Aid has diminished
Editorial
"In the past five years, there has been a continuing decrease in amounts available for Official Development Assistance, which is now close to historic low levels. ODA is now just hovering under forty billion US dollars, inclusive of bilateral and multilateral aid. At the same time, foreign direct investment is as high as 250 billion US dollars annually. The vast movement of capital and technology that characterizes globalization in thus leading to a situation where developing countries stand to benefit far more from private sector investment than they do from official development assistance. But the fact is that this foreign direct investment is not equally distributed among all developing countries. Indeed, the bulk of FDI goes to a limited number of high growth developing countries, while the majority of countries in the Third World have to make do with only some 3 per cent of the total. In fact, 80 per cent of FDI is concentrated in 12 developing countries. The focus of international cooperation has shifted dramatically to mutual gains, away from solidarity. The term "solidarity" as you know, describes the foreign aid that countries provided, after World War Two, as part of their foreign policy objectives. And there are no prospects for a change in this dynamic. This has to be clearly understood, this dynamic will be with us for some time to come." Speaking at the Foreign Service Institute on a recent visit Ms Elena Martinez, Assistant Administrator Director UNDP - Latin America and the Caribbean went on to say that UNDP core funding had fallen substantially mainly due to competing priorities for donor funding such as peace-building, emergency relief and redirecting aid flows to bilateral rather than multilateral programmes. As a result, UNDP had to become "more results oriented and able to document these results in a manner that is transparent to all." UNDP would be adopting a business plan and "this introduction of a series of instruments to produce and document results is also the policy of other international development agencies." Development assistance will be reduced and there will be an effort to co-ordinate the work of various donors. After discussing a likely change in the focus of aid Ms Martinez highlighted three areas for consideration by Guyana. First, the need to strengthen the capacity to access foreign assistance and to make use effectively of this declining resource. Secondly, the need for a stable and secure political environment which would help to attract foreign investment. A vibrant civil society could play a part in this and a crucial element, she suggested, is the achievement of social and political inclusion. Finally, there was need for a strong domestic private sector and an enabling environment of laws and regulations to facilitate investment. The message is a serious and ominous one. More money for Kosovo and East Timor and various emergencies, less for traditional aid. Globalisation means an increased emphasis on private investment. There are going to be some losers and unless it gets its act together Guyana will be among them. The need is for better government, a stable political environment and a stronger private sector. The general message is not new though the figures are striking. What the development institutions can do, as far as that is possible is to help governments to fashion imaginative programmes that focus on avhieving these objectives. In the case of Guyana the National Development Strategy is in the final stages of revision by a broad based non-political group of skilled Guyanese. Perhaps that can become the template by which programmes are measured in future or into whose parameters they must fit. And civil society, in all its manifestations, must play an increasingly public role in putting forward rational and constructive ideas.
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