Following the wave of independence from the old colonies after the second World War, a new movement emerged, which aimed to promote the economic development and welfare of the then called “third world” countries. It was called development aid and it has grown today to around over 160 billion Euros, or roughly the GDP of Algeria. For EU countries, this aid represents a mere 0.5% of the GDP.
As the largest donor, the EU organizes since 2006 the European Development Days (EDD), bringing the world’s development community together over a couple of days to share ideas and experiences. With high-level speakers such as Desmond Tutu, Kofi Annan or Richard Branson in the past, and this year Jean Claude Junker, Muhammad Yunus, Christine Lagarde and Jeffrey Sachs (among others), and over 500 sessions, there are endless possibilities.
This year’s theme is “Investing in Development“. Development aid has long been criticized for being ineffective, and one of the reasons for this is the simple fact the aid flows are dwarfed by other financial flows, such as foreign direct investments and can hardly make a noticeable difference by themselves. The new paradigm which most national aid agencies are following, is to mobilize private sector investment to complement development aid. The underlying logic is that investing in eradicating poverty, girls’ education, nutrition and sustainable employment benefit all stakeholders. The economic development and welfare of the world’s most vulnerable is more relevant than ever.
Also, in the past years, development aid has changed to become more aligned to developing countries’ priorities since the Paris Declaration on Aid effectiveness in 2005. Since this declaration, all development projects must align with the countries own development plans. Ongoing criticisms to the aid industry have allowed it to adapt to new ideas and become increasingly results focused. There are legitimate concerns that the current drive to partner with the private sector might result in many of the “bottom of the pyramid” being reached by aid, or that some private sector investments could result in increasing inequality, but it is undeniable that the flow of private sector resources can multiply the impact of public aid flow on the livelihoods of the poor.
This year the EDD is taking place at Tours et Taxis on the 7th and 8th of June. The registration is now closed but considering the over 6,000 participants, you can be sure the European and world development community will be over-spilling to the streets of Brussels.