An introduction to the OECD Development Centre

1
An introduction to the OECD Development Centre
Javier Santiso, Deputy Director and Chief
Economist, OECD Development Centre
European Commission Brussels ? 12 September 2006
2
A bridge between OECD Members and Partners
to engage in dialogue on development issues of
mutual strategic interest
and foster capacity building in policy
development
3
The OECDs Knowledge Centre on Development
A bridge between

• OECD members and partners
• Governing Board open to non-OECD South Africa,
  Brazil, Chile, India, Romania, Thailand are
  members
• research and policy
• Intellectual autonomy, no obligation of
  consensus
• policy communities
• All development policies, not just aid
• different actors (private, public, etc.)
• Informal dialogue

4
Part of the OECDs Development Cluster
OECD Development Cluster

• Club of bilateral donors
• Best practice
• Peer reviews

• Bridge OECD members and partners
• Research / policy
• Intellectual autonomy
• Informal dialogue

Development Centre (DEV - 1962)
Development Assistance Committee (DAC - 1961)
Africa Partnership Forum (APF - 2006)
Sahel West Africa Club (SAH - 1975)
Informal discussion Forum OECD / ECOWAS
Mauritania Cameroon
Monitoring commitments G8/OECD AU/NEPAD
5
Programme of Work 2005-2006
Monitoring economic Performance (AEO )
Strengthening productive capacity building
Development Finance
Horizontal, e.g. Impact of China India on
Africa, Agricultural policy, Impact of migrations

Governance, institutions
Policy coherence
Monitoring public opinion
6
African Economic Outlook monitoring the
performance of African economies

• A resource for policy makers, researchers,
  students, investors,
• A tool for policy dialogue amongst African
  partners (APRM, ) and with their partners (EC,
  G8, OECD)
• An innovative product (new indicators )
• An innovative process (tri-partnership
  OECD-ADB-EC, network of African experts, gradual
  transfer 2002-07)

7
African Economic Outlook 2006
European Commission Brussels ? 12 September 2006
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Continent?
3
Promoting Transport Infrastructure
9
What is the AEO Project?

• Joint Publication of the AfDB and the OECD
  Development Centre, supported by the EC 5th
  edition.
• Independent, comprehensive and comparative
  analysis of 30 countries, combining economic,
  social and political review and short-term
  macroeconomic forecasts.
• An input for African policy makers, incl. NEPAD
  APRM, aid practitioners and investors.
• Annual focus on major theme (2006 transport
  infrastructure 2007 access to drinking water
  and sanitation).
• Improvements in successive editions (peer-review
  process, improved modelling, broader country
  coverage)

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Coverage 2006 30 African countries
90 of GDP 87 of population
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Continent?
3
Promoting Transport Infrastructure
12
Africas growth remains robust

AFRICA
Total OECD
Sources African Economic Outlook 2006, IMF, OECD
13
Oil producing countries are leading growth
Performance of oil producers
()
()
Source African Economic Outlook 2006
14
Oil importers performed better than expected
Best Performers in 2005
()
()
Sources African Economic Outlook 2006
15
Thanks to rising commodity prices and increased
production
Sources African Economic Outlook 2006
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Thanks to good harvest and better internal
policies

• Inflation is under control

()
Sources African Economic Outlook 2006
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Fiscal discipline
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and increased political stability
Sources African Economic Outlook 2006 Political
Indicators
19
A divided Africa
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Despite recent improvements, major development
challenges remain Africa is still behind in
reaching the MDGs
Sources African Economic Outlook 2006
21
Africa receives about 50 per cent of total aid
0.40
0.36
140
0.35
0.33
120
0.30
0.30
0.26
100
ODA as a
0.25
of GNI
80
(left scale)
of GNI
ODA (2004 billion)
0.22
0.20
Total ODA
60
(right scale)
0.15
40
0.10
Total ODA to
20
0.05
Africa
(right scale)
0.00
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source OECD/DAC Statistics (2006). DAC Members
ODA 1990-2004 and simulations to 2006 and 2010,
based on Monterrey and subsequent commitments
22
with ODA increases driven by debt relief and
emergency assistance
Total net official development assistance (ODA),
non-aid official flows and private flows in
Africa, 1993-2004. (Source OECD/DAC)
23
Progress in diversifying exports is varied
The higher the index, the more diversified the
economy
SACU
Madagascar
Senegal
Cameroon
Mozambique
Cote d'Ivoire
1996
2003
Algeria
0
5
10
15
20
25
30
Source Export Diversification Index, African
Economic Outlook 2006
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Long term development requires capitalising on
windfall gains mobilising additional resources
to finance productive activities, including
transport infrastructure
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1
What is the African Economic Outlook Project?
2
African Performance A two Speed Continent?
3
Promoting Transport Infrastructure
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(No Transcript)
27
Missing links
Source Pourtier (2003)
28
Transport insurance costs as of trade value
IMPORT
OECD Countries
EXPORT
All Developing Countries
All land locked Developing
SSA Coastal countries
SSA Landlocked
SSA Least Developed Landlocked
Source Faye, McArthur, Sachs and Snow (2004) and
UNCTAD (2003)
0
5
10
15
20
25
30
35
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Critical condition of all transport modes

• Road
• Only 19 is paved (against 27 in lat Am 43 in
  South Asia)
• 4 of registered vehicles, 10 of total deaths
• Accidents cost 3 of GDP every year in Egypt
• Rail
• 3.5 of developing countries passenger flows, but
  20 of GDP population
• Air
• lt2 of developing countries passenger and freight
  flows
• Few airports with international standard
• 4.5 of traffic, 25 of accidents
• Ports
• Most ports are under equipped and have reached
  maximum capacity
• Inefficient ZAF (17 c.u/h), Dar es Salam (21) ?
  Brazil (42)

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Shift in ODA to social sectors
Source OECD/DAC Creditor reporting System (commitments) data aggregated by sectors 1980-2004
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Infrastructure is back on donors agenda

• Decline in the 1990s of bilateral ODA, not
  compensated by multilateral flows
• Shift of attention to poverty reduction (MDGs)
• Disappointment over past experiences
• Renewed interest as shown by report by Commission
  for Africa and UN Millennium Summit
• Bilateral donors insist on linkage between
  infrastructure poverty reduction and leverage
  for private funds (ex the Emerging Africa
  Infrastructure Fund)
• Increased involvement of non traditional donors
  (China, Arab countries)

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PPP experiences in transport

• Prompted by lack of public finance and lack of
  access to international financial markets,
  although second-generation road funds and
  investment of windfall gains are helping
• Not full privatisation but concession
  management contracts to allow better risk sharing
  in volatile environment
• Positive outcome with respect to transport
  service delivery (ex cargo handling)
• Under certain conditions (high private sector
  stake), privatisation of infrastructure is
  successful (ex. toll road of Maputo corridor)
• In most cases, investment in infrastructure
  remains public

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Money is not enough

• Strong regulation needed
• Strong commitment / negotiation skills
• Autonomous regulatory body (ex. Zambia)
• Better planning (ex. Master Plan for Greater
  Cairo)
• Selection of projects and solve trade-offs
• Integration in poverty reduction strategy
  medium-term expenditure framework
• Community participation
• Maximising employment generation and easing
  maintenance
• Gender dimension is crucial (ensure
  participation)
• Regional cooperation
• Economies of scale
• Partnering with NEPAD regional organisations

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Thank you for your attention!Contactswww.afdb
.orgwww.oecd.org/dev/aeo
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Top ODA beneficiaries
ODA per capita (USD)
Net ODA Receipts (USD million)
Source OECD/DAC, 2006
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Composition of ODA in top ODA beneficiaries
Source OECD/DAC, 2006
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Transport in Africa the world
Africa North Africa North Africa SSA SSA
dvping countries world dvping countries world dvping countries
Population, 2004 20.2 2.3 3.3 11.7 16.9
GDP, 2004 19.7 2.0 12.4 1.2 7.3
Trade, 2004 6.4 0.9 2.4 1.4 4.0
Air transport (f), 2004 1.8 n.a. n.a. n.a. n.a.
Air transport (p), 2004 1.9 n.a. n.a. n.a. n.a.
Rail transport, 2003 3.5 0.2 0.3 1.7 3.2
Road transport, 2002 gt24.0 n.a. n.a. 7.6 24.0
Sea transport, 2004 43.9 10.4 25.5 7.5 18.4
Source African Economic Outlook 2006 and various
sources