What the new data on private sector instruments doesn’t tell us
For the first time, the full data for 2018 official development assistance, or ODA, which was released by the Organisation for Economic Co-operation and Development’s Development Assistance Committee this February, included data on aid spending through private sector instruments, or PSIs, according to the interim rules agreed on by DAC members in December 2018. This agreement was a key, albeit controversial, step that is blurring the boundary between ODA and commercial transactions.
While the publication of this new data is welcomed, it’s important to get the rules on reporting spending through private sector instruments right from the beginning. The current total represents a limited amount of 2018 ODA: 2.7% of total bilateral ODA. But given the increasing pressure on donors to mobilize additional sources of funding for the SDGs, channeling aid through PSIs seen as catalytic instruments represents an attractive way to help fill in the SDG financing gap.
The expectation is, therefore, that funding of this type would have increased in 2019 and will keep increasing in the future.
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