NPA, Alm.del - 2005-06 - Bilag 165: 067 ESC 06 E Rev. 1 Udkast til rapport med titlen: "Monitoring G8 commitments to developing countries"

NATOs Parlamentariske Forsamling 2005-06
NPA Alm.del Bilag 165
Offentligt

NATOs Parlamentariske Forsamling

NPA alm. del - Bilag 165

Offentligt

067 ESC 06 E Rev.1

Original: English

ECONOMICS AND

SECURITY

NATO Parliamentary Assembly

MONITORING G8 COMMITMENTS TO

DEVELOPING COUNTRIES

DRAFT SPECIAL REPORT

HUGH BAYLEY (UNITED KINGDOM)

SPECIAL RAPPORTEUR*

International Secretariat

7 April 2006

Until this document has been approved by the Economics and Security Committee, it

represents only the views of the Rapporteur.

Assembly documents are available on its website, http://www.nato-paint

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TABLE OF CONTENTS

II.

III.

IV.

VI.

VII.

VIII.

INTRODUCTION: FIVE YEARS OF INTERNATIONAL DEVELOPMENT C0MMITMENTS.1

NEW APPROACHES TO DEVELOPMENT ASSISTANCE

THE YEAR OF DEVELOPMENT AND THE YEAR OF AFRICA: FROM THEORY TO

ACTION

Gleneagles Commitments

2005 UN World Summit

The Doha Round

THE YEAR OF

INITIATIVES

AFRICA:

THE

DEVELOPMENT-SECURITY

NEXUS:

AFRICAN

AFRICAN SOLUTIONS TO AFRICAN PROBLEMS? DARFUR AS A CASE STUDY

ACTORS APPROACHES TO AID AND DEVELOPMENT

European Union

United States

THE ROLE OF PARLIAMENTARIANS

BIBLIOGRAPHY

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FIVE

YEARS

DEVELOPMENT

INTRODUCTION:

COMMITMENTS

INTERNATIONAL

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).

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.

The target most explicitly geared towards the eradication of extreme poverty and hunger is the

planned 50% reduction of people living on less than one dollar a day by 2015. Indicators measure

progress and the lack thereof.

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% of gross national product

(GNP) as Official Development Assistance (ODA) to developing countries and 0.15 to 0.20% 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.

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. 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'.

Since 2002, G8 leaders have also placed particular emphasis on African development. In an

age of unprecedented global prosperity, 40% 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% of the

world's 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.

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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.

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 explores the high-profile doctrine of

`African solutions to African problems' and in particular the way in which African initiatives have

Finally, the paper assesses different donor

addressed the security-development nexus.

approaches to development and the role that parliamentarians can play in ensuring that pledges

and commitments are translated into concrete actions with tangible results.

II.

NEW APPROACHES TO DEVELOPMENT ASSISTANCE

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 1% of GDP in aid reduces poverty by 1%, and 1% of GDP in aid sparks another 1.9% 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).

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%)'. A closer examination of ODA

reveals that this broad definition comprises many elements that do not constitute 'real aid'.

According to DAC, only 39% 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

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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% of its Gross

National Income (GNI) on ODA but only 0.31% in NAT terms. For Portugal, the difference is even

more pronounced as it spends 0.63% on ODA and only 0.2% 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) 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 30% of total aid flows.

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.

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%. 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% of total OECD bilateral aid. Far greater

progress is thus needed in further untying aid.

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

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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.

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.

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

Ownership and country-specific

(World Bank Development Economic Conference 2005).

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.

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.

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. 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,

Courageous improvements in African

however, far less evident in Sub-Saharan Africa.

governance and political liberalisation are needed in order to render increased aid more effective

in the fight against African poverty.

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.

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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.

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.

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.

III.

THE YEAR OF DEVELOPMENT AND THE YEAR OF AFRICA: FROM THEORY TO

ACTION

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.

24. 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.

25. 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

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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).

GLENEAGLES COMMITMENTS

26. 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).

27. In their final document on Africa, the G8 leaders identified five areas of action, outlining

goals and intentions. 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% ODA/GNI as ODA in the

1960s and is predicting 0.36% by 2010 (assuming a constant 2% GNI growth until 2010).

28. The G8 has also proposed to cancel 100% of outstanding debts of eligible Highly Indebted

Poor Countries. 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. 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.

29. 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. 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. 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.

31. 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).

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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.

32. 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.

33. 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.

34. 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. 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).

2005 UN WORLD SUMMIT

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.

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

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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.

THE DOHA ROUND

37. 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. 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. 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. (Economist,

December 19, 2005.) 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

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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. 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).

IV.

THE YEAR OF AFRICA: THE DEVELOPMENT-SECURITY NEXUS: AFRICAN

INITIATIVES

43. 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 several

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% debt relief and the dismantling of all farm and export subsidies by 2010.

The British Government embraced the report's recommendations, which then became the basis of

the UK approach during the G8 and EU presidencies, the 2005 UN 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 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

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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).

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).

48. AU funding remains a concern. Since its inception, only 6% 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.

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

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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. The UNDP, UNECA and AfDB have

been selected to assist with some of the technical assessments.

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.

AFRICAN SOLUTIONS TO AFRICAN PROBLEMS? DARFUR AS A CASE STUDY

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

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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) 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.

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 2005 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.

VI.

ACTORS APPROACHES TO AID AND DEVELOPMENT

EUROPEAN UNION

56. 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 several pillars: Peace and Security; Human Rights and Governance; Development Assistance;

Sustainable Economic Growth; Regional Integration; Trade and Investing in People.

57. With regards ODA, fifteen EU's member states have pledged to spend 0.7 of GNP 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

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0.56% of EU GNP 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. 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. 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% (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.

UNITED STATES

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% of gross national product

(GNP) as ODA to developing countries and 0.15 to 0.20% 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.

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

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50%. 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.

VII. THE ROLE OF PARLIAMENTARIANS

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.

Parliamentarians are well positioned to ensure that commitments are realized. 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

Parliamentary scrutiny should also go beyond

feature in the parliamentary agenda.

straightforward development issues by examining policies and legislation that impact development

policy, including security, trade and migration. 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.

64. Parliamentary oversight of development issues will always be stronger when the electorate is

mobilized. According to a Eurobarameter 2005 survey, only 12% 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). 80% 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%

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

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assembly includes a number of parliaments - its vice president is Libyan — whose democratic

credentials are questionable (Kajee 2005).

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). 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).

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.

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.

69. 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.

70. 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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