DEVELOPMENT: Western Donors Agree to Meeting on Development Aid

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Jan 13 2000 (IPS) - Western donors, ceding to pressure from cash-strapped Third World nations, have finally agreed to a high-level meeting on a politically sensitive issue: the decline and fall of development assistance to poor nations.

The ministerial meeting, scheduled to take place in New York in 2001, will focus primarily on “financing for development.”

Nigerian Foreign Minister Sule Lamido, who was elected the new chairman of the Group of 77 developing countries on Thursday, said he was hoping that Western donor nations will make a “high-level commitment” to participate in the upcoming conference.

The proposal for an international conference on financing has been on the UN agenda since the 1980s.

But the United States and other Western nations expressed strong reservations on the grounds that development financing was essentially a subject best discussed at the World Bank and the International Monetary Fund (IMF) – not at the United Nations.

Since the conference is now being held in conjunction with the two Washington-based Bretton Woods institutions, the US and Western European states have agreed to participate in the meeting.

Western nations have also been reluctant to support a conference on financing, fearing they will be forced to make new commitments on development aid to Third World nations.

The decision to hold a meeting on financing comes at a time when Third World nations have been criticising Western donors for slashing development aid.

In 1970, the General Assembly set a target of 0.7 percent of gross national product (GNP) as the amount of aid that each of the rich countries was expected to provide developing nations. But to date, only four countries – Denmark, the Netherlands, Norway and Sweden – have met or exceeded this target.

In 1992, Official Development Assistance (ODA) stood at 61 billion dollars. The figure declined to 55 billion dollars in 1993 and rose to 58 billion dollars in 1994.

In 1995, it moved up slightly, to 59 billion dollars, then dropped to 55 billion dollars in 1996 and declined further to 47.6 billion dollars in 1997.

Secretary-General Kofi Annan has lamented the declining trend in ODA which, he says, “needs to be restored as rapidly as possible.”

Guyana, the outgoing chairman of the 133-member Group of 77, has also implicitly criticised donor nations for reneging on their aid commitments.

“We must not hesitate to call for a re-commitment by donor countries to provide enhanced levels of ODA to reach the accepted target of 0.7 percent of GNP,” Guyanese Foreign Minister Clement Rohee told Third World delegates on Thursday.

“To contend, as some are wont to do, that ODA is anachronistic, denies the indispensable role which ODA continues to play in the development of the poorest countries,” he added.

Rohee said that the upcoming conference should succeed in placing financing for development “on a more sound and predictable footing.”

A key issue, he argued, will be the involvement of two major actors: the World Bank and the IMF. “It is imperative that we define clearly the terms of engagement of these entities to ensure their meaningful cooperation,” he added.

“The harsh reality is that despite some improvement in the global economy, poverty persists both across countries and within them,” Rohee said.

“At the dawn of the year 2000, poverty looms large as mankind’s greatest challenge, particularly in the countries of the South,” he noted.

In a draft resolution adopted without a vote last month, the 188-member General Assembly said the meeting will address “national, international and systemic issues relating to financing for development in a holistic manner in the context of globalisation and interdependence.”

The meeting will also address the mobilisation of financial resources for the implementation of programmes adopted at several major UN conferences since 1990. Most of these programmes have been shelved for lack of funds.

When the issue was first discussed, one of the items on the proposed agenda was a call for the reform of the World Bank and the IMF, in which Western donors play a decisive role because of weighted voting pegged to their financial contributions to the two institutions.

Striking a note of warning, however, US delegate Michael Gallagher told the General Assembly that the governance of the IMF, World Bank or regional development banks, and issues related to the international financial architecture, could be addressed only by the relevant international forums.

Gallagher said the inclusion of the topic of implementing programmes adopted at UN conferences “should not be interpreted as conveying any new or expanded funding obligations” by donors.

The US, he said, remained concerned about the form and agenda of the final event.

“Developing countries would be best served if the outcome of the event was not a political document, but rather practical guidelines on the effective mobilisation, prioritisation and utilisation of resources in support of national efforts to reduce poverty and achieve sustainable development,” he asserted.