- With changing priorities, development actors must adapt
- Crises, geopolitical shifts challenging aid system
- Modernise business models, financial management practices to align strategies, budgets and delivery
- Support locally led transformation in partner countries
- Challenges also offer a window of opportunity for change
- Leaders of LICs and LMICs should take ownership of their countries’ health policies and programmes – Dr. Olusoji Adeyi
At the 60th anniversary edition of the OECD Development Co-operation Report 2023 in February, stakeholders take stock of challenges and propose ways forward along four lines of action. These include to unlock progress delivering existing commitments; support locally led transformation in partner countries; modernise business models and financial management practices; and rebalance power relations in international decision making and partnerships. LOUIS ACHI reports
The recent launch of OECD Development Co-operation Report 2023 -Debating the Aid System – in February, high-level government representatives, leaders of multilateral institutions, development agencies, civil society, experts and authors converged, debated the aid system and discussed how the OECD can help the international community to boost the relevance and impact of development co-operation.
The report draws on insights from heads of state, leaders of international organisations, practitioners, academia and civil society, with particular emphasis on voices representing the diverse experiences and perspectives of low- and middle-income countries and their populations.
The objective of a better world for all seems harder to reach, with new budgetary pressures, demands to provide regional and global public goods, elevated humanitarian needs, and increasingly complex political settings, it noted.
According to the report, critique of the roots, rationale and operations of the international aid system is resulting in calls for fundamental change, manifesting, for example, in the movements to address colonial legacies and racism in the sector.
The report’s executive summary accessed by Africa Health Report, AHR, observed that “amid overlapping crises and unprecedented strain on aid budgets, development actors are being called on to adapt their policies, strategies and partnerships in a spirit of global solidarity and burden sharing.”
The Development Co-operation Report 2023: Debating the Aid System also noted that “debates are crystalising around the need for a fundamental rethinking of the international development system – the mandates, drivers, capacity and coherence of traditional and emerging actors – and feeding into urgent new discussions about scaling up and optimising the allocation of official development assistance (ODA) to reach goals.”
Drawing on diverse contributions from all regions, the 2023 report took “stock of opportunities and challenges confronting the aid system and presents concrete ideas for action for keeping development co-operation relevant and impactful amid daunting challenges.”
As it were, themes, ideas and proposals were cobbled in the overview, which proposes the following ways forward:
- 1.Deliver existing commitments and unlock progress
- 2.Support locally led transformation in partner countries
- 3.Modernise business models and financial management practices to align strategies, budgets and delivery
- 4. Rebalance power relations and find common ground for partnerships.
Under three key headings, the report addressed the core challenges and opportunities – as follows:
Crises and geopolitical shifts are challenging the aid system but also opening an opportunity for it to change
The political economy of aid is changing. Protracted crises have aggravated global instability, hunger, extreme poverty and fragility. Geopolitical shifts raise new challenges for development co-operation. On the one hand, pressure is on the development community to use the unique influence, relationships and financial flows at its disposal to contribute to security goals or create new trading relationships.
On the other, calls are growing for development co-operation to meet the immediate needs of the most vulnerable while also tackling today’s complex challenges, such as climate change and pandemic preparedness and mitigation.
Moments of challenge also offer a window of opportunity for change. The ways in which funding relationships can perpetuate aid dependency are also being recognised, and an increasing emphasis is being placed on support to regional and global public goods as an alternative way to build resilience.
The weakness in the international financial architecture revealed by successive crises has led to a number of ideas for its reform – for example, the Bridgetown Agenda and calls for multilateral institutions to increase their level of risk and improve their ability to enable solidarity, in particular through the reallocation of International Monetary Fund special drawing rights.
Staying relevant requires delivering on past commitments and responding to new calls for change
Against this backdrop of crisis and reflection, development co-operation providers can pursue two strategic avenues: delivering on past commitments and responding to new calls for change. Over time, the aid community has made commitments and agreed on good practices that, if effectively implemented, could maximise ODA in this context of constrained budgets.
Delivering on financing commitments, for example, will be particularly important in light of the pressures to finance expenditure on global public goods and respond to new crises. Delivering on the promise to maximise the collective impact of DAC members’ ODA would decrease transaction costs for partner countries, enhance economies of scale, better focus ODA budgets on addressing needs, and help balance humanitarian interventions and long-term development impact.
Cultivate new institutional capacities to rebalance power dynamics. Create a stronger evidence base on outcomes. Allocate larger proportions of financing to local organisations. Value the contribution of local researchers and forge stronger partnerships with entities based in the Global South.
With priorities changing, development actors must be more agile and adaptable
Recent crises and wider shifts have transformed the priorities of developing countries. In Africa, for example, the focus is now on productive transformation as a source of growth and resilience. The sudden increase in poverty has re-engaged actors around tackling its root causes. Leaders across developing countries identify a lack of progress in job creation and government accountability as key areas where external support would add significant value.
Some priorities are shared across developing countries; others are highly context-specific. Development co-operation providers, therefore, are facing the complex task of aligning with local priorities and complementing local reform efforts while also identifying sectors in which they have more or less of a comparative advantage and respecting the right of developing countries to draw support from multiple partners.
National development plans can help articulate country priorities and, despite their complexity and vulnerability to capture by various interests, strengthen development co-operation by encouraging context-specific approaches. Importantly, some national development plans also highlight the global causes of domestic developmental challenges.
As such, they are used as mechanisms to localise global agendas like the Sustainable Development Goals. Development co-operation providers can support this growing alignment between global and local goals by putting a greater emphasis on policy coherence for development.
Transitioning Out of Aid Dependency in Health – Olusoji Adeyi
In his contribution to the OECD’s Development Co-operation Report 2023, titled “Transitioning Out of Aid Dependency in Health,” Dr. Olusoji Adeyi, focuses on the critical issue of development assistance for health and its contribution to impressive health gains over the years but did not fail to note the trend has also perpetuated fragile health systems and dysfunctional institutions in developing countries.
Olusoji Adeyi, MD, MBA, DrPH, is President, Resilient Health Systems Washington, DC. US and Senior Associate, Johns Hopkins Bloomberg School of Public Health Baltimore, MD. He is also the author of “Global Health in Practice: Investing Amidst Pandemics, Denial of Evidence, and Neo-dependency.”
In his words: “The architecture and incentives of development assistance for health have led many countries to underfund basic health services in their own budgets and become overly aid-dependent. Aid dependency can diminish country ownership over health policy priorities and service delivery.
“The COVID-19 pandemic has shown the perils of overdependence on external sources of finance and distant suppliers for critical health needs. Shifting aid to financing regional and global public goods rather than basic health budgets would generate greater added value, increase the accountability and ownership of health expenditures, and rebalance the power relationship between the Global South and Global North for the benefit of all.”
In his key messages, Adeyi observes that “Since 2000, development assistance for health has accounted for a growing share of overall expenditure on health in low-income and lower middle-income countries. In the same period, government’s share of expenditure on health in low-income countries fell.
“To achieve global health goals, development assistance for health should be transformed so that developing countries pay for basic health services from their own resources and development co-operation partners focus on boosting investment in regional and global public goods.”
According to him, the ambitions of the global health agenda supported by development assistance for health (DAH) are lofty, including universal health coverage by 2030, achieving global health security and building human capital.
“At first glance, these seem rational considering recent progress. For example, several dimensions of aggregate health outcomes have improved since 1990, albeit with variations across and within regions and countries. There has been striking progress in reducing child mortality, with rapid declines and narrower gaps between high-income countries (HICs), low-income countries (LICs) and lower middle-income countries (LMICs),” he notes.
He however holds that to the extent that DAH partly financed technologies that contributed to this progress, it must be seen as a net positive, with results that should make both financiers and recipients proud.
Adeyi persuasively argues that “the broader global health landscape, however, gives cause for concern: severe weaknesses in health systems; dysfunctions in multilateral and bilateral forums and inequities in access to life-saving diagnostics, vaccines and therapeutics.
“These overlapping challenges converged during the COVID-19 pandemic which also highlighted how dependent many LICs remain on development co-operation to fund basic health services and commodities. The current approach to development finance for health in developing countries is in part responsible.
According to the President, Resilient Health Systems Washington, DC, the persistent dependency on development assistance for health, and countries’ tendency to use it as a substitute for health commitments in their own budgets, point to the need for donors and recipient countries to adopt new relationships around health financing.
He however concedes that “This is not a call to reduce or end this assistance but to repurpose it in ways that build developing countries’ self-sufficiency and local accountability while boosting investment in global and regional public goods.
“This approach would mean that developing countries pay for basic health services from their own resources and according to their own priorities; that strategic decisions for the Global South are made by the Global South at regional or country level; that recipient countries are not bound to using aid dollars to purchase goods and services from donor country suppliers; and that the Global South develops its own network of institutions and expertise for health security, resilient health systems and locally sustainable financing.
“This transformation would also help achieve the global health goals of the 2030 Agenda for Sustainable Development.”
In his prescriptive transitioning to more equitable and locally accountable health, Adeyi goes ahead to outline four dimensions along which the purpose, architecture, incentives and power dynamics of DAH should evolve. Though recognising the challenges are daunting, he holds that there is a compelling case for transformative changes in development assistance for health. The solution, he states, lies in a deliberate transition from the current system to one that is fit for the 21st century.
These dimensions include: Shift aid from basic health services to global and regional public goods by 2030; Shift strategic decision making to regional- and country-level forums; Stop conditioning aid on buying products and services from the donor country; and Strengthen health expertise and supply chains developed by and for the Global South.
He elaborates: “Assistance should shift to addressing global and regional threats to health and where it has the greatest potential added value. Based on recent estimates for country-specific functions, this shift would mean repurposing up to 76% of current development assistance for health.
“Ending DAH for basic health and inputs – including items such as those on the WHO List of Essential Medicines and Diagnostics as well as maternal health services, childhood vaccines, insecticide-treated bed nets for malaria and routine supply chain management – is an essential part of the transition.
“These inputs and services are elemental, necessary, cost-effective and routine, and the need for them is generally predictable. Financing these should thus be the primary responsibility of each individual country and not dependent on charity from outside.”
Fleshing out his position on shifting strategic decision making to regional – and country-level forums, Adeyi recommends that “Leaders of LICs and LMICs should lead and take ownership as the principal decision makers about their countries’ health policies and programmes.
“National medium-term expenditure frameworks – not the preferences of international financiers, foundations and bilateral aid agencies – would then drive country budgets. This would help make leaders of LICs and LMICs accountable and responsible for the consequences of their actions and inactions.
“The premise of this shift is that economic development, including health, cannot happen without some variety of compact between the government and the governed and the recognition that it is impossible to develop someone else’s country from the outside.”
His third and fourth dimensions addressed the imperative of stopping conditioning aid on buying products and services from the donor country and strengthening health expertise and supply chains developed by and for the Global South
His words: “Development assistance for health should no longer be tied to services and products from the donor country, and bilateral donors should no longer dictate which contractors from their countries should provide technical assistance to recipient countries. Tied DAH, which features asymmetry of information between financiers and beneficiaries, is subject to capture by entrenched contractors in the donor countries.”
He further notes that, “The countries and sub-regions of the Global South should invest in developing their own knowledge-based networks and combine these with increased self-financing. These networks would include institutions; industries (in partnerships with the private sector); deep expertise in science, technology and biomedicine; and supply chains for increased self-sufficiency in essential medical supplies.”
