Who’s going to pay for the SDGs?

In July, Addis Ababa will host a crucial summit on financing for development. If September’s summit on sustainable development goals (SDGs) in New York is when governments will decide what they want to achieve on poverty and sustainability by 2030, Addis is where they must set out how they will do so.

There’s much to do, with a bewildering array of potential issues on the table – aid, trade, tax, the private sector, climate, sustainability and technology transfer are all possible focus areas – and too little clarity on what success would look like on each. Politicians are not yet feeling pressure to make serious offers.

Yet, if Addis disappoints, the fallout could be extensive. Prospects for achieving the SDGs – such as ending poverty by 2030 – would dim significantly. Frustration among developing countries could feed in to the September summit and the December climate summit, threatening a cascading failure that could damage prospects for international cooperation on defining global issues for a decade.

How can we avoid this scenario and ensure that Addis is a landmark?

First, there needs to be a clearer narrative on what the summit is for, that focuses on three or four core areas. At least one of these needs to be about politicalimpact, with a big story that leads the next day’s news agenda. In practice, this probably has to be about aid – even though it now accounts for only around a 10th of development finance.

Timetables for countries to give 0.7% of national income to aid are unlikely to work, given past promises: in 2005, 16 countries pledged to meet 0.7% by 2015, but only five have delivered. A pledge to give at least half of all aid to least developed countries, on the other hand, may cut more ice – but the politics look tough.

Other contenders could include a major push on addressing the “financing gap” faced by many middle-income countries, through scaling up official financing other than aid. And a strong focus on financing highly effective cash transfer schemes in lower income countries would go a long way towards ending poverty.

The Addis outcome could also help key “work in progress” agendas with longer term development impact.

One area where there’s plenty of buzz is the contribution the private sector can make – for instance, through scaling up foreign direct investment (the single biggest source of development finance), new public-private partnerships, or in key sectors like infrastructure. Less clear, though, is exactly how Addis may contribute.

Instead, a better candidate may be international tax cooperation – the most important thing that rich countries can do to help developing countries mobilise their own resources.

One step would be to spend more aid on developing countries’ tax administration efforts – an area with breathtaking rates of return. Faster progress on recovery of stolen assets from abroad is another priority for many developing countries, as is access to the automatic exchange of tax information that G8 and G20 countries have already agreed among themselves.

Above all, Addis could help close tax loopholes that allow multinational companies to report profits in tax havens – rather than where their workforces, assets or sales are. Country by country reporting requirements would be one important step; a unitary tax system would be even better.

Addis could put emerging issues on the development map by including these in the outcome document – even if the time is not yet ripe for agreeing concrete actions. It could put down a marker on the need to do more to tackle inequality, echoing the SDGs’ emphasis on the issue. Or, it could flag up the potential wins that would result from fair shares for developing countries in any future global emissions budget.

Most of all, Addis needs more agenda-setters to help its Norwegian and Guyananco-facilitators, and Ethiopian hosts, to champion its potential. UN secretary general Ban Ki-moon and World Bank president Jim Yong Kim could both do more. Germany and Turkey, hosts of this year’s G7 and G20 summits, could be key players too.

Addis needs more voices to make the moral case for why countries need to raise their game. Civil society has a crucial role here. And it may be that Pope Francis emerges as a leader, given his commitment to justice – and the fact that a papal encyclical on climate and development is expected soon.

Perhaps most of all, the summit will depend on commitments from finance ministers to attend (as IMF head Christine Lagarde has already done). They, far more than development ministers, have the power to unlock real progress.

Burkina Faso, Blaise Compaoré and the Secret of [Almost] Eternal Rule

My book The Ringtone and the Drum turned two last Sunday. Conveniently, one of the countries it covers, Burkina Faso, promptly had a revolution. Yesterday a great crowd of protesters set fire to parliament, invaded the state television studios, and may have succeeded in dislodging long-serving president Blaise Compaoré. It is still unclear who is in control in the country, with the army announcing the formation of a transitional government and the president inflaming the ire of the protesters and opposition parties by saying he will hang around to oversee it.

I wrote quite a lot about Compaoré and his ill-fated predecessor Thomas Sankara in the book (by this stage of my journey around West Africa I was too busy having a nervous breakdown to do much actual travel writing). Here’s an excerpt analysing how and why Compaoré and dictators like him cling to power for so long: Continue reading

Patching Up Nigeria’s North-South Divide

In the post-colonial period, African politics has tended to look something like this (as excerpted from my book on West Africa, The Ringtone and the Drum):

The French anthropologist Emmanuel Terray, drawing on his experience in the Ivory Coast, identified two distinct but parallel systems of government in Africa. The first is the world of the air-conditioner. This system, which is inspired by the Western style of government, gives off an impression of bureaucratic and technocratic efficiency. It is a world of presidents, constitutions, parliaments and laws, and speaks the language of democracy, development and modernisation. It pertains to certain places and certain hours of the day, to ‘office hours (as long as one defines these relatively flexibly),’ to government buildings made of cement and steel and glass, to presidential palaces and airports with VIP lounges, to ‘glorious official soirées in illuminated gardens.’ While the air-conditioner hums in the background, the leader, in his three-piece suit and tie and speaking in fluent metropolitan French or the smooth American burr favoured by Charles Taylor, announces grand development plans to his spellbound foreign backers: hydroelectric dams, a new motorway, airports, universities – the appurtenances of a modern state. He promises elections free and fair, and looks businesslike, not awestruck, when he takes his seat at the United Nations.

But much of this is display. As Terray observed, the principal function of the world of the air-conditioner is not to govern, but ‘to show, particularly to the outside, that the country works, that it holds rank in the concert of nations’ (recall the Sierra Leone government’s gift to Haiti’s earthquake victims, and its explanation that the country needed to play its part as a member of the international community). The serious business takes place not here, but amid a second world, the world of the veranda. This is a world of palavers under baobab trees, of sharing what you have, of the impenetrable African night, of obligations – personal, not bureaucratic, obligations – to your ancestors and your community; a world, at its most extreme, of human sacrifices in sacred forests. For our leader’s real concern is not democracy, nor the provision of services to his nation, nor that nation’s prosperous future. His real concern is in meeting his obligations to his narrow band of supporters, in feeding them in the here and now so that they will sustain him in power. This second system acts as a brake on the pride and greed of the Big Men, who are allowed to enrich themselves only if part of the material and political booty they accrue is generously redistributed. Like Gulliver tied down by the Lilliputians, Terray noted, the Big Man is ‘far from being entirely the master of his choices.’ As long as he produces the goods, the little people will sing his praises, vote for him, pass on rumours and render him other services. But if he fails to deliver, and to keep delivering throughout his time in power, they will jump ship. It is a tit for tat relationship, which requires the leader to be permanently on his toes.

Some countries may have moved away from this model in recent years; a few may even have been blessed with leaders who attempt to govern for all their people. On the ground, however, this is how African governments continue to be perceived – their reputation for cronyism has yet to be shaken off.

And perception is important. In Nigeria, which has been no exception to the above rule, the perception of many people is that the informal system of rotation of the presidency between northerners and southerners that had prevailed since 1963 has been broken. It may or may not be a coincidence that the murderous activities of the northern terrorist group Boko Haram, which some influential figures believe pose an existential threat to the country, ratcheted up after the accession to the presidency of Goodluck Jonathan in 2010. Jonathan, a southerner, succeeded the northerner Umaru Yar’Adua when the latter died after just three years in office. The informal rotation had hitherto seen the eight-year tenure of a northerner followed by a roughly similar period in charge by a southerner, but Jonathan’s victory in the 2011 election meant that by the end of his term southerners would have been in power for thirteen of the previous sixteen years. That he plans to run for re-election in 2015 has exacerbated northerners’ concern.

Northern Nigeria already lags behind the south. All ten of the country’s poorest states are in the north, school attendance is lower, and infant, child and maternal mortality rates are all much higher than in southern states. With a northern president in power in a patrimonial polity, northerners at least had the hope that they would have their “turn to eat” every few years. Without that reassurance, even in the unlikely event that the gulf between north and south does not continue to widen, many northerners’ perception is that they have been cut loose, and that the ‘material and political booty’ accrued by presidents will now be the exclusive preserve of southerners.

There are a number of measures that must be taken to quell the growing anger of the north, but in a country that threatens, as Foreign Policy magazine has recently put it, to ‘come apart at the seams’, political representation is among the most important. While it waits for leaders that govern for the many rather than the few, or for institutions that force them to do so, formalising the regular geographical rotation of presidents by enshrining it in the Constitution (thereby obliging the major parties to abide by it in putting forward candidates) may help narrow Nigeria’s north-south divide. In an ideal world this would not be necessary – leaders would take into account the interests of all their countrymen and distribute resources equally. But Nigeria is not an ideal world. The north-south divide has been accentuated by the long rule of southern presidents, and has helped bring about the emergency the country is facing. Formalising the rotation of the presidency is only a patch on a wound, but it may be a necessary one for northerners again to feel that they have a future as Nigerians.

Surprise! Aid flows are at a new all time high

So here’s a big surprise. Until last year, global aid flows were declining in the wake of the financial crisis – a trend that was widely expected to continue. But here’s what emerged when the OECD’s 2013 aid statistics came out last month:

Development aid rose by 6.1% in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of USD 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid.

An annual survey of donor spending plans by the OECD Development Assistance Committee (DAC) indicated that aid levels could increase again in 2014 and stabilise thereafter.

Admittedly, there are two important qualifiers here. One is that while aid may be at an all-time high in absolute terms, that’s not true for the arguably more important measure of aid as a proportion of donor countries’ gross national income: in 2013 they gave 0.30% of GNI, as compared to 0.32% in 2010 (and way lower, of course, than the 0.7% target).

The other point, flagged up by OECD Secretary-General Angel Gurria in his comments on this year’s statistics, is that the trend of falling aid to the neediest countries, especially in Sub-Saharan Africa (which saw a 4% real terms decrease against 2012), is still happening and appears likely to continue in the future. The new aid stats also show that donor countries only gave 0.09% of their GNI to least developed countries in 2012 – as compared to 0.10% the year before.

Donor countries have got to sort this out. While middle income countries now have access to a huge range of sources of finance for development – foreign direct investment, remittances, commercial debt, portfolio equity, and a vast increase in domestic resources from tax revenue and savings – that doesn’t hold true for low income countries, who are still highly reliant on aid. With the post-2015 agenda now about to move into the home straight, this is the year when donors need to set out a clear timetable for making good on their long-standing promise to give at least 0.15% of their GNI to least developed countries – and ideally go beyond it to 0.20%. And the OECD DAC’s High Level Meeting this December is the right moment to do it.

Can Empowered Cities Save Fragile States? My article on Lagos in the NYT

Lagos,_Nigeria_57991Nigeria is arguably the worst run of the world’s seven most populated countries. Despite earning hundreds of billions of dollars in oil revenue over the past decade, it is expected by 2015, by some calculations, to have the second-most destitute people in the world after India. But its largest city, Lagos, which until recently was known as one of the world’s most difficult cities to govern, seems to have turned a corner. As I argue in a recent article in the New York Times, one of the chief reasons for this better performance is the nature of incentives that elites and politicians face: Continue reading

After Afghanistan

In the latest of our #progressivedilemmas we consider what Labour’s approach to failing states should be.

2014 is the last year of British military involvement in Afghanistan and the end of a long phase of ‘nation-building’ efforts since 9/11. While David Cameron has unconvincingly declared ‘mission accomplished’, in reality the next Labour government will wrestle with an agonising set of dilemmas about the UK’s future involvement in stabilising failed and failing states. Iraq and Afghanistan cast a long shadow.