MDG Summit Keeping the Promise Will we? And if we do, will it be good enough? Rob Vos United Nations Policy Coherence for Development Paris, 1 October 2010

Main outcomes MDG Summit Reaffirmation of all MDG commitments and need coherence with other agendas (e.g. sustainable development, FFD) Reaffirmation of all MDG commitments and need coherence with other agendas (e.g. sustainable development, FFD) Support scaling up of successful policies: Support scaling up of successful policies: Importance of national development strategies and ownershipImportance of national development strategies and ownership Strengthened global partnershipsStrengthened global partnerships Follow up and improved accountability through ECOSOC and DCF and strengthening of monitoring systems Follow up and improved accountability through ECOSOC and DCF and strengthening of monitoring systems

National policy coherence for the MDGs Summit recommendation: Summit recommendation: Encourage all countries to design, implement and monitor national development strategies.Encourage all countries to design, implement and monitor national development strategies. Pursue MDGs in holistic and comprehensive wayPursue MDGs in holistic and comprehensive way UN to support in design national development strategies at country requestUN to support in design national development strategies at country request

MDGs and national policy coherence World Economic and Social Survey 2010: no one size fits all, but successful experiences suggest seeking coherence in terms of: World Economic and Social Survey 2010: no one size fits all, but successful experiences suggest seeking coherence in terms of: Broad approach to macroeconomic policies, main focus on full employmentBroad approach to macroeconomic policies, main focus on full employment Agricultural development is keyAgricultural development is key Adequate priority to infrastructure investmentAdequate priority to infrastructure investment Align macroeconomic policy incentives with industrial policiesAlign macroeconomic policy incentives with industrial policies Demands of sustainable development overarching in setting priorities for agriculture and industrial policies, infrastructure and energy developmentDemands of sustainable development overarching in setting priorities for agriculture and industrial policies, infrastructure and energy development Social policy itself needs to be coherent (universal social floor as basis)Social policy itself needs to be coherent (universal social floor as basis) No successful national strategy without enabling global environment (aid, trade, debt relief, technology transfer) No successful national strategy without enabling global environment (aid, trade, debt relief, technology transfer)

ODA: Summit Recommendations Recommit to the United Nations 0.7% aid target, implies roughly doubling of aid flows (via annual increments of $35 billion) by 2015 Recommit to the United Nations 0.7% aid target, implies roughly doubling of aid flows (via annual increments of $35 billion) by 2015 Deliver to priority country groups Deliver to priority country groups Deliver on aid effectiveness Deliver on aid effectiveness Expand development cooperation among developing countries Expand development cooperation among developing countries

MDG Summit recognized Gleneagles targets will not be met Expected aid shortfall in 2010 (in 2009 dollars): Expected aid shortfall in 2010 (in 2009 dollars): $20 billion for total ODA$20 billion for total ODA $16 billion for ODA to Africa$16 billion for ODA to Africa

Yet, at Summit UN Members committed to deliver 0.5% of donor GNI in ODA by 2010

HLPM reconfirms target of Aid to LDCs

Making aid more effective Some progress in: Alignment of technical assistance with country programmes Alignment of technical assistance with country programmes Untying of aid Untying of aid Strengthening of public financial management systems Strengthening of public financial management systems Less progress in: Donor use of recipient country systems Donor use of recipient country systems Predictability of aid flows Predictability of aid flows Reducing transaction costs of providing aid Reducing transaction costs of providing aid MDG Summit Outcome: Strong commitment to more budget support and less policy conditionality Strong commitment to more budget support and less policy conditionality Role of DCF in strengthening mutual accountability Role of DCF in strengthening mutual accountability

Aid effectiveness and MDG summit Some unresolved issues of incoherence: Some unresolved issues of incoherence: More earmarking of aid and more vertical funding versus need for more budget supportMore earmarking of aid and more vertical funding versus need for more budget support Additionality of aid for food security and climate (if not additional, the issue will be adequacy)Additionality of aid for food security and climate (if not additional, the issue will be adequacy) Role of innovative sources of financing in reforming the aid architectureRole of innovative sources of financing in reforming the aid architecture Alignment with other sources of financingAlignment with other sources of financing Role of aid in global rebalancing (net transfer problem)Role of aid in global rebalancing (net transfer problem)

Transfers flowing from poor to rich Back

TRADE: key MDG Summit recommendations Intensify efforts to conclude a development-oriented Doha Round Intensify efforts to conclude a development-oriented Doha Round Accelerate full implementation of DFQF market access Accelerate full implementation of DFQF market access Eliminate agricultural (export) subsidies (and all measures with equivalent effect) by end 2013 Eliminate agricultural (export) subsidies (and all measures with equivalent effect) by end 2013 Strengthen Aid for Trade Strengthen Aid for Trade

Large gap remains in providing duty free access

Agricultural subsidies in developed countries remain high Billions of US dollars Billions of euros As a percentage of OECD countries GDP Total agricultural support in OECD countries

Aid for trade increased 35 percent, reaching a record level of $42 billion

Some key coherence issues in TRADE Aid for trade versus NDSs and budget support Aid for trade versus NDSs and budget support Address inequities in Aid for Trade Address inequities in Aid for Trade Ensure DFQF market access is a win situation for beneficiary countries Ensure DFQF market access is a win situation for beneficiary countries Ensure Doha Round aligning of preference schemes is a win for all LDCs Ensure Doha Round aligning of preference schemes is a win for all LDCs Broader issues: see WESS 2010 Broader issues: see WESS 2010

DEBT SUSTAINABILITY: key MDG Summit recommendations Offer option of moratoria to countries affected by emergency situations Offer option of moratoria to countries affected by emergency situations Provide ODA in grant form to low-income countries Provide ODA in grant form to low-income countries Set up schemes of independent arbitration or mediation, or organizing ad hoc meetings of a debtor with its creditors Set up schemes of independent arbitration or mediation, or organizing ad hoc meetings of a debtor with its creditors Extend and re-open eligibility to participate in the HIPC Initiative Extend and re-open eligibility to participate in the HIPC Initiative Convene a multi-stakeholder expert group on sovereign debt workout mechanism Convene a multi-stakeholder expert group on sovereign debt workout mechanism

Countries in debt distress or at high risk of distress

Some key coherence issues in DEBT Financing of MDG strategies and debt sustainability Financing of MDG strategies and debt sustainability Additionality of debt relief to ODA commitments Additionality of debt relief to ODA commitments Sovereign debt workout mechanism with financial safety nets, compensatory financing, and new financial regulation Sovereign debt workout mechanism with financial safety nets, compensatory financing, and new financial regulation

Can the promise be kept? No major new commitments No major new commitments Commitments for global partnerships no tall order economically speaking; political will needs to be shown in actions Commitments for global partnerships no tall order economically speaking; political will needs to be shown in actions Taller order is moving towards sustainable rebalancing of global economy Taller order is moving towards sustainable rebalancing of global economy