Recommendations from CONCORD Sweden’s AidWatch group ahead of the OECD DAC High Level Meeting on 18-19 February 2016.
To: Erik Solheim, President of OECD/DAC
Transparency
We are concerned that the discussions surrounding the definition of ODA are held behind closed doors, with very little opportunity for civil society and partner countries to participate. We believe that the members and the secretariat of OECD DAC must oversee how it can involve relevant stakeholders in structured dialogues in order to ensure transparency and accountability in its decision-making processes.
ODA and in-donor refugee costs
We recognize the urgent nature of the current refugee crisis and believe that DAC-members must ensure they meet the needs and respect the rights of refugees and people seeking asylum in their countries. However, we do not believe that these in-donor costs should be covered by ODA. Diverting much needed ODA from combating poverty and supporting democracy is short-sighted and risks reversing or halting current progress in fulfilling human rights and the reduction of poverty. It is also counterproductive as poverty and lack of respect for basic human rights is one of the main reasons for people to flee their countries. For this reason OECD DAC must strive towards limiting, and in the end excluding, these in-donor costs from ODA.
In the short term, and in the light of the upcoming OECD DAC High Level Meeting, we strongly urge OECD DAC not to widen the rules of ODA any further. We have noted with concern that some DACmembers are failing to comply with the current rules related to what is eligible as in-donor refugee costs. For that reason, we welcome the proposed review of the reporting directives with the purpose of bringing clarity to 1) eligible categories of asylum seekers and refugees, 2) eligible expenditure, and 3) specification on how to comply with the 12-month rule. We also urge OECD DAC to review the current reporting formats on in-donor refugee costs as the current format, where costs are not clearly separated, makes it difficult to detect whether member states are complying with existing regulations.
ODA and Peace and Security costs
Security expenditures should remain separate from ODA. We see no reason to use scarce ODA resources for security measures when global military spending is already 13 times higher than ODA. The proposal to include additional security measures such as costs related to transporting aid items with military transport, military training, policing and the prevention of violent extremism within the definition of ODA raises serious concerns. This will open the door for the re-direction of aid away from the real purpose of aid, including long-term preventative measures to counter violent extremism carried out by development actors.
In recent years, we have seen that the blurred distinction between civil and military action has made it difficult for local populations to tell the different actors apart. This has created problems for humanitarian actors that have sometimes been hindered from gaining access to certain areas to carry out their work as they are seen as part of a military strategy. By allowing the aid budget to pay for certain military activities, the dividing line between humanitarian action and military action will be blurred even more, creating greater problems for humanitarian actors in the field.
TOSSD
We believe that it will be indispensable to develop a definition of total support for sustainable development (TOSSD) that will help to improve the quality of non-aid flows in the future. To do this, the definition should capture only flows that are relevant from a development perspective and the negotiation process should be opened up to all countries, not just DAC-members. The development effectiveness agenda can provide some useful principles to help differentiate between developmental and non-developmental flows. Flows reported as TOSSD should include a description of how they comply with the development effectiveness principles.
Private Flows
ODA represents public resources dedicated to development and poverty eradication. ODA consists, by definition, of concessional finance. Private finance leveraged by public resources must not be reported as ODA.
In order for public support for leveraging private finance flows (i.e. through development finance institutions, DFIs) not to be market distorting they should, in principle, be non-concessional. There may, nevertheless, be a de facto grant element in those cases when states can mobilize capital at more favorable terms than commercial actors. It is important that such grant elements (the concessionality) are calculated conservatively, and as net amounts (by deducting all interests and fees paid by the companies involved).
In order to be eligible for reporting as ODA, the investments that benefit from such concessional funding must of course meet all ODA criteria. They must also comply with agreed aid and development effectiveness principles. This is not the case with many of the institutions and funds that that target the private sector today. Many have strong components of tying to donor country investors/suppliers; they often have business confidentiality regulations that severely restrict transparency and accountability; and they are largely supply driven, with little alignment to and ownership by the countries where investments are made.
Brevet/the Letter (PDF)