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Three changes the OECD needs to make to guard the poorest in new aid rules

Jeroen Kwakkenbos, Jesse Griffiths

20 Feb 2017 12:56:01

Originally published by Devex It has been a busy couple of years for the OECD’s Development Assistance Committee, the body in charge of determining what can and cannot be counted as “aid” to poor countries, or official development assistance. Major changes to aid have already been made during a year-long process of modernization of the ODA rules, but the biggest change in decades is yet to come. This March, the DAC will decide on how to include what are known as private sector instruments in aid. This could mean a dramatic increase in the use of aid to invest in or give loans to private companies, or to agree to bail out failed private sector projects through guarantees. Without strong safeguards and transparency standards there is a real risk that aid could be used as a backdoor subsidy ...
This paper has been coordinated by the European Network on Debt and Development (Eurodad), with the input of various Civil Society Organisations (CSOs). It provides an analysis, with key recommendations in bold, of the proposals made by the Development Assistance ...

Three principles for aid and the private sector

Jesse Griffiths

17 Oct 2016 16:32:59

Originally published by Public Finance International Using aid to mobilise trillions in private money is a hot and hugely controversial topic. Such aid is no different from any other kind: it can be well spent or badly spent and should meet basic effectiveness principles Donor governments are currently revising rules on Official Development Assistance (ODA or ‘aid’) so that the opportunities for using aid to leverage – or more accurately, subsidise – private companies and private investment could explode. This is, of course, hugely controversial, and Eurodad has warned that more care, thought and time should be devoted to such rule changes, involve recipients and stakeholders and be preceded by a firm commitment from donors not to tie aid to the use of their own firms. When we talk ...

Assessing the performance of Development Finance Institutions

Mathieu Vervynckt

01 Jul 2015 10:57:27

Delivering development results is the mandated raison d’être of Development Finance Institutions (DFIs). Without these results, DFIs have no reason to exist as they might as well be replicating the work of commercial institutions. As a result, it won’t surprise anyone that DFIs are facing constant pressure by governments, tax payers, civil society organisations and the communities where they work to demonstrate their achievements in reducing poverty and inequality. But this has proven to be easier said than done.  Monitoring and evaluation Effective monitoring and evaluation (M&E) systems incorporated into DFI projects allow them to identify what changes – especially benefits – have been achieved either directly or indirectly through their activities and investments, and to ...

EU blending: lessons learnt, or just lip service?

Mathieu Vervynckt

17 Dec 2014 10:36:10

On 12 December, the European Council released its Conclusions on a stronger role of the private sector in development cooperation. Unsurprisingly, there is a heavy focus on the use of financing instruments and mechanisms that use public resources and institutions to ‘leverage’ additional private lending and investment, particularly on ‘blending’ as a tool of development cooperation. (Blending is the use of aid money to subsidise or support public or private sector projects.) However, the Council claims that efforts will be made to improve the development impact of blending operations “on the basis of lessons learnt”. But what will this mean in practice?  Since 2007, the European Commission (EC) has set up eight regional blending facilities to link European aid grants with loans ...

Why Doing Business indicators should not be included in the Post-2015 Framework

Tiago Stichelmans

17 Dec 2014 10:15:41

The Donor Committee for Enterprise Development (DCED) – a group of donors, multilateral institutions and foundations [1] – recently made the case for the inclusion of a Business Environment Indicator for the Post-MDG Framework. This indicator would be part of the Sustainable Development Goals (SDGs) that are set to replace the Millennium Development Goals (MDGs) in 2015. Eurodad has several concerns about this proposal, most notably regarding the creation of a composite indicator based on the World Bank Doing Business report. We strongly believe that any indicator hoping to contribute to development should avoid a donor-driven cookie cutter approach.  In the proposal, the DECD suggests four options for indicators that could assess progress towards achieving a successful ...

Shining a light on the shadowy institutions that dominate the development landscape

Maria Romero

18 Jul 2014 16:16:17

Rich country governments and multilateral institutions have provided grants and loans to companies working in developing countries for decades. However, the scale of this support has increased enormously, and the institutions providing it – development finance institutions (DFIs) – are coming to dominate the development landscape now that private finance has replaced aid at the centre of global and national development initiatives. These institutions are not new, but we know very little about how they work and – vitally - what their impacts on the ground are. Despite the questions that hang over their operations and mandates, by 2015 the money going into the private sector from DFIs is expected to exceed $100 billion, which is equivalent to almost two thirds of Official Development Assistance ...

Call for review of unaccountable institutions channelling public money into private sector projects in developing countries

Eurodad demands developing country-led investigation as Development Finance Institutions set to invest $100 billion in the private sector by 2015 Thursday 10th July 2014 Some of the world’s biggest public institutions which use billions of euros of public money to support private sector projects in developing countries are unaccountable, shadowy organisations that often favour Western-based companies and exclude the countries they are supposed to support from decision making, a report released ...