the paris declaration on aid effectiveness: Lessons for eu aid in enlargement countries Donor Co-ordination Conference , organised by the Directorate General for Enlargement, European Commission Brussels, 23 October 2008 Felix Zimmermann, OECD Development Cooperation Directorate

Overview The OECD and its Development Assistance Committee The 2005 Paris Declaration on Aid Effectiveness Is aid becoming more effective? Spotlights on Albania and Kosovo The 2008 Accra Agenda for Action

The OECD 30 member countries committed to democratic government and the market economy Where governments compare and exchange policy experiences, identify good practices, and promote decisions and recommendations Characterised by dialogue, consensus and peer review www.oecd.org

The OECD Development Assistance Committee Where donors come together to help developing countries reduce poverty and achieve the Millennium Development Goals. c Australia Austria Belgium Canada Denmark Finland France Germany Greece Ireland Italy Japan Luxembourg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland United Kingdom United States European Commission One of OECD’s main committees Full-time, elected chair Delegates from each DAC member In-country development work done by individual DAC members, not by DAC Technical expertise and operational capacity provided by the Development Co-operation Directorate (DCD) – the DAC Secretariat The leading source of good practice and review on priority development co- operation issues Mobilises official development assistance (ODA) financing for development, especially for poverty reduction The definitive source of statistics on the global development co-operation effort Helps change behaviour in the international aid system to increase the effectiveness of aid, including by making it more aligned, harmonised, results-focused and untied Develops ways to assist poor-performing, conflict-prone countries Supports increased attention by OECD members, and within OECD, to policy coherence for development Observer countries: Czech Republic, Hungary, Iceland, Korea, Mexico, Poland, Slovak Republic, Turkey

DAC Subsidiary Bodies Working Party on Aid Effectiveness Working Party on Statistics Working Party on Aid Effectiveness Network on Development Evaluation Network on Gender Equality (GENDERNET) Network on Environment and Development Co-operation (ENVIRONET) Network on Poverty Reduction (POVNET) Network on Governance (GOVNET) Network on Conflict, Peace and Development Co-operation Fragile States Group

Working Party on Aid Effectiveness Set up in 2003 following Monterrey conference on Financing for Development Comprises senior policy advisers from the DAC (23), developing countries (23) and multilaterals (11) Negotiated the Paris Declaration (2005) and Accra Agenda for Action (2008)

Projects strain limited capacities 850 800 750 700 650 600 550 Mozambique (845) Ethiopia (790) New development activities per year (2005) Tanzania (700) Uganda (630) Nicaragua (600) This is generally considered a reasonable proxy for transaction costs. A conservative estimate for a typical African country is that this translates into thousands of new reports and more than 1 000 new annual missions to appraise, monitor and evaluate. Each mission asks to meet with key officials, and each will ask the government to comment on its reports. Bolivia (550) Vietnam (540)

10 453 missions in 34 countries in 2005 800 Vietnam (791) 750 700 650 600 Cambodia (568) 550 Honduras (521) Mongolia (479) 450 Uganda (456) Number of donor missions in 2005

Financing mechanisms are multiplying Source: Financing Development 2008: Whose Ownership? OECD Development Centre Based on Kaul and Conceicao (2006)

Since 2000 Here are a few of the financing initiatives that have emerged since the turn of the century to address global health issues. Indeed, many of our recent discussions on the complexity of development finance have been particularly relevant for the health sector.

Emerging from this complexity in 2005: an unprecedented consensus Who signed the Paris Declaration? 35 donor countries 26 multilateral donor agencies. 56 countries that receive aid. [14 Civil society organisations] Mutual accountability between donors and partner countries. Roadmap to deliver more effective aid: 56 specific commitments. 12 Indicators of progress.

The Paris Declaration “pyramid” 56 Action-Oriented Commitments Based on 5 pillars – ownership, alignment, harmonization, managing for results and mutual accountability Based on 30 plus years of experience documented in DAC about what enables aid to have the greatest impact for development. Many of these commitments aim to strengthen the role of checks and balances in country – for example the commitment to put more aid on budget, where it can be subject to scrutiny by citizens.

12 indicators to monitor progress SURVEY REVIEWS Ownership 1 National development strategies  Alignment 2 Quality of country systems 3 Alignment: aid is on budget Harmonisation 4 Coordinated support for capacity development 5 Use of country systems 6 Parallel PIUs 7 In-year predictability of aid 8 Aid is untied 9 Programme-based approaches 10 Joint missions & analytic work Managing for Results 11 Results-oriented frameworks Mutual Accountability 12 Reviews of mutual performance

The Accra HLF III, September 2008 1,700 participants included 100 partner countries, most donors and international agencies, and 80 civil society representatives Taking stock of progress: Monitoring Surveys (2006, 2008) Reviews (e.g. World Bank Aid Effectiveness Review) Independent Evaluation The Accra Agenda for Action www.accrahlf.net

56 Countries participated in the 2008 Monitoring Survey Asia & Pacific Tanzania Mozambique Yemen Afghanistan Benin Nigeria Latin America Bangladesh Burkina Faso Togo Haiti Cambodia Burundi Madagascar Colombia Indonesia Cameroon Ethiopia Peru Mongolia Cape Verde Côte d’Ivoire Bolivia Nepal CAR Ghana Honduras Vietnam Chad Kenya Nicaragua Philippines P NG DR Congo Morocco Liberia Sierra Leone Dom. Republic Tonga Gabon Malawi ECIS Lao PDR Mali Arab States Albania Africa Mauritania Egypt Ukraine Uganda Niger Jordan PSG Kosovo Zambia Senegal Sudan Moldova Kyrgyz Republic

Where progress is on track 36% 59% 88%

Where targets are within reach 36% 49% 59% 1483 45% 88%

Where very special efforts are required 22% 36% 49% 59% 43% 42% 1483 45% 88% 42% (slippage) 20% 44% 9% 22% (No progress)

The number of donors per country remains high Donor programmes cover many countries (EC, France & Germany: over 100 countries each). 37 countries host more than 24 donors. Quartile distribution of number of DAC and major multilateral donors by country

Many donors account less than 10% of aid The 24 above mentioned recipient countries are: AFGHANISTAN ALBANIA BOSNIA-HERZEGOVINA BANGLADESH BOLIVIA BRAZIL CAMBODIA CONGO, DEM.REP. CAMEROON CHINA COLOMBIA EGYPT GEORGIA HONDURAS INDONESIA INDIA PERU PHILIPPINES PAKISTAN RWANDA SOUTH AFRICA SRI LANKA TANZANIA VIET NAM

Aid for health is particularly fragmented These countries are AFGHANISTAN ANGOLA BANGLADESH CONGO, DEM.REP. ETHIOPIA INDONESIA INDIA IRAK KENYA CAMBODIA MOZAMBIQUE NICARAGUA NEPAL PERU PHILIPPINES RWANDA TANZANIA UGANDA VIET NAM SOUTH AFRICA In 21 countries, in the health sector, more than 15 donors combined provide just 10% of their health CPA

Health finance according to the Ghanaian Ministry of Health (2006) Government Households Donors 59,2 % Ministry of Health 13.6 % 27,2 % Health sector

But the reality is more complex Government Households Donors 44 % Budget Support Commercial Loans (15 %) Ministry of Finance (59.2%) HPIC (0.2%) Ministry of Health Health Fund (14.9 %) & MoH Programme Support (12.3 %) Internally genera- ted funds (13.6 %) Pharma industry Foundations NGOs Global prog’s Health Sector Other private spending Project aid

Spotlight on Albania Ownership = moderate-high Challenge: translate priorities into budgetary terms Implement National Strategy for Development and Integration Alignment = low-moderate Step up donor use of public financial management systems Improve data on aid disbursements Harmonisation = low-moderate Limited use of programme-based and sector-wide approaches Managing for Results = low Lack of capacity, especially on national monitoring and evaluation Mutual Accountability = low Finalise the harmonisation action plan, including a monitoring system

Spotlight on Kosovo Ownership = low-medium Alignment = low A long-term development plan with medium-term strategies Alignment = low Insufficient communication between donors and government Improve capacities for financial management and procurement Harmonisation = low Limited use of programme-based approaches and insufficient dialogue with donors Managing for Results = low Lack of strategy to collect and disseminate data Mutual Accountability = low Donor conference should lead to high attention to aid effectiveness

The 2008 Accra Agenda for Action Not a new Paris Declaration. A political, ministerial, statement, with concrete actions to accelerate implementation of the Paris Declaration. 48 commitments for donors and developing countries, many beginning immediately. Focus on Ownership, Inclusive Partnerships and Delivering Results. AAA looks at the evidence of what is and is not working on aid effectiveness – and identifies actions which taken now will keep all partners on track to meet the Paris Declaration commitments by 2010. Vey high ministerial commitment – ministers involved in the final negotiations. Three main themes – ownership (especially broad-based ownership and transparency); inclusive partnerships (bringing in all parties – new donors, foundations and civil society); and delivering results – development impact. Many commitments start now.

Country Ownership Broaden country-level policy dialogue with parliament, local authorities and civil society Re-affirm international commitments on gender equality, human rights, disability and environmental sustainability Strengthen capacity to lead and manage donors Strengthen developing country systems… … and use them as the default option

Effective and Inclusive Partnerships Reduce aid fragmentation: What role for the EU Code of conduct? Increase value for money by untying aid and using local and regional procurement Deepen engagement with civil society South-South Cooperation Enlargement countries: from aid recipients to emerging donors? E.g. Turkey

Delivering and Accounting for Results Focus on delivering results: improving information systems; Increase accountability and transparency Change conditionality to support ownership Increase medium-term predictability of aid

Turkey: from aid recipient to donor Source: TIKA Report 2007, includes private flows.

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