Wrapping up Busan

Ban Ki Moon was there, and Hillary Clinton, and Tony Blair. The High Level Forum on Aid Effectiveness, held in Busan, South Korea, did not lack stardust. But was the game worth the candle – in other words, did the outcome justify the enormous investment made in preparation, meeting and follow-up? Specifically, to what extent are the aspirations and concrete commitments to be taken at face value? Who is responsible for what follow-up action? And who is accountable, to whom, if commitments are not met?

I’ve written about the High Level Forum on Aid Effectiveness before, though not since the meeting took place – see here (on aspirations for the event), here (on budget support,) and here (on how to give the communiqué some teeth).

At first sight, the Busan outcome document confirms some of the worst prejudices about such efforts – many warm words about partnership and collaboration, as well as some dubious commitments to live up to past promises, many of which have not  been kept. For example, paragraph 6 says that ‘we each reaffirm our respective commitments and will implement in full the actions to which we have already agreed’. That is worth a wry smile, as we reflect on the poor performance of donor countries in terms of the indicators of aid effectiveness. Don’t even mention aid volume.

On the other hand, there are more specifics in the outcome document than seemed likely even a month or two before the Busan meeting. The document has also been crafted in such a way as to allow many contributors to declare victory. The 18 sherpas who crafted the final document deserve credit for that.

It is interesting, by the way, that the sherpas are not formally recognised. It took some digging to find a putative list at the back of an OECD document, identifying them as representatives of donor and recipient governments, international agencies and a lone civil society voice – but not the vertical funds, nor the large philanthropic organisations, like the Gates Foundation, nor the private sector.

That matters, because the status of the document is also a bit of a mystery. There does not seem to have been a formal signing or endorsement process. There is no public list of countries and organisations that have endorsed the document, as exists for the Paris and Accra outcome documents. No procedure or timetable for signing up has been announced. Do we take it that the document has been accepted formally by all 3000 delegates in Busan, and the many hundreds of Governments and organisations they represent? Or are people free to pick and choose from among the 36 paragraphs? Note that formal participation in Busan was much broader than at Paris and Accra, with the process deliberately designed to be inclusive. Thus, the outcome document opens with these words: ‘We, Heads of State, Ministers and representatives of developing and developed countries, heads of multilateral and bilateral institutions, representatives of different types of public, civil society, private, parliamentary, local and regional organisations . . .’. It seems we are all committed! Well, not me, I was on my way to the climate talks in Durban . . .

Have people got what they wanted? There’s a Master’s dissertation to be written, deconstructing the various drafts and parsing the syntax. There’s another, comparing the press releases of the different participants, each of which emphasises different points. Thus, from a large number of possibilities:

• Angel Gurria, the Secretary General of the OECD, emphasised the broad partnership, the aid effectiveness principles, but also the wider development compact, beyond aid. He also chose to highlight fragile states, climate change and aid transparency.
• DFID entitled their press release ‘UK hails new aid partnership with emerging powers’, claiming some of the credit for bringing China to the table, and noting success with regard to four UK priorities for Busan: results-based approaches, greater transparency, fragile states, and cooperation with new aid donors.
• USAID highlighted Hillary Clinton’s call for a new approach to aid, recognising that aid provides a shrinking share of the resources flowing to developing countries, and calling for a new approach focused on making investments in tangible results. She also emphasised the role of the private sector.
• Publish What You Fund, an NGONon-governmental organisation campaigning for aid transparency, unsurprisingly, highlighted the commitment to transparency and the adoption of common standards.
• Oxfam greeted the outcome document with caution, welcoming common monitoring standards, but arguing that donors had put off decisions about how to implement new approaches. It seems that Oxfam don’t feel bound by the outcome!

My own take is that there are some important innovations and commitments in the text. Among the notable new points:

• The full engagement of non-DAC donors, especially emerging economies;
• Reflecting this, the emphasis on South-South cooperation and on differentiated responsibilities of new and traditional donors;
• The involvement as full participants of non-official actors, especially civil society;
• Recognition that development cooperation goes beyond aid, to include other flows, technology transfer etc . . .
• The commitment to transparency;
• The compact on fragile states;
• A commitment to use country systems as the default, and requiring donor countries to explain formally why they do not do so; and
• Specific dates for a number of commitments, mainly to processes rather than specific outcomes: to review plans for untying aid in 2012; to publish a standard for aid transparency by December 2012, along with an implementation schedule; by 2013, to provide recipient countries with rolling 3-5 year indicative forward expenditure plans; also by 2013, to make greater use of country-led coordination arrangements and division of labour; agree on principles to reduce proliferation of channels by the end of 2012; agree principles to deal with aid orphans, by 2012; agree new indicators for monitoring progress, by June 2012.

One other major point is the creation of a new Global Partnership for Effective Development Cooperation, to replace the Working Party on Aid Effectiveness, and, though this is not quite stated explicitly, to encompass the work of the UN’s Development Cooperation Forum: at least the UN is mandated to work with the DACDevelopment Assistance Committee (of the OECD) on the new Partnership.

I don’t know that all this quite meets the standard I set in my first contribution on Busan, back in June. For the record, I set ten targets for Busan, reproduced below, of which only 2 (Nos iv and x) can be considered to have been met unambiguously. There are signs that the middle income country agenda is beginning to gain prominence (item iii in my list), but some other items are notable by their absence, including commitments to aid volume and to greater multilateralism. There are a couple of paragraphs in the outcome document about climate finance, but they are the weakest possible, calling merely for aid effectiveness principles to be respected in climate funding. The ten targets were:

1. Rich countries reaffirm aid pledges and commit to timetables for meeting them;
2. Emerging countries also make aid pledges, and commit to working with other donors within the multilateral institutions;
3. Middle Income Countries and their donors agree an algorithm for reducing aid as economies grow, for example reducing the overall volume, increasing the share of loans, and developing new partnerships with the private sector and NGOs;
4. Donors old and new agree a new approach to aid in fragile states, combining traditional aid with new instruments to secure stability and improve state performance;
5. Specific commitments are made to funding global public goods with aid;
6. Progress is made in delivering the pledge made at Copenhagen to provide ‘new and additional finance’ for climate change.
7. All countries commit to channelling a greater share of resources through the multilateral system, reducing overlap and duplication, and at the same time increasing the international legitimacy of aid;
8. Countries also agree on the importance of reforming the multilateral system, and preferably a timetable to improve the accountability and performance of the Multilateral Development Banks and the UN.
9. A strong link is made to the G20 agenda, not just the so-called ‘development agenda’, but also global imbalances and other aspects of global regulation.
10. Ministers leave, as advertised, with renewed enthusiasm for results-based approaches, predictability, accountability, donor coordination, and recipient country ownership.

So they didn’t pay much attention to me. Never mind. A more interesting question is whether the participants at Busan will listen to themselves and each other. There are some real bombshells embedded in the outcome document.

For example, there is a strong commitment to tackle the proliferation of aid agencies and channels, with principles to be agreed by the end of 2012. How many bilateral or multilateral aid agencies, vertical funds, or NGOs, will either fall on their swords or be put to the sword? Or will the negotiation of principles serve to preserve the status quo?

Similarly, many agencies will find it difficult to conform to the outcome document’s provisions on forward planning, and on using country systems as the default. I like the idea that donors should be required to write to recipients explaining why they fail to use country systems – this was something I recommended, drawing on the practice in the UK, that the Governor of the Bank of England has to write to the Chancellor of the Exchequer if inflation deviates from the target by more than 1%.  But will these rules apply to the NGOs covered by the ‘We’ at the beginning of the document? Can we expect Oxfam or SCFSave the Children Fund to publish future commitments, and to channel all support to Government health systems through the Government budget? And will a paper commitment to general or sector budget support, which is what use of country systems implies, really survive the political disenchantment with this modality of aid delivery?

Finally, the broadening of the agenda beyond aid - a South Korean idea - is a radical move, which will be challenging to implement. The risk to be managed is that it will dilute the focus of discussion on aid, entrench overlap with other bodies like the WTOWorld Trade Organization and UNCTAD, and also require different officials to be involved. How, I wonder, will the institutional and bureaucratic interests respond to the closing down of the Working Party on Aid Effectiveness and the possible merger with the UN Forum? It would not be surprising if parallel or shadow structures were created to replace those lost.

Here lies the difficulty with an outcome statement that as yet has no signatories and can never aspire to a formal mechanism for compliance. As we have seen with the Paris and Accra agreements, the sharpest possible sanction, rarely used, is ‘name and shame’. In these circumstances, pious words about mutual accountability mean little. Compare and contrast the dispute resolution mechanisms of the WTO, where real penalties apply; or the mutual accountability provisions of the Cotonou Agreement, involving formal arbitration.

To summarise, there is a case against the Busan process and a case for. Against: trying too hard to be inclusive; partly as a result, avoiding some difficult questions; achieving unanimity at the expense of ambiguity and lack of bite; and failing to embed compliance mechanisms. For: managing to engage the Chinese and other non-Western donors; introducing one or two new ideas, for example on transparency and fragile states; launching a number of new processes; and setting the stage for a broader conversation about development cooperation rather than aid. What is the balance? I land on the positive side of the fence - just. I’d be interested in your views. Please comment and vote.