Information and stories about aid effectiveness and reform

UK Commits $102 Million in Aid to Sudan

UK Commits $102 Million in Aid to SudanAt the beginning of an international meeting of donors and philanthropists in Qatar to discuss the development of Sudan, the UK has committed an additional $102 million in aid to Sudan. Over half of this aid is for Darfur. Ravaged through the years by civil wars, Sudan and specifically Darfur is desolate and destroyed. However, the international community is rallying around the country to support a peace deal signed in 2011 and to work towards rebuilding infrastructure and communities in Sudan.  Significant in the pledge was the goal to move the country away from a dependence on emergency aid and food handouts. The citizens of Sudan have endured much and aid that continues to foster dependence on international donors is going to do little for the growth of the country.

Country development strategy is focused on improving local governments, agricultural upgrades, and access to microfinancing for the citizens of Sudan. The UK offered the additional $102 million in aid to Sudan to fund skills-training and provide resources to help communities grow their own food. This aid is on top of the funds the UK already budgets for Sudan. Lynn Featherstone, Britain’s international development minister remarked, “It is not good enough to simply offer more handouts.”

The country continues to face rebel forces unwilling to sign the peace agreement, but the international community is committed to the rebuilding of Sudan. This is another push towards development that works hard to increase country resources and skills and offers access to small loans which help to decrease dependence on emergency aid and food handouts. Training and educating the citizens of Sudan will allow for greater pride in their communities and also allow a raise in the standard of living within the country, creating a solid path towards peace and safety. This is the type of development aid countries that is becoming more widespread and will have long term impacts in reducing and eradicating poverty.

– Amanda Kloeppel

Source: ABC News

Photo:USAID

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6 Factors for Successful Development

economic-development-sustainability
Since 1945 the United Nations has established the contemporary global, obligation to address the economic and social well-being of ordinary citizens. A very new concept when written into their charter: “The United Nations shall promote higher standards of living, full employment, and conditions of progress and development in the economic and social order.”

Over time, for at least economists and policy makers, this development agenda has become synonymous with “improving economic opportunities through increased production of goods and services.” The implicit assumption is that economic growth will increase quality of life standards, life expectancy, improve nutrition and health.

Since 1945, there have been impressive advancements in the elimination of extreme poverty, but still many professionals wonder how to accelerate growth even more throughout the world – particularly in Africa and South Asia, two regions with a great number of poor. The issue has prompted economists and policymakers to analyze the importance of several factors, policies and institutions, finding six factors for successful development:

1. Social inclusion – With a healthier and more educated population, nations can enjoy a more effective economic and political life. Illiteracy is a major barrier to participation in the economy. Without widespread education, citizens are more easily manipulated by un-just governments – allowing for the empowerment of counter-productive leadership.
2. Quality management – Governments must manage their national macro-economic environment; if there is no over-arching/holistic governance, the nation loses its credibility both in private sector business, and the citizenry. The “political capital” of a country cannot be wasted, and moreover, if public resources and urgent needs are not continually addressed, then the country falls into a burden of “catch up” where they are always behind in development, comparatively.
3. Transparency and accountability – Transparency is essential to prevent corruption and financial fraud, and promotes citizen participation. Experience shows that trust in one’s government encourages citizens and businesses to pay their taxes, thus advancing development and social services. Companies invest and expand more, creating greater confidence in the government and a “virtuous circle” of development ensues.
 4. Technology and innovation – Economic production is no longer just about capital and labor, now knowledge and innovation are just as important. It has been proven that technology gaps can explain the disparity in productivity between different countries. Technological adoption, knowledge dissemination and information communication technology (ICT) are imperative for national competitiveness.
5. Economic opportunities – Increasing the access and use economic resources to citizens is imperative. Free and open access to markets can contribute significantly to development; access to goods, labor and financial markets for personal use, production and exchange; especially the promotion of small-businesses.
6. Administrative Infrastructure – Business and society often come down to bureaucratic needs:  issuance of licenses, permits, birth certificate, passport, filing taxes, starting a business, registering a title, property rights, contract settlements, foreign trade authorization, hiring an employee, use the public health services, etc. The efficiency of bureaucracy is pertinent to advancing greater and more equal access to public resources.
 – Mary Purcell

Source: ITC
Photo: amateurinafrica.com

Does WTO’s Aid for Trade Reduce Poverty?

Does WTO's Aid for Trade Reduce Poverty?
Aid for Trade is a holistic approach to incorporating developing economies into global trade networks by assisting them in increasing exports and market access. Aid for Trade was initiated at the WTO Ministerial Conference in 2005, and the program has since increased its scope to include building production capacity (financial services, businesses, and industry), trade-related infrastructure (communications, energy, transportation), and trade policy and regulations.

When the Aid for Trade initiative began, it was unclear whether it would receive funding or be successful. Now that it has been implemented for over a decade, it is time to reexamine the links between trade, development, and poverty reduction that Aid for Trade aims to strengthen.

The principle behind Aid for Trade is that increased trade should benefit inhabitants of developing countries, whether or not they are directly involved in the program. One Aid for Trade program teaches Ugandan farmers how to grow and process dried fruit to be sold into the European cereal market. The farmers involved should benefit from increased income, market access, and productivity, and Uganda should benefit from increased exports.

Most evaluations of the effectiveness of Aid for Trade programs take place within 18 months of a given program’s initiation. This is not enough time to measure whether the program has truly been successful at reducing poverty in a sustainable way. Additionally, evaluations often do not take into account a program’s impact on those not involved; how did the fruit-growing education program impact farmers who did not receive additional training and support?

A new study on European trade assistance aid, commissioned by NGOs Traidcraft and the Catholic Agency for Overseas Development, suggests that there may be “hidden losers” to Aid for Trade initiatives. For example, South African fruit growers increased exports to Europe after trade sanctions were lifted. They earned higher wages and improved their standard of living. However, the demand for cheaper fruit also caused some growers to lower wages and to replace full-time employees with temporary, often migrant workers, who did not enjoy the benefits.

The study also found that the majority of trade assistance goes to middle-income countries rather than to the least developed countries (LCDs) that Aid for Trade is directed towards. Little evidence exists to prove Aid for Trade’s effectiveness in reducing extreme poverty; this is likely a result of short-term program evaluations that take place before real impact can be measured, as well as lack of donor interest in, and therefore funding for, impact evaluations.

Overall, there are many obstacles to determining whether or not Aid for Trade has been successful thus far. More thorough, accurate, and long-term evaluations of poverty rates are necessary in order to determine the tangible successes or failures of Aid for Trade.

– Kat Henrichs

Sources: OECD, International Center for Trade and Sustainable Development, The Guardian
Photo: European Commission

Paris Declaration on Aid Effectiveness

Paris Declaration on Aid EffectivenessThe Paris Declaration on Aid Effectiveness (PDAE), drafted in 2005, was born out of decades of experience for what does and does not work when allocating and utilizing aid development money. The principles have gained support across the world and within aid agencies – changing aid practices for the better. More and more aid recipients are creating their own national development strategies and aligning with donor groups to streamline efforts and goals, to ensure qualitative results for every dollar spent.

The five core principles of PDAE

1. Ownership: Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption.
2. Alignment: Donor countries align behind these objectives and use local systems.
3. Harmonisation: Donor countries coordinate, simplify procedures and share information to avoid duplication.
4. Results: Developing countries and donors shift focus to development results, and results get measured.
5. Mutual accountability: Donors and partners are accountable for development results.
In 2008 the Accra Agenda for Action was designed and added to the Paris Declaration in order to strengthen and accelerate advancement towards the Paris targets. It proposed four main areas for improvement:
1. Ownership: Countries have more say over their development processes through wider participation in development policy formulation, stronger leadership on aid coordination and more use of country systems for aid delivery.
2. Inclusive partnerships: All partners – including donors in the OECD Development Assistance Committee and developing countries, as well as other donors, foundations and civil society – participate fully.
3. Delivering results: Aid is focused on the real and measurable impacts on development.
4. Capacity development: to build the ability of countries to manage their own development agendas.
– Mary Purcell

Source: OECD
Photo: Flixya

Myanmar: Spending Aid Effectively

myanmar-USAID-aid-effectiveness

A Brookings Institution article by Lex Rieffel and James Fox (Former Chief, Economic Growth Evaluation at USAID/Policy & Program) analyses aid effectiveness in Myanmar. “The transition in Myanmar that began two years ago — from a military to a quasi-civilian government — is the largest and most encouraging turnaround in the developing world in years.”

They give significant credit to President Thein Sein and social activist Aung San Suu Kyi for collaborating to lift the country out of turmoil. Their three main obstacles or agendas were: ending the civil war, providing an institutional framework to increase the general standard of living, and sharing the wealth of the country’s natural resources with the whole population.

When other countries saw the progress being made, then the World Bank, USAID, and more than 100 other aid agencies and international non-governmental organizations (NGOs) started to offer rapid assistance to Myanmar. This time, the aid agencies and government officials are intent on making sure aid is delivered effectively. All donors have committed to adhere to the 2005 Paris Declaration on Aid Effectiveness, and all subsequent additions to it. And the Myanmar government held an all-donor meeting in January 2013, to get an agreement on ground rules for spending aid effectively.

However, here are five common ways aid can be ineffective:

• Senior government officials of Myanmar end up spending hours every day meeting with delegations from international NGO’s and donor countries – not just their aid agencies but also their government representatives, corporations, media, and more. The endless meetings divert the attention of the local officials, not allowing them to formulate and implement actual progress.

• Each aid organization has its own pressure to “make a difference,” to show results.  For instance, USAID has allocated millions of dollars for their own agriculture sector projects, but only committed $600,000 to the multi-donor LIFT Fund – which is a more effective way of delivering aid.

• Local staff from financial institutions are overwhelmed by the donor organizations’ need to “move the money.” Pressure to distribute project funds is ever-present.

• Donors are often non-transparent as each competes to gain the most favorable position within a region.

• Host countries engage in “donor shopping” to get the most money for the least change.

So, for Myanmar, here are the three ways to make aid more effective:

• Slow down and do more collaborative operations. This act does not overwhelm local officials. Donors should help control the pace, and commit at least 30 percent of their funding to joint operations.

• Provide “scholarships for foreign study.” It will take years for Myanmar to raise its standard of education to the level required for meeting its development objectives. The solution is education abroad, so the students can return home with knowledge to invest in the country. This form of aid also has the least potential for mis-use.

• “Be more innovative” – for instance “cash on delivery aid.” This reinforces good management within the local government, minimizes the administrative burden of the rapid aid influx, and ensures that every dollar of aid goes to support successful projects.

– Mary Purcell

Source: Brookings
Photo: USA Myanmar

 

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Bono’s TED Talk

Bono’s TED Talk has compacted twenty-five years of anti-poverty campaigning into a ten minute presentation for a TED conference which was held this past February. The result is a passionate call for people to stay involved and stay informed about all the great work that is and has been happening in the fight against extreme poverty.

Much of the progress that has been made does not make the news but Bono sees how people, technology, and the sharing of information is turning inequality on its head; sighting the Arab Spring as a momentous shift in history. He emphasizes how facts change minds and hearts, bring new awareness and action, bring better action, and bring change in a phenomenon he names “factivism.”

Here are some facts. Since 2000:

  • Eight million AIDS patients have been receiving retroviral drugs
  • Malaria deaths have been cut in some countries by 75%
  • Child mortality rate of children under the age of 5 is down by 2.65 million deaths per year
  • 7,256 children’s lives are saved each day

The global rate of extreme poverty has declined from 43% in 1990 to 21% in 2010.

The population of people living on less than $1.25 per day has been cut in half in the last 20 years, and the facts show that this extreme poverty can be cut to virtually zero within a generation — worldwide. Bono encourages everyone to continue their efforts for lasting progress by:

  • Telling politicians not to cut foreign aid funding
  • Join campaigns that make sure all natural resources (and their profits) are shared with the people of that country
  • Continue citizen participation by demanding transparency of government spending (anti-corruption)
  • Become a “factivist” – share the facts with others about successes and hardships within global inequality

– Mary Purcell

Source: ONE.org

Development Money Creates Jobs

ethical-fashion-development-africa
Aid money is not just about hand-outs, it is more and more about igniting and fostering long term, self-sustaining development projects. A key tactic in this is providing training and support for small-business ventures that lead to self-employment and job growth.

One such project funded by the World Trade Organization (WTO), International Trade Center (ITC) and the UN, called Ethical Fashion, makes handbags, accessories and clothing for world famous designers. This project was conceived by Simone Cipriani, an Italian shoemaker, who saw no reason why Italy’s model of fashion production could not be recreated in Kenya, and places like it. Mr. Cipriani sought out unemployed and underemployed women with experience in basic beadwork and tailoring, and with training he turned the small idea into a profitable company. Ethical Fashion had sales of $900,000 in 2012, and employs 1,200 women full time. Their wages have gone from about $2 a day to nearly $8, and this income then circulates back into the community and further expands economic growth.

This project is indicative of social-entrepreneur projects and international aid programs that are spreading all around Africa and the developing world. Desmond Tutu started his own fellowship program in South Africa, to promote this entrepreneurial solution to poverty and hardship. With funding from the UN, international foreign aid, and private companies, Tutu’s fellowship now spearheads organizations and businesses across Africa, making marked improvements in the communities they serve.

Gbenga Sesan, a Tutu Fellow, started his own company Ajegungle.org in Nigeria, where 90 percent of graduates are unable to find full-time jobs. His company targets these unemployed but highly skilled individuals. Many of them come from disadvantaged communities, and could easily get pulled into petty crime and theft in order to provide for themselves. But Mr. Sesan, working in one of the poorest slums in the country, provides them with IT training and entrepreneurial skills, connects them with internships and local employers, and helps them start their own small businesses. Since he started his work in 2007, and has since helped to improve the lives of over 13,000 young Nigerians.

Stories like these are endless, and the focus on job creation is ever expanding as precedent shows real progress in third-world development. To learn how this type of foreign aid helps the US economy and US jobs, click here.

– Mary Purcell

Source: The Economist, The Guardian
Photo: Huffington Post

 

Mercy Corps and Transparency

Mercy Corps and Transparency
Mercy Corps, a Portland-based organization, has been working to fight poverty since 1979. The organization that began as a small group of individuals, led by founder Dan O’Neil, originally raised funds to help Cambodian refugees. It is now ranked as one of the most fiscally responsible aid organizations by Charity Organizer.

Mercy Corps deserves praise for two main reasons. First, just like any other organization, the result matter. Mercy Corps works to find the most efficient and innovative strategies to help struggling communities around the world. Recent projects have included disaster relief efforts in Japan and Haiti after the countries’ devastating earthquakes, working with nine separate microfinance organizations around the world, and focusing on important issues such as food security, economic opportunity and health.

The second reason that Mercy Corps has become so well respected is the organization’s no-holds-barred approach to transparency. Many donors are skeptical about where their money is going when they give. Such skepticism isn’t unreasonable, especially after reading reports of money that are stolen or have gone missing during major aid drives. What is so impressive about the approach that Mercy Corps takes? All of their information is easily found on their website for anybody to review. They reveal their IRS forms, annual financial reports, and future plans right on their website. Mercy Corps is just one more great organization that is working hard in the fight against world poverty.

– Kevin Sullivan

Source: Mercy Corps

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Death of Hugo Chavez Impacts US Aid

Death of Hugo Chavez Impacts US AidLike it or not, foreign aid usually follows the paths that are set by political relationships. U.S.-Venezuelan relations have been stressed ever since Hugo Chavez came to power, and even before then. How could the death of Hugo Chavez affect the aid relationship between the U.S. and Venezuela?

The first time that Chavez met President Obama, he gave him a copy Eduardo Galeano’s book “Las Venas Abiertas de America Latina”, a history of colonial rule over the Americas that focuses on how the United States became the colonizing power of modern age in Latin America, especially in Central America where American corporations and military interventions created the infamously titled “banana republics.” That first meeting is the perfect anecdote to represent the relationship between the two countries over the last five years. Chavez had always been extraordinarily outspoken against the United States and, because of that tense relationship, the U.S. has given very little to Venezuela with the exception of small amounts of disaster relief assistance. It is important to note that Venezuela, the founding member of OPEC, is one of the wealthiest countries in the Americas, yet nearly 32% of the country’s population lives below the poverty line.

In order to begin building a more amicable relationship, the U.S. may begin giving more to causes that aren’t related to politics and focus more on job creation and training. Providing this type of aid would not only benefit Venezuela, but it may also help build a much less tense relationship with a resource-rich country that has significant pull in international oil markets and price control. A well-executed increase in aid could end up being very beneficial for both parties as Venezuela changes leadership.

– Kevin Sullivan

Sources: The New York Times, CIA World Factbook
Photo: Biography

Aid to Haiti: What Lessons Can We Learn?

Aid to Haiti: What Lessons Can We Learn?A controversy with foreign aid does not always relate to misuse but the reality of the numbers and figures after the aid is delivered. A popular example of this has been the $9 billion in donations made to the Haitian government since the 2010 earthquake.

Last week, National Public Radio (npr) interviewed Jonathan Katz, the author of The Big Truck That Went By: How the World Came to Save Haiti and Left Behind a Disaster. This new book focuses on the damages to both the Haitian government and its people due to communication issues, lack of coordination, and the general failure of donor countries to follow-through on their promises.

After reading the interview, it is important to keep in mind that foreign aid is not a waste. There have been thousands and thousands of completely successful large-scale and small-scale transactions and projects throughout the centuries. Governments, however, need to really sit down and review their policies. In this review, one would hope they would seriously consider making more use of direct aid. As Katz briefly touches on in his interview, there is the uncommon but possible option of paying victims of the earthquake (or any crisis) and removing the middleman. Perhaps not handing them a band of cash exactly, but focusing the energy and time spent on drafting contracts, debt relief plans, and the such to send volunteers and individuals who are willing and passionate about making small but immediate and tangible changes, such as Syrian-American Omar Chamma has been doing in Syria.

The transcript of the interview follows:

Aid pledged to Haiti — $9.3 billion worth from 2010 to 2012 — is about a third of all global health aid donated in 2012. What happened to the money that was supposed to go to Haiti?

Katz: Money did what money tends to do in most foreign aid situations. That is, rather than being a model in which a rich country gives a poor country a big bag of cash and says, “Here spend this on fixing things up from whatever the latest crisis was,” what actually happens is that very little of the money actually leaves the donor countries. First of all, you’ve got billions of dollars that are promised but just never delivered. You’ve got billions of dollars more that were sort of creative accounting. Donor nations say they’re providing debt relief, yet those debts were never realistically going to be paid back. So some of the money is sort of fictive.

So how much actually made it into Haiti?

Even among the real money, if you look at what was labeled as humanitarian relief, in the months right after the quake, that amounts to about $2.5 billion.
Ninety-three percent of that money either went to United Nations agencies or international nongovernmental organizations, or it never left the donor government.
So you had the Pentagon writing bills to the State Department to get reimbursed for having sent troops down to respond to the disaster.
If we’re talking about reconstruction, it’s really a misnomer to think that relief aid was necessarily going to have the effect of rebuilding a country in any shape or form.

So what was that money spent on?

Band-Aids. Literally bandages. Short-term relief. Tarps to put over your head. Food to fill emergency gaps in supply.
But food gets eaten. Tarps wear out. Band-Aids get pulled off. And ultimately, all that money is spent, but people aren’t left with anything durable.When you hear about all these billions of dollars [in aid donations], the imagination is that they’re going to go and rebuild the country after the earthquake. They were never intended to do so and, lo and behold, they didn’t.

There are often complaints after big disasters about waste and inefficiencies. Was the Haiti earthquake different from any other international disaster or is this typical?

What is interesting about Haiti is the extremes.
There are lots of places that have weak governments, but Haiti’s government is weak in a special way. It’s the product of so many years of aid going around the government and international efforts to undermine the government. Presidents being overthrown and flown out on U.S. Air Force planes and then reinstalled and then overthrown again. That left the Haitian government in such a weakened state.
Then the disaster itself was also so much more extreme. It was so concentrated. It hit the capital city. Whether your estimates for a death toll is in the 80,000 range or closer to the government’s estimate of 316,000 — in a city of 2.5 million people — it’s just an extraordinary number.
It was an incredibly horrific disaster. It hit the country right at its heart and destroyed a government that was already weakened.
But beyond that, the attitude that so many foreign aid groups have regarding Haiti is that you can basically come in and do whatever you want. So there was no accountability, no coordination.
People were just running around doing what they thought was best or what they thought was best for them. And it really created a mess.

– Deena Dulgerian

Source: npr