Development Cooperation Report, 1998 : Efforts and Policies of the Members of the Development Assistance Committee, 1999 Edition.

252 Pages·1.586 MB·English

by  OECD

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The financial crises in emerging markets in the course of 1997 and C i
1998 have reinforced the basic thrust of the agreed OECD/DAC co-
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operation strategy. The challenges of development are more complex and Efforts and Policies
1998
formidable than many had foreseen, but the vulnerabilities revealed by
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the recent crises demonstrate the need to help strengthen the of the Members
foundations of sustainable development. The basic challenge remains o
implementing people-centred and results-oriented partnerships to
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encourage and support locally-led efforts. This has now taken hold C
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Efforts and Policies
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1998
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Co-operation
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Report by James H. Mic hel
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CHAIR OF THE DEVELOPMENT ASSISTANCE COMMITTEE
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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and
which came into force on 30th September 1961, the Organisation for Economic Co-operation
and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and thus
to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member countries
in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The
following countries became Members subsequently through accession at the dates indicated
hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971),
New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995),
Hungary (7th May 1996), Poland (22nd November 1996) and the Republic of Korea (12th December
1996). The Commission of the European Communities takes part in the work of the OECD
(Article13 of the OECD Convention).
In order to achieve its aims the OECD has set up a number of specialised committees. One of
these is the Development Assistance Committee, whose Members have agreed to secure an expansion
of aggregate volume of resources made available to developing countries and to improve their
effectiveness. To this end, Members periodically review together both the amount and the nature of
their contributions to aid programmes, bilateral and multilateral, and consult each other on all
other relevant aspects of their development assistance policies.
The Members of the Development Assistance Committee are Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands,
New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, the United
States and the Commission of the European Communities.
Publié en français sous le titre:
Coopération pour le développement
R a p p o r t 1 9 9 8
© OECD 1999
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Foreword
III
S
evere economic and social consequences of turmoil in emerging financial markets have provided
a dramatic backdrop to the struggle for development progress throughout 1998. The broad geographic impact of
what was originally seen as a severe but local Asian phenomenon has been a sharp reminder that we are living in
a global economy. The questions we face about globalisation are not whether it should occur. It is already with us.
Rather, we are faced with the challenge of how we can influence its evolution so as to maximise participation and
a just distribution of the benefits, while minimising and mitigating the risks of exclusion.
T
he 1998 Development Co-operation Report takes stock of the people-centred and results-
oriented development partnerships strategy against this volatile background. The conclusion is that the basic
elements of the strategy remain sound, even though the challenges of development are even more complex and
formidable than had been foreseen only two years ago when the Development Assistance Committee adopted its
report, Shaping the 21st Century: The Contribution of Development Co-operation. If anything, the present
crisis demonstrates the need for putting partnerships into practice on a more accelerated basis in furtherance of
internationally agreed goals of human progress that serve universal interests. There is reason for impatience
about the pace of the strategy’s implementation. And there is reason for serious concern that levels of official
financial support, more essential than ever at a time of diminishing private flows, continue to decline.
T
his 1998 Report takes stock of what has been accomplished towards achieving and measuring
progress toward agreed goals, strengthening partnerships as operational models for international co-operation,
mobilising and monitoring resources for development, and bringing together aid and other policies that affect
development. It explores the evolving recognition of corporate and individual responsibility as a factor which can
improve the prospects for giving renewed prominence to questions of sustainable human development in public
policy. It describes recent initiatives of bilateral donors and international development agencies. And it provides
unique statistical data and analyses of aid and other resource flows, including new information concerning how
aid allocations relate to agreed international development goals.
P
utting into practice partnership compacts that encourage and support locally led efforts,
based on integrated and people-centred development strategies, remains the basic challenge. There are
tensions between global goals and the need to respect the right of each country to set its own goals, based on
local circumstances. There are conflicts between the need to strengthen local capacities and institutions and
the inevitable result that an increasing exercise of local responsibility and ownership will progressively
diminish the visibility of donors’ individual contributions. There are differing judgements on how to allocate
scarce resources and efforts among countries with very different needs and wide variance in their capacities
for productive use of assistance. Strong policy differences are encountered within governments in efforts to
integrate development co-operation into a broader framework of policies that will facilitate the full participation
by poor countries in the global economy and the full participation by poor people in the political, economic
and cultural life of their societies.
Y
et, despite these obstacles, progress has been made. Donors, multilateral institutions and their
development partners are improving their own capacities to operate in a partnership context and seem to be
increasingly committed to this approach. Positive experience has been gained with a number of pilot efforts, and
the number of pilots is increasing. This report includes my personal recommendation that the international
community needs to double and redouble its efforts over the coming years and to move from pilot effort to the
systematic use of partnerships. Operational partnership compacts involving shared goals, agreed divisions of
labour, adequate resources, coherent policies and effective co-ordination must now become the norm in the practice
of development co-operation.
I
n previous Development Co-operation Reports I have acknowledged in these introductory
paragraphs the dedicated professionalism of the members of the team within the OECD Secretariat who make
these reports possible. This, my last report as Chair of the Development Assistance Committee, is no exception.
IV
T
his year’s report was produced under the editorial direction of Bernard Wood, Director of the
Development Co-operation Directorate. (Mr. Wood has alternated each year with his Deputy, Richard Carey, in
carrying out this responsibility.) The Report is released each year under my authority, but its continuous
improvement is due to the diligence and ability of Mr. Wood, Mr. Carey and their colleagues in the Secretariat.*
T
here is no separate staff for this work. It is in addition to the normal duties of all who are
involved. The contributing authors, editors, statisticians, secretaries, translators and printers have collaborated
each year to improve the content and the presentation to make these volumes as informative and interesting as
possible.
I
also want to acknowledge the comments by DAC Members, by other directorates in the OECD,
by the OECD Development Centre and the Club du Sahel, all of which contributed to the quality of the final
product. Finally, I want express appreciation for the suggestions received from readers of these Reports, which are
always considered and, I hope, adequately reflected in subsequent editions.
N
ext year I shall join the ranks of the readers of these Reports. As my term as DAC Chair comes
to an end, I look back with appreciation for the outstanding collaboration I have enjoyed with colleagues in
producing the Development Co-operation Report from 1994 to 1998. I depart from the OECD with satisfaction
that my successor will have the benefit of that same collaboration. I look forward to reading about how future
issues and challenges are addressed in the ongoing effort to support sustainable human development, with confidence
that the effort will not falter and that human security and well-being will continue to be improved through
international co-operation.
James H. Michel
* Most involved in 1998 were YasminAhmad, LeilaAttalah, StephanieBaile, JürgenBartsch, RobertBeadle,
JuliaBenn, RobertaBensky, SheenaBohan, KerryBurns, RichardCarey, HyunSikChang, FrancescaCook,
AnnCouderc, Josied’Angelo, JacquelineDamon, ArthurFell, ChristianFlamant, AnnGordon, KathleenGray,
Jean-LouisGrolleau, DeborahGuz, RaundiHalvorson-Quevedo, BrianHammond, IsabelleHernaez-Pozo,
FransLammersen, Michael Laird, Hans Lundgren, Katja Michaelowa, Fritz Meijndert, Kaori Miyamoto, Aimée
Nichols, William Nicol, Madeleine Paris, Rudolphe Petras, Jane Saint-Sernin, Robert Scharf, Simon Scott, Julie
Seif, Irene Sinha, Ruth Stock, Shirley van Buiren, Claudine Wastl and Jacqueline van Hoek, Martine Vignals and
Rolande MacNealy from Translation Division and Colette Goldstein, Jean-Michel Lebrun and their colleagues
from the Public Affairs and Communications Directorate. Mr. Kumiharu Shigehara, Deputy Secretary-General,
provided advice and support and facilitated commentary from relevant Directorates within the OECD.
Table of Contents
V
I
Overview of the DAC Chair: Staying the course toward
development results through partnership.................................. 1
1. Introduction................................................................................ 1
2. Risks............................................................................................. 2
Resources and policy coherence............................................... 2
Perceptions and fears................................................................. 2
Selectivity and partnership........................................................ 3
3. Implementing the global partnership....................................... 5
Advancing development goals
and measuring performance...................................................... 6
Strengthening partnerships and increasing
aid effectiveness......................................................................... 6
Mobilising and monitoring resources for development......... 9
Bringing together policies that affect development................ 9
4. An evolving sense of private sector and
individual responsibility...........................................................11
5. Parting thoughts........................................................................13
Lessons learned.........................................................................14
The priority of development.....................................................15
Demonstrating commitment....................................................16
6. Conclusion.................................................................................17
II The tests of crisis and the development
partnerships strategy..............................................................23
1. Overview.....................................................................................23
2. Financial crisis: Collateral damage and emerging lessons....24
3. Testing the international strategies.........................................26
4. Progress in implementing the strategy ...................................28
5. Monitoring development progress ..........................................34
6. Partnership, aid effectiveness and difficult choices...............37
7. Key current issues .....................................................................39
III Financial flows to developing countries: setbacks,
lessons and prospects...............................................................45
1. Overview.....................................................................................45
2. Highlights of recent trends in external flows..........................46
3. Financial crises, financial systems and policy implications:
Early lessons..............................................................................51
4. Mobilising and managing resources for sustainable
development..............................................................................56
Table of Contents
VI
IV
Trends and issues in the supply of aid......................................61
1. Introduction: The uses of aid....................................................61
2. Trends in bilateral aid targeted on the goals..........................62
3. Achieving a 50per cent reduction in poverty..........................64
4. Targeting other key social development goals........................67
5. Aid targeting: two country examples.......................................73
6. Multilateral trends and issues..................................................77
7. Summary: First findings on goals and aid...............................87
V
Policies and efforts of individual DAC Members........................93
1. Some hopeful signs for aid after a period of decline.............93
2. Common threads in DAC Members’ policy and practice.......97
3. DAC Member notes...................................................................98
Total DAC countries...................................................................98
Canada........................................................................................99
Spain.........................................................................................101
United States...........................................................................103
Germany...................................................................................105
European Community.............................................................107
Finland......................................................................................109
Australia...................................................................................111
Austria ......................................................................................112
Belgium ....................................................................................113
Denmark...................................................................................114
France.......................................................................................115
Ireland.......................................................................................116
Italy...........................................................................................117
Japan.........................................................................................118
Luxembourg.............................................................................119
Netherlands .............................................................................120
New Zealand............................................................................121
Norway......................................................................................122
Portugal....................................................................................123
Sweden.....................................................................................124
Switzerland...............................................................................125
United Kingdom ......................................................................126
Tables
Table II-I Matrix of development co-operation pilot exercises.....................................32
Table III-1 Total net resource flows from DAC Member countries
and multilateral agencies to aid recipients....................................................47
Table IV-1 Estimated annual resource requirements to meet key social development
goals...................................................................................................................68
Table IV-2 Multilateral official commitments to developing countries .........................79
Table IV-3 Multilateral disbursements to developing and transition countries...........80
Table IV-4 Total DAC Members’ contributions to multilateral organisations...............81
Table V-I Offical development assistance flows in 1997................................................96
Table of Contents
VII
Charts
Chart III-1 Total net ressource flows to aid recipient countries......................................46
Chart III-2 Total net ressource flows to aid recipient countries in 1997,
breakdown by region.........................................................................................48
Chart III-3 Total net ressource flows to aid recipient countries in 1997,
breakdown by income group............................................................................48
Chart IV-1 DAC Members’ bilateral aid in relation to five key international goals.......63
Chart IV-2 Prospects for global poverty reduction...........................................................65
Chart IV-3 Bilateral ODA to basic health, 1995-96...........................................................69
Chart IV-4 Bilateral ODA to water supply, 1995-96 ..........................................................70
Chart IV-5 Bilateral ODA to population programmes including reproductive health,
1995-96...............................................................................................................72
Chart IV-6 Bilateral ODA to education, 1995-96...............................................................73
Chart IV-7 Five dimensions of development in Nepal and Uganda ...............................74
Chart IV-8 Sectoral breakdown of bilateral ODA to Uganda, 1995-96............................75
Chart IV-9 Sectoral breakdown of bilateral ODA to Nepal, 1995-96...............................75
Chart IV-I0 Net multilateral ODA to countries in greatest need......................................78
Chart V-1 Net ODA of G7 and non-G7 countries.............................................................94
Chart V-2 Net ODA in 1997................................................................................................95
Boxes
Box I-1 Second Tokyo International Conference on African Development,
19-21 October 1998....................................................................................... 8
Box II-1 Strengthening partnerships for development.............................................. 29
Box II-2 Mali Aid Review............................................................................................... 30
Box II-3 Measuring development progress: A working set of core indicators ......... 35
Box II-4 DAC Source Book on Concepts and Approaches linked
to Gender Equality ............................................................................................ 41
Box III-1 The development finance agenda.................................................................. 57
Box III-2 Meeting infrastructure needs into the 21st century..................................... 59
Box IV-1 Hanoi consensus links the 20/20 Initiative
to the partnerships strategy......................................................................... 76
Box V-1 DAC Peer Review of Canada, 22 January 1998..............................................100
Box V-2 DAC Peer Review of Spain, 10 February 1998...............................................102
Box V-3 DAC Peer Review of the United States, 6 April 1998....................................104
Box V-4 DAC Peer Review of Germany, 9 June 1998...................................................106
Box V-5 DAC Peer Review of the European Community, 16 September 1998.........108
Box V-6 DAC Peer Review of Finland, 16 October 1998.............................................110
Glossary of Key Terms and Concepts.................................................................................129
Notes on Definitions and Measurement.............................................................................134
Statistical Annex .............................................................................................................137
DAC List of Aid Recipients................................................................................................A98
List of Abbreviations
VIII
ACP African, Caribbean and Pacific countries
AfDB African Development Bank
AfDF African Development Fund
AGCD* Administration générale de la coopération
au développement, Belgium
AIDS Acquired Immune Deficiency Syndrome
AsDB Asian Development Bank
AsDF Asian Development Fund
ASEAN Association of South-East Asian Nations
BIS Bank for International Settlements
BHN Basic human needs
BMZ* Ministry for Economic Co-operation and Development
(Germany)
CDE Capacity Development in Environment
CEC Commission of the European Communities
CEECs Central and Eastern European Countries
CFA* African Financial Community
CIDA Canadian International Development Agency
CSOs Civil society organisations
DAC Development Assistance Committee
DCD Development Co-operation Directorate (OECD)
DFID Department for International Development
(United Kingdom)
EC European Community
EBRD European Bank for Reconstruction and Development
ECHO European Community Humanitarian Office
EDF European Development Fund
ESAF Enhanced Structural Adjustment Facility
EU European Union
FDI Foreign direct investment
GATT General Agreement on Tariffs and Trade
GNP Gross national product
GSP Generalised System of Preferences
HICs High-income countries (and territories)
HIPCs** Heavily-indebted poor countries
IBRD International Bank for Reconstruction and Development
ICB International competitive bidding
IDA International Development Association