Development assistance: towards a better model: Richard Manning reflects on 2005 as a 'year of development'.

• Author: Manning, Richard

In looking at progress in 2005 from the perspective of development, I should prefix my comments by emphasising that what donors do can only be complementary to the efforts of developing countries themselves. No country has developed simply by accepting aid: all successful countries have based their development on their own efforts.

It is also the case that the environment that the international community provides to developing countries is in most cases more significant than the contribution of aid. From this point of view, it is worth looking at how some of these issues have developed over the last year.

The chance of a significant positive outcome from the WTO Doha Round of negotiations remains to be seen. Even assuming there is a positive outcome from these talks, there is still a big issue about how significant the effect would be, particularly on the poorer countries. There is much analysis that suggests that if you are Brazil as a highly competitive middle income agricultural exporter, let alone if you are in New Zealand, there is a lot to be gained from trade liberalisation. It becomes less obvious when you have got fewer competitive exports to trade and there are certain areas, cotton being a classic example in West Africa, where a lot more could be done than is being done at present. We should not assume that a positive trade round is going to radically change the chances of some of the poorer countries, particularly those penalised by higher transport costs; and that includes both small islands in the Pacific and land locked countries in Asia, Africa and Latin America.

On the security and fragile states agenda, I think there are some opportunities that were not there a few years ago. In countries like Sudan, despite the Darfur conflict, in Liberia, hopefully even the Democratic Republic of Congo, we face significant issues as a development community about how we engage. There is a clear distinction between what is proper for aid agencies to finance and what is proper for the rest of government to fund. As in the Solomon Islands, how in circumstances of weak governance do you construct sustainable institutions that will ensure against renewed conflict in the longer term?

Positive view

Again there are issues around migration where serious policy questions need to be brainstormed more, by many of our countries. A UN Commission has recently reported an this aspect and taken a broadly positive view on migration as a factor that can be constructive both for the exporters and the importers. There are significant issues in the Pacific, and how far migration takes place between the Pacific Islands, Australia and New Zealand, and where that complex of relationships goes in the medium term. A related question is how the cost of remittances can be reduced and their value increased; this is an area where there will be a lot more international work.

On climate change it has to be said that we are a long way short of providing anything like a sustainable environment for developing countries. As seen in New Orleans with Hurricane Katrina, it is the poor people that usually are in the wrong place and who are most vulnerable to catastrophic events. Given the length and scale of the climate change challenge, this is an area where we should be anything but complacent, and an area where development agencies are going to have to put significantly more effort in the medium term.

Finally on these cross cutting issues, it is worth saying that 2005 marked a very important step forward in the issues around the debt crisis in developing countries. Major write downs have been agreed for countries like Iraq and Nigeria, and significant decisions have been taken by the World Bank and the regional banks to forgive much of the debt owing from the heavily indebted poor countries. And to do so in a way which avoids a moral hazard problem because the new resources will flow according to the performance-based allocation systems of those agencies. The crucial questions here are how far the accounting of a debt avoids additional resource transfer to developing countries and how far countries that now have extremely low levels of debt by historic standards choose to use that freedom. I have some worries that in a situation where you are a poor country with very low levels, debt is all too easy to...