The Future of Development – Aid and Beyond

Just over a year ago, in March 2014, UNU-WIDER published a report entitled: What do we know about aid as we approach 2015? It notes the many successes of aid in a variety of sectors, and that in order to remain relevant and effective beyond 2015 aid must learn to deal with, amongst other things, the new geography of poverty; the challenge of fragile states; and the provision of global public goods, including environmental protection.

The questions raised in that report remain highly relevant and the second half of 2015 provides an unprecedented opportunity to address them, and to set the agenda for the next fifteen years. The experience of the past fifteen years—and in particular the fact that more people have emerged from absolute poverty during that period than ever before in human history—gives grounds for optimism that an ambitious agenda can be implemented successfully.

A decade and a half of progress: 2000-2015

The end of the Cold War and a strengthened focus on poverty reduction as the key objective of development—‘Eliminating World Poverty: A Challenge for the 21st Century’ was the title of a British Government White Paper in 1997—found expression in the Millennium Development Goals (MDGs). The overarching Goal of halving the proportion of people living in absolute poverty by 2015 has been achieved. Many more children (girls as well as boys) are attending primary school, fewer mothers are dying in childbirth, and far greater numbers of their children are surviving beyond their fifth birthday.

Undoubtedly rapid economic growth in China and India and elsewhere has been a major factor in this progress, but aid has also played a significant role. In Africa as well as Asia, many countries are making significant progress. Many of them are looking to move to middle-income status over the coming decade or so, and will as a consequence become less dependent on large-scale transfer of concessional resources.

The future role of aid: supporting fragile states

Does this extraordinary progress mean that we can declare victory, and that aid is no longer relevant? Not yet. Battles have been won, but the war is not over. In practice, bilateral financial aid is likely to focus on a decreasing number of fragile states and countries emerging from conflict, in which the conditions for transformational change do not exist and which lack human and institutional capacity. So, as the UNU-WIDER report notes, aid will have an important continuing role in those countries, both in addressing issues of governance and capacity-building and also providing direct support to the social sectors.

The future role of aid: supporting global public goods

Aid is not just about supporting individual countries, and the international community will have to co-operate increasingly closely in supporting ‘global public goods’. Addressing the challenges of climate change—both mitigation and adaptation—is perhaps the most obvious example. Other issues that will need to be addressed globally include environmental pollution; preventing the loss of biodiversity; and combating deadly diseases which, as the recent outbreak of Ebola in West Africa reminds us, do not respect national boundaries.

The environmental problems in particular have been created, or at least exacerbated, by the more developed countries, and the negative effects have been felt most strongly by the less-developed countries. It will take very significant resources to address them, and there are strong grounds—both moral and self-interest—for the better-off countries to provide the bulk of those resources. We ignore the existential threats to our planet, and to humankind, at our peril.

Beyond aid: policy coherence

Whatever the future of aid, it is crucial that the international community also address other policies which impact directly and negatively on developing countries. This requires a ‘whole of government approach’, also described as ‘policy coherence for development’. This includes, for example, addressing the full range of issues which can have a significant negative impact on developing countries such as the costs associated with transferring remittances; the impact of agricultural subsidies and trade barriers; the application of intellectual property rights etc.

Setting the agenda for the next decade and a half: 2015-2030

The second half of 2015 provides an extraordinary opportunity to address these and other issues. There are (at least!) four very significant meetings taking place.

The first one is the Third International Conference on Financing for Development taking place in Addis Ababa in July, which will give some indication of the total resources from all sources (aid; remittances; private sector investment) available to support the development aspirations of less-developed countries.

The United Nations Summit to adopt the post-2015 development agenda will take place in New York in the second half of September to decide on a new set Sustainable Development Goals (SDGs) to replace the MDGs which expire at the end of 2015. The broad shape of the SDGs is already clear—a comprehensive set of 17 Goals, the overarching one of which is the elimination of absolute poverty by 2030.

The SDGs are based on three key pillars: economic growth; equity (‘leave no one behind’); and sustainability (look after the planet, on which succeeding generations will depend). The SDGs reflect a comprehensive consultation process, and it is interesting that employment and job-creation were noted as a key priority, after health and education, by respondents in that process—an area also flagged by the UNU-WIDER report as being of crucial importance.

The 2015 United Nations Climate Change Conference (COP21) in Paris will link very strongly to the sustainability pillar of the SDGs. It is potentially an event which will attract more heads of state and governments than any previous conference, so we must hope they will not wish to leave without a significant and substantive agreement.

And finally there will be a World Trade Organization Ministerial Conference in Nairobi, also in December, to try to make progress on a range of trade issues which have made little progress for many years but which have the potential to stimulate world trade to the benefit of better-off and poorer countries alike. Trade, like peace and security, is in many ways a global public good.

The opportunity ahead

So a good many of the issues raised in the UNU-WIDER report of March 2014 not only remain relevant, but will come into sharper focus as we move into the second half of 2015. The remainder of this year will effectively establish the framework for international development for the coming fifteen years. It provides a unique opportunity to develop measures to stimulate global economic growth; to ensure that everyone is in a position to benefit; and to do so in ways which do not threaten the sustainability of our planet. We had better get it right.

Myles Wickstead CBE is Visiting Professor (International Relations) at the Open University and King’s College London, and Advisor to Hand in Hand and Development Initiatives.  He has held senior positions in the UK Department for International Development and FCO, including as Head of the British Development Division in East Africa; the Board of the World Bank; British Ambassador to Ethiopia and the African Union; and Head of Secretariat to the Commission for Africa. 

His book ‘Aid and Development: A Brief Introduction’ will be published in July 2015 by Oxford University Press. It describes the historical context for aid and development (starting with the post-World War Two settlement), covering key concepts and ideas, policy and practice, and looks at how they might evolve as a result of the opportunities presented by the second half of 2015.