PROBLEM

Looking back it is ironic that 1991-92, the years of the UNCED negotiations, saw the high-water mark of development assistance, measured in constant dollars.  Since then overall aid levels began to recede, and have dropped sharply since.  By the 1997 UNGASS only four countries B Denmark, Sweden, Norway and the Netherlands B had met their 0.7 per cent of GNP target.   Development Assistance had fallen from US$60 billion to US$52.2 billion in 1996.  Although there was an additional US$4 billion through the Global Environmental Facility - one of the successes of Rio -  it amounted to less than US$1 billion extra a year. As it became more and more obvious that the developed countries were not going to provide the extra funds, negotiations become increasingly acrimonious as governments negotiated through other UN Conferences such as Cairo (1994), Copenhagen (1995), Beijing (1995), Istanbul (, Rome (1996) and Habitat (1996). By the time of UNGASS in 1997, developing countries were feeling that the developed world had not only failed to live up to the deal struck at Rio but failed to support what they claimed was so important - sustainable development.

For some developed countries the UNGASS meeting was a turning point as they recognised the need to reverse the decline. Moving forward requires a move away from grand statements to action towards realistic targets. Some countries have been able to grapple with this and are now reversing their decline in ODA: the UK has pledged to 0.3% by 2001 and then to increase again (up from 0.27% ,1998); Ireland has committed to reaching 0.45% by 2002 ( up from 0.31%, 1998);  Norway has committed to reaching 1% by 2001 (0.91%, 1998); Portugal has committed to reaching 0.7% by 2006 and soon to 0.36% (0.24%, 1998); Sweden has committed to reaching 0.73% by 2001 (0.71%, 1998); the Netherlands has committed to continue to give 0.8%; and Denmark has committed to continue to give1%.

Other key countries have not reacted to the need for fulfilling their UNCED promise. In particular, France where aid falls and the government merely commits itself to ‘a high level of public aid’ (0.41% GNP), Germany where it had been hoped with the new government aid would be increased the mid term financial plan shows further cuts (0.26% GNP), the United States which only gives .10% GNP and Japan where aid has fallen to 0.28% GNP.

Collectively , the OECD countries have reduced their ODA to  0.23 per cent of GNP(1). The 1998 figure in fact does represent a halt in the decline as Aid rose by $3.2 billion or 8.9% in real terms, with the four largest donors (in volume terms) Japan, US, France and Germany still decreasing their Aid.

 Disbursements from the Multilateral Development Banks and Funds have held their own, at the same time, there have been many new claimants to these resources.  In 1992 the countries of Eastern Europe and the former Soviet Union were not significant borrowers or donors.  Nor was South Africa.  Furthermore, increased priorities in the Middle East can be envisioned with the peace process continuing (2).  These additional requests for resources have contributed to the feeling that the developed countries are not serious about sustainable development.

As a result, there is a pervasive sense of betrayal among all parties.  The G77 nations feel that a promise for financial help was made and broken.  Leading spokespersons for nations of the South have warned against ‘backtracking’ and ‘lack of political will’.  The countries of Eastern Europe and the former Soviet Union (countries in transition) who were going through the changes during the preparatory process for Rio feel that they were left out of the Rio process altogether.  The industrial countries feel there was a commitment by all participants to adopt certain policy changes to promote sustainable development and to improve the use of existing financial resources, which is not being kept (3). These all contributed to the need for a new forum to address these issues and this is why the NGOs put forward the Inter Governmental Panel on Finance in 1997.(4)

Wholly apart from the question of the overall levels of ODA is the issue of how much of the current ODA flows are being used for sustainable development.  Another of the reasons why NGOs wanted an Inter Governmental Panel on Financing Sustainable Development was to be able to keep track of how much ODA is used for the commitments of Agenda 21. Statistics are not collected in many of the necessary categories(5).  Had this data been tracked statistics would have shown a lack of information available in many categories regarding sustainable development.  We still need to set up a proper monitoring system to track ODA financing for sustainable development. Therefore there would have been the need for the setting up of proper monitoring processes. While the OECD are working to correct this, at present their statistics assume that all ODA is devoted to sustainable development.  Moreover, the majority of technical co-operation is excluded from the key compilation(6).  And although the OECD Working Party on Statistical Problems claims that support for environmental projects has risen, a study of trends in funding for biological diversity conservation found no evidence of an increase, despite the formation and replenishment of the Global Environmental Facility (7).  Finally, the all-important question of the quality of aid bears on how to measure the ODA shortfall; but this issue is far beyond the scope of this paper.

THE WAY FORWARD

The CSD should:

•  reaffirm UNDP’s mission to support the eradication of poverty and that donors should be asked to focus UNDP funds to this.
• require governments to reaffirm commitments to 0.7% GNP or a substantially higher percentage of GNP for ODA;
• require target dates for increasing ODA, particularly from Japan, Germany, France and the United States;
• should require a yearly review of governments’ implementation of their financial commitments to Agenda 21;
• instruct the Division on Sustainable Development to produce a review of the costs of implementing the CSD agreements from 1997 to 2000 for CSD2001. In this review governments should report on the funds being spent on the CSD programme areas and identify new and additional funds that have been made available.  This should be part of the preparation for information for decision making and participation in international cooperation for an enabling environment;
• instruct UNDP to conduct a comprehensive economic, social, cultural and environmental review of the impact of multilateral and bilateral donor programmes on eradicating poverty and implementing Agenda 21 in the Earth Summit process since 1992. This should form the basis of the Human Development Report in 2001.

REFERENCES

(1) The Reality of Aid 2000, The World at a glance p4, London 1999, Earthscan
(2)  Nineteen nations reached agreement in 1996 to establish a new Middle East and North Africa Development Bank.
(3) See, for example, proceedings of 'Financing Sustainable Development into the 21st Century', a series of NGO-government panel discussions at the UN Commission on Sustainable Development, sponsored by the UN Environment and Development Committee-UK Committee (UNED-UK) and National Wildlife Federation of the US under the auspices of the CSD NGO Steering Committee (1996-97, in manuscript); and 'CSD Expert Finance Meeting Produces Menu of Financial Options', Third World Network, 16 February 1994.
(4) See, Towards Earth Summit 2002, http://www.igc.org/csdngo/es2002/es2ngo.htm
(5) See, for example, proceedings of ‘Financing Sustainable Development into the 21st Century’, a series of NGO-government panel discussions at the UN Commission on Sustainable Development, sponsored by the UN Environment and Development Committee-UK Committee and National Wildlife Federation of the US under the auspices of the CSD NGO Steering Committee (1996-97, in manuscript); and ‘CSD Expert Finance Meeting Produces Menu of Financial Options’, Third World Network, 16 February 1994.
(5)  OECD ‘Official Development Assistance Data’ Review of the DAC Statistics, Reporting on the Purpose of Aid, OECD DAC Working Party on Statistical Problems, 1996.
(6)   ‘New and Additional? Financial Resources for Biodiversity Conservation in Developing Countries 1987-1994’, Royal Society for the Protection of Birds, UK, 1996, pp. 8, 13-16.