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In 2004, Official
Development Assistance (ODA) from members of the Donor Assistance
Committee (DAC) – mainly composed of OECD countries – reached 79.5
billion dollars, increasing by a comparatively small 4.1 billion
from 2003. The change may be small but the trend for growing levels
of ODA is here to stay.
Leaders of the Group of Seven (G7) have repeated their
intentions to reach 0.7pc of gross domestic income (GDI) in ODA.
Though very few have actually done so, the trends are for ramping up
ODA as a percentage of GDI. With a growing ‘generosity gap’ -
difference between GDI per capita and ODA per capita – in rich
countries, the pressure is mounting to achieve the magical 0.7pc
target.
The growing awareness of public opinion in DAC countries
only increases the pressure to give. To which is added the reality
of democratic practice that requires all government funding to meet
the expectations of the public. It must be transparent, have
policies that reflect national values and must meet the same
efficiency requirements as other public programmes.
In the last two years, the members of the DAC have been
able to count debt relief as ODA, artificially inflating these
numbers. Most of this will disappear in 2007, leaving donor
countries scrambling to increase ODA funding to keep on track to
meet the fated 0.7pc. Much scepticism exists regarding their ability
to do so, in part because donor governments have many contending
issues to deal with nationally, and because few programmes can
easily absorb large increases in funding without creating problems.
This leads to one of the two important arguments for direct
budgetary support of countries receiving donor assistance: no easier
method exists of spending assistance money fast and with little
overhead. Ultimately, it remains the purpose of development
assistance to achieve the self-sufficiency of recipient countries;
something that will not happen without the governments of those
countries managing to fulfill their responsibilities as sovereign
bodies.
Herein lies a great challenge. Last year’s Paris
Declaration on Aid Effectiveness clearly lays out the intention of
DAC members to support national governments financially and
technically in taking ownership of their own development priorities.
But, it has one big weakness. It assumes that recipient governments
will pursue good governance.
The main examples held up at the time were Ethiopia and
Uganda, often termed ‘darlings’ of the donor community. Yet in both
cases, the governments of these countries went on to severely damage
the reputations they had built for responsible governance. Youri
Museveni applied for and obtained a change in Uganda’s constitution,
allowing him to serve a third term in office, and Meles Zenawi’s
governing party resorted to repressive violence in order to quell
popular Ethiopian opposition.
Regardless of the Ethiopian Prime Minister’s claims that
police last year reacted legitimately to violent opposition
protests, a report from the independent commission of inquiry called
by the Parliament, leaked this week to the Associated Press, has
revealed the extent to which his government used excessive force to
repress often defenceless civilians. Arrests have not ended, as is
proven by the detention of four persons, two diplomats and two
Ethiopian staff of the European Union (EU), allegedly attempting to
flee to Kenya in a diplomatic vehicle credited to the EU.
The continuing dilemma of ODA is that DAC members cannot
support governments that act repressively; their own respective
citizens would not tolerate it. As a result, both Ethiopian and
Ugandan leaderships have thrown proverbial wrenches in the gears of
the massive and growing ODA steamroller.
Meles wants aid to be predictable and he accused donors of
misleading his government when they froze direct budget support last
year (shutting off a flow of approximately 500 million dollars).
Donors, however, feel that they too were misled into
believing that the Ethiopian government was committed to accountable
governance. One can wonder why either side should be surprised by
the other’s course of action.
Today, the DAC is faced with a difficult choice, whether to
continue its preferred - and preferable - focus on direct budgetary
support of countries receiving donor assistance or to bypass
national governments in their dedication to helping individuals
access their basic human needs.
It would appear that for the present, the donor community
is very cautious in its dealings with the Ethiopian government,
though ultimately they want nothing more than to work directly with
it. On the other side of the standoff, the government also views
donors as untrustworthy partners.
What seems clear is that both the donors and the government
are looking for other ways to reach their objectives. On the one
hand, donors are turning to ways of supporting independent
initiatives that support their objectives in the country, such as
civil society and projects that support the roles of independent
governance bodies. On the other hand, the government is to embark on
a quest for budget alternatives to donor assistance. In this
respect, China is looking more and more like a solution to the
government’s woes.
In light of the Prime Minister’s expressed interests in
limited and choreographed economic liberalisation, China seems a
perfect match. In light of the dramatic loss of such important
budget support from western donors, it was no surprise when the
Meles announced this last week that it was time for Africa and China
to embark on a strategic partnership.
If anything is certain in all of these competing interests,
it is that none will get exactly what they want; neither will the
growing availability of ODA be used as well as it could be. In the
end, the citizens of countries like Ethiopia will pay the price of
this face-off.
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