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Aid in Times of Crisis
Duncan GreenHead of Research
Oxfam GBJune 2010
Current aid promises
EU has pledged to reach 0.56% of GNI by 2010
2010: aid levels expected to fall €11bn short
Main shortfalls in Italy, Germany and France And the pressures on aid budgets will only
increase …..
Aid after previous financial crises
The costs of breaking those promises
Harming poor people Damaging the implicit social contract
between rich and poor countries Undermining Europe’s moral authority Why should emerging powers then trust
Europe’s promises on anything else?
The current crisis: Channels of transmission
Aug-08
Jan-09
Jun-09
Jan-10
Jun-10
Jan-11
Finance
Trade
Remittances
Informal economy
Government spending…?
Aid budgets?
Oxfam’s research on the current crisis
• 12 countries/2,500 households + lit review• So far, countries and households dealt better with
the economic crisis than we expected;• Families supported each other, shared food,
information, money, kept kids in school;• But $65bn fiscal hole a major concern (aid grants
only cover 13% of that so far)• What are the limits of resilience – for families and
nations?
Lessons for governments and donors
Build resilience before a shock, replenish it afterwards (before the next one)
Volatility matters as much as average flows/stocks
Startling gap on real-time impact monitoring and genuine dialogue with affected communities
Social protection needs extension – especially into the informal economy, and automatic instruments
Gender matters in terms of impact and response
Countercyclical spending in good times and bad
That needs support from aid system
Good v Bad Aid Do: fund watchdogs, fund long-term, support state
capacity, put government in the driving seat, ensure downwards accountability
– Measles vaccines save 7.5m lives 1999-2005– Education for All– Rise in General Budget Support (but still tiny %)– MDG contracts a model of good aid
Don’t: overcomplicate, impose conditions, support parallel systems, poach staff or tie aid
– Over 2 year period, Uganda had to deal with 684 different aid instruments from 40 donors, (just for central government funding)
Beyond Aid
Coherence is a double-edged sword Effective states learn by doing (and sometimes
failing), so defend policy space and pluralism One ray of light: innovative financing, eg financial
transaction taxes; bank levies Do No Harm agenda:
– Climate Change did not end in Copenhagen!– Migration is a Good Thing– Corruption needs supply and demand– Tax havens steal money from poor countries
Thank you!
For more information, see Oxfam’s new reports on:
The Global Economic Crisis And 21st Century Aid