UK urged to outline aid industry rationalisation

Overseas Development Institute

News Release

More aid is not enough. Will Benn's White Paper avoid the elephant traps in international development

London, ODI: The Director of the Overseas Development Institute (ODI), Simon Maxwell, today welcomed the imminent publication of the UK Government's new White Paper on international development (to be launched this Thursday 13th July), but challenged Hilary Benn, the UK's Secretary of State for International Development, to answer the questions which beset the sector.

'Increasing aid has been a good start, but more of the same will not be
enough to reduce world poverty. The road ahead is littered with elephant traps. Hilary Benn needs to tell us how he plans to deal with corruption and poor governance in Africa. He needs a strategy to deal with the impact of China and India on the rest of the world. And he must tell us how to rationalise an aid industry that is sprawling out of control. At ODI we are asking "What's Next in International Development?" Will Hilary Benn's White Paper provide an answer?'

ODI's work on What's next in international development?, shared in this week's publication of the Institute's Annual Report, celebrates the achievements of 2005, the year of the G8 Summit in Gleneagles. Simon Maxwell says:

'The campaigning NGOs who queued up to dismiss the pledges to Africa at Gleneagles last year have been proved wrong - up to a point. The trade talks are still faltering and reform of the UN is half-finished business. But debt relief and more aid has begun to materialise and make a real difference to the health, education and well-being of people in the poorest countries.'

However, corruption and poor governance pose serious risks that more aid is wasted (or is not used well enough). The trick, says ODI researcher Verena Fritz, is not to be fundamentalist but rather to support leaders in Africa who are committed to good government and to support wider political and institutional change.

'There are not many poor but well-governed countries where aid can easily be scaled up fast to reach the MDGs. Look at the recent backsliding of previously considered "good performers" such as Uganda and Ethiopia. But we can help Africa if we set minimum standards and give incentives to improve governance over time. Think of this as "good enough governance". Human rights are non-negotiable, but we shouldn't expect African countries to become model democracies overnight. New democracies are struggling and we need to support them.'

The rise in aid levels makes it all the more important to address corruption.

'Corruption can destroy progress in Africa,' says Fritz. 'We need to work to educe it and to ensure that aid doesn't fuel the problem. We mustn't give aid carelessly whether we give budget support or within projects. We need to be serious about monitoring its use and do that together with local people.

'We need to build on initiatives that build greater transparency and accountability as we have done around natural resources as, for example, withthe extractive industries transparency initiative.'

That the White Paper will emphasise governance has been widely trailed. 'Given the constraints on the World Bank from focusing on politics, this is an area where DFID can really take a lead and add value,' says Julius Court, and ODI researcher and governance specialist:

'The main challenge is, how do you link these very real concerns about governance on the one hand to the commitments to dramatically scale up on the other? There are increasing issues of political risk - these will need to be taken much more seriously in coming years.'

ODI's thinking on What's next in international development? is brought together in its Annual Report, published this week. Named 'Think Tank to Watch' by Prospect Magazine, ODI's 70 researchers contribute to policy debates around the world. Baroness Margaret Jay, ODI Chair, notes:

'ODI's work engages simultaneously with the current agenda in international development and with emerging issues. Indeed, by mapping and understanding the emerging issues, we not only respond to the concerns of policy-makers, but also help to shape the field.'

(ENDS)