Aid Effectiveness Linked to Better Financing for Development in Doha
Administrator

The Reality of Aid organized a side event entitled “Accra to Doha: from Aid Effectiveness to Better Financing for Development” during the International Conference on Financing for Development on December 1, 2008 at the Dukhan Function Room of the Sh

The two-hour forum aimed at getting key actors from government, donors and CSOs reflect on the possible implications of the Accra Agenda for Action to the negotiations that will inform the finalization the Doha Outcome Document.

The session was facilitated by Jasmine Burnley of CONCORD/ActionAid. The panelists were: Dr. Debapriya Bhattacharya, Bangladesh’s Permanent Representative to the UN; Richard Carey, Director of OECD’s Development Cooperation Directorate; Terri Hassdorf, Director of USAID’s Centre for Community and Faith Based Initiatives; Charles Mutasa, Executive Director of African Forum and Network on Debt and Development (AFRODAD); and Antonio Tujan Jr., Chairperson of Reality of Aid.

Dr. Bhattacharya shared his view that the aid effectiveness principles of ownership, harmonization, managing for results, predictability and shared accountability should be tested in all modalities of financing for development in the light of the financial crisis. He cited the following challenges to this test as: (1) ensuring financial flows to developing countries; (2) new sources of financing; and (3) trade financing. He also pointed out the need to look at institutional mechanisms particularly the tension between the Monterrey commitments and the IFIs that impose governance when they themselves fail to look at their own governance. Related to this is the politics of rules setting in financing and follow-up mechanisms.

Richard Carey highlighted the place of aid within the broader framework of the financing system, explaining that aid is a transition mechanism that paves the way for more sustainable financing mechanisms.

Terri Hassdorf observed that CSOs are a powerful voice in the aid effectiveness agenda but also mentioned the seeming challenges in coordination between faith-based organizations and the rest of the CSOs.

Charles Mutasa called attention to the challenge translating commitments in implementation given the capacity of many developing countries. He pointed out that technical assistance remains to be supply driven. As regards financing systems, Mr. Mutasa advocated for a multilateral approach to changing financial systems and development cooperation. He stressed the need to reform the Bretton Woods institutions adopting the aid effectiveness principles in defining the principles of the financial system and developing financial modalities that are workable to mitigate the impact of the financial crisis.

Antonio Tujan premised his discussion with a remark that aid effectiveness is misunderstood in financing for development and the same can be said about financing for development being misunderstood in aid effectiveness. He clarified that the question should be - how do we finance a country’s development? He supported Mr. Carey’s point of aid being a transition financing modality and explained that the value of aid is in addressing funding gaps, catalyzing poverty alleviation schemes and building the capacity of developing countries governments. While Mr. Tujan emphasized that aid effectiveness is not an agenda for aid dependency, he indicated that it is erroneous and dangerous to accept that aid will decrease due to the financial crisis.

Around 35 participants coming from different stakeholders including governments, donor agencies, CSOs, think-tanks, and representatives from various networks working in the development sector attended the side event some of whom expressed their opinion and asked questions during the open forum that ensued after the initial discussions of the panelists.

Key points that came from the floor include an observation that the principles of the AAA is not reflected in the Doha outcome document, the need to strengthen the linkage of aid to other financing modalities, and the difficulty of getting independent feedback on how ‘effective’ aid is.