 It's a great pleasure to be back at WIDA and to have the opportunity of talking about this subject. You might say that aid has been done to death over the years, but I hope to show you that although there's a lot of continuity, there are a lot of new things happening as well and that these have some significant consequences. So to start with continuity, I think that one of the curiosities of aid is in a way how little some things have changed. If I can work out how this thing clicks forward, I'll do better than this. That's right. So this is from DAC publications. This is the total official development assistance from DAC members over the years, grew gradually. After the fall of the Berlin Wall, money was diverted to Eastern Europe, so there was a dip. From about the millennium it went up pretty steadily with a big blip which is aid right off in 2005. Since the financial crisis, you haven't seen it collapse. You might have imagined it would have collapsed, but it hasn't. It has in fact leveled out because some of that increase in the final two years is the consequences of very heavy refugee spending in Europe because under DAC rules you can count the first 12 months of your expenditure on refugees in your country as a visual development assistance. So you should see that line really as flatter than it looks in that presentation. And when you look at the share of Western gross national income which is going into aid, it's still interesting that the highest point it ever reached was at the height of decolonisation, which was now rather a long time ago, that it was almost static around half the UN target for several decades. And although it went down, as I say, after the fall of the Berlin Wall, it's now back more or less where it was. So from that point of view you might say, well, what's changed? And another thing that hasn't really changed very much is the multilateral share of all this, which reached a peak, interestingly, at the end of the 1970s and trended down to about the start of the 2000s. Occasionally these figures are difficult to understand. I mean this flip downwards is merely because of this huge dip right off in that year which counts as bilateral. So some of these, but the general trend is clear. There has been a bit of a recovery in the multilateral aid share over the last few years. The other thing to note, and this is very important I think, is that the European Union which is the blue, whose flows are included in the blue line but not the red dotted line, has become a very significant player in its own rights in this field over the years. I'm not going to be saying much more about the European Union because I'm talking mainly about other aspects of aid, but it is an important contextual point. We are seeing something of a decline in contribution to some of the main replenishments from the DAC donors. You'll see there was quite a fall in IDA 18. Now part of that is due to currency movements. The US dollar was very strong. The euro was weak. That translates a little bit into some of those numbers. Same true of the African development replenishment. You are seeing also a buildup of contributions from countries outside the DAC. In this case, most notably China and in the most recent replenishment also India. As I'm in Finland, I can't forbear to show a slide about what's happening in Scandinavia and the Netherlands. Traditional supporters of the multilateral aid system. One has to say when you look at the contributions to IDA 18 and ADF 14 from these traditionally very supportive members of the international community, there is quite a pulling back. One has to say as we're here in Helsinki that Finland is perhaps the country where the pulling back has been most marked. So it's an interesting question going forward whether we can kind of rely on the very steady support that we've had from that group of countries over the years for some of these institutions. Nevertheless, this is why I put aid volume in the continuity. You've seen a pretty steady increase really in real terms over the period. Whereas private flows though sometimes more important do oscillate much more. It's also worth noting in this chart the very significant increase in net grants by non-governmental organizations of all sorts. That's both NGOs and the narrow sense and foundations and just becoming a more important part of the total transfer of particularly highly concessional flows. Another thing that in my view hasn't changed very much is development effectiveness. I was heavily involved as chair of the DAC in the Paris Declaration or went with that. It was then the famous Busan meeting. We've now got a global partnership for effective development cooperation. Read their last monitoring report and you'll see that it's a depressing story on country progress on public financial management. Slightly more countries it's got worse than it's got better over the last few years. There's no change in the use of country systems by donors essentially. A predictability is very marginally increased but not much. Untying hasn't changed much either. And although there's strong alignment at the top level that donors can always say what they're doing is in line with country priorities. When you challenge it a bit more and see what are you measuring results in the same using country systems the answer tends to be a lot less than that. I'd really like to see a sea change in the way donors get countries more involved in evaluations. Too many evaluations are done by donors for donors. We should see many more led by countries and supported by donors. Similarly on inclusive partnerships the operating environment for many CSOs is leaves a lot to be desired. Dialogue with the private sector everybody says it's a great idea. When you challenge and see what's really happening the answer seems to be not a great deal. Where there has been quite a bit of progress I think is on transparency and accountability as I put there but not really on mutual accountability. Another question I ask myself in this is whether there's been a switch or not from horizontal type funds either and so on which are a principle available for country priorities and those which are pre given their priorities by the donors because they set up for particular purposes. UNICEF as I suppose the poster example set up in I think 1947 for children and of course it's been joined by GAVI the Global Fund and more recently the Green Climate Fund. I think it's true to say I don't have fully comparable figures unfortunately because OECD has a nice data set which doesn't go back that far but I think it's true to say that that was quite a big increase from 2000 onwards in special purpose funds of various kinds but I also think that's pretty well leveling off for reasons I'll come on to later. So the balance there I think may stay much as it is for the next few years. Learning and evidence is very important in all this. I used to be until recently chair of the International Initiative for Impact Evaluation or 3IE they have a repository of all impact evaluations and you can't read everything on the chart but what you can see is there's been a lot more impact evaluations. I think the big question, a fair question in present post-truth era is what use is going to be made of the evidence? So it's an area where I'm not sure we're seeing change undoubtedly but are we seeing a real change in the way in which evidence is used and I think that's a big challenge to all of us concerned with evaluation and indeed with impact evaluation. Now areas where I think there definitely are is change. One is graduation. I mean it's quite striking isn't it that IDA was set up basically for India. India is now no longer an IDA recipient. Indeed IDA is now an IDA contributor. I think that's a very significant shift in the world. Sri Lanka, Bolivia and Vietnam are graduating in the present round and I think the Centre for Global Development's forecast that IDA will become almost not almost exclusive a very significant African and fragile post-conflict by the mid-20s is still pretty much right although the detail of course will change. I also think that IDA is getting somewhat better allocated. You'll see that there's a decline in the amount of proportion. These are proportions going to upper-middle income countries an increase for the least developed countries and I'd be very struck in the recent multinational bank replenishments that the donors are completely caught really between the traditional view that it must all be about performance and hence we have a CPIA and these various complex measurements of competence on the developing countryside versus their now almost overwhelming interest in how do we deal with fragile and conflict-affected states and this is being resolved in different ways in different institutions but more and more donors are in fact as interested in fragility as they are in supporting those who've made some progress already and correctly of course over time countries do become more self-sufficient. Here is what Henry Kissinger described in the mid-1970s as a basket case, Bangladesh, and you can see how government revenue has completely outstripped aid disbursements over that period and if I could update those figures it would be even more true. Another important change of course is the rise of assistance from countries outside the DAC. There are some figures on there and this presentation will be available so you can look at it in slower time but it's worth picking out a few interesting countries here. Turkey, of course it's largely about dealing with refugees, Turkey is spending a phenomenal amount of its resources on activities which count as visual development assistance according to DAC rules. The United Arab Emirates is providing more than 1% of its GNI in the same way and it's amazing how big the GNI must be to produce that number. Russia is still very focused on its near abroad of 60% of its aid going to Bhutan. Russia at the billion mark is the portion of GNI. It's not very different from many Eastern European countries. Brazil, a big decline since the days of Lula and I think the Brazilian program is now pretty marginal. Of course the big one is China. Now here I always look to you for the figures on this so I've taken this. What you'll see in this is an attempt by now a hero to try and apply the ODA metrics to Chinese aid and the big difficulty there is what exactly are the terms of some of the concessional lending but you'll see the general picture is a very rapid increase to very significant numbers which has levelled off for first grants and interest-free loans. It's more or less levelling off as net dispersion to concessional loans but gross dispersion are still rising. A really big increase in multilateral aid which includes the setting up of the AIIB and these big contributions to AIDA and then the dotted line which is actually very important it's all these preferential buyers credits which might not score as aid but they're very significant and they certainly have to be looked at in the overall scheme of things and this chart is a little bit hard to read because there's a lot of data on it but the China line which is here shows that even on a net basis China is now a very significant donor put in the same frame as the day if you took the gross chart it's a good deal higher and of course the most important thing about China is not going to be the grants and the interest-free part of that but it's more about things that I think Justin will be talking about later. The other thing that's really new well I think this is worth just a minute or two is a financial engineering discovery there's some discussion as who discovered this but the Asian Development Bank were the first people to put it into practice it comes about from the fact that soft funds are always repaid so every soft fund can be seen as a large asset that hasn't come in yet people will be repaying it over the next decade or so and they always do as a result because it's an asset you can borrow against it you can make something of it so in the Asian Development Bank they have ordinary capital resources their equity was 17 billion when they did this calculation for their soft fund it was 31 billion of equity in their soft fund but no one was paying any attention to you put the two together that makes 48 you have a much more conservative gearing ratio because the money's not been paid back yet so the rating ages are still going to be AAA and as a result you can increase your total lending from 13 to 20 billion on a sustainable basis and you only need half the amount of money from the donors how about that? so that's a real change and when you apply this to IDA which is of course the big elephant from contributors as I've shown have gone down concessional loans is another form of contribution from the donors has gone up a bit total internal resources keep rising because people are repaying IDA and the population is shrinking but on top of all that goodness me, we're going to borrow 16 billion dollars against this hidden equity so as a result the size of IDA in the last impression went up by over 50% in SDR terms and a little bit less in dollar terms this translates into IDA being able to double double in the present three year period it's lending to all fragile states on average and to increase its aid to all other borrowers by 40% and that's one of the reasons I say that I think there'll be a levelling out of this special fund versus horizontal fund approach because IDA is so large and it's had such a big increase it's an incredibly important result and it leads to one thing which is burning on me because I was the coordinator of the last two replenishments of the African Development Bank soft fun this is the size of my IDA 18 this is the size of ADS 14 now okay a lot of IDA is going to Asia a little bit to Haiti but quite a lot of it's going to Africa I calculated and I may be wrong on this that IDA is now going to providing seven times as much in commitments in the current period to sub-Saharan Africa as the African Development Fund I think that's wrong I think that's a very unfortunate result of donors not taking on board what they actually knew which was that IDA was going to borrow a lot of money if you look at it donors gave IDA they treated IDA slightly better than they treated the African Development Bank in terms of their own lending as a result we've got a situation where the main regional development bank is woefully underpowered compared to IDA now there are a lot of reasons for that and it may be that the donors don't really rate the African Development Bank as highly as the African Development Bank would like to be rated but I don't think that's a very satisfactory situation and I think it needs to be looked at as we approach a new replenishment round finally, lending as countries get richer people are more inclined to lend and in the DAC of course there have been a lot of traditional lenders Japan most notably and what you see here is the size of lending from the main loan partners in the DAC and Japan and Korea basically provide quite a significant portion of their assistance in this at highly concessional rates Germany and France are somewhat smaller proportion of theirs at significantly less concessional rates total loans up 13% in 2017 in real terms also DFIs and the British CDC would be a good example of significantly stepping up their activities a second one which I think is not talked about enough is what the European Union is doing this is the so-called Juncker Plan now applied to the abroad as the neighborhood areas which is parts of Eastern Europe Mediterranean plus Africa and basically it's a leveraging fund in which money is put aside and then leverage is a very large amount of investments with technical assistance and enabling environment support I think it's the nearest European equivalent to what Justin may be about to talk about the third case of course is precisely China and I'll leave that to Justin generally with incomes rising and a lot of money having been written off the highly indebted poor countries went to becoming the lowly indebted poor countries and as a result if you've had your debt levels cut what do you do? You go out and borrow so Sub-Saharan bond issues rose from next to nothing to over 5 billion a year in 2013-14 and bilateral lenders outside the Paris Club including China XM and China Development Bank have become very significant additional lenders so as a result the stock of debt and here's an IMF graphic for eight countries that they regard as having quite rapid increases in external debt as a proportion of gross national income the difference is not coming so much from the traditional donors who've gone up rather modestly it's significantly a course in the multilaterals but the biggest ones are these two non-debt lenders those outside the Paris Club and even more particularly the commercial debt and as a result the configuration of debt this is a snapshot of eight countries but the configuration of debt is very different from what people have been used to in the past for this group of countries finally I'll just say that about two things very quickly there is a review ongoing and it will be published very shortly under the leadership of the Deputy Prime Minister of Singapore Deputy Prime Minister Tharman with a very good group under the G20 which is looking at systemic issues across the international financial institutions I'm just putting it on screen so that you look out for this it will be published very shortly it will be discussed at the annual meetings and I think it will be very important in looking at the whole IFI system and finally you'll expect me to say a word on Brexit well it's not the right moment to talk about this because nobody knows what's going to happen so I'm simply putting up what the last British white paper on the subject said which is that the UK proposes a cooperative accord with the European Union that will allow for UK participation in specific EU programs instruments or bespoke projects with appropriate influence and oversight and the UK will critically assess the rationale for this so to my mind in all the negotiations over Brexit one of the easier ones is that given that the UK is going to provide 0.7% anyway there's no cost to doing some of it in association with Europe and I suspect that part of any deal will be something on those lines so finally that's my view on areas of continuity which I've talked about and some of the main areas of change and it's been a pleasure to talk to you