MAKING AID WORK FOR DEVELOPMENT Daša Šilović Senior Policy Advisor, UNDP/BDP Co-Chair UNDG WG AE New York

The target is development Development Effectiveness Aid Effectiveness Millennium Declaration/2005 Summit Outcome Document/FfD process Rome/Paris Declaration MDGs/PRS(p) 12 Indicators of aid effectiveness Development Results

Improving the impact of aid 1.Greater transparency – for greater alignment (e.g. the sub-theme groups) 2.More effective accountability – –stronger accountability (governments are accountable first of all to their parliaments & citizens on the use of public funds who exercise oversight) –more balanced accountability (donors scale down excessive demands on partner countries by, for example, making greater use of country systems of checks & balances, drawing conditionalities from PRSPs, harmonising reporting requirements) 3. Establish incentives to change behaviour 4. More credibility for development through results (disappointing results could make aid, not poverty, history)

Ownership (Partner countries) Partners set the agenda 1 Aligning with partners’ agenda Using partners’ systems Alignment (Donors - Partner) 2 Harmonisation (Donors - Donors) Establishing common arrangements Simplifying procedures Sharing information 3 Managing for Results 4 Development Results OECD Pyramid-From donorship to ownership

Aid for Development Effectiveness Pyramid National aid policies and coordination strategies - PD based Partnerships - CG/RT/RRM/JAS and national stakeholder Accountable national processes, institutions and systems MDG based development outcomes Evaluation Indicators Harmonization, alignment, capacity development and AIMS. MDG based National development Priorities and Strategies Summit Outcome Document Process andinstruments Managing for developmentresults MDG based development outputs Monitoring

GLOBAL ODA SNAPSHOT Total ODA from DAC members rose by 32% in 2005 to US$106.8 billion- a record high. This represents 0.33% of members’ combined GNI in 2005, up from o.26% in 2004 and the highest ration since Most of the increase was accounted for by only 2 countries – Iraq and Afghanistan. If these 2 countries were excluded core development programmes increased by 2.9% The lion’s share of aid increase in 2005 in 2005 came from debt relief grants which more than tripled while humanitarian aid rose by 15.8%.

2006 DCR Non-DAC Donors – a global snapshot OECD DAC member countries continue to supply around 95% of total ODA, but that is likely to decline to about 90% over the period to In the recent past, aid from non-DAC countries has probably been about 5% of worldwide ODA. This figure is likely to rise over coming years, as non-DAC EU and non-DAC OECD members such as Korea and Turkey, increase their aid. Countries outside both the OECD and the EU are also set to increase their aid, notably China and India. 17 non-DAC donors reported a total of USD 5 billion net ODA in 2005, of which 1.9 billion was from other OECD members and USD 2.4 billion was from Arab countries. As yet, there are no available data for most emerging donors in Asia, notably China and India. In 2005 non-DAC aid totaled $3.2 billion, with $1.7 billion of that coming from Saudi Arabia. These figures do not include some new Asian donors, notably China which is rapidly increasing its aid, especially to Africa.

PD Implementation – baseline 2006 Survey Progress strong expectations for change… donors have made concrete commitments and strategies for scaling up, e.g. EC aid effectiveness is on country agendas and is becoming part of aid coordination instruments; strengthened national ownership; stimulated constructive dialogue and new forms of partnerships.

cont. Constraints high transaction costs are undermining aid effectiveness; need for demand driven TC; slow progress on untying aid and ensuring predictability; donor field-HQ disconnect impacting behaviour change at country level; need incentives for change and cost-effective interventions; need for stronger and more accountable partner country institutions; lack of partner country institutional capacity to manage and coordinate ODA

Programme approaches (Indicator 9)

EC COMMITMENTS TO SCALING UP – A ROADMAP Roadmap to achieving 0,17+ : 1.Policy Implications – strategy, advocacy, legislative decisions on budgetary implications 2.Needs assessment – from advocacy around ODA to resource mobilisation and management, legislative oversight 3.Capacity assessment

REACHING THE MDGs – policy coherence and complementarity Resource gaps – needs assessment to respond to “uncovered” priorities, particularly sectoral related to MDGs TA/TC vs CD support – East/East, S/S, peer learning Data collection – AIMS (standards DAC/UNDP) MDG 8 – coherence (RRM) Donor coordination mechanisms (WB/UNDP)

UN Reform UN Reform – UNDG Action Plan WG AE Baseline Survey findings – implications for the UN system: a. Support to programme countries 1.Facilitation 2.Capacity Development b. Internal H&A – streamlining, rules and procedures, strengthening UN RC system and UNCT (UNDP expertise)

UNDP/UN RC potential areas of support Addressing the issue of “orphaned donors” at recipient country level to address: information sharing on donor mechanisms, inclusion in donor-partner country processes, promoting delegated cooperation; monitoring and evaluation, independent project appraisals, procurement and support to their embassies in managing aid.

Cont. at donor HQ level: Interface with the PD and global initiatives (information sharing/expertise) especially in the preparations for the Ghana HLF Facilitation of East/East and S/S cooperation and lessons learnt (e.g. delegated cooperation, joint missions) Continuous capacity development to strengthen their donorship initiatives; financial management; legislation setting; advocacy.