Insights and Analysis

Development Cooperation 2015: A Conversation with Erik Solheim

September 9, 2015

With September’s Sustainable Development Goals Summit on the horizon, The Organization for Economic Cooperation and Development has just released its Development Cooperation Report 2015. This year’s report, Making Partnerships Effective Coalitions for Action, outlines international development goals and strategies, examines a range of case histories, and identifies the factors that lead to successful development partnerships. Author Erik Solheim, chair of the OECD’s Development Assistance Committee, joined us recently to discuss highlights of the new report. Here are some of his remarks.

The OECD just provided statistics for education in the world, and what is an enormous surprise is that there's a very limited correlation between the money spent and the educational results.

“Now it’s quite obvious, because so many nations have developed incredibly fast – I mean, the South Koreans are 390 times richer that their grandparents were in the 1950s.”

What is the theme of this year’s Development Cooperation Report?

The theme is very simple: what are the conditions under which you can create coalitions of the willing for global purposes. “Coalition of the willing” – we think it’s a beautiful term; we should revive it, because there are so many issues which cannot be resolved by individual nations or companies or by the present UN or other global bodies. It comes from the very firm conviction that, yes, governments are crucial, yes, private businesses and non-governmental organizations are crucial, but we will be able to move much more rapidly ahead if we are able to create coalitions for action, coalitions of the willing.

This year’s Report arrives just a couple of weeks before the Sustainable Development Goals summit in New York. Is this just a coincidence? What have we learned from the Millennium Development Goals that we can apply to the SDGs?

To me, the number one lesson is that it’s all about getting the policies right. If you look to the amazing success stories of development, those nations that jumped ahead at amazing speed, it’s about getting those basic policies right. I mean, take the biggest of all global examples: if Deng Xiao Ping had not taken power in China in 1978, if the Gang of Four had remained in power in China, China would still have remained poor. With simply the change of political leadership, you could try another completely different path; and wherever you go – to African nations like Ethiopia, Asian nations like Korea or Malaysia, or to Brazil or Turkey – wherever you go, it’s about political leadership, getting the main policies right, mobilizing and believing in the market and the private sector. These are the general conditions for moving ahead. Money helps, but it is a complete misunderstanding that money is the most important issue.

That’s a very strong statement: “It’s a complete misunderstanding that money is the most important issue.”

Take a very, very simple story. When Lee Kwan Yew became the prime minister of Singapore in the 1960s, the GDP per capita of Singapore was somewhere in the range of 500 US dollars. Now it’s approaching 60 thousand US dollars per capita – this in the lifetime of one man. No one has claimed that that was because Singapore had more money than any other nation. It was about getting major political decisions right, creating a developing state at the core, believing in market forces, and keeping trust in education. These are key elements of the success of that one nation.

If you want to discuss this further, I can give you another example. The OECD just provided statistics for education in the world, and what is an enormous surprise is that there’s a very limited correlation between the money spent and the educational results. True, there is a slight tendency that if you spend more money on education you get better results. Anything else would be a surprise. But to provide another Asian example, Vietnam is now having better results for their 15-year-olds in school than the United States of America, or indeed my nation Norway, and everyone knows that is not because the Vietnamese are spending more money on education than the US or Norway. It’s about policies, ambitions, aspirations in society, and other aspects. So, again, money helps. We need to provide money for development, but it’s much more important to get the right policies.

How is the landscape of development cooperation changing? Are there different players, different problems, or even a different scale of work?

Still, of course, most of the aid is provided by the historical aid providers – basically North America, Japan, and Europe. But what is new is that there are new kids on the block. China is a major provider of aid. So are Arab nations. And the big news is that the vast majority of nations in the world in the next decade will be both providers and recipients at the same time. You will have a small group of African nations that will remain just recipients. You will have a few, like the US and Norway, that will remain just providers. But Mexico, Brazil, Turkey, Indonesia, China, they’re all both providers and recipients at the same time. So that is the news.

The other news, of course, is that when it comes to aid, a number of private institutions – and Bill Gates’s foundation is the biggest example, but there are many others – are providing more money than states.

And adding to this, of course, is the realization that aid is an important tool for development, but taxes and private investment are much more important. When it comes to education, for instance, close to 99 percent of all education in the developing world is provided for by taxes, not by global aid. Taxes are absolutely crucial for development.

Development partnerships can involve developing and developed countries, governments at all levels, civil society, and the private sector. Where are the thorniest challenges in 2015? What are the hardest partnerships to make work?

We are still far away from making real partnership with the private sector. Very often it’s a public-sector conversation about the private sector, rather than a real partnership. We still spend a lot of effort in the global system quarreling about non-issues. Whenever there is a global conference, both developed and developing nations want to score political points on symbolic issues of no real value for the people out there. So we need at least to reduce quarrels about non-issues and have a real conversation with the private sector.

Of course, the overall political climate in the world is essential. At the core of that is the relationship between the United States and China. Everything making that relationship smoother will help resolve whatever issues there may be; whether it’s the environment, or education, or peacemaking, a good relationship between the US and China is at the core.

The Development Cooperation Reports seems to read very much as a handbook for how to do it right. Is that a fair assessment?

There is no handbook, of course, but what is new is that there is an enormous amount of evidence as to what works and what does not work for development. When development assistance started, maybe at the time of John F. Kennedy and the Peace Corps, in the very early days, it was not that easy, not obvious, what works. Now it’s quite obvious, because so many nations have developed incredibly fast – I mean, the South Koreans are 390 times richer that their grandparents were in the 1950s – we know what works. To cut it very short: you need a development-oriented state; it helps if the top leaders of that state are not personally corrupt, make the right political decisions – that’s number one. Secondly, you must believe in the market and the private sector – no nation has taken off without the private sector. And thirdly, education must be a key priority if you really want to develop. There are other aspects, for sure. I mean, you should not do it in the same way everywhere. But these are key elements of development wherever it has happened up to this point.

Erik Solheim is chair of the OECD’s Development Assistance Committee. He can be reached at [email protected]. The views and opinions expressed here are those of the interviewee, not those of The Asia Foundation.

Related locations: Korea, Singapore, Vietnam
Related programs: Development and Aid Effectiveness, Inclusive Economic Growth
Related topics: OECD


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