Subject: [cwj 39] British NGOs Ask Donor Countries To Untie Aid
From: Corporate Watch in Japanese <cwj@corpwatch.org>
Date: Mon, 19 Jun 2000 16:31:38 -0700
Seq: 39
"The NGO singled out Japan and France and said they were resisting efforts to remove the conditions attached to official aid to the world's 48 least-developed countries whose Gross Domestic Product per head is less than 699 US dollars." Check out Action Aid's website http://www.actionaid.org/home.html for the full briefing. British NGOs Ask Donor Countries To Untie Aid By Jaya Ramachandran LONDON, Jun 16 (IPS) - British non governmental organisations (NGOs) have asked industrial countries to stop using aid as an instrument for promoting their commercial interests in some of the world's poorest countries. The appeal came ahead of a crucial meeting next Tuesday of the Development Assistance Committee (DAC) of the industrialised countries' Organisation for Economic Co-operation and Development (OECD) in Paris. In a statement obtained by IPS, the British NGO, Action Aid, said: "Donor countries are placing commercial interests over their commitment to help the world's poor by providing aid only on the condition that they buy goods and services from companies in donor nations." The NGO singled out Japan and France and said they were resisting efforts to remove the conditions attached to official aid to the world's 48 least-developed countries whose Gross Domestic Product per head is less than 699 US dollars. Backed by Oxfam and the Catholic Agency for Overseas Development, Action Aid pointed out that after more than two years of negotiations, development co-operation ministers had failed to reach a consensus on untying aid in May. Summing up the results of the last high-level meeting of the Development Assistance Committee, its chairman Jean-Claude Faure said in press statement May 12: "Members considered a draft Recommendation on the Untying of ODA (official development assistance) to LLDCs (least developed countries), developed through intensive consultations over recent months." Faure added: "This text sets out basic objectives and implementation provisions in a manner which is widely acceptable. A DAC meeting on 20 June will consider whether full agreement can be reached." Action Aid said Tuesday's meeting was "the last chance for donor countries to show their real commitment to poverty reduction in an era of declining overseas aid and escalating poverty." The British NGO fears that refusal to untie aid could dash reform hopes yet again, preventing companies in poor countries from competing for aid-funded contracts. In a joint letter to the DAC chairman, Oxfam, Action Aid and the Catholic Agency for Overseas Development said the draft recommendation was flawed in its scope and coverage. However, it offered the best opportunity for the world's aid donors to demonstrate that they were genuinely committed to enhancing the effectiveness of ODA rather than using it as a commercial subsidy. "Rich donor countries must not let the chance pass now. If they do, not only can they be justifiably open to the charge of hypocrisy in placing commercial interests above poverty reduction, the consensus approach to untying will break down irretrievably allowing some countries to re-tie their aid programmes," the NGOs warned. They added: "A failure to reach agreement will damage the credibility both of the donor community and the DAC." A background paper forwarded to IPS by Action Aid points out that tied aid increases costs by up to 25 percent. The annual global overseas development aid budget is around 55 billion US dollars, of which half is tied. This means that untying aid would effectively increase the total value of aid by around 7 billion US dollars. This is almost equivalent to the total aid to sub-Saharan Africa which amounted to 8.6 billion US dollars in 1998. The paper adds: "Despite the global implications of this practice, negotiations around it have largely taken place away from democratic scrutiny, within the confines of donor club meetings and without a single voice or representative from those who stand to lose the most - the recipient countries." Untied aid would also reduce the dependency of developing countries on developed countries' technologies, their advice and spare parts. This, in turn, would help to increase "Southern ownership" over the development process. Explaining this, the paper says: "Since May 1999, the redrafted (DAC) Recommendation has been strengthened in regards to promoting the greater use of developing country-based companies in aid procurement and contracting." It adds: "However, while some donors were arguing for targets to be agreed in regard to aid untying to LLDCs, the suggestion that a target for the proportion of contracts awarded to local firms has not received adequate attention reflecting both the motivations of donors and the absence of developing country partners in the discussions." Action Aid believes that alongside agreeing to the recommendation, donor countries should also promote a work programme to put into action the commitment to use aid procurement and contracting as a development instrument. "This work would provide guidelines and best practice for donors to help build the capacities of Southern firms using procurement as a demand-side policy lever alongside more traditional forms of aid-funded support for private sector development." The work programme should examine ways to involve poor communities themselves in the provision of goods and in the procurement process, says the paper. Emphasising another aspect, Action Aid's policy adviser Jeff Chinnock said: "For years rich nations have failed to end the corrupt practice of linking aid to their own commercial benefits. It is unbelievable, given the international community's rhetoric of halving world poverty by 2015, that some aid donors are unwilling to agree to take this small step because they want to unfairly support their own industry." (END/IPS/DV/jrc/da/00) Origin: SJAAMEX/DEVELOPMENT/ ---- [c] 2000, InterPress Third World News Agency (IPS) All rights reserved ------------------------------------- Corporate Watch in Japanese Transnational Resource and Action Center (TRAC) P.O. Box 29344 San Francisco, CA 94129 USA Tel: 1-415-561-6472 Fax: 1-415-561-6493 Email: cwj@corpwatch.org URL: http://www.corpwatch-jp.org ------------------------------------- ______________________ The Corporate Watch in Japanese http://www.corpwatch.org/japan (CWJ) mailing list is a moderated email list in English designed to connect activists campaigning against Japanese corporations and investments around the world. * To unsubscribe from the CWJ mailing list, send an email to majordomo@jca.apc.org with text "unsubscribe cwj". To subscribe to the CWJ mailing list, send a message to majordomo@jca.apc.org with the text "subscribe cwj" * The CWJ mailing list is NOT intended for wide distribution. If you would like to post messages from this list somewhere else, we ask that you first contact us at cwj@corpwatch.org ______________________