Trends in the Development Sector and IFRTDs Response

With universal agreement over the Millennium Development Goals (MDGs), the aid community (donors, actors and recipients) have a time-frame (2015) and framework to work towards. There are serious doubts that: A) there will be adequate funding; B) adequate time; and- perhaps most importantly- C) adequate systems that can or will deliver. Areas of concern are:

• The multiplicity of donor agencies (80 bilaterals, 15 UN agencies, 20 global and regional finance institutions and innumerable international non-governmental organisations (INGOs ) with a multiplicity of agendas often overwhelming recipient country institutions and policy-making;

• Poverty targets may be marginalised due to political, trade and security (i.e. War on Terror) pressures by bilateral donors seeking leverage;

• Conditionality of loans is not always in the interests of the poor, particularly privatization and trade liberalization without similar actions by Northern trading blocks to reduce their own barriers and subsidies;

• The lack of truly long-term commitments to real change by donors, who increasingly work to annual budgets and seek short-term results, preventing predictability of funding flows;  

• The (perceived) lack of local capacity and capability to generate and effectively implement policy at the speed required by donors and within the timeframe of meeting the MDGs;

• The (perceived) ability of institutions, civil society and locally-based private enterprise to absorb and cope with such a rapid expansion of activity and change;

• The increasing isolation from the aid system of failed states/ difficult partners/ low income countries (LICs), as donors become more selective with their ODA, marooning millions of poor people;

• PRSPs, policies and programmes nominally ‘owned’ by the recipients, but signed-off with imposed conditions, by the donor/lender and some INGOs, making for unequal “Partnerships”;

• Competition between donors (including INGOs) means that countries and projects with good potential and offering quick results are “cherry-picked” to protect income, although this can overwhelm the recipients (later causing difficulties which leads to abandonment and a further burden on poor people). Donors assess recipient performance, but there is no (independent) assessment of the donor’s;

• Tied aid and donor technical assistance is still a large proportion of ODA, undermining local capacity.

“Effective Aid” is now the watchword, looking to reform the ‘system’ to more efficiently and effectively cope with the demands of meeting the MDGs and support pro-poor growth. A number of trends are emerging:

• ‘Aid architecture’ is changing. Kofi Anan intends to review the structure and efficiency of the UN agencies, which may see some changes and mergers. The establishment of the International Finance Facility (IFF), the US Millennium Challenge Account (MCA) and the Global Fund to Fight Aids, TB and Malaria are moves to simplify, speed up, complement and coordinate aid. The OECD’s Development Assistance Committee (DAC) is encouraging more cooperation between donors (harmonization, working to comparative advantage), more evaluation, accountability, and country and sector selectivity, to reduce transaction costs. INGOs and large foundations/trusts are becoming more influential and the EU a much bigger ‘player’. Indigenous CSOs and NGOs are growing in number and capability;

• The focus on and funding of governance and capacity building is increasing, as this is critical to achieving MDGs and pro-poor growth. This includes strengthening civil society;

• There is more emphasis on programmes, rather than projects, with increasing aid being funneled through General Budget Support (GBS) and Sectorwide Approaches (SWAps), again to reduce donor and recipient transaction costs;

• There is a major shift in focus from rural to urban development;

• There is increasing investment in Global Public Goods- peace/security, environment, education, public health- not least due to the benefits the donor countries also derive;

• Some middle income countries (MICs) are emerging as regional drivers economically, politically, and in terms of information and expertise pools;

• Regional groupings (NEPAD, ECA, ASEAN, etc) offer more Southern ownership and capability to coordinate region-wide programmes;

• Future conditional terms for loans may be less concerned with market reform and privatization and more towards strengthening the government sector to deliver pro-poor growth, according to a recent World Bank Report (“Poverty Reduction and Growth: Virtual and Vicious Circle”). 

There are obvious tensions. On one hand, there is an intensified effort to increase funding and support for the delivery of effective aid and the reduction of poverty. On the other, Northern trade and security priorities can undermine this. Harmonisation of effort is desired, but competition dictates fragmentation on all levels.

Opportunities and Threats for IFRTD

Threats

• IFRTD’s emphasis on rural development runs counter to the shift in focus to urban development.

• The establishment of new global-reach institutions (IFF, The Global Fund, MCA ) may centralize power and agenda-setting, marginalize bilateral and smaller multilateral institutions, and make advocacy by smaller groups (particularly indigenous CSOs and NGOs) more difficult. The same can be said of regional economic power blocs, which decrease local influence;

• Economic investment already overshadows social sector spending. Northern environmental, economic and security concerns tend to shift bilateral priorities further away from the poverty focus and towards countries which can be co-opted into trade and political alliances;

• Donors are restructuring and realigning their ODA mechanisms and policies;

• GBS and SWAps are difficult for CSOs and NGOs to influence, with policies and agendas being more influenced by the donor than the recipient. They are difficult to monitor and assess in terms of performance and open to corruption;

• Donors are becoming more selective in the countries and sectors they support, which may mean a declining interest in the number supporting infrastructure / transport per se. The focus is on education and health related MDGs;

• Long-term commitment to building local capacity (in terms of human resource development) is lacking, with a continuing reliance on short-term inputs and consultancy support;

• Networking shows few- if any- tangible results. 

Opportunities

• The increased focus on supporting institutional and civil society capacity and capability and

• the shift towards more recipient State responsibility for governance and a pro-poor agenda opens advocacy avenues for NFGs; 

• As MICs strengthen, so do their pools of knowledge and expertise, increasing the potential for South-South exchanges and regional/global networking, filling gaps in LIC capacities;

• Restructuring and realignment of Northern aid institutions offers the opportunity to advocate changes favouring rural transport and development as mobility and access are key factors in achieving the MDGs;

• SWAps and GBS may offer opportunities for monitoring and evaluation for NFGs;

• The focus on poverty means that an argument can be made that urban poverty cannot be resolved without strategies to deal with rural poverty.

Implications for IFRTD’s Structure and Strategy

IFRTD cannot let the issue of rural mobility and access be marginalized! It is crucial that IFRTD (its membership and allied organsations) identifies what rural transport offers towards achieving MDGs and promotes it. It needs to be very clear on how this relates to the shift to urban priorities and to Global Public Goods (particularly the environment). It needs to track and influence changes in policy, institutional structures and programme planning on international, regional and country levels and establish a data-base for this. It should look for ways of strengthening South-South capacity, and ways for the South to challenge, inform and influence Northern agendas and practice, as well as Southern national and regional agendas and practice. It needs to raise the profile of the issues that concern the network with target audiences.  

In terms of governance and operation, the structure of IFRTD (NFGs, members and coordinating Secretariat) does not need to change, but it does need to expand and energize the network, particularly the membership, from being a group of interested people to a coalition of active groupings (along regions and COPs) with clear aims (i.e. SWAps/GBS, CSO strengthening, etc) and targets for influencing change. Priorities for the network to pursue should continue to be set by the membership.

Recommendations: 

• Strengthen regional resources, developing / evolving strategies and capacities to reflect and respond to the challenges in the region and strengthen institutional contact.

• Audit membership expertise and specific interests, encouraging the creation of groups to work on specific areas, looking for overlaps and evolving new groups/agendas as appropriate. Allied to this, audit skill/knowledge areas members feel they could improve on and organize training workshops (fundraising, networked research, monitoring and evaluation (M & E), report writing, etc) to strengthen capabilities.

• Audit bilateral, multilateral and international aid institutions and INGOs on their agendas regarding transport issues and priority countries and sectors (particularly regarding MDGs/mobility and access). Be aware of the trends, either to follow or challenge them.

• Prioritise issues and institutions/INGOs for information and advocacy campaigns.

• Strengthen alliances with regional banks and multilateral organizations, offering advice and expertise (through members) to assist in developing pro-poor transport policies, M & E, etc.

• Strengthen ties to policy units in INGOs (Oxfam, SAVE, etc) who have greater capacity and funding to identify and reach targets to mount joint advocacy programmes. ‘Offer’ members as experts and provide information management services to them.

• Regional Coordinators should work with NFGs/members to identify national programmes, GBS/SWAps in the making, offering to advise relevant government institutions (both donor and recipient).