Tuesday, September 21, 2010

Aid and MDGs - The Point of It All

The UN's Millennium Development Goals Summit in NY is running until Wednesday, and has brought development issues again to the fore. Bogged down as I am these days, I'm yet to check out the webcasts of what happened at the TEDXchange or the Clinton Global Initiative Summit 2010. Still, I have had the time to take a peek at the Financial Times, where Jeffrey Sachs and William Easterly show up on the pages with two different takes on aid and MDGs.

Sachs wrote a few blogposts on MDGs for the FT you can read over at their awesome emerging markets blog Beyond Brics. He sums up the conference thus:

The message from world leaders was clear: the MDGs are at the centre of national objectives in poor countries, and remain at the centre of global cooperation of rich countries. But the rich countries were also clear: we need a new financing system to ensure the success of the MDGs. The current approach is simply not adequate.

From the op-ed in FT, here's Sachs on the trouble with aid now:

Most aid has remained bilateral, making it hard to monitor and largely unaccountable. Shortfalls are attributed to problems in recipient countries. Even when aid is disbursed, these programmes are scattered among many small efforts rather than a unified national plan, and include an endless spectacle of visiting dignitaries from donor countries, politicised negotiations, and countless headline announcements of support that all too often fails to materialise.

He wants aid to be provided in pooled funds from donors, much like The Global Fund for TB, Malaria, and HIV/Aids.

The fund pools resources from many donor nations, with an independent review board approving national programmes according to scientific and management criteria rather than bilateral politics. The fund thereby provides aid in a scaled, systematic and predictable way. And while a decade ago all three diseases were running out of control, now all are being reined in with millions of lives saved.

Of course the fund is not perfect, but the programmes it supports are transparent and easily monitored – meaning that when corruption occurs, as it sometimes will, a programme can be halted and the malefactors removed. The fund’s design is a profound improvement over traditional donor aid. But it and efforts like it are chronically underfunded, largely because the US and European donor countries keep too much of their aid budgets in bilateral programmes.

I'm pretty sure many would disagree with Sachs on the Global Fund and the effectiveness of pooled funds. I'd provide examples but the FT later points some out.

In a bit of a face-off, William Easterly also at the FT contends that "The Millennium Development Goals tragically misused the world’s goodwill to support failed official aid approaches to global poverty and gave virtually no support to proven approaches." Only the eighth of the MDGs, he continues, even broaches the topic of private investment. Further:

This is all the more misguided because trade-fuelled growth not only decreases poverty, but also indirectly helps all the other MDGs. Yet in the US alone, the violations of the trade goal are legion. US consumers have long paid about twice the world price for sugar because of import quotas protecting about 9,000 domestic sugar producers. The European Union is similarly guilty.

Equally egregious subsidies are handed out to US cotton producers, which flood the world market, depressing export prices. These hit the lowest-cost cotton producers in the global economy, which also happen to be some of the poorest nations on earth: Mali, Burkina Faso and Chad.

According to an Oxfam study, eliminating US cotton subsidies would “improve the welfare of over one million West African households - 10 million people - by increasing their incomes from cotton by 8 to 20 per cent”.

For my views on aid, here and here. All I would add to that is that I, like Easterly, believe that if the U.S. and EU really want to help Africa out, easing up on (better yet, stopping altogether) the cotton subsidies would be a big boost to the industry. I would go further and say that all food subsidies would help, as would emphasizing farm technologies to increase commercial -- as opposed to subsistence -- agriculture in Africa and decrease the need for food aid, particularly in countries whose economies are almost entirely agrarian. It will also help if the U.S. were to boost exports from Africa in more than just oil and gas.

People have been emailing me this Lancet study, and I see A Bombastic Element also takes it on at his blog. It has some interesting things to say about the point of MDGs, and wonders if compiling the list was ever a good idea. The meat of it:

The very specific nature of many goals, reflecting their diverse, independent origins, leaves considerable gaps in coverage and fails to realise synergies that could arise across their implementation; we draw attention to particular synergies between education, health, poverty, and gender. In some cases, targets present a measure of goal achievement that is too narrow, or might not identify a clear means of delivery. Other challenges encountered by several MDGs include a lack of clear ownership and leadership internationally and nationally, and a problem with equity in particular.

Issues of equity arise because many goals target attainment of a specific minimum standard— eg, of income, education, or maternal or child survival. To bring people above this threshold might mean a focus on those for whom least effort is required, neglecting groups that, for geographical, ethnic, or other reasons, are more difficult to reach, thereby increasing inequity.

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