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IFAD Lecture: Winnie Byanyima on the future of aid

06 April 2016

Winnie Byanyima, Executive Director of Oxfam International, delivered the inaugural IFAD Lecture at the 38th session of the Governing Council, IFAD's annual meeting of Member States. Her lecture – entitled 'The Future of Aid' – took place on 17 February 2015. It was the first in a planned series that IFAD has launched to advance thinking on rural transformation as a key to sustainable development in the post-2015 world.

Watch the complete video of Byanyima's lecture or read the full text below.

The president of IFAD, my friend, Dr. Kanayo Nwanze,
Your Excellencies,
Distinguished members of the IFAD Governing Council,
Distinguished guests,

First of all, let me thank very much IFAD's President for inviting me to give this inaugural lecture. I'm honoured. It's a great pleasure to be here and to have the opportunity to speak with you, Council members and others.

I have been asked to speak about the future of aid in a post-2015 world.

Let me tell you a little bit about myself first. I was born in a small town, then a really very rural town, Mbarara, in south-western Uganda. My mother told me that on the day I was born, that she was in her sweet potato garden, harvesting her potatoes, when she felt me pushing out. She washed, got her little suitcase and went by the roadside to wait for a car to take her to the hospital three miles away.

A passer-by stopped and gave her a lift. She said by the time she reached the hospital, I was almost halfway out, and that by the time she got into the labour ward, I was already out. In our language, we call children, we give them names according to the events around their birth. So I could've been called … "born in the sweet potato garden." I could have been called … "almost born on the road," and that would have been a good name for me, considering the many miles I have clocked traveling around the world. Or I could have been called … "born in a clinic." And that would have been special because at that time, only about 20 per cent of children were born in clinics.

Today in Uganda, it's about 40 per cent, children who are born with a health professional. Forty per cent – it hasn't changed a lot from when I was born. And the figure is even lower in rural areas. So life hasn't changed very much for rural people. So this subject of rural transformation is dear to me. I see myself more as a survivor, even though I have very happy memories of my life in our small rural town.

So increasingly, questions are being asked: How relevant is aid in this day and age, compared to other ways of mobilizing resources? How much impact can aid have? Is aid key to the success of the post-2015 global development framework?

Books have been written, articles published. The debate is raging, and rightly so.

To explore this issue with you today, I will share my thoughts in two areas: Why and how aid must change in the post-2015 world. And secondly, three fundamental challenges for rural development.

I will say that aid is important in the fight against these challenges – the three being climate change, rising economic inequality and women's empowerment. Aid is important in the fight against these three challenges – but only with a fundamental recalibration of the way it is designed and delivered.

Oxfam's Winnie Byanyima gives the first IFAD Lecture. ©IFAD/Flavio Ianniello

Many of the biggest development challenges ahead of us cannot be solved by aid.So first, why and how aid must change.

But don't get me wrong, though. In absolute terms, volumes of traditional Overseas Development Assistance [ODA] are increasing. In 43 countries where 221 million extremely poor people live, ODA is still larger than any other form of external finance.

But aid is starting to be eclipsed by other forms of development finance – such as foreign direct investment and remittances.

At the same time, new donors from emerging economies are entering the development space and the humanitarian space. This presents huge opportunities, but also significant challenges.

Meanwhile, it is increasingly clear that the resources to end poverty and hunger must ultimately come from the domestic resources of countries themselves – for reasons of sustainability, as well as of sovereignty.

We have all seen the legacy of underperforming aid:

  • 'White elephant' projects that lack understanding of local context and commitment of host governments or communities.
  • Tying of aid, inefficient contracts, protectionist policies designed to benefit donor countries. There is now a worrying trend of donors supporting companies in their own countries as a way to boost their economic expansion in emerging markets. This is a diversion of aid.
  • A lack of transparency that makes it hard to learn from past mistakes and successes, and makes it difficult to mobilize and coordinate other investments.
  • Reluctance by donors to fully invest in the success of local development institutions and in local leadership.

These problems all share a common root. They are symptoms of donors prioritizing their own needs over the needs of their partner governments, and the needs of citizens.

I am going to argue, though, that aid can and should be used to get us towards the end of extreme poverty, and on the road to rural transformation.

But to do this, aid must be designed and delivered differently. It must strengthen the relationship between citizens and their own governments, and it must generate and invest resources domestically for development.

In short, we need aid to work itself out of a job.

IFAD President Kanayo F. Nwanze with Oxfam Executive Director Winnie Byanyima. ©IFAD/Flavio Ianniello

First, aid needs to catalyze other forms of development finance, and to help sustain them.To make this happen, there are four things that aid needs to do better.

Aid should be used to support governments to build efficient and effective revenue systems. It also needs to support efforts to crack down on tax dodging by multinational companies, and to tackle illicit financial flows.

There is no time to lose on this score. Tax avoidance is costing developing countries €123 billion every year. These hidden billions should be going to essential services for citizens, not being stashed away in secret bank accounts.

For rural development, domestic resource mobilization in developing countries is key – so that we can create circular economies, and invest in the types of things that we know really work for tackling poverty and spurring development.

Such as investing in domestic markets of rural people, extension services, credit, rural infrastructure and increasing the access of rural people to sustainable energy. These need domestic resources, more domestic resources, and more other forms of development finance.

Second, systems must be put in place so that more private financing supports poverty reduction. It's not enough to have more private financing; we must get it to reduce poverty.

Often, when donors speak of mobilizing private sector investment for development, they are talking about creating conditions conducive for their companies to invest abroad.

Well, the private sector has an important role to play, but private sector investment cannot be an end in itself. The private sector is not a panacea for rural development.

In fact, unregulated private sector investment can undermine human rights and create serious risks to the land rights of local communities in rural areas. We've seen this, we continue to see this.

Yet when it is done well, it can help reduce poverty.

The private sector, both local and international, can build partnerships with others to support development aims. But these will only be effective if local communities and producer organizations are in the driving seat.

We should move away – or we should, let me say, unpack and redefine the concept of public-private-partnerships. Redefine it so that it is about genuine partnership between governments, rural communities and business groups. Mark my word: business groups. I'm not talking about foreign companies only. Those most affected by hunger cannot be excluded from public-private partnerships.

We must put a 'c' in the letter 'p' for public. Because 'p' for public has tended to mean governments partnering with foreign companies in the agriculture sector. If we put 'c' there, communities, we will get good partnerships that transform rural communities.

Third, aid needs to advance the rights of citizens.

Ultimately, development is the product of a compact between active citizens and effective states. Active citizens, effective states. Aid most often fails when it tries to substitute for this relationship, rather than supporting it and strengthening its emergence.

It's rare that farmers are actually asked what they need and want. In my village, the one of Mbarara, I told you, development rains on us. In my village, water arrived. After it arrived, we now had completed university and left the village. Electricity arrived. Even a short tarmac road arrived. We had nothing to do with this. We just had to take advantage when they arrived.

It's rare that donors and development practitioners design their programs around expressed needs of ordinary people.

Smallholder farmers, though, are not beneficiaries – they are innovators, they are investors, they are voters. They themselves hold the keys to rural transformation. They are business-people in the making.

So development cooperation should support governments to be more responsive to citizens. It should support citizens to demand accountability from governments.

There is huge opportunity here for development agencies and donors to act as catalysts for change, and to support development that rural people themselves envision and steer.

Finally, aid needs to do a better job of supporting people out of poverty on a sustainable basis.

Donors remain reluctant to fully invest in the success of local development institutions and local leadership. Sometimes it is for selfish reasons. Tying of aid and other protectionist policies can be designed to increase the economic benefit to donor country interests.

But other times, it is a real fear of corruption and mismanagement. This drives donors to create bureaucratic hurdles that protect money in the short term – but fail to deliver lasting results over the long term.

Governing Council participants listen to first IFAD Lecture. ©IFAD/Flavio Ianniello

I'd like now, very quickly, to run through what I see as major challenges for rural development, which must be taken on board when we're designing our post-2015 framework.If we can get these challenges with aid right, we will strengthen our ability to support rural development and transformation.

I see the three crucial challenges I mentioned earlier: climate change, rising inequality and women's empowerment.

Climate change is already impacting food systems, and this is happening in very unpredictable ways. Extreme weather events are causing profound shocks for food production and distribution systems.

Oxfam's experience of working with smallholder farmers shows that creeping, insidious changes in seasons, shorter growing periods and unpredictable weather are bewildering farmers – making it harder for them to sow, to cultivate and harvest their crops, making it harder to make a living off the land.

There could be 25 million more malnourished children under the age of five by 2050 due to climate change. Twenty-five million more.

To put this number into comparison: This is equivalent to all of the children in the United States and Canada.

The poorest and the most vulnerable are being hit hardest by climate change, and this reality has to be at the centre of our future rural development strategies.

Alongside climate change, rising inequality is possibly the biggest challenge of our era.

How does it show itself in rural areas?

  • Urban bias in policy making and resource allocation.
  • Difficulties in accessing and keeping control of land that many poor families need.
  • And lack of support, lack of extension services, credit, training, markets for small-scale producers.

Inequality in rural areas leaves the poorest behind and disempowers women the most.

For too long, rural development has been viewed by governments and business as tending to plants, rather than tending to people. Focusing on yield and productivity gains – without considering how to improve incomes and reduce food insecurity and poverty – just worsens inequality.

We need to ensure that investments benefit those farmers not only with access to land, not only those close to roads, with good access to information.

But we must pay more attention to the landless, those with small parcels of land, and female-headed households.

Just as aid alone cannot solve the challenge of poverty, aid cannot solve the problem of inequality. But how aid is delivered can influence how responsive governments are to their citizens and therefore, the extent to which inequality is reduced.

Too often, the actions of donors reinforce existing power relations in partner countries, assisting elites in their efforts to capture and retain power on how national resources are distributed.

Smallholder farmers are often politically, socially and geographically remote from development decision making. To combat poverty and inequality, aid needs to support the poor and marginalized [to] find their voice and claim their vote in how development resources are distributed.

This is the antidote to political capture, and can reduce inequality both of opportunities and outcomes.

Finally, we know that women have a vital role in driving economic growth and social gains. Yet women continue to face significant and persistent inequalities in agriculture and in rural areas. Too many agricultural investments fail to deliver for women. I don't have time to tell you how, and I know you know.

But most importantly, what we need to remember is that women often hold completely different investment priorities than men.

Women, for example, often value time-saving technologies and value addition, while men, on the other hand, might be more likely to prefer productivity improvements.

If you ask a group of women in a village in Tanzania or in northern Uganda or in Burkina Faso which investments would be most useful to them – they would most likely tell you they want a water pump located close to the village, to save them hours of time that could be put to more productive use. And so on.

So we shouldn't assume that farmers, men and women, will want the same things. This is the lesson of the seventies by Ester Boserup in her famous book on women farmers in Africa, but we still haven't learned the lesson.

We need to hold donors – and ourselves as players in rural development – to much higher standards in this area of women's empowerment. One of the greatest priorities for decades to come will be how to put the economic and social empowerment of women at the heart of rural development.

BBC's Jane O'Brien moderates Q&A with Winnie Byanyima after the lecture. ©IFAD/Flavio IannielloSo, to conclude, 2015 will be a momentous year for development.

The Addis Conference on Financing for Development; looking at the Sustainable Development Goals and their financing; negotiations towards a new climate deal in Paris – all this could set the development landscape for decades to come.

Since the creation of the MDGs, we have seen the fastest reduction in poverty in human history. The proportion of people living on less than a dollar a day has fallen by more than half – lifting half a billion out of poverty.

Serious political commitments, coupled with donor development assistance, have supported this progress.

But we still face significant challenges.

In rural development, climate change, inequality and women's rights will continue to be the key challenges of our age.

The solutions to many food security problems are not only or even chiefly agronomic. They are social, they are political, they are environmental. And what we have learned is that they need many, many donors to come on board – not just governments, not just donors.

Political empowerment and inclusion will be crucial to achieving equitable and sustainable development and for the achievement of the Sustainable Development Goals post-2015.

Enough said. Now, we must get to work.

Thank you very much for listening to me.