Kishan Khoday has served with the United Nations Development Programme (UNDP) in Indonesia (1997-2005) China (2005-2009) and Saudi Arabia (2009-2013). He is currently UNDP Practice Leader for Environment & Energy in the Arab Region, based at UNDPs Regional Center in Cairo. (email@example.com)
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Development at the crossroads: reflections from the Arab Region
Next up in our financing progress series, Kishan Khoday from the UNDP Regional Center in Cairo takes a look at development finance in the Arab region in the run up to 2015. Despite the global focus being elsewhere such as on the BRICS, aid from the Arab region has been expanding in recent years - combined with the social changes taking place in the region, and the fact that the region still receives significant amounts of aid as well, this makes for a complex and changing development finance landscape.
Recent years have seen dramatic changes in the Arab region and two aspects, in particular, are important for the region’s relationship with issues of development finance. First, the expanding role of the Arab region itself as a provider of official development assistance (ODA), with some of the world’s largest ODA providers and its implications for alignment with the post-2015 agenda. Second, a focus in post-2015 debates on the need for aid to adapt to the drivers of change worldwide, such as the rise of middle-income countries (MICs) and the growing power of social movements – key issues for the future of development cooperation in the Arab region.
Arab donors and the post-2015 agenda
While much of the focus has been on the BRICS and other global partners in development, the Arab region has been expanding its ODA in recent years. The Arab Gulf countries provide more than $3 billion of assistance to countries around the world each year, with Saudi Arabia alone providing over $100 billion to almost 90 countries since the 1970s. While the sheer volume of Arab ODA has attracted some attention, less analysed but important factors for the post-2015 era will be the growing focus by Arab partners on improving development effectiveness, synergising with the post-2015 agenda, tracking impacts, applying social and environmental quality standards to manage risks in recipient countries and enhancing the benefits of south-south cooperation. There are three key issues here.
First, with Arab ODA targeted to infrastructure, energy, water, agriculture and transport in developing countries, there is an opportunity to align such assistance to the post-2015 agenda by integrating sustainability measures. For example, the Islamic Development Bank – a major multilateral channel of Arab ODA – is launching its first Energy Strategy to guide its ODA, with an emphasis on ways to achieve sustainable energy and low-carbon goals in recipient countries. There is also progress at the bilateral level, with the UAE, for example, integrating low-carbon goals into its outward ODA strategies. This includes more than $400 million of ODA to expand renewable-energy solutions in developing countries, alongside efforts to reduce its own domestic carbon footprint.
Second, while most Arab ODA has operated through bilateral cooperation channels and Arab multilateral platforms in the past, there are benefits to be had from more connectivity with other Southern donors. The centre of gravity in the global economy is shifting East at speed, and this means shifting lines of development cooperation. With Asia-Africa partnerships of vital importance for future development goals, and with the Arab region looking to Asia for new cooperation on growth and innovation, strategic alliances could be made between Asian and Arab donors. This could be a powerful force for the common goal of supporting new development solutions in Africa, with both Arab and Asian donors expected to scale up support to Africa in the post-2015 era. New partnerships across these three regions could reconnect age-old routes of trade, cooperation and innovation, forging a ‘new silk road’ of development solutions.
Third, rather than replicating traditional linear systems of North-to-South development models and solutions, Arab donors can tap into the many successes of the global South over the years. Unlike many ‘new’ donors from the South, many Arab development organisations, including those in the Gulf, started in the 1970s. Decades of cooperation provide a wealth of bottom-up development lessons and experiences that may be below the radar of the often top-down systems of global development finance, but that are, nevertheless, invaluable to global development efforts. Arab donors should complement the application of universal best practices by building on their unique role as long-standing South-South partners, engaging an emerging ‘multiverse’ of development solutions as the creativity of the South is unleashed and scaling-up local development solutions.
The post-2011 future of development in the Arab region
The Arab region itself is experiencing unprecedented changes, with implications for the nature of the development cooperation and finance it receives. Two key issues on the post-2015 global agenda matter for the region’s future development finance: the rapid growth of inequality and social exclusion in the process of development and the need to adapt development cooperation to development complexity in MICs.
The Arab region has led the shift to MIC status in recent decades, experiencing some of the world’s fastest progress on development indicators such as health and education since the 1970s. But its progress has been defined by autocratic approaches to development that, while benefiting many, have sacrificed vulnerable segments of society. Dominant forms of development, and of development cooperation, have often institutionalised the stratification of people and systems of unequal protection.
Issues of social exclusion and inequality fuelled the wave of social movements that took shape in 2011. They provided harsh lessons on how a seemingly linear journey up the low/middle/high-income evolutionary ladder can be derailed if leaders neglect the systemic issues that perpetuate inequality and injustice. Social movements for change have become a new and disruptive force in development, questioning the traditional orthodoxy of development cooperation applied in the region and the allocation of wealth and power in society, as well as demanding a fundamental rethink of development approaches.
There are clear lessons for the future of development finance in the Arab region, as well as the nature of development cooperation worldwide. Development finance helped the region achieve MIC status, but it also exacerbated social exclusion and the autocratic governance of development.
Future development finance into the region must go beyond engaging communities as mere recipients of charity and civil society must be engaged as an agent of change, with greater transparency, accountability and participation in decision-making by national and international development partners. Given their important role in the region’s future, development institutions should help partners move beyond the linear, autocratic march to economic growth, to a more contextualised approach that engages, rather than side-steps, the social, historical and cultural forces that characterise the state of development in the post-2011 Arab region.
The opinions expressed are solely those of the author and do not reflect the positions of UNDP, the UN or their Member States.