As the Annual Meetings of the IMF and World Bank draw to a close, Jean Saldanha, Director of the European Network on Debt and Development (Eurodad) reflects on a crucial, but disappointing, week in development finance.

• Almost 60 per cent of the Bank’s fast track Covid-19 Facility (US$ 8 billion) is being allocated through its private sector arm, the International Finance Corporation (IFC)
• Publicly available information indicates that as of June 2020, 68 per cent of IFC Covid-19 projects targeted financial institutions
• It also shows that 50 per cent of IFC-supported companies are either majority-owned by multinational companies or are themselves international conglomerates

Today the OECD Development Assistance Committee (DAC) – the group of countries that regulate how aid should be reported – agreed new rules for reporting debt relief as Official Development Assistance (ODA). Eurodad regrets that donor governments decided to rush an agreement, which allows them to report additional ODA for debt relief.

Debt relief should not be reported as ODA. In the coming weeks, DAC members need to decide what is most important to them: allowing ODA double counting and inflation to create incentives to reward debt relief or upholding the credibility, integrity and solid reputation of DAC statistics.

The rules on how debt relief should be counted as Official Development Assistance are currently being negotiated by the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) – under the auspices of its Chair Susanna Moorehead – and the Paris Club, which is an informal group of creditor governments. 

The world is facing an unprecedented crisis. As Covid-19 spreads across the globe it threatens to disproportionately hit developing countries.