AFD supports innovation of development finance mechanisms

On March 4 and 5 2010, the French Development Agency AFD will organise in collaboration with the Bill & Melinda Gates Foundation and the World Bank an international Marketplace on Innovative Financial Solutions for Development (2010 MIF).

The 2010 MIF will be dedicated to smart, fine-tuned, innovative financial mechanisms for mobilizing, channeling, and spending funds for development issues. The event will bring together development practioners, donors, philanthropists, social entrepreneurs, academics, representatives from across a range of financial institutions and policy makers to exchange experience and ideas on innovative development finance solutions. The 2010 MIF will be structured around workshops and a marketplace where innovators can showcase their initiatives and projects.

The main objectives of the event are to:

• advance the agenda on innovative financial solutions for development;
  
• facilitate knowledge sharing and learning, including South/South learning, on what kinds of innovative financial solutions for development work, what don’t, and how to design these solutions to maximize development impact and cost-effectiveness;
  
• spur the evolution of cutting-edge projects that apply innovative financial mechanisms to development challenges.

A key feature of the 2010 MIF will be a competition to garner and highlight fresh ideas on how innovative financing mechanisms can be used to better solve development challenges at local, country, regional, or global levels, with the goal that successful innovations can be scaled up and replicated broadly.

The winners will be awarded pilot grants to assist them in the implementation of their proposals. Proposals are welcomed from all organizations involved in innovative finance focused on development, including financial institutions, private-sector companies, social enterprises, non-governmental and civil society organizations, government agencies, universities and other academic organizations, foundations, and development organizations. Guidelines and application forms can be accessed on this website. Proposals must be submitted by November 15th 2009.

You can download the MIF 2010 guidelines and application form on: www.fininnov.org. Proposals need to me submitted before 15 november 2009 at the latest.

For more information please contact : info@fininnov.org

See also the Euforic newsfeeds on AFD and on finance for development

EU strategy on tackling the crisis in poor countries offers no new money

Concord press release

CONCORD, the European Confederation of Development NGOs welcomes the release of the European Commission’s Spring Package on supporting developing countries to tackle the impact of the financial crisis, but has expressed deep concerns about the genuine levels of commitment being shown by European governments to keep their promises to the poor.

Today’s announcement reveals that there is no fresh money available for developing countries. The Commission has acknowledged in its communication today that US$20 billion more in aid is needed to meet the commitments. Meanwhile, it signals that Italy has abandoned its aid commitments and Germany and France are off-track on meeting theirs.

The strategy details how Europe will provide money upfront from its aid budget, but offers no new funds to tackle the crisis. This comes in the face of a raft of recent aid cuts to European governments’ 2009 aid budgets (Ireland, Italy, Latvia, Estonia). CONCORD warns that these cuts, combined with insufficient rises show that EU member states are not taking seriously the needs of developing countries mired in a crisis not of their own making.

Recent figures have suggested that the impact of the crisis will affect developing countries to the tune of $300bn in 2009, meaning that despite a small rise in aid volumes from Europe in 2008, developing countries will essentially lose out even more than before.

“Less than one week after the G20, the EU has produced a strategy that fails to address the underlying flaws in the system that we know fuel poverty in developing countries.” says Ester Asin-Martinez of CONCORD “Whilst we welcome the EU’s efforts to be the first to act on international development after the G20, this falls far short of what is needed.”

CONCORD calls on European governments to:

• Step up their efforts to deal with the impact of the crisis on developing countries by providing new money without the harmful economic strings attached that have played such a prominent role in leading to the current financial crisis
• Use their leadership role to take steps to reform the flaws in the international financial and economic system
• Provide timetables to show how they will actually deliver the aid they have promised
• Halt any further cuts to 2009 aid budgets
• Implement commitments on aid effectiveness agreed last year at the OECD DAC High Level Forum on Aid Effectiveness

In May, CONCORD will release its fourth annual AidWatch report, looking at the genuine aid provided by European governments. For more information on this report, please contact jasmine.burnley@concordeurope.org


See Euforic's newsfeeds on Concord

”Great projects might get funded!”

Concord press release, 13 March 2009

CONCORD, the Confederation of more than 1600 European Development NGOs, welcomes the innovative initiative of the European Commission (EC) which organised today an “Auction floor” to help environmental projects for developing countries get financed by public or private donors.

This initiative is supporting new kinds of partnerships and leveraging additional funding which are urgently needed to address issues such as climate change, desertification, biodiversity, forests and sustainable energy. This Auction Floor demonstrates the positive recognition by the European Commission of the high quality of proposals submitted by Civil Society Organisations (CSOs).

This event also highlights the fundamental problem of insufficiency of funds from the EC thematic programmes in general. Only a small fraction of proposals can be funded by the EC, ranging from 5 to 15% of all proposals received. Elaborating a project proposal represents a significant investment on the side of CSOs and NGOs (both in terms of human and financial resources) and raises expectations with Southern partners and beneficiary groups. Therefore, there is an urgent need to increase funding available to civil society actors in thematic programmes and in the overall EU development cooperation instrument.

CONCORD members are keen to engage in working together with the EC to expand the innovative practices of mobilising alternative funding to rejected proposals in the context of the current financial framework. In addition to that, CONCORD will engage with the EU Institutions in the preparation of the next financial framework beyond 2013, to secure that adequate funding will match the needs.

The auction floor has launched a strong signal towards the recognition of the relevance and quality of the CSO development activities. “This is a positive evolution and shows the European Commission’s willingness to move from a ‘competitive lottery funding’ system towards a strategic partnership with CSOs,” says Olivier Consolo, Director of CONCORD.

The Confederation also calls for due attention to be paid to the equal access of Southern civil society to mechanisms such as the Auction Floor, as well as to EC funding in general.

Contact: An Van Goey, 02/743.87.93 or 0476/39.25.58 (an.vangoey@concordeurope.org)

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The financial crisis: consequences for developing countries and options for development policy

A written statement (pdf in German) of WEED for a public hearing on the financial crisis of the German Parliamentary Committee for Development Cooperation and Policy sheds light on the consequences of the global crisis and the options for development policy. According to the author, the hypothesis that the financial crisis will not affect development countries resulted to be wrong.

Already in 2008 stock markets in emerging economies faced average losses of 40% (i.e. South Africa 30,3%, Brazil 43%, China 65,6%, Russia 70,9%). Countries like the Ukraine or Pakistan had to ask for IMF support to avoid bankruptcy. Growth expectations also dropped dramatically. While development countries' economies grew 7.2 points in 2007 and 6,9 points in 2008, the average prognosis for 2009 is 4,6 points. Pessimistic scenarios even speak of growth rates of 0,1 for Africa and -0,2 for the Caribbean. Nonetheless this might only be some of the first consequences of the global crisis with other effects to follow at a later stage.

Different countries face different challenges. Countries like Brazil, which have a relatively strong economy and a big domestic market, have a stronger standing than countries with smaller markets and less diversified economies. Also economic effects of the financial crisis can have different influences on economies. The decreasing demand on raw materials for example caused by the economic breakdown will give countries which need to import these materials the chance to buy at cheaper rates. On the other hand raw material exporters will suffer under the low prices. Nonetheless many development countries belong to the second group of countries.

The paper speaks of two ways of infections, one through effects of the financial crisis on the real economy of a country and the second through the involvement in the same financial speculations that caused the crisis at the beginning. However, only some of the emerging economies were actually involved in direct financial speculations. Most effects are caused by the effects of the financial breakdown on the real economy.

Since the biggest world economies face recession this will lead to a demand reduction and negative trade growth for the first time since 1982. Additionally the UN estimates a decrease of foreign investment in the South of 10%. Both will lead to unfavorable financial situations and an increase of debts in the mid-term. Besides these rather direct effects, developing countries face specific indirect effects like the decrease of remittances and a possible decrease of ODA. Although ODA reduction did not happen so far there is the fear that necessary increases of financial funds to reach the MDGs will not take place.

Also the rapid growth in food prices was largely caused by financial speculations. This was denied when the prices spiked in 2007/2008. By then other causes were made responsible, like a global raise in demand, underinvestment in agriculture or the production of bio-fuels. However, when the prices recovered to a normal level in summer 2008 these reasons became less valuable since they only affect the markets in a long term thus could not be the cause of such rapid changes.

According to the report the price curve shows the typical pattern of a speculative bubble. When the real estate crisis started, financial investors simply started to look for investment alternatives and moved to the commodity markets, and speculated with oil and agriculture products. This bubble blasted when even trading in the commodity market became too risky in summer 2008.

The report says that also the German Federal Bank was involved in agricultural speculations. According to the UN this kind of speculation resulted in a 8% raise of extreme poverty in Sub-Sahara Africa and erased the success in the reduction of poverty between 1990-2004.

The WEED statement stresses the opportunities for a global financial system reform which need severe acting by the current global governance system. According to the paper the G20 is a appropriate institutional framework to lead such process. Additionally the participation of civil society and labor organizations needs to be institutionalized. The plans for stronger regulation and monitoring need strong financial and legal backup.

by Martin Behrens

For more on the financial crisis see the Euforic newsfeed on finance and development.

Concord Briefing on the impact of the Financial Crisis

The world economy is well into its worst crisis of a century. This is a crisis of the prevailing political and economic model of development focused so unilaterally on economic growth. This requires a deep questioning of some of the fundamental paradigms which have again been brought to the light by the crisis: the model of economic welfare through economic growth and unequal distribution of wealth and the overshoot of natural resources, both the renewable and the non-renewable.

This is a critical moment for global social and economic development. CONCORD is asking the European Union to take decisive action, not just to arrest the descent but to address the basic problems of distorted development that underpin these crises in the first place. There are some appropriate short-term responses, but that these must be accompanied by a search for fundamental changes in our economic and development models.

Briefing document (doc-file)

See also Euforic's newsfeeds on EU cooperation, on the Financial Crisis and on Concord

Global Perspectives on current climate, economic and security crises

The February 2009 issue of the magazine 'Global Perspectives' provides a first analysis on the newly established International Renewable Energy Agency (IRENA). The agency, which currently has 76 member states from industrialized and developing countries, representing 2,5 billion people, aims to accelerate and coordinate the introduction of renewable energy production. It wants to offer member states practical advice to reach their individual renewable energy targets.

On environmental policy, Yvo de Boer (Executive Secretary, UN Framework Convention on Climate Change) looks ahead to the upcoming Copenhagen summit in December 2009.

Regarding the global financial crisis, Inge Kaul (Herti School of Governance) calls for support to an appeal by a group of economists aiming to enhance coordination among the Euro-zone economies in the light of the global financial crisis. The journalist Eric Walberg looks at new ideas and solutions for the financial and economic breakdown. He also comments on the push to more global financial regulation in Europe and the US to tackle the crisis.

On the security crisis in Gaza, Baher Kamal Youssef presents his views on the background of the Gaza War and the involvement of the different interest groups. Gunilla Carlsson (Swedish Development Minister) and Karen Abu Zayd (UNRWA) call on us not to forget the children suffering under the ongoing conflict in Gaza; they offer a 10-step programme to overcome the humanitarian crisis.

Global Perspectives is a bi-lingual (English/German) joint production by IPS Inter Press Service Europe and the Global Cooperation Council, published by Globalom Media. The monthly editions on various themes of international cooperation and development are dowloadable for free.

See also the Euforic newsfeed on IPS Europe.

by Martin Behrens

Gender Budgeting: An instrument for good governance

Source: Concord Flash, nr. 57, January 2009

More then 25 participants from NGOs, the European Commission and the European Economic and Social Committee participated in the lunch debate on Gender Budgeting as an instrument for good governance. It was organised by the EU Civil Society Contact Group, which CONCORD is a member of alongside seven other NGO sectors. This mid-January debate was timely, as 2009 will see the European Commission proposal for the EU budget reform and its discussion in the Council. The meeting addressed the following questions:

• What is gender budgeting?
• What are practical examples of gender budgeting?
• How can gender budgeting be implemented in a European setting?

Five academic and NGO speakers gave an encompassing presentation of gender budgeting as a tool for good governance. "Gender Budgeting" is the process through which public budgets are examined in order to assess whether they do or they do not contribute to more equality between women and men, and then to introduce changes that promote gender equality accordingly.

In all societies, access to resources, rights and power are still unequally distributed between women and men. All public policies play a role in contributing to achieving the goal of equality between women and men. In particular, a government's decision about how money is raised and spent can either widen or diminish the gap between the situation of women and men. Budgets transform political priorities and commitments into practical measures. In working to achieve a more equal society it is therefore important to question if a commitment to gender equality is taken into account when budgetary decisions are made.

For further information: (coordinator@act4europe.org)

See also Euforic's newsfeeds on EU cooperation, and on Concord

A Word from Concord on the Governmental cuts in development aid

Source: Concord Flash, nr. 57, January 2009

On 3rd February, the Irish government slashed Official Development Assistance to developing countries by 95 million Euros or more than or 10% of its overall budget for 2009, barely 2 months after the UN Doha Summit on the financing of Development aid.

This was a shock since Ireland is usually considered as a progressive European development donor. The Irish aid cuts will mean that poor countries such as Malawi, which has one of the highest HIV prevalence rates in the world, could well see the suspension of funding to vital basic services such as education and health.

At a time when the financial crisis and global recession is hitting the poorest and most vulnerable hardest, this cut will have huge implications for the many developing countries receiving vital aid from the Irish government.

This represents the latest in a round of aid cuts from European donors. It signals a dangerous trend which threatens the Millennium Development Goals' commitments so vital to alleviating poverty in poor countries. Last December Italy announced aid cuts of 56%, and Latvia, which recently became a donor of development aid, released a statement last month announcing a 100% cut to its aid budget.

Jasmine Burnley, coordinator of CONCORD’s AidWatch initiative said “Europe is the world's biggest and most progressive aid donor with an aim to provide 80% of the world’s aid, some 67 billion euros, by 2010.”

“However we are seeing massive reduction of these targets. Cuts by Italy, Latvia and now Ireland have come as a triple whammy to developing countries. The decline in support from EU donors threatens efforts to tackle global poverty and inequality in the world.” she added.

CONCORD acknowledges that in this time of crisis, European governments face difficult choices, but cutting to aid to poor countries is not the answer. “If we want economic growth with global stability, we need to work towards a fair and just world" says Hans Zomer of Dóchas, the Irish national platform of development NGOs, "Ireland needs to invest in developing countries, not turn its back on the poor when times get tough”

CONCORD calls for European governments to join it in urging the Irish government to reverse this cut, and honour their own aid promises.

Contacts at CONCORD: Jasmine Burnley, CONCORD, +32 2 743 87 64

See also Euforic's newsfeeds on EU cooperation, and on Concord

Europe, developing countries and the financial crisis: response from different actors

Source: EU News, Issue 1, February 2008

The global financial crisis that erupted in 2008 will have dramatic economic, social, environmental and political consequences for all countries during 2009 and beyond. The developing world has been marginalized in many of the discussions to date, though it is directly affected. An important first step was taken with the G-20 Washington summit in November 2008 which acknowledged the need to include Southern countries in the reform of global governance.

Such a reorganization of the global system of governance raises the question on the role which Human Rights will play in the future. Social Watch – an international NGO that monitors poverty eradication and gender equality – emphasizes Human Rights as the solution in its “Social Watch Report 2008 - Rights is the answer” launched on 7th of January 2009 at the European Parliament, in the presence of Luisa Morgantini, Vice-President of the European Parliament. There concern was expressed about the risk that donors may reduce support for development and poverty eradication in view of the economic crisis. Others argued that an increase in spending on the efforts to improve Human Rights, gender equality and decent work will, in the long run, help in dealing with the crisis.

The consequences of the financial crisis for developing countries constituted one of the topics discussed on 30 January at the Informal Meeting of EU Development Ministers held in Prague, attended by European Commissioner for Development and Humanitarian Aid Louis Michel and representatives of the European Parliament Committee on Development.

Although the effects of the financial crisis on developing countries are not yet fully visible, they are likely to be considerable, the Ministers declared. It was also observed that, therefore, it is all the more important that the European Union and other developed countries fulfil their obligations in the area of development aid, from the perspective of quantity as well as quality (effectiveness of aid). During the debates on the reform of the international financial architecture, the ministers also evaluated possibilities of taking into consideration developmental aspects, including more influence for the developing countries themselves in the IFIs. Particularly disappointing however is the reluctance on the side of the UK and a few other member states to undertake any action in favour of combating tax evasion and better regulate and control tax havens. It is also surprising that a new round of debt cancellation has not been given more consideration, given that it could quickly release extra revenues to many developing countries facing serious fiscal pressures.

A major challenge for development (and environment) ministers will be to make sure that their concerns regarding the impact of the financial crisis on developing countries and climate change finance inform the debates of the EU finance ministers and the G-20. A proposal for a “support plan for the developing world” is currently being developed by the European Commission, to be finalized together with Development Ministries in March as an input to the EU position for the G-20 summit.

European civil society organises itself in response to the global financial crisis
The next G-20 meeting will take place in London on 2 April 2009. This will be the first high level summit on this issue with the new US president and opportunities for change are now higher. Strong measures must urgently be taken by world leaders not only to deal with the symptoms but also address the causes of the crisis. In preparation of the G20 summit, Eurodad and a number of other European networks and European trade unions launched a process to organise joint strategies and mobilisation efforts. This process started in Paris during the second week of January, with a cross network meeting gathering more than 130 CSO representatives from across Europe, including APRODEV. Main topics analysed during the meeting were: causes; major social and environmental consequences; challenges of the crisis, together with opportunities for change; the financial system; and the trade and regulatory framework. A specific focus has been given on Europe’s responsibilities and responses, and CSOs.

The declaration adopted in Paris and other information is available on the Eurodad website.

See also Euforic's newsfeeds on the financial crisis, CIDSE and APRODEV

Irish Government announces devastating development aid cuts

Concord press release, 04 February 2009

The Irish government yesterday slashed Official Development Assistance to developing countries by 95 million Euros or more than or 10% of its overall budget for 2009, barely 2 months after the UN Doha Summit on the financing of Development aid. NGOs across Europe have expressed shock and deep concern at this act by Ireland usually considered as a progressive European development donor.

At a time when the financial crisis and global recession is hitting the poorest and most vulnerable hardest, this cut will have huge implications for the many developing countries receiving vital aid from the Irish government.

This represents the latest in a round of aid cuts from European donors. It signals a dangerous trend which threatens the Millennium Development Goals' commitments so vital to alleviating poverty in poor countries. Last December Italy announced aid cuts of 56%, and Latvia, which recently became a donor of development aid, released a statement last month announcing a 100% cut to its aid budget.

Jasmine Burnley, coordinator of CONCORD’s AidWatch initiative said “Europe is the world's biggest and most progressive aid donor with an aim to provide 80% of the world’s aid, some 67 billion euros, by 2010.”

“However we are seeing massive reduction of these targets. Cuts by Italy, Latvia and now Ireland have come as a triple whammy to developing countries. The decline in support from EU donors threatens efforts to tackle global poverty and inequality in the world.” she added.

The Irish aid cuts will mean that poor countries such as Malawi, which has one of the highest HIV prevalence rates in the world, could well see the suspension of funding to vital basic services such as education and health.

European NGOs acknowledge that in this time of crisis, EU governments face difficult choices, but cutting to aid to poor countries is not the answer. “If we want economic growth with global stability, we need to work towards a fair and just world" says Hans Zomer of Dóchas, the Irish national platform of development NGOs, "Ireland needs to invest in developing countries, not turn its back on the poor when times get tough”

CONCORD, the European Confederation for Development and Relief NGOs calls for European governments to join it in urging the Irish government to reverse this cut, and honour their own aid promises.

Contacts:

• Hans Zomer, Director of Dóchas, Tel. +35 85-728 3258
• Éamonn Casey, Dóchas Policy Officer, Tel. +35 87-950 6222
• Jasmine Burnley, CONCORD, +32 2 743 87 64

Check out Euforic's newsfeed on Concord

When the European Commission reviews its budget

Source: Concord Flash, nr. 56, November/December 2008

The European Commission’s budget review was one of the hot topics in 2008. Development NGOs were particularly interested
in this review, which will set the future amounts and headings in the budget for the long term, because the current structure of the European budget conceals the EU’s significant contribution to the volume of resources which are available for development.

In December 2007, the European Civil Society Contact Group (CSCG), of which CONCORD is a member, organised a conference on the European budget for the future and submitted its contribution to the consultation of the European Commission. Following that, the European Commission held a conference to present the results of the consultation. However, the CSCG was not entirely happy with the outcomes and wrote a letter to the Commissioner for Financial programming and Budget, Ms Grybauskaite, pointing out:

♦ the too high a level of abstraction in the summary of the consultation responses both in the written form and in the way they were presented in the conference;

♦ the lack of reference to solidarity as a driver in EU policy and EU budgetary planning in the consultation summary;

♦ the question of legitimacy of the budget and engagement of European citizens with the EU through transparency of the income side is not reflected in the summary;

♦ in terms of the choice of speakers and panel members for the conference sessions (plenary and workshop sessions), the CSCG felt that a ratio of 3 women among a total of 38 speakers displayed a clear lack of gender balance and a lack of gender awareness.

The CSCG was also concerned that voices which diverged from the views presented would not be reflected in the summary. For example, the summary of the consultation contained almost no reference to solidarity as a driver in EU policy and EU budgetary planning, although it was mentioned by many representatives of the civil society. Another example: the workshop on
financing did discuss the question of legitimacy of the budget and engagement of European citizens with the EU. Some participants mentioned the connection between transparency, legitimacy, and a visible EU tax. But these did not find their way into the summary of the consultation. Click here and read the letter.

For further information: Regula Heggli from the CSCG

See also Euforic's newsfeeds on EU cooperation, and on Concord

Global Perspectives on what the financial crisis means for the poor

The December 2008 issue of the magazine 'Global Perspectives' looks at the consequences of the global financial crisis for the poor.

Prof Zhang Zhongxiang's analysis shows three main effects of the financial crisis in Africa. Obviously, the crisis will have a negative effect on the direct foreign investment rate in African countries. Secondly, Prof. Zhang expects a decrease in raw material exports and low revenue in the tourism sector. Last but not least the remittances from the African diaspora, sometimes as important in quantity as donor development assistance, will be lower.

Nonetheless the author points at the positive action of the African Regional Blocks and the African Union to deal with the financial crisis which would lead to deeper regional integration and, by consequence, strengthen Africa's economic position in the world.

This issue of the magazine contains also several articles that give regional perspectives on the finanical crisis from Asian and African countries.

Another report deals with the impact of the crisis on big NGOs. A mixed picture is presented with more dramatic losses in fundraising by the US NGO sector and a so far unpredictable situation in Europe.

Furthermore in this issue an editorial by Ramesh Jaura who sheds a critical light on the involvement of the European Investment Bank in Africa.

An essay by Daisaku Ikeda (Soka Gakkai International) pleading for a stronger role of the world youth in the UN institutional framework.

Global Perspectives is a bi-lingual (English/German) publication by IPS Europe. It releases monthly editions on various themes of international cooperation and development and is dowloadable for free.

See also the Euforic newsfeed on IPS Europe.

by Martin Behrens

International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus: Doha, Qatar, 29 Nov -2 Dec 2008

Concord press release, 4 November 2008

This short press briefing sets out the key issues, and provides critical analysis of political negotiations around the financing for development agenda.

1. What is the Financing for Development Meeting in Doha?

• Governments from across the world will meet in Doha, Qatar between 29 November and 2 December under a UN process to discuss financing for development. The Qatari government is organising a high-level retreat on 28 November, right before the start of the Conference. Forty to fifty heads of state and/ or government are expected to attend.

• The Financing for Development agenda is a recognition of the fact that structural flaws in the system are preventing people in poor countries from enjoying growth and development. This message is even more pertinent in the current context of the financial crisis which has hit the poor so hard.

• In 2002, the European Union agreed to the Monterrey Consensus on development finance setting out commitments in six key areas. These have been under review through issue-focused hearings held between February and May):
  

• 1. Mobilising domestic resources
• 2. Foreign direct investment,
• 3. International trade,
• 4. Financial and technical cooperation,
• 5. External debt,
• 6. Systemic issues

• In Doha, governments will meet again to reflect on progress, new challenges and to agree an outcome document setting out commitments on these crucial issues (see below for analysis of negotiations)

2. What are the issues?

The Financing for Development agenda is about redistribution, and rebalancing the global financial structures for development, given striking evidence on how financial flows from Southern countries to the North often offset flows from rich to poor countries.

But what we see is governments failing to carry out the reforms that will really change the unjust system currently in place.

Key issues of concern for civil society organisations in Europe are:

• Reform of the international financial institutions
• Regulation of tax havens/secrecy jurisdictions
• Upgrading the UN tax committee to an intergovernmental body
• Official Development Aid and Debt
• Innovative sources of finance

3. What is at stake?

Rich countries, including the EU, are showing weak commitment to the Doha process. While the European states of the G20 have managed to reshuffle their agendas to be present in Washington, it is yet unclear which EU heads of government and/ or state will be go to Doha. Once again, the poor of the world were forgotten at the Washington meeting. Half-hearted piecemeal reforms, as the ones suggested at the G20, won’t suffice.

EU governments should live up to their commitments and show strong will to implement them. They should also show strong leadership to avoid the outcome of the Doha Conference is just “business as usual”. In order to rewrite the rules of the global financial system and make it work for development, governments in Doha should:

• Reaffirm their aid commitments and agree upon timetables to deliver 0.7% of their GNP to ODA by 2015. It is urgent to avoid any temptations to decrease aid flows.
• Commit to combat illicit financial flows and tax havens, which drain between US$500 billion and US$800 billion every year from developing countries. Some concrete decisions on this area should include:
• A code of conduct on cooperation in combating international tax evasion and avoidance;
• International implementation of country by country reporting standards for transnational companies, to increase transparency and curb transfer mispricing;
• Strengthening the United Nations Tax Committee and converting it into an intergovernmental entity.

• Recognise that debt is still a problem for developing countries, which may worsen in light of the current crisis. Governments should agree to set up an international fair and transparent debt work-out mechanism based upon the principles of shared responsibility among creditors and debtors.
• Agree to launch an inclusive and transparent process to overhaul the global financial architecture, which works for equitable growth and poverty reduction. Quick fixes along the lines of those agree at the G20 Summit in Washington won’t do. The International Financial Institutions should be thoroughly reformed to ensure full participation of developing countries; and new regulatory regimes should be set up to make sure that financial markets work for all.

4. Analysis of negotiations

• Governments have been meeting once a week for several months in New York to battle over an outcome document to be published at the end of the Conference, but ultimately, agreement has not been possible. Negotiations are advancing at a snail’s pace. Potential agreements are still very unclear and any outcome could be expected.
• Japan, the US, Canada, Australia and New Zealand (JUSCANZ) are banding together to block more progressive reforms.
• EU members are in disagreement over key proposals such as tax. Although the EU wanted to portray itself as the link between the JUSCANZ and the G77 (the developing countries), the reality is that it is more and more removed from the G77 positions and strategies and will have a hard time in performing a brokering role.
• G77 countries are refusing to come behind the weak commitments of European and industrialised nation governments. Whether they will be ready to compromise a weaker text or will prefer “no deal than a bad deal” is yet to be seen.
• As time is running, it is unlikely that governments will manage to get an agreement before Doha, as they were hoping. Key negotiations will have to be continued in Doha. The final outcome of the conference is still up in the air.
  

5. Why this is important?

• Doha provides a window of opportunity because it acknowledges the unjust nature of international financial system, and the often severe impact it can have on developing countries. In a matter of few months, rich countries have been able to mobilise $3 trillion to bail out their banks, thirty times the $104 billion channelled last year for development aid. The risk that governments will “default” on their aid commitments is increasingly high. Poor countries should not pay for a crisis created by rich countries.
• This impact has been made all too clear by the recent crises in the global economic system which have hit poor countries hard, in particular the impact of food prices and the prominence of this issue in the media over recent months has highlighted the linkages between poverty, and global economic trends driven by an unfair system. Among other reasons, the food prices were spurred by unprecedented speculation on agricultural commodities. This is just one of the numerous examples that the global financial system should be regulated to avoid that speculation threatens basic human rights.
• It is becoming increasingly clear that not only have increases in global flows of capital failed to correlate with poverty reduction, but also that economic growth in developing countries does not necessarily mean growth for the poor, often it can even mean greater in-country inequality.
• Aid, which has seen increased commitments from donor governments in recent years, is one way of addressing these problems, but it has long been recognised that it cannot be effective without wider systemic change to the global economic system.
  

6. Spokespersons and contacts in Doha
• Jasmine Burnley AidWatch Coordinator, CONCORD Secretariat, +32 473 47 88 06
• Nuria Molina, Policy and Advocacy Officer, EURODAD, +32 473 41 08 34
• Sasja Bokkerink, Oxfam Novib, +31.6.46273688
• Jean Saldana, CIDSE, +32 495-227579

7. Resources on some of the key issues:

• UN website on Financing for Development
• Civil society participation at the conference

Documents:

• Position of the European Union in Doha
• Monterrey consensus
• Eurodad’s new briefings on IMF conditionality, aid effectiveness and responsible finance: Taxation and financing for development; European agenda to fight capital flight; Speculation undermines the right to food
• New principles and rules to build an economic system that works for people and the planet
• CIDSE policy paper on the Doha Review

Video testimonies

• Jean-Pierre Elong Mbassi of United Cities and Local Governments in Africa expressed in English his concern about the future of aid disbursements in the light of the financial crisis

Click To Play

• George Ehusani from Nigeria talks in English about the realities of EU aid to developing countries

Click To Play

• Robert Bodja from Alliance for the climate (Luxembourg) on ODA and aid effectiveness. In French

Click To Play

• José Brito, Minister of Foreign Affairs, Cooperation and Communication of the Republic of Cap Verde in French on the impact of financing development and financial crisis in Cap Verde

Click To Play

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Shadow Report on German Development Cooperation – support for tax and public revenue systems

The 2008 shadow report (in German) on German Development cooperation sheds light on the German support for public finance systems that enhance developing countries' capacity to fight tax evasion and capital flight.

Each year, tax evasion and capital flight cause some US$ 500 Billion to be lost as public revenue for developing countries, which is 5 times as much as total ODA. Although case studies show the enormous effectiveness of money spent to support tax and public revenue systems, only 0,07% of global ODA is actually spent on this. Reasons might be the unattractiveness of such measures, as compared to support for health or education. Furthermore the international trend of deregulation, decentralization and privatization for a long time has not supported projects that aim to increase government incomes. With the development discourse on 'good governance' and 'ownership' the issue became more important.

Recent calculations of the UN Millennium Project show that even if all donors would reach the ODA target of 0,7% immediately, it would not be enough to achieve the MDGs. For this the development countries themselves need to increase their public spending on poverty alleviation, hunger and social protection. According to the UN, there is a huge potential to increase public income if one compares economic strength and actual public revenue in developing countries.

The German Ministry for Development Cooperation identifies programmes to increase local public resources as one priority for the upcoming Doha Conference on Development Finance in December. The shadow report notes an increase of resources allocated for this purpose within the German ODA. However Germany ranks 9th among the biggest donors in this area with the UK spending more the 5 times as much. Furthermore German engagement is fragmented, uncoordinated and lacking clear political orientation, according to the authors of the report.

The 'Shadow Report of German Development Cooperation' is published by Terre des Hommes Germany and Welthungerhilfe and is seen as a critical counterpart to the OECD-DAC report regarding German cooperation. It analyses whether promises by the German government are actually met.

by Martin Behrens

Read BMZ statement on the report

See the Euforic dossier and newsfeed on German cooperation

Global Perspectives on the financial crisis

The November 2008 issue of the magazine 'Global Perspectives' focuses on the global financial crisis.

Robert Zoellick (World Bank) warns that we need to pay close attention to emerging economic powers. These new actors in the global economy have shown their economic success but are suspicious regarding the world finance and governance institutions. They want to have a say in any upcoming global finance structure reforms. 

He calls for a new Multilateral System that "will need to be a flexible network, not a fixed nor unitary system. It needs to maximize the strengths of interconnecting and overlapping actors and institutions, public and private."

The German Minister responsible for Development Cooperation, Heidemarie Wieczorek-Zeul argues that market-radical ideologies have failed. Developing countries do not need deregulation of their financial markets, since their governance structures are too weak and financial resources are too marginal. However the financial crisis will not stop at national borders;  thus Wieczorek-Zeul calls for international regulations which could be installed at the upcoming Doha Round in December.

The South Centre calls for a revision of the 'Finance for Development' concept proposed by the World Bank and IMF. An article by Ramesh Jaura (IPS) describes the lines of action proposed by the South Centre to revamp the global financial architecture:

1. Inclusive process to develop new representative architecture
2. Correct regulatory deficit of global finance
3. Reforms should be part of IMF reform agenda
4. Adopt a coordinated global macroeconomic policy
5. Create an international debt court
6. Stronger reliance on regional institutions and active cooperation with developing countries

David Cronin (IPS) criticizes the recent EC proposal against illegal timber as toothless. The proposal suggests that companies demand guarantees that their timber is from legal resources,  but environmental organizations claim concrete steps are needed to criminalize illegal timber and severely control voluntary certifications. The EU Commissioner Dimas replies that the EU relies on its member states to impose harsh penalties against trade in illegal timber.

Also in this issue an interview on the current state of South America, with former Portuguese President Mario Soares and a report from the IUCNs' world conservation congress which took place in Barcelona.

Global Perspectives is a bi-lingual (English/German) publication by IPS Europe. It releases monthly editions on various themes of international cooperation and development and is available for free download.

See also Euforic newsfeed on IPS Europe.

by Martin Behrens

Financial crisis: NGOs around the world call for the European Union to fight for a Global Governance that would finally be democratic

Concord press release, 4 November 2008

In a context of unprecedented crises regarding finances, climate and food and on the eve of the G20 summit on November 15 in Washington, representatives of 10 000 NGOs from 82 countries have for the first time organized an International Forum of national coalitions of NGOs, where participants called for the EU to defend a reform of global governance that is serving the most vulnerable populations.

Civil Society Organisations meeting in Paris last week on Thursday 30 October with Coordination SUD, the national coordination of French NGOs of international solidarity representing 10.000 NGOs, * presented a roadmap for European solidarity and responsibility in international negotiations to Mr. Joyandet, Secretary of State for Cooperation and the Francophone community..

At a time when States are questioning the need to regulate globalisation through a reform of international financial institutions (World Bank, International Monetary Fund, etc.), NGOs from across the world have called upon the European Union (EU) to ensure effective participation of the poorest countries in international forums.

Henri Rouillé d'Orfeuil, President of Coordination SUD, stressed that the need for fair and democratic regulations should lead the EU to propose "the establishment of social, environmental and cultural specifications able to frame the strategy of the economic actors in discussions on the reform of the international institutions."

In the meeting "Messages from the world to the European Union”, NGOs called on the EU to review its trade, agricultural, environmental and economic policies so that they contribute to a sustainable north and south development and to the fight against inequality.

According to Bakary Doumbia, President of the FECONG (Platform of NGOs of Mali), "The European development cooperation focuses on the fight against illegal immigration, the promotion of the interests of European companies and the fight against terrorism, instead of strengthening the policies about education, health and equality between men and women."

Mike Mathias, Chairman of the political forum CONCORD (European NGO Confederation for Relief and Development), explains "the European model of development must be reconsidered from scratch. The planet can not bear the consumption of the economically privileged populations of the world. The current model based on economic growth alone does not allow better distribution of wealth. "

* from the regional coalitions of Mesa Articulacion (Latin America), REPAOC (West Africa), REPONGAC (Central Africa), PIANGO (Oceania), National Coalition of Platforms Asia (South and South-East), SADC Council of NGOs (Southern Africa) and CONCORD (Europe).

Read the "Messages of the World to the European Union " - version française - english version

For more information contact Céline Vatier

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The international financial crisis and the financing for development agenda

Source: Cidse Advocacy Newsletter, nr. 40, October 2008

The UN General Assembly session in September was intended to renew high-level support for action towards the Millennium Development Goals (MDGs) at their half-way point. It was overshadowed by the breaking international financial crisis. The global impact of the crisis provides an added significance to the fall’s two major international conferences on financing for development, in Accra and in Doha.

The OECD High-level Forum on Aid Effectiveness in Accra, Ghana in September already took place against the backdrop of stagnating aid levels. The financial crisis has meant more pressure on donor government budgets. U.S. Presidential candidate Barack Obama’s campaign has announced that his pledges to double national aid would be affected by the current crisis. European countries are struggling to reach their commitments to allot 0.7% of their national income to development expenditures. They have dismissed calls to stop inflation of Official Development Assistance (ODA) figures and to guarantee that resources invested in international efforts to combat climate change or raised through innovative resources will not be counted in the 0.7% as politically impossible.

Happily for donors attending the Forum, its agenda did not dwell too much on ODA volumes but rather on aid effectiveness. Being so limited, the general evaluation of its outcome was positive. Donors committed to manage ODA through countries’ public finance systems instead of parallel donor structures and provide reliable forecasts of aid resources for governments’ budgetary planning. But the generally positive language is no guarantee of any stronger political will to take action. To date, official reports on the implementation of the Paris Declaration on Aid Effectiveness, supposed to be operational since it was adopted in 2005, have concluded an alarming lack of progress.

Can we expect more? The aid system is largely run on donor defined principles and managed by donor dominated institutions such as the OECD and the World Bank, with an unwieldy attempt to include ‘partner countries.’ Such a system is incapable of reforming quickly enough, for aid to make the contributions needed for the attainment of the MDGs by 2015. It cannot or does not want to look critically at aid and development. A forum to review the effectiveness of ODA management, ODA’s real contribution to reducing poverty, its relative value as compared to other avenues developing countries have at their disposal to combat poverty (ability to effectively raise and deploy fiscal revenue, combat capital flight, rely on fair trade rules and be free from debt burdens) and the need for ODA to fit in a coherent development framework remains the urgent need of the day.

The Doha Financing for Development Review Conference this December is the ideal opportunity to make such a forum happen. It will review the implementation of the Monterrey Consensus set against today’s realities and crises. Its holistic agenda and its multi-stakeholder approach puts it in the best place to answer difficult questions on the fiscal responsibilities not only of developing countries but also of other actors such as tax havens, transnational companies and the countries in which they are registered; ODA; trade; the financial architecture; and other elements impacting development. The critical determining factor of its success though, is high level representation of countries, international institutions, civil society and the private sector. Rendez-vous in Doha?

For more information contact Denise Auclair and Jean L. Saldanha

Check Euforic's newsfeeds from CIDSE, on financing and on aid effectiveness

European NGOs challenge the EU on the financial crisis’ impact on the poor

Concord press release, 30 September 2008

Against the backdrop of rising food prices and a growing global economic crisis with detrimental impact on the world’s poor, European development Ministers convened at an informal meeting in Bordeaux. European civil society representatives addressed the ministers, urging them to fulfil their responsibilities to increase financial flows to developing countries, as well as actions to clamp down on capital flight.

CONCORD, the European Confederation of Development NGOs urged ministers to agree an ambitious and specific common EU position for the United Nations “Financing for Development” summit which starts on 29 November. Citizens in developing countries have little impact on the decisions of global traders who have abused and destabilised the financial system, but they will feel the effects of the financial crisis for years to come. The civil society organisations present in Bordeaux called for low-income countries to also be represented at the proposed Bretton Woods II conference to ensure their interests are represented when the financial system is reviewed.

Henri Rouillé d’Orfeuil, President of Coordination SUD, the platform of French development NGOs, commented “It is essential that at this time of crisis Europe looks for a way forward, and does not signal that it is walking away from its political commitments and abandoning developing countries.”

“Money leaked through capital flight from developing countries to rich countries is an estimated 300 billion euros per year,” says Alex Wilks, Director of the European Network on Debt and Development. “This is an unforgiveable situation, and European governments must immediately take action to regulate the many European tax havens.”

CONCORD called upon EU Member States to agree a strong and unified European position on the Doha Financing for Development process. They urged heads of State to attend the conference in November to ensure real progress can be made in reforming the financial system in the interests of all citizens in Europe and in developing countries.

Contacts :

Alex Wilks (Eurodad) +324 985 49482
Jasmine Burnley (CONCORD): +32 473 47 88 06
Jean Merckaert (CCFD) +33 6 81 84 30 64
Henri Rouillé d’Orfeuil: +33 6 135 02 116

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Sustainable finance, aid effectiveness and poverty alleviation in the new global aid architecture

Realizing that achievement of the MDGs is endangered, the German Association of NGDOs, Venro, recently published two position papers for the Accra Forum on Aid Effectiveness and the 2rd World Conference on Development Finance.

While welcoming the international commitment to the successful implementation of the ‘Paris Declaration on Aid Effectiveness’ Venro criticises several aspects, including the:

• missing notion of pro-poor growth and adequate consideration of economic, social and cultural rights
• strong focus on governments while neglecting parliaments and non-state actors
• neglecting of the global economic framework including the development of global commodity prices and global trade policy
• ownership principle which is not balanced with political conditionality
• harmonisation which endangers the diversity of development approaches (see pdf, in German).

Regarding the “Financing for Development” Process, Venro argues that it would not be in the interest of CSOs to see the upcoming conference become a simple reviewing exercise. Directed to the German government Venro calls for a fast implementation of the UN Convention against corruption, extension of budget support in good performing partner countries, strengthened cooperation between Germany's Technical and Financial Cooperation institutions and a further discussion of the concept regarding the cancellation of illegitimate debts (see pdf, in German).

by Martin Behrens

See the Euforic newsfeed on Aid Effectiveness.

Visit our German Cooperation dossier or subscribe to the newsfeed.

See also the WECA Project of the European Center for Development Policy and Management dealing with issues of Aid Management, Ownership and Accountability.

Oxfam warns G8 of credibility crunch

Oxfam just released a new report warning the G8 of a credibility loss regarding its policies . The organization predicts that the MDGs might not be achieved if current trends continue.

“By 2010 we need to see $150bn in additional high-quality annual aid in order to reach the MDGs. […] rich-country leaders more commonly prefer to hide behind promises, polemic, and short-term self-interests. […] (They) have produced nearly a trillion dollars to bail out their reckless banks, yet cannot find $30bn in aid.”

Oxfam calls on the G8 and rich-country leaders to:

• stop burning food and start supporting poor farmers
• mend broken aid promises
• support health, education, water and sanitation for all
• support health, education, water and sanitation for all
• stop harming and start helping regarding climate change
• put women and girls first
• prioritize security for sustainable development
  

More about Oxfam's G8 campaign