Perspectives on Geopolitics, History, and Political Economy

Between Tackling Fragility and Financing Development

Global Geopolitics and Political Economy Net – IDN InDepthNews

 

Photo: An overview of the High-Level Meeting, Credit: Robert Kibet | IDN-INPS.

By Robert Kibet

NAIROBI (IDN) – Providing financial resources to the more developed among the developing countries is a very difficult bias to overcome, according to Angel GurrIa, Secretary-General of the Organisation for Economic Cooperation and Development (OECD).

Gurria was speaking to IDN during the Second High-Level Meeting of the Global Partnership for Effective Development Cooperation (GPEDC) which ran from November 28 to December 1 in the Kenyan capital.

“There is a problem with the flows of money that include aid,” said Gurria. “Who’s better to spend it? A country like Kenya that has expertise and larger companies or a country that is very poor and underdeveloped? Those countries with a higher level of GDP per capita tend to attract more because they can have large projects and a greater spending capacity.”

At the Nairobi meeting, the OECD launched States of Fragility 2016: Understanding Violence, a report calling for more development aid to be used to tackle the root causes of fragility and instability.

Despite rising financial flows to the most vulnerable places, the report notes that the last decade has seen a rise in violence across the globe, interrupting a long trend of increasing peace.

As a result, says the report, “more development aid ought to be used to tackle the root causes of fragility and instability, including building legitimate and inclusive economic growth and ensuring the availability of basic services”.

With low and middle-income countries bearing a disproportionately high share of the burden of political and social armed violence, which often impedes development gains, Gurria said that this is mainly caused by a situation in which developing countries produce highly qualified intellectuals who cannot find a market that can absorb their expertise.

Analysis of multiple data sources shows that global violence is at its worst level since the end of the Cold War, with nearly half the world population, or 3.34 billion people, living in proximity to or fleeing the impact of political violence.

“If the challenges faced by these countries are not met, progress on combating climate change and achieving the Sustainable Development Goals (SDGs) will be stalled and millions of people will remain mired in poverty and conflict, the migration crisis will not be resolved, and violent extremism will continue to increase,” said OECD Deputy Secretary-General Doug Frantz, presenting the report.

According to Vitalis Meja, Coordinator of Reality of Aid Africa Network, there are push factors that must be addressed in countries in conflict, by helping them stabilise and develop inclusive and participatory structures to allow disenfranchised citizens to express themselves.

“Conflicts affect everyone, particularly for civil society organisations (CSOs). This tends to make actors in the CSO fraternity work on humanitarian rather than development issues in countries in conflict. The thinking is, should we, in scenarios where there is war, run away from the responsibilities to address fundamental issues that touch on creating stability and infrastructure?” he asked.

For Theresa Nera-Lauron, Policy Advisor at CSO Partnership for Development Effectiveness (CPDE), there is a need to universalise effective development cooperation.

“What does it mean for people being displaced with the construction of mega dams with the use of Official Development Assistance (ODA)? That has to stop. HLM2 had both political decisions and discussions, but at the end of the day, has it brought more food on the table? Has it secured a roof over our head?” she told IDN.

Defining fragility as the combination of exposure to risk in five areas – economic, environmental, political, social and security – and the insufficient capacity of the state or system to manage, absorb or mitigate those risks, the OECD estimates that more than 1.6 billion people, or 22 percent of the global population, live in fragile areas.

While the number of people living in extreme poverty is falling, the number of extremely poor people living in fragile places is set to increase to 542 million in 2035 from 480 million in 2015.

The report notes that while the global economic impact of violence has been estimated at USD 13.6 trillion for 2015, or 13.3 percent of GDP, only a tiny amount of development aid is invested in violence reduction outside of conflict situations.

Total financial flows to fragile places, including ODA, foreign direct investment and remittances, increased by 206 percent between 2002 and 2014 in constant terms to more than USD 2.04 trillion. ODA represents 32 percent of that total.

While ODA remains an important tool for fragile states, some of it tends to be unevenly distributed and targeted at the symptoms rather than the real drivers of fragility. [IDN-InDepthNews – 16 December 2016]

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