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Jonathan Glennie

BOND, 8 May 2013

Aid and MICs: Some common assertions and some clues to the future of aid

3

Common assertion #1

MICs no longer need aid

MICsleading

4

Arbitrary and stingy cut-off points

Middle income countries

Low income (LIC)

Lower middle income (LMIC)

Upper middle income (UMIC)

High income (HIC)

$1000 or less

$1000 -

$4000

$4000 -

$12500

$12500 or

more

“Is it not time for these arcane

income thresholds for ‘graduating’

from ‘low-income’ status to be laid

to rest?”

Martin Ravallion, Director, Development

Research Group, The World Bank

5

An expanding set of objectives (Glennie 2012a)

Already agreed goals

Possible future goals

MDGs Climate

finance

SDGs Broader

Poverty eradication

Adaptation and mitigation

Equitable use of natural resources and ecosystem management e.g. forests, oceans

E.g. technological connectivity

“Development only really begins

when extreme poverty is

eradicated.”

Adolf Kloke-Lesch, former managing director

at GIZ, Germany

6

Common assertion #2

LICMICHIC progress tends to be linear

MICsleading

7

Movements between income categories

  1978 1990 2003 2012LIC 27 48 61 36LMIC 54 50 56 54UMIC 40 35 37 54HIC 30 44 54 70LDC 30 43 50 48World 151 177 208 213

8

$110bn

$130bn $172bn

9

Common assertion #3

Most poor people live in MICs

MICsleading

10

The Sumner numbers depend on only 5 countries (Glennie,

2011)

11

Common assertion #4

Aid has “done its job” in MICs

MICsleading

12

The vast majority of poor people live in Low Aid

Countries

(Glennie, 2012b)

13

10 most poor-populous countries

(Glennie, 2012b)

14

Aid to MICs is likely to be increasingly effective (VFM)

LIC

UMIC

Need

LMIC

Effectiveness(Glennie, 2011)

15

Common assertion #5

Aid from MICs differs fundamentally from DAC aid

MICsleading

16

Regional categories of donor make somewhat more sense

17

5 principles for all development finance (Glennie and Rogerson, 2011)

1. Accountability to citizens

2. Fulfilment of commitments

3. Complementarity

4. Mutual learning

5. Agreed human rights and environmental standards

18

Recap

1. MICs still need aid and they can use it effectively

2. They also want to supply aid (for political as well as charitable reasons)

3. Global goals are expanding (planetary resource limits)

19

The 2 major trends of this global era

1.Shifting geopolitical balance

2.Planetary resource limits

ALSO the return of the public sector...

South-south cooperation

Climate finance SD finance

20

A global public sector

21

People accept public spending at the national level

22

Mutual benefit, mutual cost

23

Common assertion #6

The aim of aid is to make itself unnecessary

MICsleading