Financing for development and country ownership

In July, the international community will come together in Addis Ababa to identify ways to provide the necessary resources to achieve our sustainable development objectives over the coming years. Taking place on the African continent, the Third International Conference on Financing for Development will provide an opportunity to ensure that the wide range of development resources available – including aid, partnerships with other actors, and our own domestic resources – can be harnessed effectively by developing countries to support our development priorities.

As Co-Chair of the Global Partnership for Effective Development Co-operation (Global Partnership), I see a strong need to maintain a focus not only on how many resources we can raise, but to ensure they are employed effectively to support developing countries’ efforts. In January 2015, I co-chaired the 7th meeting of the Global Partnership’s Steering Committee in The Hague, which confirmed the importance of exploring better ways to use development finance tools, and the critical need for keeping the principles of effective development co-operation – country ownership, focus on results, inclusive partnerships, and transparency and accountability – front and centre of this year’s major discussions on Financing for Development and Post-2015 agenda.

At the 2015 World Bank Spring meetings, the Global Partnership held a side event on strengthening development finance, particularly from a partner country perspective. The meeting featured interventions from a range of developing countries, including Rwanda, Tanzania, Timor Leste, Kenya and South Sudan, as well as the g7+ group of fragile states, as well as views from development partners including Development Initiatives, the Netherlands, Mexico, and UNDP. Discussions focused on how the principles of effective development co-operation can contribute to making better use of existing resources for development, as well as to leveraging more quality public and private finance to achieve sustainable development for all. Overall, the event highlighted the importance attached to the development effectiveness agenda – and particularly the centrality of country ownership – for implementing the post-2015 sustainable development goals.

This begins with keeping a focus on the commitments that have already been made to improve the effectiveness of Official Development Assistance (ODA). The first Financing for Development Conference in Monterrey in 2002 recognised the need to ensure that aid is delivered to produce maximum development impact at country level, through the harmonisation of co-operation providers’ procedures; efforts to untie aid ; and the use of development frameworks led by developing countries.

Efforts like those of the Global Partnership have helped spur progress in making development co-operation more effective in the past decade. In Malawi, for example, as part of its cloud-based Aid Management Platform, the government is using geospatial interactive maps to better understand development work, in terms of who is doing what and where. These data-driven, online maps correlate development activities by donor, type of work and poverty rates in Malawi’s 28 districts, thus helping ensure aid goes where it is most needed. Further progress is however required, calling for a collective international will to achieve development commitments.

Undeniably, development partnerships going beyond the traditional donor-recipient relationship will become increasingly important in the coming years. We will need to work with businesses, civil society, foundations, development partner governments from the South, and many more. Such partnerships will provide an immense opportunity to direct more resources to eradicating extreme poverty and promoting sustainable development – but their diversity also raises new challenges of co-ordination for developing countries. For us to take full advantage of these partnerships, we need to promote good practice so that these resources are deployed in support of our development priorities.

The surest way to promote country ownership is for us, developing countries, to mobilise our own domestic resources. At the January Steering Committee meeting of the Global Partnership, members agreed that the GPEDC will further explore how development co-operation can be scaled up, deepened and improved to strengthen institutional capacity for domestic revenue mobilisation, by improving tax transparency and accountability, and tackling tax avoidance and illicit financial flows.

Indeed, at the World Bank Spring Meetings side event, participants focused heavily on domestic resource mobilisation, calling for more support from co-operation providers to improve tax and revenue collection systems and capacity. Equally, the private sector needs to be kept in check to ensure that no one gets away with tax evasion and avoidance. There was repeated and clear recognition of the need for better and smarter quality development finance, beyond ODA, to achieve post-2015 objectives.

A strong commitment to progress in these areas should be a priority for the Addis Ababa conference.

Country leadership and ownership must be at the forefront of the post-2015 sustainable development agenda. The Global Partnership helps translate the principles of effective development co-operation into action on the ground. These principles are applicable to all forms of development co-operation, and the Global Partnership provides an inclusive platform for engaging all development stakeholders as equals.

goodall-gondweAbout the Author
Minister of Finance, Economic Planning and Development Goodall Edward Gondwe has had a long and distinguished career as an economist. Among other positions, he has worked at the Reserve Bank of Malawi, the African Development Bank and served in the IMF for 22 years. Since 2002, he has worked in the Government of Malawi, and in 2014 was appointed as Minister to Finance, Economic Planning and Development to head the amalgamation of the Ministry of Finance and Ministry of Economic Planning and Development.

The role of ODA and broader official development finance in the post- 2015 era: creating opportunities for “smarter” official finance

OECD Conference Centre, Paris

31 March 2015

Over 100 experts, practitioners, non-state actors and policy makers from developed and developing countries gathered at the OECD Headquarters, in Paris, France, to learn more about the DAC’s recent historic agreement to modernise its statistical measurement system and to identify ways for ODA and other forms of development finance to best support the achievement of the Post-2015 Sustainable Development Goals.

Building on the insightful panel presentations and lively discussions, the debates confirmed that Official Development Assistance (ODA) is and will remain a critical source of finance, particularly for very poor and fragile countries. Overall, the exchanges highlighted the importance of using ODA in innovative and catalytic ways, and strengthening developing country leadership in managing the diversity of finance and the mobilisation of domestic resources.

More information:

Social Dialogue: a “How-to” for social and economic development

The international development community and beyond has identified inequality as one of the main and growing challenges for development. Unemployment, especially among youth, has been recognised as a core source of increasing inequality, also driven by the expanding negative impact on economic and social development of the growing informal sector, particularly for women.

As an instrument of social and economic governance for development, social dialogue can contribute effectively to the development effectiveness agenda. It provides more ownership to people, in particular workers, helps to increase accountability and strengthen domestic policies, and contributes to the design and implementation of better redistribution policies. Social dialogue also facilitates social peace and is a forceful instrument for reconciliation and reconstruction.

Productive employment and decent work for all is inherent/indispensable to sustainable development, in particular in developing countries, as recognised by the Busan Partnership Agreement. In this sense, the International Labour Organisation (ILO) decent work agenda is particularly relevant to the Global Partnership for Effective Development Co-operation (Global Partnership) when we become explicit about its four pillars, employment creation, workers’ rights, social dialogue and social protection. Particularly interesting to highlight with regard to the core principles of the partnership as well as the priority themes the Global Partnership has identified as its core work, is the “social dialogue.”

Stakeholder engagement/multi-level partnerships

Social dialogue refers to all types of negotiation, consultation or exchange of information between representatives of employers, workers and governments on issues generally relating to economic and social policy. It can take place from within a particular industry or between industries, from local to national or regional level.
It can produce various outcomes from collective agreements, such as international framework agreements, to national tripartite acts like the Indonesian jobs pact. According to the International Labour Organization, effectively implementing economic and social (development) policies requires three instruments of good “governance”:

  • Social Dialogue,
  • Labour inspection and
  • Economic Policy.

arton12986Because social and economic governance are critical when defining and implementing development strategies, social dialogue has been identified as one of the strongest and most effective instruments to deliver on these principles, by directly involving the institutions, and actors within these institutions, governing the economic and social spheres. Development policies should be based on genuine democratic ownership, inclusiveness, accountability and oriented towards results.

Examples from all over the world show how social dialogues help the most vulnerable people. In India, trade unions have organized rural informal workers into rural workers’ unions, with 172,270 members in 2011. The Indonesian transport workers union has reached out to informal sector workers to enhance their economic and occupational protection. Self-employed Nicaraguans now have a resource to protect their rights when working with employers and local government. (ILO 2013)

A tool for policy design and implementation

Social dialogue is not pre-ordained and requires both the political will and an environment that welcomes it. As a prerequisite, it has to allow both workers and employers representations to exist and function equally and effectively. This begins with respect for fundamental freedoms of right to association and right to collective bargaining, representative and independent employers and workers organizations, sound industrial relations practices, functioning labour administrations, including labour inspection, and respect for the “social partners” (understood as workers and employers organizations) as the other building blocks of social dialogue.

Effective social dialogue can strengthen economic and social governance, stimulate inclusive growth and combat inequality. It can foster stable and peaceful societies through social cohesion and dispute resolution, while also enhancing accountability and democratic ownership.

An increased orientation towards the role of private sector in delivering sustainable development and the enduring focus on economic growth, coupled with increasing concerns about social and income inequalities, make social dialogue indispensable. Social dialogue and functioning labour markets instruments, (e.g. minimum wages, employment protections like unemployment insurance, collective bargaining or negotiation between employers and workers ) are effective tools for reducing inequality, in terms of income and social protection, health and education provisions and public goods in general. In this way, social dialogue with supporting legislation can help reduce the gap between productivity and salaries.

In many conflict-afflicted areas, reconstruction and reconciliation are key to community and state building. In many post conflict situations and countries transitioning to democracy, social dialogue has proven to be a powerful tool to stabilise social relationships. It can pave a way forward by bringing around the table economic and social actors and governments. Examples of South Africa, Tunisia, Indonesia and many countries in the post-Soviet Eastern Europe show how social dialogue has been at the heart of transitions to democratic and free societies.

In Angola, social dialogues have played an important part in the country’s recovery from a 27-year civil war, and have helped face a number of challenges in the resource extraction sector. In May 2010, President dos Santos established a National Council for Social Dialogue consisting of Government ministries, the trade unions UNTA and CGSILA, as well as the Angola Industrial Association and Angola Chamber of Commerce, representing the employers’ side. (NORAD 2011)

Rights, legislation and policies alone do not guarantee implementation and positive development results. Participatory accountability mechanisms need to be in place in order to ensure effective implementation and to allow for different interests to be reconciled and strategies to be adjusted for improved development outcomes. Social dialogue elevates economic and social accountability from the national to the local and enterprise level, and facilitates monitoring and adjustment in view of improving effective and adequate implementation of strategies and measures.

In light of the important part social dialogue may play in the Post-2015 development agenda, a joint “partnership on social dialogue” with the Global Partnership stakeholders would provide a relevant “how-to” instrument of economic and social development, particularly in the current context of the growing role of the private sector. Bringing together various actors under the aegis of the Global Partnership to explore ways to learn from and promote social dialogue at a global level and in individual donor and partner country, efforts in cooperation could go a long way in achieving some of the commitments made since the Paris Declaration on Aid Effectiveness.

About the Author:  Wellington Chibebe was elected Deputy General Secretary of the International Trade Union Confederation (ITUC) in 2011. Prior to taking up that position, he served as Secretary General of the Zimbabwe Congress of Trade Unions (ZCTU). He joined the ZCTU in 2001 having previously served as President of the national Railway Workers’ Union, which he joined in 1988 after serving his apprenticeship as a diesel plant fitter. Wellington Chibebe represented Zimbabwe’s trade union movement on numerous occasions at the annual ILO International Labour Conference and various other major international meetings. A champion for democracy and development, he was awarded the inaugural Arther Svensson International Award for Trade Union Rights by the Norwegian Chemical Workers’ Federation in 2010. In 2014, Wellington Chibebe was re-elected as ITUC Deputy General Secretary.

This post was originally published in Devex.