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In Our Hands, by Charamelody

Background to HLF4

Denis Burke | September 12, 2011

The 4th High Level Forum on aid effectiveness takes place in Busan, Korea in November. What is the meeting about and how did we get here?

Aid as we know it today first appeared when the Cold War was in its infancy and global European empires were coming apart. Aid has been, and in many ways still is, a tool of foreign policy for richer countries: Favourable trade relations, lucrative contracts for domestic businesses and a better image abroad are just some of the benefits involved in running an aid programme.

This approach produced mixed results and – since the mid-1990s – a movement calling for greater aid effectiveness has been underway. Aid effectiveness means ensuring that aid resources are deployed as effectively as possible. The aid effectiveness formula includes such ingredients as greater transparency (what is being used where and why?), more inclusivity of non-government groups and greater alignment with the recipient country's systems of – for instance – finance and procurement.

The aid effectiveness discussion made some real progress in a series of high level forums (of which the Busan meeting is the 4th) convened by the Organisation for Economic Cooperation and Development (OECD). The first meeting in Rome in 2003 saw some commitments by traditional donor countries to streamline their aid procedures. Two years later in Paris a larger group, including numerous policy makers, agreed to the Paris Declaration, a broader undertaking with targets designed to make development – and not just aid – more effective, and requiring actions from donors and developing countries. While generally well received, the Paris Declaration has been widely criticized as too technical and progress on reaching the targets set out has been patchy, particularly on the part of donor countries. By 2008 these commitments were somewhat refined at the Accra high level forum.

The Paris Declaration and Accra Agenda for Action are founded on five core principles:

It is now the norm for aid recipients to forge their own national development strategies with their parliaments and electorates (ownership); for donors to support these strategies (alignment) and work to streamline their efforts in-country (harmonisation); for development policies to be directed to achieveing clear goals and for progress towards these goals to be monitored (results); and for donors and recipients alike to be jointly responsible for achieveing these goals (mutual accountability).

from oecd.org

Which brings us to Busan. Building on the earlier meetings, the Busan forum is supposed to bring the aid effectiveness debate a step further. Elaborating on the targets set by the Paris Declaration and establishing new targets for diversification of finance, partnership building and knowledge sharing may all be on the table at Busan.

More than the previous HLFs, Busan will have to tackle the challenges of a changing development agenda. Aside from the broader view of aid effectiveness that has been developing for some time, the aid scene is changing fast, for two main reasons. Firstly the international community are taking a more holistic view of development. Too often a donor country's aid programmes are undermined by its own trade, agricultural, migration or security policies. Increasingly there is awareness that issues such as energy and environment, security and conflict, or trade and intellectual property rights are at least as important when development is at stake. Aid and development can no longer be meaningfully looked at in isolation from these other global issues. Secondly, the number of players in the aid game has increased greatly. Large foundations like the Open Society Institute and the Bill and Melinda Gates Foundation are operating with huge mandates and, often, large budgets. Not only the emerged giant economies of Brazil, China and India but also the 'in-betweeners' South Korea, Indonesia, South Africa and Turkey are running significant development programmes. These players have their own approaches and are likely to continue to do so. While some argue that traditional donors are working in the right direction and their example should be followed, others say that a diversity of approaches puts developing countries in a stronger position by allowing them to pick and choose.

The Broker will consider two main questions in the run up to Busan:

1. How can the development agenda be expanded to include broader international concerns including, for instance, security, migration and environmental policies? And is Busan the right place to achieve this?

 2. Can traditional and new donors align their development practices, should they, and if so how will they overcome the many challenges to alignment?

Photo credit main picture: In Our Hands, by Charamelody