The Third Development Cooperation Forum taking place at the current ECOSOC session in New York was asked to recommit to global development partnership, rethink current practices and jointly reenergize global development cooperation, as focus was directed to aid effectiveness and development financing.
Reviewing some of the key findings of the UN Secretary-General's report on Trends and progress in international development cooperation (document E/2012/78), Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs, said that in spite of renewed commitment to the Millennium Development Goals, there were wide gaps in advancing Goal 8, the global partnership for development.
Against the 0.7 per cent official development assistance (ODA) target, the gap between what was promised and what was being delivered stood at $167 billion per year; only a few development partners had honoured their commitments and maintained their levels of assistance thus far.
After the formal opening of the Third DCF, the Council then held an interactive panel discussion led by two presenters: Mr. Heikki Holmås, Minister of International Development of Norway, and Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD. It was moderated by Ms. Joanna Kerr, Chief Executive Officer of Action Aid International.
ECOSOC Panelists |
As “where is the money?” had, therefore, become a common refrain, she noted, for instance, that a small tax on financial transactions could raise billions for development and sustainability. Her organization, Action Aid — an international non-governmental organization working in 50 countries — had taken a clear stand on the need to reform development cooperation. Last year, it had published a report entitled “Real Aid”, which called for such reform and for civil society to play a key role in avoiding aid dependency. It was critical for all developing countries to become more self-reliant.
“Aid still matters”, she said, agreeing again with the UN Secretary-General’s report. In addition to a focus on policy coherence, gender empowerment must be a central component of aid, and its “catalytic role” must be utilized.
Minister Heikki Holmas responded that one of the main challenges was distribution of wealth — not just between rich and poor countries, but also within countries. Ten times more money leaked illegally out of developing countries than the total amount of aid to those countries, and the current economic system actually encouraged such illicit flows. Money flowed from the poor to the rich and hampered growth and investments in developing countries. In that respect, he was glad that illicit flow was mentioned — for the first time ever — in the Rio+20 outcome document.
There were also security and economic reasons for reducing those flows, he said, citing crime, uprisings and other concerns. For Norway, a steadily larger part of aid was concentrated on such issues. He recalled, in that respect, a recent meeting with a Tanzanian Government official, who had stressed that renegotiating the country’s deals with its mining industry would be more important than all the ODA it was currently being given.
Sharing his thoughts on how development cooperation could best support a global development agenda in the current trade environment, Dr. Supachai said sustainable development was a “highly loaded” phrase. It involved more than growth. It involved equity, women, job creation and environmental stewardship — a huge agenda. Given that, he highlighted three major issues that would determine the future of development cooperation — coherence, effectiveness and assessment — saying that the dialogue must move beyond aid approaches to cover investment, technology transfer and capacity-building.
Assessment was also needed to review aid effectiveness, he said, not just by donors like the OECD, but by recipients to ensure that assistance met national strategy requirements. Was assistance, for example, being used to help countries facilitate regional integration? Often it was not.
Even with new cooperation modalities, ODA was still very much needed, said several speakers representing developing countries, and further, they warned that it could not be replaced by South-South cooperation. Civil society and the private sector were important, some said, but such assistance should be channelled through Governments, since they were responsible for translating development plans into reality.
Dr. Supachai agreed that there were many issues outside of assistance that were equally critical for development. Among those, trade was one of the most powerful instruments, but there was a lack of effort to ensure an equitable and balanced trade environment. In the stalled Doha Round of trade negotiations, countries should demand an “early harvest” for those matters that related to development. Another issue was that of investment. Borrowing was not always easy, and more heavily-indebted poor countries were not needed. Investments, however, needed to be responsible. A set of responsible investment principles were needed.