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May 2011

Background Brief for UN LDC-IV Conference on Aid and MDGs, Istanbul

The Least Developed Countries face some of the biggest challenges to meeting the Millennium Development Goals: inadequate social services, weak governance, limited revenue bases and volatile economic growth. Recognising these challenges, the Brussels Declaration and Programme of Action (BPoA) was adopted in 2001 at the Third United Nations Conference on Least Developed Countries. Notwithstanding some progress towards achieving the thirty-six goals and sixty-three indicators set out in the framework of the BPoA, persistent economic and social challenges remain in many of the least developed countries. International aid, on which LDCs are highly dependent, has been insufficient to help LDCs address these challenges and all too frequently the quality of the aid received has been poor. This is an agenda that is doubly important at a time when the aid budgets of many bilateral donors are being squeezed, and many LDCs are struggling to cope with the aftershocks of the global economic crisis.

Key Points:

Although a majority of people below the income poverty line of $1.25 a day now live in Middle-Income Countries (MICs), poverty in Least Developed Countries is deeper and more pervasive, and they continue to shoulder much larger human development deficits in health, education and other key sectors.

LDCs account for 12% of the world’s people, but one quarter of income poverty, and 40% of children dying before the age of five.

Although aid to LDCs has risen, it falls well short of the targets agreed upon in the Brussels Declaration and Programme of Action for the Least Developed Countries in 2001. Moreover, aid allocations are often not being driven by need and the ability to use aid well.

LDCs are not getting a fair share of aid across sectors, relative to other developing countries. Some sectors – such as health and agriculture – have seen an increase in aid allocations, but this rise is accounted for by increasing allocations to just 5 countries. Meanwhile aid for LDCs in other sectors such as water and education have seen cut backs.

LDCs are a mix of both ‘aid darlings’, such as Afghanistan, and ‘aid orphans’, such as Niger.

Improvements in the quality of aid to LDCs have been slow, and therefore so has its cost-effectiveness in producing development results. For example, aid continues to be highly volatile and unpredictable. Only two-thirds of aid to LDCs

The Least Developed Countries: Biggest Challenges, Least Assistance?

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is disbursed in the intended year and in the case of the Democratic Republic of Congo, this can be as low as 20 percent.

1) Introduction

Recent poverty analysis has showed that the majority of the world’s poor no longer live in Low Income Countries (LICs), but in middle-income countries (MICs)i. In 1990, it was estimated that 93 per cent of the world's poor people lived in LICs. In contrast, in 2007, three-quarters of the world's approximately 1.3bn poor people lived in MICs, and only about a quarter of the world's poor (370 million people) in 39 low-income countries.ii There is a risk that this change in the global distribution of poverty leads to LICS and Least Developed Countriesiii - a UN classification which incorporates the majority of the LICs and other countries with major development challenges – being sidelined in global poverty reduction efforts, as the focus shifts towards MICs. Save the Children believes that the LDCs – which tend to shoulder a disproportionate burden of poverty and unmet need in health and education, and which are usually heavily aid-dependent – require ongoing support and attention from the international community. As the UN LDC Conference in Istanbul takes place, the donor countries need to increase and improve their aid to LDCs, as part of a wider development strategy to support growth and poverty reduction in the world’s poorest countries.

In the late 1960’s, the United Nations began paying special attention to the LDCs, recognizing those countries as the most vulnerable among the international communityiv. There have been 51 LDCs since the UN created the category in 1970. To date, only three have graduated from this status – Botswana in 1994, Cape Verde in 2007, and Maldives earlier in 2011. This, in itself, is a reminder that LDCs continue to be trapped in a cycle of poverty and limited economic development. Substantial progress is urgently required to meet the Millennium Development Goals (MDGs) of halving poverty by 2015 and promoting sustainable development. The success of the MDGs will depend, to a significant degree, on the success of the LDCs in reducing poverty and boosting their economic performance. The unique structural and governance challenges facing LDCs negatively impact the sources of revenue at their disposal, as they struggle to raise domestic taxation and attract foreign direct investment. Official development assistance provides a significant share of public spending in many LDCs. However, this paper shows that LDCs are not getting the quantity or the quality of aid they need to address their development challenges. In this paper we estimate the relative burden of poverty and the human development deficit faced by the LDCs, compared with Middle Income Countries and with Conflict Affected and Fragile States (CAFs). We show that aid to LDCs is not commensurate with the share of development need, and tends to be lower quality than the aid given to other developing countries. In the sections that follow, where we present data on poverty and human development, two sets of graphs are shown. In each case, the first graph contrasts the LDC burden to the total MIC and CAF burden. The second graph excludes India and China from the MICs category. We do this because India and China taken together constitute more than one-third of the world population, and therefore tend to skew comparative national statistics. 2) Least developed countries bear a burden of poverty, relative to middle-income countries The first target of the Millennium Development Goals is to reduce the incidence of income poverty by half between 1990 and 2015. However, the LDCs as a group are unlikely to reach this goal, despite moderate improvements over the last decadev. The LDCs bear a high burden

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in terms of the number of poor people and the depth of their poverty, compared to other developing countries. With a combined population of 835 million peoplevi, LDCs account for 12% of the world’s people but 24% of global poverty (calculated at $1.25 per day). Conflict Affected and Fragile States account for 21% and MICs for 55% (73% of poverty in MICs is accounted for by India and China). But at 46%, the poverty incidence in LDCs is far higher than for other categories of country. Poverty is deeper, as well as more widespread in LDCs than in other developing countries: the depth of poverty at $1.25 per day is averagedvii at a much higher rate for LDCs, at 19 percent, compared with 17 percent for CAF countries and a significantly lower average, of 3 percent, for MICs (even when including India and China in the calculation). Graph 1: Share of Poverty

Source: Calculated from the World Bank’s latest WDI poverty prevalence figures available for countries and the World Bank’s Data Catalogue for population figures.viii 3) Least developed countries suffer higher human development deficits, relative to middle-income countries At the UN Millennium Summit in 2010, the international community took stock of progress towards the Millennium Development Goals. The LDCs were found to be lagging behind on such critical indicators as hunger, child and maternal mortality, primary education and access to water and sanitation.ix Child and maternal mortality Of all the MDG goals, child and maternal mortality (MDG Goals 4 and 5 respectively) remain among the furthest off track, despite the increased focus of the international community in recent years. While considerable progress has been achieved on MDG 4, under-five mortality remains very high, with over 8 million children dying of preventable causes every year. The rate of reduction at 28 percent since the baseline year of 1990 is well below the 67 percent reduction required to meet the goal – progress must increase fourfold to reach the MDG by the target date of 2015x. In 2009, Middle Income Countries (excluding India and China)xi accounted for 12 percent of global child mortality, while LDC countries accounted for 39 percent of the global total. Together, the Democratic Republic of Congo, Ethiopia and Afghanistan account for 1.1 million child deaths a yearxii (Graph 02). A child’s survival is intimately connected to the health and wellbeing of his or her mother; a strong example of this comes from Afghanistan, where 75 percent of infants who survive maternal death die within their first year of life.xiii According to the State of the World’s Children

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Report (2009) the divide between industrialized countries and the least developed countries is greater in maternal mortality than on almost any other issuexiv. This divide was reflected in the 2009 LDC share of global maternal deaths (Graph 03) calculated at 35 percent compared to the MIC share of 24 percent. The divide becomes even starker, when India and China are excluded such that the LDC burden of maternal mortality was 41 percent as compared to an 11 percent burden share for MICs. Hunger and nutrition The MDG commitment to halve the incidence of hunger shows a similar pattern. One of the indicators by which progress on this goal is measured is the prevalence of underweight in children under five. The most common cause for a child being underweight is malnutrition or under nutrition; this is easily calculated by height-for-age (stunting) and weight-for-age (underweight) data for children under five. Despite an overall improvement in nutrition status of children, least developed and conflict affected countries continue to bear a disproportionately high number of stunted and wasted children, as indicated by Graph 04. Poverty, low levels of education, barriers to the access of health care services and a lack of food security all contribute to childhood under nutrition in LDCs. Education More than a decade has passed since the international community adopted the six ‘Education for All’ goalsxv in Dakar and the MDG target of achieving universal primary education by 2015. Despite these international efforts, more than 20 percent of children of primary school age in LDCs were still excluded from education in 2008.xvi In 2006 (the most recent available data) only 6 percent of the population aged 20-24 in LDCs was enrolled in tertiary education, compared with 23 percent in other developing countries.xvii Contrasting literacy data across LDCs, MICs and CAFs for youth (aged 15-24) also shows poor educational progress in LDCs; MICs had the largest proportion of literate youth at 55 percent, compared with only 20 percent in MICs.xviii (Graph 05). Water and sanitation MDG 7, Target 10, outlines the global ambition to halve the proportion of people without access to water and sanitation by 2015. LDCs still face acute problems related to water supply. They often lack the necessary technology and investment required to collect, treat and distribute water. Much of this problem stems from of weak governance and poor infrastructure which prevents the regulation of and control over water flows. Over 500 million people in LDCs still lack access to sanitation and over 300 million have no access to clean waterxix. Graph 02: Share of Under-five Mortality

Source: Calculated from UNICEF’s State of the World’s Children 2008 under-5 death figures available

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for countries Graph 03: Share of Maternal Mortality

Source: Calculated from the 2008 maternal death data available in WHO, UNICEF, UNFPA and WB publication ‘Trends in Maternal Mortality: 1990 to 2008’ Graph 04: Under-nutrition

Undernutrition

0

20000

40000

60000

80000

100000

120000

No.

of c

hild

ren

Stunting 57076 65174 100550

Underweight 37538 40869 70156

LDC CAF MIC

Undernutrition

0

20000

40000

60000

80000

No.

of c

hild

ren

Stunting 57076 65174 30083

Underweight 37538 40869 11544

LDC CAFMIC (excl. India &

China)

Source: Calculated from the World Bank’s latest WDI malnutrition (height for age and weight for age) prevalence figures available for countries and World Population Prospects: The 2008 Revision.xx

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Graph 05: Share of Literacy

Source: Calculated from the World Bank’s latest WDI youth literacy rates available for countries and World Population Prospects: The 2008 Revision.xxi 4) Aid Flows Are Not Responding to LDC Needs

4.1. Aid to LDCs has risen sharply, but must increase by at least 50% to meet targets A combination of poverty and unmet need, and limited domestic sources of revenue mean that many LDCs are heavily dependent on international aid.

In the aggregate, LDCs appear to have benefited from an increase in aid flows since 2000 –over the last decade donor aid to LDCs had almost trebled, rising from US$13.8 billion to US$37.3 billion. The share of LDCs in total global aid had also risen, by 5 percentage points to 31 percentxxii. However, most of this increase reflects large rises in aid to Afghanistan, just as two countries (Afghanistan and Iraq) explain most of the 7 percent rise in aid to post-or in-conflict countries since 2003.

DAC aid to LDCs also rose as a proportion of donors’ national income (GNI), from 0.06 percent to almost 0.1 percent of GNI. But this remains well below the target in the Brussels Programme of Action of 0.15-0.2 percent. By 2009, only 7 donors (Belgium, Denmark, Ireland, Luxembourg, Netherlands, Norway and Sweden) had reached 0.2 percent, and only two more (Finland and the UK) 0.15 percent. To reach 0.15 percent overall, DAC donors would need to increase aid to LDCs by 50 percent; to reach 0.2 percent they would need to double itxxiii. 4.2. LDCs are not getting A Fair Share of Aid across Sectors Looking at key sectors (Graph 07), since 2002 the share of aid going to LDCs has risen sharply in agriculture (26.6 percent to 38.8 percent) and health (28.9 percent to 38.9 percent), at the expense of middle-income countries. A closer look at Table 01 however, shows that while ODA in the health sector to LDCs has increased, 45 percent of this total goes to only 5 LDCs – Ethiopia, Congo DR, Tanzania, Afghanistan and Mozambique. Therefore, whilst the overall picture is one of increasing aid to these sectors, only a small number of countries stand to benefit.

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Graph 06: Total ODA (excluding debt relief) by Country Grouping

Source: OECD (aggregated aid statistics) Graph 07: Share of LDCs in DAC Sectoral ODA

Source – OECD (credit report system)

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The LDC share of aid to water and sanitation has stagnated at around 30 percent, while aid to education has fallen from 33.1 percent to only 28.6 percent. From 2002 to 2006, the LDC share of aid to water and sanitation was disproportionately lower than that received by MICs such as Malaysia, Indonesia and China. Malaysia received an average $500 in aid for every person without access to water. Madagascar, eighty places behind Malaysia on the Human Development Index, received less than $2 per un-served personxxiv. 5) Aid levels among LDCs vary widely Some LDCs receive far more aid than others. The disparity between aid ‘darlings’ and ‘orphans’ reflects a range of factors, including the willingness and ability of recipients to use aid well (or donor perceptions of this), geopolitical and strategic links, trade and investment interests, and cultural ties. Table 01 shows that the top five LDCs currently receive almost half of total aid to LDCs. This concentration in a few countries has been growing since 2005, as increasing amounts of aid have gone to Afghanistan. Aid concentration is reflected at sector levelxxv. 54 percent of aid to agriculture in LDCs went to only 5 countries (35 percent to Ethiopia and Afghanistan alone). Five countries received 45 percent of total aid to health among LDCs, 40 percent of aid to education and 38 percent of aid to water and sanitation. Table 01: ODA disbursements to the top 5 LDCs (by sector and total), 2009

Sector Top 5 LDC programme country recipients Top 5 total shareMedian %

share

Amounts disbursed 2009 (US$

billion)Agriculture, forestry

and fisheriesEthiopia (18.2%), Afghanistan (17.8%), Tanzania (7.3%), Mali

(5.6%), Uganda (5%)53.9% 0.91 2.64

Education Ethiopia (15.5%), Afghanistan (7.9%), Bangladesh (6.2%), Mozambique (5.4%), Nepal (4.96%)

40% 1.09 2.88

Health Ethiopia (14.4%), Congo DR (8.7%), Tanzania (8.6%), Afghanistan (7.1%), Mozambique (6.1%)

44.90% 0.64 3.10

Water supply and sanitation

Tanzania (10.7%), Ethiopia (8.8%), Haiti (7.6%), Mozambique (5.9%), Uganda (5.3%)

38.30% 0.40 1.32

Overall ODAAfghanistan (15.8%), Ethiopia (9.7%), Tanzania (7.4%),

Sudan (5.8%), Congo DR (5.6%)44.30% 1.11 394.02

Source: UNDCF 2011

This concentration does not reflect population size. According to the World Bank, ODA per capita varies from US$433 for Samoa to only US$7 for Bangladesh and Myanmar. With the exception of Afghanistan, the top 10 aid recipients per capita are countries with small populations. LDCs’ can be grouped into 6 clusters depending on their MDG status and progressxxvi. Aid to the 14 countries with the lowest status and progressxxvii has risen faster than most other clusters over the last five years. Donors’ forward spending plans indicate that aid to these countries will rise by only 0.2 percent over 2010-12, much less than other clusters. Indeed, 8 of the countries most in need (Afghanistan, Central African Republic, Chad, Haiti, Liberia, Sierra Leone, Somalia and Timor Leste) should expect falling aid levels – although in the case of Afghanistan especially this is from a relatively high initial level. Donors are increasingly moving to reward countries which have already made progress, but in doing so risk abandoning many countries with the large unmet needs.

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6) Aid to LDCs is Poor Quality The quality of aid to LDCs is often below average. This matters both because poor quality aid imposes higher transaction costs on recipients in terms of coordination, planning and reporting, and because this has knock-on effects on the cost-effectiveness in terms of the results it produces: 1. Programmable Aid: According to the OECD measure of whether aid is predictable and

gets spent in the recipient country – known as country programmable aid (CPA)xxviii - 86 percent of aid to LDCs is programmable. However, this falls below 50 percent for the bottom 10 aid recipients, and around 25 percent for Burundi, Central African Republic and Somalia. For these LDCs, less than half the aid they received can be spent on any development programmes, including delivering results in the health and education sectors. In addition, US$2.2 billion of money reported as aid is actually spent on scholarships for developing country students to study in OECD countries (most of which go to middle-income countries).xxix

NIGER: AN LDC “AID ORPHAN” Niger is a good example of an LDC “aid orphan”. It was among the first countries in the world to design its own poverty reduction strategy in 1997. It was also among the first to design its own comprehensive education and health sector plans, showing strong national leadership on poverty reduction. According to the Paris Declaration surveyxxx, it had a moderately good but improving development strategy, a moderately strong public financial management system, and a strong procurement system, though its results management was weak. Nevertheless, it has received very little aid: in 2009, donors gave US$31 for each Nigerien citizen, while it was ranked 8th from bottom of the LDC list. In addition, over the last five years its Country Programmable Aid (CPA) has grown by only 1 percent. It also has very few donors. France, Japan, Denmark and Germany are the major donor governments, with another 4 governments giving relatively small amounts limited to 1-2 sectors. IDA, EU, ADB and the UN dominate multilateral aid flows, with 3 other agencies playing a marginal role. As a result, in key sectors such as infrastructure and water, Niger has only 2-3 donors, making development results highly vulnerable to volatile decisions by individual donors. Niger also suffers from very poor quality aid.xxxi The Paris Declaration survey indicated no general budget support and less than 20 percent sector budget support (for education and health). Only 26 percent of aid uses government financial management systems and only 37 percent uses government procurement systems. Donors conducted only 18 percent of donor missions and 32 percent of analysis jointly. According to the Heavily Indebted Poor Countries Capacity Building Programme, compared to other HIPC LDCs, Niger receives more off-budget aid, lower-quality technical assistance, and little information from donors on their future plans; and faces more policy and procedural conditions. Niger has no functioning system for holding government and its donors mutually accountable for the results of aid. Partly as a result of these shortfalls, Niger is off-track on meeting MDGs 1 (poverty), 2 (universal primary education), 3 (gender equality and empowerment), 5 (maternal health) and 7 (environmental sustainability). It remains one of the countries furthest from reaching the millennium targets. Recently, this problem has been exacerbated by political instability, culminating in a military coup in February 2010. This resulted in a slowing and then suspension of aid commitments and disbursements. Yet in April 2011, Niger has elected a new civilian government committed to using aid funds well. In spite of the evidence that it needs more and better quality aid, donors were intending as of end-2009 to reduce their aid to Niger by 0.5 percent over the next 3 years. This intention needs to be reversed for Niger to have any hope of meeting the MDGs.

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2. Budget Support:xxxii Disbursing aid as budget support to LDCs is the best way to promote LDC leadership of national development plans, by allowing governments to allocate aid in ways that strengthens their national systems, and encouraging parliaments and citizens to hold their governments to account. However, though the amount of budget support disbursed to LDCs has doubled since 2001, it has fallen from 12 percent to 9 percent of aid disbursements to LDCs. Countries in- or post-conflict usually receive virtually no budget support for several years, regardless of the quality of their development programmes, because donors find it hard to move away from humanitarian aid and multiple fragmented projects. Countries like Mozambique, Rwanda and Tanzania which have received general and sector budget support have made rapid progress towards the health and education MDGs; it has allowed many others to make basic health and education free for their citizens.xxxiii Moving to budget support would reduce transaction costs, freeing up an extra 15% of each dollar to increase health and education results, as well as covering the essential recurring costs like salaries, drugs and textbooks which are vital to further progress.

3. Use of Countries’ Own Systems: Many LDCs have made dramatic improvements to their public financial management and procurement systems, sharply reducing the likelihood that aid will get diverted into corruption. But donors have not significantly improved their use of LDCs’ own systems, continuing instead to waste large proportions of aid and cause long delays to the implementation of development programmes, by running their own parallel systems. This is particularly true in countries which have seen political instability or conflict. Reducing delays and wastage by using country systems would also increase the value of aid by around 20%xxxiv, increasing the results for health and education accordingly.

4. Fragmentation or Concentration of Donors? There has been a great deal of focus in recent years on countries which have “too many” donors, and therefore are burdened by excessive numbers of projects, missions and other processes. The emphasis in most countries has been on trying to rationalise the numbers of donors and projects, and to encourage joint missions and analysis by donors. However, in many LDCs the problem is the opposite: too few donors. In a recent study of “fragile states”xxxv, the OECD identified four LDCs (Afghanistan, Liberia, Solomon Islands and Togo), which are dependent on one donor for at least 50% of aid. Cuts in aid from key donors can undermine progress towards the MDGs, as Niger saw 2000-2002 when two key donors cut grant funds including to education.

5. Predictability/Volatility and Conditionality: predictable aid is vital to help LDCs plan and implement their development programmes and budgets. Aid needs to be predictable, not just by arriving in the year when it was promised, but also over the medium-term. Only two-thirds of aid to LDCs is disbursed in the intended year, and this can be as low as 20% (in DRCxxxvi): short-term predictability depends mainly on whether donors use budget support or other coordinated government-led programmes. Over the medium-term, unpredictability is linked to excessive policy and procedural conditionalities, which delay or disrupt implementation. In spite of donor pledges to reduce conditionality, there has been little progress. In a recent analysis, the OECD estimated that higher volatility in 31 LDCs is reducing the value of aid by 15%.xxxvii The countries worst affected are those with political instability or conflict, which leads donors to delay or suspend aid and take excessively lengthy periods to resume support. Burkina Faso, Burundi, CAR, Chad, Mali and Niger have all experienced sharp fluctuations in aid to health or education, reducing their abilities

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to deliver sustainable services to their populations and achieve human development results.xxxviii

7) Recommendations for the forum Save the Children has identified 5 key recommendations for the international community to ensure that LDCs have enough high quality aid to meet their unique development challenges and reach the MDGs;

1) Donors must honour aid pledges: Donor countries should meet target 7 of the Brussels Programme for Action (allocating 0.15 - 0.2 percent of GNP to LDCs), thereby doubling annual aid to LDCs, in the context of overall progress towards meeting the target of giving 0.7% of national income in aid.

2) Aid should be allocated according to poverty and human development needs: Most donor allocations are only weakly based on a recipient country’s needs. Allocations of aid should not only be based on evidence displaying the incidence and depth of poverty. It’s equally important that donors look at human development and other measures of poverty that encompass the broad spectrum of development challenges such as maternal and child mortality, under nutrition, access to water and sanitation.

3) Better sectoral aid allocations: Donors should allocate between sectors according to need. In particular the LDC share of overall aid to water and sanitation, and education should rise sharply. Agriculture and health allocations should continue to rise to around 50 percent of total aid to these sectors. The share of sectoral or general budget support should also increase to at least 30 percent in each LDC.

4) Improve donor coordination: Poor donor coordination and monitoring at the global level has resulted in a failure to target aid at the poorest countries. This requires better donor coordination and accountability. Donors should also ensure that a more even allocation of aid by reallocating from “over-fragmented” to “over-concentrated” countries and sectors.

5) Increase aid predictability: donors should increase the predictability of aid by reducing policy conditions and providing five-year forecasts of aid flows. This will enable LDCs to better plan and allocate resources for attainment of the MDGs.

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Annex – list of UN Least Developed Countries Africa (33) 1 Angola 18 Madagascar 2 Benin 19 Malawi 3 Burkina Faso 20 Mali 4 Burundi 21 Mauritania 5 Central African Republic 22 Mozambique 6 Chad 23 Niger 7 Comoros 24 Rwanda 8 Democratic Republic of the Congo 25 São Tomé and Príncipe 9 Djibouti 26 Senegal

10 Equatorial Guinea 27 Sierra Leone 11 Eritrea 28 Somalia 12 Ethiopia 29 Sudan 13 Gambia 30 Togo 14 Guinea 31 Uganda 15 Guinea-Bissau 32 United Republic of Tanzania 16 Lesotho 33 Zambia 17 Liberia Asia (14) 1 Afghanistan 8 Nepal 2 Bangladesh 9 Samoa 3 Bhutan 10 Solomon Islands 4 Cambodia 11 Timor-Leste 5 Kiribati 12 Tuvalu 6 Lao People’s Democratic Republic 13 Vanuatu 7 Myanmar 14 Yemen

Latin America and the Caribbean (1) 1 Haiti

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This paper is based on analysis conducted by Save the Children UK and Development Finance International. It was written by Shreya Mitra (independent consultant), Jessica Espey (Save the Children UK), Matthew Martin (DFI) and Richard Watts (DFI). References: Development Finance International (DFI) (2011), Guide to Donors [online], Available from: http://www.development-finance.org/en/services/guide-to-donors.html Education for All (EFA), (2010), ‘Reaching the Marginalised’, EFA Global Monitoring Report, New York: EFA

Global Campaign for Education (GCE) (2010), Back to School ? The 1Goal School Report, accessed at http://www.campaignforeducation.org/images/stories/Files/1Goal%20School%20Report.pdf LDC Watch (2011), A World Without LDCs, May, accessed at http://www.ldcwatch.org/index.php?option=com_jdownloads&Itemid=9&task=finish&cid=42&catid=3&lang=en LDC Watch (2011), ‘Civil Society Call for a Bold New Programme of Action for the Least Developed Countries’, Civil Society Forum UN LDC-IV, 7-13 May, Istanbul, Turkey, Nepal: LDC Watch Martin, M., (2010), ‘Review of Progress in International and National Mutual Accountability and Transparency on Development Cooperation’, Background Paper for Development Cooperation Forum High-Level Symposium, September Organisation for Economic Cooperation and Development (OECD), (2010a) 2010 OECD Report on Aid Predictability Survey of Donors’ Forward Spending Plans, 2010-2012, December, accessed at http://www.oecd.org/dataoecd/13/17/46803285.pdf

Organisation for Economic Cooperation and Development (OECD), (2010b) Ensuring Fragile States Are Not Left Behind, Summary Report and Full Report, November, accessed at http://www.oecd.org/dataoecd/12/55/45659170.pdf

Organisation for Economic Cooperation and Development (OECD),(2009a) Report on Division of Labour: Addressing Fragmentation and Concentration of Aid Across Countries, Paris, December accessed at http://www.oecd.org/dataoecd/18/52/44318319.pdf Organisation for Economic Cooperation and Development (OECD), (2009b) Measuring Aid to Health, accessed at http://www.oecd.org/dataoecd/44/35/44070071.pdf Organisation for Economic Cooperation and Development (OECD), (2008), Niger Country Chapter: Paris Declaration Survey, accessed at http://www.oecd.org/dataoecd/26/4/42595414.pdf OECD Development Assistance Committee (DAC) and International Network on Conflict and Fragility (INCAF), (2010), ‘Ensuring Fragile States Are Not Left Behind, Summary Report’, Oxfam GB (2010), 21st Century Aid: Recognising Success and Tackling Failure, accessed at http://www.oxfam.org.uk/resources/policy/debt_aid/21st-century-aid.html United Nations Conference on Trade and Development (UNCTAD), (2010), ‘Towards a New International Development Architecture for LDCs’, The Least Developed Countries Report 2010, Geneva: UNCTAD United Nations Development Cooperation Forum (DCF), (2011), ‘Trends in International Financial Cooperation for LDCs’, Background Study for the 2012 Development Cooperation Forum, room document at DCF Bamako Symposium, May

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United Nations Development Cooperation Forum (DCF),(2010), International Development Cooperation Report, September, accessed at http://www.un.org/en/ecosoc/newfunct/pdf/ma_study-status_and_progress.pdf United Nations Development Programme (UNDP), (2010), ‘The Global Partnership for Development at a Critical Juncture’, MDG Gap Task Force Report, New York: UNDP United Nations Educational, Scientific and Cultural Organisation (UNESCO), ‘UNESCO’s 2010 Contribution to the Report of the United Nations Secretary-General for the 2010 Substantive Session of the Economic and Social council and for the Sixty-Fifth Session of the General Assembly on the “Implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010”’, New York: UNESCO United Nations Educational, Scientific and Cultural Organisation (UNESCO) (2011), Education for All Global Monitoring Report 2010, accessed at http://www.unesco.org/new/en/education/themes/leading-the-international-agenda/efareport/ United Nations General Assembly, (2010), ‘Keeping the promise: united to achieve the Millennium Development Goals’, Draft resolution referred to the High-level Plenary Meeting of the General Assembly by the General Assembly at its sixty-fourth session, New York: UN WaterAid and Tearfund, (2008), ‘Sanitation and water: Why we need a global framework for action’, London: WaterAid and Tearfund World Bank (2011), World Development Indicators [online], Available from: http://data.worldbank.org/data-catalog/world-development-indicators World Health Organisation (WHO) (2010), World Health Report, accessed at http://www.who.int/whr/2010/en/index.html i The World Bank classifies countries based on geographic region, income group and lending category. For the income group, the classifications are: low-income country (LIC), $995 or less; lower middle-income country (LMIC), $996 - $3,945; upper middle-income country (UMIC), $3,946 - $12,195; and high-income country (HIC), $12,196 or more. ii Sumner, A., (2010), ‘Global Poverty and the New Bottom Billion: What if Three-Quarters of the World’s Poor Live in Middle-Income Countries?’, Working Paper, Brighton: Institute of Development Studies. iii The UN classifies least developed countries based on three criteria namely 1. A low-income criterion calculated by GNI per capita; 2. A human capital status criterion based on indicators of health, nutrition, education and adult literacy and 3. Economic vulnerability criterion involving a composite Economic Vulnerability Index based on indicators of population size, remoteness, merchandise export concentration, share of agriculture, forestry, fisheries in GDP, homelessness owing to natural disasters, instability of agricultural production and instability of exports of goods and services iv UN-OHRLLS, 2011 v UNCTAD, 2010 vi http://www.unfpa.org/swp/2009/en/pdf/EN_SOWP09.pdf vii Averages have been calculated based on poverty gap percentages available from World Bank data sets http://data.worldbank.org/indicator/SI.POV.GAPS/countries viii Note: The number of poor people is estimated using WDI values on percentage of people living on less than $1.25 per day and using latest population data (2009) from the World Bank’s Data Catalogue. Because the values are not necessarily from the same year, but from the latest available years, these are estimated percentages ix UN General Assembly, 2010 x Save the Children (2010) A Fair Chance At Life, Save the Children UK: London. xi Under-five mortality has been particularly problematic for India displaying the highest record of under-5 deaths in 2009 at 1726 deaths. Some of the reasons for India’s high child mortality rates include gender discrimination, poor governance, widespread prevalence of disease (pneumonia, diarrhea, AIDS), neonatal deaths xii UNICEF, 2011 xiii Save the Children, (2011 forthcoming), ‘An Equal Start’, Save the children UK: London xiv UNICEF, 2009 xv The six Education for All Goals are early childhood care and education, universal primary education, youth and adult learning needs, improving levels of adult literacy, assessing gender parity and equality in education and the quality of education. xvi UNESCO, 2010 xvii UNCTAD, 2006

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xviii While youth literacy rate helps assess the effectiveness of country’s basic education system, literacy data does not differentiate between basic literacy and a higher level of literacy that is required for a better functioning economy. This maybe one reason why the relative burden share between LDCs and MICs (when excluding India and China) is not more divergent. xix End Water Poverty, 2011 xx Note: The number of malnourished children is estimated using WDI values on percentage of stunted and wasted children in the 0-4 year old population and data on population aged 0-4 from the World Population Prospects 2008 revision. Because the values are not necessarily from the same year, but from the latest available year, these are estimated numbers xxi Note: The number of literate youth is estimated using WDI values on percentage of literate youth in the 15-24 year old population and data on population aged 15-24 years from the World Population Prospects 2008 revision. Because the values are not necessarily from the same year, but from the latest available years, these are estimated percentages xxii See also UNDCF 2010 and 2011 xxiii See also LDC-Watch 2011 and UNCTAD 2010 xxiv Water Aid and Tearfund, 2008 xxv UNDCF, 2011 xxvi OECD, 2010 xxvii Afghanistan, Angola, CAR, Chad, Congo DR, Guinea-Bissau, Haiti, Liberia, Mozambique, Niger, Sierra Leone, Somalia, Timor-Leste, and Yemen. xxviii This excludes ODA that is unpredictable (such as debt relief/humanitarian aid), or does not reach the developing country (costs for hosting refugees, administration costs) (OECD 2009). xxix GCE 2010; OECD data for 2009 xxx OECD, 2008 xxxi Good quality aid is that bound by and subscribing to the principles set out in the 2005 Paris Declaration on Aid Effectiveness and the subsequent 2008 Accra Agenda for Action. xxxii Budget support is a form of aid, which is channeled directly to recipient governments and is linked to sector or national policies rather than specific project activities. In practice, budget support varies dramatically and is done in a large range of different ways. One of the broadest distinctions is between general budget support and sector budget support. General budget support is budget support that is unearmarked for a specific sector of government spending. Sector budget support is budget support that is earmarked for use in a specific sector or budget line, e.g. health or education. xxxiii Oxfam 2010 xxxiv Analysis by DFI (forthcoming). xxxv OECD 2010b xxxvi Analysis by DFI (forthcoming). xxxvii OECD (2010b) Ensuring Fragile States Are Not Left Behind, Summary Report and Full Report, November, accessed at http://www.oecd.org/dataoecd/12/55/45659170.pdf xxxviii UNESCO 2011; WHO 2010.