Reforming Aid Architecture – what role for the Commonwealth?
Commonwealth Finance Ministers held their annual meeting 12th-14th September 2006) on the theme of ‘Growth with or without new jobs?’ – Commonwealth Finance Ministers to re-examine the secrets of economic success’ . The timing was designed to fall just before the annual meetings of the World Bank and IMF which this year takes place in Singapore.
This year’s Finance Ministers’ meeting discussed a full agenda including the usual look at the current world economic situation, small states issues, private finance and investment issues, and this year’s theme of growth and livelihoods.
In addition, ministers considered a role for the Commonwealth in the growing international debate about the Aid Architecture. Ministers have been presented with five options for reform of the international architecture in a paper produced for the meeting. These options have been drawn from a series of workshops with Commonwealth finance ministry officials and civil society representatives which took place in London, UK, Dhaka, Bangladesh and Yaoundé, Cameroon. The five options presented were:
1. Option A – Do Nothing - Slow implementation of Paris Declaration on Aid Effectiveness; creation of more vertical funds and special purpose vehicles.
2. Option B - Rely on Harmonisation and Alignment - Gradual implementation of Paris Declaration leads to better H&A at country level; new vertical funds and special purpose vehicles continue to be created; DAC remains largely a bilateral donor club.
3. Option C – Harmonisation and Alignment+ - Recipient countries take the lead in driving H&A; donor numbers in each country controlled, with more joint programmes and offices; DAC should become open to wider membership, including non-OECD member observers; national level Paris Declaration agreements and 10-year partnership agreements agreed; mutual peer review programmes implemented; independent monitoring group at country level begins and countries request multi-donor evaluations; publication of a World Aid Report considered; the UN sets norms and standards for co-ordination, harmonisation and delivery of aid.
4. Option D - Multilateralism - A determined effort is made to simplify the aid system while retaining diversity, by increasing the share of aid channelled through the World Bank, the UN, the MDBs and the EU; UN and IFI governance reform is given high priority and a single UN Development fund formed; a forum such as a reformed and strengthened ECOSOC becomes the principal arena for discussion of aid issues.
5. Option E – Empower Recipient Governments - Developing countries are equipped with better information about the relative performance of aid agencies, the result of independent monitoring and evaluation; they are then given more say in the choice of which agencies act as suppliers of aid, perhaps through vouchers or similar; A forum such as a reformed and strengthened ECOSOC becomes the principal arena for discussion of aid issues.
In thinking about the reform of the international aid architecture and these different options, Ministers were asked to consider what role there might be for the Commonwealth given that it has both an interest in the issues and, given its unique membership and convening power, the capacity to help shape the debate.
At a minimum, the Commonwealth might content itself with monitoring progress against the Paris Declaration and providing assistance to countries which wish to strengthen their capacity to manage aid flows successfully. At a maximum, the Commonwealth could position itself in a position of leadership in the global action programme to reform aid architecture. This would obviously require both commitment and investment in a collective project.
1. Does the Commonwealth offer a unique perspective on these issues?
2. Is the Commonwealth able to play a distinctive role in the debate and help resolve differences and tensions present in other forums which discuss the issue?
3. What role should the Commonwealth play if the answer to those two questions is yes?