Andy Sumner - Institute of Development Studies

IDS WORKING PAPER 349Table 5.2 Selected large MICs and poor people, net ODA, aiddependency and forex reservesCountry Number of poor Net ODA Aid dependency Forex reservespeople (under ($bn, 2008) ratio (2008, >9% (2008–2010,$1.25/day, GNI = high) $bn)millions, 2007)China 207,559 1.5 0.0 1953.3India 455,830 2.1 0.2 279.0Indonesia 47,002 1.2 0.3 71.8Nigeria 88,592 1.3 0.7 53.0South Africa 11,528 1.1 0.4 42.0Sources: World Bank – World Development Indicators; Global Development Finance (GDF); InternationalMonetary Fund (IMF); Economist Intelligence Unit (EIU)This resonates with other calls for a new approach to development objectives:The objective, through economic development and statebuilding, istransformation of developing countries into middle class societies in whichcitizens hold their governments accountable for provision of physical securityand basic social services… A good indicator of progress in transformation is agrowing middle class that has the economic heft and consequent politicalvoice to hold government accountable for the domestic social contract.(Birdsall 2009: 2)This might mean that long-term poverty reduction requires more focus on structuraleconomic transformation (assessed perhaps by the percentage of employment inagriculture) or a social transformation to a low level of inequality (assessed by ginicoefficient and implied emergence of a middle/consuming class), or politicaltransformation (assessed by tax revenue as percentage of GDP and the impliedaccountability that follows).5.3 The future of aid – rethinking the future of aid and aideffectivenessFinally, aid needs some rethinking. Aid and ‘aid effectiveness’ in particular aregoing through a major rethink already (see detailed discussion in Evans 2010).There is the transparency and accountability revolution (see Barder 2009), andthere are much broader and deeper changes afoot. There is further a questioning ofwhether aid effectiveness debates have missed the point by focusing on quantityor quality of aid (Fischer 2010) and even suggestions that traditional ODA is dead(Severino and Ray 2009, 2010). Further, this is in the context of the aid systemand global governance needing to respond to ‘the long crisis’ (Evans et al. 2010).Severino and Ray (2009) discuss a ‘triple revolution’ in ODA in terms of goals,players and instruments (all mushrooming), questioning the validity of the current29