Reality of Aid Network Statement on the OECD Development Cooperation Report 2020
The Organisation for Economic Co-operation and Development’s (OECD) annual report on development cooperation for 2020 takes stock of the impact of the COVID-19 crisis and proposes key actions moving forward. The Reality of Aid, a global network of organizations working on aid and development cooperation, believes that the proposed key actions failed to address issues and potential pitfalls that civil society organizations (CSOs) have raised time and again, lacked the ambition and the concrete language for what needs to be done.
To a certain extent, the proposed actions reflect some of the general sentiments articulated by CSOs in engagements with the DAC, such as the need for system-level and transformative solutions to build resilience to shocks. All development actors seem to agree that the pandemic necessitates unprecedented efforts as its impact is trend-defying: it erased decades of progress in Sustainable Development Goals, pushing or dragging back millions of people into extreme poverty, exacerbating existing inequalities, among others.
Although the report acknowledges the USD 1 trillion funding gap developing countries are facing to properly respond to the pandemic, the suggested ways moving forward however glosses over areas of contention. For instance, while the report affirms the need to increase and protect the integrity of Official Development Assistance (ODA), it does not address the fact that ODA commitments remain lower than the international commitment for aid: 0.7 percent of the gross national income for developing countries and 0.15 -0.2 for least developing countries. In fact, in the latest High-Level Meeting (HLM) of the DAC, only a few DAC members expressed commitment to increasing or maintaining ODA levels – on top of current issues surrounding drastic aid reductions from the United Kingdom.
The DAC echoes its earlier messages on exploring new sources of funding and “collaboration with the private sector”, stating that “international finance is not sufficient to close the gaps.” We reiterate the need for establishing clear safeguards and the implementation of transparency and accountability standards in using private sector instruments, a necessary step to prevent subsidising the private sector with an already limited pool of ODA funding. The world had seen cases of private-public partnerships that came with a hefty price tag for the public and the environment, without much improvement in service delivery or sustainability and despite the fact that it should be affordable if not free (not to mention the corruption linked to these). Even blended finance was found to have modest impact on development.
In times like this, addressing the multiple crises brought by the COVID-19 pandemic and delivering on the sustainable development agenda is best done through the mobilization of public finance, which remains to be the gold standard for development aid. In the report, the DAC itself called for “collective action to provide and protect global public goods”. And yet, there is insufficient support to raise the level of ambition in achieving ODA targets to levels that measure up to the magnitude of the crises. This is despite the fact that developing countries badly need concessional finance for their crisis response – countries currently crippled by decrepit healthcare systems, failing social safety nets, and underfunded research and development infrastructure.
ODA is an essential resource for pandemic response as developing and least developing nations lag behind in vaccination and recovery. The pandemic has indeed afflicted the world on unequal terms, as trends show only 10 countries have administered 81% of all COVID-19 vaccines available while the poorest countries, particularly those in Africa, will be last in line when it comes to mass vaccination, with majority of the population getting vaccinated as late as 2023. Latest figures also show that 130 countries have not even received a single vaccine dose and at the current rate of vaccination, it will take up to 5 years to cover 75% of the world’s population.
Indeed, the action points offered by the report will remain as hollow platitudes as long as potential risks and issues are simply glossed over and on-ground realities are not congruent with their declarations. The same goes for the emphasis on integrating the climate agenda into development strategies. Resolutions such as ‘greening’ development are welcome initiatives to address the climate emergency, but there needs to be a strong and categorical prohibition on financing fossil fuel projects particularly in rich industrialized countries, which it has not yet done.
DAC Chair Susanna Moorehead said in the DAC High Level Meeting last year that the members have to “walk the talk” in addressing the crises we are facing. We could not agree more. It is one thing to recognize the glaring issues of inequality and gaps in global efforts to address the pandemic, but what matters more is to address the issues and potential pitfalls with actions that are commensurate to the degree to which the crisis has left millions more in poverty and hunger. Only through this way can it truly make a difference for those who are ‘left behind’ in a global crisis that affects us all but still very much on unequal terms.
The Reality of Aid Network reiterates its call to protect the integrity of ODA especially while the world grapples in responding to the COVID-19 pandemic. We call on donors to:
- Meet the 0.7% GNI target without further delay to finance holistic responses to the pandemic such as increasing access to free health services, hospital capacity, more health workers, free mass testing and vaccination;
- Meet the 0.2% GNI commitment to least developed countries and fragile and conflict-affected states;
- Pursue 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 who are disproportionately affected by the crises;
- Address other inequalities such as those based on economic marginalization, disabilities, race, ethnicity, or age;
- Reverse the closing civic space for political action, stop weaponizing pandemic restrictions to justify 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 to improve domestic health systems rather than loans, informal and tied aid;
- Deploy ODA in projects directly related to building capacities of domestic small-scale enterprises that support the creation of decent jobs and livelihood opportunities for the people;
- Stop shaping humanitarian and development strategies according to their own foreign policy, geopolitical and security interests; and
- Respond to the climate emergency without diminishing ODA and/or provision of loans for these purposes.