09 May 2012
UNCTAD Secretary-General Supachai Panitchpakdi has called for a rethinking of the aid agenda to ensure that it is more supportive of building productive capacities in developing countries.
Speaking at the high-level session of the 5th Stakeholders meeting of the Belgian Directorate-Generale for Development Cooperation (DGDC) at the Egmont Palace in Brussels on 8 May, on the topic "The future of development cooperation: from aid to coherence?", Dr. Supachai stated that official aid cannot be effective unless it is seen as part of a wider framework of development cooperation, and that aid and coherence are not mutually exclusive components of development cooperation.
He cited the example of the post-World War II Marshall Plan, which was successful not simply because of a generous and quickly released level of resources, mainly in the form of grants, but also because it nestled these aid flows in a coherent policy framework which aimed to mobilise trade and investment to a measured rebuilding of war-torn Europe.
In the current situation, where aid flows to developing countries look likely to stagnate or even decline over the coming years, Dr. Supachai said it is more important than ever to create a framework that can build mutually supportive linkages between aid, trade, finance and production in support of sustainable growth in developing countries. Sadly, he went on to say, there has been a tendency to retreat from this kind of integrated framework promoted by the Marshall Plan, and to treat the different aspects of development cooperation separately with a tendency to see market forces, in particular financial markets, as the ideal means for achieving coherence.
Dr. Supachai called for a wider sectoral approach to ensure that measures to diversify economic activity in developing countries are consistent with job creation, the security of food and energy supplies, and effective responses to the climate challenge. He also called for greater economic and financial policy coherence at the international level, which is a necessary requisite for aid effectiveness. "Governing the market" with proper institutional frameworks is also necessary, he said.
At the Stakeholders' Meeting, H.R.H. Princess Mathilde and Mr. Paul Magnette, Minister for Development Cooperation of Belgium, delivered the introductory speeches. Joining Dr. Supachai in the high level session were Ms. Helen Clark, Administrator of the UNDP, and Mr. Roberto Bissio, Director of the Third World Institute.
The full text of Dr. Supachai's prepared statement can be viewed here.
