Millstone or Milestone? What rich countries must do in Paris to make aid work for poor people...

At the start of March, international development ministers from the worlds richest countries will gather round the table in Paris to identify the actions needed to make aid work for one billion people living in extreme poverty.

Two years ago in Rome, these same countries made a series of commitments to reform the aid system, and transform it into an effective instrument of change. But instead of celebrating progress, they will be confronted by the results of two years of inaction.

This is a sorry tale of muddle and hypocrisy, dithering and stalling, with the worlds poor cast unwittingly in the role of fall guy.

4 examples: Less than half of aid gets spent in the poorest countries, and only 10% gets spent on basic services that are critical to achieving the Millennium Development Goals; 40% of aid continues to be tied to overpriced goods and services from the donors; own countries 80 official agencies are responsible for 35,000 aid transactions a year that are imposing a massive administrative burden on some of the poorest countries.

Aid conditions continue to impose donor blueprints, such as trade liberalisation and privatisation of essential services, with often devastating results for poor people

The lack of progress since Rome raises fundamental questions about the commitment of rich countries to the 2015 Millennium Development Goals. Without aid reform, these goals will not be met, and the ambitions of major donor countries to use 2005 as a turning point in international development will be jeopardised.

Yet the script can read differently. In Paris, the donor agencies have the opportunity to make the OECD-DAC High Level Forum a milestone in international efforts to eradicate poverty, rather than a millstone for the world??s poor.

To make aid an instrument of deep and lasting change, donors must agree to do some simple things to improve its efficiency and accountability.

First and foremost, they need to spend aid where it is needed, on poverty reduction, rather than channel it to their own consultancy and infrastructure industries, and geopolitical allies. Cutting the red tape and intrusive conditions that accompany aid, using countries?? own systems and procedures, delivering what??s promised on time, and practising what is preached about transparency would together transform the impact of aid on poverty. The need for these changes is well understood. So far, it is political commitment rather than analysis that has been in short supply.

To deliver these changes, ActionAid and Oxfam are urging the donors agencies gathered in Paris to act on the following three key recommendations:

1. Make Aid accountable Adopt ambitious targets for improving aid quality Hold an annual international meeting of donors and recipients to review these targets Create an independent UN commission on aid effectiveness

2. Make Aid Effective Untie all aid, including food aid and technical assistance Use countries?? own systems and systems to build capacity End intrusive policy conditions

3. Reform the Aid Architecture Allocate aid according to poverty reduction criteria Cut transaction costs by harmonising procedures Identify structural reforms to aid The public response around the world to the Indian Ocean Tsunami demonstrated that people care, and believe aid can make a positive difference to poor countries?? development prospects.

However, the Tsunami response has also cast a spotlight on the effectiveness of that aid, and raised critical questions about whether it is benefiting poor people on the ground.

At Paris and through 2005, this will be the test against which rich countries?? development commitments are measured, not least by poor people themselves.

If the international development goals are going to become a reality, donor half measures and excuses need to stop, and action needs to begin.

See the complete Report in: http://www.oxfam.org.uk/ what_we_do/issues/debt_aid/downloads/aid_millstone.pdf

Jose Parreira Http://archive.aiesec.ws/joseparreira.aiesec.ws/