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Archive for November, 2011

Secretary Clinton Calls for Renewed Commitments to Aid Effectiveness in Busan

Wednesday, November 30th, 2011
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Secretary of State Hillary Clinton announced that the U.S. will join the International Aid Transparency Initiative (IATI) at the Fourth High-Level Forum on Aid Effectiveness in Busan yesterday. In her keynote address at the opening session, Secretary Clinton called for coordination to maximize development outcomes, pointing to country ownership, untied aid, and greater flexibility as key steps toward sustainability. She looked beyond traditional donors to emerging economies, developing countries, and private sector and civil society partners to reform our foreign aid efforts.

Image from the Department of State

News that the U.S. will join IATI elicited praise throughout the development community, from USAID Administrator Raj Shah to MFAN partner Publish What You Fund. With the addition of the U.S., the world’s largest provider of bilateral assistance, IATI signatories now total 26 and 80% of Official Development Finance worldwide.  The announcement reinforces the administration’s commitment to aid transparency and, as Secretary Clinton noted, will enable the U.S. to “report data in a timely, easy-to-use format.”

Participation in IATI brings the U.S. closer to a central focus of Secretary Clinton’s remarks: accountability for outcomes. Secretary Clinton called upon donors to shift “our approach and our thinking from aid to investment, investments targeted to produce tangible returns.” As development practitioners strive to increase country ownership—one of the principles laid out in the 2005 Paris Declaration on Aid Effectiveness—the U.S. will need to hold itself and its partners more accountable for results. In response to calls for greater flexibility, the U.S. is working to eliminate obstacles and “streamline our procurement process and channel more resources into government ministries.” Secretary Clinton also discussed the ongoing struggle to untie aid, acknowledging the benefits but explaining the political constraints.

Secretary Clinton touched on a number of common themes—coordination, responsibility, and outcome-oriented development—but altered the standard aid dialogue, noting that “old distinctions – like ‘donor’ and ‘recipient’ – are less relevant.” Recognizing new sources of capital beyond official development assistance, Secretary Clinton highlighted successful partnerships among CSOs, the private sector, and non-traditional donors. Her speech called for increased coordination to harness all available resources—a particularly compelling message in an era of tighter budgets.

Secretary Clinton reiterated donor effectiveness principles while calling upon new partners to deliver efficient, targeted assistance. Her commitment to effective development—and to transparency in particular—promises to put the U.S. on course for results.

View the complete transcript here, and follow the action in Busan on HLF-4’s website.


News Roundup: 4th High Level Forum on Aid Effectiveness

Tuesday, November 29th, 2011
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Today, leaders from around the world gathered in Busan, Korea to kick off the fourth OECD High Level Forum on Aid Effectiveness. Over the next two days, some 2,000 delegates will review global progress toward improving the impact and value of development aid and make new commitments to further ensure that aid helps reduce poverty and supports progress in meeting the Millennium Development Goals. Secretary of State Hillary Rodham Clinton is leading the U.S. delegation in Busan to underscore the U.S. commitment to aid effectiveness, particularly in embracing principles like country ownership and transparency. Secretary Clinton will be delivering a speech at the forum tonight, which will be streamed live at 7:30pm EST.

Transparency is set to be a major topic of discussion at this year’s forum as more countries and organizations sign onto the International Aid Transparency Initiative (IATI) standards. To read a press release issued by several MFAN partners click here and see below for some news pieces that highlight the issue of transparency and set the stage for the forum:

  • From rags to riches, South Korea hosts forum on international aid (LA Times-November 29) For the next few days, nearly 2,500 policymakers and experts from 160 nations are meeting in Busan to devise more efficient ways of providing international aid. Key participants at the Fourth High-Level Forum on Aid Effectiveness will be U.S. Secretary of State Hillary Rodham Clinton, former British Prime Minister Tony Blair, United Nations Secretary-General Ban Ki-moon and Jordan’s Queen Rania. “It is unprecedented that the international aid forum is taking place in a country that once survived on international aid,” a government official in Seoul told the Korea Times newspaper. “In this regard, Korea is a model state whose dramatic transition from rags to riches will help highlight the significance of international aid for during the forum.” But the world’s premier development aid forum has its work cut out for it -– challenges such as getting China and India to assume a bigger role in global aid efforts. Experts are also expected to try to establish a new global framework to improve aid and make it more transparent, as well as establish a monitoring system, organizers said.
  • More Than Good Intentions: Making Development Assistance Work (Huffington Post-Stephen P. Groff, November 28) The only way donors can ensure that their funding is well utilized is if governments and donors work together to support and monitor implementation of a country’s development strategy, making decisions based on the whole picture rather than a small part of it. Six years after the Paris Declaration, some progress has been made in implementing its commitments, but action is still needed on several fronts. First, we must make aid more predictable by being transparent and ensuring that developing country governments receive timely information on how much they can expect to receive from donors in advance and over a period of several years. Without an accurate picture of available resources, it is difficult to make the sound budgetary decisions that in turn can increase the effectiveness of aid.
  • Donors ‘trying to shirk’ aid commitments (Financial Times-Alan Beattie, November 27) Governments are backing away from commitments to make development aid more transparent and better-spent in advance of an international summit on aid spending this week. A draft declaration from a “high-level forum” on aid effectiveness, to be held in Busan, South Korea, this week, reveals that rich donor governments are trying to water down commitments to streamline bureaucracy and use recipient countries’ own financial systems to administer development assistance. The draft outcome document circulated between governments last week and seen by the Financial Times also shows donor governments backing away from firm commitments to end the “tying” of aid to exports from the donor country – a practice reckoned heavily to reduce the effectiveness of assistance. Karin Christiansen, managing director of the aid transparency campaign Publish What You Fund, said donor governments were endangering the credibility of development aid at a time when squeezes on government spending worldwide had raised pressure on aid agencies to show transparency and results. “We’re in the realm of low ambition,” said Ms Christiansen. “Just days before the meeting, some countries are still trying to shirk past commitments, buy time and create loopholes. This should have been a moment for donors to celebrate making their aid more effective, but on most issues they’re fighting to stand still.”
  • Solving Uganda’s budget puzzle (The Guardian Blog-Claire Provost, November 25) Four years ago, researchers at the London-based Overseas Development Institute took up the enormous task of trying to figure out how dozens of donors were spending aid in Uganda, and how that compared with where the government was allocating its own resources. The results were striking: it turned out the Ugandan government was only aware of half the aid being spent in the country, despite routinely requesting this information from donors. Also alarming was just how difficult and time-consuming it was to gather and analyse this information. Mapping donors’ aid spending to a country’s budget is, unfortunately, not a trivial task, even if the data is available. Donors classify and divide their spends in different ways, so researchers had to play a herculean matching game, piecing together how donors’ spends fit into the bigger puzzle.


Bread for the World Releases Aid Effectiveness Paper

Tuesday, November 29th, 2011
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MFAN partner Bread for the World Institute released a briefing paper, ‘Making Development Assistance Work Better’, as the Fourth High Level Forum on Aid Effectiveness gets underway today. Faustine Wabwire, Foreign Assistance Policy Analyst at the Institute, highlights opportunities for Busan in the context of past forums, prior commitments, and progress achieved so far. With attendees such as UN Secretary-General Ban Ki-Moon and a US delegation led by Secretary of State Clinton, HLF-4 stands as a ‘critical moment’ in the global effort to achieve the Millennium Development Goals by 2015.

Discussions at previous High Level Forums on Aid Effectiveness have pinpointed reform principles, many of which form the basis of MFAN’s policy agenda. Bread for the World Institute’s paper provides a refresher course on outcomes of past conferences, from commitments to country ownership in Paris to an emphasis on inclusive partnerships in Accra. Leading up to Busan, the international community had reached a consensus on the importance of coordination, untying aid, and results.

Bread for the World Institute’s paper identifies new opportunities for Busan based on the changing development landscape. As more nations make the jump from aid recipient to donor, leaders at this year’s HLF will seek to expand partnerships and coordinate with emerging donors in a time of dwindling resources and other global challenges. For example, though the famine in the Horn of Africa poses an extraordinary challenge to donors, it offers them a chance to reexamine their engagement in fragile states.

Secretary Clinton’s participation in HLF-4 demonstrates the U.S. government’s commitment to meeting these challenges and reforming U.S. foreign assistance for the 21st century. In the wake of the PPD and the QDDR, the U.S. has begun to put aid effectiveness principles into practice. The Foreign Assistance Dashboard lays out financial data for the State Department, USAID, and, most recently, the Millennium Challenge Corporation “in a user-friendly and accessible way.” Presidential programs such as Feed the Future and the Global Health Initiative go beyond the provision of aid to build capacity and promote sustainability in developing countries. Commitments to increased transparency and country ownership enable the U.S. to hold itself and its partners accountable for results.

Bread for the World Institute calls upon the U.S. to keep the aid effectiveness conversation going. As the international community expands its prior pledges, the development agenda must include new partnerships, predictable aid, and a focus on results. Bread concludes that inclusive, transparent, and accountable development will ensure that the effectiveness conversation extends beyond Busan.

Download the full paper from the Institute’s website.

High Level Forum on Aid Effectiveness Begins Tomorrow

Monday, November 28th, 2011
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See below for a guest post from MFAN Principal Noam Unger, fellow and director of the Foreign Assistance Reform Project, and Homi Kharas, senior fellow and deputy director of the Development Assistance and Governance Initiative, both of the Brookings Institution. They offer recommendations for how the U.S. can match its rhetoric on reform with concrete action – seeing tomorrow’s forum in Busan as an opportunity for the U.S to be more assertive, particularly on the issue of transparency. This post originally appeared on the Brookings Up Front blog.

Busan, the United States and Transparent Development Results

Noam Unger and Homi Kharas

Tomorrow marks the beginning of the High Level Forum on Aid Effectiveness in Busan, Korea. The United States is attending with a particularly high power delegation, led by Secretary Clinton, to underscore U.S. leadership abroad on technical and political aspects of development policy. The U.S. government heads into the forum with a handful of priority themes, including country ownership, partnerships with the private business community and philanthropists, and transparency, sustainability and results. The United States seeks to be a leader in these areas and has the rhetoric to match, but much more needs to be done to connect the language of commitment to the reality of U.S. development activities. With the right balance of pressure and political space, the Busan forum may present the opportunity for the United States to step up its game, especially on transparency and results. In each of these areas, the United States can tangibly advance new tools for catalytic cooperation.

With regard to transparency, the United States is approaching a critical milestone. One year ago, the Obama administration unveiled its foreign assistance dashboard website and published the Quadrennial Diplomacy and Development Review, which touted aid transparency as a key principle of high-impact development. Despite leading in other areas of transparency by pushing the Open Government Partnership into existence, for much of the past year progress on aid transparency seemed to have stalled. The dashboard was limited to a synthesis of previously available State Department and USAID budget and appropriation data in a user-friendly format and there was no progress on the promised expansion of the website to include multiple categories of data across all U.S. government agencies implementing foreign assistance. The 2011 Quality of Official Development Assistance assessment found that the United States ranked 12th out of 31 donors in the category of transparency and learning, which does not exactly correspond to leadership in these areas. This assessment is generally corroborated by Publish What You Fund’s Aid Transparency Index.

But just last week, in anticipation of the forum new data was finally published to the dashboard to reflect information on planning, obligations and expenditures from the U.S. government’s Millennium Challenge Corporation. This was a long-anticipated step since the MCC was designed to serve as a model of aid transparency and has consistently led in this area, by scoring the best, for example, among U.S. agencies in the Publish What You Fund index. To build on this momentum, the United States should publish a specific schedule for adding data from more agencies and categories to the dashboard in the way it was originally envisioned. That would bring the United States closer to a position of true leadership and make it into the largest provider of data consistent with the standards developed by the International Aid Transparency Initiative (IATI). In fact, there is even speculation that the United States might officially sign up to the IATI, which would be very welcome given that the United States has shaped these standards as an observer and already come close to substantial implementation, even without officially being an IATI signatory.

The United States also stands out in its commitment to a results-based focus in aid delivery, pioneered by the Millennium Challenge Corporation, which was set up with an explicit framework for “measurable results”. The MCC approach starts with monitoring processes and outputs at the country level during its country selection and compact design phase, and then continues to track higher-level outcomes and impact as compacts mature. This approach is now being taken up by other development agencies, including the International Development Association (IDA), the concessional arm of the World Bank.

The IDA has proposed a new financing instrument called Performance for Results (P4R) to indicate its commitment to the idea that development results are the key objectives, not just expanding the size of government spending in partner countries. The instrument is demand-driven and has strong country ownership because it supports programs designed by the countries themselves. Disbursements would be linked to achieving results. This puts a greater premium on transparency and accountability—no results, no aid—and helps transform the dialogue in a constructive way onto metrics of development and cost-effective means of delivery. The IDA is in a good position to push the envelope in this direction because it is ranked as the most transparent aid agency in the world. Of course, there are issues of information, control of resources, and environmental, social and program sustainability, and these would have to be closely monitored within the program. Like any innovation, lessons from the first operation would have to be systematically incorporated into future designs. For example, one important unknown is how best to strengthen the capacity of countries to prepare and monitor their own programs without undermining ownership.

The United States should support P4R and encourage other institutions to embrace the transparency and results agenda. The Busan forum calls for innovative approaches and new partnerships that can be aligned around a common results framework. If the U.S. can raise the profile of this agenda across the globe, it can reinforce its leadership position on development.

MCC Added to the Foreign Assistance Dashboard

Monday, November 28th, 2011
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Last week, budget and appropriations information from the Millennium Challenge Corporation (MCC) was added to the Foreign Assistance Dashboard. This is a positive step toward the expansion of this user-friendly tool that allows for policymakers and the American public to track and analyze investments in foreign assistance while holding the Administration accountable for returns on these investments. Still, as Will McKitterick of the Center for Global Development points out in a new blog post, the MCC data was already available on the agency’s website. McKitterick writes:

“Based on what it sets out to provide, the website is an impressively ambitious tool, and the government should be applauded for moving quickly to get in line with international standards on aid transparency (see IATI). Nevertheless, the tool is only as useful as the information it stores, and currently, it stores very little. Sure it includes both State and USAID foreign assistance request and appropriations data, but this information was made available at the original release of the Dashboard nearly a year ago, and both agencies have yet to publish data for obligations and spent resources. The recent release of MCC information is certainly a plus, but since that information was already readily available on the MCC’s website, it hardly counts as progress.”

The “What’s Coming” section on the Dashboard, complete with a matrix (below), shows the slow progress that has been made in updating and expanding the content since the Dashboard launched in December 2010. Yet with momentum for transparency through the International Aid Transparency Initiative (IATI) and this week’s High Level Forum on Aid Effectiveness, as well as the Foreign Aid Transparency and Accountability Act from Rep. Ted Poe, there is a great opportunity for the government to fulfill this critical element of reform.