UN agency calls for shift in aid focus

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Scheherazade Daneshkhu FT Syndication Service
LONDON: A UN agency has called on donors and the governments of the world's poorest countries to focus on technology, science and innovation as a way of driving economic growth.
Calling it a new approach, the United Nations Conference on Trade and Development said last Thursday this would help the countries escape their dependence on commodities and low-skill manufacturing.
Donors should shift aid programmes towards technology transfer and fostering innovation in agricultural and urban enterprises in the 50 poorest countries, the Geneva-based agency said at the launch of its 2007 Least Developed Countries report.
Charles Gore, head of the report's team, said he was convinced the new approach - to narrow the technology gap between the poorest countries and the rest of the world - would lead to "more effective development" by addressing the growing problem of unemployment in poor countries and their need for increased productivity in goods and services.
"Science, technology and innovation are necessities, not luxuries, even in the poorest countries. These nations must develop their productive capacities and diversify their economies by increasing the application of knowledge and technology to agriculture, manufacturing and services," he said.
Unlike predominantly government-to-government technology transfer schemes of the past, Mr Gore emphasised the new approach was "bottom-up". "We're looking at it in terms of building up the technological capabilities of firms and farms," he said.
For example, agricultural techniques to boost crop yields were vital in poor countries where increasing numbers of farm workers migrated to cities, according to the report.
"LDCs cannot expect to be at the frontiers of technology. But extremely important innovation also occurs with the commercial introduction of products and processes that are new to a country or to an enterprise," the agency said.
Such innovation occurred "when an entrepreneur in Mauritania started to export camel cheese to the European Union in the 1990s. It occurred when smallholder farmers in Malawi experimented with adopting high-yield maize varieties. These were entrepreneurial acts that involved risk but had potentially high pay-offs," the report said.
But it added that donors were overly focused on governance issues at the expense of science, innovation and productive capabilities. Supachai Panitchpakdi, the agency's secretary-general, said: "There is a lack of balance between the governance and social issues and technological issues."
Less than 4.0 per cent of the World Bank's overall lending was on science and technology projects in the past 25 years. Moreover, openness to international trade and investment had failed to bring new technologies to developing countries.
Although 70 per cent of the poorest countries' workforce toiled in agriculture, donor commitments to agricultural research, education and training halved between 1998-2000 and 2003-05.