Clarifying alternative development systems

The end of the Cold War has created an opportunity to rethink the framework for development cooperation. Foreign aid was once used, at least in part, to support the strategic security of states, to achieve diplomatic objectives and to promote particular ideologies. That is no longer necessary, if it ever was, and the focus of cooperation can now shift to promoting the economic security of people, particularly the poorest people. That is, the thrust of a new framework for development cooperation should be to reduce global poverty, promote human development and protect people from severe hardship.

Those objectives can be achieved in part by reforming foreign aid as conventionally understood: improving the allocation among recipient countries, reducing the tied element, improving the accuracy of targeting etc. But development cooperation should be seen in a much broader context, including the access of developing countries to markets, improved mechanisms for the transfer of technology, greater international mobility of labour and cooperation on environmental issues. In such a context, foreign aid, although important, may play a less prominent role.

In fact, analysis indicates that much technical cooperation cannot accurately be described as aid at all, nor does it contribute to development. Technical cooperation is largely driven by the objectives of donors; it is highly tied; and it is used, inter alia, to promote exports, encourage the spread of certain languages and cultures, provide employment for technicians and professionals from donor countries and enable donors to supervise and monitor aid-financed projects. If development occurs as a result, it is largely an accidental by-product.

Conditions are little better in the receiving countries. Mechanisms for ascertaining genuine needs for technical cooperation do not exist. Foreign experts are poorly used; technical cooperation is treated as a free good; institutional capabilities are not increased and hence the apparent need for technical cooperation continues indefinitely and even increases. After 45 years of technical cooperation and annual expenditures of US $12,000-15,000 million, there is no evidence that the original objectives as publicly stated have come close to being met.

In principle, technical cooperation should contribute to the transfer of technology and to human capital formation. In practice, it seems to have done so only to a limited extent. Although our intention is to analyse technical cooperation rather than suggest policy reforms, several possibilities emerge from the discussion:

1. Most technical cooperation experts are from developed countries: less than 10 per cent are from the host country or from other developing countries. The latter percentage could be increased substantially, the costs of technical cooperation could thereby be reduced and, most important, national capabilities in developing countries could be enlarged.

2. Foreign technical cooperation experts are paid on average 15 times as much as nationally recruited experts, even when the local experts have the same qualifications. That is both inequitable and inefficient and suggests that considerable scope exists for doing more for less.

3. There is a proliferation of channels for providing technical cooperation. The task of providing multilateral technical cooperation was originally assigned to the United Nations, yet today the United Nations supplies only a quarter of all technical cooperation; the rest is supplied through the World Bank, the regional development banks and, of course, the bilateral aid agencies. The proliferation of channels suggests that there may be scope for specialization and division of labour.

Failing piecemeal reforms, it might be better to assign to each eligible country a lump sum budget to be used to purchase technical cooperation services thus shifting responsibility to the recipients, providing them with an incentive to treat technical cooperation funds as a scarce resource and encouraging them to formulate priorities for technical cooperation by sector, donor and type of service. The use of the resources could then be monitored regularly by the contributing nations and agencies.

Finally, the need for technical cooperation apparently never ends. Few countries ever graduate from the list of the needy. Since 1972, however, the United Nations Development Programme (UNDP) has classified 21 developing countries as net contributors based mainly on gross national product (GNP) per capita. Most of these countries have technical cooperation programmes with UNDP but pay for the services they receive. More recently, at its High-Level Meeting held in December 1993, the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) agreed that as of 1996, concessional assistance to 16 high-income developing countries would no longer be accounted as official development assistance (ODA) in monitoring financial flows to aid recipients. DAC also agreed to intensify the concentration of its aid in countries whose GNP per capita falls within the World Bank lending threshold. Perhaps the time has come to develop measures of progress, refine criteria for eligibility and improve mechanisms for graduation.

UNESCO traces alternative development and modernization paths compatible with the aspirations and values of different population groups and directed towards a better quality of life for all. The implications of such alternative pathways for the cultural dimensions of education, science and technology are clarified.