Financial Times

Donors of the world unite

By Random Access memory (RAM)
Over the years, the prescriptions presented for developing nations by the various international and regional donor organizations have been many. From AID to 'Trade Before AID', bilateralism, multilateralism to the mixed model, cuts in social subsidies to structural adjustments, state sector led growth to private sector led growth have all been tried and tested at one time or other. When the World Bank/ IMF tells you to open up to the global free trade regime and meet the brunt of the social effects of it all, the UNDP talks of export led growth encouraging local enterprise to ensure sustainable growth that would purportedly alleviate poverty.We are often exposed to the lack of coordination between donors in the delivery of development assistance in the various countries. The very principles of holistic or integrated planning approaches prescribed by the very same organizations often go unheeded when it comes into action on the ground.

What it does to policy makers and planners more often the world over is to leave them in a state of confusion. There have been the success stories of Singapore and Malaysia who adopted their own models and did not join the 'Club of the Confused'. Remember how Prime Minister Dr. Mahatir Mohammad, flatly rejected the IMF recipe for recovery from the Asian financial crisis. The independent policies adopted by the Malaysians saw them come out winners effectively managing the ill effects the mass exchange movements brought about a few years ago.

In Singapore, a consistent policy of induced savings had cushioned its policy makers from even having a need to take any externally prescribed recipe for development. On the contrary, it is today a case study in sound and prudent financial management.

What then was the secret behind the success of several of the smaller economies of the world that made it with little or no support from the prescriptions from donors. The German magazine for development and cooperation (D+C) in a recent editorial quotes author William Easterly from his book "The Elusive Quest for Growth" published in the US in 2001. Easterly with over 16 years standing as a Research Economist at the World Bank states "The list of failed panaceas includes foreign aid, foreign investment, education, family planning, big infrastructure projects, conditional aid, debt forgiveness, and so on." All these activities are futile Easterly says, as long as a particular requirement is not met: definite political institutions are needed for development to be possible - institutions such as rule of law and corruption free government.

Return of peace, cohabitation in governance, rehabilitation of the economy are all important for us to regain Sri Lanka.

The need to have the political will and the institutions to support the re-establishment of rule of law and bringing in systems of complete transparency will also be paramount in all of this. It is perhaps time that donors who hold the purse strings, also on a united front focus strongly on the very basic pre-conditions needed and support efforts at creating these conditions. Some do, but most are too busy working on the frills and not on the core.

The efforts of the Ministry of Finance to set up an Operations Room and an Internet-based web initiative to monitor project implementation was indeed a good beginning.
It is perhaps time for donors to unite to ensure that all projects of government and donors are transparently exposed to the public through this and other initiatives. Holding a public exhibition of all projects showcasing the returns and benefits to the people is an idea.

This perhaps can be a good first step on the road ahead to Regain Sri Lanka.

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