Africa: UNCTAD report recommends new aid approaches

The UN Conference on Trade and Development (UNCTAD) has suggested a new aid architecture for Africa, saying the current system is chaotic, with too many agencies pushing too many development projects that often do not match the recipients` development goals. UNCTAD´s 2006 report on Economic Development in Africa examines how the commitment by the international community to double aid to Africa might place the continent on a sustainable development path. The central message of the report is that, if this commitment is to translate into big reductions in poverty and lasting gains in economic welfare, new thinking is required to tackle the unbalanced state of the international aid system. The report identifies the flaws in the existing system, such as high transaction costs, politicization, lack of transparency, incoherence, unpredictability, and excessive demands placed on the weak institutions of recipients. According to the report, a ‘big push’ provides a sensible alternative in seeing how renewed capital accumulation (in both the private and the public sector) can link up to structural and technological change, unleashing a cumulative process of rising productivity, incomes and savings. A ‘big push’ would require a new aid architecture with a much larger multilateral component, managed under different institutional arrangements, and the provision of much greater policy autonomy to recipients.