A Chinese private equity fund set up a year ago for ventures in Africa plans to spend about $300 million on projects in 2008, its vice-president said on Friday. The China-Africa Development Fund (CADFund) was launched in June 2007 with an initial $1 billion provided by the China Development Bank and plans to eventually grow to $5 billion, the fund's vice-president Hu Zhirong said.

How can citizens monitor government expenditure? What are the best strategies for effecting budgetary change? This guide, by the International Budget Project, looks the work of organisations in Asia, Africa, and Latin America. It argues that civil society organisations have many opportunities to monitor budget implementation. Strategies include creating new monitoring methodologies and collaborating with the legislative branch on oversight.

Some low-profile investors are making ungodly amounts of money buying third-world debt on the cheap, then suing for the balance. Can they be stopped? More important, should they be?

In a Memorandum sent to the Internal Affairs and Environment Committee of the Israeli Knesset (parliament) Amnesty International urged legislators to reject a proposed law that imposes lengthy prison sentences on asylum-seekers and irregular migrants, disregarding their reasons for entering the country, and allowing for their immediate deportation, without regard for their possible ill-treatment or persecution to which they may be subject upon their return. The Committee is meeting on 24 June to discuss the draft “Prevention of Infiltration Law – 2008”.

The Vice-President of ECOWAS Commission, Mr. Jean de Dieu Somda, has said that the regional body is strategising and working towards attracting a fair share of Chinese aid and investment funds to Africa, according to report carried in This Day.

I welcome the writers’ analysis and assessment in the article, . It provides information, which I believe, is critical in placing the crisis in Zimbabwe in perspective.

It falls short, however, by not offering a viable alternative to anti-imperialists forces which might be masquerading as something else, as he seems to imply about the Mugabe regime. However, the present opposition as far as I can tell does not in any way represent a strong and independent alternative which will uplift the impoverished underclass and protect human rights.

On the contrary, it is clear to me that it is the tool of western imperialism and will carry out its mandates as opposed to the mandates of the people. I believe our job is to educate the people on how to best protect their interest. We must reexamine our definition of democracy very closely making sure it conforms to the needs of the people for universal health care, redistribution of the land, and an economic safety net.

The lack of this kind of examination of political forces in Zimbabwe is tantamount to replacing one despotic regime with another with neither having any true anti-imperialist credentials. Despite the chaos in Zimbabwe and the debate about who or what is mostly responsible, we have an obligation in remaining vigilant in protecting the interest of the most under privileged Zimbabweans. We must help develop and support a government in which progressive, anti-imperialists can place their faith in its authenticity.

http://www.pambazuka.org/images/articles/383/48974oilrig.jpgWe could be on the threshold of a new phase of globalisation, one where there will be a new protectionism, more regional trade and regional economic activism and where governments will be forced to address the problems of the vulnerable middle class and poor, argues John Samuel.
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Oil is back in the centre of economic and political discourse, at the international, national and local level. What does this mean for the future of the economy and geo-politics?

The roots of this phase of economic globalisation lie in the economics and politics of the 1970s. The protagonist was oil. There was a food crisis too. This perpetuated the new cycle of debt and highly indebted poor countries. The economic turmoil of the 1970s (due to the oil shock, saturation of the role of the State and consequent inefficient and ineffective public expenditure, food crisis, and consequent new indebtedness of poor and developing countries) paved the way for the new mix of neo-conservatism, neo-liberalism and the third way. The indebtedness and balance of payment crisis in many countries gave unprecedented power to the International Monetary Fund and the World Bank -- and the consequent economic and policy conditionalities they imposed. That is how the story of the new phase of economic globalisation, a mix of neo-conservatism and neo-liberalism – the Reagan-Thatcher prescription -- commenced, sometime in the early-'80s.

While there are similarities between the oil shock, food crisis and economic conditions of the '70s and the one we are beginning to face now, the political and economic context are not the same. The first 25 years after the Second World War saw unprecedented and sustained economic growth in Europe and America. In fact, the demand created by reconstruction activities after the war, the aid system in the '50s, and the capabilities in Europe without the burden of maintaining the colonies, helped to a significant extent to propel this economic growth. In other words, there was a significant demand within western countries and internal market competence to deliver the supplies.

By the '70s, the market got saturated in terms of demand, and the State got saturated in terms of the sustainability of public sector spending and effective social welfare. As a result, there was a real compulsion to find new markets elsewhere and to restructure the tax and public expenditure pattern. The rise of Japan and the competitive edge of Japanese products in Asia, the oil rich Gulf countries and the United States also created a sense of urgency to create new markets. To a certain extent the European Union was a sort of political solution to enable market integration to address the issue of market saturation.

The oil shock, and the consequent debt trap and balance of payment crisis, was a great opportunity for OECD countries to develop a combined strategy of trade, aid and debt and the conditionality approach to open up the markets of developing countries and less developed countries in Latin America, Asia and Africa. The economic and political implosion of the USSR in the late-'80s also created a crisis of the centralised policy planning mode and a non-dollar-based trade framework (there was almost a barter system between the USSR and many other countries). In fact, more than the ideological threat of communism, the West was worried about trade (in oil, arms and other commodities); such a system was a global road block for the western capitalist mode of trade. After the fall of the USSR, it was a free ride for finance capitalism and the neo-liberal mode of policy and trade framework.

The present situation is very different. The growth of the last 15 years is propelled by the growth of Asian economies, of Latin America, and parts of Africa. For the first time, the population of China and India tend to become an economic asset, instead of a liability, in terms of productive capability and domestic market expansion. Such a growth is partly due to new infrastructure development in different parts of Asia (in fact, much bigger in scale than the one in Europe in the '60s), and also due to the competitive edge in terms of cheap labour and skills. The finance capital market too played a key role in propelling new investments in the stock market that, in turn, propelled the economy. Asian countries are beginning to play a competitive game and are also using the finance capital market to acquire market share, productive capacities and big multinational corporations. Many of the takeovers (by Tata, Mittal and others) are of immense symbolic importance.

Due to the flight of jobs and due to the crisis of social development, there is a fast emerging, vulnerable, middle class and poor across Europe and the US. There is the added shade of identity politics (dramatically different from the old communist “threat”). The migrant communities which provided the crucial labour inputs during Europe's growth period have become a political liability now. This means there is more political and economic insecurity among a large number of the working class, vulnerable middle class, and the poor. All European countries are facing a new internal crisis of politics and economics (particularly in the context of the alienation of Muslim communities born and brought up in Europe).

This means there is a shift in the political sociology at the grassroots level in the USA, the EU and other parts of Western Europe. Many European countries such as Italy, Spain and France are facing a serious economic crisis. This also means that there can be a shift in the macro-political economy and geo-politics. Hence, the context is dramatically different from that of the economic crisis of the '70s. Today, there is no crisis of balance of payment (so far) and there is lots of foreign exchange reserves. There are vibrant domestic markets in India and China. In fact, the growth is sustained by the economic growth in Asia.

It seems the ongoing economic troubles, oil price hike, and food crisis, will be the springboard for another key political and economic shift in the world. The price of oil climbed from $10 a barrel in 1999 to $135 in the second week of June 2008. Goldman Sachs says it will hit $200 within the next 24 months! This means that the price of oil has risen by 900% in the last one decade. Oil spending as a share of global economy may cross 7% (more than the peak in 1979). Oil drives the engine of the present global economy. The US consumes 25% of the world output. Though demand in China and India increased, China consumes 9% and India consumes only 3% of the total oil demand.

As the price of oil climbs, commodity prices will go up. This also means that food prices will be relatively higher in the international market. The oil price increase is bringing about new political tension and turmoil. But if the price goes up, at least in some segments there will be a decrease in demand. The SUV market in the US and elsewhere was already in a slump and will face a crisis. This will also have consequences in countries like China and India which sustain the global economic growth (and demand for commodities) to a large extent. It will be difficult to sustain subsidy levels for oil in India and governments will be forced to increase the price (there is no other way). A mix of inflation, increasing oil price and deceleration of the economy (for example in real estate) can create new political tensions and equations in many countries, including India.

The increasing price of oil will make the oil-producing countries very cash rich. So the prominence of Russia, Iran, Venezuela, Saudi Arabia and the Gulf countries will significantly increase. This may also induce a new arms race -- led by Russia. On the one hand it will give rise to a multi-polar world, and on the other hand it can propel a war. It is also interesting to note that most of the oil-producing countries are run by autocratic or authoritarian regimes, many of them in the Arab world.

The role of National Sovereign Funds of Gulf countries will increase dramatically. It is estimated that if the price of oil price climbs, six Gulf countries will have a value of $95 trillion dollars (the American economy is around $13 trillion) -- about twice the size of the public equity market. Already Sovereign Wealth Funds of the Gulf countries are buying up the major and controlling stakes of big western banks and this will create new protectionism. A possible inflation (if it crosses 15%) in Asia can cause serious economic trouble. There will be a devaluation of currencies in these countries -- with potential trouble for the finance capital market. There is a real trend of inflation in most countries in Asia (Vietnam is the highest, Thailand is almost 10%, and India, China and others too face it) and the oil price hike will further accentuate the problem. Persistent inflation and stagnant economic growth may result in stagflation in different parts of Asia, including India.

All this means that (a) this phase of economic globalisation will not be sustainable and it will be a transit to the next phase, (b) there will be a new protectionism (particularly in terms of commodity markets, food etc), and (c) There will be more regional trade and regional economic activism.

So, there will possibly be a tendency to regulate finance flow and there will be more restriction for commodity markets. The elections and politics of Europe and the USA will be forced to address the issue of the vulnerable middle class and the poor. Look at the election promises in the USA – it's about jobs. The health system and social security are also top of the agenda. There will be political pressure to increase the allocation for the social sector and for creating new jobs and a reduction of foreign aid (this is what happened in Japan from 1999 onwards).

The next US President will be forced to initiate new protectionism and new social welfare measures. This will have an impact on global trade. The oil price hike may affect travel as well as trade (due to higher freight charges). All this does not mean a “reversal of globalistion”. It means a new phase of globalisation along with a new protectionism in many countries. There will be scope for a New Deal and a new kind of social democratic politics in Europe and elsewhere.

The world is on the threshold of a new phase. The present economic slowdown is likely to persist for another four years. It will influence the shape of the economy, political dynamics and geo-politics in the years to come.

*John Samuel is a social activist and the International Director of Actionaid.

* Please send comments to or comment online at http://www.pambazuka.org/

Anglican conservatives have finally declared dissolution of the Anglican Communion in a 94-page document titled The Way, the Truth and the Life. The conservatives concede that they will not associate themselves with liberals who tolerate homosexuality and ordination of women in the communion.

The UN High Commissioner for Human Rights Louise Arbour congratulated today the Human Rights Council on its adoption of an important new human rights instrument to strengthen the protection of economic, social and cultural rights. "This is a highly significant achievement", she said. "The Protocol will provide an important platform to expose abuses that are often linked to poverty, discrimination and neglect, and that victims frequently endure in silence and helplessness.

For consumers in developed markets, using a mobile phone for banking services is a smart add-on to a bank's branch network. But to people in the developing world, the arrival of mobile banking - or m-banking - is potentially revolutionary. If money is an economy's lifeblood, improving its circulation plays a critical role. Many Africans living in rural areas, for instance, rely on money sent home by members of their family who work in towns and cities. But getting that cash to a village that could be hundreds of miles away is a tricky business.

President Hu Jintao strongly urged Sudan to cooperate in the swift deployment of international peacekeeping forces and to help end humanitarian abuses in the country's embattled Darfur region, the official Communist Party newspaper said Thursday. The Chinese leader, in a meeting with visiting Sudanese Vice President Ali Uthman Muhammad Taha, used unusually frank language in calling on the Khartoum government to try harder to settle the conflict along Sudan's western border and "allow people there to reconstruct their homeland," according to the People's Daily.

The Disability Rights Fund—a groundbreaking grant making collaborative supporting the human rights of people with disabilities—has announced its first grants competition. The broad objective of the Fund -- which was launched by the Open Society Institute, The Sigrid Rausing Trust, the United Kingdom Department for International Development, and an anonymous donor on the first anniversary of the United Nations Convention on the Rights of Persons with Disabilities (CRPD) -- is to empower disabled persons organizations in the developing world and Eastern Europe/former Soviet Union to effectively implement and monitor the CPRD.

Demonstrators in many Brazilian cities and San Francisco denounced Brazil's brutal 4-year military occupation of Haiti -- on the occasion of the May 28th visit to Haiti by Brazilian President Luiz Lula da Silva, marking the 4th anniversary of the arrival of Brazilian U.N. troops in Haiti. Organized labor played a key role in coordinating the actions in Brazil.

The International Food Policy Research Institute (IFPRI) seeks a Postdoctoral Fellow (PDF) for its Environment, Production and Technology Division. Under the supervision of the Division Director and guided by the Research Fellow and Senior Scientist leading the Global Change research theme of IFPRI, and in close collaboration with other staff as appropriate, the successful post-doctoral fellow will conduct research and analysis on land use patterns and shifts under alternative scenarios of global environmental and economic change.

Russian oil giant, Gazprom, is among several foreign companies jostling to replace Royal Dutch Shell in Ogoniland following Federal Government’s decision to award the oil fields to another company. It is also reported that many Chinese companies have indicated interest in the oil fields, which hold proven reserves of over 10 trillion cubic metres of gas – one of the world’s largest.

On June 19, the United Nations Security Council is set to debate the relevance of sexual violence in conflict to its work. The debate may result in the adoption of a historic resolution which would require the Council to analyze and address the occurrence of sexual violence in all conflict-affected situations on its agenda.

The UN High Commissioner for Human Rights, Louise Arbour, welcomed Thursday's decision by the United States Supreme Court in Boumediene v. Bush that the U.S. Constitution extends to foreign detainees held in Guantanamo Bay, Cuba, and that they have the right to challenge their detention by habeas corpus in the civilian courts.

http://www.pambazuka.org/images/articles/379/48634puzzle.jpgThe Third High Level Forum on Aid Effectiveness will be held this September in Accra. But is aid effectiveness a mirage? Yash Tandon dissects the Paris Declaration in relation to aid effectiveness and reaches the conclusion that "under the pretext of making aid more effective, the aid effectiveness project is a form of collective colonialism by Northern donors of those Southern countries that, through weakness, vulnerability or psychological dependency, allow themselves to be subjected to it at the Accra conference in September." But all is not lost and he also offers a way out.
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A HISTORICAL AND CONTEXUAL NOTE

The Paris Declaration and the debate on aid effectiveness must first be placed in its proper conceptual and historical context. The origins of the debate lie in the concept of ‘failed states’ that in the 1990s became a common explanation for ‘crisis’ in large parts of the South. Theorists, largely in the US and Europe, argued that failed states were at the root of global instability and terrorism. They had lost their legitimacy and credibility, giving the North the right to intervene in order to reshape them as democratic states that would no longer pose a threat to the rest of the civilised world.

Robert Cooper, for example, described a zone of the ‘pre-modern world, the pre-state’, which was in a condition of ‘post-imperial chaos’: ‘The existence of such a zone of chaos is nothing new, but previously such areas, precisely because of their chaos, were isolated from the rest of the world. Not so today… If they become too dangerous for the established states to tolerate, it is possible to imagine a defensive imperialism. If non-state actors, notably drug, crime or terrorist syndicates take to using non-state (that is pre-modern) bases for attacks on the more orderly parts of the world, then the organised states may eventually have to respond' [1].

Cooper, an English version of the American neo-Conservatives, might have been ignored had not some of his ideas been given a boost a year later by Martin Wolf, a respected columnist for the Financial Times. In an article entitled ‘The need for a new imperialism’ [2], Wolf argued that Afghanistan was but an extreme example of a ‘failed state’. There were others, which not only posed a threat to the rest of the world but reduced the lives of their own people. ‘If a failed state is to be rescued,’ Wolf wrote, ‘the essential parts of honest government – above all the coercive apparatus – must be provided from outside…. To tackle the challenge of the failed state, what is needed is not pious aspirations but an honest and organised coercive force.’ In his view this entailed ‘a transformation in our approach to national sovereignty – the building block of today’s world.’ The legal doctrine of sovereignty must not impede the reordering of the South, by force of arms if necessary, even pre-emptively.

In essence, underpinning Bush and Blair’s intervention in Afghanistan and Iraq was the concept of failed states and the right (indeed obligation) of the North to intervene. This was ‘hard power’ at work. Complementary expressions of ‘soft power’ included Blair’s Commission for Africa and Bush’s Millennium Challenge Account. At the World Economic Forum in January 2005 Blair called for ‘a big, big push forward’ to end poverty. The G8 meeting in July that year decided to double annual foreign aid to Africa and forgive African debt. In September the United Nations took up the theme: Jeffrey Sachs toured the world spreading the message that Africa could be saved through increased aid. The year ended with Bono being named Time magazine's person of the year for his efforts to save Africa. Aid, along with other instruments of intervention such as human rights, had become a means to democratise the South and make it safe for the rest of the world.

Many in the South condemned the idea of failed states as a Northern pretext for intervention [3]. In the North, too, some were alarmed at this new-found justification for imperial or neo-imperial intervention in their name. Others were sceptical about Bush and Blair’s grandiose plans to ‘save Africa’. As a rejoinder to the idea that accelerated aid would (or could) make Africa’s poverty history, William Easterly, formerly of the World Bank, argued that top-down, donor-driven aid does not work [4], and that aid can only play a supportive role to essentially domestic efforts. Stephen Browne emphasised aid’s inadequate market signals and the way in which donor domination distorts supply and demand [5]. Roger Riddell showed how short-term political interests distort aid [6], and argued that the aid industry must change radically to become the effective force for good that it is often claimed to be.

To summarise, then, we need to recognise that we are on very controversial and politically sensitive terrain when we talk about aid. Perhaps Bono and Sachs are honest advocates of aid, believing that the rich have a responsibility to help the poor. They do not ask if the rich had anything to do with creating poverty in the first place, but their good faith is best not questioned; they are artists and academics, not politicians, spreading the good word about humanity and humanitarianism. Bush and Blair, however, are in another camp altogether. They are in the category of people that Roger Riddell argues distort the purpose of aid because they have a political agenda, whether hidden or explicit. Their political track record suggests that they share Robert Cooper and Martin Wolf’s belief in defensive imperialism. Like their 19th century ancestors Bush and Blair are driven by a kind of missionary zeal to civilise the South and reorder it, to make it safe for democracy and ‘more like us’. Both soft and hard power are needed. Aid, from this perspective, becomes another weapon in their arsenal to discipline chaotic parts of the world. It follows that it would be irresponsible to give aid without conditions.

MORE RECENT REASONS FOR THE OECD’S AID EFFECTIVENESS INITIATIVE

More recently, aid effectiveness has been driven by three additional factors. First, the need to simplify and rationalise the complex system of aid administration and reduce transaction costs [7]. Second, demands from citizens of donor countries for greater discipline and accountability in the administration of aid by their governments. And third, a sudden awareness of the serious democratic and legitimacy deficit in the present aid architecture, dominated as it is by donor countries of the Organisation for Economic Co-operation and Development (OECD), the World Bank and regional development banks.

The OECD took the lead to reform the aid architecture. In 2003, at an intergovernmental High Level Forum (HLF) in Rome convened by the OECD’s Development Cooperation Directorate, Northern donors discussed how to make aid more effective. In March 2005, at the second High Level Forum, the OECD adopted the so-called Paris Declaration, which aims to take ‘far-reaching and monitorable actions to reform the ways we deliver and manage aid’. By mid-December 2007, 115 countries had endorsed it. At the third HLF in Accra in September 2008 the OECD and other signatories will agree a text on the methods and modalities of making aid more effective. Meanwhile OECD countries are already implementing the Paris Declaration in conjunction with, ironically, the World Bank.

On its website the OECD’s Development Assistance Committee (DAC) gives three reasons why the Paris Declaration will improve aid effectiveness. First, it goes beyond a statement of general principles; it lays down a ‘practical, action-orientated roadmap to improve the quality of aid and its impact on development’. Second, it sets out 12 indicators for monitoring and ‘encouraging progress’ against partnership commitments. Third, it promotes a model of partnership that will improve transparency and accountability in the use of development resources. At international level it provides a mechanism for donors and recipients of aid to hold each other mutually accountable and publicly monitor compliance. At country level it encourages joint assessment of progress by donors and partners using local instruments.

The Paris Declaration accepts that current accountability requirements are often ‘harder on developing countries than donors’. It also recognises that ‘aid is more effective when partner countries exercise strong and effective leadership over their development policies and strategies’. This is why ownership – i.e. developing countries exercising strong and effective leadership over their development policies and strategies – is, so the Paris Declaration says, its ‘fundamental tenet’.

THE SOUTH’S CONCERNS ABOUT THE PARIS DECLARATION AND ITS AID EFFECTIVENESS MODEL

On the face of it, then, the Paris Declaration looks a benign document. It recognises the faults of the present system, sets out reasonably sensible principles on aid and, significantly, emphasises principles of ownership by developing countries and mutual accountability between donors and recipients. Why, then, are developing countries not very excited about it? Many of them have signed on to it, but appear to have done so without fully analysing its implications. There is now growing awareness among both civil society and some government actors in developing countries that all that glitters about the Paris Declaration is not gold and that another agenda, not readily transparent on first reading, may underlie it.

The most critical analysis of the Paris Declaration has come from a study by Roberto Bissio of Social Watch for the UN Human Rights Council's High-Level Task Force on the Implementation of the Right to Development. Bissio argues that relatively minor gains in efficiency and the reduction of some transaction costs are overridden by the asymmetrical conditions under which negotiations between donors and recipients take place. He adds that the Paris Declaration ‘creates a new level of supranational economic governance above the World Bank and the regional development banks’[8].

In light of this and similar critiques [9], it is important to understand the overall purpose and methodology of the Paris Declaration to appreciate fully its implications for the aid industry. Here are some of the South’s major concerns.

1. The UN was initially excluded from the system and then, belatedly, brought in to give the Paris Declaration a semblance of credibility. The UN lacks any leverage to promote its priorities within the Paris Declaration because it was not involved from the start. For example, the ILO`s internationally recognised concept of ‘decent work’ does not appear as one of the objectives in aid evaluation – nor do many of the MDG-related objectives, especially MDG 8 that deals with North-South relations.

More worryingly, the OECD has now sought to bring the UN into the Paris Declaration process. Why should this be a matter for concern? The UN`s early involvement could have been a positive step in reforming the global aid architecture, but the OECD apparently preferred to place its trust in the Bretton Woods Institutions. It now seems that the OECD’s directorate has belatedly become aware of the World Bank and IMF’s democratic deficit, and of the need to involve the UN to provide a veneer of legitimacy.

It has done this in two ways. First, the OECD-DAC has embraced the UN’s Development Cooperation Forum (DCF) initiative. The DCF was created by the General Assembly in October 2005 as a follow-up to the 2005 World Summit [10]. It is mandated to review ‘trends in international development cooperation, including strategies, policies and financing’, to promote ‘greater coherence among the development activities of different development partners’, and to strengthen ‘the normative and operational link in the work of the United Nations’. Its overall purpose is to help strengthen the Economic and Social Council (ECOSOC) and make it more effective. In January 2007 the General Assembly further provided for the DCF to meet biennially in a forum ‘within the framework of the ECOSOC High Level Segment’[11].

It is reasonable to suggest that once the OECD-DAC became aware of the democratic and legitimacy deficit of the IMF-World Bank architecture, it embraced the DCF to provide that missing dimension. The intention behind this move may not be as conspiratorial as it appears; it may be a genuine desire to render credibility to the Paris Declaration process. However, the OECD-DAC did not allow the UN to influence the process or the outcome (for example on ILO and MDG objectives). Furthermore, the World Bank continues to play a dominant role. All that the Paris Declaration has done is remove the more offensive vocabulary of the Bretton Woods institutions (such as ‘conditionalities’) and co-opt a new terminology (such as ‘mutual accountability’ and ‘coherence’ with development objectives).

The OECD-DAC’s second strategy has been to bring the Paris Declaration into the negotiating methodology of the UN system through the back door. This appears to be the objective of the Accra meeting in September 2008 at which the text of the so-called Accra Action Agenda (AAA) will be negotiated for adoption. What its legal implications might be nobody knows. Normally, the UN methodology of a negotiated text begins very early with experts and other stakeholders from the negotiating countries working on drafts. These early texts outline areas of convergence and divergence. The final proposed text is then negotiated by member countries, paragraph by paragraph, until a text is agreed that then has legal validity. The AAA text, on the other hand, appears to have been drafted by a working party outside the UN process, and it is this text that will be negotiated in Accra.

The intentions of those shepherding the Paris Declaration process are not clear. However, the process leading to Accra and the meeting itself do not seem calculated to build credibility for the AAA, especially given the other serious shortcomings of the Paris Declaration, as discussed briefly below.

2. Donors prepare performance conditionalities in conjunction with the World Bank. In the case of Tanzania, for example, there is a 12-page matrix and 49 pages on accounting. The matrix is prepared with no participation by the recipient country. There is no real mutual accountability, contrary to the Paris Declaration`s stated objective. If recipient countries do not perform, they are subject to penalties, but if donor countries do not perform they are not penalised. In normal business transactions, banks that lend money take risks as well as borrowers; if borrowers fail to repay, the banks pay a price. But in the aid architecture proposed by the OECD, the risks are taken by recipient countries alone.

3. The compliance tests administered by the Word Bank do not use the economic and social policies of recipient countries. With regard to procurement, for example, the tests are externally imposed based on a World Bank-devised procurement assessment methodology. There is no recipient country ownership of these tests. The rating system uses a methodology provided by the OECD-DAC and the World Bank to test the effectiveness of aid in relation to systems of both public finance management and procurement. There are twelve criteria or indicators by which to measure the performance and progress of recipient countries, graded on a scale from A to E. If recipient country systems meet agreed donor criteria they will be used to make the evaluation; if not, tests provided by the OECD-DAC and the World Bank will be used. For example, if the national procurement system is not good enough, an open tender system will be used to undertake international procurement, something that developing countries have already rejected in the context of WTO negotiations. In other words, the Paris Declaration brings through the back door what developing countries have already turned down.

4. On governance, it is once again donor procedures that determine the method of harmonisation. Although the Paris Declaration talks about ownership, the opposite is in reality the case. Harmonisation processes are externally set. Donors decide whether a particular procurement item is to be tendered internationally or nationally (or locally in a local government context), and whether it is open to the private sector or the state sector or both. Donors may disagree (for example, the US favours the private sector and the Scandinavians prefer state procurement). These disagreements are first sorted out between donors, and then become inflexible instruments of enforcement on recipient countries in the name of aid efficiency.

5. There is a shift from project lending to programme-based lending, which involves the pooling of donor resources and the injection of these funds into the national budget through direct budget support. Donor countries develop a single Joint Assistance Strategy for each country. Recipient countries must discuss their strategies with donors and the World Bank. The provision of assistance and funding is based on a collective donor assessment of recipient countries’ policies and the extent to which these policies are acceptable to donors. There is a danger that if the performance of recipients falls short of the indicators, direct budget support may become the instrument for stopping the flow of aid. Recent World Bank documents show that in Poverty Reduction Strategy assessments undertaken by the World Bank, ‘few of them provide the level of operational detail that specifies how objectives are to be achieved through policy actions’. [12] Growth is apparently much lower than expected by the donor community. If this is still the case in 2010, the implication is that donors will demand better performance from recipient countries or they might stop aid.

CONCLUSION

The conclusion is unavoidable. Under the pretext of making aid more effective, the aid effectiveness project is a form of collective colonialism by Northern donors of those Southern countries that, through weakness, vulnerability or psychological dependency, allow themselves to be subjected to it at the Accra conference in September.

Is there a way out? Can the Paris Declaration be salvaged? Yes, it can. In order to give it legitimacy and credibility, the following steps are necessary.

1. The Paris Declaration must be properly embedded in the UN system. The UN (ECOSOC, for example) must thoroughly analyse it and bring into it the UN`s evaluative criteria on aid effectiveness, such as those related to internationally agreed development goals, the MDGs, and the ILO`s concept of ‘decent work’.

2. Meanwhile, there must be a moratorium on the Accra process and the proposed Accra Action Agenda.

3. The Paris Declaration must distance itself from the Bretton Woods institutions or it will suffer the same credibility and legitimacy gap.

4. The principle of mutual accountability must be properly structured and monitored by a UN body. The Development Cooperation Forum of the UN can play this role. Although it is a new institution created as a forum, without power of implementation or enforcement, it could undertake or commission a proper study of the Paris Declaration and recommend how a two-way process of accountability could be put in place.

5. Finally, aid is not the route to development. It creates dependency and erodes self-reliance. The UN should encourage a study on how developing countries can exit from aid dependency over the next 10 or 15 years. The South Centre is already engaged on such an exercise.

* Yash Tandon is the Executive Director of South Centre (http://www.southcentre.org) based in Geneva.

*Please send comments to or comment online at http://www.pambazuka.org/

*For further notes, please follow this link:

The humanitarian community in North Kivu, eastern Democratic Republic of Congo (DRC), has expressed concern over the proliferation of the number of "spontaneous" sites for internally displaced persons (IDPs) in the province, hosting at least 857,000 IDPs. "These spontaneous sites are quite new in North Kivu and they are mainly linked to reduced capacities of host families to accommodate the displaced, Caroline Draveny, the public information officer for the UN Office for the Coordination of Humanitarian Affairs (OCHA) told IRIN. "We are working on ways of assisting the affected IDPs as well as the host families themselves."

The protection of children's rights was first brought up on the international agenda in the first half of the twentieth century due to child labor and its hazardous working conditions, trafficking and sexual exploitation (UNICEF 2005). One of the first key instruments in the development of children’s rights legislation was the proclamation of the 1924 declaration of the Rights of the Child by the League of Nations. However, children’s rights as we know them today emerged from the adoption of the United Nations Convention on the Rights of the Child (CRC) in 1989 which came to replace the former declaration.