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Presentation by Christoph Langenkamp (Global Donor Platform for Rural Development) at the 6th Brussels Development Briefing - Brussels, 2 July 2008
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Brussels Rural Development Briefings:Session no 6: New Drivers, New Players in ACP Rural Development
--Traditional and new donors – The need for
improved development effectiveness
Christoph LANGENKAMP
- Task Leader Agricultural and Rural Policies -Global Donor Platform for Rural Development
2 July 2008, Brussels
www.donorplatform.org
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What is the Global Donor Platform for Rural Development?
• A strategic alliance of 30 donors, international finance institutions and development agencies, created in 2004 to address aid effectiveness challenges in agricultural and rural development;
• The Platform is committed to contribute to better and more investments in agriculture and rural development;
• Platform outcomes:
1. Advocacy and outreach
2. Knowledge and innovation
3. Aid effectiveness
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Highlights of Platform activities
• Networking of ARD sector managers;• Joint preparation of studies, donor concepts and elaboration
of policy recommendations on ARD issues;• In-country facilitation for donor harmonisation and
alignment on pilot basis and elaboration of principles for effective ARD programmes;
• Supporting CAADP, e.g. through enhanced CAADP-Donor communication;
• Contribution to WDR 2008 ‘Agriculture for Development’;• Inclusion of agriculture sector aid effectiveness experiences
into the Paris Declaration process.
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Investment trendsImportant:
– Prime responsibility for agricultural development rests with national governments;
– Keeping in mind that agriculture is primarily a private sector activity.
Underinvestment in agricultureAgricultural GDP/GDP public spending on agriculture/ agric GDP
Source: C. Delgardo presentation of WDR 2008
Some facts and figures (1)
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16
10
0
5
10
15
20
25
30
35
Agriculture-based Transforming Urbanized
perc
ent
4
11
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0
2
4
6
8
10
12
14
Agriculture-based Transforming Urbanized
perc
ent
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Misinvestment in agriculture
Better use of public budgets needed — subsidies crowd out investments; the example of India
Source: Chand and Kumar 2004
Some facts and figures (2)
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1
2
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1975-79 1980-84 1985-89 1990-94 1995-99 2000-02
Per
cent
of
Ag.
GD
P
Public goods investment
Subsidies
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ODA to agriculture
ODA commitments declined from about 18 % in 1979 to 3.5 % in 2005.
The ODA trends are mirrored by national budget allocations for agriculture dropping from 11% in 1980 to 7% in 2002 in Africa.
Some facts and figures (4)
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Funding gap estimates:
Incremental funding needs to achieve MDG 1 (IFPRI June 2008):
• US $ 14 billion per year for all developing countries;
• US $ 3.8 to 4.8 billion for SSA, plus US $ 2.3 billion for subsidised input (fertilizer and seed) scheme (in addition to 10%
national budget).
But: Immediate absorptive capacity can be a challenge in some areas!
Some facts and figures (5)
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• Stand-alone projects
• Integrated rural development projects (since 1970s)
• Sector-Wide Approaches (SWAps) (since 1990s)
• Integration of ARD in PRSPs (since 1990s)
• Poverty Reduction Budget Support (PRBS) (starting 2000s)
Evolving paradigms in ARD
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• Soaring food-prices are symptomatic and catalytic;• Decades of real prices decline expected to be over;
• Agricultural growth accelerates;• Agriculture remains taxed, but at a lower rate;• Increasing demand for agricultural commodities:
– Population growth;
– Changing diets;
– Biofuels.
• Emerging markets for environmental services;
• Technical and institutional innovations.
Agriculture is back on the agenda
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• Agriculture based GDP growth benefits the income of the poor 2 to 4 times more than GDP growth from non-agriculture.
World Bank: World Development Report 2008
• But, smallholder agricultural development is critical.
Agriculture critical to address poverty
Agriculture
Non-agriculture
-2
-1
0
1
2
3
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6
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Lowest 2 3 4 5 6 7 8 9 Highest
Expenditure deciles
Exp
endit
ure
gain
s in
duce
d b
y 1
% G
DP
gro
wth
(%
)
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New architecture-Emergence of non-traditional and new donors
New important players
• CSOs managed $40 billion in 2005 (estimate: AG CSO AE, 2008);
• Grants from CSOs and foundations: $14.6 billion in 2006 (from 8.8 billion 2002, [OECD 2008]);
• Non-DAC OECD countries (like South Korea, Turkey, Mexico): $1.9 billion in 2006;
• Non-OECD countries, e.g. China and India;• Corporations, Private and voluntary organisations, religious
organisations, universities and colleges, volunteer time;• Recorded remittances flow to developing countries (2006):
177 bn $ (221 bn $ inflow, 44 bn $ outflow, World Bank Migration and Remittances Factbook 2008);
• DAC countries ODA 2007: $104 billion;• FDI to Africa (2006): $36 billion (23 bn$ to North Africa, 12
bn$ to SSA).
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Financial flows - a summary by the Hudson Institute
Financial flows into developing countries, 2006in billion $
ODA: 95
Remittances: 122
Private investment and philanthropy:
209
Hudson Institute, Center for Global Prosperity, Annual Index of Global Philanthropy, 2008
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• There is a political consensus – the MDGs;
• New players and donors;
• Development agenda: WDR 2008 Agriculture for Development;
• Food price situation is symptomatic and catalytic;
• Evolving aid effectiveness (increasing country ownership, alignment and harmonisation):
– Regional: CAADP (as an African initiative), RECs;– National: improving policy coherence - PRSs, JASs, etc.– High Level Forum on Aid Effectiveness, Accra
• Commitments to increased public investment:– AU Maputo declaration (10% of budget for ARD and 6% ag growth); – G8, Financing for Development etc.
(and as demonstrated by 8.5 billion US$ in pledges at the FAO/IFAD/WFP HLF on Food Security in June 2008 – additionality!).
Issues and opportunities
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At international level:• Increased and deepening engagement:
– International agreements (i.e. UN, MEA, Paris Declaration);
– Political fora (i.e. UN, World Economic Forum);– Issues based discussions/conferences (i.e. FAO, OECD,
Global Donor Platform).
At national level:• Active participation at policy formulation;• Participation in sector dialogue / round tables.
Better dialogue among development actors
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Operational levelThere is increased collaboration of different actors:
– Alignment to policy frameworks;– Implementation (public-CSO, PPP, non state –non state …);– Monitoring and evaluation.
Examples:• Tanzania Agricultural Rural Sector Development Programme;• Public funds for CSO implemented agricultural advisory services;• African Enterprise Challenge Fund;• Agriculture Development Grants from the Gates Foundation.Challenges include:• Increasingly complex aid architecture;• Roles, mandates, capacities, resources, processes;• Role of the state / managing the political economy;• Coherence (within and between actors and sectors).
Expanding collaboration
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The current aid effectiveness debate offers opportunities for improved collaboration and coherence while empowering national processes.
Paris Declaration on Aid Effectiveness (2005):- ownership, alignment, harmonisation, results and mutual accountability;
Partner country priorities: -conditionality, untying, incentives, division of labour, predictability and capacity development
CSO aid effectiveness process
Up-coming Joint Principles for ARD (Platform process)
More effective development assistance
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Paris Declaration: Preliminary lessons learned and recommendations from the agricultural sector
• Progress in aid effectiveness (Sector-Wide Approaches, Joint Assistance Strategies etc.) but major challenges remain;
• Strengthened public investment, alignment and harmonisation;
• More emphasis on ownership issues / stakeholder participation;
• Strengthened capacity of all stakeholders (to fulfil their respective role and be [technically] competent);
• Need for increased coherence;• Need for context specific policies and strategies.
More effective development assistance(2)
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Global initiatives for more funds in general and more investment in ARD include:
• MDG process, Financing for Development (Doha), and Ban Ki-moon’s High-Level Task Force on the Global Food Security Crisis and MDG Africa Task Force;
• G8 Summit (Gleneagles and follow-up);• FAO Initiative on Soaring Food Prices / Hunger Initiative;• World Bank’s Global Food Crisis Response Program (GFRP);• Global Partnership for Food and Agriculture.
Policy debate concerning Governance for Agriculture, Food, and Nutrition.
More development assistance /current debates
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• Countries, taking the lead, need to continue policy reform, creating strong policy frameworks and enabling environments, involving key stakeholders like the private sector and CSOs;
• Increase coherence with and align to national policies and strategies;
• Better and more investments in agriculture;• Further improve global coordination for complex and interrelated
issues between all players.In this, the Platform seeks:• To enhance members’ shared learning and aid effectiveness -
particularly harmonisation & alignment (incl. joint principles etc.);• To advocate for an adequate role of agriculture and rural
development in poverty eradication and sustainable Natural Resource use.
The way ahead
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Thank you very much!
www.donorplatform.org