Links for Thought 12

1) The Real Hamilton: What’s Not to Love?

A Bloomberg article that talks about Alexander Hamilton, one of the very early US Treasury Secretaries, and how his ideas to grow the US economy then wouldn’t be accepted by the mainstream economists and politicians today. It quotes what my Cambridge Professor, Ha-Joon Chang said about government intervention in the US then.

2) What is new about the BRICS-led New Development Bank?

An article on the Brazil, Russia, India, China, South Africa (BRICS) Development Bank. Nice to have another non-Washington Consensus-centred Multilateral Development Bank (MDB), but how “new” will the development ideas be?

3) Against Corruption: a collection of essays

Ah, the Anti-Corruption Summit held in London and chaired by the Conservative government has ended. The link i s a collection of articles by academics and world leaders on corruption, but in the neoliberal, new institutional economics version of corruption. The articles while pretty ok, fail to consider that some kinds of corruption do not inhibit ecobnomic growth and that anti-corruption methods have failed or reduced growth. The articles fail to include the works on institutional economists like Ha-Joon Chang or Mushtaq Khan.

4) The Central African Republic must be built from scratch

A Guardian Development article talking about the effects of conflict in the Central African Republic.

5) An age of choice
for developmentfinance

This Overseas Development Institute (ODI) report looks at the multitude of channels for development finance using case studies.

6) Offshore centres hit at US financial transparency ‘hypocrisy’

You also aren’t transparent, or in a known phrase, pot calling the kettle black. Ok, everyone hides their financial assets. How then to realy clamp down on “offshore” (or inshore then)?

7) New development thinking: rising powers and the role of business

An Institute of Development Studies (IDS) article on the role that Indian and Chinese businesses play in development.

8) Asian Infrastructure Investment Bank to cooperate with European Bank for Reconstruction and Development

If you are partnering with an established but slightly neoliberal regional development bank (RDB), then where is the “new” development ideas?

9) Unsustainable Development Goals?

Ngaire Woods writes about the enormous challenge of the Sustainable Development Goals (SDGs). I very much agree.

10) Closing Developing Countries’ Capital Drain

I know it’s an article from February, but Joseph Stiglitz always nails it, this time on capital drain.

New article coming soon (hopefully).

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The NSS 2015 & the SDSR 2015: The “Development” parts Part 3

Other developed-related points include the UK partnering with China for global economic movements and the development of Africa (paragraphs 5.74 and 5.75), an EU-led trade agreement to improve India’s economy. This again may be welcomed by many, but also reeks of capitalist-centred. neoliberal-type objectives. Dealing such commercial and economic links with China on the surface benefits both sides and draws China closer to the (market-centric) global economic arena (not that China requires it). This according to some Western-centric scholars like Patrick Porter, may be counterproductive to the so-called Anglo-American “Special Relationship” but that’s beyond the scope of international or economic development here. It remains to be seen what happens with China’s political economy, barring any such economic partnerships.Paragraph 5.80 gives a brief mention of helping Bangladesh fight poverty, but no detailed information how. Paragraph 5.83 says the UK will engage with middle-income and G20 member over green technology and education but that’s it.

A more important section comes in Section C, where the document indicates that the UK places importance on the United Nations (UN), especially since it is where the Millennium Development Goals (MDGS) and the Sustainable Development Goals (SDGs). The NSS and SDSR pledged to increase the number of UK personnel on UN Peacekeeping operations. Peacekeeping does help with development, but do not always drive a country towards the status of a ‘developed country’ (paragraphs 5.9.1 and 5.9.2). The next part states a old promise that has floating around for sometime: that the UK would “to build the inclusitivty of the IFIs’ membership and decision-making”. This has been a promise from not just the UK, but from many OECD states and major shareholders of the International Financial Institution (IFIs). The paragraph (5.9.4) gave the pledge that:

The International Monetary Fund agreed reforms in 2010 to enhance the voice of emerging markets and developing countries. The UK was one of the first members to make the statutory changes to put the deal into effect, and remains committed to its full implementation.

It remains to be seen if the UK follows through with this pledge. Still, it alone cannot elevate middle-income or emerging market economies to the ‘top’. It would require a combined effort of many other shareholders to give such states greater votes and/or voting power as well as a voice in IFI reforms and policy directions. Even if this succeeds, decisions by this new architecture won’t necessary be positive. The next small section looks at pledges for the G7 and G20 groups. Again, section 5.95 pledges global cooperation, but again most definitely to preserve the capitalist/neoclassical economics-centred/neoliberal order…

I’ll skip the rest of the sub-sections until 5.118, which states that “[the UK] will spend at least 50% of DFID’s budget in fragile states and regions in every year of this Parliament.” This focus on fragile states by the Conservatives isn’t new; the the previous Coalition government they pledged and spent 30% of their ODA on fragile states issues. A more comprehensive paper was released at the same time as the SDSR, titled UK Aid tackling global challenges in the national interest. (I’ll review this “White Paper” and topic in another post. For now, see stuff like this Center for Global Development article.)

I’ll stop here. This SDSR/NSS is really long….

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What’s ODA? It’s definition has been changed…

I was about to write Part 3 of the 2015 SDSR when

this news release appeared. In summary, the UK along with others Organisation for Economic Cooperation and Development Development Assistance (OECD-DAC) have altered the definition of Official Assistance (ODA). This is further detailed in by DAC members. DIFD’s news release provides an easy summary of some of the new definitions here:

*official aid can be used to support the military in fragile countries on issues that promote development, such as human rights and the prevention of sexual violence; this means the international community is better equipped to meet Global Goal 16 (of theSustainable Development Goals ) which calls for the stronger governance in developing countries to prevent violence and combat terrorism and crime

*tackling violent extremism is now formally recognised as a development activity; more than 90% of terrorist attacks occur in states with weak governance and poor human rights records

*donors are incentivised to work more with the private sector to boost economic development and create jobs in some of the world’s poorest countries.

My thoughts”

1) Yes, conflict and fragile states are an increasing issue for development agencies and practitioners. It ma sound welcome that ODA will now be considered ODA in military activities, but that comes as a huge U-turn for donors who see aid as development work, not for military purposes. The UK’s DFID was founded based on the principle that any UK aid would be only considered as development aid, not aid for military means. This was specifically noted in legal format through the 2002 International Development Act. But wait, ok, it says that ODA will be ODA now when the military is involved in the “prevention of sexual violence”. That may be development, but opening up the definition still could mean opening up for abuse, especially for other donors. (Hint, the USAID.)

2) Linking to the first part about conflict/fragile states, ODA will now be ODA if it curbs extremism. Again, this is a murky area–yes, extremism inhibits development. But calling finances to stop development could mean throwing money to projects that are for ad-hoc purposes and may just stop the action for a short term. It might further mean financial flows to groups that only prevent violence, not consider the eventual progression or development of the society or country.

3) Private sector. Well yes many donors have been focused on the private sector, especially since neoclassical economics and neoliberalism says the private sphere is the better way for development. DFID itself established a Private Sector Team for this purpose. Yes, the private sector do aid in development, but no, it is also susceptible to failure (basic development economics.) ODA now will be a financial boost for the private sector (I’m still not sure what is point is a bout). What about OOF (Other Official Flows?) And to take the Ha-Joon Chang argument, a focus on the private sector should not ignore the public sector or state.

ODA ‘s definition does need a change, but changing it opens up more questions, chief of which, is this really development?

More on this at a later time.

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The NSS 2015 & the SDSR 2015: The “Development” parts Part 2

Another also quite obvious development initiative proposed was to continue developing global or international development arena is brought up on page 48, paragraph 5.9 which states that the UK has and will continue to play a leading role in the Sustainable Development Goals (SDGs). The UK indeed has been the forefront on the successor(s) to the Millennium Development Goals, as seen in this UN High-level panel news release, this blog post by David Hallam and David Cameron’s speech to the United Nations General Assembly. It of course increases the UK’s political standing by being a leader in forming the SDGs, but it is the quality that counts.

This brings us to the the next paragraph, 5.10 which reads:

Our development programme helps to drive economic development and prosperity overseas, enabling a permanent route out of poverty while creating markets for future British business. Our assistance focuses on improving peace, security and governance; equality of opportunity for girls and women; access to basic services for the poorest; and building resilience to crises and responding to disasters when they occur. We promote the golden thread of conditions (own emphasis added) that drive prosperity all across the world: the rule of law, good governance and the growth of democracy.

The “golden thread” is a term that PM Cameron formed around 2012, whereby you only get real long-term development through aid if there is also a “golden thread of stable government, lack of corruption, human rights, the rule of law, transparent information.” In essence, only if you follow these strict rules, you will be able to improve your overall development. It sounds like a simple formula to follow but it also sounds like theWashington Consensus policies of the 1980s and early 1990s and the post-Washington Consensus policies of the 1990s such as the Poverty Reduction Strategy Papers (PRSPS). As my old Development Studies lecturer Ha-Joon Chang would say, the UK is a “bad Samaritan” and is “kicking away the ladder” (the route it took in (economic) development) for these developing countries. If the UK wishes to improve the global arena, it must diversify its “golden thread” and allow states with different local institutions to develop in their own time. (You can read more about Cameron’s “golden thread” in this
gGoogle thread, this House of Commons International Development Committee publication and Simon Maxwell’s articles .)

To Be Continued

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The NSS 2015 & SDSR 2015: The “Development” parts Part 1

Author’s note: Devex won’t accept this so here it goes…

So the much awaited National Security Review and Strategic Defence and Security Review 2015 is out. As the title(s) imply, it’s not just a military-centred document, but one that covers defence, foreign affairs and yes international development approaches.

The UK has a strong but not excellent record in the field of development since the formation of the Department for International Development (DFID). Continued by the 2010-2015 Coalition government and now the Conservative-led government, DFID is projected to be a key mechanism for the UK’s development and wider diplomatic efforts. The document gave a substantial amount of focus on development, particularly in Chapter 5. The first main open comes on page 48, paragraph 5.6. It reads:

We administer and fund the Chevening, Marshall and Commonwealth scholarship schemes through DFID and FCO, which create lasting relationships with the global leaders of our current and future partners. We will fund and administer approximately 2,200 awardsa year for young people of high ability to study in the UK through the Chevening, Marshall and Commonwealth scholarship schemes.

That’s an easy way to promote development; after all educating people from developing countries is a common route to development and sort of within Official Development Assistance (ODA) guidelines. Of course, scholarship recipients will still need to pay the Home Office a fee for Tier 4 visas.

Another major and well known point the review made in paragraphs 5.8 to to 5.11. These emphasise on DFID’s “enormous” aid budget, most-notably the 0.7% of GDP/GNI United Nations (UN) ODA target. It is a no-brainer to some that this percentage target is quite outdated. Nevertheless the term “0.7” appears 7 times in the whole document, especially in the foreword by the Prime Minister and it being mentioned in the the second paragraph of Chapter 1. While aid as “0.7 of [UK’s] GDP/GNI” is the phrase sine 2010, the document did give indications how this portion of aid would be utilised. With the title “A Secure and Prosperous United Kingdom” the document indicates that a good portion of aid would be used to address activities in fragile and and conflict states. This is mentioned in the PM’s foreword and the term appears around fifteen times in the document.

Fragile or conflict states have of course been a critical area of interests for donors and organisations. The Fragile State Index index gives a great picture of the range of extreme and possible fragile states. This move by by DFID is not new; they have, since 2010, made it a policy to spend 30% of ODA in conflict and/or fragiel states. DFID might have done that across the Coalition government years, but aid effectiveness from such aid projects is always questionable. The UK plans to increase the percentage of its ODA towards such states, so it is really dubious what impact ODA in those countries will achieve.

To Be Continued due to own schedule.

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My Guest Article on Europe Asia Security Forum

Take a look, read and comment please

My Guest Article .

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Links for thought 11

Haven’t done this series in a while so here we go:

1) Jin Liqun: From the lines of Lord Byron to AIIB’s corridors of power

A Devex article on Jin Liqun,the first leader of the recently created, non-Western dominated, non-neoliberal (hopefully!), Asian Infrastructure Investment Bank (AIIB).

2) DFAT’s International Development Minister

Although the old independent AuSAiD was merged with Australia’s Department for Foreign Affairs and Trade (DFAT), there wasn’t a specific minister for international development under Tony Abbott. Now with Malcolm Turnbull in charge, there’s a minister for international development and the Pacific, namely Steve Ciobo.

3) SDG celebration over, now the hard part begins

So instead of examining what went right and wrong with the Millennium Development Goals, the “world community” formed an even more complex set of goals called the Sustainable Development Goals. Everyone from the media-picked Malala to world leaders have welcomed it. Well, the fun is over. Implement them–if you can.

4) Are Mobility and Fragility Here to Stay?

Phil Vernon writes on mobility or rather migration and fragility, that is, unstable regions or countries.

5) Ha-Joon Chang mentioned

Not exactly a development-related article, but my old and great professor, Ha-Joon Chang is featured in this Telegraph article on the 11 types of professors you’ll meet in university.

6) 2030s and development then

The Deutsches Institut für Entwicklungspolitik (DIE) or German Development Institute has a series on note worthy articles on the SDGs and the world out to 2030

7) Does Africa still need the UN?

Nice BBC article on Africa and why the UN matters there.

8) CSSF bidding

Or rather, the constant news on what the UK’s Conflict, Stability and Security Fund (CSSF) is and nowit isan improvement over the old Conflict (prevention) pool.

9) Come on Senate confirm someone for USAID

With the talk of the SDGS, it is still amazing that up to now (October 2015), the US Senate has not confirmed anyone, or rather, Gayle Smith to be the next head of USAID. This key US aid department has still an acting administrator in charge.

10) Economy, Climate, no longer neoliberal in framework?

You be the judge in this speech by Christine Lagarde.

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