Annexes to COM(2011)541 - Proposal for the EU common position for the 4th high level forumon aid effectiveness, busan - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2011)541 - Proposal for the EU common position for the 4th high level forumon aid effectiveness, busan. |
|---|---|
| document | COM(2011)541  |
| date | September 7, 2011 |
In Busan, donors should commit to i) develop internal systems which allow for multi-year budgeting of development cooperation, ii) adapt a global reporting standard based on IATI and the Development Assistance Committee (DAC) Creditor Reporting System, iii) develop and implement mechanisms which align aid data standards with partner countries' budget classifications and iv) disclose all country-specific information of the DAC forward spending exercise, including more detailed information at sector level. Partner country commitments on transparency are integral parts of democratic ownership and accountability commitments.
In Busan, the EU should send a strong political message on EU leadership on transparency by launching an 'EU Transparency Guarantee' based on the existing transparency commitments adopted in the EU Operational Framework on Aid Effectiveness.
Reduced fragmentation and proliferation
Despite high investments by the EU on division of labour, aid fragmentation still presents challenges. The results of country and sector concentration take time to materialise, however, global efforts need to be increased.
The Paris and Accra commitments have not fully addressed the political nature of division of labour. In addition, evaluation shows that partner countries have not been able or prepared to lead in determining the optimal roles of donors.
In Busan, donors should commit to i) proceed further with concentration and division of labour while recognising that political decision making is essential for success, ii) move from individual country strategies towards joint assistance strategies among those donors that have the political will to work together, and iii) avoid further proliferating vertical funds and instead use and strengthen the existing channels. Donors and partner countries should iv) promote a global high-level debate on cross-country division of labour based on the DAC's analytical work on fragmentation and forward-looking plans, also addressing under-funded countries.
Alignment
The evidence confirms that aligning with partner countries' national priorities and using their systems makes aid more effective. Use of country systems does not refer solely to budget support but is equally important for project support. Partner country governments have the lead in strengthening country systems while the identification and mitigation of risks should be done jointly by partner countries and donors.
In Busan, donors should i) reaffirm their current commitment to align with the partner countries' national development plans, and ii) to use and strengthen, together with partner countries, country systems for all aid modalities for more effective institutions and policies.
3.3. Accountability for results
The overall justification for the aid effectiveness agenda is that it supports achieving development results. Yet performance on results is significantly off track. The same applies to performance on mutual accountability between partner countries and donors and with their respective publics.
Both partner countries and donors are increasingly accountable to their publics on the use of aid funds and achieving results. While some countries have initiated mutual accountability frameworks according to the Paris and Accra commitments, they need to be rolled out universally and also include accountability for results.
While Paris and Accra affirmed the importance of managing aid to get results, in Busan the ability to measure and report results should be at centre stage. However, the pressure to deliver results should not compromise the longer term process of developing partner countries' capacities to plan, deliver, measure and report development results. Donor assessments of results should be based, to the extent possible, on partner countries' reports on results.
In Busan, partner countries and donors should deepen their accountability for development results by committing to i) increased investment in developing the statistical capacity of partner countries, including through the initiative Paris21[7], and ii) strengthen partner countries' monitoring and evaluation capacities to track development results. Partner countries and donors should commit to iii) transparent reporting on development results using partner countries' assessment frameworks, iv) the universal use of mutual accountability frameworks tailored to country contexts to monitor progress on commitments and results and v) strengthen results-based decision-making for aid investments.
3.4. Countries in fragile situations
The Paris Declaration and Accra Agenda for Action recognised that aid effectiveness principles are relevant in fragile situations. However, they need to be tailored to the specific challenges of countries in fragile situations stemming from weak ownership and capacities and the urgent needs for basic service delivery. The results of monitoring the 10 specific Fragile States Principles[8] show that, while aid effectiveness principles remain relevant, the way they are implemented in situations of fragility needs more fine-tuning.
The Busan outcome should i) recognise and support the work of the International Dialogue on Peacebuilding and Statebuilding, and the growing leadership of the g7+[9] countries by endorsing the Monrovia Roadmap on Peacebuilding and Statebuilding as a framework for defining and measuring results in fragile states, ii) endorse the DAC guidance on state building, transition financing and risk management in fragile situations, and iii) call upon donors to adapt their procedures for decision-making, funding and implementation to the specific challenges of situations of fragility.
4. Extending aid effectiveness principles to other sources of development finance and actors
The evidence suggests that aid effectiveness commitments are relevant beyond their present scope in terms of actors and sources of development financing. The increasing importance of non-DAC donors calls for their wider participation in the aid effectiveness agenda and in the Busan Forum. The following sections addressing development effectiveness include the actors and sources of finance which can bring added value to effective development cooperation and which should be a priority in the Busan Forum.
4.1. Role of the emerging economies and South-South cooperation
Emerging economies are playing a rapidly growing role in supporting partner countries, including through South-South cooperation. It is important that Busan is used as an opportunity to strengthen the global development partnership based on the diverse approaches to and experiences of development.
Contributing to development results is relevant to all stakeholders providing development financing. The Busan Forum should include an exchange between partner countries, donors and emerging economies to share experiences in achieving results. Based on this the Busan Forum could build towards shared principles and differentiated commitments. Aid effectiveness principles can provide added value in formulating them.
The relevance of South-South and Triangular cooperation should be reaffirmed in Busan. To strengthen the results of these cooperation channels, the Busan outcome should address complementarities between North-South and South-South partners based on transparency regarding development financing flows. The Busan outcome should also emphasise the role of regional platforms for knowledge-sharing on successful development experiences as well as capacity development and aid management practices.
4.2. Civil society organisations, local authorities and private foundations
Building on the Accra Agenda for Action and the results of the EU Structured Dialogue, the Busan outcome should reaffirm the recognition of civil society organisations (CSOs) as independent actors in their own right and acknowledge that CSOs complement the roles of governments and the for-profit private sector. In addition, the Busan outcome should recognise the role of local authorities when they have autonomy and the right to initiate specific interventions supportive of local development needs.
In Busan, civil society organisations and local authorities from donor and partner countries should be called on to continue their ongoing efforts to enhance accountability, transparency and integrity in their operations based on self-regulatory mechanisms such as the Istanbul CSO development effectiveness principles[10].
The Paris principles are also applicable to private foundations that have an increasingly important role as donors. Foundations should be called upon to make adaptations to the Istanbul principles to fit their activities and partnerships.
Finally, when acting as donors, international CSOs and private foundations should promote local ownership by acknowledging the lead of local civil society in taking the initiative in identifying local development needs.
4.3. Working together with the private for-profit sector
The emergence of private actors offers different viewpoints and solutions to development challenges. This calls for closer involvement of the private sector in development cooperation to strengthen the catalytic role of aid. Increased cooperation should be based on the aid effectiveness principles.
Blending of loans with grants and further use of innovative financial instruments (risk capital, guarantees, risk-sharing) in cooperation with multilateral and bilateral institutions offers means to leverage additional development funding from the private sector. In Busan, development partners should be called on to further develop and increase the use of blending and innovative financial instruments. Furthermore, the private sector should be called on to take an active role in development cooperation through public-private-partnerships and corporate social responsibility practices.
4.4. International climate change finance as part of Official Development Assistance
The Copenhagen-Cancun process agreed on substantial finance to address climate change: so-called Fast Start Finance amounting to $30 billion over the years 2010-2012 and an increase in public and private funding to reach $100 billion per year by 2020.
The Busan outcome should i) endorse the application of the aid effectiveness principles to climate change finance and target similar endorsement in the Copenhagen-Cancun-Durban process, ii) ask the United Nations Framework Convention on Climate Change Transitional Committee to include the aid effectiveness principles in the design of the Green Climate Fund, and iii) make a commitment to assess the application of the aid effectiveness principles regularly through the Monitoring, Reporting and Verification mechanism on climate finance.
5. Future aid effectiveness governance and monitoring
At present, the key elements for efficient aid effectiveness governance are not sufficiently addressed. First, continuous political support has not fully materialised and has mainly been restricted to the three High Level Forums. Second, country level implementation has not been adequately supported by global structures and the DAC-hosted Working Party on Aid Effectiveness (WP-EFF) has become a self-standing, heavy bureaucracy. Third, monitoring of the Paris commitments has taken place, but this has not been adapted to country contexts. Finally, mutual accountability frameworks have not been developed in all partner countries, and their outcomes have not been systematically debated at the global level.
In Busan, the decisions on governance should be sufficiently detailed to avoid lengthy discussions after Busan. In general, the governance structure should have wide coverage of different development partners. Post-Busan governance should contain the following elements:
First, political engagement and decision-making should be addressed by emphasising links between aid effectiveness implementation and global development policy forums. This could be done through regular high level debates on progress in International Monetary Fund/World Bank and DAC Senior and High Level Meetings.
Second, country level implementation should be strengthened through 'country compacts' in which partner countries, based on multi-stakeholder consultation, agree on locally adapted Busan priorities and targets with their developments partners, using existing local mechanisms for mutual accountability.
Third, the WP-EFF should be streamlined, with the termination of most of the current clusters. It should be tasked to facilitate country level implementation (helpdesk function, synthesis, good practices) and to conduct global monitoring together with the DAC. The DAC should become an international hub for transparency and the host organisation of the IATI. The UN Development Cooperation Forum should focus on strengthening global mutual accountability.
Finally, global monitoring should be conducted in connection with the 2015 deadline for the Millennium Development Goals. The Paris indicators should be reduced to reflect the focused agenda. The indicators to be included should address ownership (indicators 1, 2), alignment (indicators 3 and 5), predictability and transparency (indicator 7) and accountability for results (indicator 12), resulting in an equal number of indicators for partner countries and donors. The baseline for indicators should be kept the same to enable measurement of long-term progress. Country level monitoring, in turn, should be based on existing local mechanisms. Generic lessons should be distilled at the global level through the WP-EFF and the DAC.
6. Conclusions
The Busan Forum will be a key opportunity to focus the aid effectiveness agenda to increase the impact of aid on development results. Informed decisions are possible due to the wealth of evidence available on aid reform. Sustained political support will be crucial for effective implementation. To this effect, the Commission proposes the EU continues its leadership in aid effectiveness by pursuing the following objectives:
1. The Busan outcome should be an encompassing document reaffirming the Paris Principles, based on the Paris Declaration and Accra Agenda for Action and focusing on deepened key commitments to guide future implementation. All DAC donors, vertical funds and multilateral organisations should fully adhere to the principles and commitments.
2. Aid effectiveness themes included in the Busan document should be democratic ownership, transparency and predictability, reduced fragmentation and proliferation, and alignment as well as accountability for results. Commitments in situations of fragility should be deepened in a flexible manner.
3. Aid effectiveness implementation should be anchored at the country level through flexible partner country led 'country compacts' based on existing local mechanisms. The global aid effectiveness governance structure and monitoring should be streamlined.
4. Diverse experiences of achieving development results and interpretations of aid effectiveness principles should be invited from the emerging economies, CSOs and local authorities as well as the for-profit and non-profit private sector in order to work towards differentiated responsibilities and commitments.
5. Aid effectiveness commitments should be extended to cover other sources of development finance, particularly climate change finance.
[1] In addition to the Commission, the Member States that participated in the survey are Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and United Kingdom.
[2] See: http://ec.europa.eu/europeaid/how/ensure-aid-effectiveness/documents/aid-effectiveness-benefits_en.pdf
[3] See footnote 1.
[4] See footnote 1.
[5] See footnote 2.
[6] See footnote 2.
[7] Paris21 is a consortium by partner countries and donors with a secretariat hosted by the Organisation for Economic Co-operation and Development ( OECD), see http://www.paris21.org/
[8] Fragile States Principles refer to the Principles of Good International Engagement in Fragile States to which OECD countries committed themselves in 2007.
[9] The g7+ is an independent and autonomous forum of fragile and conflict affected countries and regions inaugurated at the first International Dialogue on Peacebuilding and Statebuilding, held in Dili, Timor-Leste in 2010.
[10] http://www.cso-effectiveness.org/IMG/pdf/final_istanbul_cso_development_effectiveness_principles_footnote.pdf