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| Special Report |
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Global Financing for the MDGs: What’s Possible?
An Interview with John W. McArthur, Deputy Director of the UN Millennium Project |
 John W. McArthur, Deputy Director of the UN Millennium Project, is co-author of "Investing in Development: A Practical Plan to Achieve the Millennium Development Goals." Previously a Research Fellow at the Center for International Development at Harvard University, he co-edited Harvard’s Global Competitiveness Report 2001-2002 with Michael Porter, Jeffrey D. Sachs, Peter Cornelius and Klaus Schwab. John holds an MPhil in Economics from Oxford University and a B.A. from the University of British Columbia in his native Canada. | |  |  What is the reality of countries working together to pool money to fund the MDGs? |  We’re actually seeing tremendous momentum. The UN Millennium Project was just one of several recent initiatives that highlighted that pooling increased funds for the MDGs is both practical and feasible, the other ones being the Commission for Africa chaired by UK Prime Minister Tony Blair and the Global Monitoring Report issued by the World Bank and the IMF. These reports share a basic vision and practical assessment of what can be done. We’re now seeing breakthrough political decisions. In particular the decision this May by the EU-15 countries to commit 0.7% of their GNPs for development assistance by 2015 was a true landmark. This 0.7% target is 35 years old, but now it’s been linked to practical investments needed to meet the Millennium Development Goals. This decision means that 16 of the 22 member countries of the OECD Development Assistance Committee (DAC) have now met or set timetables for achieving the 0.7% target in support of the Millennium Development Goals. These commitments were brought together in the G8 Gleneagles summit, which included an agreement to double aid to Africa to $50 billion annually by 2010. This amounts to roughly $75-100 per African by 2010, which is moving closer to what’s needed for the MDGs. Now the challenge is to translate those promises into real delivery. I have just returned from visiting six African countries, where local donor and government officials are all struggling with insufficient aid flows and wondering when the G8 commitments will materialize. We need to move urgently to mobilize the ground-level investments the poorest countries require if they are to achieve the MDGs.
| | | Why is the 0.7% GNP decision so important? | The decade-long MDG horizon is really a fundamental shift in development assistance policy. Previously commitments have not been made on the donor side for more than a few years at a time. Expanding aid envelope up to 0.7% by 2015 will allow developing countries to produce serious long-term poverty reduction strategies anchored in the understanding that their development partners will provide sustained long-term support. It’s a straightforward proposition: to achieve these goals by 2015, nationally owned poverty reduction strategies need to be developed and presented to the world in an accountable and transparent manner. Then the development partners need to provide the support to implement those strategies.
| | | What if a country does not have an adequate poverty reduction strategy? | The first step is to help countries get poverty reduction strategies in place. Having an MDG-based poverty reduction strategy is a new operational undertaking. In his recent major report, “In Larger Freedom”, UN Secretary-General Kofi Annan put forward an appeal to all developing countries with extreme poverty to develop MDG-based national development strategies by the end of 2006. This is a crucial timetable for world leaders to consolidate at the 2005 World Summit in September. A large number of countries are eager to begin the process, and many have already started. These countries need appropriate support both to begin planning and then to implement their strategies. There will undoubtedly be some countries in which, for whatever reason—perhaps because of conflicts underway or due to other processes in play—governments are not prepared to commit to this long-term undertaking, so that strategies won’t be anchored in a clear way around the MDGs. For example, the situation can be very complex in fragile states and each one is unique. The goal in those instances is to reduce the fragilities, starting with the provision of core services, so that those countries can also begin to put forward and implement a coherent and practical national vision.
| | | Will the donors wait to see if these strategies are in place? | I hope not. The poorest countries need to see crystal clear commitments of external support. The MDGs are ambitious goals, particularly for the poorest countries where there has been limited progress or often retrogression since 1990. For those countries, it’s really important that there’s no wait-and-see attitude, but a strong upfront signal of commitment from donors that says “we will back you when you put forward your strategy.” Otherwise, there is too little incentive for the poorest countries to think that there will be enough assistance forthcoming for them to achieve the MDGs. Developing these strategies is a complicated process, requiring a lot of technical work and political consultation, both domestically and with external partners. The September World Summit provides a clear opportunity for rich and poor countries to make the joint commitments that will kick-start these efforts. Then the practical work of partnership can get underway. The UN Millennium Project has recommended a process whereby the government chairs a system of thematically oriented working groups on the various sectors covered by the MDGs. These working groups should include senior government officials, bilateral donors, the UN and international financial institution representatives, and civil society members.
| | | Which countries are furthest along with their MDG-based poverty reduction strategies? | We’ve been working with several countries over the past one-and-one-half years, helping them start the process of producing the first-ever MDG-based poverty reduction strategies. This includes countries like Dominican Republic, Ethiopia, Ghana, Kenya, Senegal, Tajikistan, and Yemen. There have been huge amounts of progress, as the countries themselves eagerly push forward but also as the development partners and professionals get themselves organized to support these countries. It’s a new task for many of the development partners, because it’s a new mandate to achieve mutually agreed and integrated development goals over a 10-year horizon.
| | | Where does aid harmonization come into this, with donors working together in a more consolidated way? | Aid harmonization includes both the policy advice and the actual development assistance flows. We also need to have harmonization around developing countries’ own national strategies so that it’s a demand-driven harmonization. This is an area where we need to see more progress. The OECD Paris Aid Harmonization declaration from February 2005, for instance, is still not fully anchored in the MDG 2015 timeline, and not fully anchored in achieving the MDGs and national strategies to achieve those goals. The agreed deadline is September for setting those OECD indicators and targets, so I am hopeful that by then they will be focused much more concertedly on the MDGs.
| | | What kind of timeline are countries on to develop poverty reduction strategies? | Each country has on its own timetable. Many countries are already reviewing their existing PRSP, for instance, on a particular timetable as we go into the second generation of those strategies. It takes probably 12-18 months for a country to go from the initiation of the process to the funding presentation. We need to understand this in the context of the 2015 time horizon because the clock is already ticking. That’s why this collective scale-up to 0.7% by 2015 is so important. Development partners need to be thinking quite urgently about how to organize their support for these long-term strategies over the next 18 months. We’ll see the first test of the international system’s response to these countries as the first MDG-based poverty reduction strategies come forth over the next few months. Ethiopia, for instance, is nearing the final stages of integrating its MDG-based poverty reduction strategy, so I’m hopeful they will have something ready by September. Yemen is similarly quite far along.
| | | What do you think will happen at the 2005 MDG World Summit in September? | We’re already seeing the potential for 2005 to be a breakthrough year for the MDGs. The G8 Summit this July in Gleneagles was a critical coming-together on the donor side in the run-up to September. Prime Minister Tony Blair and Chancellor Gordon Brown led the effort for a major scale-up for development assistance for Africa, calling on their colleagues to double assistance over the next few years and then triple it over the next decade. The G8 also made significant commitments for debt relief, for dramatic progress on malaria control, and for universal access to HIV/AIDS treatment.. These commitments marked a big step forward, but now we need to finish the job. Donor countries need to set timetables to reach the 0.7% target by 2015 and we need to see the urgent launch of a large scale International Finance Facility that can provide resources for the immediate development investments.
The broader international discussion leading up to the September UN Summit includes other core issues like the Security Council, the Human Rights Council, the Peace building Commission and guidelines around the use of force. We’re seeing some convergence in many of those other areas of inter-governmental negotiation. The president of the General Assembly just issued a revised draft outcome document in mid-July that reflects the latest basis for negotiation. In it we see a broad professional consensus emerging to support bold and ambitious national strategies to achieve the MDGs, and that development assistance will be anchored in supporting those national strategies with predictable long-term high-quality coordinated assistance with untied aid. I am optimistic that we will see this reflected in the outcome of the September Summit.
| | | What about criticisms that MDGs are too simplistic, or not achievable? | There is no question that the MDGs are the most integrated and coherent set of development targets that the international system has ever had. They are quantified, measurable, concrete and include many core dimensions of development. Yes, they should be understood as minimum development outcomes. But should also be appreciated for having provided a shared vision for the international system. We’re fortunate that five years after the Millennium Summit everyone is still talking about the same set of goals and people are actually talking about how to achieve them, among them the World Bank, the UNDP, and bilateral donors. Now, in 2005, we need to operationalize them and go beyond political or rhetorical commitment.
Without external support, we know that the poorest countries cannot achieve the goals, particularly those in sub-Saharan Africa but also parts of Central Asia, SoThe requested resource (/editor/default/) is not availableuth Asia, some Central America and the Andean region. However, there was broad consensus among the 265 experts from various disciplines and sectors brought together by the UN Millennium Project that these goals are achievable with adequate support. It will likely be difficult to achieve if we have to wait another year to kick-start the operational focus on the goals. It will be very difficult in places where the domestic government is not committed to achieving the goals, because it really requires strong political leadership. Yet we basically know what needs to be done. We just need to be able to do it at scale. That’s what the goals are really about—scale of activity, scale of progress.
| | | Is there a sense that it’s up to the countries to do all the hard work, while the donors wait on the sidelines? Or is there a sense of mutual accountability, that donors also need to do the hard work of preparing to make these financial commitments? | These are many complex political and policy processes that will require hard work from all sides if the MDGs are to be achieved. But there’s no question that a big onus lies with donor countries to make major commitments this year. Thankfully, we see some progress, such as the EU and G8 commitments. Even the G8 Finance Ministers’ communiqué from June 11 states the ambition of achieving the MDGs in the first paragraph. We have a growing understanding since the presentation of the final recommendations of the Commission for Africa and the UN Millennium Project that there are practical things that need to be done—and should be done—to achieve these goals. But now we need to get on with the hard work of supporting countries and communities to make real ground level investments. The time to 2015 is short. We can’t afford to let any more days slip away.
| | | Why are the MDGs so appealing? | The Millennium Development Goals focus on practical steps, much more than abstract notions like policy or governance. For instance, if the maternal mortality rate is extremely high in a country, why is that? It’s not just an abstract notion of policy but typically about lack of access to emergency obstetrical care. That’s a very practical thing that can be planned around. If we’re talking about issues of hunger in places that have extreme and persistent food scarcity and increasing rain variability, where there’s rain-fed rather than irrigated agriculture, we need to think about what’s needed to increase food production in those places, what are the practical investments that need to be made to improve soil health and water management. At the same time we need to think about how that boosts agricultural productivity can be linked to economic development and increasing rural incomes in those some communities. The MDGs help us focus on daily practical things at scale.
| | | How do you explain this convergence at this time? | | I think the world has always cared about development and poverty reduction. However, we now have a large body of experience and an increasing sense of global connectedness. We also have broad recognition that development and security are fundamental to one another. One of the interesting political dimensions we’re seeing this year is the recognition that you cannot have security without development, and you cannot have development without security.
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 How did Development Gateway members respond to our Aid
Harmonization Survey questions?
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| How does donor support for the MDGs stack up? Charts and
graphs measuring aid flows and public support- click here. |
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