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Aid in Times of Crisis Duncan Green Head of Research Oxfam GB June 2010 Current aid promises EU has pledged to reach 0.56% of GNI by 2010 2010: aid levels expected to fall €11bn short Main shortfalls in Italy, Germany and France And the pressures on aid budgets will only increase …..
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Aid in Times of Crisis Duncan Green Head of Research Oxfam GB June 2010
Current aid promises • EU has pledged to reach 0.56% of GNI by 2010 • 2010: aid levels expected to fall €11bn short • Main shortfalls in Italy, Germany and France • And the pressures on aid budgets will only increase …..
The costs of breaking those promises • Harming poor people • Damaging the implicit social contract between rich and poor countries • Undermining Europe’s moral authority • Why should emerging powers then trust Europe’s promises on anything else?
The current crisis: Channels of transmission Aid budgets? Government spending…? Informal economy Remittances Trade Finance
Oxfam’s research on the current crisis • 12 countries/2,500 households + lit review • So far, countries and households dealt better with the economic crisis than we expected; • Families supported each other, shared food, information, money, kept kids in school; • But $65bn fiscal hole a major concern (aid grants only cover 13% of that so far) • What are the limits of resilience – for families and nations?
Lessons for governments and donors Build resilience before a shock, replenish it afterwards (before the next one) Volatility matters as much as average flows/stocks Startling gap on real-time impact monitoring and genuine dialogue with affected communities Social protection needs extension – especially into the informal economy, and automatic instruments Gender matters in terms of impact and response Countercyclical spending in good times and bad That needs support from aid system
Good v Bad Aid Do: fund watchdogs, fund long-term, support state capacity, put government in the driving seat, ensure downwards accountability Measles vaccines save 7.5m lives 1999-2005 Education for All Rise in General Budget Support (but still tiny %) MDG contracts a model of good aid Don’t: overcomplicate, impose conditions, support parallel systems, poach staff or tie aid Over 2 year period, Uganda had to deal with 684 different aid instruments from 40 donors, (just for central government funding)
Beyond Aid • Coherence is a double-edged sword • Effective states learn by doing (and sometimes failing), so defend policy space and pluralism • One ray of light: innovative financing, eg financial transaction taxes; bank levies • Do No Harm agenda: • Climate Change did not end in Copenhagen! • Migration is a Good Thing • Corruption needs supply and demand • Tax havens steal money from poor countries
Thank you! For more information, see Oxfam’s new reports on: The Global Economic Crisis And 21st Century Aid firstname.lastname@example.org