Statement of the RoA International Coordinating Committee | 23 April 2020 (Download Statement with Spanish version)
The recently published preliminary ODA data of 2019 show that aid spending by DAC members totaled USD 152.8 billion representing a slight real term increase compared to 2018. In relative terms however, ODA as a percentage of DAC members’ combined GNI dropped to 0,3%. The figures also show a 5.7% increase in ODA given as loans instead of grants, and still has 6.7% in the form of in-donor refugee costs. This year’s Covid-19 pandemic and the anticipated severe global recession hitting developing countries particularly hard demand that donors work harder than ever to deliver on the 0.7% commitment not only to those developing countries classified as poorest but to all developing countries.
Besides meeting the quantitative targets, the donor community is at the same time challenged with the question of quality – the impact of ODA. The Covid-19 pandemic is not only drawing us furthest away from achieving the Sustainable Development Goals but has revealed the severity of global inequality and vulnerability despite decades of development cooperation. Donors and partner country governments must work harder than ever to make sure the most vulnerable will never again have to face a crisis of this magnitude unprepared.
ODA makes significant contributions when used effectively and aligned to the needs of developing countries. However balancing this act remains a major challenge for many DAC members. Data have yet to demonstrate untying of a big proportion of ODA which fundamentally undermines country ownership and increases the transaction cost for goods and services for poor countries. The increase in loans, suggesting donors may have shifted their lending programs to low-income countries, is a trend that needs to be reversed especially under the current crisis. What is needed is grants-based ODA to support vulnerable countries to provide urgent support to health workers, health systems and social protection schemes to ensure access to basic human rights.
Donors also need to reconsider how they are spending scarce ODA resources. ODA should help address the root causes, not just the symptoms, of poverty. People on the ground know the causes and appropriate solutions best, underlining the need for supporting democratic ownership. People must be enabled and involved at all levels of the development process including demanding transparency in the utilization and accountability of ODA.
Donors’ current focus on using ODA to crowd in the private sector risks to undermine ODA’s added value to strengthen the provision of strong public services and support where it is most needed. Scarce ODA must go to strengthen public goods including public health and other key public institutions that support basic social service provision for those living in poverty.
We call on the DAC to make firm commitments to protect aid budgets to protect the credibility of ODA especially during the COVID 19 pandemic. Meeting the 0.7%/GNI commitment now becomes a minimum target. Donors must work harder to provide new and additional grants needed to address Covid-19’s immediate and structural effects. The Reality of Aid Network reiterates its alternative perspective and vision for transforming aid, urgently calling on donors to:
- meet the 0.7% GNI target without further delay and separate from in-donor refugee and student costs, debt cancellation and principal purpose projects for climate finance;
- meet the 0.2% GNI commitment to least developed and other countries experiencing chronic conflict and fragility;
- establish a human rights-based framework and allocate all forms of development finance based on the four development effectiveness principles;
- demonstrably mainstream gender equality and women’s development;
- address other inequalities such as those based on economic marginalization, disabilities, race, ethnicity, or age;
- reverse closing civic space and increased authoritarian measures, institute enabling legal frameworks, and allocate ample resources to CSOs;
- increase country programmable aid, grants, demand-led technical cooperation, and support for domestic resource mobilization rather than loans, informal and tied aid;
- deploy ODA only in projects/activities directly related to building capacities of developing country private sector, i.e. small-scale enterprises that support the creation of decent jobs and livelihoods;
- stop shaping humanitarian and development strategies according to their own foreign policy, geopolitical and security (migration and counter-terrorism) interests; and
- respond to the climate emergency without diminishing ODA and/or provision of loans for these purposes.