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The Challenge of Absorptive Capacity - Will lack of absorptive capacity prevent effective use of additional aid resources in pursuit of the MDGs?

Date
Time (GMT +01) 00:00 23:59

Description

Following the commitments made at the Monterrey Conference in 2002, prospects for increasing aid flows to Africa look much better than they were a decade ago. Current work by the UN Millennium Project, and proposals for the International Finance Facility (IFF) strengthen the probability of substantial additional aid materialising over the next few years. Whilst there is broad agreement that reaching the MDGs in Africa will entail additional finance, there is less consensus on how easily and effectively extra flows will be absorbed. What if additional funds cannot be usefully spent? Worse, what if additional aid causes Dutch disease, and leads to serious imbalances in the receiving economy? In general, will lack of absorptive capacity undermine new aid initiatives?

Some of these important questions were addressed at this seminar. The seminar brought together a small number of experts from different organisational, disciplinary and sectoral backgrounds, including participants from the World Bank, the IMF, UNDP, and the Centre for Global Development.