Human Development Report 2013 - UNDP

Instead of having a centreof industrialized countriesand periphery of lessdeveloped countries, thereis now a more complexand dynamic environmentTABLE 2.2Different models of development partnershipscontribute to more- inclusive growth. Givencurrent trends, African consumers will continueto benefit from increased imports of affordableproducts. Flourishing local markets are likelyto breed local entrepreneurs and attract moreinvestment in extractive industries as well as ininfrastructure, telecommunications, finance,tourism and manufacturing—particularly lightmanufacturing industries in which Africancountries have latent comparative advantage. Inthis scenario, which has already begun to playout in the past decade and in other regions,host economies undergo structural change, andindigenous industry responds to competitivepressure from imports and investment inflowsby upgrading production. But the process isproving difficult in countries where technologicalcapabilities and infrastructure are less welldeveloped.Such expansion of domestic markets will behampered by substantial pockets of deprivationand lagging regions within large developingcountries. Although South Asia, for example,reduced the proportion of the population livingon less than $1.25 a day (in 2005 purchasingpower parity terms) from 61% in 1981 to36% in 2008, more than half a billion peoplethere remained extremely poor. 61These disparities undermine the sustainabilityof progress because they create social andpolitical tensions. In India, the Maoist rebelsare active in a large swathe of the country’shinterlands; in neighbouring Nepal, Maoistsevolved from an ill-equipped militia to becomethe country’s largest political party within 12years.Paris Declaration principle Traditional donors New development partnersOwnershipHarmonizationManaging for resultsMutual accountabilitySource: Adapted from Park (2011).National development strategiesoutline priorities for donorsShared arrangements to minimizeburden on recipientsRecipient-led performanceassessment practicesGreater accountability throughtargets and indicatorsNational leadership articulatesneed for specific projectsFewer bureaucratic procedures tominimize burden on recipientsFocus on delivering aid quicklyand at low costMutual respect of sovereignty;policy conditionality eschewedNew forms of cooperationMany developing countries are emerging asgrowth poles and drivers of connectivity andnew relationships, opening up opportunitiesfor less developed countries of the South tocatch up and leading to a more balanced world.Instead of having a centre of industrializedcountries and periphery of less developedcountries, there is now a more complex anddynamic environment. Countries of the Southare reshaping global rules and practices intrade, finance and intellectual property and establishingnew arrangements, institutions andpartnerships.Development assistanceThe rise of the South is influencing developmentcooperation bilaterally, regionally andglobally. Bilaterally, countries are innovatingthrough partnerships that bundle investment,trade, technology, concessional finance andtechnical assistance. Regionally, trade andmonetary arrangements are proliferating inall developing regions, and there are pioneeringefforts to deliver regional public goods.Globally, developing countries are participatingactively in multilateral forums—the G20,the Bretton Woods institutions and others—and giving impetus to reforms in global rulesand practices.A rising number of developing countriesprovide aid bilaterally and through regionaldevelopment funds. Often, this involves entwiningconventional development assistancewith trade, loans, technology sharing anddirect investments that promote economicgrowth with some degree of self-reliance.Countries of the South provide grant aid ona smaller scale than traditional donors dobut also give other forms of assistance, oftenwithout explicit conditions on economicpolicy or approaches to governance. 62 In project-basedlending, they may not always havebeen very transparent, but they do give greaterpriority to the needs identified by receivingcountries, ensuring a high degree of nationalownership (table 2.2).Brazil, China and India are importantproviders of development assistance, whichis substantial for countries in Sub-Saharan56 | HUMAN DEVELOPMENT REPORT 2013