The OECD Development Centre

1. The OECD Development Centre 41 Years at the Service of Development and OECD “ … to bring together the knowledge and experience available in participating countries … to adapt it to the actual needs of countries or regions in the process of economic development and to place the results … at the disposal of the countries concerned.”

2. The Development Centre was created as the result of a US initiative made at a meeting of the Development Advisory Group (DAG) in Tokyo in February 1961, a year after the creation of the DAC. Its mission - to synthesize knowledge and experience, to adapt it to developing countries needs and to put it at the disposal of those concerned - is still relevant today.

3. DAC and DEV OECD(60)13 and C(62)144 (Final): A Partnership for Progress DAC Where major bilateral donors work together to increase the effectiveness of their common efforts to support sustainable development Development Centre Provides analytical support for development policy making

4. The Centre and DAC/DCD have co-operated from the outset in many joint undertakings. Each Unit recognises the complementarity of the other in the shared aim of bringing social and economic development to the poorer countries and helping to bring about their full participation in the global economy.

5. The Centre’s Methods 1 - Forward-looking Policy Analysis 2 - Study of Long-Term Global Processes 3 - Capacity Building in Developing Countries 4 - Substantive Policy Dialogue

6. The tools at our disposal, especially the experience and knowledge available in the OECD, have equipped the Centre to approach development questions through four ways. • The Centre has been and remains able to undertake forward-looking policy analysis. • Lessons of the past are applied to the challenges of the future in an effort to understand long-term global processes better. • Knowledge and experience, however, are not solutions in themselves without the capacity to use them effectively. Hence the need to work with developing countries in sharing reform and policy experiences. • Finally, our work programme is not desk-based research. It is more demand than supply driven. It is the outcome of a substantive dialogue with our partners in both OECD and developing countries.

7. A History of Responding to Changing Policy Needs • 1962 -1972 : Putting Development on the Agenda • 1973 -1982 : Bridging North & South • 1983 -1992 : Addressing Interdependence & Divergence • 1993 -2002 : Promoting Reform in a Global Economy

8. In each period of its history, the Centre has been called upon to respond to changing international circumstances and priorities. As needs have evolved, so has the Centre’s own focus. Guided by OECD’s priorities and equipped with the Organisation’s own policy experience, the Centre has adapted its work programme in order to meet the policy challenges encountered by developing countries. Across the decades, priorities have shifted from putting development on the agenda, to bridging North-South cleavages, to addressing interdependence and divergence and to promoting sustainable reforms in the global economy.

9. Highlights from the past Forward looking policy analysis • Industry and Trade in Some Developing Countries,Little, Scitovsky & Scott (1970) • Project Appraisal and Planning for Developing Countries, Little & Mirrlees (1974) • The Tying of Aid,Jepma (1991) • Adjustment and Equity,Morrisson (1992) • Towards Capital Account Convertibility,Fischer & Reisen (1992) • Trade Liberalisation: What 's at Stake? Goldin & van der Mensbrugghe (1992) • The World in 2020 (1997) & The Linkages Study (1995) • The World Economy: a Millennial Perspective,Maddison (2001) • African Economic Outlook (2002 - )

10. One of the first products to put the Development Centre on the map was the work by Little, Scitovsky and Scott 33 years ago. This innovative work, based on hard research in a number of countries, was among the first to call into question the idea of import-substitution-led growth. It remains a standard text to this day . In 1992, three bodies of Centre work received particular attention. “Policy Brief N°5”, Agricultural Trade Liberalisation: What’s at Stake, was a ground-breaking study of the implications of agricultural trade liberalisation in the context of the Uruguay Round. It led to substantial progress on the issue and was widely quoted in national parliaments and international negotiations. Adjustment and Equity, took a dispassionate look at the effect of adjustment policies in developing countries. Towards Capital-Account Convertibility, cautioned against the hasty opening up of capital markets in developing countries that have weak regulatorysystems. This was well in advance of the financial crises in the mid and late 1990s. The World in 2020 and the Linkages studies were both undertaken for the OECD and have formed the basis for ongoing OECD reflection about relationships with the developing world. The phenomenal studies produced by Angus Maddison require no introduction. Both are fundamental texts and OECD best sellers. The African Economic Outlook, immediately established itself as an indispensable tool for monitoring and understanding African economies. It serves a number of different publics. It is a very useful instrument for statistical and economic policy capacity building in the framework of the NEPAD initiative.

11. Highlights from the past Substantive Policy Dialogue • Paris (1990): Africa Leadership Forum • China, Colombia, Chile, India, Mexico (1990s): Explanation and Adaptation of the GREEN Environmental Model • South Africa (1993/94): Support for ANC Policy Design • Côte d’Ivoire (1994): Reducing African Debt: Possible Application of a “Brady Plan” to Africa • India (1995): Economic Reform, Structural Adjustment and Competitiveness • China (1995): Military Industries Conversion • Brazil (1997): Fiscal Federalism • Washington (1999): Fighting Corruption in Developing Countries and Emerging Economies : the role of the private sector • Paris (1989 – 2002): International Forums on Economic Perspectives with the Regional Development Banks

12. This is a list of some of the Development Centre’s contributions towards supporting capacity building and reform in developing countries. Some highlights: • In advance of international conferences on climate change, the Centre devised a model for measuring the effect of industrial policies on the environment and, importantly, shared this knowledge with developing countries. The model – known as “GREEN” – was then put freely at their disposal. • We provided direct advice to the incoming ANC authorities in South Africa, helping them to devise policies that would help ensure stability and growth. • In India, the Centre helped to raise awareness policy advice to the government and private-sector actors on how best to deal with and profit from economic reform. • Our experts responded to invitations from China for help with their military conversion policies, thus contributing to a smooth transition from armaments to civilian production – 3 million workers were involved. • The Development Centre organised the 1999 meeting in Washington DC on "Fighting Corruption…The Role of the Private Sector" in co-operation with USAID and corporate partners (namely PricewaterhouseCoopers, CIPE and the MacArthur Foundation). Transparency International was among 12 other "Partner Organisations" involved in this meeting. • Finally, the series of International Forums on International Economic Perspectives, which began in 1989, in partnership with the regional development banks, has provided an opportunity for policy makers, business people, journalists, academics and other specialists to meet and share their experience of regional economic challenges.

13. DEVELOPMENT CENTRE DCD CCNM SAHEL AND WEST AFRICA CLUB Today Towards Inclusive Globalisation • OECD’s Action Plan for a Shared Development Agenda [PAC/COM/NEWS(2002)58]: • Institutional restructuring for development Development Cluster

14. At the dawn of the 21st century, priorities and capabilities have changed. Achieving the Millennium Development Goals, promoting sustainable development and securing adequate and effective financing for development have become shared objectives. The Organisation’s new strategic priorities now place development issues high on its policy agenda. The promotion of inclusive globalisation has become one of its major targets. In order to pursue these priorities effectively, the OECD has undertaken a major restructuring of its development-related activities. The creation of the Development Cluster forms part of this overall new approach. It is complemented by increased collaboration between the Cluster Units and other Directorates and aims at mainstreaming development concerns across OECD Committees.

15. Our Context • Proliferation of development research capacity in developing and OECD countries • OECD Directorates: increasing work on developing countries • Enhanced OECD outreach to developing countries (CCNM)

16. Establishing the Centre’s new priorities required taking into account the following developments: • Research capacity has increased in both developed and developing countries over recent years. • Across the House almost all Directorates have begun to work more intensively on development issues. • The Organisation has developed moreover a very active outreach programme to developing countries, coordinated by CCNM. The Centre has had to reposition itself within the Organisation, and to identify its value-added to its stakeholders.

17. 2003: A New Centre Institutional Changes • From Advisory Board to Governing Board • From President to Director

18. The changes at the Centre have not been cosmetic. Now a unit in OECD’s Development Cluster, it has been integrated fully into the OECD. It has been restructured to resemble more an OECD Directorate. It now has a Governing Board composed of Member country Ambassadors. Unlike other committees, however, non-OECD members can become full-members of the Governing Board. Thus, today 24 countries, including India and Chile, are Governing Board members. Its integration has also meant that it is now managed by a Director, appointed by the Secretary-General, rather than a President elected by the Council. Thus restructuring has implied that the Centre now services more effectively the OECD in close collaboration with other units. It essentially functions as a Part I programme, even though it is included under Part II.

19. A New Thrust Supporting the OECD’s strategic priorities on development through substantive dialogue, policy analysis and synthesis, and capacity building in developing countries. ↓ Deepening developing countries’ partnerships with the OECD

20. Institutional restructuring is being complemented by the ongoing reform to our work programme. The major thrust of our work and activities is to support and, we might venture to say, help shape the OECD’s strategic priorities on development. We can do that through engaging in relevant and topical policy analysis, undertaking syntheses of research output to support other Committees’ facilitating work, substantive and informal dialogue on current, forward- looking, or divisive policy issues and working with experts and state and non state-actors in developing countries to share experiences and learn from each other. In these ways we hope to contribute towards deepening developing countries’ partnerships with the OECD

21. 2003-2004 Work Programme: Adaptive Capacity and Inclusive Development 1- Market Access, Capacity Building & Competitiveness 2-Finance and Governance for Development 3-Social Institutions and Partnerships 4-African Economic Outlook

22. The Centre’s current work programme seeks to advance this overriding objective. The topics chosen reflect the priorities of the development community, including donors and aid agencies, as well as the expressed needs of developing countries themselves. Moreover, the programme is an integral part of the OECD’s own programme of work and is executed in close collaboration with other Directorates.

23. Increased market access and raising supply-side capacities in developing countries are major policy challenges today. For the poorer countries, capacity building is of particular importance. The Centre’s analysis intends to clarify policy options both for the poor countries themselves and for OECD members. We are working on these topics with DAC/DCD, ECH, DAF, and ECO. Having established the MDGs, the international community now has to deal with financing their realisation. Clearly, “old” forms of financing will be inadequate. The Centre’s analysis looks at the options available in the international financial system that can be drawn upon. Attracting investment and private finance for developing countries, remains an abiding problem. Equally, the contribution of those flows to development and poverty alleviation is a priority. The Development Centre aims to evaluate the influence of governance issues on both sides of the equation, leading to policy recommendations for OECD and developing countries on how to overcome the governance deficit and enhance the development impact of investment. This work is done with DCD, DAF and GOV. The role of institutions is crucial in development. The Centre’s research looks at how much poverty reduction and improved participation can be expected from supporting the adaptation of existing institutions, often described as "traditional". Though we know that public/private dialogue is key to improving public policy making, the difficulty is how to make it work effectively in countries where public institutions are weak, the formal private sector underdeveloped and disorganised, and where many civil society organisations are captured by narrow private interests. Can we go beyond mere slogans when we talk about PPPs in the poorest countries? We are working with DAC/DCD, GOV, SAH, BIAC and TUAC on these topics. The African Economic Outlook is one of the Centre’s – and the OECD’s – most successful publications. The Centre and the African Development Bank launched the AEO project having recognised a serious gap in our knowledge of African economies, especially in a comparative sense. Supported by funding from the European Communities, the joint Development Centre/AfDB AEO team is about to produce its third annual report. The value of the AEO is many fold, but its contribution to the envisaged NEPAD peer review process as well as to capacity building among the teams in Africa should be underlined.

24. New Forms of Communication • Policy Studies • Policy Briefs • Policy Insights • Working papers • Relaunched Newsletter • Active Policy Analysis Networks • Workshops and Expert Seminars • Participation in Global and Regional Forums • Informal Seminar Series

25. New forms of communication are accompanying the changes in the Development Centre’s role within the Organisation and in its relationship with policy makers. To make our work more accessible to policy makers and keep a wider public informed of what we are doing, we are remodelling our publications and concentrating more intensively on policy messages in both the Studies and the Briefs. • A new series, called “Policy Insights”, will be of very short papers available for downloading. Their purpose is to distil the policy message of our work. • The Centre’s Newsletter has been revamped to give information about the “life” of the Centre, but to do so in a thematic way we believe will be more instructive for the readership. • Informal Seminars and major events involving high-level experts and political figures will continue. They are designed to harness knowledge and experience to feed into our research and analysis, and provide an arena for other parts of the Organisation to join in contemporary policy debates. • All these products, with the exception of “Studies”, are available on our internet site. The site is constantly undergoing improvement. It will eventually become the major vector for dissemination.

26. 2003 Joint Events: DCD/DAC/Development Centre • Aid Effectiveness and Selectivity: Integrating Multiple Objectives Into Aid Allocations Experts' Seminar, Paris 10/03 • Development Co-operation: Partnership and the Governance of Aid Informal Seminar with the NGO network The Reality of Aid, Paris 27/05 • Meeting of Informal Network of DAC Heads of Information Ottawa, 5-6/06 • Land, Conflict and Development: What Role for Donors? Experts' Seminar with USAID, Paris, 19-20/06 • Trade Capacity Building and Private Sector Development in Asia Regional Workshop, Phnom Penh, 2-3/12

27. Over the past year, the Development Centre has worked closely with DCD on policy coherence, aid effectiveness and selectivity, land and conflict and most notably trade capacity building. In fact, the OECD Policy Brief on Trade Capacity Building, prepared for the Cancún meeting, was jointly written by DCD and DEV; similarly the success of the recently-concluded regional workshop in Phnom Penh is a mere example of the synergies that can be generated. An important area of collaboration is our joint work on and with non-governmental actors, such as the NGOs of the Reality of Aid Network. Finally, the Centre and the DAC/DCD have also been collaborating on the issue of "Public Attitudes towards Development Co-operation in the DAC Member countries", steering jointly the annual meetings of the Informal DAC Network of Heads of Communication and Information (last one held in June 2003 in Ottawa).

28. Some Other Major 2003 Development Centre Events • Joachim Chissano, President of the Republic of Mozambique: Private Investment, Partnership and Progress in Africa.Informal Seminar, Paris, 04/04 • Economic Development in Africa: Outlook and Strategies.Conference with Istituto Affari Internazionali, Rome, 28/05 • The Coherence and Impact of Rich Countries’ Policies on Developing Countries.Experts’ Seminar,Paris. Sponsored by the Governments of the Netherlands and Sweden, 24/06 • Development and Trade: Challenges and Priorities Participation of representatives from Brazil, Chile, China, India, Mexico and South Africa.Informal seminar, Paris, 24/11 • Foreign Direct Investment in Developing Asia. Experts’ Seminar with the Asian Development Bank, Paris, 26-27/11

29. By no means are all major events organised by the Centre over the past year (2003) mentioned here. In April, President Joaquim Chissano of Mozambique, a major influence in the NEPAD process, accepted the Centre’s invitation to come to the OECD. In front of an audience of several officials from Delegations of the Secretariat he discussed the role of partnerships in development and his talk illustrated the benefits his own country has been able to draw from such partnerships. The Centre organised a round-table discussion last month immediately after the Cancun meeting. Presentations by leading experts and trade negotiators from Brazil, Chile, China, India, Mexico and South Africa contributed to our understanding of trade–development interlinkages and the range of developing countries’ priorities. The presence at the round table of OECD Delegations and Directorates led to a frank and almost unique policy dialogue and showed the benefits that the Development Centre can bring to the OECD process. Finally, the long tradition of joint meetings with the regional development banks was continued in November with an experts’ meeting on foreign direct investment in Asia in collaboration with the ADB. The role of FDI and of FDI-trade-migration linkages were discussed extensively in the context of Asian countries and their impact on poverty alleviation and regional development were re-assessed.

30. Looking ahead The Objective Coherence and effectiveness in policies for development and poverty reduction

31. Looking ahead, in order to advance the post-Monterrey agenda and to promote development, we need to revisit the effectiveness and coherence of policies. Effectiveness implies the measurement of impacts. Coherence refers to the consistency across policy objectives and across instruments and between policy instruments and objectives. Trade, investment, development assistance and migration policies of OECD and developing countries interact with each other, producing different, and occasionally countervailing, impact effects. It is important therefore to understand both transmission mechanisms and interactions across policies and to measure their joint impact on poverty reduction and development. We should think again on the role of modalities and partnerships in achieving favourable outcomes and reassess the role of domestic institutions, governance and policy in sustaining pro-poor growth. Our challenge is to convince our stakeholders that a “holistic approach” to policy making is a prerequisite for a “holistic approach to development”.

32. Concerted Action • Cluster co-ordination • Close collaboration with DCD • Common priorities for development with other OECD Directorates and Committees • Active constituencies in the capitals • A reinforced relationship with DAC high-level representatives And …

33. Looking to the future, the Centre will be actively pursuing the goal of forging even closer links with all Cluster Units and especially with DCD and the DAC. We all worked together to produce a joint Cluster Strategy paper for consideration by the Council. In it we suggested development priorities for 2005-2006 for your consideration as well as the consideration of other OECD Committees. Our list of co-operative activities is substantial; it will grow in the coming months and years. Likewise, we are working to improve our participation and representation in other relevant OECD Committees, to mainstream development priorities in OECD policy deliberations and to promote this holistic approach to policy design for development. None of this will be easy. Some of it will be impossible if the Centre cannot establish and maintain active constituencies in OECD capitals and a reinforced relationship with our shareholders in Foreign or Finance Ministries. The very nature of our work and the spread of our activities means that our major clients are not identical with our shareholders, so we need a “filter” to disseminate our work to interested parties and policy makers and to channel messages from capitals back to us. We need to tune our work to the concerns of OECD member countries, and to do that we need to know your major concerns regarding development policy. We need your advice as to how to relate better to policy makers in capitals. Would it make sense for our contact point in capitals to be drawn from this audience? • This is an answer only you can supply and we would be grateful if you would think about it.

34. … a continuous substantive exchange with each of you

35. These are our priorities. In the discussion that follows, I would be very grateful if you would reflect upon how you would like the OECD Development Centre to better support your own priorities and activities.