Negotiations are dragging out on a final document at a major conference on aid effectiveness as African countries, led by Rwanda, are pushing for a firm deadline on ending tied aid.
Sherpas (negotiating officials) had hoped to have a draft outcome document all wrapped up before their bosses – about 100 ministers, including Hillary Clinton, the US secretary of state, and Andrew Mitchell, the UK international development secretary, arrive from Tuesday.
Rwanda has emerged as a strong advocate for rich countries to end by 2013 all tied aid – the practice of linking aid to purchases from companies in donor countries. Civil society organisations firmly back the demand.
Sherpas are now working on the sixth draft of the outcome document.
Researchers estimate that $69bn – more than half of the total official development assistance – is spent each year buying goods and services for development projects. But much of this money is "boomerang aid" – funds that flow to developing countries only on the books and may never leave the donor countries.
Ten years ago, aid donors pledged to end tied aid. The UK formally untied all development assistance in 2001, with the justification that "tied aid reduces value for money" and tends to lead to inappropriate and expensive projects that do little to tackle the needs of the poorest.
But in September a report from the European Network on Debt and Development, a network of 54 NGOs from 19 European countries, said many countries have reneged on their promises and at least 20% of all bilateral aid remains formally tied. It is estimated that tied aid reduces the purchasing power of aid by an estimated 15% to 40%.
The footdraggers on untying aid include the EU, France and Japan. In the last round of pre-conference, Japan argued that ending tied aid would sap support for its aid programme, an assertion that led to much derision among aid campaigners.
Other areas of disagreement in the final document include demands from NGOs for specific commitments on freedoms of association and speech as governments, such as Cambodia and Ethiopia, have introduced legislation making it harder for civil society groups to operate. The Busan conference marks the first time civil society is at the negotiating table, working alongside government officials on the draft outcome document. In past high-level fora on aid effectiveness in Paris and Accra, civil society organisations were observers, not direct participants in negotiations.
"What is happening since Paris is that governments are shrinking space for civil society organisations in which to operate effectively," said Carolyn Long, director at InterAction, an alliance of US-based NGOs.
It is not just NGOs who have low expectations of the Busan conference. Stephen Groff, vice-president of the Asian Development Bank, thinks that the need to satisfy such diverse actors as OECD countries and new players such as China and Brazil will lead to low common denominator.
"The risk is that because we are trying to find common ground we will not end up with a stronger basis for a global partnership," said Groff. "Maybe there isn't that common ground."
More than 2,000 delegates are due in Busan for the three-day conference that seeks to establish common principles for aid effectiveness taking into account the emergence of new players such as China and large private foundations such as the Bill & Melinda Gates Foundation. Some NGOs have accused the OECD countries of using China as a pretext to backtrack on what was agreed in Paris and Accra on the need for aid recipients to have "ownership" of aid programmes, and greater transparency and accountability....
Mark Tran, in Busan
