Bilateral Aid Review: The 'Do's' and 'Don'ts' of 21st Century Development Assistance

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Oxfam GB welcomes the UK Government's Bilateral Aid Review. The UK's international leadership in development is widely recognised, and the Department for International Development has a well-deserved reputation for progressive, effective, cutting-edge development policies and programming. Global change is continuous, so it is right and necessary that aid and development policies are subject to review, not least at a time where major challenges must be met: tackling global poverty, ensuring an equitable and sustainable growth path out of the global economic crisis, and urgently addressing the causes and impacts of runaway climate change. We welcome the opportunity to contribute to this process.
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  www.oxfam.org.uk Oxfam GB Public Submission Bilateral Aid Review “ The „ Dos ‟ and „Don'ts‟  of 21st Century Development Assistance”   Oxfam GB 30 September 2010   Bilateral Aid Review  , Oxfam GB, September 2010 2 Executive Summary Oxfam GB welcomes the UK government‟s Bilateral Aid Review. The UK‟s internation al leadership in development is widely recognised, and the Department for International Development has a well-deserved reputation for progressive, effective, cutting-edge development policies and programming. Global change is continuous, so it is right and necessary that aid and development policies are subject to review, not least at a time where major challenges must be met: tackling global poverty, ensuring an equitable and sustainable growth path out of the global economic crisis, and urgently addressing the causes and impacts of runaway climate change. We welcome the opportunity to contribute to this process.  Poverty-reduction as the goal of a systemic, coherent development strategy It is vital that poverty-reduction remains the main strategic goal of UK development policy –  whether in stable, conflict- affected or „fragile‟ states. Development is a complex process and requires a systemic, coherent and strategic approach. Aid is a key, but not the only, part of ensuring successful development. Oxfam welc omes the government‟s drive to ensure greater aid effectiveness and value-for-money in its aid spending. This emphasis should not come at the expense of a systemic approach to development nor result in a focus on easy-to-produce or easy-to-measure projects and outcomes, given that the deepest poverty is often the hardest to tackle, and that complex, but vital, long-term outcomes are not always easy to measure. Strategic policy goals should drive the choice of indicators and not vice versa.  DFID’s Country ‘Footprint’ and ‘results offers’    A truly participatory and bottom-up approach to establishing development priorities in different countries is welcome, within a coherent overarching UK development strategy. Oxfam considers that the current focus of 90% of UK aid on the poorest countries is broadly the right one. Criteria for selecting among „offers‟ should include the key drivers of development success and not just value-for- money. Support to „fragile‟ states is vital but so is support to equally poor but stable countries. UK aid is already fairly concentrated; further concentration does not seem justified. We urge greater transparency in the „results offers‟ process; we are also concerned that consultation in -countries appears to have been inadequate and urge DFID to make use of White Papers in further consultation processes. We should also not lose sight of the fact that many of the world‟s poorest live in middle income countries –  with India accounting for the greatest number, a country where DFID‟s aid has  been important in itself and in leveraging further aid in-country. DFID can play a vital role in supporting innovation and advocating scale-up of best practice in middle-income countries, though the programme-spend should be less, given the governments‟ o wn resources.  Effective states and active citizens owning their own development strategies Development in the 21st century works best when aid builds effective states held to account by informed, active citizens; it works best where those governments are responsible and accountable for their strategic development paths, taking direct responsibility for, and ownership of, the disbursement of ODA. There should be no return to an old-fashioned, donor-driven, service delivery approach to aid. Continuity and Change Overall, UK aid represents some of the best aid in the world; more substantial change is only needed in a few areas. Oxfam supports continuity where aid is at the cutting edge of   Bilateral Aid Review  , Oxfam GB, September 2010 3 international efforts to overcome poverty. Oxfam calls for change, where change is needed, especially to tackle the impacts of climate change, and energy security. Aid delivered as budget support to effective states is aid that works, as is aid that contributes to ensuring free, public provision of basic healthcare and education. Meeting the Millennium Development Goals remains a key strategic aim. Oxfam also welcomes the government‟s commitment to increasing UK ODA to 0.7 per cent of GNI by 2013. We urge the government to ensure there is a steady trajectory of increases to 2013 in the aid budget to meet this target. Keeping to the OECD DAC guidelines for ODA is welcome but the UK has played a leadership role in consistently setting much higher standards than the DAC guidelines –  this should continue.  Putting women’s rights at th e heart of poverty eradication Putting women and girls at the heart of poverty reduction strategies is vital –  they form the majority of the world‟s poor, and they are the agents of change that can lead to an end to poverty. This means more and better inve stments in girls‟ and women‟s education, in women‟s and girls‟ health, in tackling violence against women and in political and economic empowerment of women. Wealth creation and the role of the private sector Growth and wealth creation are needed if we are to overcome poverty; but they are not sufficient. To tackle poverty head-on, growth must be pro-poor, it must drive down inequality, ensure investment in public goods and services, and be climate-resilient. It must also be growth that helps to build, not undermine, food security through investing in smallholder agriculture and creating access to markets, not barriers to entry. The private sector has a key role in growth, wealth creation and the functioning of markets. Many forward-thinking companies are also building resilience and fair value distribution into their supply chain. They see major market opportunities and competitive advantage with this approach. But markets are also imperfect –  not taking account of social and environmental costs and benefits –  and regulation is a necessary part of a socially responsible private sector. Private companies must be encouraged to understand how their businesses can be both profitable and pro-poor. Climate Change Maintaining the UK‟s international leadership in tac kling climate change is vital if the huge challenges to be tackled due to rising global temperatures are to be met. Continuing to champion the interests of the poor and vulnerable countries is central, not least as they are the ones most affected by existing impacts of climate change. We urge the government to ensure at least half of climate finance is for adaptation not mitigation, that it is additional to the 0.7% ODA commitment and that it is increasingly delivered through global institutions especially through a new UNFCCC Global Climate Fund. This builds trust and influence. The UK can also lead by prioritising pro-poor approaches to adaptation and low carbon development. Conflict and Security Many of the world‟s poorest people live in countries affecte d by, at risk of, or recovering from conflict. In these states, as in more stable developing countries, the focus of development aid must be on poverty reduction and not on UK national security or foreign policy goals. Development contributes to security and stability. But subsuming aid under security or foreign policy will undermine development goals, and is unlikely as a result to actually promote security either. Oxfam is concerned that an “integrated” approach between DFID, MoD and the FCO will undermine the effectiveness of UK aid –  DFID should be at arms-length to these two departments. Of course in any one country, foreign and development policy should aim for coherence. But that coherence must not come at the expense of DFID‟s poverty focus.     Bilateral Aid Review  , Oxfam GB, September 2010 4 The „Dos‟ and „Don‟ts‟ of 21 st  Century Development Section 1: Introduction Do: Keep poverty-reduction as the main strategic goal of UK development policy. Do: Search for ways to increase aid effectiveness, including value-for-money. Don't: Let a focus on results and value-for-money undermine a systemic coherent and sustainable approach to development or allow a return to an old-fashioned, donor-driven service delivery approach to aid. Don‟t: Let budgetary pressures or the needs of the National Security Council un dermine the quality and effectiveness of DFID‟s focus on poverty reduction, which sets a standard significantly higher than the OECD DAC guidelines. Section 2: How Development Happens Do: Support policies to ensure growth and wealth creation is pro-poor, sustainable and equitable. Do: Recognise the crucial role of states and civil society in development. Don't: Treat development as technocratic when it is always also a political process. Section 3: W omen‟s  Rights and Gender Equality Do: Prioritise increasing the overall quality of education for women and girls. Do: Continue to prioritise tackling violence against women. Don't: Focus on women‟s economic empowerment without investment in women‟s political and social rights. Don't: End support for the expansion of free healthcare in developing countries, especially with respect to maternal health services. Section 4: Markets and the Private Sector Do: Encourage the private sector to understand how their business growth and investment can be pro-poor. Do: Ensure that UK companies understand and are held to account for the social, environmental and financial impacts of their operations overseas. Don't: Promote a conclusion to the Doha Round unless it returns to its srcinal pro-development intentions. Don't: Forget that private and public investment in infrastructure are often synergistic and complementary not competitive.
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