Global Development: Views from the Center
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July 25, 2006
Third UK White Paper on Eliminating Poverty: Heady Agenda
Posted by Dennis de Tray at 10:25 PM
Recently DfID, the British aid agency, issued the third White Paper in its series on Eliminating World Poverty, this one focused on Making governance work for the poor. Yesterday I was privileged to join a panel at the IMF where Mark Lowcock, DfID's Director General for Policy and International, gave an overview of the immensely ambitious and wide ranging Paper and the rationale for the commitments it makes.
In my view, the White Paper focuses on the right issues, although maybe a few too many. I was most happy to see the explicit and multiple commitments to the most difficult development challenges the world faces (fragile states, not-so-fragile but long term development challenges, and especially Africa), on the essential role that sustainable economic growth plays in poverty reduction (may seem obvious, but slipped off the agenda a bit until recently), and on a more nuanced focus on governance than I have seen recently (recognizing that dealing with governance agenda is a long term agenda, that pushing that agenda can come at a development and serving-the-poor cost, a trade-off that needs to be front and center in our deliberations and decision-making).
What's not to like? Really, not much but I do have some worries. My main concern is that a combination of the need to push a great deal more money through the British aid system (and the world system if commitments are realized) and increasing demands by rich country tax payers for aid accountability will push DfID (and the international aid community) into delivering aid that will have measurable and immediate impact. Lots of doing for poor countries, much less institution and capacity building. This will fly in the face of one of DfID’s most important commitments, to create effective states, especially in fragile and difficult countries.
My second worry is that the pressure to move on the White Paper agenda will push DfID’s already stretched staff resources to ignore lessons from the past. We don’t have a road map for dealing with corruption and governance, but we do know a lot about what doesn’t work. It would be good if DfID made sure it does not repeat history as it implements its commendable development agenda.
My closing comment at the session: this should be the last White Paper DfID does for a generation--because the agenda it sets out will need at least that long to implement.
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Comments
The problem is capital flight:
Unlike the U.S., the vast majority of defaulting emerging market countries are net creditors to the rest of the world.
-"Is Africa a Net Creditor?...Capital Flight From Severely-Indebted Sub-Saharan African Countries, 1970-1996," University of Massachusetts, Amherst"
"This paper presents estimates of capital flight from 25 low-income sub-Saharan African countries in the period 1970 to 1996. Capital flight totaled more than $193 billion (in 1996 dollars); with imputed interest earnings, the accumulated stock of flight capital amounts to $285 billion. The combined external debt of these countries stood at $178 billion in 1996."
-On the foreign bank accounts held by Nigerian elites, Mr. David Asonye Ihenacho writes for Nigeriaworld :
First, the sum of 170 billion dollars...is about 60% of the entire debt owed by the entire continent of Africa to the rest of the world...
Second, who are these Nigerians with this large sum of money stored overseas? The sum of 170 billion dollars is by far bigger than the entire wealth of the four richest people in the world combined. The wealth of Bill Gates III of Microsoft, Warren E. Buffett of Berkshire Hathaway, Karl and Theo Albrecht of Wal-mart retail and Paul G. Allen of Microsoft combined does not rise up to 170 billion dollars.
Posted by: J. M. Lawrence at July 26, 2006 07:24 PM