Busan: OECD veering in the wrong direction

The last meeting held three years ago in the Ghanaian capital Accra ended with the recognition that effective development cooperation requires democratic ownership, transparency and an enabling environment for to civil society. Another idea that also gained traction in Accra was that aid can contribute only modestly to the social and economic development of poor countries. Much more important are government policies in these countries as well as external factors such as global economic and trade conditions, which are generally dictated by the industrialized countries. Future discussions should therefore be about «development effectiveness» rather than just aid effectiveness. It was not decided at the time what this meant in concrete terms, and this will now be done at the conference in the South Korean city of Busan.

Civil society’s homework done

The civil society organizations have since done their homework. They have used a global consultation process to draw up what are known as the Istanbul principles, whereby development can only be effective if it is geared towards safeguarding human rights and ensuring social justice, gender inequality and environmental sustainability. The organizations plan to focus their work on these goals in the future. This will require a favourable environment that encompasses right to assembly, access to information, as well as scope for co-determination.

Passive governments

The 120 donor and recipient countries gathering in Busan for their part have little to show. International NGO networks such as Reality of Aid (Manila) or Concord (Brussels) assess their performance as mediocre at best. A growing number of governments in poor countries are indeed assuming greater responsibility and have drawn up development strategies or poverty reduction programmes. In most cases however, they did not consult the population, civil society and the parliament in that regard. It is also rare for these bodies to be properly informed by their own governments or by donor countries as to how much aid funds are entering the country and how they are being spent.

Moreover, civil society organizations (CSOs) in many developing countries have realized that their policy space is shrinking rather than growing. They feel abandoned by donor countries because despite the announcements made in Accra, they have done little or nothing to strengthen or encourage CSOs.

In short, not much has been done regarding democratic ownership, transparency and an enabling environment for civil society. Admittedly, a handful of countries including Switzerland have been championing these concerns since 2008. It is clear, however that the majority of donor and recipient countries are hardly interested. This does not augur well for a fruitful discussion of the concept of «development effectiveness».

Competing for «new donor countries»

To compound matters, the OECD is steering the discussion in a direction that is eliciting strong opposition from civil society worldwide. The club of industrialized countries ascribes central importance to the private sector, which they regard as the «driver of development». In Busan they will be interested mainly in discussing how development aid can be used as a lever for investments by private enterprises.

This is a concession to the countries referred to as new donor countries, including China, Brazil or India. They frequently tie their development aid to access to resources or contracts for their own companies. They are participating in a forum on aid effectiveness for the first time. The OECD is keen to see them bound by the principles of western aid, but is watering down its own standards to achieve this. One example is the standard whereby donor countries ought not to tie their aid to the provision of supplies by their own firms («tied aid»), but should purchase goods and services in partner countries so as to promote local enterprises.

This potential change of direction suits various OECD countries perfectly. Development aid that strengthens one's own economic interests will do no harm, least of all in times of crisis. Besides, they too have not always taken their own standards very seriously. The European Eurodad network, for example, concludes in a recently published study  that as much as one fifth of worldwide bilateral aid is still officially tied. Of the remainder, two thirds of contracts go to companies in the North, and where any procurement is done in the partner country, in over half the cases it is subsidiaries of northern companies that are chosen.

Switzerland opposed to dilution

It is not just civil society organizations that are resisting the potential dilution of basic principles of effectiveness. Switzerland for example welcomes the inclusion of the private sector and of new donor countries but is calling for them to abide by the existing principles as well. Switzerland is keen to see certain of these principles more strongly entrenched, for example democratic ownership or transparency. Whether it finds enough support for this will be seen in October (after the copy deadline for this issue), when the talks on the Busan final document enter their final stage. There is little time left to prevent the quality of aid from being sacrificed to donor country self-interest.

Michèle Laubscher, Alliance Sud
Collaboration: Bruno Stöckli

Article published in: Alliance Sud News No. 69, Autumn 2011

Further information:
Civil society and effectiveness (Open Forum)
Busan Conference Official Website