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.
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.
2015 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 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?
To 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.
There 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.
Discussions 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).