Washington, DC — Development means enabling people to escape a "vicious" circle of "multiple hardships... poverty, hunger, disease, oppression, conflict, pollution, depletion of natural resources," United Nations Secretary General Kofi Annan told the UN's development conference in Monterrey, Mexico, on Thursday.
The conference - "The International Conference on Financing for Development" - is focusing on implementation of internationally agreed "Millenium Development Goals" (MDG) that call for universal primary education, the halving of world poverty, and a two-thirds reduction in child deaths, with all these targets to be achieved by 2015.
A sixty-four paragraph "Monterrey Consensus" drafted in January after weeks of intense negotiation between developed and developing nations, forms the platform for discussion at the conference. It proposes approaches to trade, aid, debt, investment, strengthening national capacities and coherence of global and regional financial structures.
The record shows that "aid is vital," Annan told an audience of businessmen, finance ministers, and a dozen heads of state, including Cuba's Fidel Castro. "Aid brings spectacular improvements in literacy and spectacular declines in infant mortality when it is channelled to countries with enlightened leaders and efficient institutions."
But "different actors" must work together, the Secretary General said, "not against each other... It does no good helping dairy farmers in a country if, at the same time, you are exporting subsidised milk powder to it."
Annan's remarks support an argument central to the Monterrey consensus: Official Development Assistance (ODA) is worthwhile. The crucial discussion is how much to increase it and how best to deliver it. "[The] Monterrey [Confererence] must mark a turning point in the history of Official Development Assistance," Annan told the development conference's January preparatory session.
Just last week, U.S. President George Bush pledged an increase in ODA over the next three budget years, of US$5bn to qualifying countries. "For billions," Bush said, "especially in Africa... poverty is spreading, and per capita income is falling." This additional funding "is money above and beyond existing aid requests" sent to Congress, Bush said. Nations that live by "three broad standards - ruling justly, investing in their people, encouraging economic freedom - will receive more aid from America."
Briefing reporters on Tuesday, Under Secretary of State for Economic, Business, and Agricultural Affairs, Alan P. Larson said that President Bush has also directed Secretary of State Colin Powell, and Treasury Secretary Paul O'Neill "to try to develop the objective criteria by which we could make these decisions about how this increased assistance would be used."
There is still little agreement between developed and developing nations on such "objective criteria". Need, however, is clear. Despite success stories related to assistance that can be found across Africa, most of the continent's nations remain in a deep economic and developmenmtal hole.
Since 1980 the price of non-oil exports from Africa have declined by ten percent, according to the World Bank in its Global Development Finance report for 2002. Official aid, the Bank says, "remained the main source of foreign resource inflows in 2001" and that's been declining. According to Oxfam, aid flows per capita to sub-Saharan Africa, the region that is furthest away from meeting the 2015 MDG goals, fell from $34 to $20 in the second half of the 1990s.
Calculating the direct "effect" or value of aid money, on the other hand, is less easy, partly because it is often aggregated. To disaggregate aid money for purposes of evaluating its effectiveness is an enormous task with political overtones that few wish to undertake. Furthermore, effectiveness is dependent on other factors than cash alone; aid money has certainly assisted Uganda in its campaign against Hiv/Aids, but its political approach counts almost as much as money - a willingnesss to mount an agressive and plain-speaking campaign against the disease.
There is still no consensus about the language necessary for an effort to evaluate ODA. "People mean different things by 'assistance' said one analyst, "and not everyone is agreed on what works." The Bush Administration, for example, considers the target of developed nations committing 0.7 percent of their GDP for ODA outdated and "not credible" because of its ideas of "what works." Others want a reaffirmation of that committment.
The United States took the lead in removing from an earlier draft of the Monterrey consensus, text calling for a doubling of ODA as an urgent priority - something Annan asked for while addressing the conference, Thursday. Assistant Secretary Larson told reporters the Monterrey text is now more credible. "It talks first of all about bringing together all sources of financing of development and using them effectively, including ODA but also trade and investment, and it also talks about taking concrete steps."
And in speaking of "sound policies" when announcing his increased aid package, President Bush's words also indicated that some of this new assistance lies in a political briar patch. - out of reach for some. "More aid can actually be counterproductive," the President said, "because it subsidizes bad policies, delays reform, and crowds out private investment."
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"The essence of the [White House] initiative is a bargain: countries deemed to be well-behaved will be rewarded with greater U.S. funding," complained the advocacy group Africa Action, in a statement, Wednesday.
"The leaders of the world's richest countries promote free trade and foreign investment as the engines of development, supplemented by small increases in aid. But the principal obstacles to reducing poverty in Africa remain the hemorrhaging of some $14 billion in annual debt repayments to rich foreign creditors and the Aids pandemic and the larger health crisis it represents," the Africa Action statement continued, joining an issue that few think will get a chance of substantial discussion at the Monterrey conference.
President Bush, who will attend only the last part of the conference, has been represented there by Treasury Secretary O'Neill. In his remarks, O'Neill pooh poohed the value of foreign aid and praised the benefits of the market. Mr. O'Neill said Thursday, all the aid doled out last year fell short of what China received in private foreign investment.
