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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

organised by ODI

The Need to Break the Disproportionate Power Imbalance of the Current Aid Regime

By Opa Kapijimpanga, Institute for Policy Studies, Lusaka, Zambia

The current aid regime is characterized by a disproportionate feeling of ‘power over” by donors in relation to African governments. This expresses itself in donors continuing to impose their understanding of how African economies must be run. As an example, the Medium Term Expenditure Framework (MTEF) is essentially an instrument which the IMF uses to define macro-economic parameters. For example the government wage bill is limited by the MTEF to 8% of GDP. This then sets the limits; including how many nurses or teachers Zambia can employ in a given year. The IMF denies this! Donors have also shown reluctance to directly deal with resolving the development constraints that they also visibly see. Their unwillingness to commit to meeting the MDGs is somewhat unacceptable.

The nature and character of the aid regime must therefore change. Some of the processes that might help in doing so include the following:

a) Donor support should be directed at supporting national development plans. The MTEF, a rolling three year framework must be the instrument for securing that plan targets are being met;

b) The relationship between donors and the recipient country should be based on an Aid Policy and Strategy drawn up by the recipient country. Such an Aid Policy should define the modalities for aid and also include a framework for evaluating the Donors

c) Donors, as a group, have to express their commitment to the Plan and Aid Policy through a Joint Assistance Strategy. This will help harmonize their behaviour and procedures; towards a more responsive aid regime;

d) Aid must be directed at resolving development constraints. And these are always clearly visible in any given reality. An assessment of how these are being resolved should be made on an ongoing basis.

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The Role of IMF in Policy Making in Bangladesh

Source: Unnayan Onneshan

Unnayan Onneshan organized a round table discussion on “The Role of IMF in Policy Making in Bangladesh” at CIRDAP auditorium on 20th October, 2007. Md. Iqbal Ahmed presented a paper on the issue. Ahmed showed the effect of IMF policies with empirical data and ended with questioning its role. Mr Ahmed argued that when Bangladesh needed an investment friendly environment to generate employment and output to eradicate poverty, the IMF advised the government to tightly manage demand and offered policy advice which was contradictory, which has destabilised the economy with low investment, low capital formation, low output and low employment thus leading to staglation. At the same time the IMF's advice to cut public spending has further marginalised the poor.

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Challenge of the Current Aid Architecture: Addressing the Development Needs of Africa


"African countries like many other developing countries need external resources primarily to supplement their meagre domestic resources from their economies. The assistance countries receive redress the financial gap that arises from their development needs and act as catalyst and play a complimentary role in the implementation of the national development programs as well as stretegies. The articles concludes by saying that aid architecture must address political interests of both donors and recipient as well. Aid would only work with good public institutions and if policies are nationally-owned. Other important factors include the need to address weak public finance management systems, respect public systems by donors, and the development of Partnership principles are mutually agreed. Lastly engagement with non-state actors and parliaments must be meaningful if Africa is to make head way in improving aid architecture in the continent."

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Stock taking paper on aid management

Source: Daima Associates

This report is one of three planned outputs of phase 1 of a 2 phase project commissioned by the Capacity Building Working Group, one of the three groups conducting the technical work under the SPA 7 programme. The project aims to improve the quality and quantity of aid in support of nationally owned capacity development approaches. Phase one of the project is the stocktake phase, which is the subject of this report and the second phase will draw from the findings and conclusions of the first phase. This report categorises aid recipient countries according to the level of aid management systems and effectiveness. Criteria that were considered when grouping countries included: aid policy documentation/clear aid strategy; aid management systems and procedures; Development Partner actions and expected requirements; aid harmonisation and alignment to country systems; the capacity in aid management; and capacity constraints identified and documented. The grouping exercise resulted in four categories. Group one included coutries that were rated highlu such as Botswana, Tanzania, Ghana, Uganda and Vietnam; Group two included coutnries that are doing fairl well but could still do better such as Burkino Fas, Cape Verde, Rwanda, Zambia, Ethiopia and Mozambique; group three included countries trying to improve but in fragile situations, thus with still many capacity gaps such as Cameroon; and group four included countries with critical situations largely due to recent internal conflict such as Burundi, Sierra Leone and Haiti. The report also considers to what extent the Paris Declaration has been implemented, if, and to what extent coutnries have developed explicit aid policies, how effective are aid management systems and procedures, emerging lessons in aid management with implicaitons for capacity development, expectations from the Development Partners, Development partner support to Capacity development, best practices. Finally the report provides a comparison of Capacity Development for Aid management.

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The Ghana Poverty Reduction Strategy (GPRS): ISODEC’s Position Paper

Source: ISODEC

To qualify for the IMF’s Poverty Reduction and Growth Facility (PRGF) and assistance from the soft-loan window of the World Bank (the IDA) or the Regional Development Bank, Ghana was required to prepare a Poverty Reduction Strategy Paper (PRSP). After some hurried preparation, the IMF and World Bank boards gave their blessing to the document in February 2001 as part of the process in reaching the HIPC decision point.

The paper concludes that the PRSP process in Ghana and the development of the Ghana Poverty Reduction Strategy has generally been participatory and country-generated. However, this was done within the conditions laid down by the donor community for preparing PRSPs. As such, policies such as privatization and full cost recovery of utility services and basic social services as well as full trade liberalization have not been reviewed in spite of general dissatisfaction from the majority of Ghanaians. If poverty is to be reduced in this atmosphere then it is necessary to put in place social safety nets to assist poor households to maintain minimum consumption levels and access to basic social services.

Funding is the major constraint of the GPRS as resources generated internally are grossly inadequate while foreign debt has become unsustainable. The government has tied its hands further by committing to the condition that the funding should not be inflationary (monetary policies), should not lead to an unsustainable debt overhang (external borrowing), and should not lead to the crowding out of the private sector (domestic borrowing). No matter how beautiful the programmes are they will remain on the drawing board if we don’t get the necessary funding. This calls for a more efficient use of all resources at our disposal. The HIPC resources (if we get them) must be used to support the programmes in the GPRS. The Poverty Fund that is created should be open to public scrutiny, as past experience has shown that such funds can easily be diverted for political purposes. Local government
authorities must be given more resources, but with the necessary capacity, to implement poverty reducing programmes and projects with civil society oversight. For the tracking of poverty reducing expenditures, transparency is a necessary prescription and the involvement of all and sundry is a basic requirement for success in the implementation of the GPRS.

However, even before the GPRS has taken off, another initiative, the New Economic Partnership for African Development (NEPAD) is underway and has already been hailed as the solution to Africa’s problems: good social amenities, strengthened infrastructure base, information and technological advancement and efficient and reliable but affordable energy to spearhead growth in 2025. It remains to be seen whether the GPRS is another of those policy initiatives that have yielded no results for Ghana or there is going to be a change this time.

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PRSP Monitoring and Information in Ghana

Source: ISODEC

A progress report on the GPRS process issued by the Task Force for the GPRS in December 2000 acknowledged monitoring and evaluation as a key part of the design of the GPRS and promised that attention will be paid to defining processes or collection, analysis and management of data on poverty alongside key outcome and intermediate indicators (Task Force for the GPRS, Dec. 2000). However, to date there has been little progress in this area. Neither the Technical armonization Workshop Report (April, 2000) nor the report f the workshop on the GPRS presented at the National Economic Dialogue Preparatory Workshop (May 2000) contain any treatment of the information and monitoring needs of the GPRS1 . Neither these reports nor the outstanding GPRS time table provide for a programme of work to fill this gap. There is also no oordinated donor initiatives either within the CDF or any other framework to tackle the monitoring problem. This paper looks at the ingredients of an effective monitoring system, the state of the Ghana Poverty Information System, Poverty Diagnosis and the use of information in the GPRS, GPRS Monitoring indicators, Impact Assessment in the GPRS, Linking plans and targets to resources, using institutional mechanism for the use of poverty data and donor initiatives and coordination.

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Which way the future of aid? London, November 2005

Workshop: ODI, London, 14-15 November 2005 (Wednesday 16 November for Southern Participants only)


Scoping Paper
The purpose of this Scoping Paper is to serve as the basis for discussion at the Workshop that ODI is organising in mid-November with its collaborators from Africa, Asia and Latin America as part of its project on 'Southern Voices for Change in the International Aid Architecture'. The paper aims to provide an analysis of the forces shaping the structure and operations of the international aid system. Download the Scoping Paper (PDF)

Comments on the Scoping Paper

Proposed objectives of the workshop (for consultation)
• To promote informal discussions, learning and sharing of experiences among the participating Southern civil society organisation (CSO) representatives, Northern CSO representatives and donors, building especially on the experiences of Southern CSOs in engaging with the international aid system and on their interests and concerns about the future of aid.
• To come to a better understanding of existing Southern CSO inputs and/or responses to the ongoing debate on how to reform the international aid system.
• To identify areas of work where further Southern engagement with these issues would be desirable.
• To identify priority areas for research and next steps, asking in particular how Southern CSOs envision the Southern Voices project evolving and what kind of support they may need to continue and/or expand their engagement with issues related to the future of the international aid system.

Session notes
Session 1
Session 2
Session 3
Session 4
Session 6

Speaker Presentations
Moreblessings Chidaushe, AFRODAD, Zimbabwe Presentation notes
Alina Rocha Menocal, ODI, UK Presentation
Bill Morton, North-South Institute, Canada - Paper
Priyanthi Fernando, CEPA, Sri Lanka Presentation
Gaspard Ahobamuteze, Independent Consultant, Rwanda
Rosalind Eyben, IDS, UK>Presentation

Amartya Sen review of “White Man's Burden?

Amartya Sen, Lamont University Professor and Professor of Economics and Philosophy at Harvard University, reviews The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly.

According to Sen the book offers important insights about the pitfalls of foreign aid. However, he criticises Easterly's attack on global "do-gooders" arguing that aid can work when implemented correctly.

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