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Africa: "Aid" Gaps & Questions, 1
AfricaFocus Bulletin
Sep 7, 2008 (080907)
(Reposted from sources cited below)
Editor's Note
"Efforts to step up official development assistance (ODA) have
suffered a setback. In 2007, the only countries to reach or exceed
the United Nations target of 0.7 per cent of their gross national
income (GNI) were Denmark, Luxembourg, the Netherlands, Norway and
Sweden. ... when weighted by the size of their economies, total
net aid flows from the DAC members represented only 0.28 per cent
of their combined national income. ,,,. net ODA (in constant
prices) dropped by 4.7 per cent in 2006 and a further 8.4 per cent
in 2007." - UN Millennium Development Goals Gap Task Force Report
After increases in aid in the period 1997 to 2005, aid flows --
already inadequate to meet needs for development in the context of
the slumping world economy -- are dropping again, This AfricaFocus
Bulletin contains excerpts from the just-released United Nations
report tracking international commitments to meet development
goals. The conclusion, in understated diplomatic language, is that
"while there has been progress on many fronts, the delivery on
commitments has been deficient and has fallen behind schedule."
This AfricaFocus Bulletin contains excerpts from the task force
report. Another AfricaFocus Bulletin sent out today
(http://www.africafocus.org/docs08/aid0809b.php) poses more
critical questions, with excerpts from a new book by Yash Tandon on
"Ending Aid Dependence" and statements from civil society groups at
the just-concluded Accra "High Level Forum on Aid Effectiveness."
For the full MGD Gap Task Force Report and related documentation,
http://www.un.org/esa/policy/mdggap
For previous AfricaFocus Bulletins on aid, global public
investment, and related issues, visit
http://www.africafocus.org/aidexp.php
Announcement
Welcome back to AfricaFocus readers after several weeks break.
There is of course a large backlog of topics to be covered - - I
won't get to them all of course, but I will cover as many as
possible while still keeping to an average number of Bulletins per
month of 6 to 8. For more in-depth coverage you can always use
http://www.africafocus.org as your starting point, for news,
analysis, and, now, for a rapidly growing AfricaFocus Bookshop.
More on the bookshop in coming weeks. For now, just a sampling of
new features:
* More featured books, including the just-released House on Sugar
Beach (http://www.africafocus.org/books/afbooks.php or
http://www.africafocus.org/books/afbooks_uk.php)
* Books by AfricaFocus subscribers (http://www.africafocus.org/books/subscribers.php). If you don't
see your book and it's available on Amazon, let me know and I'll
fix the omission.
* Listing and search of Africa books publishers and distributors
(http://www.africafocus.org/books/publishers.php)
* 100 best Africa books of the 20th century
(http://www.africafocus.org/books/100best.php)
and more countries and themes, and still growing.
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
Delivering on the Global Partnership for Achieving the Millennium
Development Goals
United Nations New York, 2008
MDG Gap Task Force Report 2008
http://www.un.org/esa/policy/mdggap
Preface
In September 2000, at the United Nations Millennium Summit, world
leaders agreed to a set of time-bound and measurable goals and
targets for combating poverty, hunger, disease, illiteracy,
environmental degradation, and discrimination against women, and
placed them at the heart of the global agenda. World leaders have
repeatedly confirmed their commitment to the goals, and to
consolidating a global partnership that would improve the lives of
poor people around the world within the timespan of one generation.
We have now passed the midpoint between the adoption of the goals
and the target date of 2015. There has been progress, but in most
parts of the world much more needs to be done. With respect to the
eighth goal to create a global partnership for development Member
States have made concrete commitments focusing in particular on the
areas of trade, official development assistance, external debt,
essential medicines and technology. Such steps are important in
their own right but would also provide critical support for
attaining the other goals.
A number of United Nations inter-agency processes track whether
goals one to seven are being met at both the global and national
levels. But it has proved more difficult to assess whether the
global partnership for development is being put in place, and
whether international commitments are being fulfilled. For this
reason, in 2007 I created the MDG Gap Task Force to consolidate all
the available information regarding delivery on those commitments.
This first report of the Task Force makes clear that while there
has been progress on many fronts, the delivery on commitments has
been deficient and has fallen behind schedule. A shared future for
all will not be possible without globally concerted action and
strong partnerships. At this midpoint in our work towards meeting
the 2015 deadline, it is essential that all partners accelerate
their efforts to deliver on the promises they have made.
Ban Ki-Moon, Secretary-General of the United Nations
Executive summary
The MDG Gap Task Force has assessed the global commitments
contained in the framework of the Millennium Development Goals
(MDGs) ratified by Governments at the various international events
that followed the Millennium Summit. ...
The main message of the present report is that while there has been
progress on several counts, important gaps remain in delivering on
the global commitments in the areas of aid, trade, debt relief, and
access to new technologies and affordable essential medicines. The
weakening of the world economy and the steep rises in food and
energy prices threaten to reverse some of the progress made in the
various dimensions of human development. Strengthened global
partnerships are needed to avoid any reversal of progress made thus
far. In the countdown to 2015, urgent responses are needed to
bridge the existing implementation gaps and deliver on the promises
to achieve the MDGs.
Official development assistance
There is a large delivery gap in meeting commitments towards the
MDG target of addressing the special needs of the least developed
countries [and to provide] more generous official development
assistance for countries committed to poverty reduction.
Efforts to step up official development assistance (ODA) have
suffered a setback. In 2007, the only countries to reach or exceed
the United Nations target of 0.7 per cent of their gross national
income (GNI) were Denmark, Luxembourg, the Netherlands, Norway and
Sweden. The average effort by the 22 member countries of the
Development Assistance Committee (DAC) of the Organization for
Economic Cooperation and Development (OECD) was just 0.45 per cent
of GNI, but when weighted by the size of their economies, total net
aid flows from the DAC members represented only 0.28 per cent of
their combined national income. ,,,. Aid flows climbed steadily
from 1997, reaching a peak of $107 billion in 2005, boosted by
exceptional debt relief in that year. Thereafter, net ODA (in
constant prices) dropped by 4.7 per cent in 2006 and a further 8.4
per cent in 2007. ...
The 2005 Paris Declaration on Aid Effectiveness represents the most
comprehensive effort to date to improve aid coordination and
alignment with national priorities. Slow progress has been made in
meeting the Paris targets for 2010 that were set in 2005. The Accra
High Level Forum on Aid Effectiveness that will take place in
September 2008 will provide an opportunity for accelerating efforts
to improve the predictability of aid, and for reducing aid
fragmentation and high transaction costs in the administration of
aid resources. Further progress is also needed in reducing the
degree of aid tied to the purchase of goods and services in donor
countries and in improving alignment of aid flows with national
budgets, thus broadening the policy space for countries to define
their own development priorities.
In recent years, non-DAC donors, developing country donors and
private funds have increased the availability of financial
resources for development. Partial records of total ODA from nonDAC
countries estimate an increase (in constant prices) from $1.5
billion in 2000 to $5.1 billion in 2006. Additional efforts will
have to be made to improve dialogue and coordination with these new
stakeholders to avoid further aid fragmentation and increasing
transaction costs among recipient countries. ...
Accelerated progress requires explicit actions, which would include
the following:
- Donors should increase aid flows by $18 billion (at July 2008
exchange rates) per year between 2008 and 2010 to support core
development programmes in order to meet the agreed targets by 2010.
In 2007 total ODA fell short by over $10 billion compared to that
needed to ensure a smooth path towards the agreed target;
- In order to provide a manageable path to reaching the committed
increase in the annual flow of net ODA to Africa by 2010, donors
should allocate an additional $6.4 billion a year at constant 2005
prices to the region (or $7.3 billion per year at July 2008
exchange rates);
- Even if the commitments regarding increased net ODA to Africa
are fulfilled, donors should increase further their ODA to LDCs
(many of which are in Africa). The total annual flow to LDCs would
have to increase on average by $8.8 billion (at July 2008 exchange
rates) between 2008 and 2010 in order to reach the target of
between 0.15 and 0.20 per cent of each donor's GNI;
- Donors, including emerging donors and recipient countries, should
accelerate progress towards the alignment of aid, harmonization,
management for results and mutual accountability of aid resources
as well as improve dialogue with non-DAC donors to adhere to these
principles.
Market access (trade)
Only slow progress has been made in meeting the MDG target of
developing further an open, rule-based, predictable, nondiscriminatory
trading and financial system and providing tariffand
quota-free access for the least developed countries' exports.
One of the objectives of the Doha Round of trade negotiations
initiated in 2001 was to address the needs of developing countries
according to a "development agenda". Seven years on, the failure to
conclude a development round constitutes the largest implementation
gap in the area of trade, and arguably within the realm of MDG 8.
International efforts must be redirected to complete the Round in
accordance with its original intention of being developmentfocused,
and thus of special benefit to the lowest-income
countries. This would entail prioritizing market access for
developing countries, especially the LDCs, and maintaining the
flexibility of developing countries for supporting economic
diversification, employment generation and food security. ...
The emergence of significant new challenges resulting from high
food prices and their impact on poverty and hunger has given
additional impetus to recognizing past policy failures in ensuring
national and global food security. This has underscored the need
for increased investment in agricultural development in developing
countries while at the same time removing market distortions in the
agricultural markets of developed economies.
To improve market access for developing countries, the
international community will need to take the following action:
- Redouble efforts to conclude the Doha Round of trade
negotiations, and refocus on the elements that would make it a
"development" round;
- Ensure that prospective bilateral and regional economic
partnerships provide genuine market access and entry for exports of
developing countries, and that they act as "stepping stones"
towards rather than substitutes for multilateral agreements;
- Prioritize trade and its links to development and poverty
reduction in national development strategies;
- Reduce substantially the tariffs and tariff escalation imposed by
developed countries on agricultural products, textiles and clothing
from developing countries;
- Accelerate the reduction of domestic and export subsidies on
agricultural production in developed countries;
- Urgently assess the regional and country needs for Aid for
Trade, and ensure that total available resources and allocations
meet those needs;
- Step up efforts to make the Enhanced Integrated Framework fully
operational.
Debt sustainability
Important progress has been made in meeting the MDG target of
dealing comprehensively with the debt problems of developing
countries, but additional efforts are needed to make progress
sustainable. Actions are also needed to reduce the debt burden of
countries that have not yet benefited from current debt-relief
initiatives.
As of June 2008, 23 of the 41 heavily indebted poor countries
(HIPCs) had reached their completion point under the enhanced HIPC
Initiative. There are still 10 countries between decision point and
completion point; 8 others are potentially eligible and may wish to
avail themselves of the enhanced Initiative. Post completion point
countries become eligible for further debt relief under the
Multilateral Debt Relief Initiative (MDRI).
Debt cancellation for the HIPCs, together with high commodity
prices and strong global growth, helped to decrease the ratio of
debt-service payments to exports to 6.6 per cent in 2006 for all
developing countries. The ratio is expected to have fallen to 3 per
cent in 2007, thus creating an environment for investment and
recovery. However, less dynamic growth of the world economy in the
near future could reverse this trend. In recent years, a
significant number of countries that benefited from debt relief
have seen their debt vulnerability indicators deteriorate, in part
because they still face significant development financing
challenges. Of the HIPCs, 21 (including 14 at post-completion
point) are considered to be at moderate-to-high risk of falling
back into debt distress; 10 HIPCs (mostly those at pre-completion
point) are currently considered to be in debt distress. ...
Despite HIPC and MDRI debt relief and corresponding increases in
social expenditures, a large number of developing countries still
spend more on debt servicing than on public education or health. In
2006, 10 developing countries spent more on debt service than on
public education, and in 52 countries debt servicing amounted to
more than the public health budget. Additional concessionary
resources should be made available to vulnerable countries, and new
efforts made to relieve the debt burdens of countries that are not
part of the HIPC Initiative, including the establishment of a
sovereign debt arbitration mechanism for countries under severe
debt distress.
The framework for assessing debt sustainability should be kept
under review. Even low levels of debt may not be sustainable if
debt servicing crowds out public spending for the MDGs. Continued
technical assistance and greater coordination is needed to support
countries in strengthening their debt-management capacity.
Specific actions to improve the external debt sustainability of
countries include:
- Mobilizing additional donor resources to facilitate debt relief
in some HIPCs which have not yet reached completion point;
- Encouraging non Paris Club official bilateral and private
creditors to provide relief on HIPC-comparable terms on eligible
outstanding debt;
- Continuing to review and refine the currently
employed Debt Sustainability Framework;
- Establishing an orderly sovereign debt restructuring process for
non-HIPCs experiencing debt distress.
Access to affordable essential medicines
The MDG target that aims, in cooperation with pharmaceutical
companies, [to] provide access to affordable essential drugs in
developing countries has served to mobilize resources and improve
coordination aimed at increasing access to essential drugs and
treatments to fight HIV/AIDS, malaria and tuberculosis in many
countries. Access to essential medicines in developing countries,
however, is far from adequate.
Part of the difficulty in assessing progress towards this
commitment is the lack of a defined quantitative target. Efforts in
defining such a target will improve the accountability of global
actions to expand sustainable access to essential drugs.
Information available in a number of countries suggests the
existence of large gaps in the availability of medicines in both
the public and private sectors as well as a wide variation in
prices much higher than the international reference prices
(IRPs) which render essential medicines unaffordable to poor
people. New World Health Organization (WHO) estimates show that
public sector availability of essential medicines covers only one
third of needs, while private sector availability covers about two
thirds. The prices people pay for lowest-priced generic medicines
vary from 2.5 to 6.5 times the IRPs in the public and private
sectors, respectively. The fact that some developing countries have
better availability and lower prices shows that access to quality,
assured, affordable essential medicines can be improved through
stronger partnership among governments, pharmaceutical companies
and civil society, including consumers.
Accelerated progress requires more forceful national and global
actions in a number of areas, including:
At the national level:
- Eliminating taxes and duties on essential medicines;
- Updating national policy on medicines;
- Updating the national list of essential medicines;
- Adopting generic substitution policies for essential medicines;
- Seeking ways to reduce trade and distribution markups on prices
of essential medicines;
- Ensuring adequate availability of essential medicines in public
health care facilities;
- Regularly monitoring medicine prices and availability;
At the global level:
- Encouraging pharmaceutical companies to apply differential
pricing practices to reduce prices of essential medicines in
developing countries where generic equivalents are not available;
- Enhancing the promotion of the production of generic medicines
and removing barriers to uptake;
- Increasing funding for research and development in areas of
medicines relevant to developing countries, including children's
dosage forms and most neglected diseases.
Access to new technologies
The MDG target that aims, in cooperation with the private sector,
[to] make available the benefits of new technologies, especially
information and communications, has seen rapid progress in bridging
the gap in the mobile phone sector, but large gaps remain in
improving access to key technology (Internet with broadband access
being a good example) that is essential to increasing productivity,
sustaining economic growth and improving service delivery in such
areas as health and education.
Part of the difficulty in assessing progress in this area is the
lack of numerical targets regarding delivery on global commitments.
While there has been significant expansion of mobile telephony and
computers in developing countries, the digital divide in the access
to modern technology is widening between developed and developing
countries. Deficits in complementary infrastructure, such as
limited coverage of electricity supply in the low-income developing
countries, are preventing faster penetration of information and
communication technologies (ICT).
Recent emerging issues in development require stronger commitments
and development cooperation. The recent food crisis and the
challenges of climate change facing developing countries require
more flexible approaches to accelerating the transfer of technology
for agricultural development, improved access to essential
medicines and adaptation to climate change.
Actions required to expand the access to technology for development
include:
- Formulating national ICT strategies aligned with broader
development strategies;
- Introducing more flexibility in relation to Trade-Related
Intellectual Property Rights to accelerate the diffusion of
technology for development to developing countries, including that
related to renewable energy and adaptation to climate change;
- Increasing efforts to expand both basic infrastructure ( such
as electricity supply) and ICT-facilitating infrastructure,
especially in low-income countries;
- Creating incentives for the private sector to develop
technologies relevant to people in low-income countries, including
those that address issues of climate change adaptation and
renewable energy;
- Applying more widespread differential pricing practices to reduce
the costs of key technology in developing countries in order to
make access affordable to all.
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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