Tag: aid

Covid-19, Development finance

How COVID-19 can change incentives for development co-operation

By Nilima Gulrajani, Senior Research Fellow, ODI

This blog* is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

cooperation-hands-puzzle-world-2There is nothing new in accusing bilateral donors of repurposing foreign aid to serve their domestic national interests. Even before the current pandemic, donors had been slashing aid in exchange for middle-class tax breaks, twisting the definition of official development assistance (ODA) to allow for the inclusion of expenditures in wealthier countries, and tying aid to the uptake of domestic consultants. So, what happens now, as economic and social needs expand globally with every case of COVID-19 detected and every grave marked?

The initial vital signs of international collective action are not promising. Some politicians have come under flak for donating personal protective equipment to other countries just before domestic demand skyrocketed, even if this equipment was set to expire and the favour returned in kind. Others stand accused of using medical aid to further diplomatic ambitions. Yet others have gone even further, seemingly keen to upend global co-operation and dismantle the very institutional architecture able to marshal both the transnational networks and political leadership required to detect, monitor and eventually stop this unpredictable pathogen. In short, there are worrying signs about the possibility of upholding a functioning multilateral co-operation system, even among supposedly like-minded actors. Continue reading “How COVID-19 can change incentives for development co-operation”

Development Matters
Covid-19, Policy

Lessons from coronavirus for the future of ‘aid’

By Jonathan Glennie, Senior Fellow,  Joep Lange Institute

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

 

Beijing airport tarmac by Cory Doctorow
Beijing airport tarmac. Photo by Cory Doctorow

In December 2019 cases of a little-known disease called coronavirus were reported in Wuhan, a city in China with a population of about 11 million. As of 20 January 2020 there were 282 confirmed cases of the virus, 278 of which originated in China. Less than three months later, over 3,400 people in Italy were dead. Countries all over the world are gearing up for long periods of lockdown as a global pandemic takes hold. If ever proof were needed that health concerns in one country require a coordinated and well-funded global response, this is it.

What does this tell us about the future of global cooperation? The next chapter in the story of the China−Italy coronavirus relationship is equally relevant. On 13 March China sent a planeload of experts and medical supplies to Italy, including masks and respirators. Italy is one of the world’s richest countries (average income, US$34,480); despite rapid advance over the past decades, China is still much poorer (average income, US$9,770). Continue reading “Lessons from coronavirus for the future of ‘aid’”

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Gender, Women and Girls, Trade

Taking gender in trade more seriously

By Ann Linde, Minister for Foreign Trade, Sweden

This blog is part of a special series marking the 3 July 2019 launch in Geneva of the joint OECD/WTO publication Aid for Trade at a Glance

AFT coverThe 2030 Agenda strengthens the prominence of international trade as both a goal of and a means to sustainable development. It also recognises the importance of Aid for Trade. Sweden, for one, is highly dedicated to these commitments and supportive of the Aid for Trade initiative. Additionally, as the Foreign Trade Minister of the world’s first officially feminist government, I use the WTO’s and EU’s free trade agreements as well as Aid for Trade as important platforms for pushing forward the gender equality agenda.

Continue reading “Taking gender in trade more seriously”

Lia Beyeler
Building resilience, Development finance, Gender, Women and Girls, Least developed countries, Trade

Three trade challenges for LDCs to converge and eradicate poverty

By Anabel González, Nonresident Senior fellow at the Peterson Institute for International Economics; Former Costa Rica Minister of Trade, World Bank Senior Director for Trade & Competitiveness, and World Trade Organization Director for Agriculture

This blog is part of a special series marking the 3 July 2019 launch in Geneva of the joint OECD/WTO publication Aid for Trade at a Glance 

AFT coverBangladesh is preparing to graduate from the category of least developed countries (LDCs). Robust multi-year economic growth of more than 6-7% has helped this South Asian nation make remarkable progress in reducing extreme poverty from 44.2% in 1991 to 13.9% in 2017. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2015; it now aspires to become an upper middle-income country by its 50th anniversary in 2021. Trade has been at the heart of this success story (see Figure 1). Exports of textiles and garments are driving integration into the global economy, with new products becoming part of the country’s export basket. Will Bangladesh be able to continue to rely on trade for increased growth? Will conditions remain for other LDCs to follow?

Continue reading “Three trade challenges for LDCs to converge and eradicate poverty”

Lia Beyeler
Policy, Reviving multilateralism

From aid to Global Public Investment: an evolution in international co-operation

DEV-IN-TRANS-BANNER

By Jonathan Glennie, independent writer and researcher, and Gail Hurley, Policy Specialist on Development Finance at UNDP

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

arrows-changeIt is time to bring aid to an end.

Gradually, maybe, as a few “pockets of poverty” still persist. But this symbol of global collective action that has lasted seven decades will now, inevitably and as planned, be ended.

That is the common view of almost everyone. Whether you are a member of the general public in a “donor” country, still feeling the effects of an economic downturn, or a citizen of a “recipient” country whose economy feels like it is taking off for the first time in living memory. Whether you believe the aid era has been an unqualified failure and should be ended as soon as possible, or that aid has actually been quite successful in promoting development but has now largely “done its job” and can be rolled back as countries reach “middle income” status. Whether you think the hole left behind by aid can be filled by fairer tax collection or by better-targeted private sector finance, both of which are experiencing growth of historic proportions. Even (perhaps especially) if you are part of the aid industry and are well-practised at repeating the mantra that “our job is to do ourselves out of a job”.

Whatever side of the political spectrum you sit on, you are unlikely to disagree with the notion that aid should be decreased as recipient countries’ incomes rise, bringing to an end an experiment intended to kick-start growth in sluggish contexts, but not to last in perpetuity. With only 34 so-called low-income countries left, the only question left to be discussed is how to manage a good “exit strategy”.

Aid is temporary. Success is when aid is no longer necessary.

That’s what we thought, too. That’s what we were taught. But it’s wrong.

Continue reading “From aid to Global Public Investment: an evolution in international co-operation”

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Development finance

The lost secret of aid efficiency

By Simon Scott, Counsellor, OECD Statistics Directorate

Wilson Schmidt
Wilson Schmidt (1927-81). Photo courtesy of Lisa Hill Corley and George Mason University

In 1963 John Pincus of the RAND Corporation suggested redefining aid to reduce all forms of aid to their value as grant or subsidy, and in 2014 the OECD’s Development Assistance Committee (DAC) agreed to his suggestion. (See an earlier post about this evolution.)

Of course, in the meantime, DAC members had not just been sitting around for 51 years. In 1969 they used Pincus’ “grant equivalent” method in a Recommendation to soften the terms of aid, and in 1972 they used it again to decide which loans were soft enough to count as official development assistance. The World Bank and the IMF also used the method in measures to keep the lid on developing countries’ debt, and the Paris Club used it to equalise creditors’ efforts under different debt relief options.

Yet one potential use of grant equivalents has been thoroughly neglected. Ironically it was the very application of the method that was most discussed 50 years ago, namely its potential to ensure the most efficient use of aid funds.

Continue reading “The lost secret of aid efficiency”

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