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Transparency TOSSD overboard? Two major flaws with the proposed new measure of international resource flows

Added 29 May 2018

The OECD’s long road to producing a new measure of “officially-supported resource flows to promote sustainable development” – or ‘Total Official Support for Sustainable Development’ (TOSSD) - is beginning to near its end.  An outline of the detailed reporting instructions that providers will use, with ‘excerpts’ already filled in, has been produced by the task force that is developing the concept. Sadly, it has taken this OECD-organised task force until its fourth meeting to arrange a public consultation, which will take place at the end of May.

There are many problems with the concept, as the table below details, but there are two glaring faults that the OECD-led process seems unable to fix.  First, TOSSD purports to be a measure of official flows, but the excerpts say it will include “private resources mobilised by official interventions”. In practice this is likely to mean that the TOSSD figure will be dominated by the private flows component, given, for example, that small subsidies are often lauded by donors as having ‘leveraged’ many multiples of private investments, and that public institutions are increasingly providing guarantees for very large private investments. The consultation the OECD managed in the Philippines stressed this point, saying that, “a clear distinction between public funds and privately mobilised funds will be important when presenting TOSSD data.”

This brings us to the second problem, which is that a ‘Total’ figure of these different kinds of flows does not make sense. Not only does it mix public and private flows, but will also cover “monetary and non-monetary transactions,” and may potentially cover costs in the provider country under the yet to be developed second pillar on global public goods. The only rationale behind producing a single ‘total’ figure is to provide a new metric for how ‘generous’or supportive of development provider countries are, to rival Official Development Assistance (or ‘aid’). It seems inevitable that such a figure would become a rallying point for those governments that would rather drop the United Nation’s target to provide 0.7% of national income in ODA. If TOSSD really is supposed to be about increasing transparency and information, why can’t all the different elements be accounted for separately and the idea of a single total –– be dropped?

In 2016 Eurodad produced a set of eight principles that should guide transparent measurement and reporting of official flows, and graded the TOSSD proposals against those using a traffic light system. Unfortunately, as the table below shows, the development of the TOSSD concept by the expert group has not improved how it scores against these principles, and in some cases it has become worse, despite many good suggestions for improvements made by civil society groups and others.

What is causing this failure to adopt even the most obviously sensible proposals, such as dropping the attempt to produce a misleading ‘total’ figure?  We can only assume that the nature of the process, shepherded by the OECD, means that individual donor countries are able to block reforms. This suggest that the only way the measure will be improved is when it moves to the United Nations, where developing countries will play a larger role, and their real information needs can begin to be put centre stage.

Updated traffic light assessment, based on 2016 principles:

Quotes below each principle are taken from the ‘possible emerging excerpts of TOSSD reporting instructions’ prepared for the 30-31 May meeting.

 

 

1. Count official cost only (Do not include ‘mobilised’ or ‘leveraged’ flows in

total)

 

“No distinction is made between concessional and non-concessional transactions. Resources mobilised from the private sector by official interventions are also included.” “However, they are presented under a separate heading as the funds do not necessarily originate from the provider country and may even be domestic.” (para 30)

 

2. Count flows only (ie. those that leave the provider country)

 

The Excerpts include a pillar (two) on Global Public Goods, but this has not yet been defined. The Senegal pilot study on TOSSD was very clear that “TOSSD should not reflect investments in global programmes supporting development enablers and addressing global challenges if they do not generate cross-border flows to developing countries.”

 

 

3. Count actual disbursements (Not all commitments materialise: disbursements

are a better measure of actual flows)

 

“Both commitment and disbursement data are collected.” (para 21) “The main TOSSD measure is calculated on a gross disbursement basis”(para 22)

 

 

4. Count net flows over lifetime of project (Count any reflows / return flows associated with the initial flow (repayments on loans, repatriated income from investments etc.)

 

“The main TOSSD measure is calculated on a gross disbursement basis…. The net measure is also calculated, whenever possible”(para 22)

 

 

5. Do not double count (Do not use the same flows to meet two separate promises (eg. climate finance and ODA))

 

Though the excerpts say “TOSSD aggregates by provider will not by any means replace ODA as a measure of donor effort, nor will they undermine some providers’ commitment to reach the UN ODA / GNI target of 0.7%” (para 6) there are no safeguards to prevent this, such as the removal from the system of providers who misuse the data.

 

 

6. Count all flows (Be careful not to provide a misleading picture by counting incomplete information)

 

TOSSD will only report on flows that the provider deems to have a sustainable development objective, meaning there will still be a major gap in reporting of flows which do not have a development objective (such as military or foreign-policy flows.)

 

 

*7. Count flows to developing countries (Use objective criteria for defining the

recipients list)

 

In addition to “all countries and territories that are present on the “DAC list of ODA recipients”” a new “opt-in procedure” (para 39) is available for “any country or territory” (para 40)

 

*8. Ensure a developmental purpose (Ensure flows have over-riding objective of supporting development in recipient country. If flows have a significant commercial or foreign policy objective, count them in those categories only.

 

The excerpts rely on very weak level of evidence from providers to prove a link to a developmental purpose: “…an activity is deemed to support sustainable development if it directly contributes to at least one of the SDG targets” (para 36) but “if a reporter cannot find a direct link … the reporter will still be able to report it [by] providing an appropriate justification.”(para 38)

* Applies to flows with a development purpose only.

tags: TOSSD,