Global Policy Forum

By Emad Mekay

Reacting to criticism from western countries that blame development agencies for the ineffectiveness of international aid, the World Bank on Thursday pinned the shortcomings on interminable red tape and lack of cooperation between donor nations.

Officials from the Washington-based bank, one of the world's largest development agencies, told reporters that if donor agencies, multilateral institutions, civil society and the private sector are serious about improving aid and reducing poverty, they must pool their resources - including their cash - and reduce the burden that they place on aid recipients.

Under the administration of U.S. President George W. Bush, Washington appears to be trying to reduce aid from the World Bank's cheaper lending facilities, the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), on the basis that their assistance is not improving the lives of millions of poor people around the globe.

Similarly, other bilateral donors have been cutting back their aid budgets and rethinking the importance and worth of foreign assistance altogether.

In response to this trend, the World Bank, which works in more than 100 countries and financed projects worth more than 19.5 billion U.S. dollars in 2002 alone, launched a number of initiatives to examine how aid can be used more effectively.

The bank argues that if the world wants to meet the Millennium Development Goal of halving global poverty by 2015, donors must improve coordination among themselves and sharply cut the innumerable documents and processes that they demand from recipient countries.

The appeal comes only days before a Feb. 24-25 meeting in Rome to discuss the issue.

Officials from 26 developing nations and representatives from the international aid community are gathering to consider ways to streamline their efforts to fight poverty in the world's poorest countries and to better manage the billions of dollars that flow as aid every year.

"We're going to have to change decades of past practices," said James Adams, vice president for operational policy at the bank.

"We can achieve that by reviewing our aid policies, procedures and practices and aligning them with a common approach that reduces the burden on the poor countries."

The bank says that the push for harmonization has been born of ''harsh experience on the ground'' with, too often, the impact of aid being watered down because it is delivered by ''multiple, high-cost aid boutiques''.

It argues that the large numbers of donors leads to an abundance of projects and poor coordination among them, and increases the load for recipients who must monitor and report on each initiative.

In one case in Vietnam, it took donors 18 months and the time of 150 government workers just to buy five vehicles for a forestry programme.

In Burkina Faso, where there are 1,500 donor-funded projects, the finance ministry, whose job is to audit and supervise aid projects, failed to keep pace because each donor wanted the ministry to file a separate report, even on some overlapping and co-funded projects, says the World Bank.

In Bolivia, three donor groups offering to finance the construction of a health ministry building found it so difficult to cooperate that they even considered each building one floor.

The Bank also says that the vast consultancy industry that has sprung up around aid delivery is worth a whopping four billion dollars a year in Africa alone - money that could be better spent on development directly.

But chief among the practical steps donors must undertake to fine-tune their work, the Bank says, is pool their funds through fewer agencies, a proposal World Bank officials say has met strong resistance from donor nations, concerned about their political pay-off from aid.

''It is one area that we've had a lot of problems with in the past because donors are reluctant to pool money into a central pool,'' said Damian Milverton, a press officer with the bank.

Such donors, he said, do not want to miss out on the public relations opportunities that project spending brings.

British International Development Secretary Clare Short previously voiced similar concerns about donors' attitudes, complaining that only one-half of aid money was being directed to the most needy Third World nations, particularly those in Africa, because it was instead used to advance foreign policy aims, to make public relations gestures, or to secure trade for the giving country.

The World Bank itself has been at the receiving end of relentless criticism from non-governmental organisations (NGO), which insist the bank is an expert in dispensing the red tape that poor nations find themselves wrapped in.

The civil society groups also charge that the bank's policies are counter-productive, benefit multinational and private sector companies through privatisation programmes, and remodel the economies of developing nations at the expense of the poor.

Loans from the bank and other agencies, they say, have trapped former colonial countries in a whirlpool of perpetual debt. Some groups say that no matter how effective aid becomes, poor countries will never advance when they pay rich nations nine times more to repay their debts than they receive in "aid".

The bank says that the challenge to reform aid delivery is intimidating given that there are now 63,000 aid projects worldwide, governed by a myriad of demands and procedures intended to protect each one.

Agencies that will attend the Rome meeting include U.S. Agency for International Development (USAID), the United Nations, and multilateral development agencies like the Asian Development Bank, the African Development Bank and the Inter-American Development Bank.

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