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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

Northerners Direct The International Monetary System, They Should Not Also Direct The Advocacy Response

By Nora Lester Murad, Dalia Association, Palestine

A growing number of northern advocacy organizations working in coalition or in north-south partnerships are addressing issues of aid effectiveness, aid dependency, third world debt and related issues. Their efforts offer hope for system-level change to the global aid system, which, despite stated intentions, has become a contributing factor to de-development, disenfranchisement, and hopelessness.

Until change comes, the choices facing aid-recipient societies seem to be three: 1) engage with international organizations on their terms, often trading independence and sustainability for immediate cash, which in any case is severely restricted; 2) engage with international organizations as advocates for change, investing ideas and effort to try to affect policies; and 3) boycott international institutions, often trading much-needed financial support for integrity and values.

All three approaches risk losing credibility with local constituents, though short-term, quick-fix thinking tends to permeate societies, not only their leaders, so over and over again, aid-recipient societies choose to play the game, reap the rewards, pay the price, and thus they are complicit with their own oppression and share responsibility for lack of change.

For those of us who refuse to be complicit, the difficult decision, it seems, concerns strategy for influencing change. Those who engage with international organizations seek to change the terms of the relationship between donor and recipient, but they could be seen as naïve. Aid, whether humanitarian, development, military or otherwise, is an arm of governmental foreign policy. Politically correct statements about third world development not withstanding, the global north profits from the dependency and relative deprivation of the global south. Those of us who have tried to change the system from within the system know first hand the way that systems can dominate, distort, undermine, dehumanize, disempower, and marginalize.

From this perspective, advocates for change may be seen as wasting their time, or worse, being co-opted into a false hope for reform of a system that should be revolutionized. Southern efforts to “go it alone” or in south-south relationships can be seen as a form of boycott, but they may also be seen as naive. Money is power. Forgoing money may feel like the moral high road, but it doesn’t pay the bills.

Most importantly, we should not assume there is one “right” or “best” strategy to influence international monetary organizations or the global financial system. Advocacy may influence policy through persuasion or pressure, but non-participation by southern actors may also influence policy by breaking the monopoly that international monetary organizations feel they enjoy.

Nor should we assume that northern and southern change agents should play the same roles in the effort to change policy. It makes sense that each should expend effort primarily on their own systems, that is, northern actors should take the lead to change northern actors’ international policy. Southern actors should support their northern partners, but only to the extent it does not derail them from their independent agendas. There is great risk that southern actors become in service of northern agendas. Respondents who say that northern agendas are “helping” southern agendas and therefore southern actors should be motivated to contribute miss the whole point. Northerners should not be motivated by “helping” “disadvantaged” southerners (a framework that perpetuates, not challenges the power imbalance) but rather by moral concerns or self-interest.

Further, southern actors who decide not to engage, even in opposition to northern structures, but instead seek to create alternative structures should be supported, even if this approach fails to directly support northern actors’ efforts to change the system. When northern actors support southern actors on credible southern/indigenous terms, the process itself demonstrates the outcomes envisaged by advocacy – that is, global approaches to poverty driven by local leadership, objective needs, honest assessment of root causes, and active valuation of southern priorities and capacities.

This is not to romanticize the leadership of the south or to imply that southern approaches are monolithic and preferable to northern approaches. As previously mentioned, the oppression of the global south is currently achieved with the active participation of southern actors, many of whom profit through their complicity at the expense of their compatriots. Holding southern actors accountable for their complicity, either through active profiteering or through passivity, must be a primary focus for southern change agents. By concentrating on their unique role and strengths, southern change agents can directly support the shared advocacy agenda of north-south change agents.

Dividing our roles -- sometimes collaborating and sometimes working on different fronts -- northern and southern actors driven by shared values of justice and effectiveness should, at minimum take hope in each other’s efforts for a better world.

G20 Plus- an Opportunity for FFA action

The G20 summit and the discussion that will follow, present the FFA with an opportunity to make a substantive contribution to the current discussion about reforming the prevailing aid architecture. The attached call for opinion pieces outlines what we would like to do. The attached strategy document puts this current piece of work within the wider context of what we would like to work towards over the course of three years.

I look forward to your contributions and the discussion that it will create. Please feel free to forward the call for opinion pieces to other colleagues who may be able to contribute.

Please send your responses by email to me and cc my colleague Juanita who will help with logistics and communications.

Prashan Thalayasingam, chair, FFA Secretariat

Entre la realidad y el sueño: una arquitectura financiera sudamericana

Autor: Oscar Ugarteche

[Introducción]: En diciembre de 2007, los presidentes de Argentina, Brasil, Venezuela, Ecuador, Uruguay y Paraguay anunciaron la creación del Banco del Sur, con un capital inicial de 10.000 millones de dólares. La iniciativa forma parte de los esfuerzos para avanzar en la construcción de una arquitectura financiera sudamericana que, además, incluya una unidad monetaria. El artículo analiza los problemas que ya han comenzado a aparecer, vinculados a las asimetrías entre los países de la región, y sugiere mirar los ejemplos de Asia y Europa para encontrar un camino adecuado que permita avanzar en la articulación financiera de la región.

Para leer el documento, haga click aquí

South Bulletin: Reflections and Foresights

South Centre, September 2008

This Issue of the South Bulletin reflects upon the Third High Level Forum on Aid Effectiveness that took place in Accra, Ghana from 2-4 September and prepares its readers for the upcoming Monterrey review conference on Financing for Development that takes place in Doha, Qatar in end-November.
On its editorial article Yash Tandon reflects upon the Third High Level Forum on Aid Effectiveness that took place in Accra from 2-4 September 2008 - the follow-up and evaluation of the Paris Declaration. He states that the present chaotic situation of the aid industry is a better option for the poor countries than the anticipated order of the AAA, while the best option is to get out of aid dependence.
Analysis and commentaries appearing in the Bulletin, include on Enhanced Financial Mechanism for UNFCCC: The G77 Proposal; Financing for Development from Monterrey to Doha; Keeping Developing Countries Hooked on the Aid Drug; Food Crisis in India; and Let us not Build the EPA in the Graveyard of Regionalism.

Southern discomfort

By Yash Tandon

While the governments of rich nations want to streamline their global-development efforts in the OECD context, those of many developing countries are less enthusiastic. Some experts even view the Paris Declaration on Aid Effectiveness (PD) as a document of new colonialist aspirations, and doubt the OECD High Level Forum in Accra in September will achieve much good.
Along the article, Yash Tandon exposes the resons why developing countries are not at all exited about the PD. He stresses that while at first glance, the PD looks benign, underlying the PD could be another agenda not readily transparent at first reading

To read the full article, click here

OMC: Una ronda para el desarrollo… ¿de los países en desarrollo? ¿O de quién?

Autor: Oriana Suárez, LATINIDADD

Desde 2001 se inició la Ronda Doha que tenía como uno de los objetivos convertirse en “la ronda del desarrollo”, para conseguir beneficios para los países más pobres. Los países desarrollados (PD) consideraron que la mejor manera de apoyar a los países en desarrollo (PED) era generar mecanismos para un comercio mundial más libre al que tuvieran acceso. Sin embargo, la Ronda lleva estancada varios años porque no ha logrado conciliar los intereses de los países industrializados y los países en desarrollo.
El aparente fracaso de la ronda de Doha evidencia una reconfiguración de poderes mundiales, con EEUU y la Unión Europea por un lado, y la aparición de las economías emergentes que han logrado un contrapeso a los intereses del norte, en pos de incorporar en algo las necesidades del sur.
El presente articulo hace un repaso del desenvolvimiento de las negociaciones hasta la fecha, haciendo hincapié en la falta de interés en concensuar y la falta de voluntad para que esta sea efectivamente una ronda para los PED.

Para leer el artículo completo, haga click aquí

Bretton Woods institutions send mixed messages about China’s role in Africa

By Bank Information Centre (BIC)

[Introduction]: Since the Chinese economy has taken off and it has increasingly looked to Africa to provide raw materials, the World Bank and IMF have been confronted with the question of how to respond. Recent statements by the institutions have shown that these responses are careful and at times contradictory.
This article comments on the position taken by the WB and the IMF on the increasing presence of Chinese investment in Africa.

To read the full article, click here

After the Paris Declaration: Taking on the Issue of Power

By Goran Hyden

[Abstract]: The new approach to assisting developing countries inspired by the Paris Declaration emphasises greater recipient control over the funds provided, thus confining donors’ influence to upstream points in the policy process, where political aspects of development co-operation become more important. Understanding better the role that power plays in the aid relationship will be critical to the implementation of the Declaration. This article shows how the political science literature can inform this set of issues. It argues that an understanding of aspects of power illuminates the challenges involved in transforming relations between donors and recipient governments as well as between governments and civil society organisations.

To read the full article, click here

Unity In Diversity: Governance Adaptation In Multilateral Trade Institutions Through South-South Coalition-Building

By Vicente Paolo B. Yu III

This paper discusses the ways in which developing countries participate in the institutional governance mechanisms of the WTO and UNCTAD, the two premier multilateral trade governance institutions.
The current global trading system exemplifies “some historical and structural inequities” in which the rules are “less advantageous for developing countries.” Changing the rules of the trading game to make them more equitable and capable of supporting developing countries’ development interests will require addressing the flaws in the institutional architecture which shapes and implements those rules.
The experience of developing countries, individually and collectively, during the more recent period of globalization has only confirmed that developing countries need to be consistent and united in promoting their views and interests, and that to succeed it is also essential for them to join forces and pursue group action in most domains on the development agenda. With a number of developing countries having made important progress and strides in development and economic growth, the collective weight of the South should be used for launching major policy initiatives, as well as to counter the systemic economic and political imbalances that favour the developed countries.

To read the full paper, click here

Critical Conditions

By Nuria Molina and Javier Pereira

[ExecutiveSummary]: Faced with strong criticism for its expansive and erroneous use of conditionality, and in the wake of a financial crisis, the International Monetary Fund (IMF) approved in 2002 a set of guidelines to inform its use of structural conditionality. The Conditionality Guidelines committed the Fund to reduce the overall number of conditions attached to Fund lending and ensure that those attached respected and were drawn from nationally developed poverty plans in recognitions that developing country ownership is instrumental for successful development.
This report looks at the effectiveness of the Conditionality Guidelines in reforming IMF conditionality during the five years since the Guidelines were approved. Based on IMF figures, Eurodad examines the share of Fund structural conditions which prescribe highly sensitive and intrusive policy reforms.
This report analyses the IMF’s own figures to demonstrate that no further progress has been made since 2004, and casts serious doubts about the genuine commitment of the institution to streamlining its structural conditionality and speed up the application of their own conditionality policy. Faced with in-depth structural reforms of its own, the Fund should take this opportunity to speed up implementation of their Conditionality Guidelines and take further steps in the streamlining initiative.

To read the full report, click here

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