Introduction

The war on terror was launched by President Bush nine days after the September 11th attacks. Initially the war focused on the terrorist groups with global reach, but was then extended to include the Iraqi regime. In 2004 the war on terror will probably cost the US eight times as much as it spends on Overseas Development Aid.

After a low point in the late 1990’s, aid flows were increasing prior to September 11th. That trend has continued with aid flows in 2002 reaching a record high. Aid is expected to again increase in 2003. This trend looks likely to continue in the near term with three further EU countries pledged to provide 0.7% of their Gross National Income (GNI) for aid.

The September 11th attacks have brought renewed interest in development aid. US spending on Overseas Development Assistance is expected to rise in 2004, as it has in 2003. What is not clear is how much of this increase will be absorbed by Afghanistan, Iraq, and additional aid for countries assisting in the war against terror.

In October 2003, the US pledged 20 billion dollars for reconstruction in Iraq. This amount is equal to one and a half times the USA’s annual development aid budget. Pledges by other donors were far smaller, but those like the UK, the European Commission, or Spain that have pledged an amount equivalent to 20% of their annual development budget for Iraq will have to dig deep. This will have a cost for existing development programmes as most countries have drawn contributions for Afghanistan and Iraq from existing budgets.

Despite denials by donors, aid has often been used as a tool of foreign policy. The changing patterns of who gets aid can only be explained in terms of broader foreign policy. It has even been suggested that the reason for the decline of aid in the early 90’s was the ending of competition for clients during the Cold War.
While development aid statistics are only available up to 2002, it is already clear that substantial sums flowed into Afghanistan and Pakistan. Pakistan is a very important player in the war on terror, and it became, in 2002 the largest recipient of ODA in the world. Afghanistan saw its aid receipts grow eightfold over the average for the second half of the 90’s. This new concentration in aid sees the poor losing out as the Millennium Development Goals are subordinated to a security first policy.

In the 90’s aid was used to paper over the gaping holes of the lack of political action in both Bosnia and Rwanda. By the end of the 90’s, and the Kosovo crisis this had changed to aid being used to prop up political action and prevent unfavourable publicity. This policy was extended further in Afghanistan with pressure on Pakistan to keep its borders closed to prevent a politically embarrassing exodus, coupled with generous assistance for those who did cross.

During the Cold War, both sides used aid to support their clients. The West used aid to combat communism. Countries that were seen as being under a communist threat got generous assistance, both development and military. After the Cold War the emphasis shifted to development criteria, culminating in the Millennium Development Goals with their targets for 2015. This targeting of poverty now appears to have been lost.

After September 11th, the realisation that developed countries were at risk of major terrorist attacks seems to have caused a change in approach in the West. Suddenly, the most important factor about an aid recipient was not the recipient’s level of need, but its importance and usefulness in the war on terror. The poor lose out doubly as it is the less poor who will be targeted by anti-terrorist development funding, as the very poor simply do not have the resource base to pose the threat of international terrorism. 

A further threat to the independence of aid has been the rush to draw aid into the foreign policy sphere. The European Union has possibly been the worst case of this, with the proposed European Constitution seeing not only development Aid but also Humanitarian assistance as being subordinated to the overall Common Foreign and Security Policy (CFSP). Within the European Union’s structures themselves the development decisions now fall under the review of Foreign Ministers rather than of Development Ministers.

The United Nations quickly passed a binding resolution on terrorism, but it has no definition of what terrorism is. The draft UN definition of terrorism is so broad that it would appear to include ordinary criminal activity in its scope. This problem is repeated with national legislation.

The polarisation of Muslim communities makes it harder and more risky for agencies trying to promote anything, such as women’s rights, that may be seen as challenging religious orthodoxy.

Governments have taken advantage of the lack of firm definitions to define their opponents as terrorists, or to use vague definitions to allow opponents to be arrested under anti-terrorist legislation. Western countries, instead of upholding good human rights practices, have resorted to tactics like detention without trial. Worse, there appears to be at best, no objection to serious human rights abuses by repressive governments who are seen as allies in the war on terror. This places donor countries is a very poor position to argue for the respect of human rights in third countries.

Agencies advocating for change are at risk of being prosecuted under anti-terrorist legislation, and Human Rights Watch has already documented cases of anti-terrorist laws being used to imprison activists.

[download, PDF, 35 pp.]

I. Statement of Resolve

1. We, Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions, meeting in Paris on 2 March 2005, resolve to take far-reaching and monitorable actions to reform the ways we deliver and manage aid as we look ahead to the UN five-year review of the Millennium Declaration and the Millennium Development Goals (MDGs) later this year. As in Monterrey, we recognise that while the volumes of aid and other development resources must increase to achieve these goals, aid effectiveness must increase significantly as well to support partner country efforts to strengthen governance and improve development performance. This will be all the more important if existing and new bilateral and multilateral initiatives lead to significant further increases in aid.
2. At this High-Level Forum on Aid Effectiveness, we followed up on the Declaration adopted at the High-Level Forum on Harmonisation in Rome (February 2003) and the core principles put forward at the Marrakech Roundtable on Managing for Development Results (February 2004) because we believe they will increase the impact aid has in reducing poverty and inequality, increasing growth, building capacity and accelerating achievement of the MDGs.

Scale up for more effective aid

3. We reaffirm the commitments made at Rome to harmonise and align aid delivery. We are encouraged that many donors and partner countries are making aid effectiveness a high priority, and we reaffirm our commitment to accelerate progress in implementation, especially in the following areas:
   1. Strengthening partner countries’ national development strategies and associated operational frameworks (e.g., planning, budget, and performance assessment frameworks).
   2. Increasing alignment of aid with partner countries’ priorities, systems and procedures and helping to strengthen their capacities.
   3. Enhancing donors’ and partner countries’ respective accountability to their citizens and parliaments for their development policies, strategies and performance.
   4. Eliminating duplication of efforts and rationalising donor activities to make them as cost-effective as possible.
   5. v.Reforming and simplifying donor policies and procedures to encourage collaborative behaviour and progressive alignment with partner countries’ priorities, systems and procedures.
   6. Defining measures and standards of performance and accountability of partner country systems in public financial management, procurement, fiduciary safeguards and environmental assessments, in line with broadly accepted good practices and their quick and widespread application.
4. We commit ourselves to taking concrete and effective action to address the remaining challenges, including:
   1. Weaknesses in partner countries’ institutional capacities to develop and implement results-driven national development strategies.
   2. Failure to provide more predictable and multi-year commitments on aid flows to committed partner countries.
   3. Insufficient delegation of authority to donors’ field staff, and inadequate attention to incentives for effective development partnerships between donors and partner countries.
   4. Insufficient integration of global programmes and initiatives into partner countries’ broader development agendas, including in critical areas such as HIV/AIDS.
   5. Corruption and lack of transparency, which erode public support, impede effective resource mobilisation and allocation and divert resources away from activities that are vital for poverty reduction and sustainable economic development. Where corruption exists, it inhibits donors from relying on partner country systems.
5. We acknowledge that enhancing the effectiveness of aid is feasible and necessary across all aid modalities. In determining the most effective modalities of aid delivery, we will be guided by development strategies and priorities established by partner countries. Individually and collectively, we will choose and design appropriate and complementary modalities so as to maximise their combined effectiveness.
6. In following up the Declaration, we will intensify our efforts to provide and use development assistance, including the increased flows as promised at Monterrey, in ways that rationalise the often excessive fragmentation of donor activities at the country and sector levels.

Adapt and apply to differing country situations

7. Enhancing the effectiveness of aid is also necessary in challenging and complex situations, such as the tsunami disaster that struck countries of the Indian Ocean rim on 26 December 2004. In such situations, worldwide humanitarian and development assistance must be harmonised within the growth and poverty reduction agendas of partner countries. In fragile states, as we support state-building and delivery of basic services, we will ensure that the principles of harmonisation, alignment and managing for results are adapted to environments of weak governance and capacity. Overall, we will give increased attention to such complex situations as we work toward greater aid effectiveness.

Specify indicators, timetable and targets

8. We accept that the reforms suggested in this Declaration will require continued high-level political support, peer pressure and coordinated actions at the global, regional and country levels. We commit to accelerate the pace of change by implementing, in a spirit of mutual accountability, the Partnership Commitments presented in Section II and to measure progress against 12 specific indicators that we have agreed today and that are set out in Section III of this Declaration.
9. As a further spur to progress, we will set targets for the year 2010. These targets, which will involve action by both donors and partner countries, are designed to track and encourage progress at the global level among the countries and agencies that have agreed to this Declaration. They are not intended to prejudge or substitute for any targets that individual partner countries may wish to set. We have agreed today to set five preliminary targets against indicators as shown in Section III. We agree to review these preliminary targets and to adopt targets against the remaining indicators as shown in Section III before the UNGA Summit in September 2005; and we ask the partnership of donors and partner countries hosted by the DAC to prepare for this urgently¹. Meanwhile, we welcome initiatives by partner countries and donors to establish their own targets for improved aid effectiveness within the framework of the agreed Partnership Commitments and Indicators of Progress. For example, a number of partner countries have presented action plans, and a large number of donors have announced important new commitments. We invite all participants who wish to provide information on such initiatives to submit it by 4 April 2005 for subsequent publication.

Monitor and evaluate implementation

10. Because demonstrating real progress at country level is critical, under the leadership of the partner country we will periodically assess, qualitatively as well as quantitatively, our mutual progress at country level in implementing agreed commitments on aid effectiveness. In doing so, we will make use of appropriate country level mechanisms.
11. At the international level, we call on the partnership of donors and partner countries hosted by the DAC to broaden partner country participation and, by the end of 2005, to propose arrangements for the medium term monitoring of the commitments in this Declaration. In the meantime, we ask the partnership to co-ordinate the international monitoring of the Indicators of Progress included in Section III; to refine targets as necessary; to provide appropriate guidance to establish baselines; and to enable consistent aggregation of information across a range of countries to be summed up in a periodic report. We will also use existing peer review mechanisms and regional reviews to support progress in this agenda. We will, in addition, explore independent cross-country monitoring and evaluation processes – which should be applied without imposing additional burdens on partners – to provide a more comprehensive understanding of how increased aid effectiveness contributes to meeting development objectives.
12. Consistent with the focus on implementation, we plan to meet again in 2008 in a developing country and conduct two rounds of monitoring before then to review progress in implementing this Declaration.

II. Partnership Commitments

13. Developed in a spirit of mutual accountability, these Partnership Commitments are based on the lessons of experience. We recognise that commitments need to be interpreted in the light of the specific situation of each partner country.

OWNERSHIP

Partner countries exercise effective leadership over their development policies, and strategies and co-ordinate development actions

14. Partner countries commit to:
• Exercise leadership in developing and implementing their national development strategies² through broad consultative processes.
• Translate these national development strategies into prioritised results-oriented operational programmes as expressed in medium-term expenditure frameworks and annual budgets (Indicator 1).
• Take the lead in co-ordinating aid at all levels in conjunction with other development resources in dialogue with donors and encouraging the participation of civil society and the private sector.
15. Donors commit to:
    • Respect partner country leadership and help strengthen their capacity to exercise it.

ALIGNMENT

Donors base their overall support on partner countries’ national development strategies, institutions and procedures

Donors align with partners’ strategies

16. Donors commit to:
    • Base their overall support — country strategies, policy dialogues and development co-operation programmes — on partners’ national development strategies and periodic reviews of progress in implementing these strategies³ (Indicator 3).
    • Draw conditions, whenever possible, from a partner’s national development strategy or its annual review of progress in implementing this strategy. Other conditions would be included only when a sound justification exists and would be undertaken transparently and in close consultation with other donors and stakeholders.
    • Link funding to a single framework of conditions and/or a manageable set of indicators derived from the national development strategy. This does not mean that all donors have identical conditions, but that each donor’s conditions should be derived from a common streamlined framework aimed at achieving lasting results.

Donors use strengthened country systems

17. Using a country’s own institutions and systems, where these provide assurance that aid will be used for agreed purposes, increases aid effectiveness by strengthening the partner country’s sustainable capacity to develop, implement and account for its policies to its citizens and parliament. Country systems and procedures typically include, but are not restricted to, national arrangements and procedures for public financial management, accounting, auditing, procurement, results frameworks and monitoring.
18. Diagnostic reviews are an important — and growing — source of information to governments and donors on the state of country systems in partner countries. Partner countries and donors have a shared interest in being able to monitor progress over time in improving country systems. They are assisted by performance assessment frameworks, and an associated set of reform measures, that build on the information set out in diagnostic reviews and related analytical work.
19. Partner countries and donors jointly commit to:
• Work together to establish mutually agreed frameworks that provide reliable assessments of performance, transparency and accountability of country systems (Indicator 2).
• Integrate diagnostic reviews and performance assessment frameworks within country-led strategies for capacity development.
20. Partner countries commit to:
• Carry out diagnostic reviews that provide reliable assessments of country systems and procedures.
• On the basis of such diagnostic reviews, undertake reforms that may be necessary to ensure that national systems, institutions and procedures for managing aid and other development resources are effective, accountable and transparent.
• Undertake reforms, such as public management reform, that may be necessary to launch and fuel sustainable capacity development processes.
21. Donors commit to:
• Use country systems and procedures to the maximum extent possible. Where use of country systems is not feasible, establish additional safeguards and measures in ways that strengthen rather than undermine country systems and procedures (Indicator 5).
• Avoid, to the maximum extent possible, creating dedicated structures for day-to-day management and implementation of aid-financed projects and programmes (Indicator 6).
• Adopt harmonised performance assessment frameworks for country systems so as to avoid presenting partner countries with an excessive number of potentially conflicting targets.

Partner countries strengthen development capacity with support from donors

22. The capacity to plan, manage, implement, and account for results of policies and programmes, is critical for achieving development objectives — from analysis and dialogue through implementation, monitoring and evaluation. Capacity development is the responsibility of partner countries with donors playing a support role. It needs not only to be based on sound technical analysis, but also to be responsive to the broader social, political and economic environment, including the need to strengthen human resources.
23. Partner countries commit to:
• Integrate specific capacity strengthening objectives in national development strategies and pursue their implementation through country-led capacity development strategies where needed.
24. Donors commit to:
• Align their analytic and financial support with partners’ capacity development objectives and strategies, make effective use of existing capacities and harmonise support for capacity development accordingly (Indicator 4).

Strengthen public financial management capacity

1. Partner countries commit to:
• Intensify efforts to mobilise domestic resources, strengthen fiscal sustainability, and create an enabling environment for public and private investments.
• Publish timely, transparent and reliable reporting on budget execution.
• Take leadership of the public financial management reform process.
2. Donors commit to:
• Provide reliable indicative commitments of aid over a multi-year framework and disburse aid in a timely and predictable fashion according to agreed schedules (Indicator 7).
• Rely to the maximum extent possible on transparent partner government budget and accounting mechanisms (Indicator 5).
3. Partner countries and donors jointly commit to:
• Implement harmonised diagnostic reviews and performance assessment frameworks in public financial management.

Strengthen national procurement systems

28. Partner countries and donors jointly commit to:
• Use mutually agreed standards and processes⁴ to carry out diagnostics, develop sustainable reforms and monitor implementation.
• Commit sufficient resources to support and sustain medium and long-term procurement reforms and capacity development.
• Share feedback at the country level on recommended approaches so they can be improved over time.
29. Partner countries commit to take leadership and implement the procurement reform process.
30. Donors commit to:
• Progressively rely on partner country systems for procurement when the country has implemented mutually agreed standards and processes (Indicator 5).
• Adopt harmonised approaches when national systems do not meet mutually agreed levels of performance or donors do not use them.

Untie aid: getting better value for money

31. Untying aid generally increases aid effectiveness by reducing transaction costs for partner countries and improving country ownership and alignment. DAC Donors will continue to make progress on untying as encouraged by the 2001 DAC Recommendation on Untying Official Development Assistance to the Least Developed Countries (Indicator 8).

HARMONISATION

Donors’ actions are more harmonised, transparent and collectively effective

Donors implement common arrangements and simplify procedures

32. Donors commit to:
• Implement the donor action plans that they have developed as part of the follow-up to the Rome High-Level Forum.
• Implement, where feasible, common arrangements at country level for planning, funding (e.g. joint financial arrangements), disbursement, monitoring, evaluating and reporting to government on donor activities and aid flows. Increased use of programme-based aid modalities can contribute to this effort (Indicator 9).
• Work together to reduce the number of separate, duplicative, missions to the field and diagnostic reviews (Indicator 10); and promote joint training to share lessons learnt and build a community of practice.

Complementarity: more effective division of labour

33. Excessive fragmentation of aid at global, country or sector level impairs aid effectiveness. A pragmatic approach to the division of labour and burden sharing increases complementarity and can reduce transaction costs.
34. Partner countries commit to:
• Provide clear views on donors’ comparative advantage and on how to achieve donor complementarity at country or sector level.
35. Donors commit to:
• Make full use of their respective comparative advantage at sector or country level by delegating, where appropriate, authority to lead donors for the execution of programmes, activities and tasks.
• Work together to harmonise separate procedures.

Incentives for collaborative behaviour

36. Donors and partner countries jointly commit to:
• Reform procedures and strengthen incentives—including for recruitment, appraisal and training—for management and staff to work towards harmonisation, alignment and results.

Delivering effective aid in fragile states⁵

37. The long-term vision for international engagement in fragile states is to build legitimate, effective and resilient state and other country institutions. While the guiding principles of effective aid apply equally to fragile states, they need to be adapted to environments of weak ownership and capacity and to immediate needs for basic service delivery.
38. Partner countries commit to:
• Make progress towards building institutions and establishing governance structures that deliver effective governance, public safety, security, and equitable access to basic social services for their citizens.
• Engage in dialogue with donors on developing simple planning tools, such as the transitional results matrix, where national development strategies are not yet in place.
• Encourage broad participation of a range of national actors in setting development priorities.
39. Donors commit to:
• Harmonise their activities. Harmonisation is all the more crucial in the absence of strong government leadership. It should focus on upstream analysis, joint assessments, joint strategies, co-ordination of political engagement; and practical initiatives such as the establishment of joint donor offices.
• Align to the maximum extent possible behind central government-led strategies or, if that is not possible, donors should make maximum use of country, regional, sector or non-government systems.
• Avoid activities that undermine national institution building, such as bypassing national budget processes or setting high salaries for local staff.
• Use an appropriate mix of aid instruments, including support for recurrent financing, particularly for countries in promising but high-risk transitions.

Promoting a harmonised approach to environmental assessments

40. Donors have achieved considerable progress in harmonisation around environmental impact assessment (EIA) including relevant health and social issues at the project level. This progress needs to be deepened, including on addressing implications of global environmental issues such as climate change, desertification and loss of biodiversity.
41. Donors and partner countries jointly commit to:
• Strengthen the application of EIAs and deepen common procedures for projects, including consultations with stakeholders; and develop and apply common approaches for “strategic environmental assessment” at the sector and national levels.
• Continue to develop the specialised technical and policy capacity necessary for environmental analysis and for enforcement of legislation.
42. Similar harmonisation efforts are also needed on other cross-cutting issues, such as gender equality and other thematic issues including those financed by dedicated funds.

MANAGING FOR RESULTS

Managing resources and improving decision-making for results

43. Managing for results means managing and implementing aid in a way that focuses on the desired results and uses information to improve decision-making.
44. Partner countries commit to:
• Strengthen the linkages between national development strategies and annual and multi-annual budget processes.
• Endeavour to establish results-oriented reporting and assessment frameworks that monitor progress against key dimensions of the national and sector development strategies; and that these frameworks should track a manageable number of indicators for which data are cost-effectively available (Indicator 11).
45. Donors commit to:
• Link country programming and resources to results and align them with effective partner country performance assessment frameworks, refraining from requesting the introduction of performance indicators that are not consistent with partners’ national development strategies.
• Work with partner countries to rely, as far as possible, on partner countries’ results-oriented reporting and monitoring frameworks.
• Harmonise their monitoring and reporting requirements, and, until they can rely more extensively on partner countries’ statistical, monitoring and evaluation systems, with partner countries to the maximum extent possible on joint formats for periodic reporting.
46. Partner countries and donors jointly commit to:
• Work together in a participatory approach to strengthen country capacities and demand for results based management.

MUTUAL ACCOUNTABILITY

Donors and partners are accountable for development results

47. A major priority for partner countries and donors is to enhance mutual accountability and transparency in the use of development resources. This also helps strengthen public support for national policies and development assistance.
48. Partner countries commit to:
• Strengthen as appropriate the parliamentary role in national development strategies and/or budgets.
• Reinforce participatory approaches by systematically involving a broad range of development partners when formulating and assessing progress in implementing national development strategies.
49. Donors commit to:
• Provide timely, transparent and comprehensive information on aid flows so as to enable partner authorities to present comprehensive budget reports to their legislatures and citizens.
50. Partner countries and donors commit to:
• Jointly assess through existing and increasingly objective country level mechanisms mutual progress in implementing agreed commitments on aid effectiveness, including the Partnership Commitments. (Indicator 12).

III . Indicators of Progress

To be measured nationally and monitored internationally

Important Note: In accordance with paragraph 9 of the Declaration, the partnership of donors and partner countries hosted by the DAC (Working Party on Aid Effectiveness) comprising OECD/DAC members, partner countries and multilateral institutions, met twice, on 30-31 May 2005 and on 7-8 July 2005 to adopt, and review where appropriate, the targets for the twelve Indicators of Progress. At these meetings an agreement was reached on the targets presented under Section III of the present Declaration. This agreement is subject to reservations by one donor on (a) the methodology for assessing the quality of locally-managed procurement systems (relating to targets 2b and 5b) and (b) the acceptable quality of public financial management reform programmes (relating to target 5a.ii). Further discussions are underway to address these issues. The targets, including the reservation, have been notified to the Chairs of the High-level Plenary Meeting of the 59th General Assembly of the United Nations in a letter of 9 September 2005 by Mr. Richard Manning, Chair of the OECD Development Assistance Committee (DAC).

^*Note on Indicator 5: Scores for Indicator 5 are determined by the methodology used to measure quality of procurement and public financial management systems under Indicator 2 above.

Appendix A:

Methodological Notes on the Indicators of Progress

The Indicators of Progress provides a framework in which to make operational the responsibilities and accountabilities that are framed in the Paris Declaration on Aid Effectiveness. This framework draws selectively from the Partnership Commitments presented in Section II of this Declaration.

Purpose — The Indicators of Progress provide a framework in which to make operational the responsibilities and accountabilities that are framed in the Paris Declaration on Aid Effectiveness. They measure principally collective behaviour at the country level.

Country level vs. global level — The indicators are to be measured at the country level in close collaboration between partner countries and donors. Values of country level indicators can then be statistically aggregated at the regional or global level. This global aggregation would be done both for the country panel mentioned below, for purposes of statistical comparability, and more broadly for all partner countries for which relevant data are available.

Donor / Partner country performance — The indicators of progress also provide a benchmark against which individual donor agencies or partner countries can measure their performance at the country, regional, or global level. In measuring individual donor performance, the indicators should be applied with flexibility in the recognition that donors have different institutional mandates.

Targets — The targets are set at the global level. Progress against these targets is to be measured by aggregating data measured at the country level. In addition to global targets, partner countries and donors in a given country might agree on country-level targets.

Baseline — A baseline will be established for 2005 in a panel of self-selected countries. The partnership of donors and partner countries hosted by the DAC (Working Party on Aid Effectiveness) is asked to establish this panel.

Definitions and criteria — The partnership of donors and partner countries hosted by the DAC (Working Party on Aid Effectiveness) is asked to provide specific guidance on definitions, scope of application, criteria and methodologies to assure that results can be aggregated across countries and across time.

Note on Indicator 9 — Programme based approaches are defined in Volume 2 of Harmonising Donor Practices for Effective Aid Delivery (OECD, 2005) in Box 3.1 as a way of engaging in development cooperation based on the principles of co-ordinated support for a locally owned programme of development, such as a national development strategy, a sector programme, a thematic programme or a programme of a specific organisation. Programme based approaches share the following features: (a) leadership by the host country or organisation; (b) a single comprehensive programme and budget framework; (c) a formalised process for donor co-ordination and harmonisation of donor procedures for reporting, budgeting, financial management and procurement; (d) Efforts to increase the use of local systems for programme design and implementation, financial management, monitoring and evaluation. For the purpose of indicator 9 performance will be measured separately across the aid modalities that contribute to programme-based approaches.

APPENDIX B:

List of Participating Countries and Organisations

Participating Countries

Albania • Australia • Austria • Bangladesh • Belgium • Benin • Bolivia • Botswana • [Brazil]* • Burkina Faso • Burundi • Cambodia • Cameroon • Canada • China • Congo D.R. • Czech Republic • Denmark • Dominican Republic • Egypt • Ethiopia • European Commission • Fiji • Finland • France • Gambia, The • Germany • Ghana • Greece • Guatemala • Guinea • Honduras • Iceland • Indonesia • Ireland • Italy • Jamaica • Japan • Jordan • Kenya • Korea • Kuwait • Kyrgyz Republic • Lao PDR • Luxembourg • Madagascar • Malawi • Malaysia • Mali • Mauritania • Mexico • Mongolia • Morocco • Mozambique • Nepal • Netherlands • New Zealand • Nicaragua • Niger • Norway • Pakistan • Papua New Guinea • Philippines • Poland • Portugal • Romania • Russian Federation • Rwanda • Saudi Arabia • Senegal • Serbia and Montenegro • Slovak Republic • Solomon Islands • South Africa • Spain • Sri Lanka • Sweden • Switzerland • Tajikistan • Tanzania • Thailand • Timor-Leste • Tunisia • Turkey • Uganda • United Kingdom • United States of America • Vanuatu • Vietnam • Yemen • Zambia

* To be confirmed.

More countries than listed here have endorsed the Paris Declaration. For a full and up to date list please consult www.oecd.org/dac/effectiveness/parisdeclaration/members.

Participating Organisations

African Development Bank
Arab Bank for Economic Development in Africa
Asian Development Bank
Commonwealth Secretariat
Consultative Group to Assist the Poorest (CGAP)
Council of Europe Development Bank (CEB)
Economic Commission for Africa (ECA)
Education for All Fast Track Initiative (EFA-FTI)
European Bank for Reconstruction and Development (EBRD)
European Investment Bank (EIB)
Global Fund to Fight Aids, Tuberculosis and Malaria
G24
Inter-American Development Bank
International Fund for Agricultural Development (IFAD)
International Monetary Fund (IMF)
International Organisation of the Francophonie
Islamic Development Bank
Millennium Campaign
New Partnership for Africa’s Development (NEPAD)
Nordic Development Fund
Organisation for Economic Co-operation and Development (OECD)
Organisation of Eastern Caribbean States (OECS)
OPEC Fund for International Development
Pacific Islands Forum Secretariat
United Nations Development Group (UNDG)
World Bank

Civil Society Organisations

Africa Humanitarian Action
AFRODAD
Bill and Melinda Gates Foundations
Canadian Council for International Cooperation (CCIC)
Comité Catholique contre la Faim et pour le Développement (CCFD)
Coopération Internationale pour le Développement et la Solidarité (CIDSE)
Comisión Económica (Nicaragua)
ENDA Tiers Monde
ERODAD
International Union for Conservation of Nature and Natural Resources (IUCN)
Japan NGO Center for International Cooperation (JANIC)
Reality of Aid Network
Tanzania Social and Economic Trust (TASOET)
UK Aid Network

Notes:

1. In accordance with paragraph 9 of the Declaration, the partnership of donors and partner countries hosted by the DAC (Working Party on Aid Effectiveness) comprising OECD/DAC members, partner countries and multilateral institutions, met twice, on 30-31 May 2005 and on 7-8 July 2005 to adopt, and review where appropriate, the targets for the twelve Indicators of Progress. At these meetings an agreement was reached on the targets presented under Section III of the present Declaration. This agreement is subject to reservations by one donor on (a) the methodology for assessing the quality of locally-managed procurement systems (relating to targets 2b and 5b) and (b) the acceptable quality of public financial management reform programmes (relating to target 5a.ii). Further discussions are underway to address these issues. The targets, including the reservation, have been notified to the Chairs of the High-level Plenary Meeting of the 59th General Assembly of the United Nations in a letter of 9 September 2005 by Mr. Richard Manning, Chair of the OECD Development Assistance Committee (DAC).
2. The term `national development strategies’ includes poverty reduction and similar overarching strategies as well as sector and thematic strategies.
3. This includes for example the Annual Progress Review of the Poverty Reduction Strategies (APR).
4. Such as the processes developed by the joint OECD-DAC – World Bank Round Table on Strengthening Procurement Capacities in Developing Countries.
5. The following section draws on the draft Principles for Good International Engagement in Fragile States, which emerged from the Senior Level Forum on Development Effectiveness in Fragile States (London, January 2005).

Twenty -Six NGOs call on donors to be bolder in their vision and commitments on aid effectiveness.

1. NGOs from North and South met on 3rd February to discuss with donor and creditor representatives ahead of the Second Forum on aid harmonization. This dialogue was a welcome step but as yet has not translated into specific commitments. NGO representatives following this process would like to make the following points.

2. The current draft of the Paris Declaration on Aid Effectiveness[1] fails to go far enough in tackling the fundamental obstacles that prevent aid from going to those people who need it most. Representatives of donor and partner countries must be bolder both in vision and commitments if there is to be any hope of creating a new aid architecture that will help us achieve the United Nation’s Millennium Development Goals by 2015.

3. Our organizations believe this declaration is important and much needed. However, at present it fails to address one of the fundamental problems with aid delivery – how it is allocated between countries – and does not go nearly far enough on national ownership over development policies and procedures, building developing country capacity, enhancing aid predictability and untying aid. The NGOs consider that donors and recipients share responsibility for making aid work.

4. The Draft Paris Declaration has some indicators. However a number of important issues in the declaration have no indicator to match them and a number of the existing indicators are very weak and vague. Ministers need to agree and commit to a set of time-bound and meaningful targets. They should also agree to ensure that robust monitoring and reporting mechanisms are in place at country and international level to ensure the Declaration is acted upon. Without these the declaration will sadly be of little practical use, much like its predecessor the Rome Declaration on Harmonisation on which implementation has been far too slow.

5. NGOs consider that the good principles in the Paris draft Declaration cannot really be put into practice without a profound reform of the aid regime. This must include the more democratic governance of the international financial institutions.

6. In order for the Paris Declaration on Aid Effectiveness to make a real difference to the way aid is delivered it is vital that the final version includes:

   A commitment by all donors to increase the current amount of aid that goes to least developed countries and ensure that at least 20% of aid is allocated to the improvement of basic social services like education, health care, water supplies and sanitation. Aid will make the greatest impact if it is spent on the poorest people. Currently, only 22.4% of bilateral overseas development aid (ODA) goes to the least developed countries in the world.[2] Donors not only need to improve this amount dramatically, but they also need to live up to the commitments they made in 1995 at the World Summit for Social Development, where they pledged to spend 20% of ODA on basic social services in developing countries. Without movement in both areas, there is little hope that aid will move from being in the business of politics to being in the business of poverty reduction.

   It is also vital that the final declaration is more ambitious on:

7. Reducing tied aid:The draft declaration has extremely weak text on this issue, and no specific indicator. We demand that it commit donors to fully untie all aid, including food aid and technical assistance, to all developing countries in the next five years.

Currently, around 40% -45% of total bilateral aid remains tied. It has been clearly documented that tying aid raises the cost of many goods, services and works by 15% to 30% on average, and by as much as 40% or more for food aid. The OECD calculated on this basis that the direct cost of tied aid in 2002 reduced the actual value of total bilateral aid by as much as USD 5 to USD 7 billion in 2002.[3]

8. i. Enhancing country ownership: Strengthening national ownership over development policies and procedures is essential to enhancing aid effectiveness. Indeed, national ownership based on strong civil society participation is a preliminary condition for all donor harmonization and alignment activities. A process of harmonisation and alignment without real ownership could represent a further encroachment by donors on national policy-making.

   ii.Currently, the Poverty Reduction Strategy Paper (PRSP) one of the principle instruments for facilitating greater ownership is not delivering results, as World Bank and IMF evaluations have demonstrated. [4] The current draft declaration does not indicate any donor responsibility to create the conditions for Poverty Reduction Strategy Paper process to work better. Part of the problem is that donors have not sufficiently adapted their programs to support PRSP priorities. In light of this, the declaration should commit donors to transforming their funding systems and modalities to support country PRS processes and systems, rather than the other way round, which has too often been the case up until now.

   iii. Donors need to draw their conditions from national poverty reduction strategies, which have been produced in a participative manner. However, where this is not possible, the declaration should commit donors to setting conditions in a broad and consultative forum, where multilateral and bilateral donors are present, alongside civil society, government and parliamentarians. All donor conditions must be made public so that vital parliamentary and civil society oversight and input can be ensured.

   iv. In addition, the declaration should commit donors to a set of ambitious targets for reducing the overall number of donor imposed conditions on developing countries. In order to ensure this, the declaration should call on donors to produce an annual report charting their progress on reducing conditionality. Current research, including the OECD DAC survey on aid harmonization (2004) indicates that donors have made very little movement in this area, despite it being a key commitment in the Rome Declaration on Harmonisation in 2002.

   v. Finally, the declaration must include a call for an end to all harmful economic policy conditionality. If the governments and people of poor countries are to have control over their future, and if aid is to be an effective tool for poverty eradication, donor imposed economic policy conditionalities, such as trade liberalisation, deregulation, fiscal austerity and privatisation must be abandoned.

9. i. Strengthening Capacity: The declaration puts the responsibility for capacity strengthening on Southern countries. The declaration should commit donors to ensuring that they will fund the capacity building needs of partner countries commensurate with meeting the Millennium Development Goals (MDGs). Nearly all of the regional workshops held by the OECD DAC highlighted the dire need for greater capacity building in developing countries. Support for capacity developments should be delivered according to needs identified by host governments and civil society organisations and not donors.

   ii. The declaration should be stronger in pressing for a reduction in the use of parallel structures to manage and implement donor projects, given the evidence that this weakens capacity and distorts incentives and accountability in the public sector. This should not be contingent on partner countries 'meeting acceptable levels of performance'. The declaration should commit donors to the use of Project Implementation Units only in exceptional circumstances, and agree to a 75% reduction in the use of PIUs by 2010.'

10. i. Providing greater aid predictability: The declaration should commit donors to delivering all aid pledges in full and within a defined timeframe. A target should be set for 100% on-schedule disbursements of planned aid by 2010. The declaration also needs to provide a clear target of how much aid should be planned and committed over a multi-year framework by donors in the next five years, rather than leaving this to monitoring over time. Currently, only 70% of ODA pledged is actually delivered. ODA flows are highly volatile: four times more, on average, than recipient countries’ GDP.[5] Donors need to work towards ensuring far greater stability of aid flows in the near future, examining disbursement issues, donor budget procedures and the impact of conditionality on aid flows. Importantly, donors need to ensure appropriate safeguards are in place to avoid donor harmonisation practices do not result in further aid volatility.[2]

    ii. Finally, donors need to ensure that their funding is sufficiently adaptable to partner country needs.

    Donors need to ensure that there is greater flexibility for aid increases to help partner countries respond adequately to external and internal shocks.

11. Corruption: The declaration should commit all donors and partner countries to sign and ratify the United Nations Convention against Corruption by 2005.[6] Corruption is a function of both donor and recipient activities and is a major obstacle to greater aid effectiveness diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment.

    i. Mutual Accountability: Finally, the declaration will be of little merit, if like its predecessor, the Rome Declaration, donors and developing countries are not held to account for implementing its agenda. A new framework of mutual accountability needs to be set up, both at the country and international level. At the country level there is a real need for a set of country targets to be agreed upon between donors, governments and civil society with the aim of improving the quality of aid and accelerating its disbursement. The matrix should be regularly monitored and effective sanctions imposed on donors who fail to meet their commitments.

    ii. At the international level there is a critical need for an independent international structure, which enables developing countries to holds donors to account. This should be based on internationally agreed time-specific targets, which are regularly monitored with civil society participation and publicly reported on. This structure could be housed in existing regional or international institutions which are owned by developing country governments, such as NEPAD. Alternatively, it could be housed under the UN’s structures in the form of a UN ombudsman on aid effectiveness.

We demand that these recommendations are included in the final version of the declaration. These steps are essential if we are to create a poverty-focused aid system which will meet the needs of poorer people.

Civil society groups plan to increase their roles in monitoring aid spending and encouraging public debate about aid performance and impact.

Signatories

Afrodad, Zimbabwe
ActionAid International, UK
Asia Pacific Mission for Migrants, Hong Kong
BanglaPraxis, Bangladesh
Basc Caritas Cameroun
BOND, UK
Catholic Institute for International Relations (CIIR), UK
CBRM, Italy
Cordaid, Netherlands
Coopération Internationale pour le Développement et la Solidarité (CIDSE)
Development Services International/Afro-European Consortium
European Network on Debt and Development (EURODAD)
Health Unlimited, UK
IBON Foundation, Philippines
LOKOJ, Bangladesh
OIKOS - Cooperação e Desenvolvimento, Portugal
Oxfam International
Pacific Asia Resource Center (PARC), Japan
Philippine AidWatch Network, Philippines
Reality of Aid, Global Network
RIFONGA, Benin
Save the Children UK
Tearfund, UK
Trocaire, Ireland
World Vision UK
World Vision, Germany

Notes:

[1]OECD DAC, Second Consultative Draft of the Paris Declaration on Aid Effectiveness 2005

[2]OECD DAC Untying ODA progress report 2004

[3]Draft Report on Aid Effectiveness for the Second High-Level Forum, OECD DAC 2004

[4]IMF Independent Evaluation Office, Report on the Evaluation of Poverty Reduction Strategy Papers (PRSPs) and the Poverty Reduction Growth Facility (PRGF), May 2004. World Bank, Operations Evaluation Department ,The Poverty Reduction Strategy Initiative: An Independent Evaluation of the World Bank’s Support Through 2003, 2004

[5]International Working Group on Innovative Financing Instruments Report December 2004

[6]The UN Convention on Corruption was adopted by the General Assembly of the United Nations on 31 October 2003 at United Nations Headquarters in New York (Resolution 58/4). It is open for signatures until 9 December 2005, in accordance with article 67 (1) of the Convention.

Since 1992, Reality of Aid Reportshave focused attention on the ways in which aid has too often seved donors' foreign policy and strategic interests, in turn ignoring and sometimes undermining the rights and needs of people living in poverty. It has also pointed to the incremental progress in increasing the poverty focus of ODA starting in the late 1990s.

After September 11, 2001, the trends in global aid reveal a returning emphasis in aid priorities to the foreign policy priorities of donors in the global "war on terror". Donor policies and aid allocations have focused on an expanding security agenda in the South, accompanied by overt diversions of aid resources to regions of the world that are seen to threaten security in the North or to counter-insurgency activities in zones of conflict. Humanitarian assistance and reconstruction following the wars in Afghanistan and Iraz have captured more than a third of the new aid resources allocated by donors since 2001.

The 2006 Reality of Aid Reportexplores strategic issues in the convergence of the peace, security and development agenda: What is a rights-based approach to the nexus between human development and security? Whose security are we protecting, in whose interest and at the expense of what? Is development cooperation repeating its Cold War history, and once again becoming a crude extension of donor foreign and defense policy? To what extent is donor aid increasingly implemented as "risk management" for national security?

Prime Minister Junichiro Koizumi
Foreign Minister Taro Aso

There have been reports (Yomiuri Shinbun; Hokkaido Shinbun 2/6/06) that the Japanese government has decided to use untied ODA to provide the government of Indonesia with 3 patrol ships "in order to counter terrorism and piracy in the Straits of Malacca". For the reasons outlined below, we believe that this decision represents an unsuitable policy judgment, and we call for its immediate withdrawal.

1. This decision breaches "The 3 principles for the export of weapons"
   As the government has itself confirmed that patrol boats are a form of weapon, this decision clearly represents the overseas export of weapons.
   Indeed, in 2004 in relation to the announcement of the new defense charter (which was drawn up in order to explain an exceptional case of technical cooperation over US missile defense), the Chief Secretary included the following words in a consultation held at that time: "In future, we will highlight the fundamental principle that as a peaceful country we avoid encouraging international conflict, and as such we will conduct an empirical debate for each individual matter". These words did indeed hint at the possibility of exceptional treatment in future, but in the current case there has been no proper explanation of why an exception has been made. Furthermore, "the 3 principles for the export of weapons" are at the heart of the Japanese constitution, which states that "Japan will not support war" , a commitment that can be thought of as "the good sense of Japan". We are concerned that these barriers to the exceptional export of weapons might start to break down, and therefore we believe that this decision is fundamentally wrong.

2. This decision ignores the principles of the "ODA Charter"
   In the ODA Charter, it is clearly stated that ODA will not be used for military purposes. Furthermore, these principles were also confirmed by resolutions from the Lower House Foreign Affairs Committee (1978) and the Upper House Foreign Affairs Committee (1981). The principle that ODA "will not be used for military purposes" and that it should be used for the "peaceful coexistence" that is sought by the Japanese constitution is something that we Japanese citizens profoundly support. It has become very common to think of this as part of Japan's "way of making a peaceful contribution". In the new ODA Charter that was revised in 2003, the expressions "Peace Building" and "Counter-Terrorism" are included, but if it is a question of "Counter-Terrorism" then whatever the type of aid, there is no way that it can be permitted as a form of ODA. As is established in the four principles of the ODA Charter, since the aid is provided by a civilian agency, it is important to take care in judging that that it will not in turn out in reality to help "the military" or to encourage conflict. As long as there is no evidence of a proper system for monitoring and a concept of the responsibility to explain decisions, the decision to use of ODA to provide weapons is something that ignores the "ODA Charter". Furthermore, it is an obvious point, but clearly it is also necessary to check in advance what sort of influence the patrol boats will have in terms of meeting guidelines regarding social and environmental considerations.

3. This decision accelerates the militarization of aids Under the title of "security policy", or even if it is only a broad aim of taking similar actions again in future, "the provision of weapons" is clearly a tactic to strengthen government power. However, for a number of other donor countries, the concept of "security policy" is not a matter of strengthening government power, but rather from the perspective of supporting democracy, they emphasize aid to strengthen civil society as a check on governance and abuse of public power. Furthermore, many donors are acknowledging that a for a truly meaningful "security policy", it is necessary not only to provide equipment to public agencies, but also in order to prevent the formation of hotbeds of state violence, there needs to be technical support for judicial sector reform and the provision of equipment for civil society monitoring organizations. Up until now Japanese ODA has operated in consideration of human rights, thus stri ctly avoiding the provision of assistance for policing activities. It is crucial that there should be clear concepts and principles underlying the provision of ODA. Decisions that undermine these principles cannot be thought of as suitable policy judgments. We are very concerned that in future, the government will draw on this current decision in order to sideline concepts and principles, and to use ODA for the direct provision of weapons under the name of "the War on Terror".

4. The decision goes against DAC's definition of ODA, and it does not contribute to resolving the problem of poverty From an international perspective, this decision goes against the Development Assistance Committee (DAC) definition of ODA as something that basically contributes to welfare and economic development in developing countries. It is generally agreed amongst donor countries that ODA is something that should be used to resolve the problem of poverty. What is more, as the gap between rich and poor becomes greater and greater, and as global warming and environmental destruction continue to proceed, and as policies to prevent contagious diseases are still unsatisfactory, a decision such as the current one sends the wrong message both at home and abroad, that Japan is not seriously seeking to resolve these sorts of major world problems. At the current time international society ought to cooperate in order seriously to resolve the problem of poverty, and yet Japan is opening up this sort of inconsistent future path for its ODA. Such a path does not tally with the leadership role of Japan as the world's second biggest donor country.

For the above reasons, we strongly oppose the use of Japan's ODA for the provision of weapons, and we call for the immediate withdrawal of this
plan.

This is a statement from Japanese NGOs including PARC. if you need more information, please contact to koshida@jca.apc.org

CANCEL DICTATOR DEBTS!
CANCEL ILLEGITIMATE DEBTS!

The International Conference on the Cancellation of Illegitimate Debts was attended by 150 representatives from Southern and Northern social movements and civil society organizations from 15 countries of Asia, Africa, Europe and the Americas. Also present were parliamentarians and government officials joining the people’s efforts against the yoke of enslaving debt. The conference was organized by Reality of Aid-Asia Pacific, IBON Foundation, International NGO Forum on Indonesian Development (INFID) and Pacific Asia Resource Center (PARC). Co-sponsoring were Norwegian Church Aid (NCA), European Network on Debt and Development (Eurodad), African Network on Debt and Development (Afrodad), Christian Conference of Asia (CCA) and Kairos-Canada.

The conference participants aimed to deepen their understanding of the extent and impact of illegitimate, odious and dictator debts on the poor peoples of Southern countries. We arrived each bringing the experience of our respective movements and organizations in the struggle for the cancellation of these debts, and we leave inspired by the determination and tenacity we have seen in each others’ national and international campaigns. The global struggle against the debt has already achieved so much and we resolve to continue, build up and intensify our resistance to these.

The people of the South have suffered trillions of dollars in debt and debt servicing for decades which has been among the greatest burdens causing their continued and deepening economic backwardness and social underdevelopment. Yet even as hundreds of billions of dollars are paid every year to creditor banks and organizations in the world’s wealthiest countries these debts are not going away and indeed are growing ever larger – reaching US$2.6 trillion as of 2004. There are national governments that spend up to half of their budgets just on debt servicing. This has caused untold hunger, poverty, misery and deprivation for generations of peoples across Asia, Africa and Latin America.

The usurious Paris Club governments, organizations and international financial institutions are unmindful of all this and only concerned that repayments continue whatever the social, cultural, ecological and economic devastation wrought. Even the recent supposed initiatives at addressing the debt problem such as the Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiatives (MDRI) have so far unfortunately been merely token or insufficient. At the same time there are so few positive developments such as the creditor Norwegian government’s acknowledging the existence of illegitimate debt.

Debt servicing is happening at the cost of the exploitation of people, the denial of their basic rights to social and public services, the plunder of Southern agricultural, forest and mineral resources, and the destruction of sovereignty. The debt is even being used to impose destructive and one-sided policies of neoliberal globalization. This grotesque situation must be ended or else the greater majority of the world’s people who are poor will be driven ever deeper into debt and poverty. Northern governments are challenged to put so much Millennium Development Goal (MDG) and Financing for Development rhetoric into genuine development practice.

1. So much of Southern debt is patently onerous, imbued with corruption, forced by creditors, used for projects that have been harmful to the people and environment, a result of self-serving Northern economic policies or merely borrowing to repay debt. The people repudiate this illegitimate debt and we call for its absolute and unconditional cancellation.
2. We are particularly appalled at debt willfully given by Northern creditors to the world’s worst dictatorships including Marcos, Suharto, Pinochet, Duvalier, Mobutu, the apartheid regimes, juntas and many others. This debt of some US$451 billion accumulated over the 1950-1996 period not only merely enriched these regimes and their Northern collaborators but directly resulted in the killing, disappearance, torture and abuse of human rights of hundreds of thousands of people. We call for the immediate cancellation of dictator debt which is the most brazen and odious debt endured by Southern peoples.
3. The peoples of the South have long been repaying debt that should not be paid for being illegitimate and odious; this long-standing injustice cannot be forgotten and must be rectified. We call for the return of these payments on illegitimate and dictator debt.
4. Southern debt and debt servicing have grown to such monstrous proportions and taken such different forms that we do not even know the true extent and depths of the problem. Northern creditors have used this to obscure the extent of their culpability and the vastness of the damage. We then also call for immediate public and transparent audits of Southern debt in support of our campaign for the cancellation of illegitimate and dictator debt.
5. We recognize that our historic fight against burdensome and unjust debts lies most of all in the strength of our social movements and civil society organizations even as we link up with progressive parliamentarians and government officials. We are committed to contributing to the on-going campaigns and initiatives happening across the South and the North. Towards our overall struggle to cancel all illegitimate and dictator debt we resolve to do the following:
1. Deepen understanding of the burden of debt and its impacts on Southern countries.
   • Conduct citizen’s audits quantifying the debt, reviewing the circumstances in which they were contracted, and assessing their impact
   • Develop case studies of the most blatant examples of illegitimate and dictator debt to concretize the issue and aid campaigning
2. Build the capacity of our campaigners on the debt issue.
   • Basic information, handbooks and trainings
   • Case studies on the successful Nigeria and Argentina initiatives
3. Conduct widespread and sustained grassroots education campaigns for greater awareness-building and mass mobilizations.
   • They shall be popular, concretize the issue on the ground, and use creative forms such as cultural activities
   • They shall be conducted in communities and schools
4. Conduct media campaigns to reach out to the broadest public.
5. Promote and support Parliamentary initiatives that advance our efforts to cancel the debt.
   • These may include parliamentary resolutions and legislation calling for cancellation, official debt audits and changes in burdensome national debt policies
6. Develop further national cooperation and networking among social movements, civil society, parliamentarians, professionals, civil servants, academics and other anti-debt advocates.
7. Develop further North-South and South-South cooperation, networking and solidarity among social movements, civil society and parliamentarians.
   • Set-up core groups for these linkages
   • Conduct coordinated global education and mass actions to further raise the visibility of the debt issue
8. Conduct advocacy campaigns in Northern countries to the general public and among creditor governments, bilateral aid agencies and multilateral institutions.

The burden of debt is indeed one of the most urgent issues of our time. The campaign to cancel odious and illegitimate debt is just the start of our overall efforts to cancel the debt and end foreign domination of Southern economies. But not only have Southern peoples suffered this burden for so long they are also facing the consequences of neoliberal policies of trade and investment liberalization, privatization and deregulation imposed by the world’s handful of big powers. The struggle to cancel the debt would just be a part of our struggles to be able to realize a more just and humane society for our peoples.

Rep. Ocampo is set to speak at the International Conference on the Cancellation of Illegitimate Debts on May 27-29. The conference is co-sponsored by the international non-government network Reality of Aid (ROA), of which IBON is the secretariat.

IBON international head and ROA project manager Teresa Lauron calls the order “pure and absolute harassment”. According to Lauron, “The DOJ order violates Rep. Ocampo’s constitutional right to travel, and it should be castigated for barring him from leaving the country without a court order.”

On Wednesday, DOJ Secretary Raul Gonzales rejected Rep. Ocampo’s clearance to travel and wrote a memo asking Executive Secretary Eduardo Ermita and the rest of the members of the Cabinet security cluster to bar him from going to Jakarta. Yesterday, the Cabinet Oversight Committee on Internal Security informed Rep. Ocampo of the travel ban.

According to Lauron, IBON sees no reason how Rep. Ocampo’s attendance in the debt management conference could affect the charges filed against him and the Batasan 5. She added that Rep. Ocampo will be traveling with administration congressman Eduardo Zialcita, who will also speak in the conference.

“Rep. Ocampo is a respected legislator and we are certain that he would continue to face whatever charges filed against him by the Arroyo administration,” said Lauron.

“Rep. Ocampo is an authority in Congress on the issue of debt management and his participation in the conference is significant,” she added. “We extremely regret that he would not be able to speak in the conference because of this unreasonable and illegal travel ban.”

Rep. Ocampo is scheduled to leave for Jakarta this afternoon. The House of Representatives and the Department of Foreign Affairs had earlier issued him a travel authority and travel tax exemption.

In the province of Bohol, a leader of a local organization opposing the construction of a dam under the ¥6.78-billion Bohol Irrigation Project Phase 2 funded by the Japan Bank for International Cooperation (JBIC) was ambushed in June 2005. The ambush was carried out allegedly by elements of the AFP which has been deployed in the project area to deal with the protesting communities. In the province of Pangasinan, the Philippine National Police (PNP) raided the houses of local leaders who oppose the construction of the San Roque Multi-Purpose Dam, which has funding from JBIC and other private banks worth $0.9 billion. The military has openly accused the communities near the project as supporters of the communist New People’s Army (NPA). Other areas with JBIC-funded projects are also heavily militarized thus making the affected communities more prone to human rights violations. (See attached annex to this statement.)   

Foreign donors of development assistance like Japan, which is the country’s largest source of ODA accounting for 49% of net ODA received by the Philippines in 2004, might be unwittingly funding such abuses. Under the National Internal Security Plan (NISP) of the Arroyo government, operations of the AFP are more systematically combined with the poverty alleviation/social development initiatives of civilian government agencies, some of which are funded by ODA. Meanwhile, an independent report by the human rights group Karapatan (Alliance for the Advancement of Human Rights) recorded a total of 150 victims of political killings in 2005 alone, of which 80 were confirmed activists while 70 were suspected by the military to be sympathizers, supporters, friends, or relatives of communist or Muslim rebels.

We are concerned that human rights abuses will worsen given the increasing propensity of the Arroyo government to resort to iron hand rule to maintain power amid the political crisis facing it today. Recently, President Arroyo issued Presidential Proclamation (PP) 1017 that placed the entire country under a “state of emergency.” PP 1017 was eventually lifted but not after six progressive legislators from the House of Representatives were ordered arrested, peaceful rallies violently dispersed, and a critical media outlet raided by the police. Such militarist mindset of the national government further emboldens the soldiers, police, and paramilitary units deployed in areas with foreign-funded projects to become less tolerant of opposition from affected communities, who can be easily accused of being a member or supporter of communist or Muslim rebel groups, and thus expose the common people to more abuse of their human rights by institutions that are supposed to protect them.

The Philippine Aidwatch Network thus strongly urges the members of the National Diet of Japan to:

1. Coordinate with the Arroyo government for the immediate investigation by an independent body composed of Japanese and Filipino officials, human rights groups, and non-government organizations (NGOs) of the projects funded by Japan’s ODA with reported cases of human rights violations;
2. Advise concerned funding agencies to immediately suspend funding for these projects pending the results of the investigation; and
3. Issue a statement addressed to the Arroyo government expressing alarm over these cases. 

We fervently hope that our appeal to the representatives of the Japanese people, whose taxes are being used to fund development programs and projects in the Philippines, will not be left unheard.

(The Philippine Aidwatch Network is a national network of non-government and people’s organizations that monitors and campaigns on foreign aid. It is a member of the Reality of Aid Network, the only major north/south international non-government initiative focusing on analysis and lobbying for poverty eradication policies and practices in the international aid regime.) 

download Annex

Arroyo alleges a “conspiracy” to bring down her government and targets those in the “political opposition,” “extreme left,” “extreme right,” and even the national media. Many say that Proclamation 1017 is baseless because the government itself claims it is in control of the situation.

We, the Reality of Aid Network, the only major north-south international non-government network monitoring poverty reduction and development aid, with over a thousand members across the globe, expresses deep concern over the consequences of Proclamation 1017 to the human rights situation in the Philippines.

With the killings and abductions of political activists and journalists still unresolved and unabated, we are alarmed that Pres. Arroyo may have given the police and the military the license to abuse the Filipino people’s rights by suppressing all forms of criticism and violating the freedom of speech, of the press, and public assembly. We therefore call on the Arroyo government to lift Proclamation 1017 immediately.

With the concern that military and development aid may only be used to intensify the attack not only against rebels but against unarmed civilians including leaders and members of legal people’s organizations, we also appeal to all foreign aid donors, especially the US, to stop the flow of aid money and other forms of assistance directly or indirectly being used by all units of the Armed Forces of the Philippines (AFP). The Philippines is the largest beneficiary of US military assistance in Asia and fourth worldwide, according to Arroyo. US Foreign Military Financing for the Philippines nearly doubled from $30 million in 2004 to $55 million in 2005.

We call on the US and all foreign donors, who provide military aid to the AFP or tie development assistance to the counter-insurgency campaign of the Arroyo government, to suspend such programs and projects. If donors genuinely intend to use their resources to help build lasting peace and stability in the Philippines, then they should not condone attacks on the human rights and freedoms of the Filipino people who are critical of the government and are perceived by the Arroyo regime as supporters of the insurgency movement.

The Reality of Aid Network
Manila, Philippines
March 2, 2006

A five-country study by international charities ActionAid, PDHRE and HIC-HLRN has revealed how, after the December 2004 tsunami, governments frequently ignored human rights principles and failed to protect survivors from discrimination, land grabbing and violence.

The report criticises official relief, compensation and rehousing programmes on a number of counts including forced relocation, shoddy construction, and neglect of the needs of vulnerable groups including women, children and ethnic minorities.

The study of more than 50,000 people, in 95 towns and villages, was conducted in November 2005. It found that in many places, survivors had been driven from land, cut off from their livelihoods, and denied food, clean water and a secure home.

Particular concerns are:

Land: ‘Buffer zones’ have been used to remove people from coastal areas on the pretext of safety. This has jeopardised the livelihoods of those who rely on the sea for a living. Governments have stood by or been complicit as land has been grabbed and coastal communities pushed aside in favour of commercial interests. At Manginpudi Beach village, Andhra Pradesh, India, residents were moved inland two kilometres from their original village, making way for new tourist resorts.

Housing: Overcrowding and inadequate lighting has left women and children exposed to abuse. Shoddy construction and lack of toilets and running water has resulted in disease and left people in inhuman conditions. At Namunaghar camp in the Andaman and Nicobar Islands, each family is allocated its own toilet, but they are one kilometre away.

Livelihoods: People displaced from their homes and land have been left with no means to earn a living. Employment initiatives by government had begun in only a third of the villages surveyed, none in India and Indonesia. Compensation programmes have ignored the needs of vulnerable groups including women, farm labourers and migrant workers. In Thailand, migrant workers without work permits have been unable to obtain compensation.

Women: Widows and other single women have frequently been denied compensation which has almost always been handed out to male members of the family. Housing design and location has ignored women’s needs, removing their privacy and security. “They put me in a temporary camp by the highway,” said Hermiani at Nyak Makam shelter in Indonesia, “men would come into the tent and ask for sex.”

Discrimination: Deep-rooted inequalities based on race, sex, ethnicity and legal status have been magnified by discriminatory policies and practices. Groups experiencing discrimination include Mokens (‘sea gypsies’) in Thailand, dalits in India and war-displaced people in Sri Lanka.

Miloon Kothari, UN Special Rapporteur for Adequate Housing and sponsor of the report, said: “Failure to immediately comply with human rights standards will deepen the human-induced tragedy already inflicted on the survivors of the tsunami.”

The report offers practical recommendations for governments and others responding to future disasters, but says it is not too late for governments, NGOs and affected communities to take action to protect the rights of tsunami survivors.

ActionAid’s chief executive, Ramesh Singh said: “Lessons from this report are for everyone involved in responding to disasters but it is governments who are ultimately responsible for upholding human rights. A major effort is required to correct the wrongs that characterise the first year of tsunami response. The report findings represent an opportunity to put things right.”

Notes to editors:

For more information contact Tony Durham, +44 (0)20 7561 7636, mobile +44 (0)7957 870314, tony.durham@actionaid.org

The report ‘Tsunami Response, a Human Rights Assessment’ can be downloaded from http://www.actionaid.org.uk/doc_lib/176_1_tsunami_HR.pdf 

Research was conducted in Thailand, Indonesia, Sri Lanka, India, and the Maldives.

The report will be launched at 13:00 EST on 1 February at an invitation-only briefing at the United Nations headquarters, New York. Watch the webcast of the briefing simultaneously or later at http://www.un.org/webcast

ActionAid International (www.actionaid.org) is a non-governmental organisation which directly assists more than 13 million of the world’s poorest and most disadvantaged people in 45 countries worldwide. It is actively involved in providing long-term assistance in six tsunami-affected countries: India, Sri Lanka,The Republic of Maldives, Thailand, Indonesia, and Somalia.

PDHRE, People’s Movement for Human Rights Learning (www.pdhre.org) is a non-profit, international service organisation that works with its network of affiliates — primarily women’s and social justice organisations to develop and advance pedagogies for human rights education and learning relevant to people’s daily lives in the context of their struggles for social and economic justice and democracy.

Habitat International Coalition (HIC) is an independent, international, non-profit movement of over 450 members specialised in various aspects of housing and human settlements. The Housing and Land Rights Network (HLRN, www.hlrn.org) as an integral part of HIC advocates for the recognition, defence and full implementation of the human right to adequate housing, which involves securing a place for all individuals and communities to live in peace and dignity.

The issue came to a head with the shocked outcry of donors when the government on 7 November issued its draft PARPA (Plano de Accao para a Reducao da Pobreza Absoluta 2006-9; Mozambique's PRSP) which said aid would increase from $889 million in 2006 to $1,044 million in 2008, but remains constant after that. Donors were upset and said they had stressed to the government that more money was available. But the Ministry of Planning and Development appears to have based its figures on the IMF cap, rather than money actually available.

The core of the debate, which has been going on for more than two decades, is that the IMF believes that aid can be inflationary. Since inflation is the worst possible sin, aid must be limited. But a recent study by the IMF itself of five countries in Africa, including Mozambique, argued that substantial aid increases can be controlled and need not be harmful (see article below).

The issue is expressed in arcane accounting terms. Mozambique's agreement with the IMF is set out in the 17 October 2005 "letter of intent". Mozambique is unusual in that the IMF puts a limit on what it calls "domestic primary deficit", which is the government's current spending and locally financed capital spending, less government revenue (from taxes, customs duties, etc). Government is committed to cutting this deficit from 4.5 bn new meticais ($225 million) in 2005 to 3.8 bn new meticais ($190 mn) in 2006. This is, in effect, the amount of budget support the government is allowed to spend, yet budget support is predicted to increase from $274 million to $308 million.

This effective IMF cap on budget support contradicts donor policy in two ways.

One is that the IMF is putting pressure on Mozambique to tax aid spending. If donors were to pay tax, this would count as government income and it could be spent. Bizarrely, if donors give the same amount as additional budget support, it cannot be spent. This is serious, because most donor countries have laws saying that aid cannot be taxed by the aid recipient, so there is no chance of donors paying tax.

The other issue is that the cap excludes donor funded projects. Now, many donors are trying to reduce the number of projects outside the state budget, and are anxious to switch from funding individual projects to having the spending in the budget and funded by increased budget support. Yet the IMF is pushing exactly the opposite way, saying it will accept an increase in projects funded by donors outside the state budget, but not an increase is donor-funded spending within the state budget.

The letter of intent is available on http://www.imf.org/external/np/loi/2005/moz/101705.pdf

and the draft of PARPA II on http://www.open.ac.uk/technology/mozambique/pics/d53720.pdf

IMF STUDY SAYS BIG AID INCREASES ARE OK

An IMF study released last August says that, contrary to IMF assumptions, low income African countries, including Mozambique, are able to manage significant increases in aid. A big increase in aid to Mozambique did lead to an increase in inflation, but this was brought back to a reasonable level, the study found, both by Bank of Mozambique actions and because fiscal expansion brought rapid GDP growth.

The study goes on to challenge one of the IMF's own most central articles of faith by saying that it seems that periods of higher inflation actually achieve real growth, and that this should be tolerated in order to keep the exchange rate from depreciating.

Aid volatility is the problem, it says, and low income countries can make good use of "significant increases in aid" if they are planned.

But it appears that the IMF team which negotiated the letter of intent with Mozambique last year had not read the institution's own study.

The study is "The Macroeconomics of Managing Increased Aid Inflows: Experiences of Low-Income Countries and Policy Implications, August 8, 2005" and is on http://www.imf.org/external/np/pp/eng/2005/080805a.pdf ]]> Joseph Hanlon Thu, 26 Jan 2006 19:00:00 +0100 http://www.realityofaid.org/publications.php The enlarged « quadripartite» group, that includes Algeria, Germany, Brazil, Chile, Spain and France, has been working since the beginning of 2004 on propositions for innovative development funding mechanisms, including international taxation mechanisms. . More than 100 countries signed on to the « New York Declaration on Action against Hunger and Poverty », in September 2004 signalling initial support from the international community for the idea of launching  such mechanisms.

In September 2005, 79 States supported the launching of a pilot mechanism in the form of a ‘solidarity contribution’ on plane tickets in a new statement titled the « Declaration on Innovative Sources of Financing Development ». France and Chile have already adopted a plane ticket tax, to be launched in 2006. The Paris conference on innovative mechanisms must be a new step in this process, by gathering together all the States which support this process.

In September 2005, a broad coalition of civil society organisations representing thousands of NGOs and citizens movement from all over the world called upon States to join this initiative. They also demanded that certain conditions be fulfilled for the initiative to truly raise finance for development. On the occasion of the Paris conference, these organisations reiterate their call in the following statement :

1- Support to governmental initiatives in favour of international taxation

We take note of this intergovernmental initiative to implement a pilot mechanism of international taxation for development funding. We welcome the involvement of Head of States and governments working on additional and innovative mechanisms, specifically on international taxes. This is because it would create a useful precedent, an essential step to launch and bring legitimacy to more ambitious taxation mechanisms of a universal scope.

Along with a considerable increase in Overseas development aid (ODA), debt cancellation, a revision of world trade rules and regulations, and the reform of International Financial Institutions, the implementing of international taxation mechanisms represents an important element to fund the MDGs. While generating new resources for development, it will also serve to improve the quality of the flows of international funds. Currently, the volatility of the ODA undermines the efforts made by recipient countries to set up sustainable development strategies. Financial resources that  are entirely concessional (grants), stable and predictable are essential to reach the MDGs.

Therefore, we call upon all the Heads of States and Governments to support this initiative, by endorsing the “Declaration on Innovative Sources of Financing Development” and to commit themselves to implement this pilot mechanism, in 2006.

2-Implementing genuine taxation mechanisms

However, the diplomatic strategy of the « quadripartite » group to rally a « critical mass » of countries to this initiative must not alter the proposed mechanisms. We are deeply concerned about the absence of fundamental principles in the declaration, without which this pilot mechanism can only very marginally contribute to the funding of the MDGs including :

• Resources should be raised by compulsory taxes and not voluntary contributions which negate the principle of an international taxation and prevent the new flows from being stable and predictable.

• The fixing of a taxation rate high enough to supply new and significant resources.

• The incremental nature of the tax (distinction between economy and business classes) must not be optional but compulsory to make the tax burden weigh as a priority on high income players.

• Stipulating the additional nature of the resources raised. They must not make the Northern States back away from their commitment to dedicate 0,7% of their GDP to ODA; instead, they must be considered as mechanisms that generate additional resources.

• A link between the nature of the resources (new, stable and predictable resources over the long term) and their allocation (production of global public goods and development of the human asset over the long term). The new mechanisms must be applied to essential actions and programmes for which there is the highest need for stable and predictable resources.

• A method of support that involves a three-fold responsibility: that of the United Nations (since it deals with the respect of universal rights), of Governments(since the responsibility for development lies in their hands) and of  civil society organisations (since it is people and communities who are confronted by poverty who are at the forefront in the fight against underdevelopment, poverty and contempt of human rights).

It is essential for all of these elements to be integrated in the pilot mechanism.

3- Affirmation of the need to implement an international taxation system

Our support to the launching of pilot mechanisms is set in the wider framework of calling for the implementation of a real international taxation system. We do not consider pilot mechanisms as mere innovative tools to fund development but as an embryo for global redistribution mechanisms. The UN report of 2005 on social development once again states that economic and financial globalization is increasing disparities and making the poorest populations ever more vulnerable. As a consequence the launch of innovative mechanisms must go hand in hand with the implementation of financial and fiscal regulations and solidarity. Taxes on the gains of the main beneficiaries of globalization (multinational companies, financial industries) and those that act against the general interest (environmental taxes) can be seen from this point of view as measures of justice.

We therefore ask the Head of the States and Governments involved not to content themselves with the launching of a pilot mechanism but to pursue their endeavour to implement more ambitious international taxation mechanisms and an international legislation to support them. Thus, we must continue to think of how to implement:

• An additional taxation system on the profits of transnational companies 

• Taxation of international financial flows by both a currency transaction tax and a tax on bond transactions

• Environmental taxes that namely target the players who widely benefit from globalization and whose activity negatively impacts the environment.. This is the case, as an example, of air and sea transportation. In the same way, there is the need to tax the behaviour of economic actors that produce particularly negative environmental externalities in terms of the destruction of natural resources or the emission of greenhouse gases.

Finally, efforts to collect new international resources must go hand-in-hand with the strengthening of national fiscal regimes that should remain the priority.  This requires a resolute fight against tax evasion, dumping and tax havens. We are grateful for the mention in the declaration of the fight again tax evasion, and we ask the ratifying States to commit themselves to much more ambitious objectives to this end. Tax evasion and tax havens leads to the loss of fiscal revenues running into hundreds of billions of dollars annually for countries in the Global North and South, consequently weakening fragile democratic processes in the countries of the South and that deprives their budgets of vital income. In this respect, opposite to what this declaration could lead to believe, the fight against tax evasion and tax havens is at least as much the responsibility of the countries of the North as of the countries of the South.

Contact :
Régis Mabilais, Coordination SUD (e-mail : europe@coordinationsud.org; tél. : + 33 1 44 72 87 13)

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