Development, Untied 2018
Unleashing the catalytic power of Official Development Assistance through renewed action on untying.
In 2015 alone, donor governments around the world spent around US$ 55 billion – or more than 44 per cent of Real Official Development Assistance (ODA) – on the procurement of goods and services. Such high budgets have the potential to catalyse far-reaching change in the global south.
ODA procurement can build local supply chains for essential goods such as foods and medicines; it can incentivise local companies to act in equitable, socially responsible and environmentally sensitive ways; and it can start a chain reaction of local economic growth by getting vital cash into the hands of small businesses in the global south.
However, ‘tied’ ODA procurement, which requires goods and services to be sourced from companies in the donor country, puts the commercial priorities of firms based in rich countries before development impact.
If donors are really committed to maximising the catalytic impact of ODA for development in the global south – not just for their own companies – it is urgent that they take action to untie their ODA and improve their procurement processes.