Aid must focus on changing conditions of the poor

The only major North/South CSO network on global aid reform, the Reality of Aid Network (RoA) adopts a framework of human rights, social and economic justice on its published Reality of Aid 2012 Report – “Aid and the Private Sector: Catalysing Poverty Reduction and Development?”. This latest biennial report exposes that the emphasis in increasing the role of the private sector in development cooperation has been on donor economic interests and not reducing poverty and inequality across the developing world.

While RoA recognizes the role of the private sector in development, it also believes that the deployment of aid must focus on changing the socio-economic conditions of the poor.

The Report challenges all aid providers, including official DAC donors, Development Finance Institutions (DFIs), multilateral organizations, and partners in South-South Cooperation to implement recommendations from different CSOs worldwide:

1. Restore donor commitments to increase ODA resources dedicated to poverty eradication and reducing inequality.

2. Ensure that aid-supported private sector investments, private sector development and an enabling environment for the private sector give priority to the local/national private sector and social economy.

3. Develop and apply pro-poor analytical tools, indicators and monitoring human rights standards, the OECD guidelines for Multinational Enterprises, core labour rights and standards monitored by the ILO supervisory by the OECD DAC PovNet.

4. Support a policy and regulatory environment for the private sector at the country level that enables them to contribute to development, consistent with the state’s human rights obligations to its people, and through processes that are genuinely inclusive of all development and social actors.

5. Implement whole-of-government approach to policy coherence.

6. Put transparency and accountability at the heart of all private sector engagement and development.

7. End formal and informal tying of aid and aid-supported investments

8. Implement mandatory guidelines for public-private partnerships, building on the recently adopted OECD Principles for Public Governance of Public-Private Partnerships.

9. Implement the ILO Decent Work Agenda and apply ILO core labour standards.

10. South-South Development Cooperation aid providers should continue to develop partnerships in ways that adhere firmly to the principles of mutual benefit and equality.

The Report is written by authors from CSOs worldwide drawing on experiences and insights from both donor and recipient countries and offers a critical look at private sector involvement in aid.

The Reality of Aid 2012 Report was globally launched in December 2012 in Nairobi, Kenya. It was also launched in Oslo, Norway last March 2013 in cooperation with Forum for Environment and Development.