2. Jonathan Glennie BOND, 8 May 2013 Aid and MICs: Some common assertions and some clues to the future of aid

3. Common assertion #1 MICs no longer need aid 3 MICsleading

4. Arbitrary and stingy cut-off points Middle income countries Low income (LIC) Lower middle income (LMIC) Upper middle income (UMIC) High income (HIC) $1000 or less $1000 - $4000 $4000 - $12500 $12500 or more 4 “Is it not time for these arcane income thresholds for ‘graduating’ from ‘low-income’ status to be laid to rest?” Martin Ravallion, Director, Development Research Group, The World Bank

5. An expanding set of objectives (Glennie 2012a) Already agreed goalsPossible future goals MDGsClimate finance SDGsBroader Poverty eradication Adaptation and mitigation Equitable use of natural resources and ecosystem management e.g. forests, oceans E.g. technological connectivity 5 “Development only really begins when extreme poverty is eradicated.” Adolf Kloke-Lesch, former managing director at GIZ, Germany

6. Common assertion #2 LIC  MIC  HIC progress tends to be linear 6 MICsleading

7. Movements between income categories 1978199020032012 LIC 27486136 LMIC54505654 UMIC40353754 HIC30445470 LDC30435048 World151177208213 7

8. 8 $110bn $130bn $172bn

9. Common assertion #3 Most poor people live in MICs 9 MICsleading

10. The Sumner numbers depend on only 5 countries (Glennie, 2011) 10

11. Common assertion #4 Aid has “done its job” in MICs 11 MICsleading

12. The vast majority of poor people live in Low Aid Countries 12 (Glennie, 2012b)

13. 10 most poor-populous countries 13 (Glennie, 2012b)

14. Aid to MICs is likely to be increasingly effective (VFM) 14 Effectiveness (Glennie, 2011)

15. Common assertion #5 Aid from MICs differs fundamentally from DAC aid 15 MICsleading

16. Regional categories of donor make somewhat more sense 16

17. 5 principles for all development finance (Glennie and Rogerson, 2011) 1.Accountability to citizens 2.Fulfilment of commitments 3.Complementarity 4.Mutual learning 5.Agreed human rights and environmental standards 17

18. Recap 1.MICs still need aid and they can use it effectively 2.They also want to supply aid (for political as well as charitable reasons) 3.Global goals are expanding (planetary resource limits) 18

19. The 2 major trends of this global era 1.Shifting geopolitical balance 2.Planetary resource limits ALSO the return of the public sector... 19  South-south cooperation  Climate finance  SD finance

20. 20 A global public sector

21. 21 People accept public spending at the national level

22. Mutual benefit, mutual cost 22

23. Common assertion #6 The aim of aid is to make itself unnecessary 23 MICsleading