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OECD Development Co-operation Report 2007 shows uneven donor progress in meeting aid commitments
In general the report portrays a picture of uneven progress. Figures for 2006 show a significant correction in relation to 2005 and overall aid volumes for 2007 are expected to continue diminishing as the recent series of debt cancellations reach to an end. Falls in aid volumes in real terms are especially significant in non-EU countries. Worst performers are the United States (-18.2%), Canada (-9.9%), Japan (-9.1%), Finland (-9%), Switzerland (-7.4%) and Austria (-6.9%). Italy shows a fall of -30.6%, but the report comments that it is mainly due to the timing of its contributions to international organisations. Most of these drops can be explained by distorting effect on aid figures exerted by debt cancellations to Nigeria and Iraq .
This report examines the progress made by OECD DAC members and some other bilateral donors on different areas of development aid. This year the report is characterised by the farewell chapter written by the outgoing OECD DAC Chair Mr. Manning, in which he reviews the last five years of work of the DAC according to a number of indicators (chapter 1). Additionally, the report summarises the twelve most important lessons drawn from the DAC countries Peer Reviews (chapter 2), examines the implementation of the Paris Declaration in the Health sector (chapter 3) and analyses the progress and policies on development aid of DAC members and other non-associate countries (chapter 4). Chapters 1 and 4 are especially worth reading and contain the bulk of data and examples on ODA. The third chapter, though interesting, would have benefited from a wider approach –the Paris Monitoring will not be available until later this year- and cannot be considered a comprehensive evaluation of progress on the implementation of the Paris Principles. Finally, the second chapter is purely descriptive and only provides some advice to donor countries on how to improve aid management.
On average, almost a quarter of total ODA amounts for the period 2005-2006 went to these two countries. Moreover, Iraq continues to be by far the world’s largest recipient, suggesting the existence of significant amounts of politically driven aid flows. Discounting debt cancellations and Iraq ’s prominent role, the report comments that programmable aid figures have not increased in the last years.
According to the content of the report, aid in real terms is more pro poor now than it was a few years ago. Aid to Africa has increased from US$ 22bn in 2004 to US$ 29bn in 2006. Furthermore, the total amount of aid going to LDCs and OLICS has increased and the focus has shift from Middle Income Countries and resource rich countries to those countries less able to finance themselves. Unfortunately, the picture is gloomier in relative terms. Net bilateral ODA to LDCs and OLICs has increased from 40% in 2002 to 46% in 2006, but if excluding debt cancellation to Nigeria , the proportion declines from 40% to 39% in the same period.
Last year EU governments committed to provide timetables for their aid increases to 2010. But only a few member states have so far published their plans to meet 2010 commitments – important indicator for who is meeting targets is the ODA outturn for 2007 as amount of debt relief will significantly lower. Peer reviews show that defined scaling up plans need to be made on a national level as most DAC donors have not yet developed. More information is needed internationally on where agencies intend to spend increased budgets.
Some progress has been made in the field of tied aid. Reported figures of untied aid as a percentage of all financial aid have increased from 42.5% in 2002 to 53.0% in 2006. Nonetheless, the report claims that there are still large share of aid for which tying status is not reported, making it very difficult to provide reliable data on the issue. The United States , for instance, did not report on 43.9% of 2006 aid flows.
On the implementation of the Paris Declaration in the health sector, the report concludes that donors are making good progress and encourage them to increase the pace of reforms. In this regard, the report calls for a more sustained aid to fragile countries, which on average, receive 40% less aid per capita than other aid recipient countries. Additionally, a very interesting point on the concept of ownership is made, arguing that the concept should “extend beyond national governments” and include parliaments, civil society and other organisations.
Similarly the report emphasises that domestic accountability needs to be strengthened through engagement with civil society, an independent judiciary and media. Donors need to be accountable for their undertakings and commitments. The chapter on bilateral donors also elaborates substantially on gender issues. The report concludes that all the donors show significant progress in this regard, and that gender equality and women’s empowerment are now becoming mainstream aspects of development aid.
The report can be downloaded in full here
Source: EURODAD - Thanks to Javier Pereira and Elvira Groll for this article