong affiliates in 2010, see: 12, 2018 TacianaGouveia and Marcelo Daniliauskas. “Abong: Panorama das Associadas”, 9 Enrico Parenti& Stefano Liberti. AssociaçãoBrasileira de OrganizaçõesNão- Mozambique's farmers battle to keep Governamentais (Abong) (2010), accessed land in Nakarari. Al Jazeera (2018)https:// July 26, 2018.http://www.bibliotecadigital. www.aljazeera.com/indepth/features/ abong.org.br/handle/11465/214 (available mozambique-farmers-battle-land-nakarari- in Portuguese). prosavana-180205085026683.html accessed August 12, 2018. 2 Investigacõessobre a Conjuntura dos Investimentos das OrganizacõesInternacionais 10 Institutopara o DesenvolvimentodoInvestimento no campo social brasileiro no período de 2008- Social. “PesquisaDoaçãoBrasil 2015” (2016) 2010 (2010) D3: Dialogo, Direitos e Democracia accessed July 26, 2018. http://idis.org.br/ e InstitutoFontehttp://institutofonte.org.br/ pesquisadoacaobrasil/ sites/default/files/pesquisa_D3.pdf, accessed on July 26, 2018. 11 For information on the Brazilian Civil Society Observatory (Observatório da Sociedade 3 https://www.theguardian.com/ Civil in its original name in Portuguese), refer business/2012/mar/06/brazil-economy- to: http://observatoriosc.org.br worlds-sixth-largest 12 To access a summary of the GIFE Census 4 Mesa de Articulación :6. on Social Investment in Brazil, check: https://gife.org.br/censo-2016-keyfacts/cso- 5 Brazilian Cooperation for International capacity-building.html (in English). Development http://www.abc.gov.br/ imprensa/mostrarConteudo/900 13 Charities Aid Foundation "2017 World Giving Index" https://www.cafonline.org/ 6 To learn more about the BRICS and docs/default-source/about-us-publications/ international cooperation, see INESC’s cafworldgivingindex2017_2167a_ publication on the issue, available web_210917.pdf?sfvrsn=ed1dac40_10 in Portuguese at: http://www.inesc. accessed on October 26, 2017. org.br/biblioteca/publicacoes/outras- publicacoes/brics-e-cooperacao-para-o- 14 European Parliament's Subcommittee desenvolvimento-i/view. on Human Rights. "Shrinking space for Civil Society: the EU response", April 7 Global Witness. At What Cost? (2018) https:// 2017, http://www.europarl.europa.eu/ www.globalwitness.org/en-gb/campaigns/ RegData/etudes/STUD/2017/578039/EXPO_ environmental-activists/at-what-cost/ STU(2017)578039_EN.pdf. Accessed on accessed August 12, 2018. October 25, 2017.
8 Paulo Prada. Why Brazil has a big appetite 15 INESC et all (2018) for risky pesticides. Reuters (2015) https:// www.reuters.com/investigates/special- 16 Ibid. 1. 308 The Case of China’s Development Co-operation in Infrastructural Development in Angola and Kenya
Vitalice Meja, Reality of Aid Africa
and conditions, to expand credit scales, and Introduction and Background to support infrastructure building in Africa among other things. It agreed to expand At the first Forum on China-Africa the China-Africa Development Fund from Cooperation (FOCAC) meeting, held in US$5 billion to US$10 billion. China has 2000, China announced a number of also established the Assistance Fund measures to enhance African development. for South-South Cooperation to support It pledged doubling assistance by 2009 African countries in implementing the 2030 through the provision of US$3 billion of Agenda for Sustainable Development. preferential loans and US$2 billion of preferential buyers’ credits, the creation of US$5 billion Africa-China development Chinese South – South fund, and cancellation of debt owed by Development Co-operation the heavily indebted least-developed in Context countries. (FOCAC 2006) China formulated its African Policy Paper At the 2015 FOCAC, China and African on China-Africa bilateral cooperation in the heads of state agreed to take concrete context of its South-South Development measures and give priority to encourage Co-operation (SSDC). The policy paper is Chinese businesses and financial consistent with the “go abroad” policy of institutions to expand investment in the Chinese government to promote an Africa. It would do so through various increase of Chinese investment in foreign means such as Public-Private Partnerships countries, especially in Africa, as well as to (PPP) and Build-Operate-Transfer (BOT) strengthen collaboration between African schemes to support African countries in countries and China. The policy paper sets their efforts to build railroads, highways, out the following pillars: as well as other infrastructure projects. These include African flagship projects, in • Political pillar covering high-level particular the Program for Infrastructure visits, exchanges between legislative Development in Africa and the Presidential bodies, political parties and local Infrastructure Championing Initiative. governments, and cooperation in (FOCAC 2015) international affairs; • Economic pillar covering trade, China committed to offer African countries investment, finance, agriculture, US$35 billion of concessional loans and infrastructure, natural resources, export credit lines; to create new financing tourism, debt relief, investment and models, to optimize favorable credit terms multilateral cooperation;
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• Human resource development programs of the Chinese state. It decides on with a focus on education, science, the portion of the national budget that is culture, health, technology, media, designated to SSDC at the beginning of the administration, consular services, budgetary year. The Ministry of Finance is environment, disaster mitigation, responsible for drawing up the development humanitarian cooperation and people- co-operation budget in consultation with to-people exchange; and the Ministry of Commerce. • Peace and security with a focus on China has since created an aid agency military affairs, conflict settlement/ called the State International Development peacekeeping, judiciary and police. Cooperation Agency, (SIDCA) to promote (FOCAC 2006) aid coordination and aid planning. The agency like those of the west will seek Chinese instruments of development co- to incorporate aid in foreign diplomacy operation have thus been designed to and maximize China’s foreign interests, support progress in the four pillars of increasing its influence on the global scale. development co-operation. Over the years, It plans to strengthen trilateral partnerships Beijing has restructured its development between China, OECD DAC, and southern co-operation policy and imposed additional countries as well as buttress the monitoring restrictions. Interest-free government loans and evaluation of Chinese development have become discounted loans offered cooperation impact. through Chinese banks and aid grants have been replaced by joint ventures and other The Ministry of Commerce, specifically the forms of cooperation. Department of Aid to Foreign Countries, coordinates China’s foreign aid policy, Chinese assistance, therefore, goes beyond including inter-governmental agreements, the concept of concessional ODA flows as and reviews requests from the Ministry defined by the Development Assistance of Foreign Affairs on foreign aid. Other Commitee (DAC) of the Organization for relevant institutions are the respective Economic Cooperation and Development ministries and local embassies in Africa that (OECD). It includes various types of are tasked with monitoring implementation economic and political cooperation, such of aid that falls under their jurisdiction and as grants, loans, export credits, trade and expertise (Davis, Edinger, Tay and Naidu: investments – some of it equivalent to the 2008). A number of different bodies also DAC’s ODA concept, while others not. It is play a role in the management of the therefore difficult to separate instruments various projects once the implementation of Chinese development co-operation from begins. In addition to the local embassies, other types of economic cooperation. EXIM Bank1 loans are closely monitored by the Bank itself. Management of Chinese South - South Development Co-operation Criteria of Chinese aid
China’s State Council, which is the highest The Government of the People’s Republic executive organ of the state administration, of China’s basic criteria for funding a project is the oversight body that oversees all SSDC through concessional loans is as follows:
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• The project should be approved by or Ministry of Finance or other both the Chinese Government and the authorized government institutions of Government of the borrowing country; the importing country, and should be acknowledged by Exim Bank of China. • The project should be technically The borrower should have a reliable feasible and able to generate credit standing, and should be capable favourable economic returns; of paying all the principals, the accrued • The project should be of good social interests and related fees and charges benefit; of the loan as prescribed in the agreed • Chinese enterprises should be repayment schedule. selected as contractors/suppliers • In the event that the borrower is not ahead of other countries; the Ministry of Finance, a government • Equipment, materials, technology guarantee may be required if the or services needed for the project balance sheet of the borrowing should be procured from the People’s institution is not satisfactory. Republic of China ahead of other countries; and Country Cases • In principle, no less than 50% of the procurements should come from the Angola People’s Republic of China. Angola is Sub-Saharan Africa’s second Concessional loans availed by the largest oil producer and the world’s fourth Government of the People’s Republic of largest producer of diamonds (6.3 million China have the following terms: carats in 2003). Despite these riches, there has been, limited progress towards social • The management fee is calculated on and economic normalization. As well, the basis of the total amount of the much remains to be done to improve the loan and paid in one lump sum before transparency, accountability, and efficiency the first loan is drawn down; of the government; to increase effective • The commitment fee is calculated on social spending (especially in health and the basis of the withdrawn amount of education); to rehabilitate destroyed the loan and paid on interest collection infrastructure; and to rebuild national dates; and capacities devastated by decades of conflict. Corruption and mismanagement • Repayments are made semi-annually of public resources remains an obstacle to on 21 March and 21 September of people’s empowerment. every year after the grace period. Nevertheless, strong economic growth, The buyer’s credit Loans for developing supported by political stability, stable inflation, countries have the following terms and financial security and rapid improvements in conditions: infrastructure that have been realized over the last decade has distinguished Angola as • The borrower should be a foreign one of the most vibrant economies on the importer, or the importer's bank, continent (see Table 1).
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Table 1: Angola’s Economic Outlook Public Finances (percentage of GDP) 2010 2011 2012 2013 2014 2015 Total revenue and grants 43.5 48.8 45.8 42.5 38.4 36.2 Tax revenue 6.7 6.1 5.6 5.7 5.9 6 Oil revenue 36 40.2 38.5 35 30.8 28.5 Total expenditure and net lending (a) 34.9 38.6 37.1 40.1 43.4 43.1 Current expenditure 29.5 29.9 25.8 28 30.5 30.3 Excluding interest 27.3 29 24.9 26.5 29.6 29.6 Wages and salaries 10 9 8.5 8.4 8.1 7.7 Interest 2.2 1 1 1.5 0.8 0.7 Capital expenditure 5.5 8.6 11.2 12.1 13 12.8 Primary balance 11.4 11.2 9.7 3.9 -4.2 -6.2 Overall balance 9.2 10.2 8.7 2.4 -5 -6.9
Source: Government of Angola 2016
Angola is among the largest recipients flagging exports to other countries amid of Chinese investment in Africa. The the global financial crisis. country is strategically important to China for a number of reasons. First, its vast Relations between the Peoples Republic oil deposits make it attractive to China’s of China and Angola date back to the fight national oil corporations, supporting for national independence and its first China’s search for energy security and financial assistance and military training China is aggressively pursuing oil assets. support during the 1960s and ‘70s. From Secondly, as an African west coast the year 2000, the two countries renewed economy, Angola has great potential as a their relations, with Angola seeking to gateway to the region, especially to Central rebuild its economy and the infrastructure Africa, particularly the DRC. Angola is destroyed by 27-years of civil war and also one of the most fertile agricultural with China seeking oil and investment regions in Africa, offering great potential opportunities for its private and state- for commercial agricultural development. owned enterprises. Angola is currently China’s largest African trading partner, with bilateral trade Development co-operation between China amounting to US$ 25.3 billion in 2008, and Angola grew in late 2003, when a dwarfing even China’s trade with South “framework agreement” for new economic Africa at US$ 17.8 billion. Such strong and commercial cooperation was signed trade figures are primarily on the back of by the Angolan Ministry of Finance previously high oil prices. Currently more and the Chinese Ministry of Trade. The than 30% of Angola’s crude exports go to following year, the first $2-billion financing China. China has pledged to increase its oil package in concessional loans for public imports from Angola, and it is hoped that investment projects was approved, an uptake in Chinese demand will mitigate payable over 12 years. At the time,
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project proposals, identified as priorities Intermediate goods are imported from the by Angolan ministries, were presented relevant companies in China. to the Grupo de Trabalho Conjunto, a joint committee of the Angolan Ministry China in Angola’s Infrastructure of Finance and the Chinese Ministry for Foreign and Commercial Affairs, for review China’s growing need for raw material and funding. resources has made it one of the most important partners for development In Angola the coordination of Chinese co-operation in the South. The Chinese development co-operation functions government has succeeded in securing the under a special office under the Angolan supply of oil from Angola through a number Presidency. In 2005, the President formed of agreements, including partnerships Angola’s Reconstruction Office, Gabinete in infrastructure rehabilitation and de Reconstrução Nacional (GRN). This development financed through oil-backed office, which is exclusively accountable loans. China ensures that the Angolan to him, manages large investment government employs a number of Chinese projects and ensures rapid infrastructure construction firms to do the job required reconstruction. According to Campos by the signed agreements. After making and Vines (2008) and Corkin (2007), the the selection of the companies required GRN was also created on the assumption for a given infrastructure project, the that the ministries would not have the Chinese government provides this list to organizational and technical capacity to the Angolan government. The Angolan manage the large inflows of money for government is expected to use the Chinese reconstruction. loans to fund construction projects, with the understanding that around 70% of the The bulk of Chinese financial assistance is construction companies involved in these reserved for key public investment projects projects must be Chinese. in infrastructure, telecommunications, and agro-businesses under the Angolan The initial funding for infrastructure government’s National Reconstruction development in Angola was provided by the Program. The China Construction Bank China Construction Bank (CCB) and China’s (CCB) and China’s Exim Bank provided Exim Bank in 2002. Chinese investment the first funding for infrastructure in the rehabilitation of infrastructure development in 2002. Since the CCB rose to more than US$4.5 billion by and Exim Bank funding was provided 2003. Sino-Angolan cooperation has led directly to Chinese firms, the Angolan to the rebuilding of national roads, the Ministry of Finance had little input in building of a new airport on the outskirts these arrangements (Campos and Vines of Luanda and other major infrastructure 2008). The main Chinese development projects throughout the country. These assistance instrument to Angola is in the infrastructural projects are implemented form of commodity-secured loans. The by Chinese companies. One of the largest guarantor of the loans is the National Bank upcoming projects is the US$59.4 million of Angola. The guarantee is strengthened upgrade of a road in Lunda Sul Province, by a commitment to adjust the quantities which will be handled by the China National in the oil supplied to China. The credits Machinery Industry Corporation Group. are directed to public investment projects. Other key projects include rebuilding the
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roads from Caconda to Chicomba and China Road and Bridge Corporation Caconda to Rion Ngalo. These are being (CRBC). The project, which was funded carried out by the China Railway 20 Bureau from a US$211 million loan, required the Group Corporation, with the work costing building of 10 new bridges as well as the an estimated US$58.8 million. repair and construction of 200 aqueducts. It employed 3,000 Angolan and Chinese In 2004, Angola signed nine new workers for over two years. cooperation agreements with China following a visit to Angola by the Chinese Most Chinese SSDC projects have been, and Vice Premier, ZengPeiyang (Corkin and are continuing to be implemented through Burke, 2006). These agreements, which state-owned or state-invested enterprises of were meant to support projects in the the Chinese state. The Chinese state-owned fields of agriculture, energy, water, enterprises (SOEs) receive considerable education, mass media and infrastructure, assistance from their government in terms of were signed by the Angolan Ministry of information on the market tenders in Angola Finance and the China EXIM Bank (Corkin as well as capital. The projects are supported and Burke, 2006). In January 2005, the by Chinese oil-backed loans that are included China Exim Bank extended an oil-backed in the cooperation agreement between the US$1 billion credit line to the Angolan Chinese and Angolan government. Chinese government, later doubling it and then companies are able to overcome barriers to further increasing it to US$ 3 billion in entry faced by other companies due to the March 2006. This made China the biggest capital provided by China as well as the lower player in Angola’s post-war reconstruction interest rate provided by the EXIM bank. process (Corkin and Burke, 2006). The Angolan government also has had to create enabling conditions for the co- The loan – payable at 1.7 percent over operation to take effect. The government 17 years – was intended to assist in of Angola has allowed Chinese companies the rebuilding of vital infrastructure. to pay their laborers lower wages while In exchange, Angola provided China their competitors must follow the country’s with 10,000 barrels of oil per day. This labor policies. The government has also agreement was significant, particularly given Chinese companies tax allowances because Angola had, at the time of to import the raw materials they need for the agreement’s conclusion, been construction from China. experiencing difficulties in securing capital from international financial In their evaluation of the implementation institutions such as the Paris Club, IMF of these projects, Chinese companies cite and the World Bank. local barriers, such as the poor quality of local labour and construction materials. They The most popular construction maintain that the shortage of African skilled projects in Angola are road and bridge employees as well as Chinese employers’ infrastructure, water infrastructure and lack of trust in their abilities has meant railway rehabilitation (Corkin and Burke, that only 8% of the labour requirements 2006). For example, the rebuilding of are sourced locally. The rest, over 90%, the road that was destroyed in the 1975- is imported from China. The language 2002 civil war was undertaken by the barrier may also be one of the reasons
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Chinese companies prefer to hire Chinese In order to export produce from Kenya, workers. However, the institutional the country needs effective transportation distance between the construction firms infrastructure. Current transport and the community poses a challenge infrastructure in Kenya amounts to for democratic ownership of the various 177,500 KMs of roads, with 63,000 KMs development projects initiated by Chinese making up classified (read major) roads state-owned firms. and 114,500 KMs of unclassified (read rural) roads. Major investment is required Kenya for the approximately 40% of Kenya’s roads that need maintenance, mainly in Since 1996, Kenya has attracted the rural areas. Connecting these areas is considerable public and private clearly the key infrastructure task at hand investments into the country’s economic for the Kenyan government. To its credit, infrastructure sectors. Kenya’s Vision 2030, it has actively tried to encourage such the country’s development blueprint, development, promoting itself as a stable aspires to transform Kenya into a newly and geographical “gateway” to Africa. industrialized middle-income country, with high quality services and facilities. It National Development gives high priority to investments in all the Framework infrastructure sectors. Kenya‘s Vision 2030 sets forth the Kenya’s Africa Infrastructure Country national objective of transforming Kenya Diagnostic (AICD) report estimated into a globally competitive, middle- that the country’s infrastructure deficit income country through substantially would require sustained expenditures of higher growth rates and more balanced approximately $4 billion per year (around development. Its Vision 2030 recognizes the 20% of GDP) over the next decade. As of importance of developing infrastructure 2006, Kenya needed an additional $2.1 for socio-economic transformation. billion per year (11%of GDP) to meet that funding goal. The estimated requirements The infrastructure sector aspires for a shot up because of the desire to meet the country that has modern metropolitan Vision 2030 goals and for Kenya to be the cities, municipalities and towns, whose regional hub for East Africa and beyond. facilities meet international standards, making Kenya globally competitive and The provision of adequate and high quality prosperous. The strategies and measures infrastructure services remains to be the to be pursued in the medium term biggest challenge to the development include: 1) supporting the development of Kenya. Currently, the Government of of infrastructure initiatives around Kenya faces a growing gap between public flagship projects; 2) strengthening the investment needs and available resources institutional framework for infrastructure to finance them. Over the years the development; 3) raising the efficiency and Government and traditional development quality of infrastructure and 4) increasing partners have been the main financiers the pace of infrastructure development. of public infrastructure and services, but this role has been limited by the level of Vision 2030 seeks to realize average resources available. annual GDP growth rates of 10%, through
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investments in priority infrastructure sectors and loans for infrastructure, plants and including national flagship development equipment. These are primarily in road projects. These are to be financed and construction projects; the modernization implemented through 3-year medium-term of power distribution; rural electrification; plans. Kenya is currently implementing the water; renovation of the international MTP II, which ran up to 2017. sports centre; medical centers and drugs for fighting malaria; and construction of a Kenya - China Relations malaria research centre. For many years China has awarded scholarships to Kenyan Kenya-China relations date back to 14 students wishing to undertake their December 1963, two days after the formal studies in China in a variety of fields. Table establishment of Kenyan independence. 2 shows the magnitude of China’s support China became the fourth country to open to Kenya’s infrastructure. an embassy in Nairobi. The Sino-Kenyan relationship was centered on promoting In 2006, Kenya and China signed six trade between the two countries. China has agreements, which signaled closer its largest African embassy in Nairobi. China economic and technical cooperation currently gives both monetary and non- between the two countries. The signed monetary aid to Kenya covering loans and agreements included the Economic and grants for projects and concessional loans for Technical Cooperation Agreement on the construction of various roads in the country. provision of concessional loans by China to Kenya and the Air Services Agreement China's assistance to Kenya is exclusively that grants Kenya Airways landing rights project-based. It mainly supports in several cities in China. Also signed were investment in infrastructure, equipment agreements on radio cooperation between and plants; academic training; technical the State Administration of Radio, Film training; humanitarian relief; and tariff and Television of China and the Ministry exemptions. China has given Kenya grants of Information and Communications of
Table 2. China Aid to Kenya on Infrastructure in Kenyan Shillings 2015/2016 2015/2016 Draft Estimated (KES) Draft Estimated (KES) GoK Grant Loan GoK Grant Loan Amount AIA Revenue AIA Revenue Amount AIA Revenue AIA Revenue Ministry of Transport and Infrastructure Gambogi-Serem Road 0 0 Nairobi Eastern and Northern Bypass Project 2 Billion Nairobi-Thika Highway Improvement Project (LOT 3) 2 Billion 500 Million 0 Nairobi Southern Bypass Project 2.5 Billion 5.1 Billion 0 5.52 Billion 0 Standard Gauge Railway 3.88 Billion
*100 Kes – 1 USD Source: Compiled by the Author
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Kenya as well as a collaborative agreement road at an estimated cost of U$379 million between the General Administration over a four-year period. of Quality Supervision Inspection and Quarantine of China and Kenya's Bureau The Chinese strategy for infrastructure of Standards. This cordial relationship construction has been marked by the between the two governments has development of either extremely long facilitated the award of a tender to stretches of motorway or concentrated Chinese contractors to improve various networks within major cities. Chinese infrastructure. (Mugendi: 2011) firms have, for example, sought to ease traffic congestion in Nairobi by completing China on Kenya’s Infrastructure by-passes in the north, east and south of the city, and by linking the Jomo Kenyatta China has continued to develop major International Airport to the city centre. transport links to support its economic Where motorways are concerned, the interests in Kenya as well as the Eastern Chinese have invested approximately Africa region covering Uganda, Rwanda U$240 million in the rehabilitation of the and the DRC. There has been an increase in Nairobi-Mombasa road. Chinese infrastructure investment in Kenya. Chinese companies have been involved in Analysis of the Country Case the construction of major road networks in Findings from HRBA Perspectives Kenya, such as the Nairobi-Thika Highway, the Airport Road in Nairobi; the Kipsigak- It is important to note that Chinese co- Serem-Shamakhokho Road in Rift Valley; the operation with both Angola and Kenya is Kima-Emusustwi Road and the Gambogi- largely driven by the funding instruments Serem Road in western Kenya. Chinese and support given by the Government investment in Kenyan roads, which began of China. Unfortunately, most of these in 2006, has resulted in the rehabilitation or instruments are marked by a desire on the construction of approximately 905.4 kms of part of China to pursue economic interests Table 2. China Aid to Kenya on Infrastructure in Kenyan Shillings 2015/2016 2015/2016 Draft Estimated (KES) Draft Estimated (KES) GoK Grant Loan GoK Grant Loan Amount AIA Revenue AIA Revenue Amount AIA Revenue AIA Revenue Ministry of Transport and Infrastructure Gambogi-Serem Road 0 0 Nairobi Eastern and Northern Bypass Project 2 Billion Nairobi-Thika Highway Improvement Project (LOT 3) 2 Billion 500 Million 0 Nairobi Southern Bypass Project 2.5 Billion 5.1 Billion 0 5.52 Billion 0 Standard Gauge Railway 3.88 Billion
*100 Kes – 1 USD Source: Compiled by the Author
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Box 1: Kenya’s Project Management Process
The Project Process The Government has an operating framework for assigning roles and responsibilities of key public entities in the preparation and implementation of PPP projects during their life cycle.
i) Project identification, selection and prioritization: As the first step in determining the technical profile, operations, service delivery targets, and future income and costs of the project, the Ministry, Department and Agency (MDAs) shall perform a needs analysis through a survey. For PPP projects that require the collection of user fees directly from consumers, the policy proposes that there be a survey to confirm whether revenues paid by customers will be sufficient to make the project financially viable;
ii) Project preparation and appraisal: This includes the conducting of a social cost benefit analysis which will entail a full investment appraisal that determines the commercial sustainability of the project, the project description, and any requirements for land acquisition or other Government support, the affordability of the project’s proposed tariff path for users, the bankability of the project based on optimal risk sharing and consultations with stakeholders to ensure their interests are considered;
iii) Project tendering: This shall be consistent with the PPP Act. As a general principle, projects should be tendered with a maximum of information provided to the potential bidders, including the level of Government support to be extended to the undertaking;
iv) Project negotiation: Guidelines shall be developed to include guidance in preparing and organizing the negotiations with first ranked bidders, and the approval procedures required from oversight state departments such as the state department responsible for treasury and/or the state department responsible for fiscal management; Project approvals: The approval of PPP projects shall be done in accordance with the PPP Act2.
vi) Project monitoring and evaluation: This step will involve the development of a monitoring and evaluation plan aimed at reviewing PPP project performance to ensure compliance with the project agreement during the implementation and operation period and to ensure that the transfer of assets at the expiration of the project agreement is consistent with the terms and conditions in the project agreement.
While the Kenyan and Chinese governments deal bilaterally on infrastructure development, Chinese firms carryout the work. Kenya’s role is limited tothe identification of the project and its processing for co-operation, including providing an enabling environment and the facilitation of project implementation,3 as outlined in Box 1above.
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Box 2: Thika Highway and Standard Gauge Railway
The Nairobi - Thika Highway Improvement Project The Government of Kenya (GOK) solicited the financial assistance of the Chinese EXIM Bank for the rehabilitation and upgrading of the Nairobi-Thika highway. The Nairobi-Thika road is part of the classified international trunk road A2 that originates in downtown Nairobi and extends to Moyale at the Ethiopian border. The road operated beyond its capacity, accommodating more than 30,000 vehicles per day. Its condition had deteriorated and required rehabilitation. Three Chinese companies were involved in the substantial improvements needed to increase the road’s capacity, including the construction of additional lanes and six interchanges. Firms involved in this project were China Wu Yi (Kenya) Corporation, Sheng Li Construction Company and Sinohydro Company.
The Improvement Project in Kenya was intended to achieve the following three objectives: 1) to improve road transport services along the Nairobi-Thika corridor and reduce traffic congestion; 2) to develop a sustainable urban public transit system for the Nairobi Metropolitan Area; and 3) to boost private sector participation in the development of road infrastructures. The Government has noted the following benefits from the project: 1) improved traffic flow in and out of the city;and2) reduction in fuel consumption, which translates into economic savings for vehicle owners. The benefits in the economic evaluation include vehicle operating cost savings, travel time savings for passenger and cargo, and road maintenance savings.
The Standard Gauge Railway
The Standard Gauge Railway (SGR) is a flagship project identified by the Government of Kenya as a transport component aimed at delivering Vision 2030. The SGR project is proposed to connect Mombasa to Malaba on the border with Uganda and to continue to Kampala, Uganda’s capital city. It will then run to Kigali in Rwanda with a branch line to Juba in South Sudan. Branch lines along the route will extend to Kisumu, Kasese and Pakwach. It seeks to simplify transport operations across borders and to reduce travel costs, thus benefiting the economies of both Kenya and neighbouring countries. Construction of the 609km-long line began in October 2013 and is scheduled to be completed by December 2017. The Mombasa-Nairobi phase of the project cost KES327bn ($3.8bn). China Exim Bank provided 90% of the financing while the remaining 10% was contributed by the Kenyan Government. (KRC Website) on the one hand, and the demand for Angola infrastructure by Angola and Kenya on the other. Issues relating to human rights or Civil Society Organizations (CSOs) have people’s empowerment remain aspirations a crucial role to play in ensuring that the that are alluded to, but are not tackled boom in Angola’s new trade with China directly by either side of the co-operation. is managed in a manner that contributes
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to the eradication of poverty as well Chinese projects do not expressly prioritize as sustainable economic growth and reduced unemployment as a development development. However, the relationship goal. Though public investment projects between CSOs and the state is problematic are aimed at improving infrastructure, and does not facilitate this role. The which will eventually stimulate domestic institutional and legislative framework and foreign direct investment, Chinese governing CSOs as well as the state’s contracts are not in themselves enforcement measures are designed to employment-generating. CSOs cite lack of deter CSO input. CSOs are dismissed as evidence of technology transfer, with most placing ‘democracy’ ahead of ‘development’ sub-contracted firms being Chinese. Most and as being agents of the West. Some of projects’ skilled labor are Chinese and CSOs face blanket condemnation as foreign expatriates. being anti-development and against the exploitation of natural resources by foreign Only specific Government sectors are companies. The Angolan government engaged in Chinese co-operation. Citizen sees CSOs as a hindrance in its attempts participation in these sectors is very limited to encourage China’s contributions to or non-existent. The sectors are capital- Angola’s development. Neither the Chinese intensive and heavy equipment-related. nor the Angolan government supports the Furthermore, few government officials growth and development of CSOs that are are aware of the details of Chinese co- promoting accountability. In practice, this operation as these are managed from the greatly limits accountability to the people President’s office. Civil society has minimal, in the practices and initiatives of China- if any, awareness of Chinese co-operation Angola cooperation. and related issues. The few with an interest and understanding of the issues are There are also concerns regarding limited most often influenced by the emerging transparency in the use of Chinese funds. discussion at the international level. There is insufficient information available to the public concerning the process and There is no involvement of citizens in any magnitude of Chinese investments, especially activities related to Chinese development from the government arm that manages co-operation or projects in the country. many of the larger Chinese infrastructure Some analysts maintain that Chinese projects. There are fundamental questions investments in Angola have been implicated on the procurement procedures governing in environmental protection offenses Chinese construction tenders in Angola as well as workers’ rights violations. and the over-riding authority of the Generally, there is the feeling that there Executive in aid management (Corkin, is weak surveillance within government 2007; 3). Furthermore, Chinese companies institutions of Chinese’s projects in Angola, flout local labor regulations especially for particularly in regard to their development the Chinese expatriates working for their and empowering aspects. companies. Chinese companies are yet to establish social projects as part of their Kenya corporate social responsibility to support local communities where their projects are While the Kenyan government exercised located. leadership in the identification and
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approval infrastructural projects, a project requirements reflect this goal study done by RoA Africa in 2014 has with their emphasis on the technical revealed that citizen participation in the soundness of the investment in terms of identification of priority projects was returns. In Kenya, where the demand for essentially non-existent. It appears that infrastructure is needed for development outside the government, the exercise was purposes as opposed to merely securing closed to most stakeholders, including profit, there is a need to address tradeoffs the domestic private sector. This could rather than to just stick to an unrealistic be attributed to the technical nature of win-win rhetoric. the process to identify projects as well as the lack of a clear framework and Project requirements put emphasis on structure within which to facilitate public benefiting Chinese economic interests participation in the process. and Chinese companies rather than people’s empowerment. This was seen This lack of public and stakeholder in the development impact of the two participation has led to challenges during projects described above. Both are heavily implementation as most of the projects driven by the need to supply Chinese have required large tracks of land that capital, companies and technology, with were occupied by the population. Citizen no evidence of backward linkages to involvement is paramount in such a process local companies and supply chains or as they are not only the beneficiaries of partnerships with local companies and infrastructural projects but also active communities. players in their success. It must be noted, however, that the involvement of the cabinet The Chinese support requirements in the approval of projects indicates strong are weak on social and environmental political buy-in from the government. impact assessment. Instead they focus on the delivery of the project in a timely Projects appear to be supply-driven manner and at a cost-effective rate. An with little community participation and example of the consequences has been ownership of the construction of large the endangering of fishermen’s livelihoods installations. Government involvement during the construction of the Standard also seems to be limited, focusing primarily Gauge Railway, which has been raised as a on providing guarantees and creating an critical issue. The project is going down 150 enabling environment for the investment meters into the ocean– the same level as to take place. the fish landing sites. The access routes for fishermen to have their nets, boats, launch There is no support to community and civil into the ocean have been closed. This has society initiatives based in areas where significantly affected their livelihoods and projects have been initiated through the has caused untold suffering. Community Development Trust Fund. There is no Community Environment Facility for NGOs/CBOs to facilitate the Recommendations awareness and advocacy campaigns on land rights and access to land for pasture. Based on the above findings, it would seem that the avowed principles of China EXIM bank has remained true to Horizontal SSC are not being implemented its objective of profit-making, and the in these cases of SSDC. Saying that,
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there are some elements that have been project described in this study shows reflected in terms of country leadership conflict between the initiative and the and country ownership. However, a lot communities surrounding the projects. more would have to be done to bring the The main problems involve people’s rights/ concept of Horizontal SSC to bear in the access to fishing grounds and the poor current co-operation arrangements. The compensation mechanisms. Furthermore, recommendations in this section therefore there appears to be neither proper focus on elements that could be addressed legal representation of the communities to support a Horizontal SSC agenda for surrounded by such projects, nor are Kenya, Angola and China. there CSO groups to facilitate them to claim their rights. CSOs and human rights China’s engagement with both Angola defenders need to help secure the rights and Kenya should promote inclusive of communities surrounded and affected partnerships. The current partnerships by these projects. There needs to be more in infrastructure development are not analysis, information disclosure and inclusive. They involve only governmental transparency on Chinese development structures and the contracted Chinese assistance in infrastructure and its impact private sector. Both governments would on the countries involved. need to create structures that involve the participation of citizens who are Strengthen the South-South Co- impacted by projects. Furthermore, operation units. South-South Co- infrastructure investment projects should operation, as exemplified in this research, seek to include local investors who have shows that it is one of the most important been left out in the current framework, instruments for financing development through deliberate financing instruments infrastructure in the countries under that currently only target international study. This is not only because of the level investors from China. of finance this co-operation is attracting but also because of the complexity of Make co-operation more transparent instruments used for financing. The and accountable. Horizontal South- governments of Kenya and Angola should South co-operation is meant to empower consider creating SSC units in all the and directly tackle poverty. Therefore, ministries to facilitate the growth and the use of Horizontal SSC resources in development of these partnerships. China, Angola and Kenya in infrastructure development must clearly show these Create special standards pertaining to linkages to poverty reduction. Combining labour and employment conditions, concessional finances and investment tax regulations, environmental, and funds to support Chinese private sector export standards. These measures investments, as is the current form, fails require increased collaboration amongst the transparency and accountability of inter-governmental agencies (i.e. finance, these resources in determining the direct planning, standards, procurement) impact of such investments. to reduce corruption and improve implementation modalities in Chinese’s Address the human/ project funded projects to better align them with conflicts. The Standard Gauge Railway Horizontal SSDC principles.
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The governments of Angola and Kenya need these two governments on their relations to conduct research on China’s engagement with China to facilitate beneficial relations. with their respective economies so that If well implemented, SSC could result in they can maximise their benefits. More greater development impact from China’s information should be shared between involvement in the countries involved.
REFERENCES
AFRODAD 2006: China in Africa Synthesis Report Florence Mugendi; 2011:Kenya-Sino Economic for Angola, Mozambique, Zambia and Relations: The Impact of Chinese Investment Zimbabwe. In Kenya’s Transport Sector , University of Nairobi – thesis. Corkin, L. (2006), China’s Interest and Activity in Angola’s Construction and Infrastructure J i n L i n g; 2010: Aid to Africa: What can the EU Sectors, South Africa. and China Learn from Each Other? SAIIA, Occasional paper. Dao Tuan HiepandAstridAkoyoko 2008:Chinese Investment in Angola: How can construction M. Chege, ‘Economic Relations between Kenya firms become more competitive in a foreign and China, 1963-2007’, in J. Cooke, U.S. and market Chinese Engagement in Africa: Prospects for Improving U.S.-China-Africa Cooperation, Daniel Fiott 2010: Article; The EU and China in (Washington, D.C.: Center for Strategic and Africa: The Case of Kenya European Union International Studies) Institute for Security Studies.
ENDNOTES
1 In 1994, Beijing established the China • The establishment of institutions and their Eximbank, which set up a fund for roles in dealing with PPP projects; concessional loans to support industrial, • The process of PPP projects infrastructure, and social welfare projects by including identification, prioritization, Chinese enterprises. conceptualization, preparation, tendering, negotiations, award, approval, 2 The Public Private Partnership Act was implementation, monitoring and enacted into law in 2012 and became evaluation, and finally how they are effective in 2013. The main objective of the handed over to the Government of Kenya act is to facilitate the participation of the where applicable; private sector in financing the construction, • Financial security instruments such as development, operation, or maintenance political risk guarantees and letters of of public infrastructure or development support; projects through concession or contractual • The key elements of project agreement; arrangements. It also paves the way for and the private sector participation in provision • Establishment of a Facilitation Fund to of public services in the transport, water, cover Viability Gap Fund, Government sanitation, housing and environment subsidies, contingent liabilities when they sectors. Other areas the act seeks to affect crystallize, project preparation funds. This include the following: is aimed at making the projects bankable • The process of engagement between the and attractive to the private sector private and public parties in order to deliver 3 These include land acquisition, tax reliefs, long term public facilities and services; guarantees as well as clearing various • The definition of a Public Private regulatory hurdles for the project. Partnership, the scope and type of PPP 4 Private Sector and Development Finance in Kenya arrangement;
323 Belgium Belgium: more with less
Griet Ysewyn, Lien Vandamme, Emma Bossuyt, 11.11.11 Antoinette Van Haute, CNCD-11.11.11
Overview Belgian contributions to international climate finance are paid with resources In a recent statement, the Belgian intended for development cooperation. Minister of Development Cooperation Revenues from the European Emission maintained, “the 0.7% remains important, Trading System (ETS) allocated for but we must ensure that this discussion international climate finance in 2016 does not compromise other relevant could, for instance, be considered as questions. What results does Belgian additional resources. However, their development policy want to achieve?”.1 inclusion in ODA reporting conceals a The Minister contends that efficiency and decreasing development budget (for quantity are mutually exclusive. However, example in the case of the Flanders it could be argued that they should be seen government). In fact, the resources as fully compatible and that it is crucial provided for global challenges are not to focus on both efficiency and a robust really increasing. However, since the budget for achieving the SDGs. Belgian contribution to international climate finance is relatively low, the 1. The decline of Belgian ODA: impact on the development budget is The OECD-DAC predicts Belgium will not (yet) high. spend only 0.38% of GNI in 2019, down 3. Belgian focus on the role of the from 0.64% in 2010. Development private sector and its ability to cooperation is, of course, more than lever ODA: Following changing trends just a question of money. But how in development finance, Belgium is can Belgian cooperation continue increasingly focusing on the potential to be relevant with such a drastic of the private sector for reaching the reduction in its budget allocations SDGs. In 2017, Belgium launched the for ODA? Public finance for public first ‘Humanitarian Impact Bond’, goods such as education, health, and promoting a result-based approach social protection is still necessary. to increase both efficiency and overall Nonetheless, there is a need for development impact. However, these a strong focus for development types of bond represent a relatively cooperation on poverty eradication small niche, as their potential in and the fight against inequality. developing countries still face many 2. More challenges with less ODA, challenges. In terms of additionality, the case of international climate which is ultimately the goal, current finance: Belgium is addressing evidence suggests this is a key issue. increasing numbers of global In the context of declining ODA, it is challenges with its ODA. One of these important to ensure that the overall is climate change. The majority of cost of new instruments does not
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lead to a further reduction of public goal in 1970, 2002, 2005, 2011, 2013, 2014 budgets for development. and 2015. No plan to reach the 0.7% goal has ever been defined. Belgium is also 1. The decline of Belgian ODA moving away from being a member of the and the role of development leading group of donors at the global level. cooperation The Belgian Federal Council for Sustainable Development has representatives of Far away from internationally various social groups): environmental committed standards organisations, development cooperation organisations, consumers’, employees’ Although it is a legal obligation in Belgium, and employers’ organisations, youth the 0.7% goal is certainly not a priority for organisations and the academic world. the current Belgian government. Linear The Council made a clear statement in cuts were decided on in 2014 (€1,125 the run up to the United Nations High billion), and there have been increasing Level Political Forum in New York in July levels of under-spending in the budget 2017: “With just below 0.5% of gross (€560 million to date). As a result, in 2017, national income currently spent on official Belgium contributed only 0.45% of its development assistance Belgium still has GNI to ODA. The OECD-DAC predicts this some considerable catch-up effort to performance will fall to only 0.38% of GNI make in order to reach the internationally by 2019, down from 0.64% in 2010. set 0.7% target which was recommitted to in the context of the 2030 Agenda.”2 Belgium is thus further than ever from the objective of contributing 0.7% of its In a more welcome move, Belgium’s GNI to development aid. Despite this budget for humanitarian aid has recently performance, it committed itself to this increased from €102 million in 2014 to
ODA as Percentage of GNI
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€177 million in 2016. While this is highly availability of sufficient and predictable important, Belgium must ensure that it budgets to support long-term development also maintains financing of long-term strategies. Without sufficient budgets, the development programmes, especially results-oriented policy advocated by the in the least developed nations, which Minister for Development Cooperation will make up the majority of Belgium’s 14 remain wishful thinking. prioritized partner countries. In 2016, 21% of the budget of the development Development cooperation as an administration (DGD) was spent on instrument of foreign affairs humanitarian activities, primarily in Syria and neighboring countries. In 2016, the Belgian government approved a new strategy paper (the so-called Discourse about impact less and less comprehensive approach) to ensure that credible the different instruments of foreign policy, including development cooperation, The proportion of Belgian aid spent by demonstrate improvements in coherence government departments other than the and efficiency. The link between the Department for Development Cooperation methodology and the aims of this approach, (DGD) has continued to grow in recent however, is unclear. It does little to years. In 2016, the DGD was responsible safeguard and sustain the crucial objectives for managing only 55% of Belgian ODA, of development cooperation and to retain down from 67% in 2013. The main reason developing countries’ and their citizens’ is the increased spending of ODA by the leadership of their development processes. Federal Agency for the Reception of Asylum Given the trends at the EU level, there is a Seekers (Fedasil). This accounts for almost legitimate concern that instrumentalising 17% of the total ODA in 2016 - five times its development cooperation to meet security, volume in 2010. In 2017 it is still 14,3% and commercial and migration objectives Belgium is one of 9 of the 29 OECD-DAC risks undermining the fight against global countries contributing more than 10% of poverty as the primary objective for its ODA in 2017 to in-donor refugee costs. development cooperation, as stipulated Since 2015, the strong increase of in-donor in the Lisbon Treaty’s global development refugee costs made Belgium the first objectives and in the Belgian Law on beneficiary of its own development aid. Development Cooperation. The wish to increase collaboration amongst different Given this combination of disproportional departments does not discharge Belgium savings on international solidarity in from its responsibility to guarantee policy Belgium (€1.5 billion since 2014) and the coherence for development, as anchored in increasing use of ODA to tackle challenges the law. not directly linked to development cooperation, the Development Minister’s 2. The case of international political discourse on the importance of climate finance aid effectiveness and impact is becoming less and less credible. His statements At the Paris Climate Conference in could even seem contradictory, as aid December 2015, Belgium pledged to spend effectiveness itself depends on the €50 million annually for international
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climate finance for the next five years, finally made available to the regions in until 2020. This is the same yearly 2016. Without the 2017 expenditures, amount as provided during the Fast Start it is difficult to estimate whether this period for climate finance (2010-2012). represents a structural increase. However, In practice, this means that Belgium did seeing that the regions spent most of their not actually promise an increase, as was ETS revenues budgeted for international agreed internationally in the 2009 Climate climate finance in 2016, and that the Conference agreement in Copenhagen. Belgian commitment stays the same, it is In fact, €50 million is low compared to unlikely that Belgium’s contributions will contributions by other countries and what exceed €100 million in 2017. The final was agreed to internationally (US$100 numbers of the Flanders region for 2017, billion annually by 2020). which are already available, show a sharp decrease in contributions for climate In Belgium, all the regions (Walloon, finance compared to 2016. Belgium needs Brussels and Flanders) and the federal to commit to a structural increase in its government contribute to climate finance. climate finance objectives. In 2016, both Flanders and the federal government – which accounts for the More challenges with less resources largest part of Belgian contribution –used portions of their development budget to As discussed above, Belgian ODA is fund their commitments to international decreasing. In addition, there have been climate finance.3 This analysis will focus on increasing challenges to the protection 2016, as official reporting on international of this budget for its original purposes. climate finance in 2017 will not be One of these challenges relates to climate published until September 2018. We argue change finance. In 2016, Belgium reported that Belgian international climate finance 83.3% of its climate finance commitments is insufficient and is not additional to its as ODA. This reporting takes two forms. commitments to development finance. Firstly, Belgium scores development Increase in 2016 projects with Rio Marker purpose markers as 0 (no climate objectives), 1 (significant The reported amounts for climate finance climate objectives), or 2 (primary climate have varied considerably from one year objective) in relation to their climate to the next. In 2016 it just exceeded €100 finance purposes. While the federal level million for the first time. Two factors led (which delivers most of the climate finance) to this increase. Firstly, this increase was uses a strict methodology for this scoring,4 the result of an agreement reached in it can hardly be argued that it complies 2015 between the regions and the federal with the criteria of ‘new and additional’ government, in which the regions pledged climate finance. Furthermore, this method to contribute to climate finance. There was never approved under the UNFCCC was therefore a significant increase in as a way of accounting for international the contributions from the regions. This climate finance. The OECD developed agreement also affected the distribution it for another purpose – tracking the of ETS revenues. Part of these revenues, mainstreaming of climate relevance in which had been blocked since 2009, was development projects. The OECD does not
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represent all parties to the UNFCCC, only should also increase its contributions to the rich, donor countries. international climate finance independent of resources that have already been allocated Mainstreaming the climate challenge in for development cooperation. Belgium development cooperation is important for should take its historic responsibility for the sustainable development, but to comply climate problem seriously. with international agreements on climate finance, additional resources should be ETS revenues for climate finance made available. One positive trend is that part of the The second issue relates to Belgium’s Belgian revenues from the auctioning of contributions to multilateral climate funds allowances under the European Emission such as the Least Developed Countries Trading System has been allocated Fund (LDCF), Adaptation Fund (AF) and the for international climate finance. In Green Climate Fund (GCF). The majority principle, this allocation could lead to real of these contributions are paid with additionality. Unfortunately, this did not the decreasing budget of development prove to be the case in 2016. There are two cooperation. In this case, the contributions factors to consider. can legitimately be classified as ‘new’ but not as ‘additional’. Firstly, the amounts dedicated to international climate finance were not Because the Belgian commitment for enough to comply with Belgium’s promises international climate finance is low, the to climate finance. This meant that only a impact on the development budget is not part of international climate finance was (yet) high. However, if Belgium gradually paid with ETS revenues and were therefore increases its contribution to be closer to its additional. For the federal government, fair share of the promised US$100 billion there is a big gap between what is available by 2020, without budgeting additional (€32.6 million in total for the period 2015- resources, the impact on other development 2020) and what was promised (€25 million priorities such as education, health and per year until 2020). The remaining part to poverty eradication could be substantial. fulfill the commitment is once again paid by using the development budget. Belgium blends its promises and obligations for development cooperation The second issue is that, by including and international climate finance in ways these resources in Belgium’s official ODA that can be confusing and misleading. reporting, the government is concealing This is risky business. Both development a decreasing development budget. cooperation and international climate This situation is especially visible at the finances are important for sustainable Flanders level, where the share of climate development and global security. It finance in official ODA reporting went up is especially incoherent for a minister from 13% in 2015 to 33% in 2016 because who claims humanitarian aid is one of of the ETS revenues (and decreasing core his priorities, as there is a direct link budget for aid). Belgium should increase between climate impacts and increasing the amount of ETS revenues used for humanitarian needs. Given this stance, it international climate finance, and make
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a clear separation in reporting of these Impact investment is primarily aimed at amounts. It should also increase its core “social impact investors” who are seeking development budget. more than just financial benefits in their investments. Instead they aim to realize 3. Impact bonds: Looking for both positive social impact and financial social investors for sustainable returns. According to recent data from the Global Impact Investment Network (GIIN), development impact investment continues to grow with an expected increase of 18% per year In September 2017, Belgium launched among currently active impact investors.7 the first Humanitarian Impact Bond (HIB) with the International Committee of the Introduced in the UK in 2010, ‘social Red Cross. This Bond created €23 million impact bonds’ have been used to finance to support rehabilitation programs in social projects with assistance from 5 Mali, Nigeria and the DRC. This kind of private investors to relieve the pressure innovative finance is considered necessary on government budgets. So far, the UK in the reality of an increasing number of and the US are the front-runners in the humanitarian crises. At the same time, use of these bonds. In Belgium, this type there is growing support for a results- of investment has kicked in although to oriented approach, with well-defined date the number of projects is limited.8 and measurable outcomes. But pertinent Exploiting the potential of impact bonds questions remain. How can investors be for development finance is a more convinced to finance high-risk projects in recent phenomenon. While still relatively conflict and fragile countries? Is it possible uncommon in developing countries, the to guarantee that these instruments will quest for additional finance has brought succeed in providing additional funding impact investing within the radar of donors when considering the overall cost? and other development actors. This is where development and humanitarian Changing trends in development finance bonds have been introduced.9
There has been a real paradigm shift in Development and humanitarian the debate and practices of development impact bonds finance. Following the commitments made by the Addis Ababa Action Plan, development Development or humanitarian impact finance has become more diverse, with bonds are variations of social impact a strong emphasis on domestic resource bonds and the key principles are more or mobilization in developing countries. less the same. They set up public-private There is also a growing support for partnerships to mobilize private investors to private finance to focus on achieving finance projects where the return is linked the Sustainable Development Goals. to clear and measurable results. Service Innovative financing instruments such as providers, usually social organizations impact bonds are increasingly promoted or multi-actor groups, are expected to as a way to increase the efficiency and deliver these results. The ‘outcome funder’, effectiveness of development funding.6 which is usually the donor government,
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compensates the investors when crowding-out effects. For example, when predefined results have been obtained. For private capital comes from philanthropic the donor government, this externalizes foundations, there is a potential risk that risks, which is, of course, a good thing. In any ‘additional’ money will be compensated practices it means that the risk is borne by by a reduction in grants for NGOs, thus the private investors, who lose their money establishing a substitution rather than an in case of disappointing results. addition of funding. Early data suggests that raising additional capital for developing In the recently issued humanitarian impact countries is a key issue.15 bond, the International Committee of the Red Cross (ICRC) is the service provider A similar concern relates to the while the Belgium government is one of identification and measuring of additional the group outcome funders.10 To prove (development) impact. With an increased their efficiency, the International Red emphasis on measurable results as well Cross will have to deliver results. If the new as private investors’ being wary of high rehabilitation centers do not perform well, risk ventures, chances are that funding they too risk losing money, as they will have will be primarily allocated to projects that 11 to refund part of the costs to the investors. are likely to deliver measurable outputs with minimum risks. Though results are Innovation for more impact? certainly important, overall development impact is difficult to assess and often The HIBs and DIBs respond to the rising only visible a considerable time after a appeal for multi-stakeholder partnerships project has ended. Impact bonds are to increase overall (development) impact. therefore not likely suited to 'quick fixes' A critical question is whether they will for development issues, or to important serve as a catalyst for additional funding areas involving high risk, and should not for development. The humanitarian be promoted as such. impact bond brings in €23 million, which is a rather small amount compared to the Whether impact bonds will move from US$1.7 billion ICRC’s annual budget.12 their experimental phase as an instrument for development remains to be seen. Other questions must also be examined. If the cost of time required to create this kind Transparency, monitoring and evaluation, of innovative finance is included, its benefit will be key components to assess whether in a developing context is not self-evident.13 there is a development impact. Any By law, the maximum duration of Belgian involvement of private actors must include humanitarian programs was two years. To clear regulations to avoid scarce resources finance the bond, a change in the law was being wasted. Civil society organizations necessary. For assuming the risks, investors have highlighted the need to ensure new can expect a return up to 7% when the instruments aimed at mobilizing private project succeeds. Adding management finance should not be considered a silver and evaluation costs, this inevitably raises bullet. Public finance remains crucial to questions on the degree of additionality in guarantee social services such as health finance.14 A second concern is how to avoid care and education.
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Conclusion revenues used for international climate finance and make a clear separation Belgium will hold federal elections in May between development cooperation and 2019. It is crucial that the new government international climate finance in its reporting. focuses on efficiency and a robust budget for achieving the SDGs. This means In its search for new types of financing for honouring its commitment to spend development, Belgium must ensure that 0.7% of GNI for development assistance. private instruments such as impact bonds Belgium should respect this commitment, provide additional sources of funding. which is consistent with the Belgian law on New financing instruments should always development cooperation and OECD aid meet transparency rules and be able directives, both of which are dedicated to to prove their effectiveness to achieve tackling poverty and inequality. development goals. Most importantly, the use of impact bonds must not divert On climate finance, the Belgian government scarce public resources for the repayment should take their historic responsibility of one-sided investments. While results seriously and increase their contributions and measurable outputs are important, without touching the resources allocated development impact requires that projects for development cooperation. Belgium are locally demand-driven and have the should also increase the amount of ETS potential to be self-sustainable over time.
ENDNOTES
1 De Croo, Algemene beleidsnota 2016, p.5. 6 https://www.cgdev.org/sites/default/files/ investing-in-social-outcomes-development- 2 Pathways to sustainable development. impact-bonds.pdf First Belgian Voluntary Review on the Implementation of the 2030 Agenda, 7 https://thegiin.org/assets/GIIN_ https://www.sdgs.be/sites/default/files/ Roadmap%20for%20the%20Future%20 publication/attachments/nrv_belgium_ of%20Impact%20Investing.pdf english.pdf July 2017, p 64. 8 https://www.brookings.edu/blog/education- 3 The following discussion of Belgian climate plus-development/2018/01/17/paying-for- finance is examined as a whole, without the social-outcomes-a-review-of-the-global- distinctions between the different entities. impact-bond-market-in-2017/ 9 https://www.mo.be/de-ontwikkelaars/ 4 11.11.11 (2016). Creatief met klimaat: ontwikkeling-met-priv%C3%A9geld-wordt- hoe landen hun beloftes voor het Zuiden duur-betaald uithollen. http://www.11.be/downloads/ doc_download/1927-11-dossier-creatief- 10 Other outcome funders are Switserland, The met-klimaat UK, Italy and the “La Caixa” foundation.
5 https://diplomatie.belgium.be/en/ 11 See:https://www.dekamer.be/kvvcr/ newsroom/news/2017/humanitarian_ showpage.cfm?section=qrva&language=nl& impact_bond cfm=qrvaXml.
331 Canada Challenged by Ambition
Gavin Charles and Fraser Reilly-King, Canadian Council for International Co-operation
Overview On the surface, Canadian development and humanitarian policy is trending • Canada has clarified a vision for in positive directions. Through policy international assistance with its new announcements, and to some extent, new Feminist International Assistance budgetary commitments, the Canadian Policy (FIAP), aiming to focus Canada’s government is positioning itself as a efforts on gender equality and rights- leader on specific aspects of sustainable based approaches. development, notably gender equality and the empowerment of women and girls. • There remains significant uncertainty on The important and specific role of ODA how the government’s new agenda will is recognized by political leaders, despite be implemented in practice, and how the growing attention to blended and it will be aligned with Canada’s global leveraged financing through the private commitments to principles of aid and sector. development effectiveness and the 2030 Agenda for Sustainable Development. Yet there remains significant uncertainty • Canada’s Official Development on how the government’s new agenda will Assistance (ODA) in 2018-19 is be implemented in practice, and how it will estimated to be Cdn$6.1 billion. At be aligned with Canada’s existing global 0.27% of Gross National Income commitments. Despite the welcome policy (GNI), this is below the Organisation and rhetoric, the dollar value of Canada’s for Economic Co-operation and ODA remains very low, at just 0.27% of Development (OECD) average and GNI, which is well below the OECD average Canada’s historic contribution. Based (0.38% in 2017) and Canada’s historic on current allocations, this ratio will contribution (an average of 0.29% over the remain unchanged – or decline slightly past 10 years). – in the next five years. • FinDev Canada, Canada’s new Part I: A bold vision meets the development finance institution (DFI), challenge of implementation represents an additional form of non- ODA international assistance. FinDev Canada’s vision for its international Canada seems on the right track, assistance has been clarified and with a clear focus on development strengthened with the June 2017 release outcomes, but needs to clearly of the Feminist International Assistance articulate its role relative to other Policy (FIAP). The new Policy came a forms of public assistance and to take year after extensive consultations with steps to maximize transparency and Canadians, including Canadian civil accountability. society organizations (CSOs). It included
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numerous important commitments by and the empowerment of women and the Government of Canada towards an girls as a principal target (up from two ambitious international assistance policy percent now), and 80 percent of bilateral framework (Government of Canada, 2017a). international development assistance will integrate a focus on gender equality and The FIAP intends to refocus all of Canada’s the empowerment of women and girls (up global development and humanitarian from 70 percent in 2015). efforts to advancing gender equality and the rights and empowerment of women Canada has pledged that, within five and girls. It represents a unique policy years, 95 percent of Canada’s bilateral shift among donors and is an encouraging international development assistance and positive shift forward in the journey budget will contribute to closing gender to gender transformative change. The equality gaps. This is a highly ambitious feminist orientation entails a stand-alone goal. In addition to this mainstreaming of core focus on gender equality including gender equality funding, the government combatting sexual and gender-based has also announced the establishment of violence; supporting local women’s rights a new Cdn$150 million local fund (over five organizations and movements; improving years) for women’s rights organizations public sector institutional capacity to (WROs), a substantial increase from deliver programs and policies that support Canada’s usual investment of Cdn$4 gender equality; and targeting investments million per year. This commitment will in research, data collection and evaluation put Canada among the top donors in the around gender equality. It envisages OECD to women’s rights organizations. boys and men playing a significant role The government has also initiated a in challenging gender stereotypes and focus on Women’s Voice and Leadership, changing gender roles and relations. an initiative that has begun to provide Overall, this vision represents strong program funding to small and non- potential for Canada to pioneer global traditional partner organizations in the leadership in support of the Sustainable South. Development Goals (SDGs), with a focus on SDG 5. To complement its feminist frame, the new Policy has adopted a human rights-based With this new Policy, Canada joins approach (HRBA), building on the ODA countries such as Australia, Sweden, Accountability Act (ODAAA) (Government and Norway, which have explicit feminist of Canada, 2008), which requires that foreign policies and/or strong gendered aid allocations are consistent with policies and plans for international international human rights standards. development. Yet no other donor has Other bilateral donors, including Sweden, so clearly focused its priorities for Norway, the United Kingdom and Denmark, development and humanitarian funding currently also pursue this approach, to on gender equality. The FIAP comes with varying degrees. FIAP aspires to be highly bold funding targets for gender equality inclusive, focusing on all people “regardless and women’s empowerment: 15 percent of sex, race, ethnicity, nationality or ethnic of all bilateral international development origin, colour, religion, language, sexual assistance will have gender equality orientation, gender identity, age, ability,
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migrant or refugee status, or any other sensitive and adaptable according to very aspects of identity.” The government is different local contexts – in line with a HRBA developing guidance notes to help inform and the principle of country ownership. what its HRBA will look like in practice. In its funding modalities, GAC will have The FIAP emphasizes Canada’s support to move from an emphasis on risk- for Least Developed Countries (LDCs), averse short-term results, specialized particularly sub-Saharan Africa, through a and siloed project approaches, with commitment to dedicate no less than 50 onerous reporting and accountability percent of Canada’s bilateral assistance to requirements, in favour of greater risk- that region. taking and flexible and responsive funding mechanisms and approval processes. Just With this significant shift in focus, staff as important will be integrated program- and systems at Global Affairs Canada based approaches, ones focused on (GAC), the Canadian federal department longer-term outcomes and impacts, and responsible for international development investments in research, evaluation, and humanitarian assistance, along with public engagement and learning. diplomacy and international trade, must Building on the 2017 announcement of make major changes to be fit for purpose. an innovation fund and a fund for small However, since the 2012 Federal Budget, and medium-sized organizations, and there have been dramatic cutbacks in working with civil society, GAC could Global Affairs Canada’s staff and technical develop and test a diverse suite of funding experts, reducing the capacity of GAC’s mechanisms, including highly responsive gender experts, among others. Moreover, and decentralized funding mechanisms, while GAC has historic experience in for both development and humanitarian governance and human rights, successful programming. implementation of a comprehensive HRBA will need to rely on the expertise of other To its credit, GAC has set up a new bilateral donors, CSOs and UN agencies. International Assistance Operations Substantial investments are needed to Bureau in the past year to help implement build the capacity and processes required the FIAP. Through this Unit, they have also to implement the new Policy, both established a Task Force on Improving within GAC and among partners. GAC Effectiveness, working in collaboration with staff will need to learn how to work with civil society amongst others, to introduce new and non-traditional partners, such measures to streamline processes within as local women’s rights organizations the Department. But more still needs to be and movements, and tackle difficult done. contexts where space for civil society as a development actor is shrinking. The As the FIAP is implemented, GAC must government must also develop a suite ensure that the shifts entailed are of policies and strategies to implement undertaken responsibly and sustainably. and integrate feminist and rights-based Canada is now moving from a countries- approaches across all programming of-focus model to a more complex model streams and sectors. In doing so, GAC based on type-of-country, type-of-people, should ensure that its country strategies are and sectoral themes. GAC should be open
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and transparent about the implications fundamental humanitarian principles of of this transition for the continuation of humanity, impartiality, neutrality, and investment in areas of traditional focus. independence. Canada’s new approach Some elements of Canada’s international offers great potential and promise to assistance that were previously central advance all of these objectives, although seem to have lost their place. the dynamics are very complex.
For example, references to children and These conditions are essential to ensure youth and child protection, food security that no one is left behind in the transition and agriculture, as well as sanitation and process – the core promise of the 2030 hygiene, which are important areas in Agenda for Sustainable Development, the context of an overall focus on gender and of the human rights-based approach equality and women’s empowerment, are that should underpin the FIAP itself. In the absent in the FIAP. It will be important to inclusive spirit of Agenda 2030 and the ensure that the strong record and expertise SDGs, and in line with the cross-cutting of Canadian officials and organizations nature of the new Policy, the HRBA and in these areas is not jeopardized or lost feminist frame at the core of the FIAP as assistance is refocused through a should be carefully aligned and reinforced gendered lens. The government has made with Canada’s other foreign policy efforts to address these and other thematic activities. areas through partner consultations and programming announcements. However, Such alignment would ensure that with stagnant funding for international Canada’s diplomatic and trade initiatives assistance (see Part III), and numerous complement, and never undermine, commitments already made for years Canada’s development and humanitarian to come, it seems inevitable that many efforts. In advancing a feminist international current programs will not continue. assistance policy coherent with other policy agendas, the government should In this context, GAC needs to ensure take particular care to avoid conflating that Canada’s overarching emphasis security, sustainable development and remain focused on reducing poverty humanitarian efforts. The integration and inequality, supporting the poorest of security with humanitarian initiatives and most marginalized, and, most jeopardizes both the safety and the importantly, on people – on their needs, effectiveness of humanitarian workers rights, assets, abilities, and priorities, as who must always be (and be perceived determined at a local level, as should be to be) neutral and impartial. As the Policy exemplified in a feminist and human rights acknowledges, trade can have positive approach. If true to feminist principles, development impacts, but its effect may Canada’s international assistance will be unequal. Indeed, trade can, in some account for and respond to local and cases, undermine effective development dynamic contextual realities, as well by weakening local economic structures, as intersectional factors including age, increasing dependence on global supply ethnicity, religion, and economic status, chains and aggravating inequality. The among others. In the case of humanitarian government must therefore approach assistance, it will be consistent with the issues of integration across the conflict,
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development, diplomacy, trade, and partners require to support the people humanitarian realms with extreme care. who are most in need and hardest to reach (see also Part I). International development Part II: Aligning with effective and humanitarian organizations are development principles and the SDGs hoping to address this shortfall through the implementation of a new Civil Society Canada sits on the Steering Committee Partnerships for International Assistance for the Global Partnership for Effective Policy (Government of Canada, 2017b). Development Co-operation (GPEDC), From a draft first adopted in 2015, this one of the outcomes of the 2011 Busan Civil Society Policy was updated in 2017 to meeting on aid and development align it with the FIAP, and was substantially effectiveness. The GPEDC represents the strengthened in numerous ways, including continuation of global engagement with important references to the enabling the aid and development effectiveness environment (for details, see Canadian principles agreed over the last decade Council for International Co-operation, and a half, including country ownership 2017). The government is now working over development, inclusive partnerships, with an Advisory Group of diverse CSOs to country-determined results, and develop an implementation plan for this transparency and accountability. Policy.
Despite Canada’s welcome engagement As ODA and global development are in the GPEDC, Canada appears to increasingly framed within the context have abandoned virtually any public of the 2030 Agenda for Sustainable reference to the aid and development Development and the SDGs, the FIAP effectiveness agenda. There are virtually needs to adjust its new policy directions to no explicit public acknowledgements of respond to Agenda 2030’s transformational Canada’s commitment to support local approach. However, the references feel democratic ownership, transparency more like bookmarks than a major shift to and accountability for locally-determined a universal and much more integrated and results or inclusive partnerships. The intersectional agenda. This shortfall was FIAP, and the International Assistance also reflected in a 2018 report by Canada’s Review that preceded it, barely refers to Commissioner on the Environment and the international aid and development Sustainable Development, which found effectiveness agreements of Paris (2005), that the Canadian government is not Accra (2008), Busan (2011), and Nairobi adequately prepared to do its part for (2016).There has been no formal action the 2030 Agenda and the SDGs (Gelfand, plan on aid effectiveness since the last one 2018). The commissioner noted that concluded in 2012. A new one is needed. the government, as of the end of her audit, had no governance structure for SDG The government’s apparent abandonment implementation; no system to measure, of aid and development effectiveness monitor, and report on national progress; principles coincides with increasingly and only limited national consultation and directive policies and programs and engagement. While Canada had developed contractual relationships that limit the a data framework to measure results on responsiveness, innovation, and adaptation the 232 global SDG indicators, the data
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had not been compiled. These steps are the lowest average ODA as a percentage essential if Canadian development and of GNI of any Canadian government in half humanitarian assistance, an important a century (Greenhill and Wadhera, 2017). dimensions of its national strategy, is to measurably advance the SDGs. An ambitious policy vision, as expressed in the FIAP, requires ambitious investments. The government has begun to recognize However, when the FIAP was unveiled, this problem. In Budget 2018, as the no additional funding accompanied it. Commissioner was finalizing her report, Signature initiatives highlighted in the the government announced new funding Policy, such as a previously announced to support whole-of-government commitment of Cdn$650million for sexual coordination, monitoring, and reporting and reproductive health and rights and on the SDGs. One week before the the new Cdn$150million fund for women’s Commissioner’s highly critical report was rights organizations, will not be additional issued, the government handed out a press to the existing IAE, and will therefore release, signed by eight cabinet ministers, substitute, rather than supplement, signalling that plans were finally underway existing programming. to develop a strategy to implement the SDGs (Government of Canada, 2018). This financing picture for FIAP was in stark contrast to the announcement – just two Part III: Investing in sustainable days earlier – of nearly Cdn$14 billion in development globally additional money for defence. The new funding for defence, coupled with the lack The Canadian Council for International of new investment in ODA, has aggravated Co-operation (CCIC) has consistently an existing imbalance between these two affirmed that Canada’s new and ambitious core elements of Canada’s foreign policy. international assistance policy requires Currently, Canada spends just under four additional resources if the FIAP, and the dollars on defence for every dollar on partners with whom GAC works, are to development. By contrast, comparable realize its full potential. CCIC estimates countries such as Norway, Germany and that Canadian ODA in 2018-19 will be Sweden have ratios between 1:1 and Cdn$6.1 billion, based on Cdn$5.5 billion 1.6:1 (defence-to-development). With budgeted in the International Assistance the new commitments for defence, and Envelope (IAE)– the budgetary allocation of assuming no new development money, Canada’s development and humanitarian by 2026-27 Canada will have a defence-to- assistance. Canadian ODA will thus development ratio of 6:1 or more. represent approximately 0.27% of GNI. Discounting the inclusion of in-donor At first glance, Budget 2018 appeared first-year refugee and student costs, to to provide some good news to buck this which CSOs have long objected, Canada’s trend (Finance Canada, 2018: 156-66). performance ratio will be 0.25%. This The government announced that it would performance is well below the average invest Cdn$2 billion in new money over the of Canada’s OECD peer group. If current next five years in its Feminist International funding levels continue, by the end of this Assistance Policy to promote gender government’s first mandate, it will have equality. This was the second-highest
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new investment in the Federal Budget. being developed by the Organization for It also represents the biggest long-term Economic Cooperation and Development investment since the 8% annual increase for accounting for such investments, but initiated in 2003 and maintained until 2010. GAC Finance is clearly hoping these will have a net positive impact on Canadian However, when the new commitment is ODA. More information is still needed to divided over five years, Canada’s IAE will understand the allocation process and only see an average compound annual intentions of this new pool of funding growth rate of slightly over three (3) and how it will interact with and differ percent. In some years, after inflation, the from FinDev Canada, Canada’s new budget will not likely grow in real dollar Development Finance Institution (DFI). terms. At the end of the five-year ladder of increases in 2022-23, if the substantial The establishment of FinDev Canada was initial increase in 2018-19 is fully sustained, first announced in Budget 2015, and was Canada’s ODA to GNI ratio will remain at later re-announced (with the same initial around 0.26%, representing no increase in capitalization of Cdn$300 million) by the performance over these five years. new government in Budget 2017. DFIs can play a key role in high-impact development In addition to traditional ODA, Canada financing by providing crucial funding is looking to use new financing tools. In in credit-constrained high-risk markets, parallel to the Cdn$2 billion that will be where financing for firms is in short supply, invested in the IAE, the government has interest rates are high, or companies also allocated Cdn$1.5 billion over five are too small or deemed too high-risk to years and Cdn$492.7 million thereafter to access finance. In these cases, DFIs can support “innovation”. These investments create jobs, generate incomes and taxable will occur through the International revenues, and provide valuable private Assistance Innovation Program and the goods and services. Sovereign Loans Program. This is not new money for international assistance, but Unfortunately, global DFI practice has will be drawn from existing unallocated not been impressive to date. Notably, a funds (or “free base”) in the IAE over the disproportionate degree of DFI investments next five years. have subsidized OECD country companies working in Middle Income Countries Through these two Programs, GAC can (MICs), with DFIs too often prioritizing now offer sovereign loans (i.e. loans to profit maximization over development governments) to countries, and make long- impact. Transparency around financial term equity investments in companies leverage and development impact is still or in innovative financing mechanisms sorely lacking; financial intermediaries working in international development. and secrecy jurisdictions are widely These investments may accrue net used (Kwakkenbos, 2012; Romero, 2014; revenues (which may eventually return Vervynckt, 2014). These issues are not to GAC) or incur net losses (which GAC inevitable for DFIs. However, FinDev will write off). The impact on Canadian Canada should explicitly bear these trends Official Development Assistance will in mind, and plan and act accordingly in be determined by new rules currently implementing Canada’s DFI.
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Overall, FinDev Canada seems to be on Income Countries (LMICs), Least the right track. International Development Developed Countries (LDCs), and Minister Marie-Claude Bibeau has publicly fragile states; asserted that the DFI would focus squarely • Favouring small and medium on development and poverty reduction, enterprises (SMEs), particularly ensuring positive outcomes and real women-led SMEs; impact (House of Commons, 2018). She has also indicated that, although Canada’s • Affirming established development DFI would not be funded from ODA, it effectiveness principles (country would be aligned with the ODAAA (House ownership, inclusive partnerships, of Commons, 2017). The draft development country determined results, and impact framework for FinDev Canada, transparency and accountability); released for public consultation in 2018, • Clarifying environmental, social and reiterates this pledge by affirming that governance (ESG) policies, ensuring a contributions to three development impact rights-based approach; and goals (market development, women’s economic empowerment, and environment • Supplementing transparency and and climate action) will be the most accountability provisions with a significant factor in the deal-making and complaints mechanism. decision process (FinDev Canada, 2018). Canada is positioned to be a global leader FinDev Canada can enhance its in contributing to a fairer, more sustainable effectiveness and its contributions to and safer world. It has a new feminist development outcomes by ensuring it is policy framework for its international coherent with other government initiatives; assistance, one that emphasizes the is aligned with core global agendas and inclusive and rights-based spirit of the principles to which the Government of SDGs, and with a clear focus on supporting Canada has committed; and fills key gender equality and empowering financing gaps and needs. This orientation women and girls across its international should include: development and humanitarian efforts, Fulfilling the potential of this Policy will • Acknowledging where and how require increased ambitious, coherent, FinDev Canada’s investments and and targeted investments that serve the operations will complement the FIAP poorest and most vulnerable people, and and Canada’s ODA; leave no one behind. The next few years • Supporting operations in Low Income will determine whether Canada can deliver Countries (LICs), Lower-Middle on these good intentions.
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BIBLIOGRAPHY
Canadian Council for International Cooperation https://www.canada.ca/en/global-affairs/ (2017). An Opportunity for Leadership - An news/2018/04/canada-moving-forward- Assessment of Canada’s Policy for Civil Society on-implementing-the-united-nations-2030- Partnerships for International Assistance. agenda-for-sustainable-development-at- Retrieved from: http://ccic.ca/resources/ home-and-abroad.html CSPP_Oct_2017_EN.pdf Greenhill, Robert and Celine Wadhera (2017). Finance Canada (2018). Equality + Growth: A Strong “On paying its global share, Canada's not Middle Class. Retrieved from: https://www. back—it's far back.” Open Canada, Centre budget.gc.ca/2018/docs/plan/budget-2018- for International Governance Innovation. en.pdf Retrieved from: https://www.opencanada. org/features/paying-its-global-share- FinDev Canada (2018). Development Impact canadas-not-backits-far-back/ Framework. Draft. Retrieved from: https:// www.findevcanada.ca/sites/default/ House of Commons (2017). Oral remarks of the files/2018-05/development_impact_ Minister of International Development and framework_2.pdf La Francophonie, Marie-Claude Bibeau. Foreign Affairs, Trade and Development Gelfand, Julie. “Canada’s Preparedness to Main Estimates, 2016-17. Business of Supply, Implement the United Nations’ Sustainable Government Orders. Retrieved from:https:// Development Goals.” Commissioner of the openparliament.ca/debates/2017/5/17/ Environment and Sustainable Development, marie-claude-bibeau-16/ Office of the Auditor General of Canada. Retrieved from: House of Commons (2018). Focused, Independent http://www.oag-bvg.gc.ca/internet/English/parl_ and Patient: Building a World-Class Canadian cesd_201804_e_42985.html Development Finance Institution. Report of the Standing Committee on Foreign Affairs Government of Canada (2008). Official and International Development. Ottawa. Development Assistance Accountability Act. Retrieved from: http://www.ourcommons. S.C. 2008, c. 17. Retrieved from: http://laws- ca/Content/Committee/421/FAAE/Reports/ lois.justice.gc.ca/eng/acts/O-2.8/index.html RP9710911/faaerp17/faaerp17-e.pdf
Government of Canada (2017a). Canada’s Kwakkenbos, Jeroen (2012). Private Profit for Public Feminist International Assistance Policy. http:// Good? Can investing in private companies international.gc.ca/world-monde/issues_ deliver for the poor? Brussels: European development-enjeux_developpement/ Network on Debt and Development priorities-priorites/policy-politique. (Eurodad). Retrieved from: http://www. aspx?lang=eng eurodad.org/files/pdf/520a35cb666a7.pdf
Government of Canada (2017b). Canada’s Policy Romero, Maria-Josée (2014). A Private Affair – for Civil Society Partnerships for International Shining a light on the shadowy institutions Assistance – A Feminist Approach. Retrieved giving public support to private companies and from: http://international.gc.ca/world- taking over the development agenda. Brussels: monde/issues_development-enjeux_ Eurodad. Retrieved from: http://www. developpement/priorities-priorites/civil_ eurodad.org/files/pdf/53be474b0aefa.pdf policy-politique_civile.aspx?lang=eng Vervynckt, Mathieu (2014). Going Offshore – How Government of Canada (2018). “Canada moving development finance institutions support forward on implementing the United Nations companies using the world’s most secretive 2030 Agenda for Sustainable Development financial centres. Brussels: Eurodad. http://www. at home and abroad.” Retrieved from: eurodad.org/files/pdf/5457b8e273cfa.pdf
340 Europe Union The modernisation of European development cooperation: Leaving no one behind?
Alexandra Rosen, CONCORD Europe
Overview fold increase since 2014. One in seven euros invested by EU donors in aid was spent as in-donor-country refugee • In 2016, the EU and its member states costs in 2016. In-donor refugee costs reported a total increase in official fell slightly in 2017 by 6%. development assistance (ODA) with the total for that year being €75.46 • While total ODA from EU28 increased billion. According to the OECD DAC by 10% between 2012 and 2015, this level of ODA declined in 2017 by the ODA from EU member states 2.4%. With this level, the EU and its dedicated to LDCs actually decreased 28 member states (EU28) make up the by 2.5%. The EU and its member states world’s biggest development donor are providing more ODA to the LDCs block, demonstrating a stable increase than other donors, but in relative in total aid over the last five years. Still, terms there is a shift away from one fifth (€15.40 billion in 2016) of the spending in LDCs. total aid reported by the EU member states reflected financial flows that Although the EU is the biggest were not a “genuine” transfer of resources to developing countries donor bloc, it is still far from (“inflated aid”).The EU collective ODA reaching the targets in 2016 amounted to just 0.50% of GNI, In 2016, the EU and its member states which is 0.2 percentage points below were the world’s biggest donor bloc, the global goal of 0.7% GNI. This ratio collectively reporting €75.46 billion in total remained largely unchanged in 2017. official development assistance (ODA). This According to CONCORD AidWatch represented a 27% increase over the past calculations, if genuine aid increases two years, partly because a majority of EU at the current rate, the EU will not member states (23 out of the 28) increased meet the 0.7% target before the year their aid. Ten EU member states increased 2052 - more than 20 years after the their total ODA by over 25%, including 2030 deadline. Spain (193%) and Germany (36%). EU and • Only 5 EU member states met the member states’ ODA level declined by 2.4% 0.7%-target in 2016, namely Denmark, 2017, according to preliminary figures by Luxembourg, Sweden, UK and, for the the OECD DAC. first time, Germany. • EU donors reported a total of €10.88 Five EU countries - Denmark, Luxembourg, billion for refugee costs in 2016. This Sweden, the United Kingdom and, for the represents a 44% increase from the first time, Germany, -reached the 0.7% previous year, and a staggering three- target. Luxembourg and Sweden deserve
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special mention for keeping the integrity increased by 10% between 2012 and 2015, of their aid very high. They are the only ODA from EU member states dedicated to two EU member states that exceeded the LDCs decreased by 2.5%. 0.7% target in 2016 and spent their aid on delivering “genuine” developmental A shift away from poverty impacts in developing countries. As an eradication and sustainable example, the Luxembourg government development explicitly committed to not reporting in- donor-country refugee costs as ODA. A central question is the quality of the ODA delivered by the EU and its member states: In spite of the 2016 positive trend of did it truly contribute to poverty eradication increasing aid levels over previous and sustainable development? In fact, for years, the EU is still far from meeting its the most part, the EU’s aid increases have international 0.7% of GNI commitment. not been used for development purposes in AidWatch 2017 confirmed that overall developing countries. For a more accurate the EU is retreating from, rather than picture of EU development cooperation, making progress towards, its 0.7% ODA it is crucial to distinguish between the promise. The EUs total collective ODA portions of aid budgets that are focused in 2016 amounted to just 0.50% GNI - on reducing poverty and supporting the 0.2 percentage points below the 0.7% countries and people that have the least target. According to CONCORD AidWatch versus the amount used to cover costs that calculations, if genuine aid increases at the serve European domestic objectives. current rate, the EU will not meet the 0.7% target before the year 2052 - more than 20 According to the AidWatch inflated aid years after the 2030 deadline. methodology,1 one fifth (€15.40 billion) of the total aid reported by the EU member Along with other OECD donors, the states in 2016 was inflated. Furthermore, EU, is committed to spending 0.15% CONCORD’s calculations show that, as a to 0.2% of its GNI in the world’s least proportion of total European aid, “inflated developed countries (LDCs). However, aid” in 2016 increased by 43% compared in 2016 OECD donors’ spending in these to 2015, when it was 17% of total EU ODA. countries shrank with only seven of them meeting this international commitment The AidWatch 2017 analysis also revealed to LDCs. Six of these seven donors that the gap between current European were EU member states: Luxembourg, aid levels and the amount needed to reach Sweden, the UK, Denmark, Belgium and 0.7% ODA/GNI is wider than reported. the Netherlands. According to AidWatch Based on EU donor ODA figures reported to 2017, total EU bilateral aid to LDCs in 2015 the DAC, the EU aid gap in 2016, amounted represented just 15% of total European to €29.25 billion. When the “inflated” aid is aid. This amount represented only deducted from that figure the “real EU aid 0.06% of EU28 GNI – half of the amount gap” is €44.70 billion. While absolute EU required to honour the international LDC aid figures are increasing steadily, genuine commitment. While total ODA from EU28 aid is lagging behind.
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In-donor refugee costs: EU member states progress, reaching 50-75%. Most member still receiving its own aid states, however, still have a long way to go to reach the 85% target by 2020. In 2014- In-donor refugee costs accounted for 30% 2015, the EU Commission had reached of the total EU aid increase in 2016, showing only 34%. In its GAP II 2017 implementation once again that this type of spending report it claimed that as many as 57% of has rapidly become a main feature of its programs had gender as a significant or European development cooperation. In principal objective. Although slow, progress 2016, EU donors reported a total of €10.88 is being made, given that the portion of EU billion for refugee costs - a 44% increase programs with gender as the “principal from the previous year, and a staggering objective” will increase as well. three-fold increase since 2014. In 2017 in- donor refugee costs fell slightly. Modernising EU development cooperation - the These figures for in-donor refugee costs mean that one in seven euros invested instrumentalization of aid by EU donors in aid in 2016 was, in fact, The diversion of European ODA away spent as in-donor-country refugee costs. from those countries that are most Although it is vitally important to support in need is not necessarily serving refugees in Europe, counting donor genuine and effective development. On refugee costs as ODA is misleading. This both the EU and member state level, type of spending has little to do with there has been a trend towards an development aid and does not link directly instrumentalization of ODA to address with the core purpose of ODA, which is to emerging non-development objectives. reduce poverty in developing countries. As The following section addresses EUs CSOs have long argued, DAC rules should response to these non-development stop accepting in-donor-country refugee objectives, such as managing migration costs as ODA. The impact on EU members flows or donors’ domestic security goals. states, following the implementation of the 2017 clarification to the reporting of in donor refugee costs, remains to be seen. ODA and Migration - the externalisation of EUs responsibilities The EU is stepping up its gender commitments, but progress is slow Between 2013 and 2016, more than 3 million people sought asylum in Europe. In In 2016, the EU introduced its second response, the EU developed several plans, Gender Action Plan 2016-2020 (GAP II), agreements and policy frameworks. It again confirming that 85% of new EU also established cooperation agreements programmes must have gender as either with several third countries, highlighting a “significant” or “principal” objective, in the importance of “addressing the line with the OECD’s definition of gender root causes behind irregular migration markers. According to data on gender- to non-EU countries.” In addition, EU integrated ODA from 2014-2015, only development cooperation budgets were Sweden has met this target, although seven increasingly spent in favour of “migration member states were making significant management.” Development cooperation
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has become a tool to “control migration”, of developing country partners in migration “manage migration” or “tackle the root and border control efforts. This type of causes of migration”. conditionality is visible in many regions that are either sources of or transit points for The three ways that EU ODA is being used migrants coming to Europe. For example, 17 to curb migration include: readmission agreements have been signed by the EU with origin countries and more a) The inflation of ODA: ODA is being spent in than €6 billion from the EU ODA budget has Europe to host refugees instead of reaching been allocated to Turkey under the condition developing countries. As mentioned above, that it will host Syrian refugees under the so €10.88 billion has been reported as ODA call “EU-Turkey deal”. On a national level, in 2016 to host refugees and migrants in Denmark has appointed a “repatriation Europe. As an example, Germany spent ambassador” in charge of facilitating return more than 25% of its ODA on hosting agreements with countries of origin. refugees, making Germany the biggest recipient of its own aid. To stop the dilution of EU ODA, EU and b) The diversion of ODA: To prevent migration its member states should phase out the to Europe, ODA has been increasingly inclusion of all in-donor refugee costs from invested in specific countries from which their ODA and develop an evidence-based people tend to migrate. “Addressing the approach to migration and development root causes of migration” has been a that ensures development impact remains key theme of official European strategy the key focus of all EU aid. As well, the since 2015 and it is also reflected in EU EU must stop the instrumentalization of development cooperation policies. For development cooperation by establishing example, a main purpose of the instrument clear boundaries between migration called the Emergency Trust Fund for Africa deterrence and development efforts. ODA is to manage migration - more than €3 in particular, must hold true to its purpose billion has been invested in this fund by of eradicating poverty, reducing inequality EU member states. The instrument is and meeting humanitarian needs. problematic as it uses development budgets for migration control and enforcement Security aid - serving European measures and diverts ODA from its main donors’ national interests? purpose of poverty eradication. Also, in implementing the Trust Funds for Africa, Aid spending figures show that peace the EU and its member states are failing and security has not traditionally been to be consistent with the principles of a priority sector for donor spending in development effectiveness and fully developing countries. Yet, this is changing supporting partner countries in achieving as some European Union donors are 2 their own development priorities. starting to prioritise the strengthening c) The conditioning of ODA: EU ODA is of state security in developing countries provided on the condition that the recipient and are using ODA as a tool to counter country will either prevent migrants from perceived threats to Europe. Donors are leaving that country to enter Europe or also increasingly committing aid for the offer to host refugees. ODA is increasingly prevention of extremism or terrorism as being used to encourage the cooperation well as to control insurgency and migration.
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In 2016, the OECD DAC clarified the to be explained why the EU is allocating its reporting rules for peace and security relatively small ODA budget in support of related ODA spending. Contrary to the the private sector. For example, in its the original intention of this exercise, the current design, the External Investment revision expanded ODA eligibility for Plan does not deliver its stated sustainable peace and security spending into new development objectives. areas. Although it is too early to examine the influence of the new DAC rules on aid Evaluations confirm that the design and figures, the risk remains that scarce aid implementation of EU blending projects resources will become diverted from other generally did not have strong pro-poor development priorities, such as poverty dimensions.3 It is important that ODA is reduction. The implications for what it will not used to subsidise the European private mean if donors begin to align their aid sector whereby shareholders in Europe policy more closely to domestic security – rather than people living in poverty – agendas is not yet clear. However, there become the biggest beneficiaries. While are worrying signs, as seen in the EUs a responsible private sector is rightly rhetoric when discussing the next EU multi identified as an important partner to annual budget. finance and realise the Sustainable Development Goals, rigorous safeguards EU relying heavily on the private need to be put in place to ensure that sector to realise the SDGs inequalities do not occur.
It’s not new for the EU to resort to the In addition, it is important that the EU and private sector to finance and realise the its member states abandon the “one-size Sustainable Development Goals. Since fits all” approach to the role of the private 2011, the EU and its Member States sector in development. Instead they have been promoting a growing role for should focus on micro, small and medium various elements of the private sector enterprises (MSMEs) and social economy in development cooperation. In recent enterprises in local and regional value years, this trend has been reflected in the chains and trade. European External Investment Plan (EIP) and its European Fund for Sustainable Conclusion Development (EFSD). The European Fund for Sustainable Development is expected • The EU remains the biggest donor to mobilise €44 billion in private sector bloc but is failing to apply the ‘leave investments with the help of EU ODA. no one behind principle’. More ODA is being spent on costs within the donor Looking into the future, it is likely that country (for in-donor-refugee-costs) the EU will be transferring even more EU than on the Least Developed Countries ODA to Development Finance Instruments and there is a relative shift away from (DFIs) and through mechanisms such as spending on LDCs. blending and guarantees (for example • The EU is still facing the challenge to through the EIP and EFSD). Concerns have increase its aid levels to meet the 0.7% been raised over this approach, as it is yet target, by only providing genuine aid.
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Total EU ODA levels should not depend Recommendations on unforeseen events and decrease when, for example, refugee costs are Regarding European aid, the EU and its decreasing. EU ODA levels should be member states should: set on a stable and predictable path for reaching the 0.7% target consistent • Ensure that ODA remains focused with Agenda 2030. on poverty eradication in developing • Knowing that gender equality countries, through “genuine” ODA is a prerequisite for sustainable consistent with the Busan aid and development, it is welcomed that the EU development effectiveness principles; has stepped up its gender commitment. • Meet their aid targets (0.7% ODA/GNI However, progress is slow and the share by 2030, at least 0.15% of GNI to Least of projects with gender as a principal Developed Countries (LDCs) by 2020 objective is at low levels. and 0.2% of GNI to LDCs by 2025); • EU ODA is increasingly used to serve • Avoid using aid to cover a country’s EU domestic interests at the expense national costs of receiving refugees of people in developing countries. and, ultimately, phase out the There are concerns that EU domestic reporting of in-donor refugee costs security priorities, such as unproven as ODA. In the meantime, donors investment schemes and migration should closely monitor their increased control, will overshadow the EU’s spending on in-donor-country refugee commitments to promote human costs by using a transparent reporting rights, sustainable development system, and should apply existing and the fight against poverty in OECD DAC rules strictly; and its development cooperation programmes and actions. • Ensure that the modernisation of ODA rules is designed primarily to • While a responsible private sector increase the system’s consistency and is rightly identified as an important transparency and its alignment with partner to finance and realise the development effectiveness principles. Sustainable Development Goals, It should not be designed to suit rigorous safeguards must be put into donors by relaxing ODA definitions place to ensure that inequalities are and restrictions and thereby allowing not amplified and that people living in them to report spending not geared poverty are the biggest beneficiaries towards poverty eradication and of development efforts implemented sustainable development as ODA. by the private sector.
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REFERENCE:
AidWatch report 2017 “EU aid uncovered - how to Stocchiero/CONCORD Italy, and CONCORD reach the target on time”. (CONCORD Europe, EU TF, January 2018). Author: CIECODE, October 2017) CONCORD report “A 10-point roadmap for AidWatch 2018 “Security aid - Fostering development, Europe - on the role of the private sector in or serving European donors’ national interest?” development” (CONCORD Europe, Isabelle (CONCORD Europe, Author: Claire Godfrey, Brachet (ActionAid), Ad Ooms (ICCO February 2018) Cooperation), Sally Nicholson (WWF), AidWatch 2018 “Aid and Migration - The Gerry Boyle (CARE International), Kasia externalisation of Europe’s responsibilities”. Szeniawska (ActionAid), Jan Mayrhofer (CONCORD Europe, Author Gonzalo Fanjul (Oxfam International), Antoinette van on behalf of CIECODE, March 2018) Haute (CONCORD Europe), Mousumi CONCORD report “Partnership or Conditionality Saikia (Islamic Relief Worldwide), - Monitoring the Migration Compacts and Julia Linares (WWF), Hanna Saarinen EU Trust Fund for Africa” (CONCORD (Oxfam International), Tanvir Muntasim Europe, authors: Olivia de Guerry, Andrea (ActionAid).
ENDNOTES
1 According to the AidWatch methodology, 2 CONCORD Europe report “Partnership or “inflated aid” refers to all financial flows conditionality? Monitoring the Migration Compacts that – although formally reported as and EU Trust Fund for Africa” (January 2018) aid by donors under DAC rules – do not 3 Evaluation of Blending, Final Report, genuinely contribute to development. Volume 1 – Main Report, December 2016, https://concordeurope.org/wp-content/ p.14 (available at: https://ec.europa.eu/ uploads/2017/10/CONCORD_AidWatch_ europeaid/sites/devco/files/evaluation- Report_2017_web.pdf p. blending-volume1_en.pdf)
347 France Will Emmanuel Macron Make French Aid Great Again?
Michael Siegel, Oxfam France
Introduction But with France’s new president there is renewed political interest with President Macron committing to “escalate ODA” Some might argue that since the election and reach 0.55% of GNI for ODA by 2022, of Emmanuel Macron as President, France up from 0.43% in 2017. His Government is back in the game of development has made it clear that 0.55% is only an cooperation. In Oxfam’s view, this might intermediary target towards achieving 1 just be a smokescreen. With 10.08 billion the 0.7% international norm by 2025. Euros allocated to Official Development The Government has also promised to Assistance (ODA) in 2017, France is proud adopt a new Development Cooperation to state that it is the fifth largest donor in Law that would set out a roadmap to 2 volume. But let us not forget that at 0.43% achieve this 0.7% target. Although French of its Gross National Income (GNI) in 2017, civil society would prefer that the 0.7% France remains the tenth contributor in target be reached by 2022, the expected terms of its ODA performance, well behind increase in French aid has been positively its European neighbors. welcomed, particularly since aid had been systematically cut since 2010. In September 2018, Emmanuel Macron’s commitment to allocate 0.55% of French The new Government has also committed to GNI to ODA by 2022 generated considerable target French aid towards Least Developed applause within the UN General Assembly. Countries (LDCs), in particular 19 “Priority It would seem that the UN had forgotten Countries”, primarily francophone LDCs. France’s 1970 commitment to allocate This is positive news.3 During his electoral 0.7% of GNI to ODA, a pledge that was campaign, Mr. Macron promised to not realized. Nonetheless, the fact that fulfill the Addis Ababa commitment of Emmanuel Macron is willing to increase allocating 0.15% of GNI to LDCs by 2022,4 French aid could be seen as positive news up from 0.10% in 2016. Two months if only he would not systematically link aid after his election, he launched the Sahel to the need to promote French security, Alliance and committed to intensifying migration management and economics development efforts in Mali, Niger, Chad, interests abroad. Burkina Faso and Mauritania –some of the poorest countries in the world. Macron: The new champion of development aid? The new French Government has also clarified its priorities for French Prior to the election of Emmanuel development aid policy in the next 5 years. Macron development cooperation had These include health, education, climate fallen off the political agenda in France. change, gender equality, and humanitarian
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aid - all key sectors to reduce poverty Although the French Government and fight inequality. On the international committed to increase aid to social services scene, Emmanuel Macron likes to portray in LDCs, current trends reveal a very himself as a political leader on these different picture. French aid to LDCs has issues. He hosted the One Planet Summit shrunk from 26% in 2015 to 22% in 2016. in Paris (December 2017) during which he Only one LDC (Senegal) is amongst the announced an extra 300 million Euros for top 10 recipients of French aid, alongside climate change adaptation, in addition to emerging economies such as China, the 1.2 billion Euros promised by François South Africa and Brazil. Furthermore, Hollande during the 2015 Paris Climate French bilateral aid to basic social services Summit(COP 21). At the Global Partnership dropped from 37% in 2014 to 31% in 2015. for Education (GPE) Replenishment These figures are actually inflated since Conference in Dakar (February 2018), he 72% of the ODA that was reported for the stated that France would multiply by 10 its education sector in 2017 never reached contribution to the GPE between 2018 and developing countries and was in facts pent 2020. And a few months later, Mr. Macron’s on school fees for students who come to office announced that France would host study in France. the Global Fund Fifth Replenishment Conference in 2019. But despite all these The decreasing share of French aid rosy declarations, the reality of French aid to essential services in LDCs is mainly is complicated by many troubling aspects. due to the increase of loans in French ODA. These loans are generally directed Profitable loans, at the expense towards productive sectors (primarily of the poorest extractive industries, finance, and infrastructure) in emerging economies. Emmanuel Macron is excellent at making In 2016, the grant element of French commitments in favor of development aid. aid was 81.4%, down from 85.6% in But in practice, it’s a very different story. 2015. The grant element of French aid The reality is that his beautiful speeches therefore stands below the OECD norm are often filled with empty words and of 86% and is far from the DAC average 5 little money. Only two months after his of 94.4%. With loans comprising 50% of election, the Government announced a cut its bilateral aid France is the OEDC DAC of 136 million Euros in the development country with the second worst grants/ aid budget that had been adopted by loans ratio. Furthermore, the level the previous Parliamentin2017. The aid of concessionality of French loans is budget introduced by Emmanuel Macron’s extremely low (at 53.8%). Government for 2018 was only increased by 100 million Euros when 1 billion Euros As a matter of fact, the spectacular increase were actually needed for France to be on of almost 15% in French ODA in 2017 was the right track to achieve the 0.55% target in fact mainly due to a rise in bilateral by 2022. The new Government has also and multilateral loans.6 Furthermore, decided to reduce the scope of the French the expected increase in French ODA in Financial Transaction Tax that could have 2018 needs to be taken with a pinch of generated between 2 to 4 billion Euros for salt as it will likely be the result of further development aid in 2018. increases in bilateral and multilateral
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loans combined with the implementation The OECD is contemplating the inclusion of the new OECD reform on the way loans of private sector instruments in ODA are reported as ODA. Given these trends in reporting. Such a reform would artificially the structure and nature of French aid, the inflate French ODA at the expense of poorest countries are unlikely to reap the the poorest. For example, the reform benefits of the 0.55% commitment. would allow France to report part of the 1.4 billion Euros portfolio handled Protecting national interests, by the French Development Finance the new goal of French aid Institution, Proparco, as ODA. But given its mandate to support the private Since Emmanuel Macron’s election sector, only 2% of Proparco’s activities there has been a strong push from the are directed to the health and education Government to link aid with France’s sector.10 Moreover, Proparco does not economic, security and migration have an accountability mechanism, management interests. In his election unlike the French Development pledge, Emmanuel Macron indicated that Agency. Without sufficient safeguards development policies were central to “the on blending finance, the privatization role of France in the world, its influence of aid could widen inequalities and and its companies”. A few months later, threaten the basic social, economic and in Ouagadougou, he called upon private environmental rights of the poorest insurance companies to help fill the gap people in developing countries. in strengthening health systems in Africa. Similarly, a report from the Finance The rise of the of the 3D policy Commission of the French Parliament (Diplomacy, Defense and Development) specifically recommended that ODA since Emmanuel Macron’s election risks should “benefit the French economy and further diverting precious ODA funds its companies.”7 Blending public finance from access to social services in LDCs with private finance is increasingly being to French geopolitical interests. During portrayed by French policy makers as the first inter-ministerial meeting on innovative funding for development. development cooperation (February 2018), the French Government endorsed Such a move could threaten France’ a securitized approach to migration. strong track record on formally untying This aims to use ODA to fund border aid. In 2016, 96% of French aid was control management and the return of untied, well above the OECD DAC average migrants to their countries of origin. of 80%.8 The increasing use of public Emmanuel Macron has been actively funds to support the private sector risks promoting the security-development diverting more development funds from nexus through his Sahel Alliance initiative, essential services. Whilst AFD’s activities which puts forward development projects in support of the private sector grew from with security objectives, including the 14% to 19% between 2016 and 2017, its fight against terrorism, transnational support for the health and education organized crime and human trafficking. sectors shrank from 7% to 4% during the French operators such as the AFD or same period.9
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Expertise France have already started to Conclusion implement the 3D policy through projects funded by the EU Emergency Trust In the current global context of rising Fund for Africa. The overall objective of nationalism, France’s President Emmanuel these projects is to contain migration Macron might seem like an obvious leader and prevent violent extremism. As the for development cooperation. But one foundation for these initiatives France must dig deeper behind the President’s needs to champion better governance, public pronouncements and speeches. accountability and human rights by Whilst France continues to fail to uphold its supporting internal/external checks commitments on aid quantity, it is pushing and balances in the G5 Sahel countries, the international community in the wrong working with parliaments, independent direction in terms of aid effectiveness. By media, civil society organisations and systematically promoting development judiciary bodies. Otherwise, the nexus cooperation approaches that benefit national security-development promoted by the interests at the expense of essential services Sahel Alliance risks further destabilizing in Least Developed Countries, France is the Sahel region. undermining the very essence of aid.
ENDNOTES
1 Response of Emmanuel Macron to ONE’s 5 OECD DAC Development Cooperation survey during the 2017 Presidential Report 2017 (page 198) http://www.oecd. Election (page 2) : https://s3-eu-central-1. org/dac/development-co-operation- amazonaws.com/one-vote-france-2017/wp- report-20747721.htm content/uploads/2017/04/20164102/PDF- EM-R%C3%A9ponseAnalyse-ONE.pdf 6 Transversal Policy Document 2018, https:// www.performance-publique.budget.gouv. 2 Response of Emmanuel Macron to fr/sites/performance_publique/files/ Coordination SUD’s survey during the farandole/ressources/2018/pap/pdf/DPT/ 2017 Presidential Election (page 9) : DPT2018_politique_developpement.pdf https://s3-eu-central-1.amazonaws. (p.12) com/one-vote-france-2017/wp-content/ uploads/2017/04/20164102/PDF-EM- 7 National Assembly, Finance Commission R%C3%A9ponseAnalyse-ONE.pdf Report on the ODA Mission: http://www. assemblee-nationale.fr/15/pdf/budget/ 3 Conclusions of the French Inter-ministerial plf2018/b0273-tIII-a6.pdf (page 6) Meeting on Development Cooperation, 8 February 2018 : https://www. 8 According to the 2018 DAC report – Table diplomatie.gouv.fr/IMG/pdf/releve_de_ 14 - http://www.oecd.org/dac/financing- conclusions_du_comite_interministeriel_ sustainable-development/development- de_cooperation_internationale_et_du_ finance-standards/DCD-DAC(2018)12-REV2. developpement_-_08.02.2018_cle4ea6e2-2.pdf en.pdf.
4 Response of Emmanuel Macron to 9 Groupe AFD, Résultats 2017 https://www. Coordination SUD’s survey during the afd.fr/sites/afd/files/2018-04-02-28-29/ 2017 Presidential Election (page 9) : groupe-afd-resultats-2017.pdf https://s3-eu-central-1.amazonaws. com/one-vote-france-2017/wp-content/ 10 Proparco, Key Statistics on 2017 Activities : uploads/2017/04/20164102/PDF-EM- https://www.proparco.fr/fr/chiffres-cles-sur- R%C3%A9ponseAnalyse-ONE.pdf lactivite-de-proparco-2017
351 Germany Germany’s Engagement in Development: Struggling with ODA, migration and security interests at the European level
Dr. Martina Fischer, Bread for the World
Along with other OECD-member states CSOs for “whitewashing” the figures. In Germany, has agreed to increase “Official 2017, the 0.7% UN goal was not achieved, Development Assistance” (ODA) and to partly due to the decreasing number of guarantee that 0.7 % of its GNI will be spent refugees seeking asylum in Germany and for this purpose until 2030. In 2016 the it seems unlikely that this goal will be German Government proudly announced achieved again in the near future. In fact, that it had achieved the 0.7% target, having the CSO-Platform VENRO predicts that failed to reach this goal the previous year. Germany’s ODA performance will be less than 0.52% of GNI in 2018. The majority of Germany’s ODA spending (around 37%) is generated by the Ministry An examination of the 2018 budget for Development Cooperation (BMZ). Other proposed in May 2018 shows promising institutions, such as the Federal Foreign developments, with an increase in spending Ministry (8%), have also contributed by on development assistance of €900 million covering the funding for university grants over the 2017 budget. This contradicts the for students from the Global Southand German Government’s Mid-term Planning the “Bundesländer” (Federal States (“MittelfristigeFinanzplanung”) proposal in Germany) (5%). The Development that implied that funding for development Bank, “Kreditanstalt für Wiederaufbau,” cooperation would decrease in both 2019 generates 25%, and 10% is transferred to and the following years. New figures the EU (European Development Fund).1 for the 2019 budget, presented in July 2018, include an increase in the national Germany’s achievement of the 0.7% goal development budget, with €300 million in 2016 was largely due to the fact that it being added, bringing the budget to€9.7 could count the costs for newly arriving billion for 2019.3 This was accompanied by refugees. For Germany these costs made a proposal to increase the Defence Budget up 17% of its ODA spending in 2016/17.2 to reach €44 billion (or 1.3% of GNI), which In practice, it meant that a significant Chancellor Merkel and Defence Minister proportion of ODA funds from Germany von der Leyen have confirmed will increase have been spent in the donor country to 1.5 % of the GNI by 2024. (Germany) itself and have not contributed to traditional development activities such Germany’s Government still maintains as poverty reduction, fight against hunger, that it will increase development funding health care or education within the poorest to achieve the 0.7% goal. CSOs and or most fragile countries. independent development experts are skeptical and have expressed concern that Because of these distortions, Germany’s this promise will not be fulfilled. VENRO, government has often been criticized by Bread for the World, and other Church-
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related organizations have published rights and democracy, stability and peace statements and appeals to raise awareness and aim to control migration. It shall have among Members of Parliament and to a budget of €89.5 billion according to the obtain substantial increases. Otherwise Commission.5 Germany’s ODA-funding will fall under 0.5% in 2019, and shrink even more in the 1.1. Background: The “Multiannual 4 years to come. Financial Framework” (MFF)
Development experts have emphasized With the Multiannual Financial Framework that there is an urgent need for (MFF) EU member states have the power Germany to substantially increase its to decide how much money they wish to development engagement in response to provide for Community tasks over a seven the deep shifts emerging in the financial year’s period as well as the maximum amount architecture of the European Union. that should be spent in various policy areas. There is fear that Brexit and UK leaving It serves a framework for the EU’s annual the Union may be followed by a decrease budget planning. As member states need in development funds. In reaction to this, to agree unanimously on this framework, the EU Commission wants to reorganize extended debate can be expected. its funding system and suggests major shifts in the financial structure for external On 2 May 2018, Commission President engagement after 2020. Jean-Claude Juncker and Budget Commissioner Günther Oettinger 1. European Commission plans unveiled their proposals for the next to restructure the EU budget EU budget post-2020.6 The Commission post-2020 recognises that more money must be provided by fewer member states for this From May to July 2018, the EU-Commission Community budget as a consequence of published its plans for the next Multiannual the “Brexit” and UK leaving the Union. Financial Framework (“MFF 2021-2027”), The Commission proposes that the 2021- along with related legal documents. 2027 MFF should amount to €1,279 billion According to these proposals, the European (in current prices which consider the Development Fund (EDF) will be integrated inflation until 2027; in fixed prices this into the EU-budget as set out by the MFF. is equivalent to €1,135 billion for 2021- The EDF, together with the Development 2027) – €186billion (approx. 11 %) more Cooperation Instrument (DCI), will be than was agreed in the MFF for 2014- merged with other instruments (such as 2020. Unfortunately, because of both the the Instrument for Stability and Peace, the different calculation methods and the Instrument for Democracy and Human restructuring of the budget headings by Rights, and the Neighborhood Instrument) the Commission, direct comparison of to form one single “Mega-Instrument” the proposed items with those adopted for external action. The title of the new for the current funding period is almost instrument is “Neighborhood, Development impossible. and International Cooperation Instrument” (NDICI). This instrument will utilize the According to the Commission’s calculations, tried and tested instruments for human more funding will be allocated for
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strengthening the EU’s external borders. May 2018,7 the figures sparked heated These changes will include a fivefold debate in the European Parliament. This increase (to 6,000) in the number of staff was partly because the method used for employed by the European Border and their calculation was very different than Coast Guard Agency, FRONTEX, as well as previous budgets. Another problem was a stronger focus on defence, research and that many budget lines have been newly youth. Almost all the other EU programmes arranged and shifted. As an example, in the will be subject to cuts, including spending on new Multiannual Financial Framework, the agriculture and structurally weak regions, European Commission proposes to merge although these two items will continue to be and restructure previous standalone the largest areas of expenditure, accounting budget lines, notably the instruments for for 34.5% and 29.7%, respectively. development, democracy and human rights, and civil conflict management. For migration (Asylum and Migration Fund), the Commission has penciled in 1.2. The new “Neighborhood, €10.4 billion, with a further €9.3 billion Development and International for an Integrated Border Management Cooperation Instrument”(NDICI) Fund. Proposed spending on security and defence is €18 billion, including €13 billion The new “Neighbourhood, Development for the European Defence Fund, launched and International Cooperation in 2018. These budget proposals are Instrument” (NDICI) willreplace well- connected to plans for a comprehensive established, and hitherto independent restructuring and refocusing of the EU’s mechanisms, such as the European financial instruments. Development Fund (EDF). The latter is not currently part of the EU budget and is The total amount for external action of the replenished separately by member states. EU will amount to €123 billion, including It would also affect the Development the new “Neighborhood, Development and Cooperation Instrument (DCI), the International Cooperation Instrument,” as European Neighborhood Initiative (ENI), well as investments in Humanitarian Aid, the Instrument for Democracy and Human Common Security and Defence Policy, Rights (EIDHR), and the Instrument Cooperation with Oversees Countries and contributing to Stability and Peace (IcSP). territories, and Pre-accession Assistance. This latter mechanism was established The Neighborhood, Development and in 2014 to support crisis prevention, civil International Cooperation Instrument will conflict management and peacebuilding/ be allocated €89.5 billion, with a further reconciliation. It has provided funding for €11 billion for Humanitarian Aid, €3 billion civil society projects around the globe. for the Common Foreign and Security Policy, € 0.5 billion for Cooperation with Oversees Countries and Territories and 1.3. Migration control and “capacity €14.5 billion for Pre-accession Assistance. development” for partners’ armed forces
When Commission President Jean-Claude The Neighborhood, Development and Juncker and Budget Commissioner International Cooperation Instrument is Günther Oettinger unveiled their proposals intended to contribute not only to peace, for the next EU budget post-2020 in security, development and stability, but it
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also has an objective “to address irregular in the world’s poorest countries. With this migration” and “fight its root causes”: new Instrument there is a strong possibility that funding will primarily benefit countries that are willing to cooperate with the EU “Migration is a priority which will on reinforcing borders and controlling be identified and addressed across migration. This trend is evident in various the instrument and in the different agreements recently with governments in pillars, including by drawing on North Africa and the Sahel region, whose 8 unallocated funds.” human rights records are problematic.
The Communication also notes that Another concern is that the new external budgetary flexibility (“rapid-response financing instrument weakens civil crisis pillar with worldwide scope”) will enable prevention and civil society support. funding to be provided for the training and equipping of the security apparatus in partner countries.9 This expenditure 1.4. The new external financing will primarily focus on armed forces in instrument weakens civil crisis African partner countries that have been prevention and civil society support specially selected for “Capacity Building for Security and Development,” with an emphasis on counterterrorism, organised Two EU funding lines have been very much crime, drug and human trafficking, appreciated and considered as crucial for border management and control of the funding of civil society activities, in the migration. Specific mention is made of view of European CSOs: The Instrument the possibility of making fast and flexible contributing to Stability and Peace (IcSP) use of unallocated funds “to address and the Instrument for Democracy and migratory pressures ... but also to address Human Rights (EIDHR). unforeseen events, stability needs and new international initiatives and priorities”. The IcSP11 plays an essential role in Additional “capacity building” programs strengthening civil crisis prevention and in training and equipping military and peacebuilding at the EU level. With this police institutions will be funded through instrument, 273 peace building projects the “European Peace Facility”, an off- have been funded in 75 countries12 in budget instrument proposed outside the many important areas such as for instance 10 Multiannual Financial Framework. conflict prevention, peace and security; early warning and mainstreaming conflict Bread for the World views the changes sensitivity; confidence building, mediation proposed for the NDICI with considerable and dialogue; economic recovery, concern. It worries that long-term funding reconstruction and rehabilitation after for mechanisms with good track records violent conflict; reintegration of ex- for supporting development, civil crisis combatants; children, youth and conflict; prevention, and human rights protection countering violent extremism; culture, will give way to the EU’s short-term security media and conflict; electoral assistance; interests. It is convinced that development government and civil society; natural policy should focus on ending poverty and resources and conflict; humanitarian mine improving social and economic prospects actions, disarmament of small arms and
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light weapons; rule of law and transitional on a local level and cannot absorb huge justice; women peace and security and amounts of money or implement very gender mainstreaming. The IcSP has a expensive projects. strong focus on support for CSO activities. A 2017 evaluation of the IcSP rated it as In June 2018 the Commission published highly effective and successful. detailed regulations for the various policy areas, including a breakdown of The EIDHR is crucial in funding the numbers. The draft regulation for projects in the area of human rights, the NDICI foresees a 50% reduction of fundamental freedoms and democracy spending in the area of civilian crisis in non-EU countries. It was designed prevention, post-conflict regeneration to “support civil society to become an and peacebuilding. In the MFF 2014-2020 effective force for political reform and the “Instrument for Stability and Peace” defence of human rights.”13 It included had a budget of €2.3 billion. In the new an emergency fund for “Human Rights Instrument, support for crisis prevention Defenders at Risk” (small grants and post-conflict peacebuilding would program), and programs for medium be less than €1 billion. Given this and long-term support for human rights prognosis, it is unsurprising that some organisations. Furthermore, under the important activities that were funded EIDHR Human Rights Crisis Facility direct by the IcSP in 2014-20 will no longer be awards could be granted to finance civil included in the NDICI draft regulation society actions in the most difficult for the MFF 2021-27. Among these tasks situations. Thus, the EIDHR so far has are: transitional justice and dealing with proven to be very flexible and accessible the past activities, social reintegration for CSOs working under very threatening of ex-combatants and re-socialization of and difficult conditions. The EIDHR has child soldiers, de-mining programmes provided targeted support for local in post-conflict areas, civilian oversight initiatives, civil society and the media of the security sector, support for the in social dialogue. As a very flexible potential of women in peacebuilding, instrument it can make important support for civil society in peacebuilding, contributions to anti-discrimination and support for peace research.14 and protection of human rights activists even in times of crisis. There is a huge risk that, if the EIDHR and IcSP budgets should disappear as As mentioned above, the EU Commission independent funding lines, support for plans to dissolve the IcSP and EIDHR and civil society projects will be drastically transfer tasks that have been served by reduced. It is already very difficult for these budgets to the new external financial many CSOs working at the grassroots instrument, the NDICI. It is still very in regions of crisis to access sufficient unclear how civil society support will be funding. Integrating these EU funding organized within this future Mega-Budget, mechanisms into a larger general budget whether small grants will be available in line would, without question, reduce CSOs’ the future, and whether and how access access even more. Not only would funds will be guaranteed also for CSOs that are be disbursed in much larger tranches but not operating on an international but this type of mechanism would also be
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unlikely to have the capacity to provide ad and the European Peace Liaison Office hoc support in emergencies. (EPLO). Specifically, CSOs are proposing the following changes: Given that the scope for civil society engagement is already extremely limited Maintain the Instrument contributing to in many countries, it is irresponsible to Stability and Peace (IcSP) and the European further curtail these organizations’ access Instrument for Democracy and Human to funding. Therefore, Bread for the World Rights (EIDHR) as standalone funding views the scrapping of funding mechanisms mechanisms to support civil/civil society for civil society, particularly the Instrument conflict prevention, peacebuilding and the contributing to Stability and Peace (IcSP) - protection of human rights defenders; which is the only instrument that has been explicitly dedicated to conflict prevention • Increase spending on international and peacebuilding - as a massive setback. aid and retain a self-standing Bread for the World is also critical of financing instrument oriented solely the proposal to integrate the European towards development (poverty Instrument for Democracy and Human reduction, education, health, etc.), Rights, which is indispensable as a flexible with the merging of the EDF and DCI if budget to support human rights defenders, appropriate; into the new NDICI framework. • Achieve 100% alignment of the development instrument with the 2. Political demands and OECD’s ODA spending criteria and alternatives15 ensure compliance with international aid effectiveness principles with a priority Despite these well-founded concerns, given to the LDCs and to safeguarding it is important to note that these draft a geographical balance; and regulations are still in the proposal stage. • Establish scrutiny mechanisms to They must be discussed and voted on by ensure that development spending Member States, the Council of the EU, and is ODA-compliant in all cases and the European Parliament. The German genuinely benefits those in need. Government could influence discussions within the Council on the future for the instruments for development, human rights 3. Further perspectives and and peacebuilding. The Government should challenges: preventing ODA advocate that they be retained as separate from being abused for donors’ funding mechanisms within the MFF, as security interest proposed by European CSOs. Members of the European Parliament (MEPs) should The EU and most of its member states vigorously lobby for this outcome as well. have placed a strong focus on “migration” (particularly “migration control”). It is In addition to Bread for the World, CSOs important that CSOs and parliamentarians advocating for these changes include the critically examine these policies and European Confederation for Relief and guarantee continuous monitoring on Development (CONCORD), the Human development funding. In the past there Rights and Democracy Network (HRDN), has been a distressing tendency to
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appropriate civilian and development accepted in the plenary by a majority of funding instruments to obtain support for the European Peoples Party, the Social migration control and border management Democrats and Liberals. The Greens/ in so-called partner countries. European Free Alliance and European United Left - Nordic Green Left voted A good example of how funds can be against it. It was only due to the pressure contorted is seen in the recent experience from CSOs and a minority of MEPs that the with the IcSP. When it was established decision was amended by a supplement in 2014, the Instrument’s stated aim that appeals to the Commission not to was to increase the effectiveness of EU spend money that had been earmarked policy in the fields of crisis response, for poverty reduction on training and conflict prevention and peacebuilding. equipment for military assistance. The IcSP’s wide and ambitious remit was accompanied by a much less modest The German Government played a crucial budget – €2.338 billion for 2014-2020. role in the redefining the use of IcSP by the Commission. It supported the Commission’s Two years later, in July 2016, the EU initiative to re-purpose the IcSP for the benefit Commission launched a proposal to amend of the military from the very beginning, this Instrument to pay for equipment and and can even be seen as a driving force training for armies in partner countries.16 behind this plan. In 2015, it set up a national This move was directly contrary to the budget line to “enhance the capabilities” (“Ertüchtigung”) of partner countries’ armed Instrument’s original objective. The forces. It was clearly eager for these types following year, in 2017, almost a third of of initiatives to be funded through the EU, the IcSP funds were earmarked for flexible which is why Germany and other member and rapid crisis response measures and states sent a non-paper and letter to the for migration “management” and border Commission pushing for these changes. protection in Turkey. Supporters of the Commission’s proposal The Commission was also eager for IcSP have pointed out that it does not allow funds to be used for capacity building for the supply of arms and munitions. of armed forces. In response to these However, the text does not specify the demands against a limited budget, the types of equipment that can be provided Commission proposed that IcSP budget or its purpose. Given this vagueness, it be increased by €100 million to 2020. could include anything from uniforms to One option initially discussed was to IT infrastructure, the establishment of draw the full amount from the poverty military bases or the provision of an array reduction reserves. In a later proposal the of equipment used in the waging of war. Commission suggested the cash could be The Commission’s proposal has been obtained from four separate development justified by citing the threat of instability policy and civil budget lines. across entire regions and the need for a “comprehensive” approach to conflict Both the Committee on Foreign Affairs and management. The structural causes of the Development Committee accepted the conflict, however, are rarely analysed, let Commission’s proposal and it was also alone addressed.
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On the contrary, the proposed need is for policies, which give precedence repurposing of the IcSP points in a very to civil conflict management over the different direction, reflecting the broader expansion of military capabilities. There trend away from peaceful preventive is a growing resistance to these trends in policy-making that addresses root the EU, with groups such as the European causes, and towards a primarily military Network against Arms Trade (ENAAT) understanding of security. speaking out against the use of EU funds for military research and development. Over the past decade, the EU has The EU, it says, should be a peace project, begun to subsidise defence research. not a subsidy-generating machine for the The Preparatory Action envelope of arms industry. In the ENAAT’s view, EU the Common Security and Defence funds – which are public money - should go Policy opens the way for a joint defence to projects that help resolve and prevent research program with €90 million conflicts and address their root causes – initially earmarked for this purpose, and a and do so non-violently. further €500 million per year coming from member states in future.17 The proposed 4. Conclusions research program will be flanked by comprehensive agreements on more The development community should intensive defence policy cooperation be highly critical of the re-purposing in a so-called “Permanent Structured of development funds for military Cooperation” (PESCO), and “European purposes that – in reality – are fulfilling Defence Fund” already being established by donors’ security interests. They should the Commission and a number of member insist that EU member states interested states. The defence industry and its in providing training and equipment associations have welcomed these moves for partner countries’ armed forces in general and are particularly poised to should do so through multilateral exploit the potential new markets which initiatives beyond the EU-budget with will open up with EU-funded “capacity additional funding. At the same time, building” programs.18 they should clearly state the criteria that they are using to select partners and European CSOs are convinced that peace explain how they intend to ensure that and security is not created by providing assistance complies with human rights, armed forces with better equipment or democratic standards and peace policy. by mixing budget lines. What is needed, These measures require careful scrutiny instead, are cross-cutting policies and and reliable governance structures coordinated action which aims to prevent at the local level. They should not be the escalation of violence and addresses implemented at the expense of civil the causes of conflict. In other words, the conflict prevention and development.
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ENDNOTES
1 Accordingto 2017 figures, see Verband 12 For a global overview on issue areas and Entwicklungspolitik und Humanitäre project descriptions see https://icspmap.eu/ Hilfe (VENRO) (ed.) Die Entwicklung der 13 See https://ec.europa.eu/europeaid/ deutschen ODA bis 2020: Was muss die how/finance/eidhr_en.htm_en. See also Bundesregierung tun, um das 0,7-Prozent- Regulation (EU) No 235/2014 establishing Ziel zu erreichen? Berlin, November 2017. a financing instrument for democracy and 2 Verband Entwicklungspolitik und human rights worldwide for the period Humanitäre Hilfe (VENRO) (ed.) Die 2014-2020; https://eur-lex.europa.eu/legal- Entwicklung der deutschen ODA bis 2020: content/EN/TXT/PDF/?uri=CELEX:32014R023 Was muss die Bundesregierung tun, um 5&from=EN das 0,7-Prozent-Ziel zu erreichen? Berlin, 14 See Martina Fischer, EU-Finanzplanung November 2017,p. 3 gefährdet zivile Krisenprävention, Blog, 3 See Frankfurter allgemeine Zeitung, „Mehr 14.7.2018 https://info.brot-fuer-die-welt.de/ Geld für Verteidigung und Investitionen“, blog/eu-finanzplanung-gefaehrdet-zivile 4.7.2018. 15 Further information and assessments of EU 4 Breadforthe World, Entwicklungsfinanzierung policy are available here https://info.brot- braucht Verlässlichkeit. Brot für die fuer-die-welt.de/blog/dr-martina-fischer Welt zu den Haushaltseckwerten, Media 16 See Martina Fischer, EU Development funds Statement, 2 May 2018; https://www.brot- to be used for the military, July 5, 2017 fuer-die-welt.de/pressemeldung/2018- https://info.brot-fuer-die-welt.de/blog/eu- entwicklungsfinanzierung-braucht- development-funds-be-used-military verlaesslichkeit/ 17 See Martina Fischer, EU-Pläne zur 5 See Martina Fischer, EU-Topf für Nachbarschaft, Förderung von Rüstungsforschung, 22 Entwicklung und Globales, May 2, 2018; February 2018, https://info.brot-fuer-die- https://info.brot-fuer-die-welt.de/blog/eu-topf- welt.de/blog/eu-plaene-zur-foerderung- nachbarschaft-entwicklung-globales. ruestungsentwicklung 6 EU-Commission, Proposal for a Council 18 In a position paper dated 20 June 2016, Regulation laying down the multiannual the AeroSpace and Defence Industries financial framework for the years 2021 to Association of Europe welcomed the revision 2027, Brussels, 2.5.2018, COM(2018) 322 of the IcSP and recommended focusing on final, 2018/0132 (APP), https://ec.europa.eu/ border surveillance, counter-terrorism, commission/sites/beta-political/files/laying- organized crime and protection of critical down-mff-may_2018_en.pdf infrastructures, based on repurposing 7 EU-Commission, A Modern Budget for part of the development budget. “Up until a Union that Protects, Empowers and now,” the Association states, “IcSP has Defends, MFF 2021-27, Brussels, 2.5.2018, funded mainly activities of international https://ec.europa.eu/commission/sites/ organizations, NGOs, Think Tanks, etc. beta-political/files/annex-communication- We believe that the natural partner for modern-budget-may2018_en.pdf the supply of EU-funded equipment and 8 Ibid, p. 80 & 82. services should be European industries.” With that aim in mind, it is proposing 9 Ibid, p. 82. a “structured dialogue” with industry. 10 Ibid, p. 90. See AeroSpace and Defence Industries Association of Europe (ed.), Considerations 11 REGULATION (EU) No 230/2014 OF THE on ‘Capacity building in support of security EUROPEAN PARLIAMENT AND OF THE COUNCIL and development (CBSD) in third countries, of 11 March 2014 establishing an instrument 20 June 2016, https://www.asd-europe. contributing to stability and peace, http:// org/sites/default/files/atoms/files/ASD_ ec.europa.eu/dgs/fpi/documents/140311_ Position_Paper_on_CBSD.pdf icsp_reg_230_2014_en.pdf
360 Italy Development cooperation to the test in a new political reality
Luca de Fraia, Action Aid Italy
Overview from previous perceptions of charity operations. Will NGOs survive? And, A broad reform of Italian development more importantly, will development cooperation was introduced in 2014. cooperation weather the storm and stay Since then, its implementation has been true to its core principles and values? progressing in the face of global and national challenges as well as policy and Major changes budget constraints at the domestic level. Because this reform was long overdue, According to the DAC preliminary figures it was welcomed as a positive change for 2017, Italy’s ODA was 0.29% of its to align Italy with current trends in GNI, which is on track with the 0.30% target development cooperation. There has also agreed to internally for 2020. As a member been an increase in the level of Italy’s aid, of the EU, it has committed to reaching the but at the same time in-donor refugees 0.7% target within the time framework of costs have also gone up and thus played the Agenda 2030, which, as noted by CSOs, a significant role in these increases. implies postponing the original agreements by another 15 years. Development cooperation policies reflect the political environment in both Italian ODA is largely inflated according to Europe and Italy. Italy’s general elections the CSO methodology that reviews donors’ in 2018 ushered in a new political reality, performance to assess their ‘real aid’. Such one that has brought together former inflation is not new for Italy. In the 2000s, political foes the Five Stars Movement the country’s performance significantly and the League. Such an unprecedented reflected debt cancellation agreements. alliance has found common ground in While this responded to a global cry for an anti-establishment narrative and debt cancellation, it also served donors as populist agenda. A core piece of this it allowed them to increase their ODA in political alchemy is a strong message relation to debt obligations, which often against refugees and migrants as well as would never have been paid. the NGOs that support them. Since 2011, inflation of Italy’s ODA is Italian development cooperation seems primarily a function of in-donor refugee to have come to another turning point costs (IDRCs). With the Arab Springs and with a load of unexpected challenges. the regime change in Libya in particular, NGOs have found themselves at the more and more refugees have fled their center of a public debate where their home countries to launch a trek to Europe roles and accountability are being across the Mediterranean Sea. For many, questioned. This is an abrupt change Italy is the first port of a call.
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The numbers speak for themselves. In In terms of geographic allocations, the 2017 (the latest year for data), Italy’s largest slice of Italy’s aid goes to Sub- total ODA was US$5.7 billion of which Saharan countries: 38% of the gross US$1.8 billion was absorbed by in-donor flows with specific regional targets, refugees costs, namely 31% of the total. according to the DAC data for 2015/2016. Such numbers for 2016 were similar, Italy’s performance lags behind on Least accounting for 32.7% of total aid and 68% Developed Countries (LDCs) with only of the bilateral streams. Thus, Italy is the about 0.05% of its GNI targeted to first beneficiary of its own ODA. Refugee these countries in 2015/2016. costs are likely to account for more than 40% of total aid in 2018. In terms of There is some good news to consider. In budget arrangements, it is important to fact, while the overall ODA landscape has note that the resources to cover IDRCs been steadily influenced by migration sit within the Ministry of Interior. Even management policies and the related if this is not a case of diversion, this a political agendas and tensions, the blatant example of aid inflation, which Italian development cooperation system casts doubt as to Italy’s capacity to meet is going through some positive changes. the agreed targets in case of a different political scenario (domestically and The vast reform program that was globally) that leads to a reduced number introduced in 2014 (Law 125/2014) is of migrants or diminished assistance now delivering on its promises. The during their stay in Italy. new Italian Agency for Development Cooperation Agency (AICS) began There is no formal policy that conditions its operations in 2016.1 It has been ODA allocations to partner countries’ progressing by developing its own policies obligations in the area of migration and and structures, including local offices security. But because of its position and in partner countries. National budget the recent high number of refugees allocations for the Agency reached 488 entering the country, Italy was one of million Euros for 2018, up from 392 million the most vocal players at the EU level Euros in 2017. regarding new approaches based on migration compacts with partner countries Regarding stakeholders, CSOs are (April 2016). The expectation was that officially acknowledged as subjects (or various policies and instruments would actors) of Italian development cooperation be bundled together by EU donors in according to the sector legislation of 2014. order to gain partner countries’ support Norms that regulate access to Agency and assistance to manage migration. funds were revised in 2017 to better These approaches have been reflected acknowledge the variety and richness of in many elements of the new EU the CSO community beyond the traditional Consensus on Development (2017) and, role of development NGOs. It is worth before that, in the EU Africa Trust Fund noting the prominence and the space (2015). Notably, Italy established its own given to migrant diaspora organizations, Africa Fund in 2017, where development which are acknowledged as development and other interests were merged in one actors in their own right. Through the instrument. National Council for Development
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Cooperation, CSOs have a consultative role 2014. On actual expenditures, a report in the planning process. As well, the Agency is presented annually by the operational contacts them on regular basis to discuss structure to an Inter-ministerial Committee policy and regulative issues. Core support on Development Cooperation, which to national CSOs has increased from 94 should also consider policy coherence. million Euros in 2014 to 137 million Euros Work to improve transparency include in 2016, according to the Agency’s reports. an association with the International Aid Transparency Initiative (IATI) as well as Private companies can also be part of the new website to disseminate information development cooperation system on the on funds and projects in a timely manner.2 condition that they operate in a manner Notably, CSOs have launched their own that is consistent with global human transparency initiative3with the aim of rights standards; the sector legislation providing the most comprehensive picture makes provisions for soft loans to foster of their activities and working structures. partnerships with companies from Partner countries. The subjects of the Italian Current legislation (L. 125/2014) development cooperation system from incorporates provisions for development CSOs to private companies, from cooperation projects to be based on local academia to national Ministries and local procurement as the first option. This is in governments – are consulted through the accordance with international regulations National Council and its working groups, and the EU frameworks to ensure effective which are directly managed by the non- standards. There is an explicit reference executive actors. to the principle of country ownership. In some countries, Italy participates in A financial development facility has the Joint Programming of the EU and in been accommodated within Cassa Depositi others, the Italian Agency of Development e Presititi- a publicly owned financial Cooperation drafts country programs with institution, managing postal savings – partner governments. with the ambition to mobilize resources from the private sector including through The way ahead: development blending operations and partnerships with cooperation at the centre of a the European institutions and facilities to political storm. this end. Financial support for the private sector and blending are areas of business The 2018 general elections significantly still in their early stages. changed the national political landscape. On June 1st, a new Government was sworn In terms of aid effectiveness, the most in by a new Parliamentary majority. The comprehensive data on forward spending new coalition comprises political parties is reported in a dedicated addendum to the and movements that struggled against annual budget law. It provides information each other during the electoral campaign on allocations to development cooperation and openly proclaim their populist for the following three years (e.g. 2018 to and nationalist agendas. The outgoing 2020) from all relevant ministries, from legislature, which generated such a Foreign Affairs to Interior. This addendum dramatic turnaround, embraced a season was introduced with the sector reform of of reform for some social sectors, including
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development cooperation; the contrast official projections, Italian ODA is likely to between the two governments has left remain highly inflated with the in-donor many with a strong sense of bewilderment costs related to the management of refu- and concern about the future. gees. Given the dramatic change in the po- litical landscape, it will be crucial to closely Despite the apparently rosy scenario of monitor any change at the government the reforms of the years 2013 to 2018, level, which will have an impact on devel- radical changes were in the making with opment cooperation, including priorities the political landscape moving quickly and resources. Thus, it is important to pri- and deeply. The migration crisis had oritize efforts to ensure that: been brewing since 2011. The political implications from this crisis, coupled with • ODA volumes stay on track to realize the long-term impact of the economic the agreed-upon calendar of increases, crash of 2007/2008, have been significant. including the achievement of 0.30% At the EU level, the response was far below by 2020. Just as important is the new what was required, which exposed the intermediate goal for 2025 on the road weaknesses of the European partnerships. to 0.7% by 2030; As tensions reached their peak, CSOs • A new effectiveness plan is established found themselves at the centre of the that comprises ODA and a wide storm. Beginning in April 2017, they array of development cooperation became caught in the middle of a political modalities and actors as well as and media campaign led by groups that finance for development; are now holding the rein of power. • Provisions from the sector legislation During this period (2017 onwards), the smear (L.125/2014) that institutionalize space campaign against CSOs was considerable. for CSOs and other stakeholders are They were called “the taxi of the sea”, or “mi- upheld including recognition that grant taxi”, with the inference that they were CSOs should be consulted on key colluding with migrant traffickers, although decisions such as multi-year plans and there was no evidence to prove such allega- programmes; tions. The government in place at the time • Development cooperation is not reacted by introducing a Code of Conduct on seen or used as a stop-gap to stem search and rescue, which implied that CSOs migration flows to Italy and Europe. were at least partially culpable. Now, with a This requires a multi-level approach new government in place, the demonization from cooperation to search and rescue of CSOs continues to be a recurring preoccu- to integration policies; and pation in political debates. • Decisions on the EU multi-year budget For the future, it is expected that Italy’s for 2021 – 2027 respect the integrity of performance will get closer to the nation- development cooperation and protect it ally agreed ODA/GNI performance targets from attempts to use it to address short- with a significant proviso. According to the term issues in security or migration.
ENDNOTES
1 See -https://www.aics.gov.it/language/en/ 3 See https://www.open-cooperazione.it/ 2 Seehttp://openaid.aics.gov.it/en/ web/
364 Japan Emphasizing SDGs but Increased Instrumentalisation Under the New Development Cooperation Charter
Akio Takayanagi, Japan NGO Center for International Cooperation (JANIC)
Overview ODA Charter was aimed at further instrumentalising aid for Japan’s According to the OECD-DAC security and commercial interests. preliminary ODA figures for 2017, At the beginning of the process, the Japan’s ODA in 2017 was US$11.48 Vice Foreign Minister said, “ODA will billion, representing a 13.9% increase play a role in security-related fields.”2 from 2016. This accounts for 0.23% In JANIC’s chapter to Reality of Aid 2016 it of Japan’s GNI, up from 0.20% in was noted that CSOs had three major 1 2016. Although this is far below the concerns with the new Charter: 1) internationally agreed target of 0.7% securitisation of aid; 2) dominance Japan is, nonetheless, the fourth of growth-centered vision and 3) (re) largest donor among the members of commercialisation of aid.3 the DAC.
The main characteristics of Japan’s In the past three years since the new ODA are as follows: 1) geographically Charter was announced, what has really it is focused on Asian countries; 2) taken place? This chapter focuses on how a sectorally, economic infrastructure growth-centered view is reflected in Japan’s and other growth-oriented actors are ODA policy and allocation. It also examines emphasized; and 3) loan modalities how aid policy and programs have been are a major modality. While these instrumentalised for the country’s security approaches have been criticized and commercial self-interests. by CSOs, they have not changed significantly since the firstReality of Aid report was released in 1993. SDGs and Japan’s Aid Policy The current policy framework for Japan’s aid is the Development Following the adoption at the UN General Cooperation Charter, approved by Assembly in September 2015 of Agenda the cabinet in February 2015. It was 2030, including the SDGs, the MoFA and a revision of the 1992 ODA Charter, the Japan International Cooperation which was later revised in 2003. When Agency (JICA), the implementing agency the process for the second revision for Japan’s ODA, emphasized Japan’s started in March 2014, the Ministry of role in implementing the SDGs. While Foreign Affairs (MoFA) made it clear this commitment is welcomed, a major that the new Charter should be aligned concern is that their views on SDGs are to the Abe government’s security too growth-centered, as noted in JANIC’s policy, announced in December of chapter in The Reality of Aid 2016: the previous year, as well as Japan’s economic revitalisation plan. In “While the 1992 and 2003 Charters other words, the amendment of the both had poverty alleviation and
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growth as priorities, the new one In September 2016, “JICA’s Position Paper puts forward “’quality growth’ and on SDGs: Toward Achieving Sustainable poverty eradication through such Development Goals” was launched. growth. The new Charter maintains That JICA produced a paper on SDGs is that “quality growth” must be significant. The paper maintains that SDGs inclusive, sustainable and resilient, are consistent with JICA’s philosophy of but these statements give the “realizing ‘human security’ and ‘quality impression that the assumption growth’ in order to contribute to peace, is that growth is the priority and stability, and prosperity of the international poverty reduction is the result of community.”6 JICA, however, cautions that growth.”4 there are differences between SDGs and Japan’s aid philosophy: An examination of MoFA and JICA publications reveals that their views “The SDGs do not clearly specify the on SDGs reflects Japan’s emphasis on securing of diversity with respect for “‘quality growth’ and poverty eradication each country’s cultural and social through such growth,” rather than directly values. Japan has experiences of addressing conditions affecting poverty supporting various development eradication. This view is reflected in the patterns respecting partner sectoral allocation of Japan’s ODA – more countries’ different cultural and than half of Japan’s ODA goes to economic social values, which should be further infrastructure -- which will be described strengthened from the viewpoint of later in this chapter. peace, stability and prosperity of the international community.”7 The Japanese Government’s 2017 Annual Report on ODA (published by MoFA) has It is not clear what this qualification a section on roles Japan’s ODA has been really means in practice. Depending on playing in achieving the SDGs. It highlights the interpretation of “respecting each the fact that Japan has mainstreamed country’s cultural and social values,” it SDGs both in domestic and international could undermine the universality principle cooperation policies covering issues of Agenda 2030. such as climate change, universal health coverage and peace-building. The Report JICA also describes its “scenario” for elaborates details on Japan’s aid programs, achieving the SDGs by merging the including aid for infrastructure and human seventeen goals into the following five, resource development, support for while also arguing that the seventeen sectors such as health and population, goals are indivisible: water and sanitation, quality education as well as the empowerment of women. But, 1. Goals that JICA contributes through this section is titled “Quality Growth and comprehensive response: Goals 1 Poverty Eradication through Such Growth,” (End poverty), 5 (Gender equality), 10 and its preface emphasizes that while it (Reduced inequalities), and 16 (Peace must be inclusive and sustainable, growth and governance); is an indispensable premise for poverty 2. Goals that JICA approaches as core eradication.5 development areas: Goals 3 (Health),
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4 (Education), 2 (End hunger) and 6 but there are few references to HRBA. (Water and sanitation); JICA’s position paper on SDGs says nothing 3. Goals that JICA plays the key role: Goals about human rights. 2 (End hunger), 3 (Health), 4 (Education), 6 (Water and sanitation), 7 (Energy), 8 Aid Volume in 2017 (Economic growth), 9 (Industry and infrastructure), 11 (Sustainable cities), Around the time the first Reality of Aid 13 (Climate actions), and 15 (Forests report was published in 1993, Japan and biodiversity); was the largest donor among the OECD- 4. Goals that JICA considers necessary DAC members. But since 2001 and the means of implementation: Goal 17 government’s decision to cut the aid (Partnerships); and budget because of a budget deficit, Japan’s 5. Goals that JICA plays a catalytic role aid volume has generally been in decline. working with civil society and the private sector: Goals 8 (Economic According to the DAC preliminary figures growth) and 12 (Sustainable for 2017, set out in April 2018, Japan’s ODA consumption and production) in 2017 was US$11.48 billion, representing a 13.9% increase from 2016. This level It could be questioned why Goals 1 (End of aid accounts for 0.23% of Japan’s GNI, poverty), 5 (Gender equality) and 16 (Peace up from 0.20% in 2016 but far below the and governance) are not considered as internationally agreed target of 0.7%.10 “key” or “core” development areas (SDGs The OECD says that the increase was “due in area two above). It gives the impression to an increase in its bilateral aid to least that instead of directly tackling poverty or developed countries as well as loans.”11 gender equality, they will be mainstreamed Whether other factors contributed to and achieved as results or by-products of this increase is unknown as up to date efforts in the four “core” or ten “key” goals.8 statistics from the OECD or the Japanese government are not yet available. Regarding Goal 5 (Gender equality), 37% of Japan’s ODA was directed to support gender Aid Allocation equality and women’s empowerment, only slightly less than the DAC average Geographically, Japan’s has emphasized of 40%. But if we look at aid with gender aid for Asian countries. As shown in Figure equality and women’s empowerment as 1, Japan allocates over 55% of ODA to the principal objective, while the DAC total Asian countries. While DAC members is 4.4%, for Japan it is only 0.8%.9 Given the allocate 22.6% for Sub-Saharan Africa, critical importance of gender equality, why Japan provides only 10.6% of its aid to the would JICA not add Goal 5 in its “key” or sub-continent. “core” areas to enhance Japan’s efforts on gender equality? The top ten recipients in 2015-16 were countries in Asia: India, Vietnam, In MoFA and JICA policy papers, little Bangladesh, Iraq, Indonesia, Myanmar, attention is given to human rights-based Philippines, Afghanistan, Thailand and approaches (HRBA). MoFA’s publications Pakistan. Distribution for LDCs was only mention human rights as important values 20.8% (gross disbursement). However,
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Figure 1 Geographical Allocation of Japan’s Aid Compared with Total DAC (2015-16: Gross Disbursment)
Source: OECD Development Finance Data according to the OECD, it is likely that this around 40%, while in the last few years it figure went up in 2017. has been over 50%. This may be the result of the recent government’s emphasis on Sectorally, most DAC members emphasize “’quality growth’ and poverty eradication aid for social development sectors such as through such growth.” health, education and population as well as other social infrastructure, especially Only 27.2% of Japan’s ODA was provided government and civil society. Japan’s as grants. In contrast, 77.2% of DAC members’ aid was given as grants and the emphasis has always been on economic percentage of grants was over 95% for infrastructure such as transportation, 21 countries, including 13 countries that communication and energy. In fact, the provided all of their aid as grants. share of aid for economic infrastructure has been increasing in the past few years. In Reality of Aid, 1993, JANIC criticized In late 2000’s and early 2010’s, it was Japan’s aid program as being both too
Figure 2 Sectoral Allocation of Japan’s ODA Compared with Total DAC (2015-16: commitment)
Source: OECD Development Finance Data
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focused on Asia and on growth-oriented considered on a case-by-case basis sectors rather than sectors directly related in light of their substantive relevance. to poverty reduction. It also stated that (Emphasis added by the author)13 the share of loans was too great.12 Sadly, throughout the 25 years history of the Despite the Vice Foreign Minister’s Reality of Aid, the writers of the country acknowledgement that aid would play report of Japan, have continued to raise a role in security-related fields, after this issue, with little or no change. parliamentary debates, the final 2015 Charter only allows aid for armed forces or Instrumentalisation of Japan’s Aid their personnel in cases of public welfare or disaster-response purposes. However, An examination of the ODA policy of the CSOs are concerned that there is potential Abe government (in office since December for the government to expand the scope 2012) reveals that aid has strongly aligned of its military-related aid. CSOs also fear to the government’s security and domestic that equipment provided for non-military economic policy. purposes could be converted for military purposes in the future. Securitisation of Aid In the past three years under the new Among the four principles of the ODA Charter, there have been cases where Charter (approved by the Cabinet in 1992 ODA was provided for projects involving and revised in 2003) was “any use of ODA the armed forces or their members of the for military purposes or for aggravation of recipient countries. For the most part, these international conflicts should be avoided.” were projects related to disaster prevention In the second revision of the Development although there have also been several big Cooperation Charter, approved in February projects that support the marine coast 2015, the idea of avoiding the use of aid for guards in several Asian countries. military purposes was retained. However, a sentence was added to open ways to possibly At the ODA Policy Council of the NGO- support for armed forces or members of Ministry of Foreign Affairs Regular armed forces in recipient countries: Consultation Meetings in July 2017, securitisation of aid was one of the issues Avoidance of any use of development discussed.14 MoFA disclosed a list of aid cooperation for military purposes projects and programs that involved the or for aggravation of international recipient country armed forces or their conflicts: Japan will avoid any use members and another list of major projects of development cooperation for and programs related to anti-terrorism, military purposes or for aggravation public security and maritime security.15 of international conflicts. In case the armed forces or members of the According to the MoFA’s list, there have armed forces in recipient countries been 23 projects and programs that have are involved in development involved recipient countries’ military or cooperation for non-military purposes their personnel after the Charter was such as public welfare or disaster- announced in February 2015. Several relief purposes, such cases will be analytical points are apparent from this list:
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• Twelve (12) of the 23 projects and plan was a project to prevent human- programs have been aimed at disaster trafficking. Projects for countries in South prevention; Asia (Bangladesh, Sri Lanka, Pakistan and • In twenty (20) out of the 23 projects Maldives) entailed several objectives: anti- and programs, military personnel terrorism, anti-piracy, maritime safety and were part of the participants in training security and prevention of crimes such as programs, or the military was part drug trafficking. All projects related to anti- of the beneficiaries among various terrorism, public security and maritime ministries and departments involved; security in the above-mentioned countries were supported through either financial • In the three cases where the military grants or technical cooperation. was directly supported, two gave assistance to the Military Band of The most controversial initiatives are Papua New Guinea (PNG). In another probably the loan projects to Vietnam (signed case the military was in charge of in June 2017 for 38.4 billion Yen (US$350 disaster prevention; and million) and to the Philippines (October • Three projects in Indonesia and Malaysia 2016 for16.5 billion Yen (US$150 million). aimed to support the coast guard in its In both cases, patrol boats were provided capacity for information gathering, and to enhance the capacity of these countries’ military members were included among coast guards in maritime law enforcement, the participants. This support could again potentially compounding tensions in possibly aggravate geo-political tensions the South China Sea.16 in the South China Sea. When the discussion to revise the Development Cooperation Charter were To date, the principle of avoiding Japan’s aid initiated in spring 2014, there was a being used for direct military purposes, or media report that the intention of the Abe the aggravation of international conflicts, Government was to lift the ban on the use has been observed. But it is important to of ODA for military purposes. One example continue monitoring this area, to ensure given was the support to the Philippines that the government does not expand the and Vietnam (both having territorial scope of its military-related aid or that the disputes with China) to construct military- equipment and knowledge provided for civilian ports.17 These intentions were later non-military purposes through aid is not denied by the government. converted or used for military purposes in the future. In the case of Vietnam, the coast guard was part of the navy until 2013 when it was The list of major projects and programs reclassified as an organization independent related to anti-terrorism, public security of the military. According to a media and maritime security included the report, it was Japan that proposed this names of 32 initiatives in 16 countries. restructuring as a way of getting around Most of the projects for African countries the previous Charter ban on support to (Côte d'Ivoire, Nigeria, Mali, Mauritania, the military.18 During the process of the Kenya and Rwanda) and two MENA 2014-15 revision of the Charter, there was countries (Jordan and Morocco) were for a speculation that one reason why the Abe public security. Included in the Nigerian government wanted aid to play roles in
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military-related fields is to prevent a similar investment: commercial self-interest was situation – asking the recipient countries to unapologetically dominant. At one point, restructure their governmental agencies – more than 95% of Japan’s bilateral aid in happening again. was tied to Japanese suppliers. Following criticisms of the country’s huge trade In November 2016, the governments of surplus, Japan started to untie its aid. In the Malaysia and Japan signed an Exchange mid-2000’s, DAC statistics (which excludes of Note, which granted two patrol vessels technical aid) demonstrated that 90% to used by the Japan Coast Guard (scheduled 95% of Japan’s aid was formally untied, to retire) to the Malaysian Maritime approximating and sometimes above the Enforcement Agency (MMEA) and to DAC donor overall performance. provide grant aid aimed at contributing to the improvement of maritime safety But this performance was not sustained. and security.19 While the aid is described The business community has always been as part of ODA, the provision of the two advocating for the government to increase patrol vessels is not. tied aid. In 2016, as a result of increased pressure, 77.4% of Japan’s ODA was untied, Vietnam, Philippines and Japan all have 12.4% tied. Japan did not report the tying ongoing territorial disputes with China. status of 10.2% of its aid.20 Malaysia, too, is a country that faces the South China Sea. Japan considers China a There are also issues with how the threat and responding to China’s growing Japanese government reports to the DAC influence in the region has been a key on the tying status. According to the DAC priority of Abe’s government foreign policy. Peer Review Report in 2010: The provision of patrol ships to Vietnam and the Philippines as well as the grant to “Japan considers a project to Malaysia could be seen as an indication be untied even if it requires the that Japan’s ODA is increasingly aligned to primary contractor to be Japanese. its security interests. In its relations with It justifies this on the grounds that the Philippines and Vietnam, it should be the primary contractor is the project noted that, although it will not be counted manager and is able to sub-contract as ODA, the Abe government has been freely. However, where primary expanding technical cooperation and the contractors have to be Japanese and provision of equipment to the militaries of can act as both agents and suppliers both countries. of goods or services (including management) Japan should report (Re)commercialisation of Aid such aid as tied.”21
1. Issues relating to Tied Aid As of yet the Japanese government has not taken any measures to respond to this In the early days of Japan’s aid program, recommendation. up until the 1970’s, government policy documents explicitly stated that the major Another issue is the STEP Yen Loan scheme objective of the country’s aid programs (Special Terms for Economic Partnership). was to promote Japan’s export and According to JICA, “STEP was introduced in
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July 2002, with a view to raising the visibility • Although reporting the tying status of Japanese ODA among citizens in both of technical aid is not mandatory, recipient countries and Japan through best most DAC members do. Japan does use of advanced technologies and know- not. Since there is an agreement that how of Japanese firms.”22 Although the all members should report the tying interest rate is much lower than for ordinary status of all aid, Japan should report yen loans, it is tied to the procurement of the tying status of its technical aid. Japanese goods and services. • Despite the 2010 recommendation Japan, still reports to the DAC aid as Notably, an increasing number of large untied that must be procured through STEP projects have recently focused on the Japanese prime contractors.24 transportation sector. Examples include: From a CSO perspective, Japan’s aid • Improvement of the Philippine should be untied, and there should be a National Railway and construction of fundamental reconsideration—including the subway in Metro-Manila; complete termination -- of the STEP scheme. • Improvement of roads in Metro- CSOs also maintain that Japan should follow Manila; the DAC peer review recommendations • High-speed train construction in India; regarding tying status reporting. • New airport terminals in Hanoi and Ulaanbaatar; and 2. Development Cooperation Charter • Improvement of the commuter train system in Jakarta At the beginning of the 2014/15 process to revise the ODA Charter to the new The 2010 DAC Peer Review Report raised Development Cooperation Charter, “Japan’s concerns about STEP loans, saying that Revitalization Strategy” was presented as a they “can act as an incentive for partner justification and foundation for the new countries to choose tied conditions.” The Charter, although not explicitly stated in Report recommended “Japan should the final version. Among the Charter’s ensure that its untied loans are as basic policies and principles, “dialogue and favourable as its tied loans. Further roll out collaboration based on Japan’s experience of the STEP scheme could also threaten and expertise” and “cooperation that the progress Japan has made in untying. takes advantage of Japan’s strength” If Japan is to untie further, it will need to were identified. Use of Japan’s experience phase out STEP loans.”23 and expertise is common to the idea behind the STEP. While the Development The 2014 DAC Peer Review Report Cooperation Charter does not mention recommended, “Japan should look for STEP, new commitments for STEP loan opportunities to reverse the decline in projects were significantly increased in untied aid.” Japan was criticized for not FY 2015; from 90 billion Yen (US$800 implementing the recommendations million) in the previous year to 831 billion around tied aid presented in the 2010 Yen (US$7.5 billion). However, it dropped review. Concerns raised in the 2014 review to 134 billion Yen in FY 2016.25 It will be around tied aid include the following:
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important to monitor whether the new Climate Change and Japan’s ODA Development Cooperation Charter will bring about mid and long-term increases MoFA’s annual report on ODA in 2017 of STEP loan projects. emphasized that Japan plays an important role in tackling climate change.28 In the Also, noted in the previous JANIC’s DAC annual report, Japan is named as chapter in Reality of Aid 2016, the new one of the countries that has “maintained Charter refers to the possibility that strong financial commitment to the Japan would be “proactively presenting environment and climate change.” In proposals while giving full consideration 2015, 52.7% of bilateral allocable aid to policies, programs and institutions” supported the environment (DAC average: of developing countries. The Japanese 33.2%), and 48.8% focused on climate government has always maintained that change (DAC average: 26.2%).29 While this its aid is implemented under the “request- is commendable, the other reality is that based principle.” Instead of Japan’s aid Japan has been criticised for supporting agencies proactively proposing projects coal-fired power plants in emerging or programs, they respect the requests by economies such as Vietnam and Indonesia. partner countries’ governments, thereby respecting ownership of developing In early 2018, the Advisory Panel to the countries. Ironically, given the current Foreign Minister on Climate Change was increased global consensus on developing organized. In its final report, the Panel countries’ ownership for development recommended that “Japan should focus effectiveness, the Japanese government, on energy efficiency and renewable as a result of pressure from the business energy deployment for providing support community, now talks about a donor’s to developing countries. Japan should proactive proposal. aim for the immediate end to the public assistance for the export of coal-fired In addition to the Charter, the JICA’s SDGs power.”30 The report noted that this would position paper also refers to the utilization be consistent with the world’s trend to of Japan’s knowledge and experience in focus on renewable energy. achieving the SDGs.26 While not to reject this idea all together, it is important to note that it was proposed by the business Conclusion community as one way to align Japan’s aid with its commercial interests. Depending The Japanese government has been on how Japan’s knowledge and skills are emphasizing the SDGs in both domestic practically utilized, this approach could and international aid policies. However, in prove to be at odds with the ownership reality, the policies and approach of Japan’s principles repeatedly agreed at a series aid agencies on the SDGs and Agenda 2030 of high level forums and meetings on aid have tended to stress “quality growth” and development effectiveness in Accra and view poverty eradication as the by- (2008), Busan (2011). Mexico City (2014) product or result of “quality growth.” The and Nairobi (2016).27 reality is, that under the new Development
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Cooperation Charter, announced particularly relevant as it is a measure that seven months before the adoption of competes with an increase in China’s tied aid Agenda 2030 at the United Nations, in the same sector and the same countries. Japan’s aid programs have increasingly been instrumentalised for security and Aid should not be seen as an instrument that commercial objectives. competes with or counters the strategies of a neighboring country that is increasing Instrumentalisation of aid is also part of its influence in terms of both military and economic power, and is also emerging as Japan’s response to China’s growing influence an aid donor. From the CSO perspective, particularly its “Belt and Road” strategy, which aid policies should focus on action plans is considered by Shinzo Abe’s government to achieve the SDGs, while emphasizing as a security threat. Commercialisation principles that aim to end poverty, leave and securitisation of Japan’s aid could be no one behind, promote environmental considered as a response to the economic sustainability, gender equality and human dimensions of this Chinese strategy in the rights-based development. A fundamental region. The increase of STEP loans in the shift in Japan’s aid policy is indispensable transportation sector in Asian countries is to achieve these goals.
ENDNOTES only 1.5% of aid had gender equality as a 1 OECD, “Development aid stable in 2017 principle objective, far below the DAC total of with more sent to poorest countries,” Press 5.0% (OECD, Aid in Support of Gender Equality Release, 9 April 2018. and Women’s Empowerment: Donors Charts, 2017.). Also allocation of Japan’s ODA to 2 Asahi Shimbun, April 1, 2014. government and civil society was only 2.1% while the DAC total was 9.6% in 2016. (OECD, 3 Akio Takayanagi, “Japan: Recent Trends in Aid Policy and Technical Cooperation,” The “Development Finance Data.”) Reality of Aid 2016: 9 OECD, Aid in Support of Gender Equality and 4 Ibid. Women’s Empowerment: Donor Charts, 2018.
5 MoFA, White Paper on Development 10 OECD, Press Release, 9 April 2018, op.cit. Cooperation 2017: Japan’s International Cooperation. 11 Ibid.
6 JICA, “JICA’s Position Paper on SDGs: Toward 12 Akio Takayanagi, “Japan,” The Reality of Aid: An Achieving Sustainable Development Independent Review of International Aid, 1993. Goals,” 2016. 13 Government of Japan, “Development 7 Ibid. Cooperation Charter: For Peace, Prosperity and a Better Future for Everyone,” 2015. 8 This paper maintains that Japan’s efforts in ODA in gender equality and governance have 14 In Japan, regular policy dialogues between not been good. In 2015, 41.2% of Japan’s CSOs and Ministry of Foreign Affairs (MoFA), bilateral aid had gender equality and women’s and Japan International Cooperation Agency empowerment as a principle and significant (JICA: the implementing agency of Japan’s objective, above the DAC average 36.3%. But ODA programs) have been institutionalized
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since the late-1990s. The “NGO-Ministry 22 https://www.jica.go.jp/english/our_work/ of Foreign Affairs Regular Consultation types_of_assistance/oda_loans/step/index. Meetings” has two subcommittees: ODA html (accessed 23 March 2018) Policy Council and the Partnership Promotion Committee. The former discusses aid policy 23 OECD Development Co-operation Peer while the latter focuses on MoFA’s support Reviews: Japan: 2010. p.70. schemes for CSOs. Both meet three times a year in addition to a general meeting held 24 OECD Development Co-operation Peer once a year. The NGO-JICA consultations are Reviews: Japan: 2014. pp.60-61. held four times a year. 25 https://www.jica.go.jp/activities/schemes/ 15 Although it is only in Japanese language, the finance_co/about/step.html (accessed 24 list is accessible on MoFA’s website. March 2018. In Japanese language)
16 Press releases on the two projects 26 JICA, op.cit. (http://www.mofa.go.jp/press/release/ press4e_001617.html and http://www.mofa. 27 Akio Takayanagi, “Japan: Recent Trends in Aid go.jp/press/release/press4e_001323.html: Policy and Technical Cooperation,” op.cit. accessed 27 February 2018.) 28 MoFA, White Paper on Development 17 Asahi Shimbun, 1 April 2014. Cooperation 2017, op.cit.
18 Sankei Shimbun, 8 May 2013. 29 OECD, Development Co-operation Report 2017. 19 http://www.mofa.go.jp/press/release/ press4e_001355.html (accessed 27 February 30 Advisory Panel to the Foreign Minister on 2018) Climate Change, “Recommendations on Energy: Promote New Diplomacy on Energy 20 OECD Development Finance Data. through Leading Global Efforts against Climate Change,” 2018. (http://www.mofa. 21 OECD Development Co-operation Peer Reviews: go.jp/mofaj/files/000335204.pdf: accessed Japan: 2010. p.21. 13 April 2018)
375 The Netherlands The Netherlands: A mixed message on ODA
Daniela Rosche, Oxfam Novib
Key messages two consecutive governments led by Prime Minister Mark Rutte, the so-called RutteI • Official Development Assistance (ODA), and Rutte II Governments (2010-2013, which began to decline in 2010, has now 2013-2017). The most consequential cut to reached an all-time low; ODA, €1 billion annually, was implemented • In 2017 The Netherlands provided 0.6% of its in 2013 by the Rutte II cabinet, a coalition GNI towards ODA. This represents the lowest of the Center-Right Liberal Party of PM performance for Dutch aid since 1974; Rutte and the Dutch Labor Party (PvdA). • Dutch GNI has seen its highest growth in a This policy change was underpinned by decade, growing at about 3% for the last 2 years; a lack of a political commitment to public • A new center-right government was development finance and development installed in October 2017; cooperation as a policy instrument. Under • The new Government has agreed to pressure from populist parties on the right, increase ODA investments with €1.8 the Rutte 1 and 2 Governments promoted billion in the coming 4 years and to correct a view that development aid was no ODA upwards1, given The Netherlands’ longer needed and private development strong economic growth; finance and private sector development • While this marks an important turning were better suited to help the poorest point, Dutch ODA performance is projected countries progress.2 The policy yielded to continue to decline until 2022 with an to development skeptics who insisted expected drop to 0.54%; that effectiveness of Dutch aid and the • The aid decline is a result of a structural aid development programming it finances cut of €1 billion annually. This policy was could not be guaranteed and therefore adopted by the Rutte 2 Government in 2013. it was time to scale down development Indirect aid cuts have also had an impact; cooperation. • Aid diversion to in-donor refugee costs is a concern but has been brought to a halt; Up until 2010, The Netherlands had a • About half of the ODA allocated towards The reputation as a generous and supportive Netherland’s private sector instrument, is donor, contributing 0.8% and more of its made available to Dutch businesses GNI to ODA. The rise of populists within and outside mainstream political parties 1. Overall ODA trend: The Dutch changed this approach as they, persistently 2017 ODA budget at its lowest questioned the validity and effectiveness point since 1974 of Dutch oversees engagement. A decades-long tradition, one that enjoyed Since 2010, Dutch ODA has sharply declined a consensus of support amongst policy (Figure 1). This decline is the result of a makers, came to an end. As figure 1 shows, deliberate policy agreement to cut ODA by Dutch aid decline has been gradual until
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recently, masking the full extent of the cover in-donor refugee costs, about €700 downward spiral. For example, although million higher than the amount originally Dutch ODA dropped from 0.8% of GNI in budget. This unexpected over-expenditure, 2010 to 0.67% of GNI in 2013, yet in 2013 threatened the delivery of existing Dutch The Netherlands remained close to the development commitments with bilateral, 0.7% target. multilateral and CSO partners. At the same time, the structural aid cuts remained in With the exception of 2015, when the Dutch place. The situation was so severe that aid budget rose above the 0.7% mark due to the Dutch parliament adopted a motion a stark increase in in-donor refugee costs, the requesting the government to protect aid budget declined consistently reaching an existing development commitments from historic low point in 2017. For the first time additional aid cuts. In response to this since 1974, Dutch ODA dropped to 0.6% of request,the Minister for Development its GNI being allocated to ODA.3 Cooperation decided to “borrow” money from future ODA funds. In doing so, the As a result of this aid decline, The Government created a substantial financial Netherlands is no longer among the top five gap in the current aid budget that will take OECD-DAC donors, and currently stands at years to repair. 7th place among these donors (Figure 2). Its development programming has also faced In addition to the direct budget cuts of €1 severe pressure due to rising humanitarian billion annually The Netherlands is also needs. This pressure was most evident in applying indirect cuts to its ODA budget. 2015 with the so-called ‘migration crisis’. While these are smaller in volume, they have In keeping with ODA reporting rules, The contributed an annual loss of about €400 Netherlands charged 100% of its costs million. These have taken several forms. for supporting refugees during their first year in the country. This resulted in First, The Netherlands calculates its ODA an expenditure of about €1.2 billion to contribution on the basis of a lower GNI
Figure 1: ODA contribution by The Netherlands 2010-20224
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Figure 2: The Netherlands’ ranking among the top 7 OECD-DAC donors
Source: http://bit.ly/OECD-cijfers-2017 than its actual economic performance. budget loses about €1.4 billion annually In 2010, the EU agreed to a common based on the 0.7% of GNI benchmark. European System of Accounts (ESA), which harmonizes the way EU members 2. ODA forecast until 2022: calculate their GNI. On the basis of this new downward trend despite investment accounting framework, The Netherlands by a new Government had to correct its GNI upwards. The resulting accounting adjustments were In October 2017, a new Rutte III applied to all sectors of government and government was installed, led by Prime economic policy making. However, it was Minister Mark Rutte in his third term. It not applied to the calculation of ODA. In consists of four coalition partners: 1) the fact, the government uses its pre-2010 center-right liberal party of PM Rutte, VVD; GNI, which is lower than its current GNI, 2) the Dutch Conservatives, the CDA; 3) the to calculate its ODA contribution. The Centrist D66 party and 4) the progressive result is that the ODA budget is reduced by Christian party, CU. €264 million annually from what it should be, according to information provided In contrast to the two previous Rutte through the budget and in response to governments, the October 2017 coalition 5 parliamentary questions. Government Agreement includes a clear commitment to development cooperation A second indirect cut is the result of The and ODA. Both the CU and the Centrist 6 Netherlands’ Foreign Ministry charging its D66 party were keen to forge an in- aid budget to cover rising administrative principle agreement to end the downward costs from inflation and increases in staff ODA spiral. In a compromise with the salaries. Together these expenses have other two parties, the new Government amount to €48.7 million annually.7 agreed to invest €1.8 billion in the ODA budget between 2018 and 2021. The new Through a combination of direct and Government has also agreed to leave the indirect cuts, therefore, the Dutch ODA annual structural aid cuts of €1.4 billion
378 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports in place.8 Under the leadership of the 3. Dutch aid diversion to in- new Minister for Trade and Development donor refugee costs and the Cooperation, Sigrid Kaag, the ODA budget has also been corrected for GNI growth private sector several times. This scenario- a ‘yes’ and Pressure on the Dutch aid budget and a ‘no’ to ODA- has not fully stopped the development programming has been downward trend in Dutch aid, but it will exacerbated in recent years by aid have a softening effect. diversion to in-donor refugee costs and the Dutch private sector. Even with these policy measures, Dutch ODA is projected to reach another historic low point by 2022, with an expected ODA In-donor refugee costs contribution of 0.54% of GNI (Figure 1).9 This performance comes at the same time In line with OECD-DAC rules, The that the Dutch economy is growing at Netherlands is financing the first twelve the highest rate since the 2008 economic months of sustenance, education and crisis. with GNI rising by about 3.2% in language courses for refugees -- the so- called in-donor refugee costs -- out of the 2017. According to the Dutch Bureau for aid budget. This did not pose a political Economic Policy Analysis, CBP, this trend problem when the costs were lower, will continue in 2018 and 2019, with a accounting for some 7% of the aid budget. projected growth of 2.7% in 2018 and Since 2014, however, these costs have 2.9% in 2019.10 The preliminary OECD risen steadily as many people fleeing war Development Co-operation Report 2018, have sought refuge in Europe. In 2015, The released in July this year, confirms the trend Netherlands welcomed a large number of we have witnessed in The Netherlands: refugees, almost 60,000 people.12 As the While DAC donor’s economies are government finances the first 12 months growing, this economic performance has of substance for refugees seeking asylum not translated into ODA growth.11 in The Netherlands 100% out of the aid budget, development programming came The new development and trade policy under severe pressure. Approximately €1.2 presented by Minister Kaag in May 2018, billion was charged to The Netherland’s may provide the government with more ODA fund, almost a quarter (23%) of its policy space to increase ODA. The new total allocation (Table 1). These funds were policy document includes a commitment spent in The Netherlands, not oversees. to return to an ODA contribution of
0.7% by 2030. However, the timetable A change in the calculation method has for the realization of the Sustainable meant that these costs dropped slightly in Development Goals (SDGs) is the same 2016. However, they rose again in 2017, year – 2030. The Netherland’s return to making up about 17% of the ODA budget. 0.7% in 2030 will be too late. The Minister In the coming years, in-donor refugee costs and other coalition parties, along with are expected to level off at around 10% of some opposition parties, have signaled the aid budget. that would like to see this return happen as soon as possible. Advocating for this The impact of fully financing in-donor measure will be a priority for Oxfam Novib refugee costs to the ODA budget is a cause and our partners in the coming years. for great concern. Firstly, charging these
379 The Reality of Aid 2018 Report
costs to the development budget, even if there can be a significant difference between allowed under DAC rules means people the projected costs and the actual ones. in the poorest countries are essentially footing the bill. The Netherlands is one of Given the difficulties associated with the largest economies in the Eurozone and budgeting these costs, particularly the huge worldwide. Surely, it can finance these costs fluctuations, a funding gap in the budget out of the general budget or pool funding can easily emerge in just one year. In 2015, from other line ministries. the funding gap between budgeted in- donor refugee costs and spent in-donor Secondly, as the in-donor refugee costs refugee costs was more than €700 million.16 may vary considerably from one year Uncertainty about available development to the next, as noted above. It is hard to finance not only undermines the predict what they will be going forward. predictability of ODA for partner countries, This volatility has huge consequences but also ultimately poses huge challenges for for development program planning and the fulfillment of the Minister of Development security of funding levels to governments, Cooperation’s mandate. CSOs, multilateral agencies and other development partners. It makes Dutch To address these issues, it is vital that aid less predictable, a key pillar of aid refugee costs are limited in the aid budget, effectiveness. Also, for the Minister of for example through establishing a ceiling. Development Cooperation whose mandate Ultimately, they must be phased out it is to oversee the proper implementation from the aid budget entirely and covered of Dutch development policy financed by by appropriate domestic budget lines. ODA, predictability is vital. Political parties in the Government and the opposition are paying close attention There is also a governance issue. In-donor to the issue. Over the past two years, refugee costs are made by the Ministry of two motions have been tabled in the Interior and charged to the ODA budget.15 development committee of the Dutch The Minister for Development Cooperation parliament calling for the installment of a has no influence over the calculation or ceiling for these costs in the ODA budget. the accounting of these costs. Each year the Ministry of Development presents a ODA for the Dutch private sector projection of these costs for the coming 3-4 years, which is included in the annual Under the Rutte II government, The presentation of the ODA budget. However, Netherlands adopted the Agenda for Aid
Table 1: In-donor refugee costs between 2013-2021: total and as percentage of The Netherland’s ODA budget13 Year 2013 2014 2015 2016[14] 2017 2018 2019 2020 2021 In-donor refugee costs charged to 274.3 697.4 1.185 392 750.81 534.25 441.45 348.13 334.65 the ODA budget (in million€) % of the ODA budget 7% 17% 23% 9% 23% 11% 11% 8% 8%
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and Trade,17 which merged the roles of the projected income for 2018 of €500.000.21 Minister of Development Cooperation and Four years after the establishment of the the Minister for Trade, responsible for the Fund, financial additionality is also yet promotion of Dutch commercial interests to be demonstrated as the Minister for abroad, into one. The new Government has Development Cooperation confirmed in continued this approach with the Dutch her response to questions by Parliament.22 development policy, stipulating that success Despite this lack of evidence for for Dutch businesses abroad is a policy development and financial additionality, goal, along with the reduction of poverty. in its new Development Policy (presented Since 2010, the Dutch private sector May 2018) the Government announced instruments program, which is presented its intention to use blended finance to as part of the development cooperation mobilize additional development finance. budget, has risen from 4% in 2010 to about 11% in 2017.18 The overall instrument consists of a multitude of smaller programs 4. Conclusion and funds, each implementing different policy objectives. About half of these ODA Over the past few years, Dutch ODA policy funds are made available as finances and has undergone significant changes. These subsidies for Dutch businesses. have had an enormous impact on aid modalities. In 2017 ODA levels reached an In 2018, €406 million of ODA was budgeted historic low and aid diversion to the Dutch for the private sector instruments budget private sector and in-donor refugee costs line.19According to information provided by are increasing the fragility of the aid budget. the Minister for Development Cooperation, The new Government has turned around about half of these funds, (€190 million) has the anti-ODA trend by recommitting to the been allocated to the Dutch private sector- 0.7% target and announcing investments both small and medium enterprises (SMEs) in the ODA budget. After years of aid cuts and multinationals.20 This support includes and a negative narrative around public loans, export credits, mezzanine finance development finance and development and subsidies. A large part of these funds cooperation, this is a positive and welcome has been made available through blending development. However, the downward of ODA with private finance. The Dutch spiral of Dutch aid performance continues, Good Growth Fund (DGGF) is a prominent partly because direct and indirect budget example of such a blending facility. cuts have not been reversed.
When the DGGF was set up in 2014, the The current “yes and no” approach to argument for using ODA was that of ODA is a threat to Dutch development “catalyzing” more development finance and foreign policy objectives as well as through a blending facility. The DGGF is the reliability of The Netherlands as an Year 2013 2014 2015 2016[14] 2017 2018 2019 2020 2021 a revolving fund with the idea that ODA international partner and responsible In-donor refugee loans disbursed to the private sector, donor. The Minister and the Parliament costs charged to including Dutch companies, would flow must work together to return its ODA 274.3 697.4 1.185 392 750.81 534.25 441.45 348.13 334.65 the ODA budget back in higher volumes into the Fund. contributions to 0.7% of GNI within the (in million€) So far, these expectations have not been coming five years, instead of waiting until % of the ODA met. While the DGFF is costing about 2030 as the policy currently stipulates. It 7% 17% 23% 9% 23% budget 11% 11% 8% 8% €140 million each year, reflows remain far must also and take concrete steps to limit below the levels of ODA investment with a and significantly reduce aid diversion.
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ENDNOTES
1 The Netherlands calculates its 0.7% towards 6 The Department of International ODA contribution based on current GNI, Cooperation, DGIS, is part of the Ministry then subtracts the structural cuts of 1,4 bn of Foreign Affairs. The Ministry is headed EUR of the figure based on 0.7%. If there by two Ministers, the Minister of Foreign is a variance then between projected ODA Trade and Development and the Minister of growth and budgeted ODA for example Foreign Affairs. because the economy grew stronger than expected, the difference is added onto 7 Vaststelling van de begrotingsstaat the aid budget. In doing so, the budget is van Buitenlandse Handel en “corrected upwards” Ontwikkelingssamenwerking (XVII) voor het jaar 2018,nr. 34775-XVII, Verslag houdende 2 See the 2013 development policy note of een lijst van vragen en antwoorden, the Rutte II cabinet, “A world to gain:A new Vastgesteld 7 november 2018, p.1, agenda for aid, trade and investment”, question2, https://www.tweedekamer.nl/ https://www.government.nl/documents/ downloads/document?id=4b3bc8ca-fb1a- letters/2013/04/05/global-dividends-a- 419e-a3df-6dabcccb4851&title=Verslag%20 new-agenda-for-aid-trade-and-investment, houdende%20een%20lijst%20van%20 Last viewed 21 August 2018 and the vragen%20en%20antwoorden.pdf, Last 2010 policy note and the development viewed21 August 2018 policy note of the Rutte I cabinet, “Basisbriefontwikkelingssamenwerking”, 8 CoalitionGovernment Agreement 2017/ https://zoek.officielebekendmakingen.nl/ Regeerakkoord 2017 “ Vertrouwen in de kst-32500-V-15.html ; Last viewed 21 August toekomst” , 10 October 2017,p. https://www. 2018 rijksoverheid.nl/binaries/rijksoverheid/ documenten/publicaties/2017/10/10/ 3 In 1974, The Netherlands provided 0.6% regeerakkoord-2017-vertrouwen-in-de- of its GNI towards ODA. OECD (2018), Net toekomst/Regeerakkoord+%27Vertrouwen ODA (indicator). doi: 10.1787/33346549-en +in+de+toekomst%27.pdf, Last viewed 22 (Accessed on 21 August 2018) August 2018
4 For 2010-2017 figures see OECD (2018), Net 9 2018 Dutch Development Policy “ Investing in ODA (indicator). doi: 10.1787/33346549- Global Prospects”, https://www.government. en (Accessed on 15 June 2018). 2019-2022 nl/documents/policy-notes/2018/05/18/ figures reflect the ODA current projection by investing-in-global-prospects,p.100,Last the Dutch government as presented in the viewed 22 August 2018 new development policy note “Investing in global prospects” https://www.government. 10 Dutch Bureau of Economic Policy Analysis, nl/documents/policy-notes/2018/05/18/ CBP, Press Release of 19 June 2018, https:// investing-in-global-prospects, Last viewed www.cpb.nl/persbericht/groei-houdt-aan- 21 August 2018 politieke-risicos-toegenomen
5 Vaststelling van de begrotingsstaat 11 OECD (2018), Development Co-operation van Buitenlandse Handel en Report 2018: Joining Forces to Leave No One Ontwikkelingssamenwerking (XVII) voor het Behind, OECD Publishing, Paris, https://doi. jaar 2018,nr. 34775-XVII, Verslag houdende org/10.1787/dcr-2018-en., p.21 een lijst van vragen en antwoorden, Vastgesteld 7 november 2018, p.1, 12 The Netherlands Ministry of Immigration question 2, https://www.tweedekamer.nl/ and Naturalization, Statistical Data, https:// downloads/document?id=4b3bc8ca-fb1a- ind.nl/en/Documents/AT_December_2015. 419e-a3df-6dabcccb4851&title=Verslag%20 pdf, Last viewed 22 August 2018 houdende%20een%20lijst%20van%20 vragen%20en%20antwoorden.pdf, Last 13 Data for 2013-2017 as reported to OECD DAC, viewed22 August 2018 data for 2018-2021 as projected in the 2018 ODA budget, HGIS-nota 2018, HomogeneG
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roepInternationaleSamenwerking,https:// 18 Algemene Rekenkamer 2016: “Monitoring www.rijksoverheid.nl/binaries/rijksoverheid/ beleid voor ontwikkelingssamenwerking: documenten/begrotingen/2017/09/19/ het financieringskanaal bedrijfsleven. Stand hgis---nota-homogene-groep-internationale- van Zaken 2014”. Blz.12 & Oxfam Novib, BV samenwerking-rijksbegroting-2018/HGIS- Nederland in Ontwikkelingssamenwerking, nota-2018.pdf, p.49 , Last viewed 22 August 2018 Oxfam Novib, december 2016, blz. 9, https:// www.oxfamnovib.nl/files/rapporten/ 14 [v] Lijst van vragen en antwoorden, Wijziging ZakenEerst-BVNederlandInOntwikkelingssam van de begrotingsstaat van Buitenlandse enwerking.pdf Handel en Ontwikkelingssamenwerking (XVII) voor het jaar 2017 (wijziging 19 Ministry of ForeignAffairs, HGIS-nota samenhangende met de Voorjaarsnota), 2018 Homogene Groep Internationale beschikbaar via: https://www.tweedekamer. Samenwerking, https://www.rijksoverheid. nl/downloads/document?id=7039a47f-bfe8- nl/documenten/begrotingen/2017/09/19/ 4b59-bfe1-e587f85553b8&title=Verslag%20 hgis---nota-homogene-groep- houdende%20een%20lijst%20van%20 internationale-samenwerking- vragen%20en%20antwoorden.pdf, blz.12, rijksbegroting-2018, Annex 4, Budget line 1 vraag 26 (Beleidsartikel 1: Duurzame Handel )
15 Algemene Rekenkamer (Dutch Court 20 Vaststelling van de begrotingsstaat of Auditors), Aandachtspunten bij de van Buitenlandse Handel en ontwerpbegroting 2018 (hoofdstuk XVII) Ontwikkelingssamenwerking (XVII) voor van de minister voor Buitenlandse Handel het jaar 2018,nr. 34775-XVII, Verslag en Ontwikkelingssamenwerking, 9 Oktober houdende een lijst van vragen en 2017, p. 9, https://www.rekenkamer.nl/ antwoorden, Vastgesteld 7 november publicaties/kamerstukken/2017/10/10/ 2018, p.1, https://www.tweedekamer.nl/ aandachtspunten-bij-de-ontwerpbegroting- downloads/document?id=4b3bc8ca-fb1a- 2018-hoofdstuk-xvii-van-de-minister- 419e-a3df-6dabcccb4851&title=Verslag%20 voor-buitenlandse-handel-en- houdende%20een%20lijst%20van%20 ontwikkelingssamenwerking, Last viewed 22 vragen%20en%20antwoorden.pdf, p. 14 August 2018 21 Ministry of Foreign Affairs, HGIS-nota 16 Projected in-door refugee costs for 2018 HomogeneGroepInternationaleSam 2015 were 296.955 million. See: Ministry enwerking,https://www.rijksoverheid.nl/ of Foreing Affairs, HGIS-nota 2015 documenten/begrotingen/2017/09/19/hgis- HomogeneGroepInternationalSamen- --nota-homogene-groep-internationale- werking https://www.rijksoverheid.nl/ samenwerking-rijksbegroting-2018, Annex binaries/rijksoverheiddocumenten/ 2b, p. 61, Last viewed 22 August 2018 begrotingen/2014/09/16/hgis-nota- homogene-groep-internationale- 22 Vaststelling van de begrotingsstaat samenwerking-rijksbegroting-2015/ van Buitenlandse Handel en homogene-groep-internationale- Ontwikkelingssamenwerking (XVII) voor samenwerking.pdf, p. 33, Last accessed 22 het jaar 2018, nr. 34775-XVII, Verslag August 2018 houdende een lijst van vragen en antwoorden, Vastgesteld 7 november 17 See the 2013 development policy note of 2018, p.1, https://www.tweedekamer.nl/ the Rutte II cabinet, “A world to gain: A downloads/document?id=4b3bc8ca-fb1a- new agenda for aid, trade and investment”, 419e-a3df-6dabcccb4851&title=Verslag%20 https://www.government.nl/documents/ houdende%20een%20lijst%20van%20 letters/2013/04/05/global-dividends-a-new- vragen%20en%20antwoorden.pdf, p. 19, agenda-for-aid-trade-and-investment, Last question 42 viewed 21 August 2018
383 Norway What next for the long-standing champion of high aid levels?
Irene Dotterud-Flaa, Save the Children Norway
Overview from 5% to 9.3% of total ODA, and humanitarian rose from 8% to 13%.3 • Norway has consistently exceeded its commitment to provide 0.7 percent of In 2014, a process to restructure GNI as ODA. For the past nine years, Norwegian aid was initiated. The aim Norway has maintained an aid-level was to reduce the number of recipient of around 1% of GNI,1 as well as its countries and agreements. Since 2013, commitment to provide 0.15-0.20 the number of recipient countries has percent of GNI to the Least Developed been reduced from 116 to 84, while Countries (LDCs). Current aid the number of aid contracts has been halved (from over 7,700 in 2013, to spending, at 1 percent of GNI, enjoys around 3,300 in 2017).4 This process support from both the government is still being finalized, and it is unclear and Parliament. what the level of concentration will be. • Norway has a long-standing • Norway has 24 prioritized partner commitment to development countries: Eight (8) countries for long- effectiveness: It has managed to fully term development cooperation; Ten untie aid. However, progress has been (10) that are directly or indirectly slow in other areas such as the use of affected by conflict; and Six (6) that country systems, and medium-term are central to efforts to address predictability of ODA. global challenges.5 In June 2018, the • Norway’s ODA is organized around government published a new white five thematic priorities: 1) Education paper outlining the strategic thinking (particularly primary education, on partnerships with proposals with a focus on girls’ education); 2) to reduce the number of partner 6 Health (with around half going to countries. This has not yet been primary health care); 3) Humanitarian reviewed by Parliament. assistance (primarily emergency • Following the inclusion of the Liberal relief, with around 8 percent Party into the Solberg-government as directed to disaster prevention and of January 2018, the post of Minister rehabilitation); 4) Private Sector for International Development was (most of which is channeled through reinstated, five years after it had been Norfund); and 4) Climate change abolished. Civil society, as well as many (the majority to the protection of opposition parties, had called for the the environment).2 Education and post to be reinstated, citing several humanitarian assistance have seen concerns – that Norway was losing its the largest increases under the current influence in global forums; that efforts government since 2013: Between on broader development challenges 2013 and 2017, aid to education rose had been deprioritized; and that aid
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and development policy was under Introduction increased risk of becoming a vehicle for Norwegian interests. Norway’s aid imperative has traditionally • One of the first initiatives taken by been centered somewhere between the new Minister for International altruism, solidarity, and national interests. Development was a reform of the Governments across the political spectrum current aid management model. This have invested substantial financial and reform has been well received, with political capital towards the protection of the recognition that it may enhance the world’s poorest and most vulnerable as the effectiveness of Norwegian ODA. well as the promotion of their rights. This But there are concerns that the new has included both aid contributions and model may keep aid expertise separate participation in international negotiations. from aid management and thus put Norway’s role as a major humanitarian ODA under further political control. and development actor has contributed The reform process is expected to to the opening of doors and opportunities conclude in late 2018. in bilateral as well as multilateral arenas, which would otherwise not have been • A parliamentary majority has available. repeatedly voted to protect the integrity of Norwegian ODA and to keep With some exceptions, there is a general its purpose firmly centered on poverty consensus and broad ownership by reduction and development. However, Norway’s citizens over the key priorities under the current government, for Norwegian aid. Following the 2013 national interests such as migration national elections, the social democratic control or national security have taken coalition (consisting of the Labor Party, the a more prominent role in the aid and Socialist Left and the Centre Party) lost the development policy. The most recent majority they had held for eight years. The example includes the government’s election was ceded to a minority coalition plan to make aid conditional on the of the Conservative Party and the right- creation of repatriation agreements.7 wing Progress Party, which was joined • As Norway is not a part of the European by the centrist Liberal Party following the Union, its aid is not strongly integrated 2017 elections. into the EU’s development cooperation framework. But since 2015, Norway Support for aid, particularly the level of 1% has increased its partnership with of GNI, has traditionally been challenged the EU, particularly on migration by the Conservatives and the Progress and security via contributions to the Party. The former has always held that EU Emergency Trust Fund for Africa a focus on aid levels diverts attention (EUTF), where Norway holds a seat from an examination of the quality of on the board, and in its participation aid, while the latter is skeptical about in the Valetta-agreement. There are the effectiveness of aid in general. With plans to further increase support to the exception of humanitarian aid, the the fund (pending evaluations), and to Progress Party has consistently opposed pursue other avenues of development high aid spending. Despite this, the 2013 cooperation with the EU.7 change in government has not lead to
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lower aid levels. In fact, the government has maintained above 0.7% target for has maintained a near 1% of GNI to ODA more than four decades,8 and in recent since it came into power five years ago. years, aid levels have remained stable at around 1% of GNI. Debates on aid levels The lack of reduction in aid levels can have differed substantially from those partly be attributed to the fact that happening in most other donor countries. the government is a minority, which In Norway they have focused on whether depends on the Christian Democrats the country should maintain or exceed for continued support in Parliament. the current 1% level, while ensuring The Christian Democrats are staunch aid is effective and genuine. In 2015/16 supporters of a high financial and political there was a breakthrough when the engagement in development issues. Parliament reached a majority consensus Furthermore, the process by which aid (opposed by the governing parties – the and development policies are determined Conservatives and the Progress party) entails considerable transparency, public to protect aid spending at 1% of GNI. engagement and parliamentary ownership In 2018, the government (including the of and control over decisions made on aid. aforementioned Conservatives and Parliament enjoys substantial supervision Progress Party) included the pledge in its of Norwegian ODA, including its priorities, new political platform. strategic direction and budget.
Norway is one of only a handful of donors Commitment to effectiveness to have met the UN commitment to provide and results for the poorest at least 0.7% of GNI as ODA. It is also one of few donor countries to have allocated The overarching goal of Norwegian ODA above 0.15% -0.20%of GNI in ODA to the is to contribute to poverty reduction and Least Developed Countries (LDCs). Norway sustainable development. Additionally,
Norwegian ODA 2013-2018
Source: Norad’s aid database
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there are four cross-cutting considerations developments under the social democratic deemed crucial for poverty reduction and Stoltenberg II-government (2005-2013). development that are key criteria for aid Also, a greater emphasis has been placed allocations and agreements: human rights; on education, with a particular focus on women’s rights and gender equality, primary education and girls, as well as an climate and environment, and anti- increased role for the private sector under corruption.9 the conservative Solberg-government (2013 to present). While the government has reaffirmed its commitment to the implementation Norway currently has five long-term of development effectiveness principles, thematic priorities that Parliament in progress remains slow in some areas. A 2017 agreed following the white paper commendable feature is that Norway is on Norway’s development efforts in the one of few donor-countries that has 100 wake of Agenda 2030 and the SDGs.13 percent untied aid, a key policy to ensure These include health, education, climate aid effectiveness. The OECD has pointed and environment, private sector and job out that the cost of tied aid is between creation, and humanitarian assistance. 15 to 30 percent, and up to 40 percent In terms of geographical priorities, the in tied food aid.10 The recent white paper government launched a new white paper (2018) on partner countries in Norway’s on partner countries in June of 2018. The development cooperation, identifies government has proposed 16 partner national ownership as an underlying countries (ten countries are defined as principle for cooperation, although the countries for long-term development government notes that it can be difficult to cooperation, and six are defined as remain true to the principle in fragile and countries in fragile contexts). Almost all conflict-affected states.11 bilateral aid will be allocated to these countries going forward. Aid to Norfund, But, according to the Global Partnership support to strengthen civil society, and for Effective Development Cooperation humanitarian assistance are not restricted (GPEDC), there is room for improvement geographically. in other areas. For example, medium-term predictability of ODA remains low (55% of A recent assessment of Norwegian aid aid to the government sector), and the use and its coherence to Agenda 2030’s of country systems has declined slightly in ‘Leave No One Behind’ pledge (LNOB) recent years (down from 62% of aid to the was undertaken by the Overseas government sector in 2010, to 56% in 2016).12 Development Institute (ODI) on behalf of Save the Children Norway. It confirmed Norwegian aid allocations and broader that Norway’s thematic and geographical development efforts are guided by priorities broadly align with a focus on the thematic priorities that have evolved and world’s poorest people and countries.14 The changed over the past decade. Notable prioritized sectors – particularly primary changes include the emergence of education, health care and humanitarian climate and health as prominent thematic assistance – are key to the achievement priorities and inequality and redistribution of LNOB. The study also found that a high as an overarching priority – both are percentage of Norway’s partner countries
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are defined as either Severely Off-Track its establishment in 2011. But under the Countries15 (countries most at risk of being leadership of the 2013-2017 Minister of ‘left behind’ on extreme poverty in 2030) Foreign Affairs it received less political and or countries with a large share of refugees financial attention. and/or internally displaced people. The ODI evaluation cautioned against a focus At the Addis Ababa Conference in 2015, on migration-related challenges and the Norway pledged to double its support potential shift whereby efforts are made to to technical cooperation for DRM from hinder migration, rather than to support 2015 to 2020. Unfortunately, progress to refugees. achieving that commitment is off track. In the two years following the ATI-pledge, aid Increasing optimism for to tax reform was more than halved. Things ‘catalytic’ aid: DRM and private are looking up in 2018 as this is the first sector year where the allocations are larger than the baseline year, and Norad has recently The 2017 white-paper on development has signed a five-year agreement on technical served as a policy platform to determine cooperation with the Norwegian Tax the ways Norway’s development efforts Authority. The Minister for Development can and should contribute to sustainable has reaffirmed that the support will be development in line with the landmark doubled by 2020, and has expressed a global agreements of 2015: Agenda 2030, firm belief in the potential of relatively the Addis Ababa Action Agenda, and the small aid contributions to strengthening Paris Agreement on Climate Change. These tax systems. agreements are part of the increased optimism around ‘catalytic aid’. While not The bulk of Norway’s aid to the private a new concept, catalytic aid – the notion sector and job creation is currently that relatively small public contributions channeled through Norfund, Norway’s can generate additional (and often private) Development Finance Institution. By year- investments – has gained traction. Coupled end 2017, Norfund’s committed investment to this is the understanding that massive portfolio was NOK 20.4 billion.17 It primarily investments are needed to finance the SDGs focuses on investments to countries in (‘moving from billions to trillions’) as well as Sub-Saharan Africa. There are four main the realization that the relative importance areas of interest: clean energy, financial and size of aid vis a vis other sources of institutions, food and agribusiness, and development finance has reduced.16 small and medium enterprise (SME) funds.
In terms of Norwegian ODA, this optimism In its annual reports, Norfund provides a is evident in the increased emphasis on descriptive overview of the development the potential of the private sector and a effect realized as reported by the renewal of efforts to support domestic businesses, financial institutions and resource mobilization (DRM). Norway’s sectors (e.g. clean energy) in which it Tax for Development aid program, which has invested.18 The current reporting focuses on the improvement of tax systems methodology only allows for aggregated and increased tax revenues in developing quantitative results across all companies, countries, has had some successes since without a clear baseline or reporting on
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unintended consequences (such as risks share of in-donor refugee costs (IDRC) as of crowding out local businesses). There ODA. In the fall of 2015, following a large is need for documentation that examines number of refugees seeking asylum in development effects beyond taxes paid Norway, the government proposed that and jobs created, as well as for financial a record 20 % of the 2016 aid budget be additionality of these investments. In allocated to cover IDRC. These costs were a follow-up note to Norfund’s 2015 to be covered by slashing support to civil evaluation, dated April 2018, the Ministry society by two-thirds, and by reducing the of Foreign Affairs reports that some support to multilaterals and UN agencies. changes have been made and others No assessments or considerations are underway, including measures to were made on the potential long-term strengthen development impact and consequences of these unexpected cuts. a related indicator framework. While The proposal faced massive backlash inclusive economic growth and job from aid organizations, the government’s creation are crucial components in the coalition partners and several opposition fight against poverty, and it is clear that parties and was finally overturned. Instead the private sector has a key role to play, the Parliament opted for an extraordinary efforts supported by public aid should increase to the aid budget (to 1.1 percent be accompanied by clear expectations of of GNI), to cover the increased IDRC. The financial additionality and development 2016-budget shows how vulnerable the impact. aid budget can be. Apart from the smaller opposition parties there is little support Looming threats in the horizon: for excluding or limiting the reporting of What works for development or IDRC as ODA to protect the predictability what works for Norway? of long-term aid.
ODA plays a unique role in the Save the Children Norway and many other development finance landscape. It is the civil society organizations have repeatedly only international financial flow with an called on the government to stop this expressed mandate to reduce poverty practice. Their arguments against using and promote development. It is ODA to cover in-country refugee costs therefore a major concern when shifts include three main points. First, while emerge whereby aid is being used more Norway has a responsibility to receive and explicitly to advance the foreign policy and care for people seeking asylum, the costs security objectives of donor countries. Aid of doing so do not contribute to poverty is also being increasingly spent to prevent reduction and sustainable development in migration and to cover refugee costs in developing countries, and should therefore donor countries. Norwegian ODA has be covered outside the aid budget. Second, sadly not been immune to these shifts. the commitment to spend 1 % of Norway’s GNI on ODA is often viewed as a ceiling, 1. The use of ODA to cover in-donor making allocations a zero-sum game. In refugee costs choosing to report IDRC as ODA, less long- term aid is available to the poorest people As with most other DAC-donors (with a few and countries. And finally, IDRC is a volatile honorable exceptions), Norway reports a and unpredictable expenditure – great
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changes from one year to another are likely laying the foundations for sustainable to be followed by an increase or reduction development – are in the interest of every in other parts of the aid budget. This has country, rich and poor alike. The use of the potential to hamper the efficiency and ODA to build this foundation is perfectly results of long-term aid. Kharas (2008) has acceptable, and even welcomed. The suggested unpredictable and unstable aid problematic side of national interests has a high inefficiency cost.19 Recognizing arises when the needs of donors move that there is a strong pressure for in- away from, or even hamper, efforts to country refugee costs to be included as build sustainable development, and when part of ODA, one alternative would be to scarce ODA is diverted away from its core agree to a maximum of 5% of ODA to cover purpose of poverty reduction. Two areas of these eligible expenses. concern stand out for Norway: migration and security. The government’s current method of calculation of IDRC is unclear. The updated Around the time the white paper on SDGs guidelines approved by the OECD DAC in and development was published in 2017, October 2017 will hopefully lead to more another white paper on foreign policy clarity on the methodology of calculating and security was launched. The two white costs. The MFA has confirmed that the new papers, which were adopted by Parliament directive will be implemented in the 2019 in June 2017, illustrate that sometimes budget. the lines between these interests are not clearcut. Both papers include an increased Currently, IDRC as a share of Norwegian priority on vulnerable states to support ODA is among the lowest it has been in their respective goals. Prioritizing aid to the last decade. This is not due to a more fragile states may be important from a restrictive calculation methodology but development perspective as many of rather to the government’s increasingly these countries are severely off-track to restrictive refugee-policy, which have been meet the SDGs by 2030 and they have supported by joint EU efforts to close off huge struggles in trying to mobilize other external borders. sources of finance.
2. Allowing Norwegian national The government has demonstrated an interests to seep into aid decisions acceptance of the risks associated with prioritizing ODA to conflict-affected Apart from the long-standing tradition and fragile contexts, which has been of spending a chunk of the aid budget welcomed by CSOs. On the other hand, the domestically, recent years have also seen geographical focus remains close to Europe a change in focus and narrative on the and with countries where large numbers potential benefits of aid. Norway like all of refugees come from (e.g. Afghanistan). countries has its own foreign interests and The MFA’s new strategic framework for the government has many ways to promote engagement in fragile contexts and regions 20 these interests, while ensuring policy (2017), as well as the 2018 budget, coherence. Reducing poverty, building demonstrate how Norwegian interests institutions, contributing to increased related to migration and security have partly stability and human security– in short shaped the rationale and geographical
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focus for this ODA commitment as well the instrument for the Valletta cooperation. measures taken. Norway also has a seat on the Fund’s board. In its 2018 work program for cooperation The strategic framework outlines how with the EU, the government states that repatriation shall be linked to aid, further contributions to EUTF would be stating that: considered based on an assessment of the Fund’s results and documented needs.22 “Flight and migration from Several analyses and case-studies have vulnerable states and regions affect pointed to serious weaknesses with EUTF. the influx to Europe and Norway. These includes poor transparency; a lack Repatriations and migration shall of adherence development effectiveness therefore form an integrated and principles; and multiple examples where central part of the relationship the short-term interests of donor countries to important countries of origin. have preceded the long-term development It is expected that countries that plans and needs of developing countries.23, receive Norwegian aid respect their obligation to accept their own citizens.” Conclusions There is much to be commended in The government’s 2018 political platform Norway’s aid and development strategies pledges that Norway will trade aid for and commitments: the protection of 1% repatriation agreements. Not only is this of GNI to ODA and 0.2% of GNI to LDCs; an unacceptable use of ODA, it is unlikely faithfulness to development effectiveness that this relatively small amount of aid principles; the prioritization of countries is an effective tool to apply pressure for that are at risk of not achieving the SDGs; acceptance of repatriation. It is also a poor and increased aid spending to areas use of ODA. Making aid conditional on that are key building blocks of inclusive acceptance of repatriation agreements can societies, such as health, education and make aid more unpredictable and hamper strengthening of tax systems. effectiveness.21 Trading aid for repatriation can result in long-term aid programs, Still, the past few years have brought such as health or education programs, some changes that may hamper the future being cut short if the government of the effectiveness and pro-poor direction of developing country does not agree to Norwegian aid. The reluctance by the repatriation, which in the end harms the government and Parliament to separate poorest population. IDRC from ODA (or to even set a ceiling) continues to negatively impact aid Norway is a signatory to the 2016 Valletta effectiveness as well as the spending to Declaration and its corresponding the poorest countries. The government’s Action Plan, which aims to strengthen willingness, and sometimes eagerness, to cooperation between European and add Norwegian interests in the aid-mix is African countries and address current a concern, particularly when it steers the challenges and opportunities of migration. focus towards areas beneficial to Norway at It also provided aid to the EU Emergency the expense of the long-term development Trust Fund (EUTF) for Africa, the financial needs and plans of developing countries.
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There is need for continued engagement countries, it is even more important for to ensure that aid is protected and countries such as Norway to provide spent where it is most needed. As a counterweight and to protect the protectionism and national interests are integrity of international development increasingly setting the tone in many efforts.
ENDNOTES
1 Norad (n.d) Milestones in Norway’s Responsibility for Common Future. The Development Cooperation. Webpage Sustainable Development Goals and Norway’s [Norwegian only],accessed May 10th, 2018 Development Policy – full version only available 2 MFA (2017).Meld. St. 24 – Fellesansvar in Norwegian, English summary available here] for fellesfremtid [White Paper ‘Common 14 ODI (2018). ‘How can Norway implement Leave Responsibility for Common Future. The No One Behind, as a guiding principle, in its aid Sustainable Development Goals and Norway’s and development policy?’ [Report commission Development Policy – full version only available by Save the Children Norway] in Norwegian, English summary available here] 15 Chandy, L. (2017) ‘No country left behind: 3 Norad’s aid database (n.d) Confirmed The case for focusing greater attention on 2017-figures of Norwegian ODA the world’s poorest countries.’ Washington 4 MFA (2017) Press release on 2018 aid DC: The BrookingsInstitution budget[only available in Norwegian] 16 ODI Background Note: What if development 5 MFA (2017).Prop. 1 S (2017-2018) – aid were truly ‘catalytic’? https://www. ProposisjontilStortinget for budsjettåret odi.org/sites/odi.org.uk/files/odi-assets/ 2018 [2018 Budget proposal for the MFA – publications-opinion-files/7373.pdf only available in Norwegian] 17 Norfund (2018). ‘AnnualReport 2017’. 6 Government of Norway (2018). [onlyavailable in Norwegian] Meld. St. 17 (2017-2018) – 18 See for example Norfund (2018). Partnerlandiutviklingspolitikken [White Paper ‘AnnualReport 2017’. [onlyavailable in on Norway’s partner countries – only available Norwegian] in Norwegian] 19 Kharas (2008) Measuring the cost of aid 7 Government of Norway (2018) Norway in volatility. Wolfensohn Center for Development Europe. The Government’s strategy for 20 MFA (2018) Strategisk rammeverk for the cooperation with the EU 2018-21 [Only norsk innsats i sårbare stater og regioner. available in Norwegian] [Norwegian only] 8 Norad (n.d).Norway’s ODA as a share of 21 Kharas (2008) Measuring the cost of GNI [Available in Norwegian only]. Website, aid volatility. Wolfensohn Center for accessed May 10th, 2018. Development 9 MFA (2017).‘Tverrgåendehensyniutviklingspolitikken’. 22 Ministry of Foreign Affairs (2018).Norge i [‘Cross-cutting considerations in Norway’s Europa. Regjeringens arbeidsprogram for development policy’ - only available in samarbeidet med EU 2018. [Norway in Norwegian] Europe. The Government’s work program 10 OECD (2009) Untying aid: Is it working? for the cooperation with the EU, 2018 – only 11 Government of Norway (2018). ‘Meld. St. 17 available in Norwegian]. Oslo: Ministry of (2017-2018) – Partnerlandiutviklingspolitikken’ Foreign Affairs. [White Paper on Norway’s partner countries – 23 PWYP (2018) http://www.publishwhatyoufund. only available in Norwegian] org/putting-trust-trust-funds-eu-achieved- 12 http://dashboard.effectivecooperation. far/. Global Health Advocates (2017) Misplaced org/viewer – Monitoring data on Norway, Trust: Diverting EU Aid to Stop Migration. accessed May 10th, 2018 Concord (2018) Partnership or conditionality? 13 MFA (2017). ‘Meld. St. 24 – Fellesansvar Monitoring the Migration Compacts and EU for fellesfremtid’ [White Paper ‘Common Trust Fund for Africa
392 Switzerland Decreasing ODA funds, increasingly spent on migration and public-private partnership
Eva Schmassmann and Jürg Staudenmann, Alliance Sud
Key points: performance as a share of Gross National Income (GNI) to 0.5%. This goal was • In 2015, Switzerland achieved the achieved in 2015, made possible because objective set by Parliament to spend of growing budgets for development 0.5% of its Gross National Income cooperation programs, but most for ODA. This was mainly reached particularly, by increasing expenditures for however through a massive increase asylum seekers in Switzerland. According in in-donor refugee costs (IDRC). In to international standards set by the OECD 2017, the ODA ratio fell again to the Development Assistance Committee (DAC), 2013 level of 0.46%. costs for asylum seekers for their first year in the donor country can be counted as a • In the last two years, ODA, exclusive development expenditure. of IDRC, decreased from 0.44% (2015) to 0.41% (2017). This is the result Last September (2017), the National Council of two consecutive budget cuts in confirmed, with a clear majority, its intention development cooperation. to maintain the 0.5% target. However, • There is a strong demand from right- current figures reveal that Switzerland has wing politicians to link migration with actually fallen back to 2013 levels, with the development cooperation. A clear ODA ratio at 0.46% of GNI in 2017. This example of this linkage is the push declining performance is the result of a to make Eritrea a priority country for reduction in asylum applications as well Swiss development projects. In recent as two successive austerity programs. Civil years, Eritreans have represented the society organizations (CSOs) have also largest group of asylum seekers in repeatedly criticized the use of shrinking Switzerland. ODA for public-private partnerships and • The Swiss government is unwilling to climate finance without any exploration of entertain innovative or new sources additional or innovative sources of financing. of financing to reach its fair share in international climate finance. Instead, the funds are to be sourced from Mismatch between strategy existing development cooperation and financial resources for budgets complemented by (up to now development aid unspecified) “private contributions.” In 2016, the Swiss Parliament adopted the Dispatch on Switzerland's International Keeping ambitions high without Cooperation, the main strategy guiding dedicating the necessary means Swiss aid activities for 2017 – 2020.1 It sets priorities and pledges for the In 2011, the Swiss parliament set an funds allocated in the federal budget ambitious target for increasing Swiss ODA for the implementation of the Swiss aid
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program. The main controversies during massively cut back, with austerity measures the parliamentary debate at the time of translating to an absolute cut in resources. its adoption continue to be at the heart This has resulted in a mismatch between of current debates: What is the amount planned activities and available funds of financing available for development at the beginning of the implementation cooperation? And should development period. Instead of being able to expand cooperation be linked to migration policy? programs as planned, programs have had to be significantly reduced. The strategy for Swiss development cooperation is strongly oriented towards Additional budget cuts beyond the Agenda 2030 for Sustainable Development. austerity cuts described above were It focuses on fragile states and countries also made in the 2018 budget. Once in southern Africa. An important objective again, development cooperation was is to increase commitments to vocational hit disproportionately hard, resulting in training and cooperation with the private a contribution ofapproximately20% of sector.2 After the strategy was defined, the savings measures. This means that however, a large-scale austerity program between 2018 and 2020 there will again was launched (stabilization program be a shortfall of US$150 million per year. 2017-2019). The right-wing majority in Compared to the total amount originally Government (the Swiss Federal Council is planned, this means that more than one by definition a Grand Coalition) prevailed billion Swiss francs are missing for the with its demands for savings and was implementation of the strategy defined supported by the equally right-wing in 2016, or approximately 8% of the funds majority in parliament. originally allocated.
The austerity program has had a In its Foreign Policy Report 2017, the Federal disproportionate impact on development Council pointed out the consequences cooperation. With a share of just under 4% of these austerity measures: "For this of the federal budget, it contributed 28% of reason, Switzerland must cut back existing the austerity measures. Compared to the programs ahead of schedule and can only original financial plan, the implementation expand its commitment to stabilization of the strategy in the years 2017-2019 will and conflict prevention in fragile contexts therefore be reduced byUS$143 million, more slowly than planned. There will also US$200 million, and US$243 million per be cuts in the education portfolio. The year respectively.3 Overall the strategy withdrawal from Bhutan, Vietnam and will need to be implemented with a cut of Pakistan must also be initiated early."4 almost US$600 million. But the strategy has not been adjusted to take into account Switzerland's ODA performance ratio had the significantly reduced resources. reached 0.5% of GNI for the first time in 2015. With the first austerity program, The austerity measures have affected the the ODA target was adjusted downwards. various instruments of Swiss development By 2020, the Federal Council set itself the cooperation in varying degrees. The target of maintaining an ODA/GNI ratio Swiss Development Cooperation Agency’s of 0.48%. In 2017, some members of (SDC's) bilateral cooperation has been Parliament called for a complete break
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with an ODA target, and for expenditure on development cooperation to be based purely on the state of the federal finances. 20% of Swiss ODA spent in In September 2017, however, a clear Switzerland to cover costs for majority of the National Council rejected refugees in 2016 this demand and implicitly re-confirmed the ODA target of 0.5%.5 Switzerland's ODA ratio has been trending upward since 2003. However, as of 2004, its The latest figures for 2017 show that in-donor refugee costs have been making the austerity measures - together with up a substantial portion of this improved a decline in asylum applications –have ratio, which is really intended to measure reduced the ODA ratio to 0.46%. While expenditure on official development budgetary measures affected the ODA assistance, not costs for asylum seekers. performance, the decline in the ODA ratio Since 2004 Switzerland has been including is primarily a function of the reduction refugee costs in its calculation of ODA, in the costs for asylum seekers. But the and on average these costs make up 14% ratio for development cooperation itself of ODA, increasing to 16% since 2008. In (excluding support for asylum seekers) has 2016, every fifth franc that was declared to also declined for the third year in a row. be development funding actually went to In 2015 this ratio was still 0.44%, and in cover refugee costs in Switzerland. Due to recent decreasing asylum applications, the 2016 it fell to 0.43%. In 2017 it fell again to proportion fell to 9.2% in 2017. 0.41% of GNI. The most recently published data clearly indicates where the austerity To make an international comparison, the programmes have hit hardest: In 2017, proportion of its in-donor refugee costs SDC, the Swiss development agency had for Switzerland is just below the average almost US$175 million less available for for countries represented in the OECD long-term development cooperation than Development Committee (DAC) at 9.7%. in 2015, a decline of 10%. For the first time in a long while, it isno longer one of the countries that counts the Civil Society: Mobilising for the highest percentage of non-development 0.7% UN target costs as development funds.From2004 to 2013, Switzerland consistently had the In the run-up to the 2016 parliamentary highest share of refugee costs in its ODA debate on the current strategy, civil society as compared to other donor countries. mobilised against the planned cuts with a "wake-up call against hunger and poverty". Calls for ODA-conditionality in Seventy-five (75) organizations demanded field of migration that Switzerland finally implement its promises and allocate 0.7% of its GNI to In 2016 there was a fierce debate on the need development. The campaign received to make explicit links between the provision broad support. One positive result was of ODA and the agreement of partner that the parliament, by majority vote, countries to accept rejected asylum seekers. opposed further cuts. But Switzerland still A motion to this effect was very narrowly does not have a plan or clear date by when defeated in Parliament. However, a majority it hopes to achieve the ODA target of 0.7%. in parliament succeeded in softer variant
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with a motion combining development Politicians who are calling for a resumption cooperation and migration. This motion of this funding fail to recognize that calls for strategically linking international this could be fraught with difficulties. cooperation and migration policy - where it Development cooperation with Eritrea is in Switzerland's interest – by addressing solely based on the aim of obtaining the causes of conflict and migration. While a readmission agreement for rejected it is still unclear how this initiative will be asylum seekers would not lead to implemented it could result in stronger meaningful projects. Instead it is likely to agreements and partnerships between just finance projects in the interests of development cooperation and migration. the authoritarian regime. Development cooperation must not be instrumentalized In recent years, the minority parties at the in this way. Under constant pressure from national level have repeatedly advocated Parliament, however, the SDC has now for this explicit link between development initiated its first projects in Eritrea.6 It will cooperation and migration policies, but evaluate whether conditions are sufficient have failed. However, right-wing bourgeois to allow for a larger commitment. parties in the canton of Zurich have narrowly pushed through a similar demand Funding Switzerland’s fair share in in their cantonal law. This recently adopted climate finance: No more support law requires that the canton of Zurich for “new and additional” makes its support for development projects dependent on whether the government of With the ratification of the Paris Climate the developing country is prepared, at least Agreement in 2017, Switzerland agreed in principle, to take back rejected asylum to support the poorest and most seekers. There is concern that the passing vulnerable countries and communities in of this law at the cantonal level will give new the fight against climate change and its impetus to the demands at federal level. growing impacts. This Agreement obliges “developed country parties” to scale up Right-wing politicians are calling for their financial support “to achieve the Switzerland to make Eritrea a priority goal of jointly providing US$100 billion country for development cooperation in annually by 2020.”7 Each country must the context of migration issues. Eritrea determine and communicate its individual has been the country of origin for the contribution “on the basis of equity largest number of asylum seekers for and in accordance with their common many years. Certain politicians hope to but differentiated responsibilities and use development cooperation to negotiate respective capabilities.”8 re-admission agreements with the Eritrean dictatorship. Essentially, this would In February 2018, the Swiss Federal mean that Switzerland would withdraw Statistical Office published new data, development funds if Eritrea does not stipulating: “More than 60% of the agree to take back its refugees. Switzerland greenhouse gas footprint originates stopped development programs years ago abroad.”9 This statement confirms that in both public and private development Switzerland is directly responsible for 2.5 cooperation for Eritrea since the political times as many emissions as was reported conditions did not permit meaningful in the national greenhouse gas inventory. development work to take place. It corresponds to approximately1% of the
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world’s total emissions, which is about Partnerships with the private the same magnitude of Switzerland’s respective (economic) capability (e.g. GNI) sector compared to other developed countries. As in other countries, the Swiss development agency is increasingly seeking In spite of the fact that Switzerland’s fair partnerships with the private sector. The share contribution to international climate current dispatch/strategy explicitly states finance amounts to approximately US$1 that the number of such partnerships billion per year, the government intends will double by2020. This objective is to mobilize onlyUS$470 million – US$635 problematic for several reasons. Instead of million per year as of 2020. As well, the government appears to be ignoring the seeking out local partners in the South and climate framework convention’s call for supporting Southern small and medium “new and additional funding.” In its May enterprises, SDC is mostly partnering 2017 report, the government proclaimed – with Swiss multinationals, such as Nestlé, for the first time explicitly – that funds would Holcim, Swiss Re or Syngenta. Projects be sourced from existing development created through these partnerships are cooperation budgets and (up to now usually based in middle-income countries unspecified) “private contributions.” This such as Vietnam, India or Latin American contradicts the findings of a 2011 study, countries rather than in the poorest places where the Swiss government identified that should be a priority for development potential innovative financial sources aid. Rationales for partnerships with the adhering to the polluter-pays principle, private sector are centered on incentives for concluding that mobilizing adequate new Swiss based private companies, ones that and additional public climate finance was, decrease risks associated with unknown, in principle, possible. less stable markets in developing countries. This approach essentially subsidizes the In view of continuing cuts in ODA and entry of Swiss companies into new markets, its growing diversion of these funds to under the generally positively umbrella of climate finance, there is great risk that development cooperation. In the worst- Switzerland’s climate finance allocations case scenario, a big Swiss player takes will undermine other commitments to over a market segment, undermining the poverty reduction. In the absence of any possibility for a local market to develop and viable private funding sources, the once grow. To date, a comprehensive analysis of proclaimed allocation of 12.5% of the ODA these risks is lacking. for climate-related interventions (US$ 300 million per year) may soon be surpassed.10 Instead of offering incentives to Swiss Further, if Switzerland responds to growing multinationals by supporting their international pressure by increasing implementation of projects with a its contributions to climate finance so development focus, a better approach that they are more aligned to its true would be to insist that Swiss-based responsibility and capability, the growing multinationals respect human rights diversion of existing ODA towards climate and environmental rights throughout finance may eventually reduce SDCs their value chain. Offering decent jobs, budget by up to 35-40%. respecting people’s rights and providing
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for a healthy environment would greatly the Goals. Its aggressive international contribute to meaningful development tax policy, for example, which leads to and peoples’ agency. an erosion of public funds available in developing countries, only exacerbates a Agenda 2030 and policy disappointing trend of incoherence. coherence for development? A major concern in the context of Agenda 2030 is the fact that the Swiss government As mentioned above, the Swiss is not prepared to put additional financial development strategy is strongly linked to resources to support the implementation Agenda 2030 for sustainable development. of this Agenda. According to the Federal In order to realise the seventeen SDGs, Council (Swiss government), the Agenda Goal 17.14 is central –“Enhance policy must be implemented with the funds coherence for sustainable development.“ It currently available. As shown in the analysis would guarantee that the implementation above, the current reality is decreasing of Agenda 2030 would be done in a means for international cooperation, coherent way with the aim of fostering pitting the costs for climate finance against comprehensive sustainable development. the funding for development cooperation. Trade-offs between single SDGs must not be accepted. These targets require that In the end, the ambitious global objectives all policy decisions, whether in trade, tax set out in Agenda 2030, and their adoption or security, must promote sustainable by the Swiss government, will remain development. a paper tiger, in the absence of the appropriate funds and the political will for Switzerland still has a long way to go strong policy coherence for (sustainable) to realize this approach to achieving development.
ENDNOTES
1 See Dispatch on Switzerland’s International 7 UNFCCC (2015): The Paris Agreement, COP Cooperation 2017–2020. Key points in brief Decision CP1/15, Art. 115, p. 17. FCCC/ CP/2015/10/Add.1 2 Ibid. 8 UN (1992): UN Framework Convention 3 Bundesgesetz über das Stabilisierungsprogramm on Climate Change, Art. 3.1, p. 4. FCCC/ 2017–2019, March 17, 2017, in: federalgazette INFORMAL/84 2017, p. 2449 4 Bundesrat, Aussenpolitischer Bericht 9 FSO News (Feb 2018): “More than 60% of 2017, in: federalgazette 2017, p. the greenhouse gas footprint originates 1836[author’stranslation]. abroad.” (https://www.bfs.admin. ch/bfs/en/home/statistics/territory- 5 The National Council rejected the proposal of environment/environmental-accounting. itsFinanceCommissiontoabandonthe 0.5% assetdetail.4322945.html; accessed March ODA-target, cf Motion 17.3362 „Fixation du 22, 2018) montant du financement de l'aidepublique au développement“ 10 Dispatch on Switzerland’s International 6 Bundesrat, Aussenpolitischer Bericht 2017, Cooperation 2017-20, in: federal gazette in: federalgazette 2017, p. 1837. 2016, p. 2389.
398 United Kingdom “Aid in the national interest” – in the interest of the poorest?
Mike Green, Bond
Overview from independent bodies for having poor transparency, effectiveness, coherence and accountability. These • The UK government has continued to meet its legislative commitment departments and funds are routinely to spending 0.7% of GNI on ODA in used as the main vehicles for the Government’s increasing focus on 2016 (£12.1 billion1) and in 2017 (£13.93 ‘aid in the national interest’, which billion2) and all the main political parties has involved increased funding and pledge to keep the 0.7% commitment priority of areas including economic during the 2017 snap election. development, trade and security. • At the October High Level Meeting of • The new Secretary of State for the DAC in 2017 the UK advocated for International Development, Rt Hon changes in ODA eligibility criteria, with Penny Mordaunt MP, has been in suggestions of further changes being post since November 2017. Her vision hinted at. for UK Aid includes positive pledges • The split of UK multilateral and such as ensuring that ‘aid money bilateral contributions has remained cannot be better spent’ and ‘finding roughly in line with previous years, new ways to help other departments with bilateral ODA at 62.4% and make their spending more effective’. multilateral ODA at 37.5%. She makes increasing references to • Multilateral aid has grown faster than spending aid ‘in the national interest’ bilateral aid in relative terms at 8.1% such as: “Aid helps create self-sufficient (£391 million) to £5,234 million, with economies and our trading partners of bilateral aid increasing by 1.9% (£164 the future” and “Britain’s security and million) to £8,698 million. prosperity depends upon international development.”3 • In the realisation of the 2015 UK aid strategy, the amount of ODA • Political focus on international aid and spent outside the Department for development has been superseded with International Development (DFID – issues around Brexit. The resignation of the national development platform) former Prime Minister David Cameron, continues to decrease. DFID’s relative whose Government bought in 0.7% share of the aid budget it manages legislation, has meant the loss of declined to 72.5% down from 74.0% support and political leadership from from 2016. In absolute terms, it was the Head of the Government. an increase of £234million. • In early 2018 the aid and development • Other government departments and sector was significantly damaged by funds have received significant criticism historical revelations that aid workers
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from various NGOs had sexually budget outside of DFID by 2020. To date, exploited vulnerable people they this goal is very much on target. In 2017, were working with. In some instances, DFID’s proportion of the total ODA budget attempts were made at the time to had declined to 72.5%, down from the cover this up this abuse. 2016 level of 74.0% while the relative share of aid that other government departments Introduction manage and contribute to grew from 26.2%.to 27.5%. Since the Brexit vote in 2016, the issue of Britain’s withdrawal from the EU has To meet the UK’s aid strategy objectives, dominated the UK’s political landscape. a new cross government ODA fund was Aid and development are no exception, established, and an existing fund was with a number of questions on future bolstered with significant increases. contributions to and on receiving of funding The Prosperity Fund was established to from European Union mechanisms. achieve the promotion of global prosperity While the nuances of the UK’s future objective, which is working in middle- relationship with the EU have not been income countries to remove barriers to directly addressed, aid relationships are economic growth. A secondary benefit is recognized as one of the many issues that that reforms brought about by supported need to be discussed and agreed upon in programs have the potential to create the UK-EU negotiations. opportunities for international business including UK companies.4 The political narrative of Brexit and ‘taking back control’ have increasingly permeated The Conflict, Stability and Security Fund the narrative of aid and development. This (CSSF) was created in April 2015. In has led to unprecedented media attacks 2016/2017, its budget was £1.1 billion, with and campaigns to ‘take back’ money a mix of ODA and non-ODA funding (£517.8 currently used under the aid budget. million ODA and £586.4 million non – ODA).5 As well, there is a record level of public The CSSF, which focuses on strengthening scepticism around the aid budget and the global peace, security and governance, 0.7% commitment at a time when political utilizes its resources to deliver and support commitment to it has also waned. security, defence, peacekeeping, peace- building and stability activities. In parallel to these developments, the 2015 aid strategy “tackling global challenges The Government cites both funds as in the national interest” continues to be examples of where aid is being used ‘in implemented, seeking to achieve objectives the national interest’. This has been an before the 2020 deadline. The strategy is increasingly part of the narrative of Penny committed to strengthening global peace, Mordaunt, the new Secretary of State for security and governance, resilience and International Development , who came response to crises and to promoting global into office in November 2017. In answering prosperity, tackling extreme poverty and questions from the House of Commons helping the world’s most vulnerable. To International Development Select realize these objectives, the Government Committee, she said “I would like to have has pledged to spend 30% of the total ODA projects which deliver a much more explicit
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win for the U.K.’s interests as well, because predicted that “to respond to the changing without that we won’t be doing aid well.”6 world, more aid will be administered by other government departments, drawing The funds themselves, however, have come on their complementary skills.”9 under significant scrutiny and received criticism for their lack of transparency, By 2020, one third of the UK’s ODA will aid effectiveness, value for money, cross be spent by government departments government coherence and poverty focus outside of DIFD. As well, all UK ODA, (see below: Increasing non-DFID ODA). regardless of which department spends it, will be ranked as either ‘good’ or ‘very good’ Another pledge in the UK’s 2015 aid strategy on the international aid transparency was to change the definition of ODA at index. The Government is on track to the OECD’s Development Assistance reach its target that 30% of ODA will be Committee. This was also an election managed outside DFID. The rationale manifesto on which the Conservative is this move will harness the expertise party were elected to Government. The of other government departments and manifesto noted, “We do not believe that encourage a holistic approach to aid and international definitions of development development that DFID might not be able assistance always help in determining how to realize on its own. Examples of the money should be spent, on whom and for value of this strategy can be seen in the what purpose, and we will work with like- minded countries to change the rules so Department of Health’s management of that they are updated and better reflect the “Ross Fund,” which draws on in-house the breadth of our assistance.”7 expertise in supporting research into diseases with epidemic potential, such as The commitment in the aid strategy Ebola, as well as other neglected tropical received a warmer welcome, probably diseases. Despite legitimate reasons for because the stated reasons for the rule increasing the number of departments change were to ensure ODA reflected and funds involved in the management the breadth of the new international of ODA, the figure of 30% has never been development agenda set by the UN Global justified. There have been arguments Goals, and fully motivated other countries that the arbitrary nature of this number to meet these goals. In contrast, the 2017 means that departments, who are neither Conservative party manifesto rationalized as equipped or experienced as DFID, are a change in the rules so “they are updated having to handle a sudden increase in and better reflect the breadth of our the overseeing of hundreds of millions of assistance around the world.” If the change pounds of ODA. was not implemented, the manifesto promised unilateral action through Prosperity fund domestic legislation to allow for a “better 8 definition of development spending.” An examination of the cross government Prosperity Fund demonstrates some of the Increasing non-DFID ODA problems that can arise. The Fund, which is not a government department, was set up At this point, DFID is still the UK’s primary as part of the 2015 Aid Strategy‘s emphasis aid channel. However, the 2015 aid strategy on supporting economic growth. As noted
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above, its primary work is in middle- budget was £1.127 billion, of which £600.9 income countries, where a portfolio million was spent on ODA-eligible activities. of investments seeks to better enable economic growth, with the secondary The rationale for blending ODA and non- benefit of creating opportunities for UK ODA funding is that it enables a wider companies and international business.10 range of departments to deliver on It was originally allocated £1.3 billion to instructions from the National Security deploy to this end. The Prosperity Fund’s Council, which administers the Fund. main geographic focus lies with Middle This, in turn, facilitates a more holistic Income Countries (MICs), which are DAC and integrated UK approach to conflict recipients such Colombia, India and South and instability. As a result, the CSSF can Africa. In 2016 the Fund spent £38 million respond to NSC priorities as they evolve as that was ODA-eligible. opposed to being restricted purely to ODA eligible activities. The Independent Commission for Aid Impact, the body responsible for formally However, this good theory has had scrutinising UK aid spending, launched difficulties in practice. In March 2018, a study of the Fund. Among a number of ICAI published a performance review concerns, it stated that: of the Fund, which gave it a red/amber rating.12 Specific areas of concern “The planned scale and pace of included inadequate results management, its aid spending poses a number inconsistencies in the quality of the of risks. Chief among them is the programming and erratic human rights risk that those lead government risk management. departments with little experience of large aid programmes may A lack of transparency was also struggle to design and deliver highlighted, which was made more programs capable of achieving complicated by the CSSF’s blend of ODA intended results.”11 and non-ODA activities. Large tranches of information were redacted for national As a result the originally planned security reasons, making it difficult to deployment of £1.3 billion was revised to assess the quality of significant elements £1.2 billion from 2016/17 to 2021/22. of programming. The ICAI stated that:
Conflict, Stability and Security “Sometimes sensitivity and Fund (CSSF) confidentiality are used as arguments for the decision not to share The CSSF’s mandate is to promote the information … Although this may economic development and welfare of be valid in specific circumstances, developing countries by strengthening our evidence indicates that this peace and resilience where there is actual, justification is over-used …we found or a risk of, conflict and instability. This that different people classified purpose aligns with national security CSSF documents in different ways, objectives of “Protect our People” and with some restricting access as the “Project our Influence”. In 2016, the CSSF’s default option, and others not.13”
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Transparency: just the main aid agency, is a growing trend internationally. For example, in Switzerland, 38% of ODA spending in 2016 A common criticism of ODA managed by was delivered by departments other than other government departments is that the Swiss Agency for Development and they do not meet the historical levels of transparency that DFID has achieved. Cooperation. In Sweden, which spends 1% The importance of this critique has of GNI annually on ODA, only roughly half been recognised by the Government. In of ODA spending was managed by Sida response, it is requiring that all government (the Swedish government authority for departments that spend ODA must development cooperation). The majority achieve a ‘good’ or ‘very good’ rating on the of other ODA eligible expenditures were International Aid Transparency Index. undertaken via its Ministry for Foreign Affairs. In fact, the UK is the only DAC donor In June 2018, Publish What You Fund to have an independent government released their 2018 Aid Transparency Index. department headed by its own senior The Index is the only independent measure minister to administer ODA. of aid transparency commitment for the world’s major development agencies. It These are complicated issues, Despite the ensures that donors disclose information valuable experiences other departments on how they use aid, enabling the public to can bring to UK aid and development, hold them accountable for making good on the numerous problems that these their aid commitments, and encouraging departments and funds have incurred progress where it is needed. around transparency, aid effectiveness, secondary purposes, cross-government DFID was rated as “very good” with a score coherence and poverty focus, create a of 90.9 out of 100, meaning it ranked 3rd worrying picture at a time when their ODA out of 45 global donors. However, the budgets are set to increase. Foreign and Commonwealth Office, scoring just 34.3 out of 100, was rated “poor” and Only some of these problems have been ranked 40th out of 45 donors. The “poor” touched upon. Technical problems in rating repeated the status acquired when delivering ODA outside the main aid the FCO last appeared in the index in 2014. agency are compounded when mixed with a narrative of providing ‘aid in the national The results paint a worrying picture for the interest.’ Dual objectives of national Government and its commitment to having interest alongside poverty reduction can not just the FCO, but all of its ODA spending create an inherent tension, which results departments reach the level of good or very in secondary national interests eclipsing good in the next 18 months before 2020. ODA’s primary aim of reducing poverty. Taking this to its furthest conclusion, an Conclusion: Aid outside DFID – increasing emphasis on the promotion of A valuable resource? UK interests can distract from the rightful emphasis of ODA on poverty reduction. It The management of a share of ODA by also has potential to be a worrying step relevant government departments, not toward the return of tied aid.
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ODA is both an invaluable and finite resource. should play a primary role in developing the While relevant government departments skills and capacities of ODA-administering can have a role to play in delivering ODA, departments across Whitehall, while also this must be done cautiously, with ODA’s ensuring consistently high standards for core objectives in mind. To that end, DFID ODA administration.
ENDNOTES
1 https://assets.publishing.service.gov.uk/ government/uploads/system/uploads/ 7 Conservative Party 2017 manifesto, attachment_data/file/572063/statistics-on- P39, https://s3.eu-west-2.amazonaws. international-development-2016a.pdf com/conservative-party-manifestos/ Forward+Together+-+Our+Plan+for+a+S 2 https://assets.publishing.service.gov.uk/ tronger+Britain+and+a+More+Prospero government/uploads/system/uploads/ us....pdf attachment_data/file/697331/Statistics- International-Development-Provisional-UK- 8 Ibid. aid-spend2017.pdf 9 See https://www.gov.uk/government/ 3 https://dfidnews.blog.gov.uk/2018/01/16/ publications/uk-aid-tackling-global- media-coverage-of-penny-mordaunts-five- challenges-in-the-national-interest. pledges-for-uk-aid/ 10 https://www.gov.uk/government/ 4 https://www.gov.uk/government/ publications/cross-government-prosperity- publications/cross-government-prosperity- fund-programme/cross-government- fund-programme/cross-government- prosperity-fund-update prosperity-fund-update 11 ICAI follow up of The cross-government 5 https://assets.publishing.service.gov. prosperity fund, P2, https://icai.independent. uk/government/uploads/system/ gov.uk/wp-content/uploads/ICAI-Follow-up- uploads/attachment_data/file/630077/ Prosperity-Fund.pdf conflict-stability-security-fund-annual- report-2016-2017.pdf 12 From poorest to best, ICAI ratings are red, red/amber, amber, amber/green, green 6 https://www.devex.com/news/new-dfid- leadership-team-sets-out-priorities- 13 ICAI (2018) The Conflict, Security and 91997?utm_source=article&utm_ Stability Fund’s Aid Spending: https://icai. medium=92981&utm_campaign=line independent.gov.uk/report/cssf/
404 United States The challenges and opportunities of US Foreign Assistance under Trump
Tariq Ahmad, Marc Cohen, Nathan Coplin, and Aria Grabowski, Oxfam America
Overview States should “stop sending foreign aid to countries that hate us.” This anti-aid mantra sent chills down the spines of • The Trump administration has successfully shifted some aspects of anti-poverty activists who understood US foreign assistance towards a more what a weakened US foreign aid profile self-serving agenda. Fortunately, meant for the global fight against the “America First” rhetoric has poverty. Many foreign policy experts not completely devastate the worried what these statements meant 1 poverty-fighting potential of US for US security interests. Foreign Assistance. A number of key initiatives remain intact or are Once Trump became president, his gaining support. administration successfully shifted aspects of the US’s foreign assistance • Congress rejected the administration towards a more self-serving agenda. But dramatic foreign assistance cuts. the aid supporters in Congress have, so • Efforts inside development agencies far, effectively blocked some of his more hold the promise to increase audacious proposals. As a result, the US attention towards ownership, continues to be a leading aid donor and more transparency, and to better has taken strides towards linking its aid to mainstream a focus on gender. other forms of development finance. Yet, the administration continues to beat the • There are also promising efforts anti-aid drum, and this may ultimately lead to increase the link between US to regressive aid practices. foreign assistance and other forms of development finance, including a strengthened focus on aid for US Foreign Assistance domestic revenue mobilization (DRM) and congressional Given that the US is a significant actor introduction of a bill that would in the fight against global poverty any consolidated and expand the US’s changes to US foreign assistance will have development finance institution. major consequences. Although the US only spends 0.18% of its Gross National Income (GNI) on Official Development Assistance Introduction (ODA), which represents less than 1% of the US federal budget,2 it is the world’s During the 2015-2016 presidential largest bilateral donor.3 In addition, the campaign, then-candidate Donald US is still the largest provider to least Trump consistently returned to a developed countries, responsible for 37% familiar sentiment, that the United of all DAC ODA provided to LDCs in 2016.4
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While it still requires congressional Upon taking office in January 2017, Trump approval, the administration’s proposed has moved to implement this pledge. By State, Foreign Operations, and Related December, Trump issued a new National Programs (SFOPS) for fiscal 2019, gives Security Strategy that fleshed out the indications as to future geographic America First approach.10The policy allocations for US foreign assistance, included a decidedly reduced commitment which includes more than traditional to multilateralism,11 including reduced US ODA.5 Nearly 45% of all foreign assistance funding for the United Nations.12 In 2018, would go to the Middle East and North the Administration doubled down on Africa region, 34% to Sub-Saharan Africa, the approach, imposing retaliatory trade 8% to South Central Asia, 7% to the sanctions for alleged unfair trade practices Western Hemisphere, and the remaining on traditional US allies such as Canada and 6% to Europe/Eurasia and East Asia and the European Union. the Pacific.6 The Administration has shifted to an In its foreign assistance, the US tends to emphasis on defense over diplomacy prioritize countries where it has a strategic and development. This approach is in interest. In that regard, Israel would contrast to the Obama administration’s continue to be the largest beneficiary of US calls for balance among these three foreign assistance ($3.3 billion), followed by pillars of foreign policy. This change is Egypt ($1.38 billion,) Jordan ($1.28 billion), apparent in the lack of formal policy- Afghanistan ($663 million,) Kenya ($624 making officials at USAID (presidentially million,) Tanzania ($553 million,) Uganda appointed and Senate confirmed) other ($461 million), Zambia ($440 million), than administrator Mark Green, 17 months Nigeria ($352 million) and Pakistan ($336 into the administration.13 These posts million).7The United States Agency for remain vacant or in the hands of career International Development (USAID), the officials who hold them on an acting basis, country’s primary development agency, with limited authority. At the same time, accounts for the largest share (39%) of political appointees who do not require US foreign assistance, followed by the Senate confirmation (with titles such as Department of Defense (31%), the State “special assistant”) wield outsized policy Department (12%), and a host of other authority. A similar situation exists at the agencies and programs spanning from the State Department14 and the Millennium Department of the Treasury to the Centers Challenge Corporation,15 where the Senate for Disease Control and Prevention.8 has yet to confirm the nominated CEO.
The US Administration’s Anti- The administration has threatened to cut Aid Push off aid to governments that fail to vote with the United States in the United Nations.16 During his campaign, candidate Trump It has also revived and broadened the promised to implement an “America First” so-called Mexico City policy, severely foreign policy. He used the term without restricting the use of US aid funds for irony, even though it meant adopting the family planning and women’s reproductive slogan of groups considered anti-Semitic health.17 This policy has significantly and pro-Nazi in the run up to World War II.9 limited local health organizations’ abilities
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to perform their activities or access contained severe cuts (and in some funds, even if the finances for their family cases eliminated) funding for accounts planning activities are not obtained from that address the needs of women in the US.18 the developing world and drastically cut poverty-fighting programs. Both would In April 2017 Trump issued an executive have had a disproportionate effect on order requiring government agencies to women.25 Programs with an exclusive “buy American and hire American”19 and focus on gender equality and women’s ordered compliance by September. For empowerment were to be cut by 61%, USAID, the move contrasted sharply with another clear sign that women would be the approach of the Obama administration, hurt most.26 While these cuts were blocked which passively supported special by congress, the administration tried again exemptions20 and permitted procurement in their proposed FY19 budget calling for a from developing-country firms.21 30% cut from the approved FY18 budget.27 As discussed later in this chapter, congress President Trump’s clearest anti-aid signal again blocked these steep cuts. is demonstrated in his annual budget proposals, which have called for steep cuts The administration has also demonstrated in the FY18 and FY19 budgets. Fortunately, a lack of support for US foreign these cuts were blocked by Congress. For assistance by failing to elevate the role example, in fiscal 2018, the administration of development as a pillar of national proposed a cut of 32%.22 If these cuts security. The Obama administration began had been approved, they would have to rhetorically prioritize development disproportionately affected anti-poverty alongside diplomacy and defense as part and gender equality programs. In FY18 of a broader national security strategy.28 details, the administration put forward a But these ambitions fell short of elevating 40% cut for low-income countries, deeper the USAID administrator to the National than the proposed 32% reduction to the Security Council or the President’s cabinet, entire international affairs budget. In these or to grant the development budget parity budgets, rule of law and human rights, with diplomacy and defense. The Obama water and sanitation, and education would administration did, however, propose a have been cut by approximately 45%.23 single coherent US global development Programs that protect vulnerable policy, the Presidential Policy Directive populations would have been cut by over on Global Development,29 something 80%. Global health programs fared a little the current administration has not done. better in the proposed budget with a 26% Without a single coherent policy, US cut, still a devastating blow that would implementation of foreign aid suffers mean that thousands of people who from duplication, political competition struggle to meet basic needs would lose and varied implementation of good access to critical health services such as donor practice, including compliance with HIV treatment or maternal health care.24 development effectiveness principles.
The President’s proposed budget would Shortly after assuming the office, the new have had a disproportionate impact administration called for a reorganization of on women. The FY18 proposed budget the State Department and USAID.30 The call
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sparked concern and strong engagement administration’s efforts and to improve from the CSO community, fearful that it transparency, ownership, and locally led signaled intent to subsume USAID under planning. Former USAID administrator Raj the State Department and thus further Shah had introduced a series of internal debilitating USAID’s ability to fight poverty.31 reforms, known as USAID Forward. These In response, aid advocates offered proposals aimed to strengthen USAID’s approach to strengthen development and prioritize to building local partnerships, through the developmental purpose of US foreign the fostering of innovative development assistance.32 approaches, being more results oriented, and allowing for more in-country based Reasons to be hopeful strategic planning through a Country Development Cooperation Strategy While the picture on US development (CDCS).35 A number of these reforms, investments may seem bleak, there is especially an effort to provide more reason to be hopeful. The drastic cuts US aid directly to local organizations,36 proposed by the administration were were codified into USAID’s operational essentially blocked by Congress, even with guidance.37 that body under the control of Trump’s own party. The approved appropriation bill for Current USAID Administrator Green has FY 2018, essentially, Congress’s response to embarked on his own reform agenda, the administration’s proposed budget and entitled Journey to Self-Reliance (JTSR).38 which was ultimately enacted, indicated This proposal focuses on supporting only a slight 6% cut to the International countries’ own ability to solve development Affairs Budget compared to 2017. While challenges, and includes a set of self- still a cut, it is far from the administration’s reliance metrics measuring a country’s proposed 32% reduction.33 Congress has commitment and capacity. While initially also maintained spending on key anti- the metrics were to identify countries ready poverty accounts, especially global health for a changed bilateral relationship with programs, including $6 billion to combat USAID, with less focus on bilateral ODA, HIV/AIDS. The most recent reorganization the metrics are now intended to guide proposals keep USAID independent while country level strategy and programmatic creating internal efficiencies.34 While the choices through the CDCS process. lack of an overall development strategy inhibits a consistent approach consistent The Millennium Challenge Corporation with aid effectiveness principles and (MCC) continues to embed the development support for gender equality, internal effectiveness principle of ownership bureaucratic pressure exists to improve in its operational model.39 However, the poverty-fighting potential of US aid. many of these efforts are threatened by understaffing and implementation US aid and development challenges because those appointed to effectiveness prominent positions lack development expertise.40 The current USAID leadership intends to reform USAID operations, offering USAID41 and MCC42 have both adopted opportunities to build on the Obama gender policies to inform their work.
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However, these agencies face operational against the IATI gender policy marker, challenges,43 and need to ramp up gender making it harder to track the quality of spending. In 2015, only 6% of US aid it programs marked as working towards was spent on programs with a primary gender equality. purpose of addressing gender inequality, leaving the US at 11th place among other Aid for Domestic Resource top donors.44 Even expanding the scope Mobilization (DRM) to include projects that consider gender issues but not as the primary objective, the Domestic resources are a long way from figure only rises to 20% of US aid, which replacing the need for ODA, considering put the US in 21st place in 2015. the rate of DRM growth and the amount of finance required to achieve the Congress has joined efforts to improve SDGs. Still, DRM is a critical aspect of US foreign aid, passing the Foreign Aid sustainable financing for developmental Transparency and Accountability Act though DRM activities encompass less (FATAA) in 2016.45 The bill ensures that all than .02% of ODA. The US seems to be US aid providing agencies measure and moving in the right direction in terms report their activities and their impact to of pushing for more ODA commitments determine what is and is not working in towards aid for DRM by both increasing US foreign assistance. In compliance with its own activities and championing aid for the Act, an increasing share of US foreign DRM efforts in global arenas. According assistance is regularly reported to the to Administrator Green, DRM is a means US Foreign Assistance dashboard and towards “passing the baton” to partner relatedly, more US agencies are reporting countries48 and has integrated DRM into their activities through the International the Journey to Self-Reliance. Aid Transparency Initiative (IATI). USAID currently spends approximately MCC consistently ranks in the top 10 on $29 million per year on aid to DRM in over Publish What You Fund’s Aid Transparency 30 countries.49 In addition, the MCC spends Index.46 USAID, the Department of around $12 million and the US Department State, PEPFAR, and the Department of of the Treasury spends around $4 million. Defense have steadily improved their While aid for DRM is provided through scores on the index since its inception multiple agencies, the US is the largest aid in 2013. Despite this progress, a number contributor to DRM activities.50 The US is of challenges remain. According to also a founding member of the Addis Tax Oxfam research, for example, it was only Initiative (ATI), and is currently a co-chair possible to verify (through IATI) that 7% of of the ATI Steering Committee. One of US foreign assistance provided to Ghana the three ATI commitments is for donors arrived in the country between 2013 and to double support for DRM from $223.7 2015.47 One significant reason for this million in 2015 to $447.5 million by 2020.51 situation was the US Government’s failure Most donors are not on track to meet to require all of its implementing partners this commitment, but the US Congress to report their activities to IATI, similar recently endorsed more DRM spending to requirements at UK DFID. The US also by approving $75 million for DRM specific does not currently report its activities line items in the FY19 budget request.52
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Yet, for DRM activities to be a force authority to make equity investments. against poverty, aid for DRM must go It would roll the DCA into the new beyond technical assistance and software agency. The IDFC would continue to give development to an integrated focus preference to US firms, but would also on how revenues are collected as well have the ability to provide resources to expenditures. The quality of aid for DRM non-US companies. One motivation of the must also be improved consistent with bill’s sponsors is a desire to enhance the development effectiveness principles. It US’s ability to compete with China as a should also help support governments to source of global development finance. adopt pro-poor/equitable DRM strategies with a stronger focus on gender- The initial text of the BUILD Act responsive budgets. weakened OPIC’s environmental and social safeguards and was vague in US and private sector ensuring that IDFC projects would advance sustainable development. The US has a history of supporting the The legislation would have drastically private sector in development, and with watered down a 33-year-old prohibition the Trump administration there is a on investments in countries whose renewed focus and greater attention on governments fail to take steps to this front. USAID has emphasized projects uphold labor rights. The House of that contribute to building local private Representatives took steps to improve sectors53 and has fostering more private the bill in committee, although it did sector finance through initiatives like the not fully return to the level of standards Development Credit Authority (DCA.)54 in the current OPIC authorization. The Private sector growth is embodied in the House passed its version of the bill. MCC’s mission “to reduce poverty through In committee the Senate further built economic growth.”55 The MCC puts this upon the improvements in the House mission into practice by assessing all bill so that the human rights, labor, proposed MCC compact activities against and environmental standards in OPIC a rigorous economic rate of return would remain in the BUILD act and it metric.56 also included improved transparency requirements. The Senate bill has passed In February 2018, Congress introduced out of committee but has not yet passed bipartisan legislation to revamp and the full chamber (August 2018). expand the US’s development finance institution, the Overseas Private Progress in an unfriendly Investment Corporation (OPIC). Created environment in 1971, OPIC provides loans, guarantees, and risk insurance to US firms that invest While the signs of an anti-aid agenda in developing countries. The Better from the Trump administration remain Utilization of Investments Leading to mostly signals there is still reason to be Development (BUILD) Act of 2018 would concerned. It may only be a matter of time replace OPIC with the US International before the anti-aid drumbeat has tangible, Development Finance Corporation (IDFC) adverse effects. Efforts to provide more at double the level of capitalization, with locally implemented ODA may succumb
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to the administration’s emphasis on its outlined in internal guidance from US UN “buy American” mandate. The push to Ambassador Nimrata (“Nikki”) Haley.58 The provide aid to countries that vote with the current administration still has some time US at the UN may ultimately create more to fully implement an anti-aid agenda. US politicized aid practices. US aid is already organizations advocating for accountable highly correlated with UN voting.57 This and effective US foreign aid will need may become even more pronounced, to be vigilant and ready to push the depending on the strength of the mandate administration in the right direction.
ENDNOTES
1 Francis, David et. al., “Will Foreign Aid Get interests. These figures represent the Cut on Trump’s Chopping Block?.” Foreign administration’s proposed budget and in Policy Report, November 2016, accessed recent years, have not specifically aligned August 2018 at https://foreignpolicy. with what is ultimately provided or spent com/2016/11/23/will-foreign-aid-get-cut-on- in the countries and regions. Because of trumps-chopping-block/ these caveats, the data presented here can only offer a speculative glance of US foreign 2 Ibid.; Oxfam America, “Foreign Aid 101: A assistance funding. To learn more about Quick And Easy Guide To Understanding Us the distinction in the US foreign assistance, Foreign Aid, Fourth Edition, 2017, accessed please see Oxfam America, “Foreign Aid 101: July 2018 at https://www.oxfamamerica. A Quick And Easy Guide To Understanding Us org/explore/research-publications/foreign- Foreign Aid,” Fourth Edition, 2017, at https:// aid-101/ www.oxfamamerica.org/static/media/files/ ForeignAid_4thedition_FINAL_o5YMAbX.pdf. 3 The next four largest bilateral donors are Germany, the UK, Japan, and France. See 6 Epstein, S., Lawson, M., and Gill, C., OECD, “Development aid stable in 2017 “Department of State, Foreign Operations with more sent to poorest countries,” 2018, and Related Programs: FY2019 Budget and accessed July 2018, at http://www.oecd. Appropriations,”Congressional Research org/development/financing-sustainable- Service Report, June 8, 2018, accessed July 2018 development/development-finance-data/ at https://fas.org/sgp/crs/row/R45168.pdf. ODA-2017-detailed-summary.pdf 7 ibid, Table 7, these numbers do not include 4 Data calculated from OECD DAC CRS, ODA MCC funding. Disbursements, constant prices, to LDCs, 2016 8 Calculations based on https://explorer. usaid.gov/agencies. 5 There are a few caveats to mention here. “US foreign assistance” is defined differently 9 Wayne S. Cole, Charles A. Lindbergh and from the OECD DAC definition of ODA. The the Battle against American Intervention in US will measure the parts of US foreign World War II, Harcourt Brace Jovanovich, assistance that comply with the OECD 1974. definition during their DAC OECD reporting. Second, because of this reporting difference, 10 The White House, National Security these figures presented here provide a Strategy of the United States of snap shot of aid that will ultimately be America, December 2017, accessed counted as ODA but also includes other July 2018, at https://www.whitehouse. types of foreign funding such as Foreign gov/wp-content/uploads/2017/12/NSS- Military Funding (FMF) typically provided Final-12-18-2017-0905.pdf. to countries with US security and strategic
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11 Goodman, P., “Trump Just Pushed the World thehill.com/policy/healthcare/383579- Trade Organization toward Irrelevance” trump-officials-claimed-us-is-a-pro-life- The New York Times, March 23, 2018, nation-pushed-for-abstinence-based; Riley, accessed June 2018, at https://www. J., Trump Appoints Transgender Rights nytimes.com/2018/03/23/business/trump- Opponent to USAID Post,” Metro Weekly, world-trade-organization.html; Lardieri, June 30, 2017, accessed July 2018 at https:// A., “United States Announces $285M www.metroweekly.com/2017/06/trump- Cut in U.N. 2018 Operating Budget,” U.S. appoints-trans-rights-opponent-usaid-post/; News, December 26, 2017, accessed July Frey, B., “The Women, Peace and Security 2018, at https://www.usnews.com/news/ Agenda Under the Trump Administration: politics/articles/2017-12-26/united-states- Undercutting Advances with a Return announces-285m-cut-in-un-2018-operating- to Masculine Militarism,” University of budget; Krugman, P., “Donald Trump's Minnesota, September 27, 2017, accessed G7 debacle heralds collapse of Western July 2018 at http://genderpolicyreport. alliance,” Financial Review, Jun 11, 2018, umn.edu/the-women-peace-and-security- accessed July 2018, at https://www.afr. agenda-under-the-trump-administration- com/opinion/columnists/donald-trumps- undercutting-advances-with-a-return-to- g7-debacle-heralds-collapse-of-western- masculine-militarism/; Sharman, J., “Donald alliance-20180611-h118i8. Trump to strip all funding from State Department team promoting women's 12 Lardieri, A., “United States Announces rights around the world,” Independent, $285M Cut in U.N. 2018 Operating Budget,” April 25, 2017, accessed July 2018 at https:// U.S. News, December 26, 2017, accessed www.independent.co.uk/news/world/ July 2018, athttps://www.usnews.com/news/ americas/us-politics/donald-trump-budget- politics/articles/2017-12-26/united-states- 2018-state-department-cut-office-global- announces-285m-cut-in-un-2018-operating- womens-issues-oxfam-ivanka-a7701631. budget. html.
13 See https://www.usaid.gov/who-we-are/ 18 CHANGE, Prescribing Chaos in Global Health organization/leadership-listing The Global Gag Rule from 1984-2018, June 2018, accessed July 2018 at http://www. 14 See https://www.state.gov/r/pa/ei/biog/title/ genderhealth.org/files/uploads/change/ index.htm publications/Prescribing_Chaos_in_Global_ Health_full_report.pdf 15 See https://www.mcc.gov/about/leadership 19 Cordell, C., “Agencies must be in compliance 16 Lynch, C., “Haley: Vote with U.S. at U.N. or with 'Buy America' order by September,” We’ll Cut Your Aid,” Foreign Policy, March Federal Times, July 3, 2017, accessed July 5, 2018, accessed July 2018 at https:// 2018, at https://www.federaltimes.com/smr/ foreignpolicy.com/2018/03/15/haley-vote- acquisition/2017/07/03/agencies-must-be- with-u-s-at-u-n-or-well-cut-your-aid/ in-compliance-with-buy-america-order-by- september/ 17 The White House, Presidential Memorandum Regarding the Mexico City Policy, January 20 Norris, J., “No Easy Fix for U.S. Foreign 23, 2017, accessed July 2018 at https:// Aid,” Foreign Policy, September 23, 2010, www.whitehouse.gov/presidential-actions/ accessed July 2018, at https://foreignpolicy. presidential-memorandum-regarding- com/2010/09/23/no-easy-fix-for-u-s-foreign- mexico-city-policy/; Siddiqui, S., “How has aid/ Donald Trump's first year affected women?,” The Guardian, January 18, 2018, accessed 21 Provost. C., “USAid Now Free to Buy Goods July 2018 at https://www.theguardian.com/ from Companies in Poor Countries,” The us-news/2018/jan/18/how-has-donald- Guardian, February 6, 2012, accessed July trumps-first-year-affected-women; Anapol, 2018, at https://www.theguardian.com/ A., “Trump official claimed US is a 'pro-life global-development/2012/feb/06/usaid- nation' in UN meeting: report,” the Hill, changes-procurement-policy April 17, 2018, accessed July 2018 at http:// 22 Epstein et. Al, op. cit.
412 Chapter 4: Global Aid Trends, BRICS Reports, OECD Reports
Plan for U.S. Assistance, Unified Proposal, 23 U.S. department of State, Congressional October 2017, accessed July 2018 Budget Justification, 2018, accessed July athttp://modernizeaid.net/wp-content/ 2018 at https://www.state.gov/documents/ uploads/2017/10/Redesign-Consensus-Plan- organization/271014.pdf for-U.S.-Assistance.pdf
24 Grabowski, A., “Will the US abandon 33 Saldinger, A., “Congress again rejects steep the world’s poorest?,” Oxfam America, cuts to US foreign assistance in new budget,” June 2017, accessed July 2018 at https:// Devex, March 26, 2018, accessed July 2018 politicsofpoverty.oxfamamerica. at https://www.devex.com/news/congress- org/2017/06/will-the-us-abandon-the- again-rejects-steep-cuts-to-us-foreign- worlds-poorest/ assistance-in-new-budget-92403
25 One, Poverty is Sexist: Why Girls and Women 34 Heckman, J., “USAID unveils OMB-approved Must be at the Heart of the Fight to End reorganization proposal to staff,” federal Extreme Poverty, March 2015, accessed July News Radio, April 6, 2018, accessed July 2018 athttps://www.one.org/international/ 2018 at https://federalnewsradio.com/ policy/poverty-is-sexist-why-girls-and- workforce/2018/04/usaid-unveils-omb- women-must-be-at-the-heart-of-the-fight- approved-reorganization-proposal-to- to-end-extreme-poverty/ staff/
26 Grabowski, A., “Trump’s budget is an attack 35 https://www.usaid.gov/usaidforward on women around the world,” Oxfam America may 25, 2017, accessed July 2018 36 Oxfam America and Save the Children, at https://politicsofpoverty.oxfamamerica. The Power of Ownership, Transforming US org/2017/05/trumps-budget-is-an-attack- Foreign Assistance, accessed July 2018 at on-women-around-the-world/ www.powerofownership.org
27 U.S. Global Leadership Coalition, Despite 37 See https://www.usaid.gov/who-we-are/ Growing Dangers Facing America,Budget agency-policy/series-200 Request Once Again Calls for Draconian Cuts to International Affairs, accessed July 2018 at 38 See https://www.usaid.gov/selfreliance/ http://www.usglc.org/the-budget/analysis- administrations-fy19-international-affairs- 39 See https://www.mcc.gov/initiatives/ budget-request/ initiative/country-ownership
28 See https://www.state.gov/s/d/rm/rls/ 40 O'Harrow, R., “White House uses foreign perfrpt/2010/html/153715.htm aid agency to give jobs to Trump loyalists,” Washington Post, July 28, 2018, accessed 29 U.S. government accountability Office, U.S. July 2018 at https://www.washingtonpost. Foreign Assistance: Inventory of Strategies com/investigations/white-house-uses- At Selected Agencies, June 13, 2017, accessed foreign-aid-agency-to-give-jobs-to- July 2018 at https://www.gao.gov/products/ trump-loyalists/2018/07/28/3f819ac2- GAO-17-563R 86da-11e8-8589-5bb6b89e3772_story. html?utm_term=.c77d003690df 30 Federal Register, Comprehensive Plan for Reorganizing the Executive Branch, 41 USAID, Gender Equality and Female March 13, 2017, accessed July 2018 Empowerment Policy, March 2012, at https://www.federalregister.gov/ accessed July 2018 at https://www.usaid. documents/2017/03/16/2017-05399/ gov/sites/default/files/documents/1865/ comprehensive-plan-for-reorganizing-the- GenderEqualityPolicy_0.pdf executive-branch 42 MCC, Gender Policy, May 2011, accessed July 31 https://www.csis.org/analysis/reforming- 2018 at https://www.mcc.gov/resources/ and-reorganizing-us-foreign-assistance doc/gender-policy
32 Atwood, B., et. al, Redesign Consensus: A 43 USAID, the USAID Gender Equality and
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Female Empowerment Policy: A Report on Implementation, June 2016, accessed 50 Coplin, N., “Betting Big on ‘DRM’” Oxfam July 2018 at https://encompassworld. Policy Brief, June 2018 com/resources/usaid-gender-equality- and-female-empowerment-policy-report- 51 Addis Tax Initiative, ATI Monitoring Report implementation 2015, accessed July 2018 athttps://www. addistaxinitiative.net/documents/Addis-Tax- 44 Grabowski, A., “Gender equality is the US aid Initiative_Monitoring-Report_2015_EN.pdf reform focus we’re missing,” Oxfam America, September 8, 2017, accessed July 2018 at https://politicsofpoverty.oxfamamerica. 52 U.S. Department of State, “State Department org/2017/09/gender-equality-is-the-us-aid- and U.S. Agency for International reform-focus-were-missing/ Development FY 2019 Budget Request,” February 12, 2018, accessed July 2018 45 Foreign Aid Transparency and Accountability athttps://www.state.gov/r/pa/prs/ Act available at https://www.congress.gov/ ps/2018/02/278228.htm bill/114th-congress/house-bill/3766/text 53 See https://www.usaid.gov/what-we-do/ 46 Publish What You Fund, The 2018 Aid economic-growth-and-trade Transparency Index, available at http://www. publishwhatyoufund.org/the-index/2018/ 54 See https://www.usaid.gov/what-we-do/ economic-growth-and-trade/development- 47 Parrish, S., Cohen, J. And Mekuria, T., credit-authority-putting-local-wealth-work Tracing Us Development Flows A Study Of The Traceability Of Us Aid To Ghana. Development Initiative and Oxfam, January 55 See https://www.mcc.gov/about/values 2018, accessed July 2018 athttps://www. oxfamamerica.org/static/media/files/tracing- 56 See https://www.mcc.gov/our-impact/err us-development-aid-ghana-050118-en.pdf 57 Rose, S., “Linking US Foreign Aid to UN 48 Green, M., Statement for the Record, Votes: What Are the Implications?,” Center United State Senate Committee on Foreign for Global Development May 4, 2018, Relations, June 15, 2017, accessed July 2018 accessed July 2018 athttps://www.cgdev.org/ at https://www.foreign.senate.gov/imo/ publication/linking-us-foreign-aid-un-votes- media/doc/061517_Green_Testimony.pdf what-are-implications 49 See https://www.usaid.gov/what-we-do/ 58 https://foreignpolicy.com/2018/03/15/haley- economic-growth-and-trade/domestic- resource-mobilization vote-with-u-s-at-u-n-or-well-cut-your-aid/
414 Part 2
Glossary of Aid Terms Glossary of Aid Terms
ADB - Asian Development Bank assistance given in certain cases to dependent territories to cover a recurrent AF - Adaptation Fund budget deficit
AfDB - African Development Bank CBOs – Community-Based Organisations
AIIB - Asian Infrastructure Investment Bank CCB – China Construction Bank
AICD - Africa Infrastructure Country CCIC – Canadian Council for International Diagnostic Cooperation
Aid - see ODA Official Development CDC – Commonwealth Development Assistance Corporation
AIMM - Anticipated Impact Measurement CDCS - Country Development Cooperation and Monitoring is a system that offers Strategy an "end-to-end" framework to help IFC managers and its board make decisions CODA - Climate-related Official about which projects to approve based Development Assistance on a range of quantitative and qualitative information about the project's likely Concessionality Level - is a measure of the impacts on poverty alleviation and market 'softness' of a credit reflecting the benefit to creation the borrower compared to a loan at market rate (cf. Grant Element). Alignment - Donors base their overall support on partner countries' national Conditionality - is a concept in international development strategies and co-ordinate development, political economy and development actions international relations and describes the use of conditions attached to a loan, debt relief, AMP - Aid Management Platform bilateral aid or membership of international organisations, typically by the international ASEAN - Association of South East Asian financial institutions, regional organisations Nations or donor countries.
BDEAC - Banque de Développement des COP – Conference of the Parties États de l'Afrique Centrale (Development Bank of Central African States) CSO – There is no precise definition or category of Civil Society Organizations BF - Blended Financing but generally they are the full range of organizations that are established Bilateral Aid - is provided to developing voluntarily by citizens seeking to promote countries and countries on Part II of the DAC their concerns. List on a country-to-country basis, and to institutions, normally in Britain, working in CSSF - Conflict Stability and Security Fund fields related to these countries. DAC - Development Assistance Committee BNDES - Banco Nacional Do of the Organisation for Economic Desenvolvimento (Brazilian Economic and Cooperation and Development (OECD) is Social Development Bank) a forum for consultation among 21 donor countries, together with the European Budgetary Aid - is general financial Commission, on how to increase the level
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Glossary of Aid Terms
and effectiveness of aid flows to all aid FATAA - Foreign Aid Transparency and recipient countries. The member countries Accountability Act are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, FIAP - Feminist Assistance Policy Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, FinDev Canada - Canada's new Switzerland, UK, and USA. DAC sets the development finance institution, which definitions and criteria for aid statistics represents an additional form of non-ODA internationally. international assistance
DBSA - Development Bank of Southern FOCAC - Forum on China-Africa Cooperation Africa FPIC – Free, Prior and Informed Consent is DCF – Development Cooperation Forum a specific right that pertains to indigenous peoples and is recognised in the United Debt relief - may take the form of Nations Declaration on the Rights of cancellation, rescheduling, refinancing or Indigenous Peoples. re-organisation of debt. G20 - Group of 20 Finance Ministers and DEG - Deutsche Investitions-und Central Bank Governors. Established in Entwicklungsgesellschaft (German 1999, it brings together systematically Investment and Development Corporation) important industrialized and developing economies to discuss key issues in the DFIs - Development Finance Institutions global economy.
DFID – UK’s Department for International G24 - Group of 24 developed nations Development meeting to coordinate assistance to Central and Eastern Europe EBRD - European Bank for Reconstruction and Development GAC – Global Affairs Canada
EC - European Commission GATT - General Agreement on Tariffs and Trade EFSD - European Fund for Sustainable Development GCF - Green Climate Fund
EIB - European Investment Bank GDP - Gross Domestic Product
EIP – EU’s External Investment Plan GNI - Gross National Income. Most OECD countries have introduced a new system of ELC - Economic Land Concession is a long- national accounts which has replaced Gross term lease arrangement program under National Product (GNP) with GNI. As GNI the Cambodian government, allowing a has generally been higher than GNP, ODA/ concessionaire to clear land to develop GNI ratios are slightly lower than previously industrial-scale agriculture reported ODA/GNP ratios.
ESA - European System of Account GNP - Gross National Product
ESF - Economic Support Fund is aid GPEDC - Global Partnership for Effective designated to promote economic or political Development Co-operation stability in areas where the United States has special strategic interests.
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Glossary of Aid Terms
Grant element - reflects the financial JAS - Joint Assistance Strategies terms of a commitment: interest rate, maturity and grace period (interval to first JICA - Japan International Cooperation repayment of capital). It measures the Agency concessionality of a loan, expressed as the percentage by which the present value of KOICA – Korea International Cooperation the expected stream of repayments falls Agency short of the repayments that would have L&D – Loss and Damage been generated at a given reference rate of interest. The reference rate is 10% in DAC LIC – Low-Income Countries or countries statistics. Thus, the grant element is nil for with an annual per capita income of less a loan carrying an interest rate of 10%; it is than US$765 in 1995 100 per cent for a grant; and it lies between these two limits for a loan at less than LDC - (or sometimes LLDC) Least Developed 10% interest. If the face value of a loan is Countries or the 48 poor and vulnerable multiplied by its grant element, the result is countries are defined by the United Nations referred to as the grant equivalent of that as having an annual per capita income of loan (cf. Concessionality level) (Note: the less than US$765 in 1995. grant element concept is not applied to the market-based non-concessional operations LMIC - Lower Middle-Income Countries or of the multilateral development banks.) countries with an annual per capita income between US$766 and US$3035 in 1995 IAE – International Assistance Envelope MDGs - Millennium Development Goals are IDRC - In-donor refugee cost the international goals for poverty reduction and development agreed by the United IBRD - International Bank for Reconstruction Nations in the year 2000. These include the and Development International Development Targets.
IcSP - Instrument Contributing to Stability MDBs - Multinational Development Banks and Peace MFF – Multi-annual Financial Framework IEG – Independent Evaluation Group evaluates the development effectiveness of MIC – Middle Income Countries the World Bank Group MIGA - Multinational Investment Guarantee IFC - International Finance Corporation Agency
IFFs - Illicit Financial Flows generally refers MSME – Micro, Small and Medium to cross-border movement of capital Enterprise associated with illegal activity or more explicitly, money that is illegally earned, Multilateral agencies - are international transferred or used that crosses borders. institutions with governmental membership, which conduct all or a significant part of IFIs - International Financial Institutions their activities in favour of development and aid recipient countries. They include IMF - International Monetary Fund multilateral development banks (e.g. The World Bank, regional development INGOs - International Non-Governmental banks), United Nations agencies, and Organizations regional groupings (e.g. certain European Union and Arab agencies). A contribution
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Glossary of Aid Terms
by a DAC Member to such an agency is profit-making bodies that are active in deemed to be multilateral if it is pooled development work with other contributions and disbursed at the discretion of the agency. Unless NIC - Newly industrialised countries otherwise indicated, capital subscriptions to multilateral development banks are NIPs - National Indicative Programmes (EU) recorded on a deposit basis, i.e.: in the NPV - Net Present Value amount and as at the date of lodgement of the relevant letter of credit or other OA - Official Assistance (Aid) is government negotiable instrument. Limited data are assistance with the same terms and available on encashment basis, i.e.: at the condition as ODA, but which goes to date and in the amount of each drawing Countries and Territories in Transition which made by the agency on letters of other include former aid recipients and Central instruments. and Eastern European Countries and the Newly Independent States. It does not count Multilateral aid - aid that is channelled towards the 0.7% target. through international bodies for use in or on behalf of aid recipient countries. Aid ODA - Official Development Assistance channelled through multilateral agencies (often referred to as 'aid') of which at least is regarded as bilateral where the donor 25% must be a grant. The promotion of controls the use and destination of the economic development or welfare must funds. be the main objective. It must go to a developing country as defined by the DAC Multilateral portfolio investment - covers the transactions of the private non-bank ODAAA - Official Development Assistance and bank sector in the securities issued by Accountability Act multilateral institutions. ODF - Official Development Finance is used Mutual Accountability - Donors and in measuring the inflow of resources to partners are accountable for development recipient countries; includes [a] bilateral results ODA, [b] grants and concessional and non-concessional development lending by NABARD - National Bank for Rural multilateral financial institutions, and [c] Development Other Official Flows that are considered NBR - National Board of Revenue developmental (including refinancing loans) which have too low grant element to qualify NDICI - Neighborhood, Development and as ODA. International Cooperation Instrument OECD - Organisation for Economic NEDA - National Economic and Cooperation and Development (see DAC) Development Authority, the economic planning agency of the Philippines OHCHR - Office of the UN High Commissioner for Human Rights NGDO - Non-Governmental Development Organisation OOF - Other Official Flows are flows to aid recipient countries by the official sector that NGO (PVO) - Non-Governmental do not satisfy both the criteria necessary for Organisations (Private Voluntary ODA or OA. Organisations) also referred to as Voluntary Agencies. They are private non- ODI - Overseas Development Institute
418 419 Glossary of Aid Terms
Glossary of Aid Terms
OPIC - Overseas Private Investment RoA - The Reality of Aid Network Corporation SDC – Swiss Agency Development Cooperation Ownership - Partner countries exercise effective leadership over their development SIDCA - State International Development policies, and strategies and co-ordinate Cooperation Agency development actions Smart Power - the combination of “soft” PDF - Philippines Development Forum (e.g. development aid) and “hard” (e.g. military) power. Performance-based aid - is a system of benchmarks which, once reached, trigger SMEs - Small and medium-sized enterprises additional funding packages. Soft Loan - A loan of which the terms are PFM - Public Finance Management more favourable to the borrower than those currently attached to commercial market PPP - Public Private Partnership terms. It is described as concessional and the degree of concessionality is expressed Private Flows - are long-term (more than one as its grant element. year) capital transactions by OECD residents (as defined for balance of payment purposes) South-South Development Cooperation - with aid recipient countries, or through refers to the cooperation/relations amongst multilateral agencies for the benefit of such developing countries; in the AAA, "South- countries. They include all forms of investment, South cooperation on development aims to including international bank lending and observe the principle of non-interference Export Credits where the original maturity in internal affairs, equality among exceeds one year. Private flows are reported to developing partners and respect for their DAC separately for Direct Investment, Export independence, national sovereignty, cultural Credits and International Bank Lending, Bond diversity and identity and local content. Lending, and Other Private (lending) It plays an important role in international development cooperation and is a valuable Programme Aid - is financial assistance complement to North-South cooperation" specifically to fund (I) a range of general imports, or (ii) an integrated programme SSA - Sub-Saharan Africa of support for a particular sector, or (iii) discrete elements of a recipient's budgetary SSDC – South-South Development expenditure. In each case, support is provided Cooperation as part of World Bank/IMF coordinated structural adjustment programme. STEP - Special Terms for Economic Partnership Yen loan scheme was introduced PB - Participatory Budgeting was in July 2002, with a view of raising the visibility implemented by the Brazilian City of Porto of Japanese ODA among citizens in both Alegre with the objective of including a wider recipient countries and Japan through best part of the population in the process of city use of advanced technologies and know-how budget allocation, through an annual cycle of Japanese firms of public consultations and deliberations. TA/TC - Technical Assistance/Technical PSIs - Private Sector Instruments Cooperation includes both [a] grants to nationals of aid recipient countries Recipient Countries and Territories - is receiving education or training at home or the current DAC list of Aid Recipients see abroad, and [b] payments to consultants, LDC, LIC, LMIC, UMIC, HIC advisers, and similar personnel as well
420 421 Glossary of Aid Terms
Glossary of Aid Terms
as teachers and administrators serving UNDP - United Nations Development in recipient countries (including the cost Programme of associated equipment). Assistance of this kind provided specifically to facilitate UNEP - united Nations Environment the implementation of a capital project is Programme included indistinguishably among bilateral - United Nations Framework project and programme expenditures, and UNFCCC Convention on Climate Change is omitted from technical cooperation in statistics of aggregate flows. UNESCO - United Nations Educational Scientific and Cultural Organisation Tied Aid - is aid given on the condition that it can only be spent on goods and services UNFPA - United Nations Fund for Population from the donor country. Tied aid credits Activities are subject to certain disciplines concerning their concessionality levels, the countries UNHCR - Office of the United Nations High are to which they may be directed, and their Commissioner for Refugees development relevance designed to try to avoid using aid funds on projects that would UNICEF - United Nations Children's Fund be commercially viable with market finance, and to ensure that recipient countries UNRWA - United Nations Relief and Works receive good value. Agency
TNC - Transnational Corporation United Aid - Official Development Assistance for which the associated goods UMIC - Upper Middle Income Countries or and services may be fully and freely countries with an annual per capita income procured in substantially all countries. of between US$3036 and US$9385 in 1995 USAID - United States Agency for UN - United Nations International Development
UNAIDS - Joint United Nations Programme Vertical Programmes - also known as on HIV/AIDS vertical funds, global programmes and global initiatives, are defined by OECD and UNCED - United Nations Conference on the World Bank as "international initiatives Environment and Development, Rio de outside the UN system which deliver Janeiro 1992 significant funding at the country level in support of focused thematic objectives" UNCHS - United Nations Centre for Human Settlements WB - World Bank
UNCDF - United Nations Capital WFP - World Food Programme Development Fun WHO - World Health Organization UNDAC - United Nations Disaster Assessment and Coordination WID - Women in Development
UNDAF - United Nations Development WTO - World Trade Organisation Assistance Framewor
Sources consulted include: Reality of Aid, Annual Development Cooperation Report of the DAC
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Part 3
RoA Members Directory The Reality of Aid 2018 Report ROA Members Directory
E891 Postnet No. 302, Lusaka, Zambia RoA AFRICA Tel: (260) 211 290154 Email: [email protected] Africa Leadership Forum ALF Plaza, 1 Bells Drive, Benja Village,Km 9, Economic Community of West Idiroko road, Ota, Ogun State, Nigeria African States Network on Debt and Tel: (234) 803 4543925 Development (ECONDAD) Email: [email protected] 123 1st East Circular Road, Benin City, Edo Website: www.africaleadership.org State, Nigeria Tel: (234) 52 258748 Africa Network for Environment and Economic Justice (ANEEJ) Economic Justice Network (EJN) 123, First East Circular Road Benin City Edo Church House 1, Queen Victoria Street, Cape State Nigeria, West Africa Town. Republic of South Africa Tel: (234) 80 23457333 Tel: (27) 21 424 9563 Email: [email protected] Fax: (27) 21 424 9564 Website: www.aneej.org Email: [email protected]; admin@ejn. org.za African Forum and Network on Debt and Website: www.ejn.org.za Development (AFRODAD) 31 Atkinson Drive, Harare, Zimbabwe Forum for African Alternatives Tel: (263) 4 778531/6 Email: [email protected] Fax: (263) 4 747878 Email: [email protected] Forum for the Reinforcement of the Website: www.afrodad.org Civil Society (FORCS)/ Forum pour le Renforcement de la Société Civile (FORSC) Center for Economic Governance and Aids Email: [email protected] in Africa (CEGAA) Room 1009, Loop Street Studios, 4 Loop Forum National sur la Dette et la Street, Cape Town 8001/ P.O. Box 7004, Pauvreté (FNDP) Roggebaai, 8012 South Africa BP 585 Abidjan cidex 03 Riviera, Abijan Tel: (27) 21 425 2852 Tel: (225) 05718222 Fax: (27) 21 425 2852 Email: [email protected] Website: www.cegaa.org Foundation for Community Development Centre for Peacebuilding and Socio- - Mozambique Economic Resources Development Av. 25 de Setembro, Edifícios Times Square (CPSERD) Bloco 2 - 3º andar Lagos, Nigeria Tel: (258) 21 355300 Email: [email protected] Fax: (258) 21 355 355 Email: [email protected] Centre for Promotion of Economic and Website: www.fdc.org.mz Social Alternatives (CEPAES) P. O. Box 31091, Yaounde, Cameroon Foundation for Grassroots Initiatives in Tel: (237) 231 4407 Africa (GrassRootsAfrica) Email: [email protected] Foundation for Grassroots Inititives in Africa (GrassRootsAfrica) House Number 87 Bear Civil Society for Poverty Reduction (CSPR) Regimanuel Gray Estates, Plot No. 9169, Nanshila Road Kalundu-P/B Kwabenya-Accra PMB MD 187 Madina- Accra
424 425 RoA Members Directory ROA Members Directory
Ghana Tel: (233) 21-414223 Jubilee Angola Fax: (233)-21-414223 PO Box 6095, Luanda, Angola Email: grassrootsafrica@grassrootsafrica. Tel: (244) 2366729 org.gh Fax: (244)2335497 Website: www.grassrootsafrica.org.gh Email: [email protected]
GRAIB-ONG Jubilee Zambia Address: BP 66 AZOVE Benin P.O. Box 37774, 10101, Lusaka, Zambia Email: [email protected] Tel: (260) 1 290410 Phone #: (229) 027662; 91 62 22 Fax: (260) 1 290759 Fax #: (229) 46 30 48 Email: [email protected] Website: www.jctr.org.zm Groupe de Recherche et d'Action pour la Promotion de l'Agriculture et du Kenya Debt Relief Network (KENDREN) Développement (GRAPAD) C/O EcoNews Africa, Mbaruk Road, Mucai c/1506I Maison DJOMAKON Jean VONS Drive, P.O. Box 76406, Nairobi, Kenya Guindéhou VEDOKO, Benin Tel: (254) 020 2721076/99 Tel: (229) 21 38 01 72 / 21 38 48 83 Fax: (254) 020 2725171 Fax: (229) 21 38 01 72 Website: www.kendren.org Email: [email protected] Kenya Private Sector Alliance (KEPSA) Grupo Mocambicano da Divida (GMD) / 2nd Floor, Shelter Afrique Along Mamlaka Mozambican Debt Group Road, Next to Utumishi Co-op House P.O. Rua de Coimbra, nº 91 - Malhangalene, Box 3556-00100 GPO Nairobi, Kenya Maputo Tel: (254) 20 2730371/2 and 2727883/936 Tel: 21 419523, cel. 82 - 443 7740 Fax: (254) 2 2730374 Fax: (258)21-419524 Email: [email protected] Email: [email protected] Website: www.kepsa.or.ke Website: www.divida.org Malawi Economic Justice Network (MEJN) Habitat of Peace - Congo - DRC Malawi Economic Justice Network, Centre Tel: (243) 99811818 House Arcade, City Centre, PO Box 20135, Institute for Security Studies/Institut Lilongwe 2 Malawi D‘Etudes de Securite Tel: (265) 1 770 060 PO Box 1787 Brooklyn Square Tshwane Fax: (265) 1 770 068 (Pretoria) 0075 South Africa Email: [email protected] Tel: (27) 012 346 9500/2 Website: www.mejn.mw Fax: (27) 012 346 9570 Email: [email protected] Social Development Network (SODNET) Website: www.iss.co.za Methodist Ministry Center, 2nd Wing, 4th floor, Oloitoktok Road, Off Gitanga Road, Institute of Development Studies (IDS) Kilimani Nairobi 00619 Kenya University of Zimbabwe Tel: (254) 20 3860745/6 PO Box MP167, Mt Pleasant, Harare, Fax: (254) 20 3860746 Zimbabwe Email: [email protected]; Tel: (263) 4 333342/3 [email protected] Fax: (263) 4-333345 Website: www.sodnet.org Email: [email protected]
424 425 The Reality of Aid 2018 Report ROA Members Directory
Southern African Centre for the Email: [email protected] Constructive Resolution of Disputes Website: www.ngoforum.or.ug (SACCORD) P.O. Box 37660, Lusaka, Zambia Zimbabwe Coalition on Debt and Tel: (260) 1 250017 Development (ZIMCODD) Fax: (260) 1 250027 5 Orkney Road, Eastlea, Harare, Zimbabwe; Email: [email protected] P O Box 8840, Harare, Zimbabwe Tel: (263) 4 776830/31 Tanzania Association of NGOs (TANGO) Fax: (263) 4 776830/1 Off Shekilango Road, Sinza Afrika Sana Dar Email: [email protected] es Salaam P. O. Box 31147 Tanzania Website: www.zimcodd.org.zw Tel: (255) 22 277 4582 Fax: (255) 22 277 4582 Email: [email protected] RoA ASIA/PACIFIC Website: www.tango.or.tz Advancing Public Interest Trust (APIT) Tanzania Coalition on Debt and 107/ Ground Floor, Sher Sha Shuri Road, Development Mohammadpur, Dhaka 1216 Bangladesh (TCDD) Tel: (880) 2-9121396; (880) 2-9134406 Shaurimoyo Road, Mariam Towers, 8th Fax: Ext-103 Floor, Email: [email protected] PO Box 9193, Dar Es-Salaam, Tanzania Website: www.apitbd.org Tel: 255 (22) 2866866/713 - 608854 Fax: (255) 22 2124404 Aidwatch Philippines Email: [email protected] 114 Timog Avenue, Quezon City, 1103 Website: www.ttcdd.org Philippines Tel: (63) 2 927 7060 to 62 THISDAY Fax: (63) 2 929 2496 35 Creek Road, Apapa, Lagos Email: aidwatch-philippines@googlegroups. Tel: (234) 8022924721-2; 8022924485 com Fax: (234) 1 4600276 Website: aidwatch-ph.collectivetech.org/ Email: [email protected]; etimisim@ node/2 hotmail.com Website: www.thisdayonline.com All Nepal Peasants’ Federation (ANPFa) PO Box: 273, Lalitpur, Nepal Tel: (977) 1-4288404 Uganda Debt Network Fax: (977) 1-4288403 Plot 424 Mawanda Road, Kamwokya Email: [email protected] Kampala / P.O. Box 21509 Kampala, Uganda Website: www.anpfa.org.np Tel: (256) 414 533840/543974 Fax: (256) 414 534856 ANGIKAR Bangladesh Foundation Email: [email protected] Sunibir, 25 West Nakhalpara, Tejgaon, Website: www.udn.or.ug Dhaka 1215 Bangladesh Tel: 881711806054 (mobile) Uganda NGO National Forum Email: [email protected] Plot 25, Muyenga Tank Hill Rd, Kabalagala, PO Box 4636, Kampala, Uganda Arab NGO Network for Development Tel: (256) 772 408 365 (ANND) Fax: (256) 312 260 372 P.O.Box: 5792/14, Mazraa: 1105 - 2070
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Beirut, Lebanon Tel: (961) 1 319366 Coastal Development Partnership (CDP) Fax: (961) 1 815636 55/2 Islampur Road, Khulna-9100, Email: [email protected] Bangladesh Website: www.annd.org Tel: (880) 1916033444 Fax: 88 02 9564474 Asia Pacific Mission for Migrants (APMM) Email: [email protected] c/o Kowloon Union Church, No.2 Jordan Website: www.cdpbd.org Road, Kowloon Hong Kong SAR Tel: (852) 2723-7536 Cooperation Committee for Cambodia Fax: (852) 2735-4559 (CCC) Email: [email protected] #9-11, St. 476, TTPI, Chamkarmorn, Phnom Website: www.apmigrants.org Penh, Cambodia, PO Box 885, CCC Box 73 Tel: (855 23) 216 009 or (855 -16) 900 503 Centre for Human Rights and Fax: (855 23) 216 009 Development (CHRD) Website: www.ccc-cambodia.org Baga toiruu, Chingeltei district, Ulanbataar 17, Mongolia Cordillera People’s Alliance (CPA) Tel: (976) 11325721 # 2 P. Guevarra Street, West Modern Site, Fax: (976) 11325721 Aurora Hill, 2600 Baguio City, Philippines Website: www.owc.org.mn Tel: (63) 74 304-4239 Fax: (63) 74 443-7159 Centre for Organisation Research and Email: [email protected]; [email protected] Education (CORE) Website: www.cpaphils.org National Programme Office A-5 Vienna Residency Aldona Bardez 403 508, Goa, Council for People’s Democracy and India Governance (CPDG) Tel: (91) 832-228 9318 Quezon City, Philippines Email: [email protected]; core_ Tel: (63) 2 3741285 [email protected] Website: www.coremanipur.org East Timor Development Agency (ETDA) P.O. Box 30, Bairro Pite, Dili, Timor-Leste China Association for NGO Cooperation Tel: (670) 723 3674; (670) 723 3816 (CANGO) Email: [email protected] C-601, East Building, Yonghe Plaza, 28# Andingmen Dongdajie, Beijing, 100007, Ecumenical Center for Research, P.R.China Education and Advocacy (ECREA) Tel: (86) 10 64097888 189 Rt. Sukuna Rd. G.P.O 15473 Suva Fax: (86)10 64097607 Republic of Fiji Islands Email: [email protected] Tel: (679) 3307 588 Website: www.cango.org Fax: (679) 3311 248 Website: www.ecrea.org.fj COAST House# 9/4, Road# 2, Shyamoli, Dhaka 1207 Forum LSM Aceh (Aceh NGOs Forum) Bangladesh Jl. T. Iskandar No. 58 Lambhuk, Banda Aceh, Tel: (880) 2-8125181 Indonesia Fax: (880) 2-9129395 Tel: (62) 651 33619; 081514542457 Email: [email protected] Fax: (62)65125391 Website: www.coastbd.org Email: [email protected]; forumlsmaceh@
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yahoo.com Email: [email protected] Website: www.forumlsmaceh.org Website: www.loksanjh.org
Forum of Women’s NGOs in Kyrgyzstan LOKOJ Institute Isanova 147, kv. 7; 720033 Bishkek, Kyrgyzstan No. 706, Road No. 11, Adabor, Shamoli, Tel: (996) 312 214585; (996) 555 996612 Dhaka 1207, Bangladesh Website: www.forumofwomenngos.kg Tel: (880) 28150669 Fax: (880) 29664408 Green Movement of Sri Lanka (GMSL) Email: [email protected]; aruprahee@yahoo. No 9, 1st Lane, Wanatha Road, Gangodawila, com Nugegoda, Sri Lanka Website: www.lokoj.org Tel: (94) 11 2817156 Fax: (94) 11 4305274 Mindanao Interfaith People’s Conference Email: [email protected] (MIPC) Website: www.greensl.net 2F PICPA Bldg., Araullo St.,Davao City 8000 Philippines IBON Foundation Inc. Tel: (63) 82 225 0743 114 Timog Avenue, Quezon City, 1103 PhilippinesFax: (63) 82 225 0743 Tel: (63) 2 927 6981 Email: [email protected] Fax: (63)2 927 6981 Website: www.ibon.org National Network of Indigenous Women (NNIW) INCIDIN Bangladesh National Network of Indigenous Women 9/11, Iqbal Road, Mohammadpur, Dhaka-1207 (NNIW), Kathmandu Metropolitan- 34, Bangladesh Baneshwor, PO Box 7238, Nepal Tel: (880) 2-8129733 Tel: (977) 1-4115590 Website: www.incidinb.org Fax: (977) 1-4115590 Email: [email protected] International NGO Forum on Indonesian Website: www.nniw.org.np Development (INFID) JL Mampang Prapatan XI, No. 23 Jakarta 12790, Nepal Policy Institute (NPI) Indonesia 60 Newplaza Marga, Putalisadak, Tel: (62) 21 7919-6721 to 22 Kathmandu, Nepal Fax: (62)21 794-1577 Tel: (977) 1-4429741 Email: [email protected] Fax: (977) 1-4419610 Website: www.infid.org Email: [email protected]; npi.info@ wlink.com.np Law & Society Trust (LST) Website: npi.org.np Law & Society Trust, No. 3, Kynsey Terrace, Colombo 8, Sri Lanka NGO Federation of Nepal Tel: (94) 11 2684845 / (94) 11 2691228 Post Box No 8973 NPC 609, New Baneshwor, Fax: (94) 11 2686843 Email: [email protected], [email protected] Kathmandu, Nepal Website: www.lawandsocietytrust.org Tel: (977) 1 4782908; Cell : 977 9841212769 Fax: (977) 1 4780559 Lok Sanjh Foundation Email: [email protected] House 494, Street 47, G-10/4, Islamabad, Website: www.ngofederation.org Pakistan Tel: (92) 51-2101043 Pacific Islands Association of Non Fax: (92) 51 221 0395 Governmental Organisations (PIANGO) 30 Ratu Sukuna Road, Nasese, Suva, Fiji
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Islands; 50200, Thailand Postal: P.O. Box 17780, Suva, Fiji Email: [email protected]; kenneri@ Tel: (679) 330-2963 / 331-7048 shanwomen.org Fax: (679) 331-7046 Website: www.shanwomen.org Email: [email protected] Website: www.piango.org Solidarity for People’s Advocacy Network (SPAN) Pakistan Institute of Labor and Education Cebu City, Philippines Research (PILER) Email: [email protected] Pakistan Institute of Labour Education & Research ST-001, Sector X, Sub Sector - V, South Asian Network for Social and Gulshan-e-Maymar, Agricultural Development (SANSAD) Karachi – Pakistan N-13, Second Floor Green Park Extension Tel: (92) 21 6351145-7 New Delhi India - 110016 Fax: (92) 21 6350354 Tel: (91) 11-4164 4845 Email: [email protected]; [email protected] Fax: (91) 11-4175 8845 Website: www.piler.org.pk Website: www.sansad.org.in
Tamil Nadu Women’s Forum Peoples Workers Union Kallaru, Perumuchi Village and Post B-25, Bano Plaza, Garden East, Nishtar Road, Arakkonam 631 002, Vellore District, Tamil Karachi, Pakistan Nadu, India Tel: 92-30-02023639 Tel: (91) 041421 70702 Email: [email protected] Proshika I/1-Ga, Section-2, Mirpur, Dhaka-1216, The NGO Forum on Cambodia Bangladesh #9-11 Street 476, Toul Tompong, P.O. Box Tel: (880) 8015812; (880) 8016015 2295, Phnom Penh 3, Cambodia Fax: (880) 2-8015811 Tel: (855) 23-214 429 Email: [email protected] Fax: (855) 23- 994 063 Website: www.proshika.org Email: [email protected] Website: www.ngoforum.org.kh Public Interest Research Centre (PIRC) 142, Maitri Apartments, Plot No. 2, Third World Network (TWN) Patparganj, Delhi – 110 092, India 131 Jalan Macalister, 10400 Penang, Malaysia Tel: (91) 11-43036919 Tel: (60) 4 2266728/2266159 Fax: (91) 11-222-4233 Fax: (60) 42264505 Email: [email protected]; [email protected] SEWALANKA Foundation Website: www.twnside.org.sg # 432 A, 2nd Floor, Colombo Road, Boralesgamuwa, Sri Lanka UBINIG (Policy Research for Development Tel: (94) 773524410; (94) 112545362-5 Alternative) Fax: (94) 112545166 22-13, Khilzee Road, Block # B, Email: [email protected] Mohammadpur, Shaymoli, Dhaka 1207, Website: www.sewalanka.org Bangladesh Tel: (880) 2 81 11465; 2 81 16420 Shan Women’s Action Network (SWAN) Fax: (880) 2 81 13065 PO Box 120 Phrasing Post Office, Chiangmai Email: [email protected]
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Fax: (5184) 236889 Vietnam Union of Science & Technology Email: [email protected] Associations (VUSTA) Website: www.arariwa.org.pe 53 Nguyen Du Str. - Ha Noi - Viet Nam Tel: (84)4 9432206 Asociación Civil Acción Campesina Fax: (84)4 8227593 Calle Ayuacucho oeste No. 52, Quinta Acción Email: [email protected] Campesina Los Teques, Estado Miranda, Website: www.vusta.vn Venezuela Tel: (58 212) 3214795 Vikas Andhyayan Kendra (VAK) Fax: (58 212) 321 59 98 D-1 Shivdham, 62 Link Road, Malad (West), Email: [email protected] Mumbai 400 064 India Website: www.accioncampesina.com.ve Tel: (91) 22-2882 2850 / 2889 8662 Fax: (91) 22-2889 8941 Asociación Latinoamericana de Email: [email protected] Organizaciones de Promoción al Website: www.vakindia.org Desarrollo, A.C. Benjamín Franklin 186, Col. Escandón, Del. Voices for Interactive Choice and Miguel Hidalgo, México, D.F. C.P. 11800 Empowerment (VOICE) Tel: (5255) 52733400 House #67, 4th floor, Block-Ka, Pisciculture Fax: (5255) 52733449 Housing Society, Shaymoli, Dhaka-1207, Email: [email protected] Bangladesh Website: www.alop.org.mx Tel: (880) 2-8158688 Fax: (880) 2-8158688 Asociación para el Desarrollo de los Email: [email protected] Pueblos (ADP) Website: www.voicebd.org Apartado postal 4627, Managua C.S.T. 5 cuadras al Sur, 1 1/2; cuadra al Oeste Wave Foundation Managua, Nicaragua 3/11. Block-D, Lalmatia, Dhaka 1207, Tel: (505) 2281360 Bangladesh Fax: (505)2664878 Tel: (880) 2-8113383 Email: [email protected] Email: [email protected] Website: www.adp.com.ni
Base, Educación, Comunicación, RoA LATIN AMERICA Tecnología Alternativa (BASE-ECTA) Avenida Defensores del Chaco, piso 1 San (SUR) Centro de Estudios Sociales y Lorenzo, Paraguay Código Postal 2189 San Educación Lorenzo José M. Infante 85, Providencia, Santiago, Tel: (59521) 576786/ (59521) 580239 Chile Email: [email protected] Tel: (562)2642406 / 2360470 Fax: (562)2359091 Central Ecuatoriana de Servicios Email: [email protected] Agrícolas(CESA) Website: www.sitiosur.cl Apartado postal: 17-16 -0179 C.E.Q. Inglaterra N 3130 y Mariana de Jesús, Quito, Asociación Arariwa para la Promoción Ecuador Técnica-cultural Andina Tel: (593 2) 524830 / 2529896 Apartado postal 872, Cusco, Perú, Avenida Fax: (5932) 503006 Los Incas 1606, Wanchaq Cusco, Perú Email: [email protected] Tel: (5184) 236-6887
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Website: www.cesa.org.ec Centro de Investigación y Promoción del Centro Andino de Acción Popular (CAAP) Campesino (CIPCA) Apartado postal 17-15 – 173 – B Martín de Pasaje Fabiani No. 2578 Av. 20 de Octubre / Utreras 733 y Selva Alegre Quito, Ecuador Campos y Pinilla, Casilla 5854, La Paz, Bolivia Tel: (5932) 252-763 / 523-262 Tel: (591 2) 2432272, 22432276 Fax: (5932) 568-452 Fax: (5912) 22432269 Email: [email protected] Email: [email protected] Website: www.ecuanex.net.ec/caap Website: www.cipca.org.bo
Centro Cooperativista Uruguayo (CCU) Centro de Investigaciones (CIUDAD) Edo. Víctor Haedo 2252, CP 11200 Montevideo, Calle Fernando Meneses N24-57 y Av. La Uruguay Gasca, Casilla Postal 1708-8311, Quito, Tel: (5982) 4012541 / 4009066 / 4001443 Ecuador Fax: (5982) 4006735 Tel: (5932) 2225-198 / 2227-091 Email: [email protected] Fax: (5932) 2500-322 Website: www.ccu.org.uy Email: [email protected] Website: www.ciudad.org.ec Centro de Assessoria Multiprofissional (CAMP) Centro de Investigaciones y Educación Praca Parobé, 130-9o andar Centro Popular (CINEP) 90030.170, Porto Alegre – RS Brasil Apartado postal 25916, Santafé de Tel: (5551) 32126511 Bogotá, Carrera 5ª No. 33A-08, Bogotá, Fax: (5551) 32337523 Colombia Email: [email protected] Tel: (571) 2456181 Website: www.camp.org.br Fax: (571) 2879089 Email: [email protected] Centro de Derechos y Desarrollo (CEDAL) Website: www.cinep.org.co Huayna Capac No 1372, Jesús María Lima 11, Perú Centro Dominicano de Estudios de la Tel: (511) 2055730 Educación (CEDEE) Fax: (511) 2055736 Santiago 153, Gazcue (Apdo. Postal 20307) Email: [email protected] / [email protected] Santo Domingo, Dominicana, Rep.. Website: www.cedal.org.pe Tel: (1809) 6823302; 6882966 Fax: (1 809) 686-8727 Centro de Educación Popular (QHANA) Email: [email protected]; cedee@ Apartado postal 9989, La Paz, Calle Landaeta verizon.net.do No. 522, La Paz, Bolivia Email: [email protected] / lapaz@qhana. Centro Félix Varela (CFV) org.bo Calle 5ª No 720 e/ 8 y 10 El Vedado, Ciudad Website: www.qhana.org.bo Habana, Cuba Tel: (537) 8367731 Centro de Estudios y Promoción del Fax: (53 7) 8333328 Desarrollo (DESCO) Email: [email protected] / [email protected] Jr León de la Fuente No. 110, Lima 17, Perú Website: www.cfv.org.cu Tel: (511) 613-8300 a 8307 Fax: (511 ) 613-8308 Centro Latinoamericano de Economía Email: [email protected] Humana (CLAEH) Website: www.desco.org.pe Zelmar Michelini 1220 11100 Montevideo,
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Uruguay Tel: (502) 2432-0966 Tel: (5982) 9007194 Fax: (502) 2433-4779 Fax: (5982) 9007194 ext 18 Website: www.congcoop.org.gt Email: [email protected] Website: www.claeh.org.uy Corporación de Estudios Sociales y Educación (SUR) Centro Operacional de Vivienda y José M. Infante 85, Providencia, Santiago, Poblamiento AC (COPEVI) Chile Calle Primero de Mayo #151 Col. San Pedro Tel: (56) 2 235 8143; 236 0470 de los Pinos, Del. Benito Juárez México, D.F. Fax: (56) 2 235-9091 C.P. 03800, México Email: [email protected] Tel: (5255) 55159627 y 4919 Website: www.sitiosur.cl Email: [email protected] Website: www.copevi.org Corporación Juventudes para el Desarrollo y la Producción (JUNDEP) Centro para la Acción Legal en Derechos Fanor Velasco 27, Santiago, Chile Humanos (CALDH) Tel: (562) 3611314 - 3611316 6ª. Avenida 1-71, Zona 1, Ciudad de Email: [email protected] Guatemala, Guatemala Website: www.jundep.cl Tel: (502) 2251-0555 Fax: (502) 2230-3470 Corporación Región para el Desarrollo y Email: [email protected] la Democracia Website: www.caldh.org Apartado postal 67146 Medellín, Calle 55 No. 41-10, Medellín, Colombia Centro Peruano de Estudios Sociales Tel: (574) 216-6822 (CEPES) Fax: (574) 239-5544 Av. Salaverry No. 818, Jesús María, Lima 11, Email: [email protected] Perú Website: www.region.org.co Tel: (511) 433-6610 Fax: (511) 433-1744 Corporación Viva la Ciudadanía Email: [email protected] Calle 54, No. 10-81, piso 7, Bogotá, Colombia Website: www.cepes.org.pe Tel: (57 1) 3480781 Fax: (57 1) 212-0467 Comisión de Acción Social Menonita Email: [email protected] (CASM) Website: www.viva.org.co Barrio Guadalupe 21-22, Calle 3, Av. NE, 2114 San Pedro Sula, Cortés, Honduras Deca-Equipo Pueblo, AC Tel: (504) 552 9469/70 Apartado postal 113-097 México, D.F., Fax: (504) 552 0411 Francisco Field Jurado No.51, México, D.F. Email: [email protected], casm@ México sulanet.net Tel: (52 55) 5539 0055 – 5539 0015 Website: www.casm.hn Fax: (52 55) 5672 7453 Email: [email protected] Coordinacion de ONG y Cooperativas Website: www.equipopueblo.org.mx (CONGCOOP) 2a. Calle 16-60 zona 4 de Mixco, Enlace, Comunicación y Capacitación, AC Residenciales Valle del Sol, Edificio Atanasio (ENLACE) Tzul, 2do. Nivel Guatemala, Benjamín Franklin 186 Col. Escandón CP Centro America 11800, México, D.F., México
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Tel: (52 55) 52733343 – 52734648 Fundación Promotora de Vivienda Email: [email protected] (FUPROVI) Website: www.enlacecc.org Del costado Norte de la Iglesia de Moravia 700 mts. Este, 100 mts. Norte, 100 mts. Federación de Órganos para Asistencia Oeste Moravia, San José, Social Educacional (FASE) Costa Rica Rua das Palmeiras, 90 Botafogo, 22270-070 Tel: (506) 2470000 Río de Janeiro, Brasil Fax: (506) 2365178 Tel: (5521) 25367350 Email: [email protected] Fax: (5521) 25367379 Website: www.fuprovi.org Email: [email protected] Website: www.fase.org.br Fundación Salvadoreña para la Promoción y el Desarrollo Económico Fondo Ecuatoriano Populorum Progressio (FUNSALPRODESE) (FEPP) Apartado postal 1952 Centro de Gobierno, Apartado postal 17-110-5202 Quito Calle 27 Calle Poniente y 17 Av. Norte, No. 1434, Mallorca N24-275 y Coruña, Quito, Ecuador Colonia Layco, San Tel: (5932) 2520408 – 2529372 Salvador, El Salvador Fax: (5932) 250-4978 Tel: (503) 22252722 / 22250414 / 0416 Email: [email protected] Fax: (503) 22255261 Website: www.fepp.org.ec Email: [email protected] Website: www.funsalprodese.org.sv Fundación Foro Nacional por Colombia Carrera 4 A No 27 62 Bogotá D.C., Colombia Fundación SES (Latindadd) Tel: (571) 2822550 Avda de Mayo 1156 2º piso,Ciudad de Fax: (571) 2861299 Buenos Aires. Argentina Email: [email protected] Tel: 54-11-4381-4225/3842 Website: www.foro.org.co Email: [email protected] / e-grupo2- [email protected] Fundación Nacional para el Desarrollo Website: www.fundses.org.ar (FUNDE) Calle Arturo Ambrogi #411 entre 103 y 105 Fundación Taller de Iniciativas en Av. Norte, Col. Escalón, San Salvador, El Estudios Rurales (Fundación Tierra) Salvador, P.O. Box 1774, Apartado postal 8155, La Paz Calle Centro de Gobierno Hermanos Manchego No. 2576 La Paz, Tel: (503) 22095300 Bolivia Fax: (503) 22630454 Tel: (5912) 2430145 – 2432263/2683 Email: [email protected] Fax: (5912) 211 1216 Website: www.funde.org Email: [email protected] Website: www.ftierra.org Fundación para el Desarrollo en Justicia y Paz (FUNDAPAZ) Grupo Social Centro al Servicio de la Calle Castelli 12, segundo piso “A” Acción Popular (CESAP) (C1031AAB) Buenos Aires, Argentina San Isidro a San José de Ávila, final avenida Tel: (5411) 48648587 Beralt (al lado de la Abadía), Edificio Grupo Fax: (5411) 48616509 Social CESAP Email: [email protected] Caracas, Venezuela Website: www.fundapaz.org.ar Tel: (58212) 8627423/7182 – 8616458 Fax: (58212) 8627182
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Instituto Cooperativo Interamericano Juventudes para el Desarrollo y la (ICI) Producción (JUNDEP) Apartado postal 0834-02794, Ciudad de Fanor Velasco 27, Santiago, Chile Panamá, Avenida La Pulida, Pueblo Nuevo, Tel: (56) 3611314; 3611321 Ciudad de Panamá, Panamá Email: [email protected]; corpjundep@123. Tel: (507) 2246019/ 2240527 cl Fax: (507) 2215385 Website: www.jundep.cl Email: [email protected] Website: www.icipan.org La Morada Purísima 251, Recoleta Santiago, Chile Instituto de Desarrollo Social y Tel: (562)732 3728 Promoción Humana (INDES) Fax: (562)732 3728 Luis Sáenz Peña 277, 5to. Piso, oficina 10, Email: [email protected] 1110 Buenos Aires, Argentina Website: www.lamorada.org Tel: (5411) 43726358/ (543752) 435764 Fax: (5411) 43726358/ (543752) 435764 Productividad Biosfera Medio Ambiente - Email: [email protected] indesmisiones@ Probioma arnet.com.ar Equipetrol calle 7 Este No 29 Santa Cruz de Website: www.indes.org.ar la Sierra, Bolivia Tel: (591) 2 3431332 Instituto de Estudos Socioeconomicos Fax: (591) 2 3432098 (INESC) Email: [email protected] SCS quadra 08 Bloco B-50, salas 433/441 Website: www.probioma.org.bo Edificio Venáncio 2000, CEP 70333-970 Brasilia – DF, Brasil Programa de Promoción y Desarrollo Tel: (55 61) 212-0200 Social (PRODESO) Apartado postal 168, Santiago de Veraguas, Fax: (55 61) 226-8042 Calle 4 Paso de las Tablas, Santiago de Email: [email protected] Veraguas, Panamá Website: www.inesc.org.br Tel: (507) 998-1994 Fax: 998-6172 Instituto de Estudos, Formacao e Email: [email protected] Assessoria em Politicas Sociais (Instituto Website: www.prodeso.org Pólis) Rua Araújo, 124 Centro, Sao Paulo - SP Brazil Proyecto de Desarrollo Santiago-La Salle Tel: (55) 11 2174-6800 (PRODESSA) Fax: (55) 11 2174 6848 Apartado postal 13 B, 01903, Guatemala, Email: [email protected] Km. 15 Calzada Roosevelt, Zona 7 Website: www.polis.org.br Guatemala, Guatemala Tel: (502) 24353911 Fax: (502) 24353913 Instituto Hondureño de Desarrollo Rural Email: [email protected], federico. (IHDER) [email protected], edgargarciatax@yahoo. Apartado postal 2214, Tegucigalpa, D.C., com.mx Honduras Colonia Presidente Kennedy, Website: www.prodessa.net Zona No. 2, Bloque No. 37, casa #4416, Súper Manzana No. 5 Tegucigalpa, Red Latinoamericana sobre Deuda , Honduras Desarollo y Derechos (LATINDADD) Tel: (504) 2300927 Jr. Daniel Olaechea 175, Jesús María - Perú Email: [email protected] Tel: (511) 261 2466
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Fax: (511) 261 7619 ActionAid International - via Broggi 19/A - Email: [email protected] 20129 Milano, Italy Website: www.latindadd.org Website: www.actionaid.it
Servicio de Información Mesoamericano Action Aid UK sobre Agricultura Sostenible (SIMAS) Hamlyn House, Macdonald Road, Archway, Lugo Rent a Car 1c al lago, Esq. Sur oeste London N19 5PG, UK parque El Carmen, Reparto El Carmen, Tel: (44) 20 7561 7561 Managua, Nicaragua Fax: (44) 20 7272 0899 Tel: (505) 22682302 Email: [email protected] Fax: (505) 22682302 Website: www.actionaid.org.uk Email: [email protected] Website: www.simas.org.ni Alliance Sud Servicio Ecuménico de Promoción Monbijoustrasse 31, PO Box 6735 CH-3001 Alternativa (SEPA) Berne, Switzerland Apartado postal 23036 Fernando de la Mora Tel: (41) 31 390 93 33 Soldado Ovelar 604 esq. Marcos Riera, Fax: (41) 31 390 93 31 Fernando de la Mora, Paraguay Email: [email protected] Tel: (59521) 515-855/ 514365 Website: www.alliancesud.ch Email: [email protected] British Overseas NGOs for Development Servicio Habitacional y de Acción Social (BOND) (SEHAS) Bond Regent’s Wharf 8 All Saints Street Bv. del Carmen 680, Villa Siburu (5003) London N1 9RL, UK Córdoba, Argentina Tel: (44) 20 7520 0252 Tel: (54 351) 480-5031 Fax: (44) 20 7837 4220 Fax: (54 351) 489-7541 Email: [email protected]; advocacy@bond. Email: [email protected] org.uk Website: www.sehas.org.ar Website: www.bond.org.uk
Servicios para la Educación Alternativa Campagna per la Riforma della Banca AC (EDUCA) (CRBM) Escuadrón 201 #203 Col. Antiguo Mondiale (CRBM), via Tommaso da Celano Aeropuerto, Oaxaca, México C.P. 68050 15, 00179 Rome, Italy Tel: (52 951) 5136023 – (52 951) 5025043 Tel: (39) 06-78 26 855 Email: direcció[email protected] Fax: (39) 06-78 58 100 Website: www.edudaoaxaca.org Email: [email protected] Website: www.crbm.org
RoA EUROPEAN OECD COUNTRIES CeSPI - Centro Studi di Politica Internazionale 11.11.11 - Coalition of the Flemish North- Via d’Aracoeli 11, 00186 Rome, Italy South Movement Tel: (39) 06 6990630 Vlasfabriekstraat 11, 1060 Brussels, Belgium Fax: (39) 06 6784104 Tel: (32) 2 536 11 13 Email: [email protected] Fax: (32) 2 536 19 10 Website: www.cespi.it Email: [email protected] Website: www.11.be Christoffel-Blindenmission Deutschland e.V. (CBM) Christian Blind Germany e.V., Nibelungen Action Aid Italy Straße 124, 64625 Bensheim, Germany
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Tel: (49) 6251 131-0 [email protected] Fax: (49) 6251 131-199 Website: www.forumsyd.org Email: [email protected] Website: www.christoffel-blindenmission.de Global Responsibility Austrian Platform for Development and Humanitarian Aid Concern Worldwide Berggasse 7/11, A-1090 Vienna, Austria 52-55 Lower Camden Street, Dublin 2 Tel: (43) 1 522 44 22-0 Ireland Email: [email protected] Tel: (353) 1 417 7700; (353) 1417 8044 Website: www.agez.at Fax: (353) 1 475 7362 Email: [email protected] IBIS Website: www.concern.net IBIS Copenhagen, Norrebrogade 68B, 2200 Copenhagen N, Denmark Coordination SUD Tel: (45) 35358788 14 passage Dubail, 75010 Paris, France Fax: (45) 35350696 Tel: (33) 1 44 72 93 72 Email: [email protected] Fax: (33) 1 44 72 93 73 Website: www.ibis.dk Email: [email protected] Website: www.coordinationsud.org Intermón Oxfam Calle Alberto Aguilera 15, 28015 Madrid, Diakonia-Sweden Spain SE-172 99 Sundbyberg, Stockholm, Sweden Tel: (34) 902 330 331 Tel: (46) 8 453 69 00 Email: [email protected] Fax: (46) 8 453 69 29 Website: www.intermonoxfam.org Email: [email protected] Website: www.diakonia.se KEPA Service Centre for Development European Network on Debt and Cooperation- KEPA Elimäenkatu 25-27(5th Development (EURODAD) floor),00510 Helsinki, Finland Rue d’Edimbourg, 18–26 1050 Brussels Tel: +358 9 584 233 Belgium Email: [email protected] Tel: (32) 2 894 46 40 Website: www.kepa.fi Fax: (32) 2 791 98 09 Email: [email protected] MS Action Aid Denmark Website: www.eurodad.org MS ActionAid Denmark Fælledvej 12 2200 Kbh N., Denmark Eurostep Tel: (45) 7731 0000 Eurostep AISBL, Rue Stevin 115, B-1000 Fax: (45) 7731 0101 Brussels, Belgium Email: [email protected] Tel: (32) 2 231 16 59 Website: www.ms.dk Fax: (32) 2 230 37 80 Email: [email protected] Networkers South-North Website: www.eurostep.org Ullveien 4 (Voksenåsen), 0791 Oslo, Norway Tel: (47) 93039520 Forum Syd Email: [email protected] PO Box 15407, S-104 65 Stockholm, Sweden Website: www.networkers.org Tel: 0046 8-506 371 62 Fax: 46 8 506 370 99 Norwegian Forum for Environment and Email: [email protected]; maud. Development (ForUM)
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Storgata 11, 0155 Oslo, Norway 19 Eve St Erskineville NSW 2043, Australia Tel: (47) 2301 0300 Tel: (61) 2 9557 8944 Fax: (47) 2301 0303 Fax: (61) 2 9557 9822 Email: [email protected]; oerstavik@ Email: [email protected] forumfor.no Website: www.aidwatch.org.au Website: www.forumfor.no AidWatch Canada Novib - Oxfam Netherlands 69 Poplar Street, Ottawa, Ontario, Canada, Mauritskade 9, P.O. Box 30919, 2500 GX The K1R 6V3 Hague, The Netherlands Tel: (1) 902 538 1429 Tel: (31) 70 3421777 Fax: (61) 2 9557 9822 Fax: (31) 70 3614461 Email: [email protected] Email: [email protected] Website: www.novib.nl Australian Council for International Development (ACFID) OEFSE- Austrian Foundation for 14 Napier Close Deakin Australian Capital Development Research Territory (Canberra) 2600, Australia Berggasse 7, A-1090 Vienna, Austria Tel: (61) 2 6285 1816 Tel: (43)1 317 40 10 - 242 Fax: (61) 2 6285 1720 Fax: (43) 1 317 40 15 Email: [email protected] Email: [email protected] Website: www.acfid.asn.au Website: www.oefse.at
OIKOS Canadian Council for International Rua Visconde Moreira de Rey, 37 Linda-a- Cooperation/Conseil canadien pour la Pastora 2790-447 Queijas, Oeiras - Portugal coopération internationale (CCIC/CCCI) Tel: (351) 218 823 649; (351) 21 882 3630 Canadian Council for International Fax: (351) 21 882 3635 Co-operation (CICC) Email: [email protected] 39 McArthur Avenue Ottawa, ON, K1L 8L7 Website: www.oikos.pt Tel: (1) 613 241-7007 Fax: (1) 613 241-5302 Terre Des Hommes - Germany Email: [email protected] Hilfe für Kinder in Not Ruppenkampstraße Website: www.ccic.ca 11a 49084 Osnabrück, Germany Postfach 4126 49031 Osnabrück, Germany Council for International Development Tel: (05 41) 71 01 –0 (CID) Fax: (05 41) 71 01 –0 2/F James Smith’s Building cnr. Manners Mall Email: [email protected]; [email protected] and Cuba St., Wellington, New Zealand/ PO Website: www.tdh.de Box 24 228, Wellington 6142, New Zealand UK Aid Network (UKAN) Tel: (64) 4 4969615 UKAN, Action Aid, Hamyln House, London, N19 Fax: (64) 4 4969614 5PG, UK Email: [email protected] Fax: +44 207 561 7563 Website: www.cid.org.nz Email: [email protected] Friends of the Earth (FOE) Japan International Environmental NGO, RoA NON-EUROPEAN OECD COUNTRIES FoE Japan 3-30-8-1F Ikebukuro Toshima-ku Tokyo 171-0014, Japan Aid/Watch Tel: (81) 3-6907-7217
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Fax: (81)3-6907-7219 (121-894), 4F, Nuvo Bldg. 376-2, Seogyo- Email: [email protected]; dong, Mapo-gu, Seoul, Korea [email protected] Tel: (82) 2-518-0705 Website: www.foejapan.org Fax: (82) 2-6442-0518 Email: [email protected]; Japan International Volunteer Center (JVC) [email protected] 6F Maruko Bldg., 1-20-6 Higashiueno, Taito- Website: www.odawatch.net ku, Tokyo 110-8605 Japan Tel: (81) 3-3834-2388 Pacific Asia Resource Center (PARC) Fax: (81) 3-3835-0519 2, 3F Toyo Bldg., 1-7-11 Kanda-Awaji-cho, Email: [email protected]; [email protected] Asia Taiheiyo Shiryo Centre, Chiyoda-ku, Website: www.ngo-jvc.net Tokyo 101-0063, Japan Tel: (81) 3-5209-3455 Japan ODA Reform Network-Kyoto Fax: (81) 3-5209-3453 Email: [email protected] Japanese NGO Center for International Website: www.parc-jp.org Cooperation (JANIC) 5th Floor Avaco Building, 2-3-18 Nishiwaseda, People’s Solidarity for Participatory Shinjuku-ku, Tokyo 169-0051, Japan Democracy Tel: (81) 3-5292-2911 132 Tongin-Dong, Jongno-Gu,Seoul, Fax: (81) 3-5292-2912 110-043, South of Korea Email: [email protected] Tel: (82) 2 723 5051 Website: www.janic.org.en Fax: (82) 2 6919 2004 Email: [email protected]/ ODA Watch Korea [email protected] Website: www.peoplepower21.org/English
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