Despite the protracted economic slowdown, the world’s advanced countries should ramp up efforts to meet their aid commitments to help needy partners fight poverty, diseases and other grave challenges, senior development agency officials said.

Brian Atwood, chair of the OECD’s Development Assistance Committee, a club of major patrons of poor countries, and Sigrid Kaag, assistant administrator and director of the U.N. Development Programme’s partnerships bureau, warned of a potential negative impact of the eurozone debt crisis and its ripple effects through the rest of the world on official development assistance spending.

“My fear is that they also talk to rationalize that ODA isn’t really important now and their FDI is overwhelmed. But (total ODA from DAC members) is only about $130 billion. If you can pair that to U.S. defense budgets, it’s over $800 billion,” Atwood said in an interview with The Korea Herald.

The sum reflects a 2.7 percent yearly drop in global ODA disbursements, marking a significant negative turnaround after the peak year of 2010. It also falls far short of the U.N.’s $300 billion target.

U.N. Secretary General Ban Ki-moon called on donor governments to “make rhetoric a reality and keep promises” after the agency released a report late last month that indicates financial hurdles for achieving its 2015 Millennium Development Goals.

“But our projections call for flattening out over the next five years. People give us forward their plans and right now I think it may be too optimistic but they’re talking about a 2 percent per year increase,” Atwood said. 

Though some countries such as Korea and Australia are making stronger commitments, budget constraints pose daunting challenges to multinational agencies, according to Kaag.

“If I look at the U.N. system in funds and programs’ perspective for instance, it’s a challenge also on us as multilateral development providers ― how we orient ourselves, how we can make good use, optimal use of the very precious but limited ODA that’s given to U.N. funds and programs such as the UNEP, and how we can leverage that very catalytically and most effectively,” she said.

The two leading development experts were visiting here to take part in the Seoul International ODA Conference on Thursday.

The one-day event invited some 450 policymakers, civic group leaders, scholars and businesspeople from around the world to discuss the implementation of the Global Partnership for Effective Development Cooperation launched in Busan last year and its role in keeping up the global development agenda.

They touted Seoul’s miraculous transformation from one of the poorest economies to the world’s 17th-largest donor in a few generations. The country’s ODA ― comprised of grants and low-interest loans ― totaled about $1.32 billion last year, up more than 12.5 percent from 2010 and six-fold from 2000, according to the OECD.

The record tally, however, represents a meager 0.12 percent of gross national income, versus the government’s 0.13 percent goal and the 0.35 percent rich-world average. Officials blame snowballing welfare outlays and shriveling tax revenues.

Specialists and relief workers have also voiced the need for greater commitments, bigger skilled workforce, long-term strategies and a shift to grants rather than loans.

Conflicting plans and goals of state agencies are one of areas for improvement, Atwood said. Tension persists between The Foreign Ministry with KOICA and the Finance Ministry, which respectively manage grants and loans.

“It’s probably fair to say tension in relationships (of ministries). And everyone wants to see that worked out,” he said.

“A vast increase in ODA causes a lot of fragmentation. We just have to get a handler because partner countries are inundated with programs in every sector and they have a hard time spending time themselves developing strategies, defining and actually doing the development work. We really do need to figure out how to create political relevance to deal with the fragmentation issue.”

With the number of stakeholders surging and strategies diversifying, the development agenda is branching out to fresh topics such as green growth, equity, social inclusion and cohesion.

To boost the effectiveness of limited resources, Korea should foster a “thriving ecosystem” by cooperating more closely with the private sector and civil society, Kaag said.

“Engaging with civil society is critical to ensuring national ownership of the development process, as well as the quality and relevance of the development programs,” she said in a separate email interview.

“As for the private sector, we have seen that they can create literally new ways of doing business in which the role of poverty reduction is not an afterthought but front and center in operations in which inclusive green growth is their core value and part of their core business.”

By Shin Hyon-hee
(heeshin@heraldcorp.com)