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Debt Relief, Aid and Trade Should be Complementary for Effective Assistance to Developing Countires

22 September 2005

"All countries must fully engage in the process of achieving the MDGs through country-owned development strategies based on good governance, partnerships, sound policies and effective institutions."

The impact of official development assistance (ODA) for poverty reduction in developing countries is often limited by donor countries' trade and investment policies, according to a Civil Society Statement on Delivering the MDGs that was presented to Commonwealth Finance Ministers at their meeting in Barbados on 19 September 2005, for their consideration.

The statement, prepared by more than 50 civil society representatives from the Commonwealth, said: "The lack of an equitable global trading and financial system continues to hamper progress on the Millennium Development Goals (MDGs). Debt relief and cancellation are inadequate on their own and need to be accompanied by corresponding measures to address trade imbalances; if developing countries do not benefit equitably from trade regimes and protocols, and if these do not have development and poverty reduction at their centre, achieving the MDGs may remain a challenge. Current proposals for debt cancellation need to go deeper and wider to include all countries with unsustainable levels of debt in need of relief."

Commonwealth civil society representatives have recommended in their statement that debt relief should be in addition to rather than a substitution for other forms of aid. It noted that "the MDGs should sit at the heart of the entire aid and development system, which itself should be situated within the framework of a rights-based approach to development."

The civil society representatives called for stronger partnerships among government, the private sector and civil society to promote development and poverty eradication. They also advocated that the MDGs should be integrated into national planning and resource allocation, with long-term strategies devised to prepare national economies, and agricultural sectors in particular, to face global competition. They urged donor governments to address issues including the "lack of predictability of [aid] flows; emphasis on technical assistance and emergency relief, rather than investment, long-term capacity and institutional support; tying of aid to donor country contractors; lack of donor co-ordination and the overriding influence of geopolitical concerns in establishing funding priorities."

Many Commonwealth countries, it was noted, face policy formulation and implementation challenges to their efforts to achieve the MDGs, and many of these countries need development partners to improve, harmonise and align their support behind national strategies and to do so with substantial increases in ODA.

The civil society representatives stated: "All countries must fully engage in the process of achieving the MDGs through country-owned development strategies based on good governance, partnerships, sound policies and effective institutions."

Their statement also emphasised the need for governments to address HIV/AIDS not just as a public health concern, but also as a development issue because of its impact on human resources for the affected countries' long-term development prospects.

CNIS - Commonwealth News and Information Service Issue 253, 21 September 2005