Africa, Africa: Women from P♂lls to P♀lls, Civil Society, Development & Aid, Economy & Trade, Europe, Gender, Global, Global Geopolitics, Headlines, Human Rights, Poverty & SDGs, Women & Economy, Women in Politics

Q&A: 'Development Aid Is No Panacea'

Interview with Celine Tan, aid expert

ROME, May 29 2008 (IPS) - Celine Tan is a Lecturer in Law at the University of Birmingham. Her doctoral research has focussed on development financing, in particular its impact on global governance and international relations.

Tan is also a researcher with the Third World Network, a non-governmental organisation (NGO) based in Malaysia. She has also worked with other NGOs including the London-based Bretton Woods Project, and with human rights organisations.

IPS Editor in Chief Miren Gutierrez spoke with Tan about aid and its contradictions in a context of a shrinking global economy.

IPS: The world of international aid seems a complicated tangle of acronyms and theories. Why should people care about whether and how development is financed?

Celine Tan: Finance is important for development. International aid is necessary when countries and communities cannot mobilise sufficient resources … The manner in which such aid is used determines whether or not it meets the targeted development objectives.

Everyone should care about how development is financed because development is a global public good. Poverty creates insecurity, not just for the communities and individuals affected by it but also for the wider world, especially in an era of globalisation where local decisions can have global repercussions.

IPS: Your thesis examines the Poverty Reduction Strategy Papers (PRSP) approach to development financing. What are your main findings?

CT: The PRSP framework replaced the infamous structural adjustment programmes (SAPs) as the basis for aid and debt relief to developing countries.

The thesis found that while the PRSP process may have opened up some space for participation and ownership in the countries and put poverty reduction at the forefront of development policy, (its) overall impact is more detrimental to international development than supportive … The PRSPs place too much emphasis on the role of governments … without addressing global pressures which constrain developing countries from achieving these objectives, such as unfair international trade, the problem of external debt.

The PRSP also prescribes the same conditions as SAPs, such as privatisation and trade liberalisation, which have been shown to be destructive of countries’ economies and hence, detrimental to poverty reduction.

IPS: The PRSPs are prepared by the member countries, outlining their economic policy … But you say that they go beyond procedural documentation, why?

CT: The PRSPs are not just procedural documents. Governments are expected to follow a template of participatory policymaking which may be imported from abroad and with little consideration for their domestic circumstances. This means that countries and communities have no ownership over the process, and the process may be managed to fit into what donors feel are priorities in development policy …

In this manner, any genuine reform in terms of opening up participation to genuine stakeholders may be limited and the substantive goals of poverty reduction and development circumscribed.

IPS: How do you see development aid evolving in a shrinking global economy? Do you think the growing economies of the so-called South should have a stronger role?

CT: Development aid is necessary … However, it is not the panacea to the problems of poverty reduction and other development challenges. The solution is in creating more equitable structures of international trade and finance to enable countries to generate resources domestically … This means ensuring that their products have a fair chance of being traded in different markets …

The growing economies of the south should have a stronger role in funding development but they can only do so much if constrained by international factors. The bigger countries – such as China, India, Brazil and South Africa – all finance development projects in less developed countries, such as those in Africa, but they also have large numbers of poor people in their own countries and again, they are constrained by the same unequal trade and finance rules as the less developed countries.

IPS: You have recently written disapprovingly about the Paris Declaration on Aid Effectiveness …

CT: I have no objection to the mechanisms of accountability, but the OECD's accountability framework is one-sided. It was designed by the donors with little input from the recipient countries and it does not provide an equivalent framework for recipients to hold the donor countries to account for their own aid policies and other policies which affect the effectiveness of aid. Thus, while recipient countries are subjected to more conditionalities for aid, donors are not held to account on their aid commitments or on their aid policies.

IPS: The Paris Declaration was adopted in 2005 as a roadmap to increase the quality of aid, what has been its influence in the past two years?

CT: The effectiveness of the Paris Declaration remains questionable. Many developing country governments view it as another set of conditions they have to meet in order to receive meagre aid. Not all donors are implementing the framework either …

Worryingly, the conditions of the Paris Declaration may be promoting policy reforms which countries have rejected in other international negotiations, such as opening up government procurement to foreign companies, something that developing countries have rejected in trade negotiations.

IPS: This year there is string of relevant meetings ending with Doha. What do you expect from this process?

CT: The Monterrey Consensus was an important document as it represents the first comprehensive and holistic articulations of the challenges facing countries in meeting development objectives and places financial resources at the centre of meeting such goals. The Consensus was based on a global partnership for development … I expect a comprehensive review of the progress of the Monterrey Consensus and the development of a clear road-map to implementing the goals that have not been achieved thus far.