LONDON (AlertNet) - If donors are serious about helping to rebuild war-torn countries, they should give reliable, steady amounts of aid money, be prepared to run their projects for a minimum of 15 years and think big, according to a World Bank report which urges new thinking to tackle conflicts and violence.
The report notes that most financing agreements cover from three to five years - despite some notable exceptions such as the UK's Department for International Development's 10-year aid programmes - with many projects cut much shorter. For example, 63 percent of all donor projects in Cambodia span less than three years, while more than one third last less than a year.
Longer project life cycles are vital, the World Bank says, given that it can take a generation - between 15 and 30 years - for countries to make the transition from a "fragile" state to one in which institutions perform adequately.
Volatile or fluctuating aid flow is another major problem for weaker states. The inconsistency makes it impossible for governments to plan their budgets properly or control their fiscal deficit. It can derail efforts to build roads, fund institutions and improve governance.
According to the World Bank, it is not uncommon for total aid to Burundi, Central African Republic, Guinea-Bissau and Haiti to drop by 20 or 30 percent in one year and increase by up to 50 percent the following year. Guinea-Bissau saw aid more than doubling in 2003, only for it to be halved in 2004.
"Insecure situations are in particular need of consistent support because of the high potential that interrupted reforms will be reversed," the report says.
"Yet aid to fragile and conflict-affected states is much more volatile than that to other developing countries-- indeed, more than twice as volatile."
The World Bank says the economic losses associated with fluctuating net official development assistance were more than twice as high for weak states as for strong states (2.54 percent versus 1.19 percent of GDP). It suggests that 30 to 50 percent of volatility is donor-driven, independent of events in or actions by the recipient country.
The poverty-fighting institution says a reduction in volatility of 30 percent by donors would deliver $27 million to $39 million a year to each conflict-affected economy.
The Washington-based institution's annual report also covers the changing face of aid over the past decade with the rise of new middle- and higher-income players.
"Consider China’s economic investment in and trade with Africa (investment is estimated to have at least tripled since 2002), Brazil’s peacekeeping role in Haiti, Indian development assistance to Afghanistan, Saudi Arabia’s increased assistance to the World Food Programme, and the evolving roles of South Africa, Qatar, and the United Arab Emirates in mediation," the report says.
More financial support has meant a mushrooming of humanitarian, development, security, and political players and initiatives. In 2009-10, there were 14 special envoys to Afghanistan alone, representing various interests. Haiti's Ministry of Planning estimated that up to 10,000 NGOs were operating in Haiti after its massive 2010 earthquake.
Over the past decade, the number of foreign humanitarian workers has increased at an average 6 percent annually, with roughly 211,000 in the field in 2009, and humanitarian funding has tripled since the start of the decade - all of which means "aid management and broader strategic coordination are more daunting today than 20 years ago," the report says.
Not only has the number of donors and programmes grown to more than the number of recipient countries, the World Bank says, but aid itself has become more fragmented.
In the Democratic Republic of Congo, 30 donors are financing 362 projects in the health sector, 262 for less than $1 million, and 305 projects in the justice sector, 199 for less than $1 million. Meanwhile a recent study by the Organisation for Economic Co-operation and Development identified 32 countries receiving aid from 15 or more donors.
Yet development success in Botswana and South Korea has been attributed to the presence of a single or dominant donor.
"Fragmented assistance places a huge administrative burden on weak capacities, draining rather than building them," the report says.