EDITOR’S NOTE: Collective action among G-8 and G-20 nations is needed to tackle the most pressing global challenges, especially when it comes to boosting development in the world’s poorest countries, writes Homi Kharas, senior fellow for Global Economy and Development at the Wolfensohn Center for Development. A few excerpts:
The G8 and G-20 meetings taking place in Canada are the most visible symbols of multilateral cooperation. The agendas for discussion include coordinating policies on the pace with which fiscal stimulus is reduced, financial regulations, raising living standards in the developing world and cutting fossil fuel subsidies. But what lies behind this talk is a growing recognition that collective action is the only option to confront the most pressing global challenges and that building the trust to move forward together is a key achievement of summitry.
At Gleneagles, rich countries agreed to pay special attention to Africa, not just because of the income gaps, but because Africa was perceived to be lagging on many dimensions including poverty, health, education, violence against women and other indicators of a just and free society. Most of the countries that are off-track to meet the Millennium Development Goals are in Africa.
The same pattern holds for aid with donors not harmonized. Many countries provide technical and financial assistance to Africa, but this is fragmented into small projects, administered by a proliferation of donor procedures and reporting requirements. As a consequence, foreign assistance suffers from considerable overlap and waste.
The GAFSP is the first concrete step toward a multilateral approach to development, led by the United States and endorsed by the G-20. Further steps are needed, including agreement to recapitalize the international financial institutions and to complete a generous replenishment of their concessional funds. The U.S. should call for a G-20 development discussion at the next meeting in Korea that goes beyond aid, so that global policies on energy subsidies, financial regulation and fiscal stimulus exit strategies take into account the impact on the poorest countries. That kind of debate, coupled with real resources for implementation, would be welcome news for developing countries.
Re-published with permission by the Wolfensohn Center for Development at Brookings. Visit the original article.