World leaders attending the United Nations General Assembly this week in New York face multiple serious and intersecting crises around the world– from forced migration to extreme poverty. These crises are actively charged by climate change and extreme economic inequality. In this context, the role of development aid, and the need for more effective aid, could not be greater. But many governments wrongly write off aid as a relic of the past.
Since 1990, more than a billion people have escaped extreme poverty and millions of lives have been saved by reducing the burden of preventable diseases such as malaria and HIV/AIDS. But despite massive progress, too many people remain trapped in poverty today, denied many of their basic rights and unable to meet their basic needs.
More than one in five people on this planet struggle to live on less than $1.48 a day. Economic and political exclusion lies at the root of poverty: people lack income, assets, access to basic services and opportunities, and often suffer from discrimination, insecurity and rising inequality. Their influence remains diminished by their lack of resources.
The Sustainable Development Goals (SDGs) signed by world leaders one year ago were designed for an ambitious mission: to tackle these complex dimensions of poverty, inequality and injustice.
These ambitious goals go beyond Band-Aid solutions, and attempt to address complicated issues at the root of poverty and inequality. Inequality, after all, is not inevitable. It is the direct consequence of political choices.
While aid is often portrayed as passé by some, it remains particularly indispensable for the poorest countries.
The role of aid in achieving the SDGs should not be underestimated. With the SDGs agenda is owned nationally, aid can support poor people become active citizens, while also helping effective and accountable governments to plot their own path to achieving the SDGs.
Aid remains essential amidst excitement around new sources of funding for development. Private finance is important in the effort to mobilize the massive resources needed to meet the sustainable development challenge, but it cannot substitute for public spending. The ability of countries to mobilize their own domestic resources is critical – but alongside bold reform to an economic model which undermines that very ability. Data from leading economists in a new Oxfam report show that “trickle-down economics” cannot be relied on for the poorest and most marginalized communities; they have been virtually locked out of developmental progress, capturing less than 1% of the benefits of global economic growth.
And while aid is often portrayed as passé by some, it remains particularly indispensable for the poorest countries which can neither raise sufficient revenues domestically, nor attract sufficient private investment for development.
In a post-2015 world, development aid can and should support the relationship between citizens and their state, – empowering a government to work in the best interest of its citizens. This citizen-state compact sits at the center of a country’s relationships and institutions necessary to drive development progress. It’s not development aid that is the driver of development, it is the compact. Aid serves as a vital policy instrument whose goal should be to support this compact.
Because aid is a form of public finance, it has a potential impact far beyond its scale in absolute dollars precisely because it can be programmed in a way that helps people gain more power over decision making. This kind of aid helps countries catch up while at same time empowering them to be in a stronger position to lead their own development path.
At the core, poverty is about access to power: people who are denied the chance to make decisions about their lives. With power, they can gain more control over their own lives and can more surely begin to escape from poverty.
This is an essential prerequisite to realizing the core ambition of the SDGs: to leave no one behind and to reach the furthest behind, first. However, aid will need to be better and more effective in order to fulfil this essential role.
Oxfam’s vision on the role of aid in the SDG-era therefore centers around countries ability to mobilize and sustain financing for their own development priorities, helps countries deliver the development results their citizens demand, helps citizens demand the investments and outcomes they need, and helps people escape poverty sustainably.
World leaders, and the governments they run, must be far more strategic and forward-looking, and help build diverse economies that deliver the jobs for the generations to come. They must give space to citizens to hold them accountable, and listen carefully to their voices. We should indeed not leave anyone behind.