Resource Flows To Fragile And Conflict-Affected States
Resource Flowsto Fragile and Conflict-Affected StatesAnnual Report 2008
ACKNOWLEDGMENTSThis Report was prepared by Oxford Policy Management (OPM) and the Secretariat of theOECD DAC International Network on Conflict and Fragility (INCAF). The work wasundertaken by a team, including Juana de Catheu (INCAF, co-ordination of the report),Katarina Kotoglou and Dhruv Malhotra (OPM), and Margarete Jacob and Asbjorn Wee(INCAF).The team would like to thank Yasmin Ahmad, Ben Dickinson, and Frederik Ericsson(OECD), Rebecca Dale (UK Department for International Development), Odd-HelgeFjeldstad (Chr. Michelsen Institute), Sébastien Lapierre (UN Department of PeacekeepingOperations), Christian Lotz (UNDP) and Julien Serre (UN Peacebuilding CommissionSupport Office) who contributed or commented on earlier drafts.The report is part of a discussion process and expresses the opinions of the authors. These donot necessarily reflect the views of the INCAF. All data contained in the paper have beenverified as far as possible; nevertheless, we cannot discount the possibility of errors. Theauthors cannot guarantee the validity, accuracy or completeness of the data contained in thispaper; no liability can be accepted for any damages resulting from the use of these data.2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES2
TABLE OF CONTENTSACKNOWLEDGMENTS.2TABLE OF CONTENTS .3ABBREVIATIONS .6EXECUTIVE SUMMARY .8INTRODUCTION.19Purpose.Background.Methodology .191921SECTION I. OFFICIAL DEVELOPMENT ASSISTANCE .27CHAPTER 1. TRENDS IN OFFICIAL DEVELOPMENT ASSISTANCE .CHAPTER 2. DAC DONOR PRESENCE, CONCENTRATION AND FRAGMENTATION2744SECTION II. AID: ONE PART OF A COMPLEX EQUATION .48CHAPTER 3. MIXING ODA AND NON-ODA FUNDS IN SUPPORT OF SECURITY, STATE BUILDING ANDPEACE BUILDING .48CHAPTER 4. FLOWS FROM NEW INTERNATIONAL ACTORS .60CHAPTER 5. GLOBAL FUNDS AND PHILANTHROPIC FOUNDATIONS .69CHAPTER 6. PRIVATE RESOURCE FLOWS .77CHAPTER 7. DOMESTIC REVENUES .85CHAPTER 8. CROSS-BORDER FLOWS OF PROCEEDS FROM CRIMINAL ACTIVITIES, CORRUPTION ANDTAX EVASION .95SECTION III. TRANSITION FINANCING IN POST-CONFLICT COUNTRIES101CHAPTER 9. ESTIMATING THE GAP IN TRANSITION FINANCING .CHAPTER 10. INITIAL FINDINGS OF CHALLENGES TO TRANSITION FINANCING1011073
LIST OF TABLES, FIGURES AND BOXESTablesTable 0.1 The Early Recovery Financing Gap in Humanitarian Funding Instruments . 15Table 1.1 Projected increase in aid 2005 – 2010 . 33Table 1.2 Aid projections, 2008 - 2010. 35Table 1.3 Projected decrease in aid 2005 – 2010 . 36Table 1.4 Unpredictable aid – differences in ODA commitments and disbursements as a % ofGDP, averages, 1990-2005. 40Table 1.5 Use of country systems and aid predictability, 2007 . 41Table 2.1 Donor concentration, averages, 2005 and 2006 . 45Table 3.1 Peacekeeping expenditures, 2000 – 2007 (USD million) .50Table 5.1 Education for All-Fast Track Initiative disbursements, 2004 – 2008 (USD millions). 70Table 5.2 Global Fund to fight AIDS, Tuberculosis and Malaria, disbursements, 2004 – 2008(USD millions) . 71Table 5.3 The Bill and Melinda Gates Foundation, disbursements, 2000 – 2007 (USDmillions) . 73Table 5.4 The Ford Foundation, disbursements, 2005 – 2007 (USD millions) . 74Table 5.5 The Soros Foundation, disbursements, 2004 – 2006 (USD millions) . 74Table 5.6 The Rockefeller Foundation, disbursements, 2004 – 2008 (USD millions) . 75Table 6.1 Foreign direct investment, averages, 2000 – 2007 . 78Table 6.2 Remittances, averages, 2000 – 2007 . 80Table 6.3 Exports and imports, 2007 .82Table 7.1 Government revenue (% of GDP), 2007 . 85Table 7.2 Government revenue (% of GDP), 1997 – 2007.86Table 9.1 Funding gaps for peace-building in Guinea-Bissau . 105Table 9.2 Funding gaps for peace building in the Central African Republic . 106FiguresFigure 0.1Figure 0.2Figure 0.3Figure 0.4Figure 0.5Figure 0.6Figure 0.7Figure 1.1Net ODA to fragile and conflict-affected states (USD billion, constant 2006) 9Fifty percent of net ODA have benefited just five out of 48 fragile andconflict-affected states in 2007 (USD billion, constant 2006) . 9ODA to fragile and conflict-affected states for governance and security (USDmillion, constant 2006). 11ODA to fragile and conflict-affected states for security system reform (USDmillion, constant 2006). 11Peacekeeping, Net ODA and Emergency Aid (2000-2007) . 13Trends in ODA flows before and after peace agreements (USD million,constant 2006) . 16Foreign direct investment to fragile and conflict-affected states isconcentrated to oil-rich countries and Pakistan (USD million, 2000-2007) 17Net ODA from all donors to fragile and conflict-affected states (USD billion,constant 2006) . 272008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES4
Figure 1.2Figure 1.3Figure 1.4Figure 1.5Figure 1.6Figure 3.1Figure 3.2Figure 3.3Figure 6.1Figure 7.1Figure 9.1Fifty percent of net ODA have benefited just five out of 48 fragile andconflict-affected states in 2007 (USD billion, constant 2006) .28Composition of ODA to fragile and conflict-affected states (2005) .28Projected decrease in aid exceeding USD 20 million . 36Aid projected to decrease, and CPA-to-GNI ratio below 15% in 2010 . 37Use of country systems and aid predictability, 2007 . 40ODA to fragile and conflict-affected states for governance and security (USDmillion, constant 2006).48ODA funds for security, state building and peace building in Nepal . 49Peacekeeping, Net ODA and Emergency Aid (2000-2007) . 51Remittances and FDI to fragile and conflict-affected countries, 2000 – 2006. 79A social contract conceptual framework . 87Trends in ODA flows before an dafter peace agreements (USD million,constant 2006) . 104BoxesBox 1.1. Dimensions of aid absorptive capacity . 29Box 1.2. Country level analysis on aid absorptive capacity in Yemen . 31Box 1.3. Sectoral absorptive capacity and institutional capacity . 32Box 1.4. Aid predictability . 39Box 3.1 The Dutch Stability Fund . 54Box 3.2. Experiences with multi-donor trust funds . 56Box 3.3 Operational challenges with multi-donor trust funds . 58Box 7.1. Supply side factors.89Box 7.2. Demand side factors . 90Box 7.3. Examples of country-level analysis and evidence . 91Box 8.1. The Cassiterite trade across the Congo – Rwanda border . 96Box 8.2. Crime as both a cause and consequence of state fragility: the case of Guinea Bissau . 97Box 9.1. The early recovery financing gap in humanitarian funding instruments . 1025
ABBREVIATIONSARTFAfghanistan Reconstruction Trust FundAPFEU Africa Peace FacilityAUAfrica UnionCAPConsolidated appealsCERFCentral Emergency Response FundCFIPCarleton University Country Indicators for Foreign PolicyCHFUN Common Humanitarian FundCHPFCommon humanitarian pooled fundsCPACountry programmable aidCPIACountry policy and institutional assessmentDRCDemocratic Republic of CongoDRCPFDRC Pooled FundECEuropean CommissionEFA/FTIEducation For All/Fast Track InitiativeEUEuropean UnionEXIMExport/Import BankGAVIGlobal Alliance for Vaccine and ImmunizationGEFGlobal Environment FundGFATMGlobal Fund to Fight AIDS, Tuberculosis and MalariaFDIForeign direct investmentGDPGross domestic productGNIGross national incomeGNPGross national productHIPC/AAPHeavily Indebted Poor Countries Public Expenditure Tracking Assessmentand Action PlanIDAInternational Development AssociationIMFInternational Monetary FundINCAFInternational Network on Conflict and FragilityIRTFIraq Reconstruction Trust FundLDCLeast developed countriesMDRPMulti-Country Demobilization and Reintegration ProgramMDTFMulti-donor trust fundMINUSTAHUnited Nations Stabilization Mission in Haiti2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES6
NATONorth Atlantic Treaty OrganisationNGOsNon-governmental organisationsODAOfficial development assistanceOPMOxford Policy ManagementOSCEOrganisation for Security and Co-operation in EuropePEFAPublic expenditure and financial accountability assessmentsPFMPublic finance managementPRGFPoverty Reduction Growth Facility UNUNDESAUnited Nations Department of Economic and Social AffairsUNDPUnited Nations Development ProgrammeUNPBFUN Peacebuilding FundUNDPKOUnited Nations Department for Peacekeeping OperationsUNODCUnited Nations Office on Drugs and CrimeUnited Nations7
EXECUTIVE SUMMARYTHE CURRENT GLOBAL ECONOMIC SITUATIONAlthough the current crisis is an important backdrop to this report, the full effects areyet to be seen. A variety of factors require monitoring over coming months: pressureon Official Development Assistance (ODA) budgets, falling migrants‘ remittances, asqueeze on foreign reserves in US dollars and further terms of trade shocks. It isalready clear, however, that net private capital flows to fragile states have dropped 1.For example, mining investment in the Democratic Republic of Congo hasplummeted after the drop of commodity prices and 200,000 mining workers havebeen laid off. There may be new situations of fragility, and countries that areemerging from conflict and fragility may relapse. Globally, almost 100 million extrapeople will be trapped in poverty by the slowdown in economic growth, on top ofaround 130 million people directly affected by the big rise in food prices in 2007 2.AID FLOWS TO FRAGILE STATESWhile many countries are making progress towards achieving the MillenniumDevelopment Goals, a group of countries is falling behind. One billion people live inthese countries, where half of the world‘s children die before the age of five, and onethird of all people surviving on less than USD 1 per day live. Thirty-five countriesconsidered fragile in 1979 are still fragile in 20093, and the gap with other developingcountries has been widening since the 1970s: In 2007, per capita GDP grew only at2.6 per cent in fragile states, whereas it reached 4.6 percent in other low-incomecountries. The regional and international spillover effects from these countries—violent conflict, instability, organised crime, migration, human trafficking, publichealth—continue to resonate widely beyond the development community.Donors have responded to the challenges of fragile and conflict-affected states withmore aid: In 2007 USD 37.2 billion of ODA went to fragile and conflict-affectedstates, or 38.4 percent of total ODA (See Figure 0.1).1Draft European Report on Development ―Development in a context of Fragility‖ (February 2009).2World Bank estimate.3World Bank staff estimate.2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES8
Figure 0.1 Net ODA to fragile and conflict-affected states (USD billion, constant 2006)Total net ODA disbursements from all donors to fragile andconflict-affected states2006015050401003020501001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007ODA to fragile and conflict-affected statesOther ODATotal ODA01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Total net ODATotal net ODA excluding debt relief grantsSource: OECD DAC online database (2000-2007).However, half the ODA for 48 fragile and conflict-affected states benefited just fivecountries in 2007: Iraq (23 percent), Afghanistan (9.9 percent), Ethiopia, Pakistanand Sudan (See Figure 0.2) and around a fifth was in the form of debt relief.Figure 0.2 Fifty percent of net ODA have benefited just five out of 48 fragile and conflictaffected states in 2007 (USD billion, constant 2006)9876543210KiribatiTongaEquatorial GuineaSao Tome & PrincipeComorosVanuatuGambiaKorea, Dem. Rep.DjiboutiTogoGuinea-BissauCongo, Rep.EritreaCote d'IvoireUzbekistanCentral African Rep.MyanmarTajikistanYemenGuineaSolomon IslandsAngolaTimor-LestePapua New ra LeoneNigerNepalCambodiaLiberiaHaitiRwandaCongo, Dem. Rep.KenyaUgandaPalestinian nIraqSource: OECD DAC online database (2000-2007).9
From an examination of ODA flows to fragile and conflict-affected states4, three setsof countries warrant particular attention:1. Countries with projected decreasing aid levels While a 2008 survey5 suggests 16 countries could expect an increase of USD100 million or more in country programmable aid6 by 20107, 15 could expect adecrease, of which 7 could expect a decrease by more than USD 20 million:Chad, Eritrea, Guinea, Iraq, Solomon Islands, Tajikistan and TimorLeste. Among these seven countries, Chad, Guinea and Tajikistan cancurrently be considered not aid dependent8 .2. Countries with volatile aid Fluctuations in aid are larger in fragile and conflict-affected states than inother developing countries. Seven countries experienced fluctuations of aid inexcess of 5 percent of GDP over 1990-20059: Burundi, the DRC, Eritrea,Guinea Bissau, Liberia, Sierra Leone and the Palestinianadministrated Areas.Countries emerging from conflict require sustained international support—evidencesuggests that in post crisis situations aid tails off just as countries reach the pointwhere they could use it more effectively.3. Countries with access to a limited number of donors Twenty fragile and conflict-affected countries receive two thirds of their aidfrom three donors or less. Iraq currently depends on one donor – theUnited States – for 95% of aid. Papua New Guinea and Solomon Islandsare dependent on Australia for 77% and 71% of aid, respectively.The list of fragile and conflict-affected states used for the 2008 Report (not an official DAC list ordefinition) is a compilation of three lists: the bottom two quintiles of the Country Policy andInstitutional Assessment (CPIA) 2007; the Brookings Index of State Weakness in the DevelopingWorld 2008; and the Carleton University Country Indicators for Foreign Policy (CFIP) 2007 index.45Survey on Aid Allocations Policies and Indicative Forward Spending Plans, OECD, 2008Country programmable aid is defined as ODA minus aid that is unpredictable by nature (such asdebt forgiveness and emergency aid); entails no cross border flows (such as research and studentexchanges); does not form part of cooperation agreements between governments (such as food aid);or is not country programmable by the donors (such as core funding through international andnational NGOs).6Projected increases in aid are significant for a number of countries that start with a very low 2005baseline in terms of aid levels (below USD 100 million), notably Cote d‘Ivoire, Somalia and Liberia(percentage increase in aid is above 150%).78Their ODA to GNI ratio, a common measure of aid dependency, is below 15%.9Celasun and Walliser, 2008.2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES10
Afghanistan, Comoros, Djibouti, Equatorial Guinea and Yemen areeach dependent on one donor for 50% of aid.Although donor concentration should be encouraged, changes in donor priorities andpolicies could impact significantly on the predictability of aid flows to countriesdependent on exceptionally few donors.AID FOR STATE BUILDING, PEACEBUILDING AND SECURITYWhile total aid flows for fragile states matter for fragile states, more precision isneeded to examine what types of aid impact on state fragility, peace building andsecurity. ODA directed to governance and security activities has grown almost fourfold between 2000 and 2007 (see Figure 0.3). ODA for security system reform hasgreatly increased from 2004 to 2007 (see Figure 0.4).Figure 0.3 ODA to fragile and conflictaffected states forgovernance and security(USD million, constant 2006)Figure 0.4 ODA to fragile and conflictaffected states for securitysystem reform (USD million,constant 2006)7,0006,0005,0004,0003,0002,0001,0002000 2001 2002 2003 2004 2005 2006 2007Government, civil society and monetary institutionsConflict prevention and resolution, peace and securityTotal for both itemsSource: OECD DAC online database (2000-2007).2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES11
OECD DAC DONORS ARE ONLY PART OF THE PICTUREThe above categories of countries are derived from DAC ODA flows only; but nonOECD DAC donor aid flows, globa
2008 ANNUAL REPORT ON RESOURCE FLOWS TO FRAGILE AND CONFLICT-AFFECTED STATES 10 From an examination of ODA flows to fragile and conflict-affected states4, three sets of countries warrant particular attention: 1. Cou
DAC INTERNATIONAL NETWORK ON CONFLICT AND FRAGILITY (INCAF) 3 LOW-INCOME FRAGILE STATES ( USD 1 005) LOWER MIDDLE-INCOME FRAGILE STATES (USD 1 006 TO USD 3 975) UPPER MIDDLE-INCOME FRAGILE STATES (USD 3 976 TO USD 12 275) The list of 45 countries in fragile situations used for this analysis (neither an official DAC list nor an official definition) is a compilation of two
5 Fragile states don’t always give birth to fragile cities, and fragile cities can be found outside fragile and conflict-affected states. There are many cities exhibiting signs of vul- nerability, fragility and instability in considerably middle-income and high-income settings (see R. Muggah, ‘Decons
—Handbook authors Liane J. Abrams, MS, CGC, NFXF Genetic Specialist, . male relative who has tremors, memory loss or balance problems and you are starting to wonder about the cause . let’s look at the different Fragile X-associated disorders: n Fragile X syndrome (FXs): the most common inherited cause of intellectual disabilities, fragile X syndrome occurs in both genders . girls .
FRAGILE STATES 2013: RESOURCE FLOWS AND TRENDS IN A SHIFTING WORLD Fragile situations became a central concern of international development and security agendas in the 1990s. Since then, powerful forces have been influencing the causes and manifestations of fragility,
All 8 states are included in either the 2011 or 2012 editions of the OECD working list of fragile states. OECD, Fragile States 2013: Resource Flows and Trends in a Shifting World (OECD: Paris, 2012); and OECD, Ensuring Fragile States are not Left Behind: 2
1. OECD Ensuring Fragile States are not left behind: 2013 Factsheet on resource flows and trends. (Paris, 2013) 2. World Bank, World Development Report 2011 (the World Bank, Washington DC). Factsheet on resource flows and trends.) Second, we h
flows to fragile states. Official development assistance (ODA) is the largest source of external financing to fragile states, followed by remittances, and then FDI (OECD 2013). While the World Bank estimated that between 2005–2010 fragile states
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