OECD Development Centre The OECD

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OECD Development Centre The OECDs Knowledge
Broker on Development

• DAC Senior-level Meeting, Paris
• 6 December 2005

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Bringing together

• OECD, emerging economies and developing countries
• Development policy and research
• All parts of the OECD towards development
  objectives
• Public and private sectors

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Programme of Work 2005-2006
Governance
Development Finance
Private Sector Development
Impact of China / India
Policy Coherence
Institutions
Monitoring Performance (AEO)
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I. Coherence

• How do aid, trade, migration, investment policies
  impact on development?
• How do they reinforce or contradict each other?
• How do they interact with developing-country
  policies?

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Evidence from Country Case Studies
Migration-Aid Ghana, Mali, Moldova
Migration-Investment Ecuador
Migration-Trade Morocco, Central America
Investment-Aid Senegal
Investment-Trade Kenya
Trade-Aid Viet Nam, Mozambique, Uganda, Tanzania, Zambia
Migration-Development Central Europe, Albania, Bulgaria, India, Turkey
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Preliminary Findings

• ODA, FDI, migration and trade flows are strongly
  complementary.
• Aid allocation is pro-poor, but FDI, exports and
  migrant flows are with middle-income countries.
• Coherence Orphans.

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II. Private Sector Development and
Capacity-Building

• What are the obstacles to diversification?
• How have donors supported trade capacity?
• What institutional changes are needed for
  agricultural reform?

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Evidence from Country Case Studies
ODA Agricultural Trade Capacity Tanzania, Zambia
ODA Agro-business Development Mali, Senegal
Institutions Agriculture Mali, Cameroon, Ghana
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III. China Indias Growth

• Do African countries gain from booming trade with
  China and India?
• What are the dangers of engagement (e.g.
  governance)?
• How much will OECD countries compete with China
  and India in Africa?
• Are there lessons for African development
  strategies? (Traditional structure vs
  diversification)

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Preliminary Indications

• Opportunities
• Improved African terms of trade (raw materials)
• Higher growth
• Booming stock markets
• Risks
• Intensified rent-seeking
• Higher exposure to volatile prices
• Less upgrading of skills

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IV. Development Finance

• Grants vs. Loans when is each instrument
  appropriate?
• How important are financial guarantees for
  development?
• Back to commodity funds?
• How can public support for international
  development be raised?

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Preliminary Findings

• Financial guarantees can
• Compensate for market and policy failures
• Stimulate private flows
• Improve sub-sovereign credit ratings
• Grants and loans can be mixed
• Commodity funds can work dont stabilise prices,
  protect incomes

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V. Governance, Institutions Investment

• How are governance indicators used and abused?
• Does corporate and public governance determine
  real investment behaviour?
• How do investors influence formal/informal
  governance?
• How can informal institutions be changed?

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Evidence from Country Case Studies
Governance-Investment Interactions China, Brazil, Algeria-Tunisia, India, Chile, Morocco, Korea, Mexico, Turkey, Singapore, Peru, Greece
Decentralisation Health Chinese provinces
Cultural practices investment behaviour Côte dIvoire, Indonesia, Ghana, China
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Preliminary Findings

• Paradox governance indicators often lack
  transparency
• Public and corporate governance are mutually
  interdependent
• Local institutional investors are becoming agents
  of change
• Cultural practices can undermine governance
  reforms and investment
• Context-specific social protection schemes are
  needed

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VI. African Economic Outlook

• Joint OECD AfDB project (EC funding)
• Comparative monitoring tool (30 countries)
• Capacity building through local experts

• AEO 2005-2006 5th Edition
• Launch May 2006 (Ouagadougou Paris)
• Annual theme Transport Infrastructure