A missed opportunity: The OECD DAC fails to address the erosion of aid during annual CSO dialogue
This blog unpacks last week's disappointing civil society dialogue with the OECD Development Assistance Committee.
Last week I joined the annual dialogue between civil society representatives and the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC). This was the first meeting with the new DAC chair, Carsten Staur, offering CSOs the opportunity to restate their positions and call for a greater transfer of resources from the global north to the global south, together with more accountability. Yet, while there was a discussion on protecting the integrity of official development assistance (ODA or aid), the DAC members present in the room failed to address the problems with what gets reported or not as ODA, and how it affects the resources reaching the global south. We left the dialogue feeling extremely disappointed about the lack of willingness to engage in these discussions.
CSO concerns were voiced loud and clear
Coming just two months after the latest data showed an historical increase in the inflation of ODA by 155 per cent, this forum offered a timely opportunity for CSOs to discuss the problems with how aid is measured. We shared our concerns about the problematic inclusion of costs related to hosting refugees, and to recycled vaccines, and we reminded DAC donors about the critical role ODA plays in eradicating poverty and fighting inequalities, particularly for developing countries that are facing multiple crises.
During the discussion, I pointed out that changes in the rules on what counts as ODA risk undermining the credibility and relevance of aid statistics. And IBON’s Jennifer del Rosario-Malonzo also pointed to the debt relief agreement in 2020 as another example of the slow erosion of ODA rules in recent years. She called for mobilising climate finance but emphasised the importance of distinguishing between climate, humanitarian and aid flows.
I also argued that ODA’s impact should be tracked, as should the implementation of the aid effectiveness principles - notably ownership, transparency and use of the recipient country systems.
Vitalice Meja, Executive Director of Reality of Aid Africa, criticised the lack of feedback received from the DAC and its subsidiary bodies when CSOs shared their views and analysis on ongoing policy processes and negotiations.
The DAC responds
The discussion was focused on “protecting ODA” but rich countries did little to reply to CSO criticism about the inflation of aid statistics. This was a missed opportunity to set out an ambitious agenda for the rules that govern aid.
The UK’s absence was particularly notable, as its contribution would have fallen last year, had it not reported the fourth highest share of in-donor refugee costs for 2022 of all DAC members.
Responding to the calls for ODA reform from CSOs and other stakeholders, the DAC chair said that it would take a long time to change ODA rules and that the focus instead should be on sticking to the rules as they are laid out.
On a more constructive note, Mr Staur also mentioned the debt distress many countries find themselves in and called on the DAC to keep an eye on the declining aid to Africa. He also pointed out that the record amount of U$204 billion in 2022 was still small, globally speaking, and should not be expected to fill the gaps in climate finance.
Meanwhile, the DAC Secretariat emphasised the role that the private sector could play in filling the financing gap. Even the DAC Chair called for using aid to mobilise private flows. This included attempts to raise the profile of the world’s biggest asset management company, BlackRock, and its capacity to shift its trillions to achieve sustainable development.
Yet, the asset company that has been criticised for "greenwashing" has never said they would do so and even its former chief investment officer for sustainable investing acknowledges that sustainability in general is just window dressing for the company’s investments.
The future of aid?
For aid advocates, donors simply need to return to treating ODA as a tool to eradicate poverty and address inequalities, particularly in the world’s poorest countries. As things stand ODA is being spread way too thin and is used to fill more and more funding gaps wherever it serves donors’ political and economic interests. This is done through changing technicalities that then have major implications in terms of both aid quality and quantity. The most recent example that warrants caution is the ongoing negotiations on the ODA reporting measures on private sector instruments. This process was not even mentioned.
Walking away from this dialogue, we could only echo the words of our fellow civil society colleagues in the DAC-CSO Reference Group in relation to the latest ODA figures: “It’s not enough and it’s not ODA.”