1.      During 2005, the so-called year of
development, the international community undertook a wide array of high-level
inter-governmental conferences including the Paris High Level Forum on Aid
Effectiveness, the G8 Gleneagles Summit, the United Nations World Summit and
the WTO Ministerial conference in Hong Kong. These meetings produced several
declarations and initiatives intended to advance the development agenda and
generate momentum towards achieving the Millennium Development Goals (MDGs).Â
2.      The development community has shifted
its attention in recent years to poverty reduction. In 2000, 189 countries
endorsed the Millennium Development Goals. The MDGs are innovative in that
each of the eight goals is linked to quantifiable targets and timetables for
their achievement. Â The target most explicitly geared towards the eradication
of extreme poverty and hunger is the planned fifty per cent reduction of people
living on less than one dollar a day by 2015. Indicators measure progress and
the lack thereof by means of statistical assessments.Â
3.      The Millennium Summit in 2000
triggered a series of international summits, conferences and panels dedicated
to advancing the MDGs. The strategy that emerged has been based essentially on
three pillars: increasing aid flows and aid effectiveness, debt relief and a
more fair and open international trade regime. At the Monterrey Conference
‘Finance for Development’ in 2002, over fifty heads of state, finance
ministers, and foreign ministers called on ‘developed countries that have not yet
done so to make concrete efforts towards the target of 0.7 per cent of gross
national product (GNP) as Official Development Assistance (ODA) to developing
countries and 0.15 to 0.20 per cent of GNP of developed countries to least
developed countries’. Until the pledges outlined in 2005, however, only a
handful of donor countries were on track to meet these commitments (Global
Monitoring Report 2005). This apparent failure to translate international
commitments into concrete action points to the need both to monitor progress
made on the 2005 pledges and to develop practical steps to fulfil them.Â
4.      The sixty poorest countries in the
world (as measured by the OECD) are the focus of international efforts to
reduce extreme poverty by half by 2015. Violent conflict is further
impoverishing roughly a third of these countries, condemning their populations
to persistent underdevelopment while threatening international security and
stability. Many other countries on the list are currently in danger of becoming
unstable or falling back into conflict. The World Bank has identified some
thirty Low Income Countries Under Stress’ (LICS) while the UK Department for
International Development (DFID) has classified forty-six states as fragile.Â
The security and development agendas are not always well co-ordinated but
increasingly conflict prevention includes development strategies. The 2002 US
National Security Strategy, for example, recognises that: ‘the events of
September 11 2001 taught us that weak states, like Afghanistan, can pose as
great a danger to our national interests as strong states. Poverty does not
make poor people into terrorists and murderers. Yet poverty, weak
institutions, and corruption can make weak states vulnerable to terrorist
networks and drug cartels within their borders’.
5.      Since 2002, G8 leaders have also
placed particular emphasis on African development. In an age of
unprecedented global prosperity, 40 per cent of Sub-Saharan Africa’s 600
million people subsist on less than $1 per day. Africa’s average per capita
income is lower than it was 20 years ago while human development, as defined by
the Human Development Report, has actually declined in recent years
(UNDP Human Development Report 2002). It may well be the case that MDG No.8 which
aims to half poverty by 2015, will be met globally, but if so, this will likely
reflect substantial poverty reduction in India and China, two countries which,
together accounted for 60 per cent of the worlds poor in the baseline year of
1990. Unfortunately, most African states will be hard pressed to achieve MDGs
given current trends both in Africa and among donor countries.Â
6.      That said, at the G8 Summit in
Kananaskis in 2002, leaders solidified an Africa agenda by endorsing the Africa
Action Plan (AAP). The G8 countries had developed the AAP as a response to the
New Partnership for African Development (NEPAD), which had been outlined at the
G8 Summit in Genoa the previous year. In Evian in 2003, the expanded G8-NEPAD
partnership created the African Partnership forum to monitor commitments and
generate international support for NEPAD.Â
7.     The aim of this report is two-fold; to take
stock of recent development commitments; and to highlight the mechanisms for
monitoring their progress. Given that the scaling up of ODA represents a major
component of recent development commitments, the discussion below about aid
effectiveness and aid coherence is designed to set the stage for the more
detailed examination of the pledges made during 2005 that follows. This report
will also explore the systems that are currently in place to monitor ODA
implementation. It also examines the high-profile doctrine of ‘African
solutions to African problems’ and in particular the way in which African
initiatives have addressed the security-development nexus. Finally, the paper
assesses different donor approaches to development and the role that
parliamentarians can play in ensuring that pledges and commitments are
translated into concrete actions with tangible results.
Â
8.      The Millennium Development Goals
with their focus on quantifiable targets have helped put aid back onto the
international development agenda while encouraging governments to commit
financial resources to development. It is widely acknowledged that a large
boost in aid flows to Sub-Saharan Africa can help lift countries out of poverty
traps (Sachs). Aid sceptics typically point to the largely unsuccessful
attempts in the 1960s and 1970s to trigger development through huge capital
projects and the then common argument that developing countries were somehow
not subject to the laws of economics. But development policy has evolved
substantially since then and is now far more focussed on social capital, nature
capital and human capital, sound macro and micro economic policies and aid
efficiency. Current research demonstrates that aid can indeed foster
economic growth but only if certain conditions are met (Burnside and Dollar
2000). In states with reasonably strong governance systems, World Bank
cross-country studies suggest that one per cent of GDP in aid reduces poverty
by 1 per cent, and 1 per cent of GDP in aid sparks another 1.9 per cent of GDP
in private investment. Or, as Nancy Birdsall has written ‘aid is only as good
as the ability of the recipient’s economy and government to use it prudently
and proactively. Thus the fundamental dilemma: countries most in need of aid
are often those least able to use it well’ (Birdsall/Rodrik/Subramanian 2005,
Foreign Affairs).Â
9.      According to the OECD DAC
definition, Official Development Assistance (ODA) consists of ‘grants and
loans…to developing countries which are (a) undertaken by the official sector
(b) with promotion of economic development and welfare as the main objective
(c) at concessional financial terms (if a loan, having a Grant Element of at
least 25 per cent)’. A closer examination of ODA reveals that this broad
definition comprises many elements that do not constitute ‘real aid’.Â
According to DAC, only 39 per cent of so-called aid is ‘real aid’. The rest
can be attributed to overpriced and ineffective technical cooperation (20%),
debt relief (14%), excessive transaction costs (13%), non-poverty focused aid
(7 %), tied aid (4%), hosting of refugees (2%), and excessive administration
costs (1%).
10.    The Center for Global Development
proposes an alternative definition of ODA: the concept of Net Aid Transfers
(NAT) which takes into account net transfers from developed to developing
countries in terms of both principle payments on ODA loans and also in terms of
interest payments. The NAT concept also includes debt cancellations, which are
separate from the cancellation of ODA loans. An examination of the data from
2004 reveals that country figures vary depending on whether net ODA or NAT is
being measured. France spends 0.41 per cent of its Gross National Income (GNI)
on ODA but only 0.31 per cent in NAT terms. For Portugal, the difference is
even more pronounced as it spends 0.63 per cent on ODA and only 0.2 per cent in
NAT terms. For the Netherlands, Belgium, the UK, Germany and Japan, the difference between ODA to NAT amounts to around 0.4 percentage points (CGD
2005).
11.    Were poverty reduction the primary
goal of development aid, then ODA would have to be allocated for the very
poorest people in developing societies. In reality though, aid allocations are
based more on donors’ strategic preferences, historical ties with ex-colonies,
and commercial interests than on any expectations of aid effectiveness.
(Alesina and Dollar 2000)Â As a general rule, undemocratic former colonies
garner roughly twice as much in assistance than democratic developing countries
with no colonial ties. This is an especially important factor in bi-lateral
aid, which, at present constitutes thirty per cent of total aid flows.Â
12.    Of course, the impact of aid cannot
be measured solely in terms of the quantity of assistance. Civil society
organisations and development researchers in donor and recipient countries have
long called for a review of aid quality. Several factors obstruct the
achievement of enhanced aid effectiveness. Tying aid, imposing conditionality
and poor co-ordination with other policy fields like trade, human rights and
security policy all undermine aid effectiveness.Â
13.    ‘Tying aid’ reduces real funding
levels available for development. According to the Center for Global
Development, donor imposed requirements on goods and services procurement drive
project costs up by 15 to 30 per cent. Denying the use of generic
antiretroviral drugs as opposed to branded drugs is one of many ways in which
official aid is whittled away in practical terms. NGOs caution that a
substantial proportion of donor support for AIDS treatment (‘as close as
possible to universal access to treatment for all those who need it by 2010,
paragraph 18b) will be tied to procurement requirements. OECD member countries
agreed in 2001 to untie most aid to the Least Developed Countries, and
according to the OECD DAC’s 2004 report, most have broadly met their
commitments. This agreement, however, only covers financial assistance (68% of
ODA to LDC’s) and does not cover technical assistance nor aid to low-income and
middle-income countries. Hence, the agreement only covers 12 per cent of total
OECD bilateral aid. Far greater progress is thus needed in further untying
aid.Â
14.    Aid conditionality constitutes
another major challenge. Making aid conditional on donors’ preferences for
certain anti-corruption measures, economic governance initiatives and selective
macro-economic policies, is intended to improve aid effectiveness. Yet it
poses myriad problems as well. Macro-economic conditionality often fails to
produce the intended results largely because it strips recipients of any sense
of policy ownership, which is a pre‑requisite for good governance. Even if
donors (like the UK, the Netherlands of the Scandinavian countries) were to
back-track on macro-economic policy conditionality and simply resort to general
budget support, conditions attached to loans and debt relief would continue to
tie the hands of recipient countries. The conditionality challenge is further
exacerbated by the multitude of agencies that impose rules on aid use and the
sheer number of donor countries that impose such conditions. To date, there
are over 40 bilateral donor agencies, of which 23 are DAC members, 15 are UN
system agencies and 20 are global and regional financial institutions in the
development business. The human resource strain on countries required to
report donor conditions poses untold burdens on those developing countries
governed by weak and overstretched institutions. Tanzania, for example, is
reported to produce two thousand donor reports every month (de Waal). That in itself is a waste of precious resources and human capital.
15.    Making policy conditionality
coherent remains high on the donor agenda and policy makers have begun to
explore new approaches to the problem. With ‘development policy lending’
quickly replacing ‘structural adjustment lending’, the World Bank now suggests
that conditionality must be focused on precise targets. The Bank has also
placed a stronger focus on ex-ante conditionality, according to which policy
changes must be implemented before ODA is disbursed. Civil society
organisations, however, question whether these changes will ease the problems
associated with conditionality.Â
16.    Macro-economic conditionality can
also reduce the sense of responsibility among governing elites. Some analysts
suggest that a wiser approach would focus on good governance. This is
especially the case with bilateral lending, which, in the past has proved less
sensitive than multi-lateral lending to governance standards in recipient
countries. The American Millennium Challenge Account (MCA), for example,
theoretically links lending to good governance; only those countries that meet
certain governance standard can apply for loans from the MCA.Â
17.    One of the enduring development
lessons of the 1990s has been that no single policy or set of policies
generates economic growth. Successes in one country are not easily replicated
in another, particularly one operating under different economic, political and
cultural circumstances (World Bank Development Economic Conference 2005). Ownership
and country-specific strategies based on refined analysis, evaluation and
adaptation are essential to success. Donors might, for example, strengthen
budget support in those countries with stronger governance structures or
increase direct support to the private sector and civil society organisations
in countries where these approaches work more effectively. Closer scrutiny
should also help determine the proportions of loans and grants in assistance to
developing countries.Â
18.    Poverty Reduction Strategy Papers
(PRSPs) play a key role in efforts to achieve poverty reduction in low-income
countries. These papers outline macro-economic, structural and social policies
and programmes for countries over the short and medium term while defining
external financing needs associated with these programmes. By the end of 2005,
49 full PRSPs had been submitted, and 11 countries had completed interim
PRSPs. The key principles informing the PRSPs are country-ownership, result
orientation, comprehensiveness, partnership and long-term perspectives for
poverty reduction. The World Bank Group’s institutions strongly encourage
bilateral donors to adhere to these country strategies in order to improve aid
coherence. Â
19.    The problems associated with
development assistance in certain countries are often cited in order to caution
against extending too much aid. When channelled through authoritarian
regimes or extended in ways that ignore unique conditions in recipient
countries, aid often will neither reach the poor nor boost economic growth.Â
Fortunately, the average quality of policies and institutions, as measured by
the World Bank’s Country Policy and Institutional Assessments (CPIAs), has
risen in developing countries. Over the last five years, progress has been
made in the four clusters of indicators: economic management; structural
policies; social inclusion and equity; and public sector management and
institutions (Global Monitoring Report 2005). Progress on this front is,
however, far less evident in Sub-Saharan Africa. Courageous improvements in
African governance and political liberalisation are needed in order to render
increased aid more effective in the fight against African poverty.Â
20.    Concerns about absorptive
capacities of recipient countries suggest that even well intentioned
governments confront difficulties deploying aid effectively due to
macroeconomics, personnel and infrastructure constraints. As donor countries
scale up ODA as a result of the 2005 commitments, such obstacles must be taken
into account. The Global Monitoring Report 2005 suggests that Sub-Saharan
countries can absorb additional aid and put it to productive use so long as
reforms continue apace. The UN Millennium Project recommends that the donor
community identify those low-income countries capable of absorbing large
increases in assistance as ‘fast track’ countries.Â
21.    Absorptive capacity in the wider
sense of the term also relates to the possible adverse effects of aid on a
recipient's economy and institutions. Large aid inflows, for example, could
theoretically trigger conditions akin to Dutch Disease. In such cases,
aid flows spark exchange rate appreciation that penalises exporters, thereby
dimming the longer-term prospects for sustained growth. For those countries in
which ODA represents a major share of government revenues, there is a further
concern that aid can tempt corruption and undermine accountability. Citizens
tend not to hold governments accountable for the use of inflows from abroad in
the same way that they do for tax generated public spending. According to a
Center for Global Development simulation, aid constitutes a higher share of
governments spending than domestically generated revenue in 35 out of 52
low-income developing countries and more than 75% of government spending in 17
low-income developing countries. In these countries the potential for such
asymmetrical accountability is particularly worrying.Â
22.    Clearly strong institutions and
governance are key to improving both aid delivery and aid effectiveness and in
such cases greater aid levels can help deliver poverty reduction.Â
Parliamentarians in donor countries should therefore monitor the quantity of
aid that their governments have committed within the usual budgetary oversight
procedures. But they must also work to bolster aid effectiveness and aid
coherence. In recipient countries, parliaments also have a vital role to play
in monitoring and improving the implementation of poverty reduction strategies
and aid financed pro-poor policies.Â
23.    As suggested in the introduction,
international development commitments followed thick and fast after the
Monterrey Declaration of 2002 in which the signatories for the first time
explicitly urged developed countries to allocate a specific proportion of their
GNP to ODA for developing countries. The agreements and conferences in 2005
reinforced a new development agenda dedicated to greater ODA and improved aid
effectiveness, while redefining international understanding of what development
entails. The Gleneagles commitments were particularly important in this regard
but so too were the Paris High Level Forum, the 2005 UN World Summit and the
ongoing Doha Development Agenda talks.Â
24. Â Â Â The Paris High Level Forum on Aid
Effectiveness, which took place from 28 February to 2 March 2005 resulted in
the Paris Declaration on Aid Effectiveness. The Forum engaged development
officials and ministers from 91 countries, 26 donor organizations, and a range
of civil society and private sector representatives. Building on the core
principles of ownership, alignment, harmonization, managing for results, and
mutual accountability, participants agreed on twelve indicators by which progress
will be measured until 2010. Donors pledged to base their overall support on
partner countries’ national development strategies and align any conditions
with country-owned strategies. Furthermore, donors pledged to harmonise
assistance and decrease the administrative burden for recipient countries. In
concrete terms, this means that by 2010, three quarters of developing countries
will have established operational development strategies, half of developing
countries’ procurement and public financial management systems will have
registered improvements, 85% of aid flows will be reported in developing
countries national budgets, and two thirds of donors’ analytical and planning
work will be undertaken in a truly coherent and integrated fashion.Â
25. Â Â Â Implementation of the Paris
Declaration is monitored by the OECD/Development Assistance Committee (DAC),
which is currently developing a survey to establish the baselines for the
agreed indicators. Ahead of the next high-level Forum on Aid Effectiveness in 2008 in Ghana, the Working Party of the OECD/DAC will conduct a second round of monitoring to review
progress. The website established by the OECD/DAC lists country activities and
donors involved in the different measures and projects (www.aidharmonisation.org).Â
26. Â Â Â At the G8 Summit in Gleneagles,
Scotland, ‘Heads of State pledged an increase in ODA which translates into a
US$50 billion a year increase by 2010, compared to 2004’ (Summit Outcome Document, paragraph 28). It is important not to overlook the fact that the
level of commitment differs substantially across countries. The US ‘proposed’ to double aid’, Japan ‘intended’ to increase ODA, the UK and France ‘announced a time table’, Italy and Germany undertook ‘to reach’ and Canada promised to ‘double its international assistance’ (Annex II, Official Gleneagles
Summit Outcome Document).Â
27. Â Â Â In their final document on Africa, the G8 leaders identified five areas of action, outlining goals and intentions.Â
Targets and commitments are laid out in the section regarding financing for
development. The increase in foreign aid agreed at the Gleneagles summit is
the largest registered by the OECD DAC since its creation. In absolute terms,
ODA is set to rise by $50 billion from $80 billion in 2004 to $130 billion
by 2010. $25bn of this increase will go to Africa alone. In relative terms
however, i.e terms of ODA as a proportion of GNI, these aid levels are lower
than in the 1960s. The OECD DAC measured a proportion of 0.5 per cent ODA/GNI
as ODA in the 1960s and is predicting 0.36 per cent by 2010 (assuming a
constant 2 per cent GNI growth until 2010).Â
28. Â Â Â The G8 has also proposed to cancel
100 per cent of outstanding debts of eligible Highly Indebted Poor Countries.Â
At the annual meeting of the World Bank and the IMF in September 2005 members
agreed to compensate the Bank accordingly and thus preserve its capital stock.Â
The compensation amounts to $18bn for 2006 to 2008 in addition to donor countries’ contributions to the International Bank for Reconstruction and
Development (IBRD). In January 2006, the IMF wrote off debts owed to it by the
eighteen poorest countries, and it is expected that debts to the World Bank and
the African Development Bank will be written off in July 2006. Twenty other
countries are still in the interim or pre-HIPC (heavily indebted poor
countries) process.Â
29. Â Â Â With regards to Peace and
Stability, the G8 pledged to support the African Union and the United Nations.
Plans for co-operation are based mainly in the areas of conflict prevention and
post-conflict reconstruction.  Concrete measures include commitments to equip
some 75, 000 troops by 2010 for peace support operations (Sea Island Commitment
2004). The G8 leaders also pledged to provide debt relief to conflict-ridden
countries and grants for reconstruction.
30. Â Â Â In the area of governance, the G8
again pledged to support African initiatives to make governments more
transparent and responsive. They expressed broad support for NEPAD and, in
particular, welcomed NEPAD’s strong endorsement of democracy and human rights.Â
The G8 leaders accorded special attention to the fight against corruption. In
addition to supporting African initiatives like the AU’s Convention on
Preventing and Combating Corruption, the G8 encouraged developing countries to
join UN initiatives like the Extractive Industry Transparency Initiative and
the Convention Against Corruption. For their part, G8 leaders pledged to adopt
measures designed to combat corruption such as enhancing due diligence for
financial transactions and enforcing bribery laws against companies found
guilty of bribing foreign officials.Â
31. Â Â Â In order to achieve the goals set
out in the UN Millennium Declaration, the G8 Heads of State also pledged to
support new education and health measures. These include the Education for All
Initiative and the Fast Track Initiative both of which should help develop
education strategies and train extra teachers (of which there is a notable
deficit in Africa, largely due to HIV/AIDS). They also endorsed plans to
replenish the Global Fund to fight AIDS, TB and Malaria in 2005. The funding
gap for the Polio Eradication Initiative was met in 2005 and additional promises
have been made to reach a funding level of $829m for 2006-8. The document also
calls for an improved investment climate and trade openness. Measures by the
G8 countries include capacity building for trade, trade facilitation measures
and support for African countries to comply with regulatory standards and
procedures for export into developed country markets. The final document also
mentions a range of initiatives that the G8 intends to support: an
international infrastructure consortium by the AU, the AU/NEPAD Investment
Climate Facility, the AU/NEPAD Comprehensive Africa Agriculture Development
Program and the UN Global Compact for Responsible Investment.Â
32. Â Â Â The method of monitoring the G8
commitments varies according to the area of agreement. The OECD/DAC monitors
its members’ policies and efforts in the area of development cooperation and
thus their commitments in terms of ODA and debt relief. Monitoring takes place
through the OECD/DAC peer review mechanism in which members undertake mutual
examination of each other’s practices. Reviews of individual countries are
carried out every four years and timetables and reports are freely available on
the OECD website.Â
33. Â Â Â The OECD has two particular
concerns in relation to the ODA pledges made at Gleneagles. Firstly these
pledges are promises not commitments, and the DAC has some doubts about whether
these will actually be met, particularly in times of serious budget
constraints. Considering that aid will be the fastest growing item of public
spending in some EU member states the potential for political backlashes
against ODA are real. Second, and even more significant is the continuing
discussion surrounding ‘real aid’. Emergency aid and state building expenses
are considered part of ODA, and large outlays here can reduce the amount of
additional ‘real aid’ considerably. Debt write-offs for Iraq ($15bn alone) and Nigeria will qualify as aid and so does Tsunami relief.Â
34. Â Â Â The African Partnership Forum (APF)
was established in 2003 in order to monitor the African Action Plan that was
agreed the previous year. The APF meets twice a year and has a comprehensive
membership comprising representatives of the G8 countries, OECD donors who give
over $100 million to Africa each year, international institutions and African
countries. The goal is for donors and recipients to monitor each other’s
commitments. The Forum will be funded by voluntary contributions for an
initial period of three years and the OECD will host a support unit. The Unit
will work closely with the AU/NEPAD Secretariat through joint task teams.Â
Beginning in October 2006, it will deliver a public annual monitoring report to
measure the progress of the commitments made under the Africa Action Plan. So
far, however, there have been no further mechanisms established to ‘give it
teeth’. The next meeting of the APF will take place in April 2006 in Africa. Russia, in its G8 Presidency role, will then host the APF meeting scheduled for
October 2006. (http://www.foundation-development-africa.org/nepad/nepad_general
/africa_partnership_forum.htm).Â
35.   The 2005 United Nations Summit had
two core components. The first was taking stock and adjusting policies desired
to meet the Millennium Development goals. The second was an examination of how
best to achieve the proposed reform of the UN system with particular
implications in the field of security and human rights.Â
36.   In order to monitor MDG progress,
the United Nations Development Group, created by the Secretary General as part
of a UN reform effort in 1997, publishes a national Millennium Development Goal
report online. Of the G8 countries, only the US, Italy, and Japan have not
released these reports online. On an international level, the yearly Global
Monitoring Report to the Development Committee – the Ministerial-level body
that advises the World Bank and the IMF on development issues – assesses all
parties progress on the MDGs. Bank and Fund staff prepare the report in
collaboration with the staff of partner agencies and was first published in
2004.Â
37. Â Â Â 2005 was also
slated to be the year in which trade negotiators would agree the broad details
of a framework to conclude a round of highly complex multilateral trade talks.
The Round was initially launched in November 2001 in Doha, Qatar. Labelled
the Doha Development Agenda, the negotiations were structured to make explicit
the link between an open trading system and economic opportunity for the
world’s less developed countries. It explicitly recognized that developing
countries now play a central role in multilateral trade talks, which because
their consensual nature have no chance of success without bringing the
developing world’s interests on board. The Doha meeting provided the mandate
for negotiations on a range of areas including agriculture, industrial goods
and services.
38.    The Doha
Ministerial declaration laid out the goals of the round, which were to further
liberalize the global economy and to ensure that trade played a part in promoting global
economic recovery, development and poverty alleviation. The declaration
invoked a development angle in virtually every paragraph and importantly
recognized that developing countries, and especially the least developed among
them, secure a share in the growth of world trade commensurate with the needs
of their economic development. It acknowledged the limited capacity of the
least developed countries to participate effectively in trade talks and
promised to deepen this capacity through technical assistance and other
capacity-building programmes. It acknowledged the special role of agriculture
trade in developing countries and promised to consider the special interest of
developing countries on matters pertaining to the Trade Related Aspects of
Property Rights (TRIPS), trade and investment rules, and trade and environment.
It also called for meaningful market access for the least developed countries
along with and support for the diversification of their production and export
base, and trade-related technical assistance and capacity building.
39.    The original
mandate was subsequently refined at Ministerial meetings in Cancun
in 2003, Geneva in 2004, and Hong Kong this past December.Â
Encapsulating the precise status of ongoing multilateral trade negotiations is
always difficult because key aspects of any final deal are often hammered out
in the waning days of the talks. Because the American President’s trade
negotiating authority will expire in mid-2007 and because it is very likely
that Congress will not renew that authority anytime soon, negotiators in Geneva
know that they must wrap up agreements by the end of this year. Theoretically
this should concentrate the minds of negotiators,
but there is much work to be done. (WTO Website)
40. Â Â Â Indeed, after six days of talks in
Hong Kong this past December, negotiators had made almost no progress in
reducing farm tariffs, liberalizing trade in industrial goods and opening
services markets. Although the meeting did not collapse in acrimony as
occurred in Cancun, little progress was registered beyond the symbolically
important agreement that all export subsidies on farm goods would be eliminated
by 2013. The Ministerial also agreed to open market access for 97% of goods
exported from the least developed countries (LDCs), although the exemptions are
important and most of the world’s impoverished people do not live in these LDCs.Â
(Economist, December 19, 2005.)Â In Hong Kong, the United States
promised to reduce domestic cotton subsidies more quickly than other farm
supports and announced as well that it would comply with a recent WTO ruling to
end all cotton export subsidies by the end of next year. But these concessions
are mere window dressing and failed to conceal the paltry results of the talks
41.    On big-ticket items of importance
to the great bulk of developing countries, and not just the 32 LDCs, there was
little progress registered in Hong Kong. The United States gave itself room to
exclude sensitive products like textiles and sugar from its duty free, quota
free pledge while Japan will be able to exclude rice and leather. For its part,
the EU is a long way from agreeing to substantial reductions in its farm
tariffs and claims it will not go any further unless emerging economies open
their markets for industrial goods and services. The gulf between the EU, the
US and the developing countries on industrial and agriculture tariffs remain
very wide.
42.    Finally, recent studies by the
World Bank suggest that even a break through in the Doha Round would not
achieve as much for the world’s poor as originally claimed. The Bank’s most
comprehensive free trade model suggests that if industrial and farm trade were
fully liberalized, the efficiency gains of reallocating resources would boost
developing country income by US$86 billion by 2015 and pull 30 million
people out of extreme poverty, two thirds of whom live in Africa. Â But a more
modest assumption would generate an increase of only US$16 billion by 2015 and
only 2.5 million more people would be freed from extreme poverty. These
estimates are far below earlier Bank studies that forecast gains of US$200
billion and 100 million pulled from extreme poverty, (Anderson and Martin;
Hertel and Winters).
43. Â Â Â The United Kingdom has played a
special role helping put Africa back on the international agenda. In early
2004, Prime Minister Blair established the Commission for Africa, the stated
purpose of which was to take a ‘fresh look’ at Africa’s past and present in
order to agree clear recommendations for the future. A majority of Commission
members were African. In March 2005, the Commission released their report
(‘Our Common Interest’), which was based on five broad recommendations:
ensuring good governance; ensuring peace and security; investing in people
through health and education; economic growth and fairer trade. It was
envisaged that this broad package would be realised through the
operationalisation of various, policy recommendations including an extra
US$25 billion a year in aid to Africa by 2010 and a further $25bn by 2015;
100 per cent debt relief and the dismantling of all farm and export subsidies
by 2010. The British Government embraced the reports recommendations, which
then became the basis of the UK approach during the G8 and EU presidencies, the
UN Millennium Review Summit, and the WTO Ministerial Meeting in December 2005.
44.    The Commission bases its
recommendations largely on the concept of mutual accountability between donor
and recipient countries. It specifically recommends the establishment of ‘an
independent mechanism’ possibly led by two distinguished figures, one from the
African and one from the donor community. They would be responsible for
producing a short annual report assessing the progress of the Commission
recommendations while also adding momentum to their delivery. The Africa
Commission report was premised largely on the view that the ‘the future of
Africa lies correctly in the hands of Africans’ and the belief that the
foundations of Africa’s development must rest on good governance, peace and
security. Promoting peace and security in Africa has a major economic
component. It is generally acknowledged that in a number of countries, armed
conflict is the central obstacle to reaching the MDGs. In 2003, the United
Nations estimated that twenty-three countries in sub-Saharan Africa were
‘experiencing some kind of conflict emergency’ and that wars were costing the
continent US$15 billion every year. The interface between security and
development is currently addressed in the two key ‘home grown’ African
initiatives for development: NEPAD and the AU.
45.    The New Partnership for African
Development (NEPAD) was launched in Abuja, Nigeria in October 2001 and soon
thereafter, in July 2002 the African Union replaced the Organisation of African
Unity (OAU). NEPAD is best understood as both a mandated initiative and
development strategy of the African Union. The AU and NEPAD together
constitute a framework for linking peace and security issues, governance and
constitutionalism (the core of the AU), and sustainable economic development
and international partnership (the core of NEPAD) (African Development Forum).Â
46.    In structural terms, the AU is far
more proactive than its predecessor, the OAU, which was predicated on the
principles of sovereign equality and non-interference. The Constitutive Act
states that the AU shall function in accordance with its right to intervene in
a member state ‘pursuant to a decision of the Assembly in respect of grave
circumstance, namely: war crimes, genocide and crimes against humanity’. This represents
a very significant departure from the post-Westphalian concept of international
relations. Henceforward in Africa sovereignty no longer constitutes a shield
behind which abusive governments and leadership can evade international
sanction. Indeed Article 3 of the Constitutive Act describes the maintenance
of African peace and security as the primary aim of the AU. Not surprisingly
then, one of the eight portfolios of the AU Secretariat is a Directorate for
Peace and Security.
47.    The central AU organ for peace and
security is the Peace and Security Council (PSC), designed to act as a decision
making body for the prevention, management and resolution of conflicts. The
PSC has been operational since December 2003 and is composed of fifteen rotating
members representing Africa’s five regions. Every member of the PSC is
required to meet certain conditions bearing on contributions to peace missions
and ‘respect for constitutional governance as well as the rule of law and human
rights’. Article 5(2) of the Constitutive Act outlines other organisational
capacities and structures to support the work of the PSC. In addition to the
Commission, these include a Panel of the Wise (POW), a Continental Early
Warning System (CEWS), an African Standby Force (ASF), a Military Staff
Committee (MSC) and a Common African Defence and Security Policy (CADSP).Â
48.    AU funding remains a concern. Since
its inception, only 6 per cent or less of the regular budget of the OAU (later
the AU) has been allocated to the Peace Fund, which helps finance the AU’s
peace support operations. Between 1993 and 2004, for example, the total
allocated to the fund was $67.8m. The OAU/AU member states accounted for 34%
of contributions, while the donor community contributed the remainder (Touray
2005). The African Union is very explicit in its desire to promote and
implement ‘African solutions to African problems’. There is, however, a
notable incongruence between the doctrine of self-reliance and the continent’s
material and financial dependence on the external resources it needs to ensure
peace and security across the continent.
49.    In suggesting measures for the
future, some defence experts recommend that the AU member states themselves
increase their contribution to the regular budget by raising their allocations
to the Peace Fund from 6% to 10% of the annual budget. Alternative sources of
funding for the peace agenda might include levying a tax on arms imports into
the continent, estimated at $8 billion in 2000. Even a token levy of 0.5% of
this amount would raise funds equivalent to the African Union’s entire 2004
budget of $40 million (Touray 2005). At the same time, however, the
‘partnership’ dimension of NEPAD advocates mutually beneficial sustainable
development to replace aid dependency. In this spirit, the AU must continue to
secure the cooperation of Africa’s development partners. The recent EU
decision to allocate $250 million to the Africa Peace Facility, for example, is
a welcome indication that European governments want to achieve a lasting
solution to Africa’s security crises.Â
50.    While the African Union develops a
peace and security ‘architecture’ for the continent, NEPAD has helped establish
a new African Peer Review Mechanism (APRM), widely seen as one of the best ways
to prevent domestic political conflicts in Africa from precipitating coups,
insurgencies or civil wars. The United Nations Commission for Africa developed
the APRM at the request of NEPAD’s HSGIC. Its mandate is to ensure that
policies and practices of participating states conform with agreed political,
economic and corporate governance codes and standards contained in the
Declaration on Democracy, Political and Economic Corporate Governance, that the
AU Summit approved in July 2002. The overarching goal of the APRM is for all
participating countries to adopt and implement NEPAD’s priorities and
programmes. Its two most important organizational components are the APR Heads
of State Forum which will comprise the highest decision making authority of the
mechanism and the Panel of Eminent Persons (APR Panel), an independent body
responsible for overseeing the day-to-day functioning of the peer review
process. Various ‘APR Teams’ meanwhile, will be tasked with conducting the
actual technical assessments that will constitute the country peer reviews.Â
The UNDP, UNECA and AfDB have been selected to assist with some of the
technical assessments. Â
51.    The potential benefits of the APRM
are widespread and include greater transparency, improved public accountability,
enhanced policy coherence, beneficial and robust partnerships and strengthened
capacity. Of the 53 members of the African Union, 24 countries have so far
joined the programme. Accepting the concept of peer review represents a ‘sea
change in the thinking of African leaders and a major milestone in the
political development of the continent’ (Hope). Yet, there has also been
notable tension and overlap between NEPAD and the AU over the mandate and
location of the APRM. Prior to the fifth NEPAD implementation committee
meeting in Nigeria in 2002, the South African Government cast doubts on whether
the APRM would examine both economic/corporate and political governance, as the
AU had taken on responsibility for political review through its own structures
(Herbst and Mills 2003). That only one third of invited African Presidents
attended the meeting revealed a worrying lack of interest in the policy’s
design and implementation. Another issue of concern is the increasingly
bureaucratic and unnecessarily cumbersome admission process that may discourage
potential members.
52.    While mechanisms for monitoring
progress and sharing best practice are theoretically understood, considerable
institutional capacity building and greater political will are needed for
implementation. This begs the question: how can a country like Nigeria provide
peer review of its neighbour’s governance policies when its own house is hardly
in order. Given that the APRM is often understood as a litmus test for NEPAD
policies, its failure to deal effectively with the situation in Zimbabwe has
raised some serious concerns. APRM has recently produced country reports on
Ghana and Rwanda which are said to be robust in their criticisms but not
publicly available; their impact would likely be greater, however, if they were
to be released to the general public. Peer reviews are now under preparation
for a number of other countries including Kenya, Mauritius, Mozambique and
South Africa.
53.    The conflict in Darfur represents a
test case for the African Union’s conflict resolution capacities. In June 2004
following the ceasefire signed between the Government of Sudan (GOS) and the
Sudan Liberation Movement/Army (SLM/A), the AU signalled its intention to
deploy an observer mission (AMIS) of some 60-80 monitors and a Protection Force
of approximately 300 troops to the region. International support for the
operation was strong, partly because it represented a concrete realization of
the ‘African solutions to African problems’ philosophy. Despite this, the UN
Security Council, in its desire to protect Sudanese sovereignty supported a
weak military mission not to enforce security in Darfur but to monitor the
ceasefire. By late October 2004, it was clear that AMIS had been unable to
‘neutralise’ the Arab Janjaweed militia. It was in this context that the AU
sought and gained the official consent of all Sudanese parties (GoS, SLM/A and
JEM) to expand AMIS. By April 2005, the AU in consultation with the UN had
developed the concept of operations for AMIS ‘2’: a planned deployment of eight
additional battalions and 1,500 civilian police bringing the total number of
troops to over 7,000 by September 2005. AMIS ‘3’ will be increased to over
12,000 troops by Spring 2006. At present, the AU receives logistical support
from NATO, the UN and the EU.
54.    Security and humanitarian
situations have clearly improved in those areas where AMIS has established a
presence. (ICG 2005)Â Â The limitations of the AU mission in Darfur are largely
due to a lack for resources and logistics and transport deficiencies. The
Director of the AU’s Peace and Security Division, Sam Ibok, pointed out during
the discussions on AMIS expansion, that the AU spent only US$1.6million (under
US$31,000 per member states) a year on resolving conflicts throughout the
entire continent. AMIS ‘2’ will likely cost over US$465 million for one year;
yet the pledging conference chaired by the AU and the UN in late May 2005
managed to raise promises (rather than concrete donations) of only US$291
million. Â
55.    There is a degree of cynicism
surrounding the international community’s eagerness to adopt the ‘African
solutions to African problems’ philosophy. Some argue that mass killing, rape
and torture must be seen as ‘global problems’. These problems should be
addressed accordingly, using the best international instruments available
rather than relying wholly on a small, under-funded, under-equipped African
Union force that cannot realistically conduct a large-scale civilian protection
operation. In effect, this approach has culminated in the AU’s March 2006
decision to ask the UN ‘in principle’ to take over AMIS by September 2006. At
present, NATO is supporting AMIS with strategic deployment and staff capacity
building in command, control and operational planning. This assistance became
operational on June 9th after an earlier request from the AU for logistical
support in Darfur. The Bush administration and Jan Pronk, the UN Special
Representative to Sudan, have suggested that, conditional upon AU approval,
NATO play a broad interim role in Darfur until a UN mission is deployed. A
heavy, well equipped, and well-protected mobile military force is clearly
needed. NATO is arguably the only organization that can project the kind of
military force capable of conducting a medium or large-scale enforcement
operation in the region.Â
56. Â Â Â On 20 December 2005, the President
of the European Commission, the Council of the EU, and the European Parliament
signed the European Consensus on Development, which sets out a common vision
for European development cooperation.  A long overdue strategy, it emphasizes
aid coherence, coordination and complementarity. Development policy advocates
hope that the Consensus will raise the development agenda profile in member
government foreign policies. They do, however, criticize the omission of
paragraphs on concrete measures from the original draft drawn up in the summer
of 2005. The document ‘acknowledges the essential oversight role of
democratically elected citizens’ representatives while encouraging increased
involvement of national assemblies, parliaments and local authorities. The EU
Strategy for Africa, adopted by the Council of the European Union in December
2005, re-iterates and reinforces many of the commitments made by some member
states at the G8 Summit at Gleneagles. The strategy relies on five pillars:Â
Peace and Security; Human Rights and Governance; Development Assistance;
Sustainable Economic Growth; Regional Integration; Trade and Investing in
People.Â
57.    With regards ODA, fifteen EU’s
member states have pledged to spend 0.7 of GNI on ODA. Denmark, Luxembourg and
the Netherlands, Norway and Sweden have already reached or exceeded this
target. Ireland has made a commitment to fulfil the target by 2007, Belgium by
2010, France and Spain by 2012, the UK by 2013, and Germany by 2015. In total
this amounts to 0.56 per cent of EU GNI by 2010 or an estimated 20 billion
euros. Half of this amount will go to Africa. In order to realize these
targets, the EU has reviewed possible innovative financing mechanisms such as
an International Finance Facility underwritten by taxes levied on airline
tickets. Twelve countries
recently agreed to join France in imposing a tax on airline tickets to fund
HIV/AIDS, tuberculosis and malaria programs.
58.    The promotion of both international
and regional trade plays a key role in boosting economic growth in Africa.Â
This involves strengthening Africa’s trade capacity through trade
infrastructure development, assistance in complying with EU rules and
standards, increasing transparency and simplicity of rules and standards and a
commitment to aid for trade amounting to 1 billion euros per year by 2010.Â
Since 2002, Economic Partnership Agreements under the Cotonou agreement have
replaced the Lome system of non-reciprocal trade preferences. The Lome System
and the system of Generalised Preferences largely failed to deliver increased
EU market access for African countries. From 1976 to 1999, the share of
African imports as a proportion of total EU imports fell from 6.7% to 2.8 per
cent (EU Commission) despite preferential market access.  Economic Partnership
Agreements (EPAs) with African regional groupings are intended to increase
regional integration, increase access to European and regional markets and
reduce non-tariff barriers. Of course, one must add here that Europe’s system
of agricultural export and production subsidies continues to penalise
developing countries in a way that undermines its other pro-development
policies.
59.    The US has endorsed the Monterrey
Declaration of 2002, in which the signatories urge developed countries to ‘make
concrete efforts towards the target of 0.7 per cent of gross national product
(GNP) as ODA to developing countries and 0.15 to 0.20 per cent of GNP of
developed countries to least developed countries’. In the run-up to the
Millennium Summit, however, the US was heavily criticized for obstructing the
path towards any meaningful agreement. John Bolton, the US Ambassador to the
UN, demanded numerous changes to the draft agreement just two weeks before the
commencement of the summit. The most contentious American omissions were the
mention of the MDGs and the 0.7% target.Â
60.    The Center for Global Development
ranks donors in terms of their direct and indirect assistance to developing
countries and pro-poor policies in the fields of aid, trade, investment,
migration, environment, security and technology. The US, not surprisingly,
outscores most other countries (fourth after New Zealand, Canada and Australia)
in the area of trade, reflecting a computed across-the-board tariff less harmful
to developing countries than others’. According to these statistics, the US
ranks lowest in the areas of ODA and environment but does much better than many
European countries in the areas of migration and security.
61.    The American Strategy for International
Development relies on two main pillars: the US Agency for International
Development (USAID) and the Millennium Challenge Account (MCA). A variety of
programmes and budgets are spread throughout different governmental
departments, a condition that inspired US Secretary of State Condoleezza Rice
to announce the appointment of a Director of Foreign Assistance to oversee the
existing 18 budgets. The new Director holds a rank equivalent to that of a
deputy Secretary of State which suggests that the US is seeking to align its
development policy more closely to its foreign policy goals (FT. 18.1.06).
62.    The creation of the Millennium
Challenge Account is regarded as the most substantial shift in US development
policy since President Kennedy created USAID. It is significant in two key
ways. Firstly, because it relies entirely on governance conditionality, and
secondly because it is bi-lateral. This is seemingly incongruous with the
present trend towards multi-lateral donor cooperation. In 2002, President Bush
announced a $5 billion a year fund that would boost the US aid budget by 50%.Â
Only those countries possessing sound economic development and poverty
reduction strategies and thus able to meet certain governance criteria (measure
by objective indicators, such as those developed by the World Bank and the
Freedom House Survey), qualify for cooperation under the MCA. Unfortunately
political and administrative difficulties have hampered the programme. Last
year Congress slashed the proposed budget of the MCA during the authorization
and appropriation process; of the US$3.3 billion proposed in 2005 only US$1.5
billion was appropriated. Of the US$5 billion figure that Bush proposed in
2005, only US$3 billion was authorized and US$1.75 billion appropriated. The
programme also fails to address the most fundamental problem with conditional
aid: it invariably excludes the poorest countries. Only one compact has so far
been concluded with a country in Sub-Saharan Africa (Benin). Other countries
that have compacts with the MCA are Madagascar, Honduras, Cap Verde, Nicaragua,
Georgia, Armenia, and Vanuatu. Burkina Faso, Senegal, Ghana and Malawi are
involved in the ‘Compact Development Program’, in which countries that miss the
threshold but demonstrate genuine commitment are nonetheless eligible for
assistance from USAID to work towards fulfilment of the MCA. The Center for
Global Development is tracking the Millennium Challenge Account under its MCA
Monitor Program.Â
63.    The year 2005 was a year of
important development pledges. But just as important in the long run has been
the strong support for new instruments for monitoring and accountability.Â
Parliamentarians are well positioned to ensure that commitments are realized.Â
Parliamentary scrutiny of development policy differs largely across developed
and developing countries. Some NATO countries have active development
committees, but in others, development issues barely feature in the
parliamentary agenda. Parliamentary scrutiny should also go beyond
straightforward development issues by examining policies and legislation that
impact development policy, including security, trade and migration.Â
Parliamentarians must share this conceptual rendering of the multi-farious and
transcendent nature of modern development and security issues in order to
ensure policy coherence and best practices. Â
64.    Parliamentary oversight of
development issues will always be stronger when the electorate is mobilized.Â
According to a Eurobarameter 2005 survey, only 12 per cent of OECD citizens
have heard of the MDGs. The percentage of those who have heard about them and
have a degree of knowledge about them is even lower (McDonnel/Solidnac/Lecomte
2005). Eighty per cent of citizens perceive development narrowly as aid but
nonetheless support development aid and their government’s pledges. The poll
also revealed that the public perceives conflict as one of the key constraints
to development. Overall, DAC members spend approximately 200m euros (or 0.26
per cent of total ODA) on public information, communications and development
education. There are calls to increase this share. The Netherlands spends
almost 4 euros per person, Norway, 2.50 euros, Sweden 2.29 euros and Belgium 2
euros. Figures are much lower in Germany (0.8 euros) and Japan and Australia
(0.4 euros) (OECD DAC Development Policy Dialogue). Were public opinion better
informed and properly mobilized then parliamentarians would have a stronger
popular mandate to advance the development agenda and hold their government’s
feet to the fire.
65.    Interparliamentary organizations
provide another important fora for mobilizing support for development and for
sharing experiences across different political cultures. The same benefits accrue
as a result of co-operation among recipient countries. The Pan-African
parliament was launched in 2004 with the specific purpose of ensuring that
governments deliver on their development promises. During its March 2005
session the Pan-African parliament passed a resolution calling on national
parliaments to ‘urge their governments to accede to APRM as a demonstration of
their commitment to democracy and good governance in Africa’. That said, the
assembly includes a number of parliaments – its vice president is Libyan –
whose democratic credentials are questionable (Kajee 2005).Â
66.    The failure of the one-size fits
all approach has finally convinced donors that closer partnerships with
recipient countries are needed in order to find the right approach and make it
work. Civil society involvement and participatory strategies provide a sense
of ownership and can improve the technical quality of analysis that informs
PRSPs. There is, however, an increasingly critical discussion surrounding the
role of civil society and the potential danger of sidelining formal political
institutions with electoral legitimacy. Parliaments in recipient countries
tend to be excluded from the formulation of PRSPs (Piron/Evans 2004).Â
Moreover, donors have frequently sidelined legislatures both within and without
the PRSP process, for example, when ODA loans are granted without previous
parliamentary approval in recipient countries. In Ethiopia the constitution
requires such approval but loans continue to be disbursed without prior
ratification (BMZ 2003).Â
67.    There are two crucial matters also
at stake here: the decision-making role and capacity of parliaments. A legal
environment in which parliaments have a constitutional role and robust powers
within the political system should be the desired goal. Improved governance
and accountable governments in both donor and recipient countries are key to
making aid work for development and peace.  Some parliaments in recipient
countries already have a central formal role but lack the capacity to fulfil
their constitutional functions. Donors should therefore also seek to promote
capacity building in parliaments that lack resources and access to information
and expertise.Â
68.    The budgeting process is any
parliament’s most powerful means to ensure accountability. Public expenditure
management systems and budgeting reforms (including gender budgeting and
development budgeting) can provide parliamentarians with useful tools for
holding their governments to account. Donors should provide timely,
transparent and comprehensive information on aid flows in order to enable
partners to present comprehensive budget reports to their parliaments and to
their citizens.Â
69. Â Â Â Donor country parliamentarians
should deploy other instruments like parliamentary questions, committee
investigations, inter-parliamentary networks like the Parliamentary Network of
the World Bank and even the NATO PA to monitor development commitments. They
should also demand annual reports from governments on development policy and
strategies for achieving the MDGs. Finally parliamentarians should be actively
engaged in meetings and negotiations between donors and recipients. Lending
documents (analyses, tranche releases etc.) should be made available early
enough to allow for informed oversight.Â
70. Â Â Â Ultimately, defending the
development agenda requires political mobilisation and success in the field.
The two are mutually reinforcing and Parliamentarians have a central role to
play on both fronts. Along these lines, the Rapporteur would like to ask his
committee colleagues to share the initiatives their parliaments have taken to
promote development in Africa.
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