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Aid

One boat, one direction

by Brenda Killen

In depth

Moving forward together: racing boat in Bangladesh.

Moving forward together: racing boat in Bangladesh.

Why partnerships matter and how the Global Partnership for Effective Development Cooperation can make a difference. Relevant issues include boosting public-finance systems and improving the enforcement of tax laws.

A few weeks ago when visiting a colleague at the Ministry of Health and Sanitation in Freetown, Sierra Leone, I was struck by a quote on her wall saying "One boat, one direction". When I asked her about it, she simply said: "It helps me keep the focus on why we’re here – and how we should be working". Since then, that quote has become my favourite way to describe the power of development partnerships.

Partnerships lie at the heart of most success stories on how to achieve the Millennium Development Goals (MDGs). Efforts to bring together different actors, promote innovation and strengthen mutual accountability have proven effective in achieving results – such as getting children into school, slowing the rate of deforestation, and caring for people affected by HIV/AIDS and malaria. Effective aid targeted at health systems in some of the poorest parts of Tanzania contributed to a 50 % reduction in child deaths in less than a decade (Killen 2011).

Successful partnership models like these need to be replicated and scaled up. Much of the recent debate on how to follow up on the MDG agenda once its deadline is reached in 2015 has so far focused on outcomes – and rightly so. But as global consultations advance, we also need to consider the means to achieve those outcomes. This means looking not only at the "what", but also at the "how" of international development cooperation – its quality and effectiveness. In a multipolar world, we must reach beyond national governments to harness the resources of a diverse range of actors involved in development – including civil society, businesses, philanthropists, local governments and parliaments – and recognise their diversity and comparative advantage.

The Global Partnership for Effective Development Cooperation does just that. Established at the Busan High-Level Forum on Aid Effectiveness at the end of 2011, it is a free-standing and voluntary alliance of 160 countries and more than 45 organisations (see D+C/E+Z 2012/01, p. 4 f.). Its four main aims are:

  • to maintain and strengthen political momentum for more effective development cooperation,
  • to ensure accountability for implementing the commitments made in Busan, ranging from aid predictability to transparency to the use of developing countries’ own systems, ­
  • to exchange knowledge and share experience in development cooperation and
  • to support implementation of the Busan commitments at the country level.

The OECD and the UN Development Programme support the functioning of the Partnership. Three ministerial-level co-chairs preside over a 15-member international steering committee comprised of senior representatives from governments, international organisations, civil society and the parliamentary and business communities (see interview with Talaat Abdel-Malek in D+C/E+Z 2012/09, p. 345 ff.).

 

Added value

The real potential of the Partnership lies in its ability to push the traditional boundaries of the aid effectiveness agenda to include seemingly unrelated issues and increasingly involve key players, while keeping its focus where it matters most – at the country level. Take taxation and development for example. Multinational firms often avoid tax by assigning profits to branches located in jurisdictions with low taxes. This practice is called "transfer pricing". Although technically legal, transfer-pricing schemes can result in large tax-revenue losses for the poorest countries. This is particularly so as their tax-administration capacity tends to be weak. Erik Solheim, the chair of the OECD Development Assistance Committee, likens this kind of tax schemes to water: "It always finds a way. The only way to stop the seepage of tax resources is working together in a global partnership."

Donors can play an important role by promoting transparent reporting by multinational corporations as well as tax havens. Developing countries can allocate part of the aid they receive to improve their tax administration. We already have impressive results. In Colombia, a $ 15,000 project to support the national tax authority on transfer-pricing matters led to an increase in revenue of around $ 2.5 million. Advice provided to Kenya on the matter cost about $ 10,000 and led to additional tax revenues of $ 12.9 million.

It is similarly encouraging to see donors use a share of their funding to help countries like Tanzania prosecute cases of grand corruption. Such support can have a major multiplier effect by strengthening developing countries’ public-finance management. The approach allows countries to handle not only aid, but other financial flows in a better way.

The Global Partnership reflects the reality of today’s world by connecting core aid business to the challenges many developing countries face when they deal with inadequate tax systems, illicit financial flows, corruption or fragile statehood. It does so by:

  • sharing good practice (like the success stories from Colombia and Kenya),
  • attracting political support for needed reforms and
  • linking national and international accountability efforts in development cooperation.

These issues concern not only the governments of developing countries. They concern entire nations, including civil society and the private sector. Creating the political space where all relevant actors interact is an important step towards better development co­operation. Regular and broad-based debate on how to improve cooperation and how to hold each other accountable is useful. It may be difficult sometimes, but it is necessary.

In the coming months there will be several opportunities to intensify these efforts. Let me mention a couple. In late January the Global Partnership will hold an event on business and development at the World Economic Forum at Davos. Two of the co-chairs of the Global Partnership – Ngozi Okonjo-Iweala, Nigeria’s finance minister, and Justine Greening, Great Britain’s secretary for international development – will meet top business leaders to address the one-billion-dollar question: how do you identify development solutions that benefit both developing nations and the for-profit private sector? It will be an un­precedented event.

Later next year, the Global Partnership will hold its first High-Level Meeting in Mexico City. Hundreds of ministers and development leaders from across the world will gather to take stock of the progress made since Busan. A global monitoring framework based on 10 indicators and other sources of evidence will help measure what has been achieved.

In Mexico, Global Partnership members will also take action on several issues that are crucial to realizing the vision set forth in 2011. They will look at:

  • how development cooperation can boost domestic resource mobilisation and business investments,
  • how middle-income countries tackle poverty as they move from the receiving to the providing side of the development cooperation spectrum, and
  • how sharing knowledge for development, south-south and triangular cooperation can enrich the traditional donors’ agenda.

Far from being just a talk shop, the first High-Level Meeting of the Global Partnership will anchor the discussion in the Busan commitments while show­casing what the Partnership can achieve more concretely in a select number of areas.

 

Brave new model

New alliances such as the Global Partnership for Effective Development Cooperation bring together all the pieces of the puzzle that make development work effective. As a loose, flexible and open forum, the Partnership can provide space for innovation. It is designed in a way that encourages leadership by willing coalitions, benefits from the support of key international organisations, and promises to bring together politicians and decision makers to take action on pressing issues when needed.

It may be a shaky boat at times, but the Global Partnership takes the principle of inclusive partnerships to unexplored shores. It welcomes all kinds of development actors from north and south, getting them to navigate vastly different development issues and see how development cooperation can help, both on the ground and in the bigger picture. It puts developing countries at the helm, building on what has been learned on the journey. It points to a horizon of shared principles for better development cooperation, while reflecting the complementarities of the development actors on board and their own way to help sailing forward – together.

 

Brenda Killen works for the OECD’s Development Co-operation Directorate.
[email protected]