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Busan Partnership for Effective Development Cooperation: some progress, no clear commitments, no thanks to EU

Added 07/Dec/11

 

By Bodo Ellmers,

 

The Fourth High Level Forum on Aid Effectiveness (HLF4) has come to a close, resulting in the new Busan Partnership for Effective Development Cooperation, which is a mixed bag in terms of the results that civil society was advocating for.

Some progress has been made on the core aid effectiveness agenda, with strengthened commitments on democratic ownership, using country systems and aid untying. Furthermore, China and other BRICs hesitantly moved under the new partnership’s umbrella.

However, Busan fails to deliver a framework for effective and responsible private finance, and the future of the aid and development effectiveness process post-Busan is unclear, as the modalities of a follow-up and implementation process could not be agreed. 

Hot issues that had to be settled last-minute in Busan were the use of country systems, the transparency of commercial flows, human-rights based approaches and the enabling environment for civil society organizations. 

 

Tough last-minute negotiations at HLF4: EU lacks ambition, BRICs endorse on condition that commitments are non-binding,

HLF4 assembled more than 3000 participants, of which more than 100 ministers and heads of international organizations. Civil society organizations participated for the first time as a formal stakeholder group in an HLF, sending 300 representatives coordinated by the BetterAid platform.

The European Union, which played a leadership role at the previous HLFs in Paris and Accra, unfortunately lacked such ambitions in Busan.   The emerging economies – in particular China – played the star role at the HLF, simply by threatening absence. That reflects the changing patterns of international development finance, as well as of geopolitics.

The question of whether China would participate in the new partnership kept the negotiators busy until late night and distracted the sherpas from dealing with substantial issues and commitments. Finally, China agreed to participate but under the condition that “the principles, commitments and actions agreed in the outcome document in Busan shall be the reference for South-South partners on a voluntary basis”.

 

Progress on aid untying, use of country systems and democratic ownership,

The Busan Partnership gives a new impetus for aid untying and the use of country systems- crucial areas for making aid contribute better to building the capacities that are needed to end aid dependency. Progress in these areas has been the priority for African developing countries, backed by civil society organizations including Eurodad who have been at the forefront of advocacy efforts to push donors to deliver more and better aid.

The African demand to untie all aid by 2013 did not find consensus, however, due to strong resistance from major donor countries. Donors just committed to “accelerate our efforts to untie aid” and improve reporting on the tying status.  But the agreement also spells out that untying offers opportunities for local procurement, implicitly recognizing the double dividend that can be yielded for development when more aid is spent locally.   

A major breakthrough, although at this stage just verbal, is the commitment to “use country systems as default approach”. This was the red line for African sherpas in the negotiations ahead of and at HLF4. Donors also committed to “state the reasons for non-use”.  However, they pushed through an amendment that “the governance structures of both the provider of development co-operation and the developing country” will be respected. This may take pressure off for them to actually change the way they are doing business. 

In any case, if duly implemented, using country systems as the default approach could become a fundamental game-changer. Since modern development cooperation started, parallel implementation by aid agencies has been the rule, and implementation through country systems the exception. The new approach makes country systems the rule, and parallel implementation the exception. It will also significantly improve recipient ownership of development finance.

On ownership, while the Paris Declaration was criticized for a government-focused interpretation of ownership, the Busan partnership agreement finally makes it clear that ownership means democratic ownership. One of the key principles to guide all actions agreed in Busan is to “deepen, extend and operationalise the democratic ownership of development policies and processes.”

 

Private sector: Busan fails to deliver a framework for effective and responsible private finance,

The key mission for the Busan HLF, at least from DAC donors’ perspective, was to enlarge the tent and bring new actors and flows under the umbrella of aid effectiveness principles and commitments. Besides the emerging public donors from middle-income countries, this targeted in particular the for-profit private sector. However, the private sector got a free ride- while CSOs have campaigned for years to be acknowledged as development actors in their own right and formal stakeholders of the HLF process (achieved at HLF3 in Accra), ahead of Busan the private sector was simply invited to join the party without having to really commit to anything.

While the private sector features a lot in the Busan Declaration, HLF4 has failed to deliver a framework for effective and responsible private finance. Instead, it opened avenues for the private sector to benefit from official development assistance. The agreement to “enable the participation of the private sector in the design and implementation of development policies” risks sacrificing democratic processes to businesses’ commercial interests. ODA used for public-private partnerships and blended financing tools might dilute the poverty focus of aid.

That major players in the HLF game have little interest in holding the private sector to account became clear as the World Bank demanded commercial flows to be excluded from the obligation to be transparent and responsible. Massive protests by other parties led to the consensus to: “make the full range of information on publicly funded development activities … publicly available subject to valid concerns about commercially sensitive information.” 

 

Aid and development effectiveness post-Busan: Which way?

A former co-chair of the Working Party on Aid Effectiveness (WP-EFF) warned early in the negotiations process that “everyone familiar with international relations knows: if there are no dates, nothing will happen after Busan.”  The Busan Partnership Agreements contains much narrative in over 36 paragraphs, but hardly any targets, timelines, indicators, action plans or any other features that are necessary to translate rhetoric into action and real change on the ground.

Also, the new “Global Partnership for Effective Development Co-Operation” is at this stage no more than a ghost, as membership and working arrangements are not yet agreed. The old OECD-hosted WP-EFF will stay in place for the time being, mandated to reach agreements on such arrangements by June 2012.  

The coming months will show if Busan was relevant or if the agreements will just add to the pile of unfinished business and unimplemented commitments left from Paris and Accra - if the many, many millions of aid monies spent on meetings, travels, and conferences during the cumbersome preparatory process were actually effective aid.