Tracking resources for sustainable development: notes on TOSSD

 

 

 

The effort to develop and use a measure to track officially supported financial flows beyond Official Development Assistance (ODA), which have an express purpose of financing sustainable development, reached a turning point in late 2019, when the findings from the first round of data collection were presented to the development community at the United Nations in New York in October.

 

The Total Official Support for Sustainable Development (TOSSD) is a framework to measure resources in support of the Sustainable Development Goals (SDGs). Born out of the Organisation for Economic Cooperation and Development and legitimised by the Addis Ababa Action Agenda, it seeks to provide a metric which in intended to complement ODA by increasing transparency and monitoring important new trends that are shaping the international development finance landscape with a strong focus on private financial flows mobilised by public resources. But, as early data from the new metric start is now available, key aspects to TOSSD are still to be sorted out.

 

The definition from the Reporting Instructions reads: “The TOSSD statistical measure includes all officially-supported resource flows to promote sustainable development in developing countries and to support development enablers and/or address global challenges at regional or global levels.” In plain words, TOSSD will track not only official resources, but also private flows mobilised thanks to public money; more accurately: “private resources mobilised by official interventions, where a direct causal link between the official intervention and the private resources can be demonstrated.” Other key features mark a departure from traditional aid: concessionality is no longer a prerequisite; the new metric will report on activities with development impacts on the global and regional levels. Such new features are reflected in the fact that TOSSD is organised around two areas: Pillar 1 on cross-border flows, closer to traditional aid; Pillar 2 on support for global and regional enablers.

 

The official narrative is that TOSSD will enhance transparency in financing for development, which will then allow for better allocation of resources for the benefit of the partner countries; consistently, one major priority is to capture under the new metric as many flows as possible. There is a significant potential to broaden the picture of the finance for development with some of the elements missing at the moment, for instance non-concessional finance or South-South Cooperation. Also, multilateral providers will report directly regardless of the original source of funds, official or private sector, which may in turn strengthen a recipient perspective in reporting.

 

CSOs have been invited to several consultations on TOSSD over the past few years and recently joined the conversation officially in an observer capacity. The dialogue with the International Task Force on TOSSD has been productive, but still there are concerns especially on the quality of data as well as about making sure that the new metric will not undermine existing global commitments, despite the best intentions stated in the Reporting Instructions. Reporting parties will in fact be allowed some latitude when reporting on certain aspects such as leveraging and development impacts, including direct links to SDG indicators and goals. In general, it is assumed that reporting will take place in bona fide with obvious implications when it comes to areas such as the safeguards that apply to peace and security-driven spending. There should be adequate oversight mechanism in place to check the TOSSD eligibility of reported resources, or their compliance with key principles and standards.

 

Quality issues may get sidelined, surely in the early stages of TOSSD implementation, when there is a pressure to broaden the picture as much as possible. From this angle, it is telling that the principles for effective development cooperation are acknowledged, but, on the other hand, it is also understood that there are limitations as to the possibility of assessing the actual implementation of the principles. As reporting takes place at the activity level – including different types of modalities, from projects to budget support – and data gathering is managed at the donor level, it is then legitimate to question how it is possible to assess that each single activity is consistent with the effectiveness principles, bearing also in mind that global reporting on effectiveness – led by the GPEDC – is carried out through the ‘global light, country-heavy’ approach.

 

TOSSD is expected to generate totals bigger than the current volumes of ODA: the public’s attention may well be directed to the new numbers with aid commitments heading for oblivion. It is not just that: inflation may be actually taken to entirely different levels with much more severe optic problems than the one we have been facing with the traditional in-donor costs. TOSSD will place donors in a unique position as they will be allowed to report significant shares of their own domestic budgets on the assumption that there is a global impact. A very clear case in point is climate spending and gas emission reduction projects in particular, whose global impact is taken for granted regardless of where they are implemented. Along this route, a donor country may cut its ODA and invest in planting trees at home without affecting its total TOSSD performance.

 

Discussions on the governance backing TOSSD are still open. Tasked to develop the measure is the aforementioned Task Force, which is supported by the OECD Development Finance Statistics division; there is still no clarity as to which body will operate as a co-custodian agency. At the October 4th 2019 meeting, hosted by the Nigerian Mission to the UN, the Task Force presented the initial findings of the first data survey; the governments of Costa Rica and Nigeria also presented case studies of their experiences in trying to pilot the measure in their countries. TOSSD has been submitted into the UN-led process on the SDGs monitoring as an additional indicator under 17.3; the Inter-Agency Expert Group on SDGs – in October 2019 – discussed the new metric and committed to setting up a working group to further developing it over the next two years and a final decision has been then postponed until 2020.

 

The dataset released last October at the UN does not help understand whether or not TOSSD will be a game changer. Findings in fact have been presented in top line aggregates and activity-level information is not yet available. From the start, it is striking that data from important parties such as Germany and the Netherlands have not been listed by now; on the other hand, Switzerland, currently a GPEDC co-chair, is in the lot. From the multilaterals, at the moment there is a strong contingent including UNDP, UNHCR, UNFPA, UNRWA, WFP, and WHO; but when it comes to development banks, only IADB and IsDB are on the list. As for numbers, the current TOSSD estimate is 295 billion dollars, of which 215 bn qualify as cross-border flows (Pillar 1) and 80 bn as funds in support of activities with a global and regional impacts (Pillar 2). Mobilised finance for the private sector totals 40 bn, of which 39% is guarantees and 27% is direct investment in companies. According to the official data, by now only 20 to 25% of such findings are new activities.

 

As the future of TOSSD is still in the making, opportunities abound for CSOs to contribute towards its development. Civil society must claim its role in tracking the flow of resources for sustainable development, helping shape tools and mechanisms to gather information and systematise processes, and demanding transparency and accountability of all development finance actors. For their part, states, multilaterals, development banks, and members of the private sector participating in financing for development must be willing to work with CSOs, to ensure that resources go where these are most needed, and help create a world in which no one, indeed, is left behind. #

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