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Published:April 24th, 2006 05:15 EST
World Bank Advisors Call for Better Aid Management

World Bank Advisors Call for Better Aid Management

By SOP newswire

Washington -- Developing countries need to do more to strengthen the way they manage their foreign aid to make these resources more effective, says a joint advisory committee of the World Bank and International Monetary Fund (IMF).

As well, donors need to improve the ways aid is delivered to make it less volatile and better aligned with recipients' national poverty reduction strategies, the Development Committee said following its April 23 meeting in Washington.

The committee also asked the World Bank to work with middle-income countries to involve them more in global poverty reduction efforts, including improving access to market financing.

The advisory committee said the Bank and Fund should fully support efforts to fight corruption. A broad anti-corruption approach would lead to the development of coherent, clear and fair performance indicators for aid recipients in such areas as public financial management and procurement, it said.  (See Bribery and Corruption.)

Better coordination of policies directed at improving governance and accountability of how aid is used should be "common," Paul Wolfowitz, World Bank president, said at the committee's concluding press conference.

"If each donor and each partner country has a different policy we will have no policy at all," Wolfowitz said.

Yet, he said, a single anti-corruption standard would not work in "the broad, complicated development environment."

"No country has achieved perfection" in eliminating corruption. . . . What we can expect, however, is progressive improvement over time."

The committee also asked the Bank and Fund to continue advocating for using aid to help all countries adopt free trade policies.

But, it said, using aid for trade "is a complement not a substitute" for a successful completion of the ongoing round of negotiations in the World Trade Organization (WTO), known as the Doha Development Agenda.  (See USA and the WTO.)

On another topic, the committee said the Bank should explore new ways to finance investments in clean, sustainable, efficient and cost effective energy sources for developing countries.

A new financing approach could help control greenhouse gases as well as help developing countries adapt to climate changes. (See Climate Change.)

The committee also urged continued coordination at the international, regional and national levels to develop rapid response plans to a potential global spread of avian influenza, commonly known as bird flu. (See Bird Flu (Avian Influenza).)

For more information on U.S. policies, see Trade and Economics.