Slow Progress on Development Aid Improvements

UN Integrated Regional Information Networks
NEWS
2 September 2008
Posted to the web 3 September 2008
Dakar

Aid agencies attending an international meeting on the effectiveness of aid say donors have not made enough progress addressing long-time problems in aid.

About 800 participants from donor and aid agencies, recipient countries, financial institutions, and civil society groups are gathering for the first of three days in Accra at a high-level forum to discuss how to improve donor assistance in order to meet fourteen aid effectiveness targets by 2010.

Donor governments and partner countries endorsed these targets in the Paris Declaration on Aid Effectiveness in 2005, to build stronger partnerships so that governments could achieve their development goals.

Robert Fox, head of the UK-based non-governmental organization Oxfam, told IRIN, "The effectiveness targets set for 2010 won’t be reached unless there’s a sea-change in commitment from all donor countries to match their rhetoric with action."

Expected conference topics include timing aid to make it more effective, improving donor coordination, avoiding unnecessary bureaucracy, and how to improve the monitoring of spending and outcomes.

Management improving, but still weak

According to the Organisation for Economic Cooperation and Development’s Development Assistance Committee (DAC) which set up a working group on aid effectiveness, donors are doing more to help governments manage aid, which is leading to a better evaluation of whether spending makes a difference.

But only ten of the 28 countries surveyed by the DAC in 2006 and 2008 have set up stronger systems to manage public funds.

While donors channel more aid directly through partner governments they do so inconsistently.

Where does the aid go?

In the Paris declaration, donors and partner governments agreed to channel more cash directly through government systems in order to strengthen them and enable aid partners to have more ownership of development funds.

The agreement was made with the understanding that some governments, particularly those in fragile states, find it difficult to absorb large cash flows and do not have strong checks and balance systems in place but that unless such systems are built up, aid will not be sustainable.

According to the DAC survey, only US$10 billon out of US$45 billion in annual aid in the countries surveyed, actually makes it to the governments directly, according to Oxfam. "Too many donors still set up their own parallel management structures or channel their aid through private corporations," said Fox.

From 2004-2007, 40 donors signed almost 700 individual agreements with the Ugandan government, according to the government’s records.

Unpredictable aid makes it hard to plan

More than half of money donors promised over the last three years was never delivered, according to DAC, which is about 20 percent less than what donors set as a goal at the 2005 Paris conference.

Afghanistan has received US$15 of the US$25 billions it was promised, with the United States delivering half of its commitment and the World Bank just over half, according to Oxfam.

"The lack of aid predictability jeaporadises significantly a country’s ability to plan and account for its resources to its citizens," stated the DAC report.

Recommendations

To improve aid management , Oxfam’s Fox says donors need to fund governments directly. "It is fundamental that aid is delivered to strengthen the capacity of countries…unless we do this we will always confront the same problems."

And when it comes to predictability, the DAC calls on partner and donor governments to better document what aid they give and receive so both can be held accountable for what is missing.

For Oxfam the answer is to extend aid contracts. "Donors must commit to three to five years and follow through on those commitments as a fundamental building block for reforming the aid system."

Fox continued, "If we can’t raise the bar in terms of performance to fulfill these modest targets, then we have no chance of reaching the Millennium Development Goals [need to define or hyperlink]. We hope this meeting steps up the pressure on donors and builds up confidence among them that this is the way to go."

[ This report does not necessarily reflect the views of the United Nations ]