The future of aid, The future of aid, 2005-20102005-2010

Setting the scene: trends and Setting the scene: trends and forces shaping the aid systemforces shaping the aid system

Why now?Why now?

2005 is decision time, coherent or not:2005 is decision time, coherent or not: Post-9/11 foreign policies still in flux,Post-9/11 foreign policies still in flux, Impacting the fragile 2002 aid Impacting the fragile 2002 aid

“consensus”,“consensus”, While new schemes graft onto old While new schemes graft onto old

system;system; UK/EU UK/EU and and US can innovateUS can innovate

What’s up for What’s up for discussion?discussion?

The credibility of the Millennium The credibility of the Millennium GoalsGoals

Should aid double and if so, how;Should aid double and if so, how; Aid if no trade?;Aid if no trade?; Who runs the IMF and World Bank;Who runs the IMF and World Bank; Value-added of EU and UN;Value-added of EU and UN; How to pay for global goods.How to pay for global goods.

The aid system todayThe aid system today

Talking ODA, mainlyTalking ODA, mainly Some 75 agencies, $58 billion p.a.Some 75 agencies, $58 billion p.a. Much of it technical, humanitarianMuch of it technical, humanitarian No exits and many entriesNo exits and many entries Weak users, weak ownersWeak users, weak owners

Four shaping forcesFour shaping forces

1.1. Shrinking middle on the demand Shrinking middle on the demand sideside

2.2. Multiple donor objectivesMultiple donor objectives

3.3. Symbiotic relationships with Symbiotic relationships with NGOs NGOs

4.4. Institutional barriers to Institutional barriers to competitioncompetition

Conventional wisdom Conventional wisdom after Monterreyafter Monterrey ConsensusConsensus Better, simpler Better, simpler

aidaid PredictabilityPredictability Millennium GoalsMillennium Goals Ownership and Ownership and

PRSPRS Performance-Performance-

basedbased

Achilles’ HeelAchilles’ Heel Cost-benefit?Cost-benefit? Short termismShort termism Growth, shelf lifeGrowth, shelf life ConditionalityConditionality SelectivitySelectivity

Unfinished BusinessUnfinished Business

Aid volume and AbsorptionAid volume and Absorption New Tied AidNew Tied Aid Selectivity and BalanceSelectivity and Balance Grants versus LoansGrants versus Loans

New Wine into old New Wine into old bottlesbottles The Millennium Challenge The Millennium Challenge

Account: beyond conditionality?Account: beyond conditionality? The Global Fund: chip off the old The Global Fund: chip off the old

block?block? The International Financing The International Financing

Facility: opportunity to reshape Facility: opportunity to reshape global aid governance?global aid governance?

2010, a snapshot : two 2010, a snapshot : two sketches among manysketches among many Poverty +/-Poverty +/- Tied aid +/-Tied aid +/- MDG triumph/ MDG triumph/

fadefade UN , EU, up/downUN , EU, up/down Pivot role of MICsPivot role of MICs

Competition +/-Competition +/- Recipient choice Recipient choice

+/-+/- More, less More, less

bilateralsbilaterals More, less NGOsMore, less NGOs Pivot role of MICsPivot role of MICs