Much has changed since the Millennium Declaration in 2000. The global economic crisis itself marks the end of a relatively benign period for development cooperation of buoyant aid budgets in the OECD-countries ("the North") and strong commitments to public expenditures on social sectors in the South, reasonable economic growth in many developing countries, relative stability and a consensus on policy parameters and instruments in the Millennium Development Goals (MDGs) and Poverty Reduction Strategy Papers (PRSPs).
The forthcoming period is likely to be far less certain and aid effectiveness ever more critical as rich countries face post crisis fiscal limitations. Development cooperation faces multiple and inter-connected crises in climate, and energy, the end of an oligopolistic market with the emergence of new donors and (the as yet) uncertainty on a post-MDG architecture. Such uncertainties not only have the potential to impact adversely on levels of poverty, but also change the context for doing development cooperation. With more actors and fewer resources, aid coordination and transparency will require renewed emphasis.
There is already emerging evidence that the economic crisis itself is leading to significant changes in the context for development cooperation such as in:
- Global governance: The G8 to G20 shift means more representation and power for large developing nations but changes in the IMF and World Bank will be crucial for wider changes in governance; the new aid architecture requires better harmonization.
- New economic policies: There is likely to be a greater tendency for developing countries to explore new development models; approaches from China, the ‘Beijing Consensus’ are more likely to be taken up than Western prescriptions; the exchange of experience and information across paradigms will be increasingly important; similarly "putting countries in the driver seat" to implement policies of their choice will require that they build the capacity and the tools needed to do so effectively;
- Greater social protection: The scale of food and financial crises has made a powerful case for better social protections systems. But building ownership in governments and civil societies remains a challenge in securing long term budget allocations;
- A green(er) economy: There is a strategic opportunity to use the fiscal stimuli to promote a shift to lower carbon development but political pressure to implement such measures as quickly as possible.
The questions for bilateral donors and for European Development Cooperation are then how best to pursue the MDGs in this changing world with new opportunities and risks? What are the best real-time poverty monitoring approaches? What are the best mechanisms for MDG country level adaptation? Who should do what at global and national levels in terms of an MDG division of labour? What should be done differently in this new context and what should be done the same?
IDS fellow Andy Sumner has been contracted to review the MDG experience so far, and to propose how the MDGs should be adapted to the crisis/post-crisis context (and to look at and bigger ‘game changers’ such as climate change in particular and the emergence of a multi-polar world).