The staging of the World Cup in South Africa was a tribute to that country’s transformation since Apartheid in the 1990s. However, poverty persists. Some 54% of South Africans are poor, based on a national definition of poverty of living on $4 a day. And poverty and inequality still reflect race, as our graph shows. While widespread access to services such as housing, water and electricity has improved substantially, the link between race and poverty remains remarkably strong by international standards, as the income of black South Africans continues to lag behind whites and Asians in the country.

The road from conflict to peace and from destruction to development is far from smooth. In fact, research shows that half of all countries that have been ravaged by conflict are at war again within a decade. Transition Financing: Building a Better Response, part of the OECD’s Conflict and Fragility series of books, examines how the international community can help countries move from resolving conflicts to a lasting peace, grounded in what the authors describe as “sustainable development”. It involves a transition to greater national ownership and a greater capacity to ensure public safety and welfare.

Health spending rises; Round up; Soundbites; Benvenuto!; Economy; Food speculation question; Chinese flexibility welcomed; Slovenia joins the OECD; Plus ça change...

With the crisis still unfolding, can governments meet their agreed development aid targets? Total net official development assistance (ODA) from donor countries in the OECD Development Assistance Committee came to $119.6 billion in 2009, which is a real increase of 0.7% from 2008. If debt forgiveness is excluded, the real increase jumps to 6.8%. In fact, development aid rose by some 30% in real terms between 2004 and 2009, and continued to grow during the crisis, unlike other financial flows to developing countries, which have fallen sharply. Nonetheless, more aid effort is needed.

Before the global recession, most of Africa was booming. At last. Can it bounce back?

As an OECD “veteran”, I was delighted to see that “human progress” is now on the OECD agenda (see www.oecd.org/progress). If you compare the OECD strategy to emerge from the oil-shock recessions of the 1970s (the McCracken Report) to the OECD Strategic Response to the Financial and Economic Crisis of today, you can see that in three decades the OECD has been transformed.

Could country-by-country tax reporting help boost revenue for development? The answer is not that simple.

Reforming tax systems can boost development by giving countries more autonomy. This can lead to broader reforms too.

The launch of the ATAF marks a milestone in the continent’s quest for greater self-reliance, economic growth and social development.

Some major businesses are starting to view taxation as a mainstream part of their corporate social responsibilities. Others should follow their example.

A lot of debate about tax and developing countries nowadays tends to focus on how to reduce revenue leakage through offshore tax havens. But there is another hot issue called transfer pricing which developing countries have to be mindful of, particularly if they want to avoid the risk of losing out on tax revenue from cross-border transactions carried out by multinational enterprises. How does it work?

Emblazoned on the front of the Internal Revenue Service building in Washington DC is a quote from American poet, author and judge, Oliver Wendell Holmes: “Taxes are what we pay for a civilized society ” It is the potential to inspire better governance through raising revenue that matters to civil society, and everyone has a role to play. To act as responsible corporate citizens, companies must pay the right amount of tax and be transparent about it. Yet Christian Aid estimates that developing countries lose as much as $160 billion–greater than the global aid budget–to companies dodging tax.

In the current economic climate, in which early signs of recovery give grounds for optimism, the countries of the MENA region are keenly aware of the common challenges that must be met through stronger principles of good governance and economic freedom, consolidation of the rule of law and democracy, the fair distribution of wealth and compliance, and respect for the environment.

The world is going through hard times. Though there are some signs of an economic recovery, global confidence remains fragile. From the economic and social crisis to climate change, natural disasters and conflict, rarely in modern history have we faced such a testing period.

The crisis has taught us many lessons, about our policies, our practices and our ways of life. But if there is one lesson that stands out, it is the importance of international co-operation to help us overcome the challenges we face.

Unemployment at historic highs, declining oil prices, plummeting government budgets and low investment due to persistent political uncertainty-one or more of these barriers to progress exist in many MENA states, but add them all and combine the security concerns in the aftermath of war and that is the unique challenge for Iraq. For years, arms and oil have been the major trade activity, but with security improvements being implemented in tandem with political, legal and regulatory reforms, investors are once again beginning to view the Mesopotamian cradle of civilisation also as a cradle of investment.

On 2 November, Morocco launched a US$9 billion solar energy programme. With fi ve power plants, the programme aims for a total installed capacity of 2,000 MW by 2020-equivalent to almost 40% of the country's electricity production.

Through the ages, the countries of the Middle East and North Africa have been known for their great feats in engineering. The marvels are legion, from the Mesopotamian irrigation systems to the Great Pyramid. But did you know that the first concentrated solar steam engine was built near Cairo in 1914? A century later, solar energy is again putting the region on the cusp of new exploits, this time in renewable energy.

A salmon would find it a hardscrabble life in the waterways of the Middle East and North Africa (MENA). Not because of dried riverbeds, overfishing or pollution, but because the region has more dams per cubic metre of water than any other place on earth.

The Maghreb coastal corridor links Morocco to Egypt by road and from there connects to the Arab countries of the Mashreq. Much of the 31,000 km of planned roads are in place. Part of a major road plan that some hope will one day link much of the African coastline, the corridor embodies a future of promise.

The Egyptian government is focusing on several regulatory reform and improved governance priorities. An initiative now underway, ERRAD, aims to collect and review all legislation and ministerial decrees in the areas of investment, trade and industry.  A Transparency and Integrity Committee was also formed to help establish a national strategic plan for governance in civil service.  Special attention is also given to reforming the social security system.

Investment is essential for development, but not all investment brings the wide benefits it promises. This is because the impact of investment on development depends on many things. The type of investment is one factor, but more important is the way in which businesses conduct their activities. This also largely depends on whether the policy and regulatory environment provided by governments encourages or discourages responsible business conduct.

Small and medium-sized enterprises may be the flavour of the moment in development policy, but the potential role of large multinational firms, or MNEs, should not be overlooked. After all, there is some evidence of MNEs having a positive effect on employment and wages, as well as plugging local suppliers into international markets, which boosts skills, technology and productivity.

State building is governance writ large. Seen from without, the accomplishments of a nascent state stand in harsh juxtaposition to the fine-tuning of politically and economically stable governments. One is a stone mason and the other a builder, confident the foundations will support his project.

Morocco is facing the same challenges as most other countries in the MENA region, and hopes to follow the best and most practical paths toward the integrity, transparency, openness and partnership that will promote good governance and development.

The University of Al-Karaouine is located in Fez, Morocco. Founded in 859, it is regarded by many as the oldest university in the world. Today, as countries in the Middle East and North Africa region begin to compete more vigorously in the global economy, they are again focusing more concertedly on how to rekindle their great, historic asset: human capital.

Small and medium-sized enterprises need adequate financing to meet needs at each stage of their life cycle, from creation through operation, development, restructuring, recovery and beyond.

Since antiquity, governments, emperors, kings and queens have been providing traders and investors with special sites offering respite from normal import-export tax regimes and regulations in return for a steady stream of much needed revenue for the public purse. Before modernity, such places were concentrated in the Mediterranean basin, at Delos in Greco- Roman times, and in Venice, Genoa and Marseilles during the Middle Ages. By the 19th century, they had spread to Southeast Asia. But it was not until the latter half of the 20th century that so-called free zones made their mark as deliberate tools of economic development, most notably in China in 1979 when one of the most famous free zones of all was set up at Shenzen.

Hana Barqawi realised her dream of opening her own children's furniture store two years ago in the Jordanian capital of Amman. Ms Barqawi is part of a wave of female entrepreneurs that has swept across the Middle East and North Africa area over the past decade or more. She is not surprised: "Arab women are well-educated, openminded, open to new ideas, new cultures, new challenges," she says. Nor has she found cultural attitudes to be a major problem, with Jordanian men accepting the new female business presence. But Ms Barqawi notes that while servants and nannies are available to help with childcare, balancing work and family life has now become a daily juggle for many women like her. But to what extent do Ms Barqawi's experiences reflect those of other women across the Middle East and North Africa region?

The global crisis and how to get growth and development back on track led the agenda as ministers from MENA and OECD countries gathered at Marrakech in Morocco on 23 November 2009. In our ninth OECD Observer ministers' roundtable, we asked representatives from four MENA countries-Morocco (as hosts of the ministerial meeting), Bahrain, Egypt and Yemen-and from three OECD members-Italy, Korea and Spain: "What action is your government taking to help improve development prospects in the MENA region?"

The countries of the Middle East and North Africa stand at a crucial stage in their development. Though several of them had until recently witnessed high growth-Morocco's economy expanded by over 5% in 2008, Egypt's and UAE's by over 7%-the global crisis has finally dealt a blow.

Showing progress; Economy; Hard talk

Africa's economies were on the rise when the financial crisis hit in 2008. Growth was running high on the back of commodity price increases, with African exports almost doubling between 2000 and 2006. Over the same period, foreign capital flows quintupled. Yet the crisis has jeopardised this progress, resulting in a severe investment slowdown, particularly in oil and mineral production, and halving Africa's growth rate from 5.7 % in 2008 to 2.4 % in 2009.

The wave of natural disasters that swept the Pacific and Indian Ocean regions in recent weeks has left a heavy human and economic toll. Thousands have perished, lives and communities have been shattered. Could some of this have been avoided, or the toll reduced? We have been here before, notably following the tsunami that struck southern Asia and the east coast of Africa in 2004. The latest tsunamis, typhoons and earthquakes are tragic reminders of how vulnerable some human settlements are, and underline the importance of integrating disaster risk into development practices.

On 7 September 2009, a report from the United Nations conference on Trade and Development (UNCTAD) blamed the "dominance of the dollar" for playing an important role in the recent build-up of global imbalances, particularly in trade and the current account, which helped lead to today's global economic crisis.

The good intentions of governments and donors to ensure long-term food security for all may be melting away in the face of the current global financial and economic crisis.

There are just six years to go to the deadline set by the international community for achieving the Millennium Development Goals (MDGs). The trouble is, reports now indicate that no sub-Saharan African country will attain all the goals by 2015.

Africa did not cause the economic crisis, but will suffer from it. What are the prospects?

Record fall in GDP; Economy; Gender learning; Other news; Soundbites; Plus ça change...

“The Chinese government rightly advocates firm opposition to trade and investment protectionism, as emphatically stated by Premier Wen Jiabao on several occasions in the past few weeks. As it did a decade ago during the Asian crisis, China has set itself firmly against inward retrenchment in the face of economic downturn. We celebrate this commitment at OECD.

Development aid rose to a new record in 2008. While good news in a crisis, how can the trend be maintained?

Coherence in policies within countries and between them will be vital to restoring economic growth and development.

The economic crisis has hit the entire world economy, with governments stepping in to rescue financial systems and kick-start economic growth. This adds up to a triumph for government fiscal policy, though fiscal policy must be used audaciously.

International aid conferences are famous for their promises and commitments, but at Accra, donors and aid recipients may finally have started to “walk the talk”.

Emerging markets such as China, India and Brazil are increasingly regarded as central rather than peripheral players in the global markets. Can this “rebalancing” continue through the current crisis?

Two major international sporting events take place this summer, with the Olympic Games in Beijing and the European football championships in Austria and Switzerland. The question on many policymakers’ minds will be less about medals on the track or pitch, but whether holding such major events can make or break the cities that host them?

According to President John F. Kennedy, the person who can solve the water problems of the world should receive two Nobel prizes, one for peace and the other for science. More than four decades after his death, the world is realising the complexity and urgency of the water-related problems facing humanity, and the relevance of his remark.

Originally founded by OECD member countries as “Club du Sahel” in 1976 to raise international support and awareness of the drought crisis in the Sahel region, the Club extended its geographic coverage in 2001 to encompass all 17 West African countries, home to approximately 290 million people.

Did you know that over the last ten years, the largest bilateral donors to Africa, excluding debt forgiveness, were the United States and France? The US has focused aid on Egypt, Ethiopia and Sudan, whereas France’s main aid recipients have been Morocco, Mayotte and Senegal.

With the global economy mired in the fallout of subprime crises, costly oil and financial market volatility, it may seem a little surprising to learn that for the fourth consecutive year, Africa has experienced record economic growth. According to the 2008 edition of the African Economic Outlook (AEO) launched in May, the headlines are good indeed: 5.7% GDP growth and a per capita increase of 3.7% in 2007, with estimates looking quite bright for 2008 too. However, behind those numbers lies something more complex.

Over the last two years, prices of agricultural commodities have risen spectacularly, and nominal prices for many crops and dairy products are at an all-time record high. This surge in prices is not unique, and when adjusted for inflation, the recent price spike is neither unique nor the biggest one to occur in the last three decades or so.

Several Sahel and West African countries have seen prices of agricultural commodities rising since September 2007 compared with 2006 and on into the first quarter of 2008. This has given rise to tension in some countries like Burkina Faso, Cameroon, Côte d’Ivoire and Senegal.

The gloomy image that has for so long hung over the world’s largest continent may at last be lifting.
Conflict and disease remain a bane, and there are challenges in areas like governance and transport, but as we reported in our last issue (No 255, May 2006), the OECD Development Centre’s latest African Economic Outlook is upbeat about future economic growth there.

Latin Americans’ access to telecommunications services has expanded fast since the early 1990s, with a telephone density now above the world average. Chile and Argentina lead the continent, with 90 and 82 telephone lines per 100 inhabitants respectively. Fewer, albeit wide, disparities still exist.

One role of development aid is humanitarian assistance to help victims of natural disasters, famine and conflict. Since 2000 the trend has been rising sharply, reaching some 6-7% of total bilateral official development assistance in 2005, or some US$7.1 billion (constant 2005 prices).

Something new is happening in Africa. Once talk of investment in the continent’s countries was dismissed as idealism. Now global investors are turning their eyes–and their funds–to a new investment frontier. Is this short-term euphoria?

Mexico has made great economic strides over the past decade, and output growth is expected to reach 3.5-4% in 2008. However, the latest Economic Survey of Mexico says that only a renewed reform effort will raise the economy to a higher plane of growth and help close the gap with wealthier OECD countries.

US Secretary of State Condoleezza Rice shakes hands with OECD Secretary-General Angel Gurría at the launch of a new multilateral initiative called the Partnership for Democratic Governance (PDG).The new initiative is designed to assist those developing countries that need help to improve governance, strengthen capacity and accountability, and deliver the services that are essential supports of effective government.

Egypt has become the first Arab and first African country to sign the OECD Declaration on International Investment and Multinational Enterprises. Egypt has made impressive progress in reforming its investment policies in recent years–foreign investment in manufacturing has been fully liberalised, for instance, with the exception of defence-related industries–but significant barriers to both foreign and domestic businesses remain.

A new global courtship is blossoming, and it is bringing China and Latin America closer together. Whether it ends in happiness or in tears depends mostly on Latin America.

The figures you give for the dramatic fall in support for economic infrastructure and agriculture as part of total bilateral ODA between 1995/96 to 2002/2003 are sobering (No. 261, May 2007). There is increased emphasis on these two areas by development agencies, but it will be important to see if resource commitments actually follow–particularly for aid and investments in agriculture. But didn’t NEPAD members at Maputo commit to invest 10% of GDP in agriculture, not to increase investments by 10%?

On 22 March, World Water Day 2007, 21 Chinese environmental NGOs came together to launch a new “Green Choice Initiative”. Aimed at China’s vast consumer population, the hope is to encourage all individuals to consider a company’s environmental performance in guiding their daily purchasing decisions.

How can civil society help to make development aid more effective? Some 30 civil society organisation (CSO) representatives met to discuss this question on 7 March, at the OECD headquarters, with the Working Party on Aid Effectiveness, an international partnership of donors and recipient countries, hosted by the OECD’s Development Assistance Committee (DAC).

After several years of encouraging increases, development aid slumped in 2006. The 22 member countries of the OECD Development Assistance Committee (DAC), the world’s major donors, provided US$103.9 billion in aid in 2006, down by 5.1% from 2005, in constant 2005 dollars.

More than two billion people in developing countries rely on agriculture to meet their basic food and income needs. While the development community has long recognised the importance of investments in agriculture to fuel economic growth, the strategies employed have been erratic, sometimes misdirected, and often ineffective. As a result, benefits that poor people might have derived from a vibrant agricultural sector have not materialised.

The jury is still out on whether pro-poor growth is enough to reduce poverty. However, the OECD’s specialised network, POVNET, believes growth and poverty reduction should work together.

League tables of competitiveness give an easily comparable ranking of the global economic performance, but they leave underlying questions unanswered. Why are the “poor” countries four times less productive than the “rich” ones, for instance? And what do these rankings say about the role of human capital, or financial markets or physical infrastructure?

Dear editor, Developed countries met in Paris at the beginning of March to discuss how much they will contribute to the World Bank’s soft loan window for the next three years. 

The Newsletter has been prepared by the Public Affairs Division of the OECD for the purpose of informing the public of OECD cooperation with civil society. The Public Affairs Division acts as a clearing house for information about OECD dialogue with civil society. OECD staff who are in contact with civil society through consultations, workshops or other activities contribute to this newsletter.

The report entitled Challenges for China’s Public Spending: Toward Greater Effectiveness and Equity, published earlier this year, identified education and healthcare as priority areas for public spending. Why does China need to spend more on education and health?

Will the Millennium Development Goals launched in 2000 be met by the agreed deadline of 2015? This question is at the top of discussions in government and development agencies around the world. There have been several initiatives to help focus minds and boost international progress towards meeting the goals, not least by the G8.

An assessment of India’s short-term economic prospects appears for the first time in the latest OECD Economic Outlook, so adding to the coverage in this report of key non-OECD economies Brazil, China and the Russian Federation. India has been one of the most rapidly growing economies in the world over the past five years. Nonetheless, with a slightly lower population than China and significantly lower average incomes, the economy is only half the size of China’s, though double that of Brazil and Russia.

Jannat Bibi, who lives in a village in south Pakistan, was engaged to an older man at the age of three. In the circumstances, that would normally be the end of her story. Yet when she was 16, Jannat participated in the Girl Child Project, an initiative of UNICEF and the Swiss Agency for Development and Cooperation (SDC), whose workers encouraged Jannat not to rebel against her family but to convince her elders to support her own choices.

Imagine a type of nut that could save hundreds of thousands of people in poor countries from starvation. In fact, imagine one that costs about $20 per child for a month, roughly the same as therapeutic milk, but which, unlike most other therapeutic foods, does not require preparation, is packaged, keeps fresh after opening, and can be easily transported and distributed directly to parents and children.

The latest African Economic Outlook from the OECD Development Centre, which looks at prospects for 29 countries, reports that economic activity overall in Africa rose by nearly 5% in 2005 amid windfall gains from booming markets in oil and minerals. The African Economic Outlook sees growth accelerating to 5.8% in 2006 and easing to 5.5% in 2007. These figures hide large differences between countries, particularly in light of endowments in natural resources.

Reconciling environmental conservation and the necessities of development will be very difficult in a developing county like mine. We know that the source of man’s welfare is the biosphere, and so to grow we must use its resources, particularly natural ones.

Latin America is back in the spotlight this year. The political climate is warming up once again, with major elections taking place in several countries. Economic prospects remain bright, as low interest rates and high prices of raw material exports bolster Asian-style growth rates, while China in particular sucks in huge quantities of soya, iron, copper, oil and gas. The emerging markets are awash in liquidity, with high yields attracting investors. Latin America has recorded three successive years of growth, its first such run in half a century and one that looks set to continue in 2006.

On 4 April OECD development and environment ministers meet in Paris. The aim is to push for more progress on the many areas that link the environment and development.

Fiscal responsibility is no longer a taboo in Latin America. Just look at Mexico. Once a country with burgeoning budget deficits, it is now a stable global economic player. But this OECD member is not the only example. New governments have been elected in Brazil and Chile, each promising fiscal rectitude.

“Tradition is a guide and not a jailer”, wrote W. Somerset Maugham. Could it be that some traditions, however rooted in great histories and cultures, are now trapping countries in poverty? This certainly appears to be the case when it comes to the influence of social and cultural norms on the status of women.

The downward trend in aid to water supply and sanitation has been reversed. Or has it?

In 1962, we usually divided the world into three regions. The advanced capitalist group was then known as the developed world. The second was the “Sino-Soviet bloc”. Countries “in course of development” were the third world. The China-USSR split occurred in the early 1960s; most of the communist regimes collapsed around 1990, and the hostility of the cold war has largely faded away. The income gap between the former communist countries and the advanced capitalist group has become very much wider than it was. For this reason, a tripartite division of the world economy is no longer appropriate.