1 Preparing for the 2010 Development Cooperation Forum 2nd Vienna High-level Symposium 12 – 13 November 2009 Vienna Policy Coherence The new development frontier Robert Picciotto United Nations DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

2 What is policy coherence for development (PCD)? Coherence: “the quality of being logically integrated, consistent and intelligible”. Policy coherence: “looking for synergies and complementarities and filling gaps among different policy areas so as to meet common and shared objectives”. No ‘here’ in policy coherence unless all partners agree on what success means and voluntarily strike judicious trade-offs among means and goals. Choices are often constrained by inadequate knowledge, time pressure and limited analytical capacity. Only second best outcomes may be feasible but solutions achieved at the expense of one or more parties (e.g. through coercion) are not legitimate.

3 It is a response to the integration of the global economy Developing countries’ exports (about $4 trillion) are more than 40 times the level of official aid flows. Remittances from migrants ($282 b) are three times as large as aid flows. Private capital inflows ($961 billion) are more than ten times as large as aid flows. The reverse flow from intellectual property royalties is broadly comparable to aid flows. The damage to poor countries caused by rich countries’ environmental practices is huge.

4 It is consistent with the Millennium Declaration… PCD originally saw the light of day in the Maastricht treaty (1992) but it is now embedded in the historic poverty reduction compact agreed by all United Nations members at the turn of the century. Millennium Development Goal 8 specifies that developed countries have an obligation to provide more and better aid, to accelerate debt reduction and to level the playing field of the global economy. The notion that development cooperation extends beyond aid was confirmed by a Ministerial Statement of the Organization of Economic Cooperation and Development (OECD) in 2002.

5 It extends beyond aid…but aid remains critical to the poor Aid is a life line for low income countries where 1.3 billion people live (average: 5% of GNI; % in some cases). Of the 84 countries with available data only 45 are on track to meet the MDG poverty reduction target. The rest including 75% of African countries and 10 out of 12 fragile states are not. The most serious gaps are in sanitation, child and maternal mortality, education and hunger. Aid is affordable: 0.28% of the GNI of developed countries (vs. the official target of 0.70%).

6 It has four main dimensions Internal coherence: consistency between goals, objectives and modalities of a single development policy carried out by an OECD government (e.g. aid). Intra-donor (whole of government) coherence: consistency among several aid and non-aid policies of an OECD government in terms of their development impact. Inter-donor coherence (harmonization): consistency of aid and non-aid policies across several OECD countries in terms their development impact; and Donor-recipient coherence (alignment): consistency of policies adopted by OECD countries and poor countries individually or collectively to achieve shared development objectives.

7 Development aid has not amplified the voices of the poor It has concentrated on the internal coherence of aid operations (results chain). It has downplayed the impact of distorted policies (aid and non aid) on outcomes. It has assumed that all donor goals are “owned” by recipients.

8 It is time to put the spotlight on global policy dysfunctions Agricultural policies in OECD countries benefit very few of their citizens and undermine equitable growth in the developing world. The highest OECD tariffs on industrial goods affect labor intensive products critical to developing countries Protection of intellectual property rights restricts access to knowledge intensive products and services in poor countries. Immigration restrictions discriminate against the poor, hinder the growth of remittances and aggravate labor shortages in OECD countries. Fishing subsidies absorb $15-20 billion a year and deplete fish stocks on which poor countries’ coastal fisheries depend. Climate change: industrialized countries (home to 20% of the world’s population) account for 63% of carbon dioxide that has accumulated in the atmosphere since 1900.

9 It is time to add human security to the development agenda We will not ‘make poverty history’ without ‘making war history’. Violent conflict is the single most important factor that explains slow growth. The risk of war is three times higher for countries with per capita incomes of $1,000 vs. per capita incomes of $4,000. Conflict is twice as likely for a growth rate of -6% compared to a growth rate of +6%. Only the United Nations has the mandate to overcome both freedom from fear and freedom from want.

10 It is time for DCF to address PCD It should tackle global policy dysfunctions It should incorporate human security in human development It should make globalization work for the poor through aid for trade, aid for sound migration, etc. It should hep increase aid and its effectiveness (Paris declaration) –Improve aid targeting and coordination –Reduce aid fragmentation –Address aid volatility –Improve aid efficiency It should forge broader development coalitions.

11 If you agree, let us do so -- beginning right here and right now… …and thank you for your attention…