1. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt HUMAN DEVELOPMENT REPORT 2005 SOME COMMENTS Valter Angell, NUPI VA@NUPI.NO VANGELL1@HOTMAIL.COM

2. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt Three issues are selected The Growth and Structure of the Aid Industry –Major changes in aid governance needed Trade policy is important –The Doha Round and MDG The HDI Index –Its composition and relevance for Norway

3. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt The Growth of the Aid Industry (World Bank 2004)

4. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt United Nations c UNDP 850 741 296 UNFPA 118 130 271 UNHCR 4371 145 534 UNICEF 382 770 629 UNRWA 219 303 430 UNTA 291 288 504 WFP 7991 531 319 Other UN 452 687 484 Total UN3 5495 5963 467 EC2 1384 1476 665 Global Environment Facility-- 107 Montreal Protocol Fund-- 66 Arab Funds 278 487 202 Total concessional11 88317 95721 304 200392-93 87-88 Multilateral Aid

5. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt AfDF 368 710 586 AsDF 6511 0061 138 Caribbean Dev. Bank 35 29 37 Council of Europe 8 1- EBRD-- 53 IBRD 0-- IDA 371150186884 IDB 346 232 593 IFAD 261 158 264 IMF b 537 5731 187 Nordic Dev. Fund-- 55 Total IFIs5918772710797 1987- 1988 92-93 2003

6. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt A major shift from UN to IFIs Why these changes? Are the WB better?? –Taking over from the UN system. 10.000 in D.C. OR; –Robert Michels “Iron Law of” oligarchy?; political parties and other membership organizations inevitably tend toward oligarchy, authoritarianism, and bureaucracyoligarchy Do Norway allocate its aid resources in the best way? Is the global division of labor between th IGOs optimal?

7. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt Findings on Aid Governance in the HDR A stronger emphasis on inequalities –Needed to reach the MDG Without a sustained increase in aid, the DMG will not be achieved More aid given through current aid structures will yield suboptimal results –Too many donors - too little coordination Duplication, transactions cost high HDR: “major changes in the administration of aid programmes needed”

8. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt Improved aid quality needed Focus on national priorities and national reporting Budget support should be 70% by 2010 –Projects by-by Fewer missions –Have money-like to travel National procurement –Less tying More predictability and stability AND, INCREASED TRANSPARENCY –But nothing in HDR on the causes of and the impacts of corruption

9. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt HDR on Trade HDR gives important nuances to the general blessings of trade liberalization, GOOD! – the state has an important role to play The Doha round in the WTO in focus: –Unfair rules: how the trading system favors developed countries WE KNOW! “To benefit from trade and achieve human development gains developing countries and poor people need access to rich country markets”

10. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt HDR on Agricultural Trade “The problem at the heart of the Doha Round negotiations can be summarized in three words: rich country subsidies” And how are we doing? –LDC countries (29) get duty free access, but import is low and not growing; 0,2% of total imports, but the concessions are not binding and can be withdrawn if prices are falling. The Norwegian Agricultural Settlement rules! –Only Switzerland imports less from least developed countries (Table 18)

11. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt (OECD)

12. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt And what says HDR? “Some political leaders in developed countries seek to justify agricultural support by reference to rural development objectives and the interests of vulnerable communities. There is little evidence to support this justification”.

13. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt WILL THIS CONTINUE ?

14. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt The Relevance of HDI Human development is about much more than the rise or fall of national incomes.. about expanding the choices people have to lead lives that they value, and it is thus about much more than economic growth ( UNDP) BUT; For rich (donor) countries; GDP rules –Education and Life expectancy about the same For poor countries HDI more interesting –Because their score reflects political decisions

15. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt

16. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt Weaknesses of HDI Not a Sustainability Index –Does not meet the criteria; A development that meets present needs without compromising the ability of future generations to meet their own needs. (Brundtland Report 1987) No Environmental Index included –Does not consider input use nor output Environmental costs (externalities) in production; Norway, overuse of electricity? Pollution problems; Global level; global warming, CO 2, the Kyoto-targets Regional level; particles, SO 2, Other criteria's might be discussed

17. Norwegian Institute of International Affairs Norsk Utenrikspolitisk Institutt Concluding remarks HDR 2005 is showing a willingness to address important areas –Aid governance needs fundamental reforms –The outcome of the Doha-round critical to reach reach MDG –The HDI needs to capture more GDP The HDR has put up a new agenda for Norwegian aid policy Hopefully, the new government, will meet these challenges