Traditional and new donors – The need for improved development effectiveness


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Presentation by Christoph Langenkamp (Global Donor Platform for Rural Development) at the 6th Brussels Development Briefing - Brussels, 2 July 2008

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  • Traditional and new donors – The need for improved development effectiveness

    1. 1. <ul><li>Brussels Rural Development Briefings: </li></ul><ul><li>Session no 6: New Drivers, New Players in ACP Rural Development </li></ul><ul><li>-- </li></ul><ul><li>Traditional and new donors – The need for improved development effectiveness </li></ul><ul><li>Christoph LANGENKAMP </li></ul><ul><li>- Task Leader Agricultural and Rural Policies - </li></ul><ul><li>Global Donor Platform for Rural Development </li></ul><ul><li>2 July 2008, Brussels </li></ul><ul><li> </li></ul>
    2. 2. What is the Global Donor Platform for Rural Development? <ul><li>A strategic alliance of 30 donors, international finance institutions and development agencies, created in 2004 to address aid effectiveness challenges in agricultural and rural development; </li></ul><ul><li>The Platform is committed to contribute to better and more investments in agriculture and rural development; </li></ul><ul><li>Platform outcomes: </li></ul><ul><ul><li>Advocacy and outreach </li></ul></ul><ul><ul><li>Knowledge and innovation </li></ul></ul><ul><ul><li>Aid effectiveness </li></ul></ul>
    3. 3. Highlights of Platform activities <ul><li>Networking of ARD sector managers; </li></ul><ul><li>Joint preparation of studies, donor concepts and elaboration of policy recommendations on ARD issues; </li></ul><ul><li>In-country facilitation for donor harmonisation and alignment on pilot basis and elaboration of principles for effective ARD programmes; </li></ul><ul><li>Supporting CAADP, e.g. through enhanced CAADP-Donor communication; </li></ul><ul><li>Contribution to WDR 2008 ‘Agriculture for Development’; </li></ul><ul><li>Inclusion of agriculture sector aid effectiveness experiences into the Paris Declaration process. </li></ul>
    4. 4. <ul><li>Investment trends </li></ul><ul><li>Important: </li></ul><ul><ul><li>Prime responsibility for agricultural development rests with national governments; </li></ul></ul><ul><ul><li>Keeping in mind that agriculture is primarily a private sector activity. </li></ul></ul><ul><li>Underinvestment in agriculture </li></ul><ul><ul><li>Agricultural GDP/GDP public spending on agriculture/ agric GDP </li></ul></ul><ul><ul><li>Source: C. Delgardo presentation of WDR 2008 </li></ul></ul>Some facts and figures (1)
    5. 5. Misinvestment in agriculture Better use of public budgets needed — subsidies crowd out investments; the example of India Source: Chand and Kumar 2004 Some facts and figures (2) Public goods investment Subsidies
    6. 6. ODA to agriculture ODA commitments declined from about 18 % in 1979 to 3.5 % in 2005. The ODA trends are mirrored by national budget allocations for agriculture dropping from 11% in 1980 to 7% in 2002 in Africa. Some facts and figures (4)
    7. 7. <ul><li>Funding gap estimates: </li></ul><ul><li>Incremental funding needs to achieve MDG 1 (IFPRI June 2008) : </li></ul><ul><li>US $ 14 billion per year for all developing countries; </li></ul><ul><li>US $ 3.8 to 4.8 billion for SSA, plus US $ 2.3 billion for subsidised input (fertilizer and seed) scheme ( in addition to 10% national budget ). </li></ul><ul><li>But: Immediate absorptive capacity can be a challenge in some areas! </li></ul>Some facts and figures (5)
    8. 8. <ul><li>Stand-alone projects </li></ul><ul><li>Integrated rural development projects (since 1970s) </li></ul><ul><li>Sector-Wide Approaches (SWAps) (since 1990s) </li></ul><ul><li>Integration of ARD in PRSPs (since 1990s) </li></ul><ul><li>Poverty Reduction Budget Support (PRBS) (starting 2000s) </li></ul>Evolving paradigms in ARD
    9. 9. <ul><li>Soaring food-prices are symptomatic and catalytic; </li></ul><ul><li>Decades of real prices decline expected to be over; </li></ul><ul><li>Agricultural growth accelerates; </li></ul><ul><li>Agriculture remains taxed, but at a lower rate; </li></ul><ul><li>Increasing demand for agricultural commodities: </li></ul><ul><ul><li>Population growth; </li></ul></ul><ul><ul><li>Changing diets; </li></ul></ul><ul><ul><li>Biofuels. </li></ul></ul><ul><li>Emerging markets for environmental services; </li></ul><ul><li>Technical and institutional innovations. </li></ul>Agriculture is back on the agenda
    10. 10. <ul><li>Agriculture based GDP growth benefits the income of the poor 2 to 4 times more than GDP growth from non-agriculture. </li></ul><ul><ul><ul><ul><ul><li>World Bank: World Development Report 2008 </li></ul></ul></ul></ul></ul><ul><li>But, smallholder agricultural development is critical. </li></ul>Agriculture critical to address poverty
    11. 11. New architecture-Emergence of non-traditional and new donors <ul><li>New important players </li></ul><ul><li>CSOs managed $40 billion in 2005 ( estimate: AG CSO AE, 2008 ); </li></ul><ul><li>Grants from CSOs and foundations: $14.6 billion in 2006 (from 8.8 billion 2002, [ OECD 2008] ); </li></ul><ul><li>Non-DAC OECD countries (like South Korea, Turkey, Mexico): $1.9 billion in 2006; </li></ul><ul><li>Non-OECD countries, e.g. China and India; </li></ul><ul><li>Corporations, Private and voluntary organisations, religious organisations, universities and colleges, volunteer time; </li></ul><ul><li>Recorded remittances flow to developing countries (2006): 177 bn $ (221 bn $ inflow, 44 bn $ outflow, World Bank Migration and Remittances Factbook 2008) ; </li></ul><ul><li>DAC countries ODA 2007: $104 billion ; </li></ul><ul><li>FDI to Africa (2006) : $36 billion (23 bn$ to North Africa, 12 bn$ to SSA). </li></ul>
    12. 12. Financial flows - a summary by the Hudson Institute Hudson Institute, Center for Global Prosperity, Annual Index of Global Philanthropy, 2008
    13. 13. <ul><li>There is a political consensus – the MDGs; </li></ul><ul><li>New players and donors; </li></ul><ul><li>Development agenda: WDR 2008 Agriculture for Development ; </li></ul><ul><li>Food price situation is symptomatic and catalytic; </li></ul><ul><li>Evolving aid effectiveness (increasing country ownership, alignment and harmonisation): </li></ul><ul><ul><li>Regional: CAADP (as an African initiative), RECs; </li></ul></ul><ul><ul><li>National: improving policy coherence - PRSs, JASs, etc. </li></ul></ul><ul><ul><li>High Level Forum on Aid Effectiveness, Accra </li></ul></ul><ul><li>Commitments to increased public investment: </li></ul><ul><ul><li>AU Maputo declaration (10% of budget for ARD and 6% ag growth) ; </li></ul></ul><ul><ul><li>G8, Financing for Development etc. (and as demonstrated by 8.5 billion US$ in pledges at the FAO/IFAD/WFP HLF on Food Security in June 2008 – additionality!). </li></ul></ul>Issues and opportunities
    14. 14. <ul><li>At international level: </li></ul><ul><li>Increased and deepening engagement: </li></ul><ul><ul><li>International agreements (i.e. UN, MEA, Paris Declaration); </li></ul></ul><ul><ul><li>Political fora (i.e. UN, World Economic Forum); </li></ul></ul><ul><ul><li>Issues based discussions/conferences (i.e. FAO, OECD, Global Donor Platform). </li></ul></ul><ul><li>At national level: </li></ul><ul><li>Active participation at policy formulation; </li></ul><ul><li>Participation in sector dialogue / round tables. </li></ul>Better dialogue among development actors
    15. 15. <ul><li>Operational level </li></ul><ul><li>There is increased collaboration of different actors: </li></ul><ul><ul><li>Alignment to policy frameworks; </li></ul></ul><ul><ul><li>Implementation (public-CSO, PPP, non state –non state …); </li></ul></ul><ul><ul><li>Monitoring and evaluation. </li></ul></ul><ul><li>Examples: </li></ul><ul><li>Tanzania Agricultural Rural Sector Development Programme; </li></ul><ul><li>Public funds for CSO implemented agricultural advisory services; </li></ul><ul><li>African Enterprise Challenge Fund; </li></ul><ul><li>Agriculture Development Grants from the Gates Foundation. </li></ul><ul><li>Challenges include: </li></ul><ul><li>Increasingly complex aid architecture; </li></ul><ul><li>Roles, mandates, capacities, resources, processes; </li></ul><ul><li>Role of the state / managing the political economy; </li></ul><ul><li>Coherence (within and between actors and sectors). </li></ul>Expanding collaboration
    16. 16. <ul><li>The current aid effectiveness debate offers opportunities for improved collaboration and coherence while empowering national processes. </li></ul><ul><li>Paris Declaration on Aid Effectiveness (2005): </li></ul><ul><li>ownership, alignment, harmonisation, results and mutual accountability; </li></ul><ul><li>Partner country priorities: </li></ul><ul><li>conditionality, untying, incentives, division of labour, predictability and capacity development </li></ul><ul><li>CSO aid effectiveness process </li></ul><ul><li>Up-coming Joint Principles for ARD (Platform process) </li></ul>More effective development assistance
    17. 17. <ul><li>Paris Declaration: Preliminary lessons learned and recommendations from the agricultural sector </li></ul><ul><li>Progress in aid effectiveness (Sector-Wide Approaches, Joint Assistance Strategies etc.) but major challenges remain; </li></ul><ul><li>Strengthened public investment, alignment and harmonisation; </li></ul><ul><li>More emphasis on ownership issues / stakeholder participation; </li></ul><ul><li>Strengthened capacity of all stakeholders (to fulfil their respective role and be [technically] competent); </li></ul><ul><li>Need for increased coherence; </li></ul><ul><li>Need for context specific policies and strategies. </li></ul>More effective development assistance(2)
    18. 18. <ul><li>Global initiatives for more funds in general and more investment in ARD include: </li></ul><ul><li>MDG process, Financing for Development (Doha), and Ban Ki-moon’s High-Level Task Force on the Global Food Security Crisis and MDG Africa Task Force; </li></ul><ul><li>G8 Summit (Gleneagles and follow-up); </li></ul><ul><li>FAO Initiative on Soaring Food Prices / Hunger Initiative; </li></ul><ul><li>World Bank’s Global Food Crisis Response Program (GFRP); </li></ul><ul><li>Global Partnership for Food and Agriculture . </li></ul><ul><li>Policy debate concerning Governance for Agriculture, Food, and Nutrition. </li></ul>More development assistance / current debates
    19. 19. <ul><li>Countries, taking the lead, need to continue policy reform, creating strong policy frameworks and enabling environments, involving key stakeholders like the private sector and CSOs; </li></ul><ul><li>Increase coherence with and align to national policies and strategies; </li></ul><ul><li>Better and more investments in agriculture; </li></ul><ul><li>Further improve global coordination for complex and interrelated issues between all players. </li></ul><ul><li>In this, the Platform seeks: </li></ul><ul><li>To enhance members’ shared learning and aid effectiveness - particularly harmonisation & alignment (incl. joint principles etc.); </li></ul><ul><li>To advocate for an adequate role of agriculture and rural development in poverty eradication and sustainable Natural Resource use. </li></ul>The way ahead
    20. 20. <ul><li>Thank you very much! </li></ul><ul><li> </li></ul>