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After four days of negotiation between UN member states, the third Financing for Development conference in Ethiopia ended on 16 July by setting the stage for a revision of how the world gives out aid.
In a nutshell, rich countries will continue to supply overseas development assistance but focus this more around the forthcoming Sustainable Development Goals (SDGs) and the needs of the least developed countries. Poor countries will now be asked to contribute national funds to such efforts, raising the money through taxation and better governance.
Until now, aid was applied top-down: rich countries gave and poor countries received, with few requirements for long-term commitments to growth.
The Addis Ababa deal sounds simple on paper, but will not be in reality.  Historically, many developing countries have been reluctant to make the financial contributions they admit are important. Taxation, for example, remains weak in most developing countries despite wide recognition of the importance of national revenues.
This hesitation is understandable. Raising public revenues requires functioning institutions, cooperative citizens and statistics offices that can properly monitor state income, public spending and policy success. All this is extremely hard to achieve, especially in conflict countries.
But it is also easy to see why rich countries have been frustrated — in the Addis Ababa deal, they insist on seeing their aid contributions matched by increases in national revenues and funding.
It is also true that, in places, decades of aid have done little to allay poverty as funds are channelled into unsustainable projects or lost to corruption. For example, the conference heard how poverty in East Timor increased by 15 per cent between 2001 and 2007 despite getting US$8 billion of aid over this period.
So how to get past that perennial mismatch of goals to reality? One way is to focus on an area where national funds combined with aid can work wonders: science. Unfortunately, spending on research and innovation were pushed to the sidelines as talks got hung up on taxation, commitment levels and remittances.
To make the Addis deal a success, developing countries need to overcome a global mind-set that casts them as needy, helpless and passive — and which manifests in the traditional giving of aid with little need for receiving countries to address corruption, bad public services and other obstacles to growth. They can change that by taking pride in their institutions, policies and achievements, and translating this pride into lasting commitments to spending and growth — from politicians, citizens and businesses.
Science is the perfect target for such efforts. Spending money on education and science would be an easy sell when asking citizens to pay more tax. Meanwhile, aid funds spent on science would quickly improve growth and wellbeing, while rich countries would also gain access to more research collaboration partners and knowledge.
“The conference practically ignored the potential of science spending to boost economic growth and social development.”
Inga Vesper, SciDev.Net
Scientific achievements create international visibility. Good universities are a source of pride and perfect public relations material for countries trying to attract investment. The side effects of a focus on science education are also clear: an increased number of educated citizens who are more likely to pay taxes and hold their institutions to account. And scientific research can feed into innovation and business growth, which in turn raises tax income, cuts unemployment and raises people’s disposable income — all crucial factors in creating national growth and weaning countries off aid.
But the summit’s only nod to science came in the form of an agreement to establish the Technology Facilitation Mechanism, which includes a website that joins up UN science projects and funds.
This is due to the staid and conventional way donor countries view science. It was clear from comments during negotiations that many high-level politicians in rich nations see science as something that needs expensive laboratories and equipment, prestigious institutions and, above all, a tradition of “doing research” that harks back hundreds of years.A debate on the Technology Facilitation Mechanism, for example, focused primarily on giving developing countries access to research and science done at universities in rich countries — to the frustration of Kenya’s UN ambassador, Macharia Kamau, who pointed out that science comes in many forms. Innovative minds exist everywhere, he said: poverty creates the need to innovate every day, and the developing world is brimming with young, smart people keen to turn their great ideas into reality.
But most of these efforts flounder when it comes to financing. Research funding in many developing nations is close to nonexistent and venture capital is hard to access for those without assets.
Aid money could close these finance gaps — by funding universities and government-led projects to support promising research, and by encouraging investment in innovative companies. Unfortunately, in Addis Ababa that opportunity somehow got lost.
Questions of poverty
But there are glimpses of a change in mind-set. Leaders from developing nations, especially those from Africa, were clearly irritated when Western speakers cast their countries as places of poverty, disease and war.
Nkosazana Dlamini Zuma, chair of the African Union Commission, said she was tired of aid’s focus on extreme poverty, which, she said, ignores a wide range of economic activities and developments. “I often get approached by people who ask me if the world thinks it’s okay to be poor as long as you are not very poor.” The point is, escaping extreme poverty is not enough — and, according to Zuma, science and technology could be the bridge that helps people move into economic security, and stops developing countries being seen as passive places of want.
But the conference practically ignored the potential of science spending to boost economic growth and social development.
Nonetheless, the traditional system of providing aid has been shaken up. Developing countries must now play their part, with developed countries directing aid into areas that promote independent, sustainable growth. Science can only benefit from that.
Inga Vesper is news and features editor at SciDev.Net.