Historic modernisation of official development assistance
OECD – Paris, 16 December 2014
Press Release [Full text]
The OECD Development Assistance Committee ended its High Level Meeting 15-16 December 2014 with an historic agreement to modernise the statistical system underpinning development co-operation. These steps will create incentives to mobilise more and better financing for development.
The DAC members agreed to modernise the reporting of concessional loans, which will encourage more resources on softer terms to the poorest nations while putting in place safeguards to ensure debt sustainability.
They also agreed to target more development assistance to the least developed countries and other nations most in need including small island developing states, land-locked developing countries and fragile and conflict-affected states.
This reform package by the DAC will enable donors to mobilise more private finance for development by making use of the available instruments in the financing tool box, such as guarantees and equity investments.
“This modernisation of official development assistance comes at an important time now as the world prepares for post-2015 and a new set of sustainable development goals,” said Erik Solheim, Chair of the OECD Development Assistance Committee.
‘’To eradicate poverty and continue the huge development success of the past decades, we need to direct more development assistance and concessional loans to the poorest nations and mobilise much more private finances for development.”
.
OECD: DAC (Development Assistance Committee) High Level Meeting
Development Co-operation Directorate (DCD-DAC)
15 to 16 December 2014, Paris
The OECD Development Assistance Committee DAC convened its 2014 High Level Meeting from 15 to 16 December 2014 in Paris. The principal objective of the meeting was the modernisation of the OECD DAC development finance measurement framework to ensure that it is credible and fit-for-purpose in today’s global context. The decisions and actions taken in the meeting (see final 2014 HLM Communiqué in English – French version forthcoming – and statement by the DAC Chair) will enable the OECD and its members to make an important contribution to future monitoring of the financing framework underpinning the forthcoming Sustainable Development Goals.
This meeting was the culmination of an imperative fully endorsed by political leaders at the DAC High Level Meeting in December 2012. They called on the DAC to adapt its long-standing statistical concepts to the profound changes in the global financial and economic landscape. (See 2012 HLM Final Communiqué — EN, FR)
.
Final 2014 HLM Communiqué in English
16 December 2015
[Excerpts from opening clauses, and Annexes; Editor’s text bolding]
1. We, the members of the OECD Development Assistance Committee (DAC), convened at high level in Paris on 15-16 December 2014. We welcomed the five new members who have joined the Committee since our last High-Level Meeting in 2012: the Czech Republic, Iceland, Poland, the Slovak Republic and Slovenia. We also welcomed the United Arab Emirates as the first country beyond the OECD membership to become a Participant of our Committee. The International Monetary Fund, the World Bank, the United Nations Development Programme, the Inter-American Development Bank and non-DAC OECD members – Chile, Estonia, Hungary, Israel, Mexico and Turkey – participated in our deliberations.1
2. We have witnessed tremendous development progress over the past 15 years. Globally, extreme poverty has been halved, substantial progress has been made toward reaching gender parity in school enrolment at all levels and in all developing regions and child mortality has been halved as has the proportion of people without access to safe water. Yet the job of ending global poverty is unfinished, and we encounter continued instability and conflict, humanitarian crises and rising inequality. Addressing all these challenges in a sustainable way requires a renewed global partnership for development.
3. We met as the world prepares the ground for the post-2015 agenda, an ambitious global framework for achieving inclusive, sustainable development for all. Three decisive events taking place next year will sharpen the vision and clarify the means of implementation underpinning this agenda: the Third International Conference on Financing for Development, the United Nations Summit for the Adoption of the Post-2015 Development Agenda, and the 21st Conference of the Parties on the United Nations Framework Convention on Climate Change.
4. As we shape the new sustainable development goals for the post-2015 era, we want to ensure our contributions make the difference that is needed. We invite the OECD to fully use its interdisciplinary expertise to support members and partners as they design and implement the range of policies needed to achieve these goals in all countries. This new set of goals will require both financial and non-financial means and efforts. As regards the financing challenge, a wide array of domestic and international resources – both concessional and commercial in nature – needs to be mobilised from public and private sources and from all providers. These different resources must also be used effectively, drawing on their respective comparative advantages. In this context, we welcome relevant efforts from across the OECD on development finance, including in the areas of taxation and investment. We consider that improving global access to reliable statistics regarding all these resources will be essential for all stakeholders, including developing and provider countries, to optimally plan, allocate, use and account for development resources. Reliable statistics will also facilitate national, regional and global transparency and accountability.
5. OECD DAC statistics on development finance are a global public good that informs policy choices, promotes transparency and fosters accountability. Following a mandate that we adopted at the 2012 High Level Meeting, we began work to modernise our statistical system, measures and standards to ensure the integrity and comparability of data on development finance and create the right incentive mechanisms for effective resource mobilisation. We have today taken stock of progress achieved in this regard, and have taken decisions in a number of areas.
6. Official Development Assistance (ODA) will remain a crucial part of international development co-operation in implementing the post-2015 agenda, particularly for countries most in need. We also acknowledge the important role of international private flows. Domestic resources, however, will continue to be the main pillar of development finance for the broad majority of developing countries.
7. We note that despite challenging fiscal circumstances in many OECD countries, we have maintained high levels of ODA – which reached an all-time high of USD 134.8 billion in 2013. We reaffirm our respective ODA commitments, including those of us who have endorsed the UN target of 0.7 per cent of Gross National Income (GNI) as ODA to developing countries, and agree to continue to make all efforts to achieve them…
.
Annex 3: Developing a new measure – Total Official support for Sustainable Development
[Excerpt]
1. We, DAC members, recognise that the development agenda is broad and complex and that we need to mobilise resources and expertise to address related challenges.
2. We agree, therefore, that there is a need to capture in OECD DAC statistics the wide array of support we are providing beyond concessional finance through a measure of Total Official support for Sustainable Development (working title). Such a measure would encourage visibility and understanding about development financing options and impacts, enhance transparency and foster accountability beyond ODA, and facilitate information-sharing with providers of development co-operation beyond our Committee. This will contribute to broader global efforts to monitor international resource mobilisation for implementing the post-2015 agenda.
3. We have reviewed the work carried out on this measure and express our appreciation to various stakeholders who have participated in our ongoing efforts to shape its narrative and possible components.
4. We agree, today, to create a TOSD measure, which will:
:: complement and not replace ODA;
:: potentially cover the totality of resource flows extended to developing countries and multilateral institutions in support of sustainable development and originating from official sources and interventions, regardless of the types of instruments used and associated terms, i.e. including both concessional and non-concessional financing provided through various instruments, such as grants, loans, equity and mezzanine finance;
:: cover activities that promote and enable sustainable development, including contributions to global public goods when these are deemed relevant for development and aligned with developing countries’ priorities;
:: make a clear distinction between official support and flows mobilised through official interventions, but also between flows and contingent liabilities; and
:: capture and report resources on a gross cash-flow basis, while also collecting and publishing net flows so as to ensure full transparency of support and flows.
5. We agree to consult broadly with developing countries, international institutions, other providers of development co-operation and stakeholders on the scope, definition and statistical features of the measure, with the hope of contributing to a more global monitoring mechanism. We will also explore whether and how private finance mobilised by official interventions could be reflected in this new measure.
6. We will clarify the ultimate parameters once the final shape of the post-2015 agenda has been agreed. We will share the emerging features of this measure with the international community at the July 2015 Financing for Development conference in Addis Ababa, as an additional DAC contribution to the post-2015 monitoring framework, and use the opportunity to collect feedback on these features…
