ODA

The coming of age of triangular co-operation

Development Matters ODA , ,

By Jorge Moreira da Silva, Director of the Development Co-operation Directorate, OECD, and Jorge Chediek, Special Envoy of the UN Secretary General for South-South Co-operation and Director of the United Nations Office for South-South Cooperation (UNOSSC)

traingular event webpage imageTriangular co-operation is when actors from both developing and developed countries come together, often with international organisations, civil society and private sector partners, to deliver innovative and co-created development solutions. A niche issue for many years, it is now taking centre stage in the global discourse.

2019: the turning point

No country is too economically poor to help and share experiences, and none is too rich to learn from others. That is the idea behind triangular co-operation that came into the global spotlight in 2019 at the Second High-level United Nations Conference on South-South Co-operation, commonly known as BAPA+40. Some forty years after the original Buenos Aires Plan of Action (BAPA) was agreed in 1978, the importance of triangular co-operation was explicitly acknowledged in the BAPA+40 Outcome Document as a way to strengthen South-South and North-South co-operation. The consensus amongst participants, regardless of their level of development, was that triangular co-operation enables countries to access more and a broader range of resources, expertise and capacities to achieve national and internationally agreed sustainable development goals. Continue reading →

The Future of Development Co-operation: Not the end, just the beginning of a new era?

Development Matters Development finance, ODA, Policy ,

DEV-IN-TRANS-BANNER

By Andy Sumner, King’s College London

This blog is part of an ongoing series evaluating various facets
of Development in Transition
The 2019 Perspectives on Global Development
on Rethinking Development Strategies adds to this discussion

immigration-integrationYesterday’s blog listed five areas of change related to global poverty and economic development in developing countries. What do these changes mean for development co-operation?

First, development co-operation needs to adapt to the new polarisation within the developing world. More precisely, the old model of supporting ‘stuck’ and ‘ODA-dependent’ developing countries needs to be complemented with a new model of collaborating with ‘moving’ and ‘post-ODA’ developing countries.

Second, development co-operation to support expanding social welfare regimes and social protection systems focused particularly on children is important to disrupt the inter-generational transmission of poverty, especially given that under 18-year olds make up half of global poverty.

Over 100 developing countries have already established cash transfer schemes, which indicates that these systems are already being built, and systematic reviews concur on poverty reduction impacts. A global knowledge bank on building social welfare and social protection systems is thus one potential area for post-ODA development co-operation. Continue reading →

Multilateral action for sustainable development: How to build on the strength of ODA?

Development Matters Development finance, SDGs , ,

By Jorge Moreira da Silva, Director, Development Co-operation Directorate and Charlotte Petri Gornitzka, Chair, Development Assistance Committee

Multilateral wheelIn the backlash against globalisation and multilateralism and despite tightening national budgets, OECD countries’ combined Official Development Assistance (ODA) remains strong. While some criticise recently-released ODA figures for stagnating, steady commitment has been undeniable.

Indeed, ODA has remained politically resilient, steadily increasing since the turn of the century and doubling since 2000. In 2017, net ODA stood at USD 146.6 billion or 0.31% of gross national income (GNI). While this aggregate figure reflects a slight drop of 0.6% compared to 2016, previous figures were artificially high due to the refugee crisis that increased donor spending within their own borders. That spending subsided this year, and when in-country refugee costs are excluded, ODA increased by 1.1% from 2016 in real terms.

Continue reading →

With great data comes great responsibility

Development Matters Data, Development finance, SDGs , , , , ,

by Charlotte Petri Gornitzka, Chair, Development Assistance Committee
and Jorge Moreira da Silva, Director, Development Co-operation Directorate, OECD

This article is featured in the Development Co-operation Report 2017: Data for Development released today. Read the report and find out more about data for development.

DCR ID for blogversion française

If USD 142.6 billion falls in the forest of development and no one hears it, does it matter?

That depends on who you are. While mothers in Afghanistan or South Sudan can tell you how their families’ lives have been transformed by effective development programmes every single day, strong data are needed to communicate how these billions of dollars improve the human condition and create more stable societies for all.

In 2016 official development assistance (ODA) to support development goals represented 0.32% of donor countries’ gross national income, an all-time high. However, aid to those who need it most, including least developed countries (LDCs), is declining. The June 2017 report card on the 2030 Development Agenda – the world’s roadmap to end poverty, inequality and injustice for all by 2030 through a set of 17 goals and 232 indicators – tells us progress is slow and data are incomplete.

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Making aid RANDy

Development Matters Development finance , , ,

By Simon Scott, Counsellor, OECD Statistics Directorate

rand
Entrance to the RAND headquarters in Santa Monica in 1968 (photo courtesy of the RAND Corporation)

It was the go-to think tank for the US Department of Defense during the Cold War. It was where Nathan Leites deciphered The Operational Code of the Politburo and Paul Baran conceived the “hot potato routing” system that would lead to the Internet.

But the RAND Corporation, spun off from an Air Force project with the Douglas Aircraft company to do Research ANd Development on intercontinental warfare, was active across the whole field of international relations. And at the height of East-West tensions during the 1962 Cuban missile crisis, DoD contract number ARPA/SD-79 had it investigating … a better way to measure foreign aid.

Up until that time, all official flows from rich to poor countries had been summed up indiscriminately, whether they were grants or loans, and whether or not they targeted development. John Pincus of RAND came up with a new idea – get rid of the non-developmental aspects and “reformulate the definition of aid [so that] all forms of aid are reduced to their value as grant or subsidy.”

Continue reading →

Aid rising in 2016: No room for complacency

Development Matters Development finance, Humanitarian, SDGs , , ,

Charlotte Petri Gornitzka, Chair, OECD Development Assistance Committee
Jorge Moreira da Silva, Director, Development Co-operation Directorate, OECD

oda generic 22015 was a year of big promises: eradication of global poverty, delivery of more effective development finance and calls for resolute action against climate change, all for a better world by 2030. But with growing concerns about inequalities at home, and rising protectionism and unilateralism abroad, the last few months cast some doubts about whether OECD countries still firmly stand behind their commitments.

The latest OECD figures on international aid are reassuring: 2016 preliminary data on Official Development Assistance (ODA) provided by OECD Development Assistance Committee (DAC) countries reveals yet another increase in aid volumes, reaching the highest levels on record. This is an 8.9% increase in real terms. Indeed, since the adoption of the Millennium Development Goals in 2000, ODA volumes have more than doubled. It is also positive to note that support to multilateral agencies has increased, reflecting the vital role played by multilateral aid in responding to the global challenges that require collective responsibility.

Yet, there is no room for complacency. A closer scrutiny of the increases reveals that humanitarian appeals and response plans remain consistently underfunded, with only 60% of global humanitarian appeals funded in 2016. Inadequate resources are being over-stretched to cover a larger diversity of needs and greater instances of crisis. Continue reading →

Maximising bang for the buck: Risks, returns, and what it really means to use ODA to leverage private funds

Development Matters Development finance , , , ,

By Paddy Carter, Research Fellow, Overseas Development Institute

shutterstock_249974521The idea of using official development assistance (ODA) to leverage private finance is a staple of the financing for development circuit and features heavily in most donors’ strategies. Experienced financiers both from official sector development finance institutions (DFIs) and private investors are, however, still feeling their way into this field’s unfamiliar territory. DFIs for the most part emphasise the importance of providing finance on non-concessional terms to avoid distorting markets and crowding-out other sources of finance. Though some standard elements of their business could fall under the rubric of blended finance, such as grant-funded technical assistance, for the most part DFIs and development banks have treated explicit subsidies to private enterprises as dangerous medicine to be prescribed rarely. Now the pressure is mounting to find more creative ways to leverage private finance using ODA. But how?

Continue reading →

Reaching the last mile: The role of innovative finance in meeting the SDGs

Development Matters Development finance, SDGs , , ,

By Judith Karl, Executive Secretary of UNCDF, and Samuel Choritz, Policy Adviser at UNCDF

financesdgsTo meet the SDGs with their emphasis on leaving no one behind, we need solutions that tackle persistent exclusions and inequalities in the local economies and communities where the poor live and work. Targeting the last mile means adapting solutions to the households, localities and small enterprises that are underserved, where development needs are greatest and where resources are scarcest.

Addressing market failures by making finance work for the poor is a critical catalyser to this end. Official Development Assistance (ODA) can be the largest source of external finance in least-developed countries, where private investment often favours commodity and real estate sectors. Disparities in incomes and living standards show that location matters more for living standards in developing countries than it does in developed ones [1]. “Last mile finance” models can use public resources — such as ODA — to de-risk and crowd-in public and private finance, especially from domestic sources, to create virtuous dynamics of inclusion, local growth, resilience, and productive investment. Continue reading →

Setting the Record Straight on ODA

OECD Environment Focus Development finance , , , ,

By Doug Frantz, Deputy Secretary-General, OECD 

Doug FrantzThere will never be enough development aid to solve all the problems in the poorest countries. If we are to lift the last 800 million people out of extreme poverty we will need to find new ways to mobilize resources beyond the traditional assistance from wealthy governments in the form of loans, grants and other concessions.

Government assistance remains vital. The billions of dollars donor countries pour into developing countries every year are critical both in terms of actual aid and as a catalyst for mobilizing private sector funds and underpinning the efforts of developing country governments and civil society. Yet there is a consensus that the role of development aid must adapt to changes in the geography of poverty and to the new lens of the Sustainable Development Goals.

Continue reading →

Revising ODA in the era of SDGs

Development Matters SDGs , , , ,

DEV-IN-TRANS-BANNER

By Andrea Vignolo, Executive Director of the Uruguayan Agency for International Cooperation, and Karen Van Rompaey, Knowledge Manager of the Uruguayan Agency for International Cooperation.

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

 


SDGsDiscussions on the post-2015 development agenda have paved the way to new thinking about development as a multidimensional and global process. They also have built momentum for revising and modernising the concept and concessionality of Official Development Assistance (ODA).

ODA’s eligibility and graduation criteria are still based fundamentally on countries’ economic growth performance. A growing consensus among academic, practitioner and political communities reveal that classifying countries according to their per capita income is inadequate to measure well-being or sustainability. Furthermore, it is not fit for the purpose of “leaving no one behind” in the era of universal sustainable development goals.

Achieving sustainable development is a far more complex enterprise than achieving economic growth. It requires not only the latter, but also specific knowledge, technologies, the right incentives and institutional capacities to change the way we currently live, work, produce, consume, share the fruits of growth and treat the planet. Otherwise, the quest towards economic growth can lead to negative consequences for the environment and future generations.

Middle- and upper-income developing countries have had access to an enhanced domestic resource base in the past decade to set forth their development priorities. They increasingly have assisted other developing countries through South-South and triangular co-operation. As a result of this growth in their aggregate income, some of them, like Antigua and Barbuda, Chile and Uruguay, have been classified recently as “high-income countries.”

Is this just good news?

Despite past growth and progress in their human development indicators, most of these upper-income developing countries still face acute structural gaps and vulnerabilities that constitute persistent development bottlenecks. They need to close gaps in policies, institutions and capacities to ensure policy coherence towards sustainable development. They lag behind when it comes to accessing, for example, technologies and knowledge, both of which are the “game changers” required to transform their current model of growth into sustainable development.

Moreover, the “rise of the South” has halted in Latin America and the Caribbean (LAC), threatening to jeopardize all progress made to date. Currently, the LAC region is experiencing a slowdown in trade, a decrease in investment in physical infrastructure as well as human capital and innovation, and a reduction in fiscal space. External vulnerability remains very high since most of the economies in the region lack diversification and are vulnerable to climate change.

Hence, ODA can play a strategic role to support these countries in the transition needed to build capacities in key areas/policy issues such as institutions, economic structures, risk management, social cohesion, research and innovation/technology to effectively achieve sustainable development.

Furthermore, by participating in triangular co-operation schemes, these developing countries can expand their contribution to global sustainable development by sharing their experiences, lessons learned and policy innovations.

Humankind stands at a critical juncture, when it is important to count on the contributions and support of all stakeholders to achieve the global sustainable development goals. It is therefore necessary to work towards an integral and non-exclusionary system of development co-operation that will fulfill the commitments made to date.

For an international co-operation system to be truly integral and non-exclusionary, it needs to provide the right incentives and overcome any zero-sum glance at the issues. While focusing on countries with greater challenges and less capacity to mobilise their own resources, ODA should support all developing countries according to their diverse conditions and needs. In this way, they can build their capacities and contribute towards global sustainable development.

Finally, it is thus necessary to review the OECD Development Assistance Committee’s current ODA graduation criteria to include other multidimensional measures of well-being and sustainability beyond GNI and an alternative timeframe, according to the scale of both the challenges and commitments of Agenda 2030 for Sustainable Development.