Following the Financing for Development (FfD) Forum 2020, global civil society platform CSO Partnership for Development Effectiveness (CPDE) called on donor countries to fulfill their official development assistance (ODA) commitments, especially taking into account the impact of COVID-19.
Last week, ODA figures from the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) member countries for 2019 showed an increase of 1.4% in real terms, to 152.8 billion USD.
“While this is a modest increase in real terms, we want to emphasise that ODA actually decreased when computed as a percentage of GNI or gross national income from, .31 to .3%, On a positive note, we welcome the suggestion that ODA to Low-Income Countries likely increased, but anticipate the figure is still below the 0.15 to 0.2% GNI commitment,” explained CPDE Co-Chair Marita Gonzalez.
Aid provided in the form of loans as opposed to grants also increased by 5.7% compared to 2018. For CPDE, this is a cause for concern for many developing countries who are already suffering from rising debt levels. Debt servicing further restricts the capacity of developing country governments to support measures that respond to people’s needs during the COVID-19 pandemic.
The ODA figures release coincides with the Financing for Development review process, which has just published its Financing for Sustainable Development Report (FSDR) 2020. Civil society organisations in the Civil Society FfD Group, of which CPDE is part, have expressed concern regarding the impact of negative ODA trends on the broader development finance landscape.
“We note with concern that the overarching message from the Inter-Agency Task Force is that the international community is failing to stay true to their commitments on ODA. We convincingly support the Task Force’s call on donors to realize the internationally agreed commitments to ODA [quantity and quality],” the Civil Society FfD Group asserts in their response to the report.
A closer look reveals that ODA is down as a percentage of GNI, which means donors as a whole continue to fail on the 0.7% commitment, with only five DAC donors delivering: Denmark, Luxembourg, Norway, Sweden, and the United Kingdom. The numbers are widely expected to shrink even further in the next two years, as donors deal with the effect of COVID-19 on their economies.
For CPDE, taking this direction will only aggravate the situation, and worse, put the Sustainable Development agenda at risk. As Co-Chair Justin Kilcullen explains, “The reality of COVID-19 should all the more encourage donor countries to increase their ODA to help developing countries directly respond to the impacts of the disease, as well as narrow the inequality that underpins it and makes all of humankind vulnerable to more pandemics.” He also argued that COVID-19 assistance packages should not be used to tighten grip on civil society and contribute to the pattern of shrinking civic space.
For her part, Co-Chair Beverly Longid says public budgets should not be used in any bailout packages for big corporations: “The COVID-19 pandemic shows that the monies of donor governments must go where it is needed the most - on strengthening public healthcare to provide free testing, treatment, and timely information, and other social services. As the OECD itself stated, providing support to weak healthcare systems is crucial in light of COVID-19.” She also reiterated CPDE’s position on the mobilisation of private sector investments through ODA that such efforts can create incentives that are not necessarily aligned with the mandate of development cooperation to address poverty.
This sentiment is similarly expressed by the CSO FfD Group, which argued that the crisis shows “the volatility and unreliability of financing strategies based on private investors and the urgent need to bring global finance back into democratic accountability and service to the real economy.”
“Post-COVID-19, ensuring the effectiveness of development finance will take on even greater importance. We urge donor countries and our members and partners to help protect the gains we have made towards financing for development that truly alleviates poverty and inequality. We also welcome the debate on the cancellation of external debts in LDCs, and a restructuring of sovereign debt, within the framework decided by the UN in 2015," added Gonzalez. #