Emerging aid donors urged to step up standards

BUSAN, South Korea (AFP) - Global leaders called Wednesday on emerging donors such as China to step up efforts to help the world's poor as US Secretary of State Hillary Clinton warned aid recipients to be "smart shoppers".

Aid experts from some 160 countries are meeting in Busan, South Korea, in a bid to increase aid effectiveness at a time of tight budgets in developed countries and growing spending by new donors including China, India and Brazil.

"Europe and the United States may be struggling in the economic situations, but in east and south Asia, in Latin America and even in Africa, many economies are growing," UN Secretary General Ban Ki-moon told the conference.

"With such success comes responsibilities. This is your chance to assume your new leadership," he said.

Clinton called on all donors to work together to ensure that aid recipients become more self-sufficient and avoid the "resource curse" where they export oil, diamonds or other lucrative goods but remain poor.

"Being an accountable partner also means refusing to look the other way when leaders repress their own people," Clinton said.

She warned developing countries to avoid "quick fixes" that fill short-term budget gaps without lasting benefit.

"Be smart shoppers. Be wary of donors who are more interested in extracting your resources than in building your capacity," she said.

Clinton also pledged that the United States would step up its own efforts by joining the International Aid Transparency Initiative, a set of standards for openness of aid spending -- bringing applause from the audience.

She did not single out China, which has ramped up assistance around the world and insists it will avoid what it calls a moralising tone by the West.

But Clinton hit China's arguments head-on, saying: "While national sovereignty is an important principle, it cannot become an excuse for avoiding scrutiny of our development efforts -- not if we want results."

The US secretary of state, however, refused to end all US "tying" of aid -- setting the condition that recipients buy products from the donor. Aid groups say such restrictions create added hurdles for poor countries.

Clinton said two-thirds of US aid was untied in 2009, up from just 32 percent in 2005, but she insisted that tying was needed in some areas -- such as food assistance -- to ensure domestic support.

The Busan talks are led by the Organisation for Economic Cooperation and Development (OECD), which says members of its Development Assistance Committee spent $129 billion last year.

Booming economies such as Brazil, India and China are not OECD members. China has come under criticism in the West for bank-rolling countries such as Sudan and Zimbabwe, weakening the impact of Western pressure aimed at addressing human rights concerns.

According to OECD figures, 400 million fewer people now live in poverty around the world than in 1990 when the United Nations set the "Millennium Development Goals" for the poorest countries to meet by 2015.

But Ban said no conflict-hit country had met any of the Millennium Development Goals and voiced alarm at pressure in developed nations to cut aid funding.

"Assistance is not charity. It is smart investment in security and prosperity," Ban said.

Ban singled out for praise Britain, which has bucked global trends by not cutting foreign aid due to the economic crisis, and his native South Korea, a one-time aid recipient which last year joined the club of global donors.

South Korean President Lee Myung-Bak recalled that as a child, his war-torn country was a recipient of aid and that it achieved development at the same time as it advanced democracy.

"We feel deeply proud that South Korea is a country that has achieved both industrialisation and democracy at the same time," Lee said.