Making bilateral aid more effective

Aid is more effective when it supports a country's own development strategy and when the partner government and donors are both accountable for the results that it achieves. The Paris Declaration on Aid Effectiveness, signed in 2005, outlined five partnership commitments to improve aid: ownership by partner countries of the development process; alignment by donors to country priorities, institutions and systems; harmonisation of donor support; management for development results to improve decision making and resource management; and mutual accountability of donors and partner governments for development results.

The UK is a strong supporter of the principles contained in the Paris Declaration. The OECD (Organisation of Economic Cooperation and Development)'s Development Assistance Committee (DAC) peer review of UK aid concluded that the UK provides 'a powerful model for development cooperation'.

Making the multilateral system more effective

International organisations play a major role in delivering aid. Three institutions - the European Commission (EC), the World Bank and the United Nations (UN) - already account for around 30% of global aid. In 2005/06, the UK channelled 38% of our aid through multilateral organisations. Much of today's multilateral system - including the UN, the World Bank, the International Monetary Fund (IMF) and the European Union (EU) - was created after the Second World War. These institutions have served the world well, but the challenges we face in the 21st century are very different to those of 60 years ago. The UK Government is working to achieve an international development system that delivers, amongst other things, increasing levels of development assistance effectively and shows results.

The UK successfully influenced the World Bank to improve its use of conditionality in 2006, further strengthening country ownership. Eight countries are piloting the 'One UN' approach at country level in 2007.The success of these pilots is one of our top priorities. In 2006/07, the UK successfully advocated for the major UN agencies and the World Bank to develop plans to improve their support to gender equality and women's empowerment.

Fragile states, conflict and crises

Around one-third of the world's poor live in fragile states, and every year over 300 million people are affected by conflict and natural disasters.Women and girls are disproportionately targeted in armed conflict and often experience rape, sexual violence, forced pregnancy, kidnap or abuse. Conflict and humanitarian crises not only have an immediate toll on lives and property, but they destroy progress towards economic and social development.

The new UN Peacebuilding Fund was launched in October 2006. The UK committed £30 million over three years to the Fund. The UK will no longer use 'dumb' cluster munitions and will support efforts to reach an international agreement which bans them altogether. The UK Government also worked hard to secure a UN General Assembly resolution leading to negotiations on a legally binding Arms Trade Treaty.

The UN's Central Emergency Response Fund, launched in March 2006, has been provided with over $399 million (£217 million) by 73 donors. The UK has given £83 million in 2006 and 2007.We have pledged to give £40 million a year in 2008 and 2009 which will bring the total UK contribution to £163 million. In its first year the Central Emergency Response Fund was used to meet humanitarian need through 361 projects in 40 countries in Africa, Asia, the Middle East and Latin America.

Environment, climate change and natural resources

Climate change is increasing the incidence and intensity of natural disasters and people living in the poorest countries are the worst hit and least able to cope. Good environmental and natural resources management is imperative to achieving long-term and sustainable reduction in poverty. Poor countries depend on natural resources to a much greater extent than richer countries. Poor people are particularly vulnerable to environmental shocks and stresses affecting their access to resources which they need to shape their livelihoods. The UK has led efforts to establish an £800 million international environment fund for reducing poverty through environmental management and helping developing countries to respond to climate change. The UK also secured G8 agreement that the World Bank should establish a Clean Energy Investment Framework (CEIF) with the aim of stimulating public and private sector investment in clean energy in developing countries.

Working with others on policies beyond aid

It is important that both the UK government and other developed country governments consider the impact of all policy decisions on developing countries and work in a “joined up” manner to promote international development. The non-aid policies of developed countries can often have a far greater economic and social impact on poor countries and international development than aid.

International trade rules have a major bearing on the ability of poor countries to earn their way out of poverty, while migration policies have implications both for a country's workforce and for their income from abroad. The UK government aims to ensure that all of its policies support, or at least do no harm to, sustainable development and poverty reduction in poor countries. The UK is pushing, through the Doha Development Agenda, for a fairer trade system through ending all forms of export subsidy and substantial reductions in trade-distorting support and agricultural tariffs.

The UK also supports innovative financing mechanisms including the International Finance Facility for Immunisation, which raised £255 million for immunisation in developing countries by the end of 2006, and the International Drug Purchase Facility (UNITAID), hosted by the World Health Organization, which will fund drugs for Aids,TB and malaria.