Europe Aid Introduction Just because youre doing good

Europe. Aid Introduction Just because you’re doing good, doesn’t mean you’re doing it well.

Overview Aid? Europe. Aid MDGs? A&DE? What would you do with 50 years and 1. 5 trillion euros?

Aid is… Helping the poor: “flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective. ” Helping the poor, to some extent: “a voluntary transfer of resources from one country to another, at least partly given to benefit the recipient country” “acting as a signal of diplomatic approval, strengthening a military ally, acting as a reward for good behaviour desired, to extend cultural influence, or to provide commercial access. ” Not helping the poor: “when you take money from the poor people in a rich country and give it to the rich people in a poor country. ” Harming the poor: “the billions that have hampered, stifled and retarded Africa’s development. ” Europe. Aid

A very brief history Europe. Aid After the War: What works for Europe… World Bank, IMF, Marshall Plan (‘ 48 -’ 52: $13 bn). Aid to fix the ex-colonies (and maintain influence). Modernise & industrialise… The Sixties: All we need is industry. State-led. Roads, railways, dams = growth = development but too big and long-term for Gov’s. Plus help the agri sector in the meantime. We’ll be done in a decade.

The Eighties: Greed is good Bring on the market, less Big Government, Europe. Aid liberalise don’t subsidise, follow the Asian Tigers. Structural Adjustment in return for a loan to help with your loan. $15 bn a year from poor to rich. The lost decade for development? The Nineties: It’s the Government, stupid Greed is only good in the private sector. � corruption, � rule of law, � capacity. Aid if you have good policies (Burnside & Dollar). Aid fatigue = volumes � The Noughties: More is Better, Better is Better $50 bn by 2010? ) MDGs, AE (ownership, budget support), Celebrity Aid, Military Aid. Today: The Backlash? First on the cuts list, “Africa’s future is up to Africans”, The White Man’s Burden, Why Foreign Aid Isn’t Working, Dead Aid…

Guess which celebrity said… “More than half the people of the world are living in conditions approaching misery…For the first time in history, humanity possesses the knowledge and the skill to relieve the suffering of these people. ” US President Harry Truman, 1949 Europe. Aid

How much are we talking about? Thousands Global ODA from all donors to all recipients (OECD QWIDS) 160 140 120 100 80 60 40 20 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 Europe. Aid

25 How much are we talking about? Bilateral ODA from DAC donors to all recipients (OECD QWIDS, 2009) 20 Bilateral = 75%, Multilateral = 25% 15 EC - $13 bn (9% of budget) UN - $4. 8 bn EU - $67 bn 10 Europe. Aid Gates - $1. 8 bn Global Fund - $2. 3 bn 5 0 United States France Germany United Kingdom Japan Spain Netherlands Sweden Norway Canada Italy Denmark Australia Belgium Switzerland Finland Austria Ireland Korea Greece Portugal Luxembourg New Zealand Thousands 30

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Do we give what we promise? By 2010: • $130 bn / year • Aid to sub-Saharan Africa doubled Europe. Aid

Who is it spent on? (OECD DAC) Europe. Aid

Who is it spent on? (EC) 610 59 955 617 809 3501 1237 1720 Europe. Aid Africa - South of Sahara Europe Asia: South, Central & Far East America: South, Central & North Middle East Africa - North of Sahara Oceania Bilateral unspecified Total ODA disbursed by the EC in 2009 (millions euros) Source: Annual Report 2010 on the EU’s development and external assistance policies and their implementation in 2009

Who is it spent on? (EU) Source: EU Donor Atlas April 2010 Europe. Aid

Orphans and darlings? Source: World Bank 2008 Europe. Aid

Does aid work? Europe. Aid

Does aid work? Human Development Index in 2009 Europe. Aid

Does aid work? Gross National Happiness? u Sustainable development u Cultural values u Natural environment u Good governance Europe. Aid

Does aid work? Yes it works! Botswana, Indonesia, Korea, Tanzania… No it doesn’t!! DRC, Haiti, Papua New Guinea, Somalia… Let’s ask the economists… Does aid lead to growth? Yes, no, maybe. And what about growth & poverty? It Depends…Policies (Burnside & Dollar), what we do & how, combined effect (direct, policy, institutions & governance, macro-economic stability). Europe. Aid

Does aid work? Dambisa Moyo Europe. Aid Problem: Aid harms: dependency, corruption, poor growth, more poverty. “the billions that have hampered, stifled, and retarded Africa’s development. ” Solution: • Stop aid in 5 years • Raise money from capital markets • Attract FDI • Cut trade restrictions • Up financial services to the poor

Does aid work? Paul Collier Europe. Aid Problem: 4 traps: • conflict • natural resource reliance • being landlocked and having bad neighbours • bad governance in small countries Solution: Cheap but tricky. Concentrate aid and take more risks; add to aid with: military interventions, international charters on good governance, free trade. Learn from the Marshall Plan

Does aid work? William Easterly Europe. Aid Problem: Fumbling in the dark on growth and poverty reduction. Too many variables, too much information, no one solution. Big Soviet-style plans don’t work. Solution: Innovation and trial and error. More of what works. Seekers not Planners. Flexible, Fast, Feedback. E. g. http: //www. givewell. net

Does aid work? Jeffrey Sachs Europe. Aid Problem: Poor countries can’t reach the bottom rung, stuck due to: geography, infrastructure, healthcare, corruption. Solution: More aid (0. 7%), diagnosis and prescription = end of extreme poverty by 2025. Bed nets, debt cancellation…Millennium Villages. Once on the bottom rung, will be able to pull themselves up into the global market economy.

Does aid work? Owen Barder Europe. Aid Problem: Aid could work better: multiple & competing aims, weak incentives, incomplete info. , poor feedback & learning, poor results-focus, long delivery chains. Solution: planning, markets & networks. • Planning: systems & standards not details. • Markets: for delivery (unbundle funding from design, Co. D, Vouchers) • Networks: feedback, transparency, incentives

Does aid work? Percentage of the world’s population that lives in developing countries: 84 Number of people worldwide who will die today due to poverty: 20, 000 Number of children who will die this year from easily preventable diseases: 10, 000 Number of people without enough to eat today: 840, 000 Europe. Aid

Overview Aid? Europe. Aid MDGs? A&DE? “There is no magic bullet. These are just basic problems requiring basic work. ” Jeffrey Sachs

The Millenium Development Goals Europe. Aid 2001: 192 UN MS + international organisations agree 8 development goals (not growth!). Aim: halve poverty by 2015.

Are we achieving the MDGs? Europe. Aid

Are we achieving the MDGs? Europe. Aid Some doing well: Asia (China). Some not doing well: Sub-Saharan Africa. Growing criticism: arbitrary targets, focus on setting instead of jumping the bar. Has led to: increased interest in effectiveness of aid & what works on the ground rather than goalsetting.

Overview Aid? Europe. Aid MDGs? A&DE? “A little less conversation, a little more action please. ” Elvis Presley

What is Aid Effectiveness? Spending aid on the effective channel Europe. Aid right things and through the most Ensuring that all aid has the maximum possible poverty reduction impact on Ensuring that the financial resources provided by rich countries to poor nations improve the daily lives of millions of people and move the world closer to achieving the MDGs

What is Aid Effectiveness? Europe. Aid Government Driving Donors Joined-up Predictability, Transparency Results, Accountability

What is NOT Aid Effectiveness? No. of indicators the island of St Vincent has been asked to monitor on HIV/AIDS? 191 Percentage of aid projects that are for less than $1 m? 80 Number of aid coordination forums in Senegal? 82 No. of donor missions to Ethiopia in 2007? 221 No. of NGOs working on health in the west coast of Aceh? 22 No. of bank accounts the Mozambique Govt has to have to meet donor requirements? 1, 000 Europe. Aid

What is Development Effectiveness? Europe. Aid • the level of achievement of overall development goals which are affected by a host of different factors • the assessment of aid against official, long term and quantifiable development goals (e. g. the MDGs or national goals) ØThus development effectiveness is not solely the level of goal achievement of aid/development interventions. Ø Ø Have the immediate goals of assistance been achieved? And have those goals enhanced the development process?

International commitments 2011 HLF 2005 G 8 2005 PCs 2003 Rome HLF 2008 AAA 2008 F 4 D 2000 MDGs 2002 F 4 D 2008 MDGs Europe. Aid

EU Commitments 2005 - EU Consensus for Development 2006 - More, Better, Faster - Joint Framework for Country Strategies - Financing for Development 2007 - Strategy for Africa - Code of Conduct on Division of Labour 2008 - Backbone Strategy on Technical Cooperation - Toolkit for Capacity Development 2009 - Operational Framework for Aid Effectiveness 2011 - The Future Approach to EU Budget Support - Increasing the impact of EU Development Policy: an Agenda for Change Europe. Aid