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Official development assistance (ODA) has had an indisputable instrumental value in supporting developing countries’ progress on their development paths. Yet, because it has been allocated, ex ante, in a scattered and unco-ordinated manner (the “Arlequin syndrome”) and not been scaled up enough or targeting deliberately the root causes of underdevelopment—including the imperative of structural transformation and a focus on people’s agency—it has, over time, had diminishing returns, running the risk of having a limited impact and thus falling into irrelevance. It is, therefore, high time to revisit and reinvent the way ODA is conceived and delivered.
The real instrumental value of ODA lies in its ability to both contribute to mitigating risks created by global trends and invest in global goods and global commons that other forms of development financing are unlikely to address. These include:
- climate security
- food security
- human security
- ungoverned or underinvested spaces like borders and cross-border areas, which public policies have difficulty reaching due to limited fiscal space
Redirecting and focusing ODA on these blind spots would contribute to accelerating—or rather stimulating—the achievement of the Sustainable Development Goals.
Read more on the Forum Network: In My View: Bangladesh will continue to champion effective international partnerships for inclusive and sustainable development, by Hon. Sheikh Hasina, Prime Minister, Bangladesh
Bangladesh’s sustained economic growth, coupled with a sharp reduction in poverty, has grabbed the attention of global development narratives. But with the country striving to move away from climate vulnerability to long‑term sustainability and resilience, affordable financing will remain critical to achieve the SDGs by 2030, explains Hon. Sheikh Hasina, Prime Minister of Bangladesh.
The impact would be even greater if developed countries were to fulfil their promise to provide ODA equivalent to 0.7% of their gross national income (GNI) as recommended in 1969 in the Pearson Commission’s Partners in Development report. This target was built on the DAC’s 1969 definition of ODA and a suggestion taken up in a resolution of the UN General Assembly on 24 October 1970.
The reinventing of ODA must then focus on a few avenues:
- fulfilling the Pearson recommendation to provide 0.7% of GNI in ODA
- fitting into a clear funding framework, defined ex ante, such as the integrated national financing frameworks
- becoming a source of proactive and anticipatory financing rather than just a reactive model of funding
I see five key structural challenges that warrant our immediate collective attention if we are to ensure that ODA is not just fit-for-purpose but also future-proof:
- Strengthen co-creation among partners from the outset, including governments, international and regional organisations, international financial institutions, civil society and the private sector, in the design and implementation of long-term initiatives. These initiatives should leverage the comparative advantages of grant and non-grant instruments to better target the poor absorptive capacities of national counterparts, as well as neglected demographic, thematic and geographic areas.
- Leaving no one behind will require a holistic and inclusive approach to marginalised groups that addresses the needs of the majority of the population who live off the land (60-80%). This includes herders, farmers, cross-border traders and fishers, of which 51% are women and 60% are youth and whose jobs (primarily informal) are concentrated in the lower segments of the value chain in labour‑intensive agricultural sectors.
- Addressing the root causes of crises necessitates strengthened effective targeting of neglected thematic areas such as local governance;[i] micro, small and medium-sized enterprises; education; and green agriculture techniques.
- Stronger focus on marginalised geographic areas such as cross-border regions that have a higher propensity for violent conflict and conflict contagion across borders, as well as on strengthening sources of resilience such as socio-economic linkages between the Sahel countries and the littoral countries.
- Shifting from accounting to accountability requires revamping our current data collection mechanisms on ODA such as the Creditor Reporting System, which faces important limitations.[ii] Existing purpose codes lack focus on important but underprioritised thematic, demographic and geographic parameters. If we are to collectively learn from our experiences and crowd-in a more effective and diverse set of financing instruments, we need to plug the data gaps and start to measure what we treasure.
The United Nations Integrated Strategy for the Sahel is aimed at addressing these structural challenges in the Sahel. If we succeed, we will stimulate the flow of more resources in a co-ordinated, scaled and impactful manner, transforming the current ODA Arlequin tapestry into a more inspiring Vasily Kandinsky-Kalidou Kasse[iii] moment. A moment for people to feel the sustained impact of international development co‑operation, partnership and solidarity.
[i] Land access and use, and natural resource management—especially water management currently receiving less than 1% of ODA.
[ii] Including inconsistent reporting by donors and the voluntary basis on which non-concessional loans are reported.
[iii] Artists Kandinsky from the Russian Federation and Kasse from Senegal—also known as the “Brush of the Sahel”—both believed in transcending current realities to reach the higher grounds of new and more inspiring realities.
To learn more, check out also the OECD's work on development and read the Development Co-operation Report 2023: Debating the Aid System
This 60th anniversary edition of the Development Co-operation Report takes stock of current challenges in the international aid system, and proposes ways forward along four lines of action: unlock progress to deliver existing commitments; support locally led transformation in partner countries; modernise business models and financial management practices; and rebalance power relations in international decision making and partnerships.