Developing countries told to ‘say no’ to donors that fail to address poverty reduction priorities

Developing countries should “say no” to foreign donors who offer funding for projects which fail to address national poverty reduction priorities, according to new research sponsored by the Commonwealth Secretariat.

The study, Learning from Experience, explores how the Poverty Reduction Strategy Initiative - a joint World Bank and International Monetary Fund programme launched a decade ago to improve aid effectiveness - has worked in practice in four countries: Bangladesh, Ghana, Malawi and Tanzania.

David Peretz, an independent consultant who co-authored three of the studies, said: “Donors like to have projects that they can have their own national flag on and photographs that they can show back home and say ‘this is something we did’.

“But the message is that development works when it is country led and owned so that donors need to co-operate with recipients. Developing countries need to take a strong lead in this – they have to provide leadership to make sure donors do co-operate.”

The research examines how, in each of the four case studies, poverty reduction strategies have been designed and implemented. It looks at the level of country ownership of the strategies, accountability, transaction costs and the alignment of partner support.

In Malawi, the study focused on the evolution of the country’s Poverty Reduction Strategy, which ran from 2002 to 2005, and the run-up to its successor, the Malawi Growth and Development Strategy (MGDS), looking at the whole process from the drawing up of documents to strategy implementation.

It found that “most donors have been willing - or at least say they have been willing” to follow the strategy as the framework for their aid work. But it also warned that the Malawian Ministry of Finance has not always been made aware of aid activities and that donors have sometimes been unwilling to switch support between different priorities.

Randson Mwadiwa, Secretary to the Treasury in the Malawian Ministry of Finance, reflecting on lessons learned in an interview with the Commonwealth Secretariat, agreed that aid which does not fit its “home-grown” strategy is “undesirable”.

He said the Malawi Growth and Development Strategy now “explicitly states” that all aid must be aligned. “The main thrust of the MGDS is to create wealth through sustainable economic growth and infrastructure development as a means of reducing poverty. This planning direction is a paradigm shift from previous strategies,” he explained.

“Development partners should respond to changing priorities within the national development strategy. This stance is communicated to the donors very clearly.”

Related News:

• Commonwealth Publications