Thammasat University students interested in ASEAN studies, economics, political science, development studies, and related subjects may find it useful to participate in a free 20 June Zoom webinar on The Changing Pattern of Development Finance in Southeast Asia: Drivers, Trends and Impacts.

The event, on Thursday, 20 June 2024 at 9am Bangkok time, is presented by ISEAS – Yusof Ishak Institute, Singapore.

The TU Library collection includes several books about different aspects of development finance in Southeast Asia. 

Students are welcome to register for the event at this link:

https://us06web.zoom.us/webinar/register/8417177435668/WN_clwPR-w4RQCzYZY_gGgCnA#/registration

As explained on the event website,

Most Southeast Asian countries are still developing economies with significant financing needs, notably for infrastructure, human development, and responding to climate change. International development cooperation has therefore a critical role to play. Yet, development support from the international community has dwindled to the lowest level ever recorded, even as China and Western governments increasingly use development finance as a tool for influence amid intensifying geostrategic tensions.

Understanding the scale and contours of development finance in Southeast Asia is of critical interest to governments in the region and their development partners.

The seminar will consider how the sourcing, composition, and quantum of development finance has been evolving over the past decade, and its implications for the region, presently and into the future. It will draw upon the findings of a recent study from the Lowy Institute that tracks and analyses more than 120,000 development projects in Southeast Asia from 107 partners from 2015 onwards.

About the Speakers

Alexandre Dayant is a senior economist and Deputy Director of the Indo-Pacific Development Centre, a dedicated policy research centre within the Lowy Institute. Alexandre directs both the Lowy Institute Pacific Aid Map and the Lowy Institute Southeast Asia Aid Map projects, which provide the world’s most comprehensive data tracking of all official aid and other development finance flows to the Pacific Islands and Southeast Asia. […]

Satish Chand is currently the Professor of Economics in the School of Business at the University of New South Wales and based at the Australian Defence Force Academy in Canberra. […]

Stephen Howes is a Professor of Economics at the Crawford School of Public Policy at the Australian National University. He is the Director of the Development Policy Centre. […]

Sarah Y. Tong graduated from Beijing University of Aeronautics and Astronautics and worked at the Development Research Center of China’s State Council. […]

In 2010, Professor Howes wrote a research paper, An overview of aid effectiveness determinants and strategies.  

From its Conclusion:

There are so many factors which influence aid effectiveness which might give the impression that it is highly unlikely that all obstacles will ever be successfully negotiated, and that aid could ever be effective. But this would be misleading. As set out in Section 2, it is impossible to give a definitive answer to the question: is aid effective? There are certainly many productive ways to spend additional aid, and aid volumes are likely to continue to rise. This in turn makes the question of improving aid effectiveness all the more important.  The starting point for this paper is the performance of the recipient government. But even if the mainstream position is accepted that this is the most important determinant of aid effectiveness, and indeed of development success, the extent to which donors can influence this determinant is both limited and unclear. Withdrawing aid from poorly governed countries is an attractive strategy, but one that can only be pursued within limits. None of the strategies to improve the governance environment within which aid is expensed have a proven track-record in lowgovernance environments: from the use of technical assistance and conditionality, through to the use of demonstration impacts from individual projects and the generation of demand for reform. The potential rewards from attempting to improve governance are so high that donors will continue to invest resources in this direction, but the limits of donor influence over recipient performance also make it imperative to look at other strategies to improve aid performance.   The second determinant of aid performance is the performance of the donor. The paper has argued that overseas aid agencies may perform worse than domestic aid agencies because: they are less subject to performance feedback; they face a greater knowledge burden; and they are high-discretion organizations. The strategies to respond to these weaknesses are: a greater performance orientation, in particular independent evaluation; greater selectivity; devolution and other efforts to expand sectoral and country knowledge; the use of simple and standardized interventions; and greater operational independence for aid agencies. The third determinant of aid effectiveness is the way in which recipients and donors interact, and in particular the problem of donor fragmentation. Donors can reduce the burden on recipient governments by being more selective, by ensuring coordination of their own agencies delivering aid, and by working more through alternative channels, including non-government organizations, multilaterals, the private sector, and international public good providers. In line with the Paris Declaration, donors should cooperate much more, and find appropriate ways to allow governments to influence and direct their programs, even when this has to fall short of working through government systems.

It is evident that some strategies influence more than one determinant of aid, and thus involve either synergies or trade-offs. Selectivity emerges strongly as a strategy that will positively affect all three determinants (on the first, assuming that the selectivity is in favour of better-performing governments). Devolution also emerges as a strategy that will positively affect both the second and third determinants (since it improves country knowledge and facilitates government-donor coordination). Two strategies, however, clearly involve trade-offs. The alignment and harmonization agenda of the Paris Declaration takes donors away from the use of individual projects and their own systems, and thus makes it harder to make them individually accountability for results, and may make aid more susceptible to corruption by forcing reliance on less-robust government systems. Likewise the move away from conditionality under the Paris Declaration may make it harder to promote governance and policy reforms.  Aid effectiveness is subject to many and complex determinants, the most important of them beyond the reach of donors. There are no magic bullets, there is no aid revolution just around the corner, and international progress in improving aid effectiveness will continue to be slow. There is, however, plenty of room for improvement. 

(All images courtesy of Wikimedia Commons)