Busan, 30 November 2011
President Kagame has told delegates at the 4th High Level Forum on aid effectiveness in Busan, South Korea that it is futile to talk about competent use of aid without addressing impediments to its effectiveness:
“As the history of Asia amply illustrates, it is sound economic policies and investment capital that propelled millions of Asians to prosperity. We should therefore be talking about aid effectiveness in tandem with trade and investment – and I would add, a fair framework with clear rules and proven best practices”.
President Kagame pointed out that in spite of the many aid commitments always made and periodically reviewed; Africa is not getting the desired results:
“It is most relevant that we are having this conversation in Korea which in the last half a century has moved from an aid recipient country to an industrial nation that is now supporting others to develop. Other countries in Asia have made a similar transition. Over the same period, about one trillion US Dollars in development aid has been transferred to Africa. But real per capita income today is less than it was in the 1970s and more than half the population – about 500 million people – still live in poverty.”
President Kagame said that the average annual economic growth of between 5-8% on the continent, despite low foreign investments and the global economic crisis, is evidence that Africa has great promise:
“These two contradictory realities are pertinent to our discussion on aid effectiveness and beg serious questions. Why has massive aid been largely ineffective and little investment productive? How can we translate aid commitments into effective development outcomes that will drive our graduation to self-sufficiency?”
President Kagame emphasized that there was no contention whatsoever on the principles of aid effectiveness as adopted during previous forums and that structural and attitude barriers had to be overcome.
“In Paris we committed, and reaffirmed in Accra, to channel aid through country systems so as to strengthen national capacity to execute development plans, to budget efficiently and deliver services. It was also meant to build the foundation for enhanced capacity and accountability towards development results. In practice, the status quo still prevails. In fact, there is still resistance on the part of some donor countries to channel their aid through national systems, which raises important issues of effectiveness and accountability. While donors may not be entirely to blame for bypassing these systems where they are weak, or non-functional, why not use aid to build up and strengthen such critical systems?”
President Kagame singled out Tony Blair’s Africa Governance Initiative as a model of capacity building that is supporting fast implementation of development programmes and transfer of skills. He also cautioned that when multiple and parallel execution modalities and systems are employed, there is a significant impact on the effective allocation and use of public resources, which he said may undermine the relationship between governments and their citizens if they are not seen to be credible or responsive to people’s needs
On the issue of accountability, President Kagame said that although there has been agreement on the crucial importance of mutual accountability in the development effectiveness agenda, the principle of mutual accountability had not been applied equally or fairly.
“While there are more demands on developing countries to account, there has been reluctance from some donors to do the same. And often this is accompanied by the introduction of issues unrelated to aid performance either as an excuse not to act or to delay commitments. Similarly, there is real danger that the huge industry that has been built around aid can become a permanent feature of our development process and perpetuate dependency, thereby directly undermining the very national systems that should instead be strengthened. Developing countries spend more time and energy agreeing on procedures and accounting to donors and an ever-increasing number of related non-state actors than in actual development work, often responding to endless questioning that no answers can fully satisfy”.
President Kagame urged a shift in the aid regime to broaden beyond traditional donors to emerging economies, as countries that have recently achieved prosperity understand well what it takes to get out of poverty and have relevant lessons regarding what works best.
“This shift inevitably means strengthening South-South Cooperation and bringing it from the margins to the centre of international development frameworks. This should shape future development discourse and could be the lasting legacy of Busan”.
President Kagame reiterated that aid can be effective in achieving development objectives if greater trust in partnerships is allowed and recognized as a shared responsibility built on common values and goals.
President Kagame called on the Busan conference to draw clear commitments, actions, and targets to enhance mutual respect and inclusive global partnerships by building on previous commitments on aid and development cooperation.
Korean President, Lee Myung-bak called on advanced nations to make sure to carry out their aid commitments to developing nations, stressing that less well-off nations are not a burden, but key partners for sustainable growth of the global economy:
“We are living in an era where various difficulties each nation faces cannot be resolved by any country alone but can be overcome when all of us living in the global community unite in strength. All of us around the world live in the era of globalization, where each and every country is closely interconnected to one another.
The United Nations Secretary General, Ban Ki Moon said:
“The skills of the Private sector, ideas and dynamism can make a difference; through working together I have seen the power of partnership. I have seen in Rwanda the Government is setting trends in Gender empowerment, education, education and ICT as key components of the development process.”
The US Secretary of State, Mrs. Hillary Clinton said the United States is working to remove many of the requirements tying aid to U.S. companies, recognizing that it frees recipients to choose from a wider range of partners, and it maximizes impact by increasing competition and driving down costs:
“We should recognize the accomplishments that have occurred, in some places quite dramatically, as we have heard not only about Korea but also about Rwanda. But let us also acknowledge honestly the challenges and the problems that we must address if we expect to see greater progress. We need to continue shifting our approach and our thinking from aid to investment, targeted to produce tangible returns.”