Annalisa Prizzon:Deeper cooperation can serve countries' own interests to accelerate global recovery
Updated: Jan 7
Dr.Annalisa Prizzon, Senior Fellow in Economic Security
Klaus Dodds is a professor in the Department of Geopolitics at Royal Holloway, University of London, and editor of the journal Territory, Politics and Governance. He has served as an expert adviser to the Arctic Select Committee in the House of Lords and the House of Commons Environmental Audit Committee. His main research areas include geopolitics and security, media/popular culture, ice studies, and international governance of the Antarctic and Arctic. Related books include Ice: Nature and Culture, and The Arctic: What Everyone Needs to Know.
Deeper cooperation can serve countries' own interests to accelerate global recovery
1.Could you please elaborate on the view that "Development cooperation could serve self-interest to accelerate global recovery"?
Motivations behind development cooperation are multi-faceted often, but not always, reinforcing each other, e.g. global solidarity, mutual support, diplomacy and commercial interest. This crisis is a stark reminder that collective investment is needed to achieve common goals across all countries and challenges, including pandemics, climate change and security. Development cooperation towards pandemic preparedness, treatments and vaccines can help reduce the spread of the Covid-19 virus, the development of new variants and lead to much a faster re-opening of economies across the world.
2.What could explain the fact that aid flows did not decrease as much as predicted during the economic crisis or the COVID-19 pandemic?
There are many factors. First of all, development cooperation budgets are defined at the beginning of the fiscal year. Therefore, changes in aid budgets might materialise well after the main economic shock occurred. Second, many donors are aware that cuts could have a long-term impact on their programmes and can decide to ringfence aid budgets. Third, aid budgets are a relatively small fraction of public expenditure and of the fiscal policy packages many countries have implemented in response to the Covid-19 crisis. Fourth, economies in many European countries and the United States are bouncing back to pre-crisis levels of economic activity much earlier than initially forecast. Lastly, multilateral development banks have ramped up their programmes, leveraging on existing and past contributions and capital from their donors and shareholders.
3.Will multilateral development banks play a bigger role in helping poor countries recover?
Yes, they will. The World Bank and four major regional MDBs have already responded quickly to the Covid-19 crisis. Overall, the volume of project approvals by these MDBs rose by 35% between 2019 and 2020, doubling for the concessional lending arm of the World Bank and tripling for the concessional lending arm of the Asian Development Bank. MDBs offer very good value for money as they leverage additional finance from donor contributions and their capital, the more so as bilateral aid budgets are under pressure. MDBs also provide countercyclical lending at more affordable rates for most borrowing countries than what markets can offer. The replenishment of the International Development Association (IDA) – the concessional lending arm of the World Bank – brought forward by a year to 2021 and the record replenishment of the International Fund for Agriculture Development (IFAD) are all examples of the support bilateral donors to multilateral organisations in the recovery from the Covid-19 crisis.
4.What problems should future international aid focus on?
In the short-term, vaccinations. Vaccination rates are too low in many low-income countries. They should accelerate and so vaccine production, for the same reason I mentioned earlier on: we will all be safe if everyone is safe. And then measures for economic recovery, especially to those countries whose industries suffered the most from travel restrictions and social distancing, e.g. tourism and manufacturing. Boosting food production is another priority to improve food security and reduce reliance on imports. And finally, reaching those fragile countries and challenging contexts where aid remains one of the few financing options available to support national development.
Interviewer: Cai Hongze
Interview Date：May 1, 2021