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THE CHANGING DONOR LANDSCAPE IN NICARAGUA: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Lauren Walshe-Roussel International Development.

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Presentation on theme: "THE CHANGING DONOR LANDSCAPE IN NICARAGUA: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Lauren Walshe-Roussel International Development."— Presentation transcript:

1 THE CHANGING DONOR LANDSCAPE IN NICARAGUA: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Lauren Walshe-Roussel International Development Research Centre November 3, 2012

2 RESEARCH QUESTIONS AND METHODOLOGY 1) What influence are emerging donors having on the recipient government and traditional donors? 2) What direction does this influence suggest for the future of development cooperation in Nicaragua? Multistakeholder approach comprised of interviews conducted in June-July 2012 Traditional Donors Emerging Donors Government of Nicaragua Multilaterals

3 BACKGROUND : INFLUENCE ON THE EXISTING AID SYSTEM Threat to healthy and sustainable development Cost- effective, relevant, and respectful ÷ Emerging donors influence on the existing aid system is poorly understood Silent revolution in development assistance : Emerging donors are challenging the existing system and its development paradigm Common threads: donor distinctiveness, the donor divide Emerging donors are not overtly attempting to overturn rules or replace them. Rather, by quietly offering alternatives to aid-receiving countries, they are introducing competitive pressures into the existing system (Woods, 2008; 17)

4 1) What influence are emerging donors having on the recipient government and traditional donors? 2) What direction does this suggest for the future of development cooperation in Nicaragua? Empowerment for recipient government Traditional donors re-evaluating their approaches Competition vs. Cooperation? Donor engagement is desirable (Davies; 2008; Fues et al., 2012), but skepticism as to whether it is possible (Woods, 2011; Chandy and Kharas 2011). BACKGROUND : COMPETITIVE PRESSURES &THE BALANCE OF POWER

5 NICARAGUA CASE STUDY: INTRODUCTION Poorest Country in LAC, after Haiti Revolution ( ) and Natural Disasters (72, 98) Pilot Country for Aid Effectiveness Strong Donor Presence & Aid Dependency

6 Main Bilateral Actors at Present Emerging donors: Argentina, Brazil, China (Taiwan), Cuba, Korea, Mexico, Russia, Venezuela Nicaragua = greatest recipient of bilateral south-south cooperation projects from Ibero-American states after El Salvador in 2010 (SEGIB, 2011) Traditional donors: Canada, EU, Finland, Germany, Japan, Luxembourg, Netherlands, Spain, Switzerland, (USA) NICARAGUA CASE STUDY: INTRODUCTION Nicaraguas Changing Donor Landscape since 2006

7 FINDINGS: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Alternatives and Empowerment for the Government Nicaraguan government back in the drivers seat of its development agenda, Emerging donors facilitating this process National Human Development Plan for Financing for Development : Gvt. priority & reflection of available resources Brazil – Hydroelectric plant, US$ 1,126 million Mexico – Telecommunications, US$ 405 million Venezuela – Refinery, US$ 3,939 million Diversified investment = fuel and leverage for gvts development agenda

8 FINDINGS: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Alternatives and Empowerment for the Government Technical cooperation: enhancing the governments ability to manage its development priorities Venezuela – US$ million to state administered social programs in the first half of 2011 alone (BCN, 2011; 11) Terms of engagement based on respect for national priorities the influx of funds has allowed Nicaragua to talk to the traditional donors in another way, because it no longer depends, in any kind of way, on what we do or do not want to fund

9 Alternatives and Empowerment for the Government We cannot say can we do this project, please sign here anymore. And thats okay. We were basically told this is your money…we can talk about it, and if I agree and you agree, then lets do it, and if not, just take your money home. (…) This is a new attitude or a new strength of the government that they didnt show before. Donor pluralism has empowered the government to pursue a development agenda of its own on its own terms Resulting approach - foreign investment à la Washington Consensus - consensual cooperation priorities with bilateral donors - state-led social programs that target the poor FINDINGS: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES

10 Reality Check for Traditional Donors No change in traditional donor relationships with other bilateral development actors Traditional donors agree that impact of emerging donors in Nicaragua is huge No cooperation/direct competition, but subtle & strong competitive pressures spurred by emerging donors Thinking about new development strategies Strategic sectors that are consonant w/ national priorities (e.g. renewable energy) Public-private alliances, development component for private sector interventions Investment and exchange-based cooperation in areas like education Triangular cooperation projects with objective to strengthen the aid delivery capacity of Mexico (Japan-Mexico-Nicaragua) FINDINGS: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES We (traditional donors) are less important...which is good, very good; but this obliges us to use different instruments and to look to different sectors, strategic sectors, for a different development cooperation context

11 Breaking the Ice of Isolation Traditional Donors Emerging Donors FINDINGS: INFLUENCE ON DEVELOPMENT COOPERATION RELATIONSHIPS AND PRACTICES Making the link between bilateral donors is the single most important challenge for the development community in Nicaragua We already know that we work differently (from traditional donors), that we are not competing. It would be good to have dialogue to potentially maximize development results and minimize costs. Discussion on inviting emerging donors to the donor roundtables Demonstrated willingness to engage in cooperation beyond bilateral relationships with UN bodies Initiative Will

12 CONCLUDING REMARKS: BROADENING OUR UNDERSTANDING OF THE CHANGING DONOR LANDSCAPE Empowerment for Recipient Government Modalities, principles & leverage of emerging donor cooperation ownership Empowerment evinced by governments ability to stand by its unique development agenda, demonstrated by assertiveness with traditional donors Reality Check for Traditional Donors Traditional donors re-evaluating approaches, toward common ground w/ emerging donors Silent Revolution Constructive not disruptive processes – emerging donors present opportunities for development as opposed to threats Donor Divide Increasingly blurry – unhelpful framework for capturing dynamic processes Need to broaden and contextualize assessments of changing donor landscape


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