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High Level Meeting of OECD Development Assistance Committee

The OECD (Organization for Economic Cooperation and Development) Development Assistance Committee (DAC) convened a High Level Meeting from 15 to 16 December in Paris. Apart from 28 representatives of DAC[1] and OECD[2] participating states, the meeting was joined by invited guests from countries on their way to negotiate the OECD membership (Columbia, Latvia), key OECD partners (Brazil, China, India, Indonesia, and South Africa), other international organizations (IMF, the World Bank, UNDP), development banks, foundations as well as Croatia, Ethiopia, Malawi and the United Arab Emirates.

Ministers attending the meeting agreed on the key elements of the Committee’s stance regarding the most important events for the global development cooperation in 2015: the Third International Conference on Financing for Development (Addis Ababa), the United Nations Summit for the Adoption of the Post-2015 Development Agenda (New York), and the 21st Conference of the Parties on the United Nations Framework Convention on Climate Change (Paris). The discussion focused on the necessary modernization of the statistical system used by DAC to collect data measuring contribution inflows from developed countries for the purpose of development. The key tool measuring Official Development Assistance (ODA) does not cover all instruments to earmark public funds for development; it does not include all activities serving for the purpose of development. At the same time, substantial latitude is allowed in, for example, classifying provided concessional loans as ODA. Another reason to consider a reform necessary is that broadened development cooperation aims adopted in the international development cooperation programme for 2015 will generate new financial flows insufficiently measured by existing methods.  

All of the meeting’s participants underscored that changes to be adopted cannot serve as a pretext to undermine ODA’s fundamental role in the assistance system and the commitment to attain the 0.7% target of ODA as a proportion of gross national income[3]. At the same time, a declaration was made to increase the official development assistance for the poorest countries and those in need to reach the specific UN target of 0.15-0.20% of GNI as ODA. However, many countries stressed that such process cannot take place at the expense of assistance commitments to the existing partners.

In the course of the ODA concept modernisation, HLM participants agreed on a compromise to report concessional loans by introducing grants on which the amount qualified as ODA will be calculated instead of existing net flows[4]. The degrees of concessionality of loans were also diversified to match the affluence level of the beneficiary country (which is to promote countries most in need).

The meeting’s participants agreed on the direction of continued work to establish a method to measure the volume of assistance generated with the use of market financial instruments[5] and recognizing peace- and security-building expenditures as ODA. Despite common acceptance of security and the close interdependency between development and peace (confirmed in the UN documents), and despite acknowledgement of assistance’s developmental goal as most significant, some countries think that institutions providing assistance should be strictly distinguished in ODA and that expenditures from military budgets should be excluded from ODA.

Ministers agreed on the need to create a new instrument to measure development financial flows, provisionally called the Total Official Support for Sustainable Development (TOSD). It will cover all public funds extended to developing countries (regardless of conditions on which they are transferred) to implement sustainable development purposes. Its scope will be conditional on the UN Summit decisions concerning the post-2015 development assistance programme and the Conferences on Climate Change.

According to the DAC participating states’ principle of transparency and inviting partner states and organizations to join the discussion, all invited guests have actively contributed to the debate.

[1] Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, the United Kingdom, the United States, and the European Union.

[2] Chile, Estonia, Hungary, Israel, Mexico, Turkey.

[3] In the EU, it was adopted as a collective commitment and tailored to particular countries (given their current potential).

[4] Calculation as the whole ODA loan amount and the following deduction of installment payments from ODA of a particular country.

[5] Based on existing principles, a state investing in a developing country must deduct the income from this investment from ODA, which hampers the use of various development aid instruments.

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