Speakers:
Brenda Killen - Head of the Aid Effectiveness Division of the Development Cooperation Directorate, OECD
Lucia Wilde - Team Leader, High Level Forum in Busan,DFID
Jamie Drummond - Co-Founder and Executive Director, ONE
Daniel Ottelenghi - Head of the London office, European Investment Bank

Chair:
Jonathan Glennie – Research Fellow, ODI

One month ahead of the Fourth High-Level Forum on Aid Effectiveness in Busan (HLF4), this ODI event represented a unique and timely opportunity to discuss the results and the lessons from (a) the 2011 Survey on Monitoring the Paris Declaration and (b) the 2011 Survey of the Fragile States Principles.  

Evidence from the 2011 Survey on Monitoring the Paris Declaration: Mixed patterns and challenges

Brenda Killen’s presentation focused on:

·         Evidence, main messages and lessons emerging from the Survey

·         Implications for the Busan conference and the outcome document and the way ahead

Evidence, main messages and lessons emerging from the Survey

The Survey on Monitoring the Paris Declaration focused on 13 targets and around 56 commitments covering more than three quarters of official development assistance - substantially increasing country coverage from 34% in the 2006 Survey and from 55% in the 2008 Survey – witnessing the growing importance of this process. The 2011 Survey of the Fragile States Principles recognized the specific issues for these countries in assessing the progress towards the targets stated in the Paris declaration. Furthermore, an independent group has evaluated the effects of the Paris Declaration on Aid Effectiveness, looking at how the principles of aid effectiveness have been put into practice and what results this is having in developing countries.

Progress is happening in the right direction but not to the extent and the pace foreseen in 2005

The evidence presented from the 2011 Survey highlights mixed patterns. At the global level, only 1 out of the 13 targets monitored for 2010 has been achieved, i.e. co-ordinated technical co-operation – which measures the extent to which donors co-ordinate their efforts to support countries’ capacity development objectives. However, even if the remaining targets have not been met yet, progress has been made towards the right direction especially at country level. Also the overall assessment by the Independent Evaluation Group has been positive – principles of aid effectiveness do matter for development. However, Brenda underlined how it is important to sustain the political momentum behind the reforms, especially in terms of accountability and learning lessons emerging from the monitoring exercises enabling mutual accountability. 

Brenda focused on fivemain messages from the 2011 Monitoring Survey compared to previous assessments:

1.    Larger use of country systems but not strongly linked to their quality;

2.    Limited progress in untying aid;

3.    Little progress in implementing common arrangements;

4.    Increased fragmentation in aid delivery;

5.    Challenges for mid-term predictability of aid flows.

In particular, she stressed how little progress has been made on donors’ co-ordination in the context of fragile states.

Implications for the Busan conference and the outcome document and the way ahead

 Finally, Brenda stressed how the results, the main messages and the lessons of the 2011 Monitoring Survey are reflected in the Busan agenda and outcome document, looking at the evidence emerged in the Survey and the Independent Evaluation Group. The 2nd and 3rd day of the conference at Ministerial level will endorse the outcome document and, most importantly, discuss the way ahead. She found remarkable the consensus on structure and aims, shared principals and common goals in differentiated ways towards the same direction within the Sherpa group – representing the main groups that will endorse the outcome document.  Brenda ended her presentation by outlining key meetings and timeline ahead of HLF4: on 4th November in Paris the Sherpa group will discuss the outcome document; the records to delegations participating in the HLF4 will be circulated on November 9th; the second Sherpa meeting will take place on 18th November in Paris with further discussion within the Sherpa group and agreement on the outstanding issues; on 23rd November the final record of the outcome document will be circulated for approval in Busan.

Towards HLF4: DFID Key Policy Areas

Lucia Wilde – Team Leader, High Level Forum in Busan, DFID – outlined DFID key policy priorities and process towards HLF4. These four policy priorities include:

1.    Results

DFID has been leading the building block on results which aims at taking forward the work on developing results compacts, enabling monitoring of partner country performance and also donor delivery.  Indicators will be partner-country led.

2.    Transparency

The building block – of which DFID is a member - would like to see language in the outcome document commit to make information available in a timely manner.

3.    Fragility

4.    Engagement of emerging economies and middle-income countries

This building block, centred around process, concerns the engagement of emerging countries (in particular China, India, Brazil and South Africa) in working together more closely and in what capacity emerging countries would be endorsing the outcome or parts of the outcome document.

Richard Calvert – Director of Finance and Corporate Performance – will officially lead the delegation together with 10/12 officials, representing Nordic countries, Australia, Canada and New Zealand in the Sherpa drafting committee team.

Daniel Ottolenghi – Head of London Office, EIB – briefly described EIB mission, i.e.  the provision of credit for projects and not grants per se – with of portfolio of 4 Billion Euros for developing countries. 

He raised one crucial question: should aid be reserved for its standard development priorities in the social sector or should aid be used to leverage additional private sector development to sustain pro-poor growth?  In this latter case, a key element would be the use of a larger share of EU aid to catalyze private investment by playing on the profit motif of individual firms.  Ottolenghi stressed two ways to use part of aid finance in this sense:

·         using aid for financing some actions which would make the private sector more effective. For aid finance to make the private sector more effective in delivering pro-poor growth, a proper regulatory framework and policy setting, capacity building, the creation of a conducive environment for private investment and – even more important – technical assistance for taxation, would be crucial.

·         blending aid with resources of institutions like EIB, blending grants and loans.  One dimension hampering the private sector is the perception of risk, undermining access to finance for the private sector. Ottolenghi stressed the EIB role in filling this gap by providing lending resources, instruments for risk mitigation and guarantee facilities to banks and incentives for banks to finance these schemes (i.e. guarantee facilities to help banks to support SMEs in North Africa). 

Jamie Drummond – Co-Founder and Executive Director, ONE – ended the panel presentations by raising the following challenges and issues:

·         Transparency, accountability and results should be at the heart of the development goals. This requires a step change in investment in statistical capacity to evaluate results of development finance.

·         Increased development finance generated by natural resources is a key area of work, especially in terms of building capacity to monitor and manage these resources. 

·         The role of emerging donors should not be considered as an excuse for traditional DAC donors to water down their ambitions in the running up to Busan.

·         Transparency needs to be considered in the outcome document as a principle rather than just an action.

·         Accountability would require an independent and transparent framework for monitoring at national and global levels.

·         The need for a more mature debate about aid and public engagement, especially on risk. Development effectiveness should be evaluated on its average and not necessarily absoluteperformance. 

The debate focused on the following questions/themes:

·         How can people engage in the aid debate in donor and partner countries?

·         Is politics taking over from the evidence in the running up to Busan?

·         The importance of managing risks and limiting uncertainty.

·         The role of Sherpa from emerging economies and the role of the working party going beyond the DAC.