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Presentation to the Overseas Development Institute

Development Cooperation Report 2003 Presentation by Richard Manning, Chair of the Development Assistance Committee to the OECD. Presentation to the Overseas Development Institute. Friday, 30 January 2004 London. Report Highlights. Aid in Context Aid volume Aid allocation

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Presentation to the Overseas Development Institute

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  1. Development Cooperation Report 2003 Presentation by Richard Manning, Chair of the Development Assistance Committee to the OECD Presentation to the Overseas Development Institute Friday, 30 January 2004 London

  2. Report Highlights • Aid in Context • Aid volume • Aid allocation • Aid effectiveness • Aid policy controversies

  3. Aid in Context (1) Progress towards Millennium Development Goals • Significant progress in poverty reduction, notably Asia • Serious shortfalls in health and environment • Mixed picture on education and on gender

  4. MDG Charts

  5. MDG Charts

  6. MDG Charts

  7. MDG Charts

  8. MDG Charts

  9. MDG Charts

  10. Potential impact of additional ODA on MDGs’ achievement Data sources: Sudhir Shetty’s study, September 2003.

  11. Aid in Context (2) The Importance of Policies • Their policies and institutions critical to progress. • Development first and foremost the responsibility of developing countries. • Roles for Governments, Parliaments, Private Sector, Civil Society. • But OECD policies also critical in setting enabling environment: - trade/ agriculture/ debt/ migration/security. • Need “policies as if development mattered”.

  12. Aid in context (3) Aid and private flows 1.2 Other Private 1.0 0.8 Direct investment 0.6 Share of DAC GNI (%) Net Grants by NGOs 0.4 Other Official Flows 0.2 ODA 0.0 1980 1985 1990 1995 2000 2002 Chart 2.2: DAC members' resource flows to developing countries, 1980-2002

  13. Evolution of Aid Flows 1980-2006

  14. 2006 outcome depends crucially on five donors Table 1.1 Anticipated ODA - 2006 US$ billion (at 2002 prices and exchange rates) Net ODA 2002 Anticipated ODA 2006 Increment United States 13.3 19.5 6.2 United Kingdom 4.9 6.9 2.0 France 5.5 7.4 1.9 Italy 2.3 4.2 1.9 Germany 5.3 7.1 1.8 Sub-total 31.4 45.1 13.8 All other DAC members 26.9 31.7 4.8 TOTAL 58.3 76.8 18.6

  15. Aid Allocation Aid is becoming: • more performance-linked

  16. Aid Allocation • more allocated to governance and health

  17. Aid Allocation • at the expense of production sectors, including agriculture and energy

  18. Aid Allocation • food and commodity aid are down but humanitarian aid up ; debt relief fluctuates

  19. Aid Allocation Share of total ODA to least developed and low-income countries 60% 50% 40% 30% 20% 10% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 • the share to least developed and low-income countries is little changed • but some evidence of shift towards Africa

  20. Aid Allocation - multilateral share is little changed

  21. Aid Allocation - the share to the UN system and to the EC has risen slightly

  22. Aid Allocation - but concessional spending by multilateral development banks has risen because of recycling of repayments - European Commission the third largest source of funds after US and Japan

  23. Aid Effectiveness (1) • Crucial issue and central to DAC role • Hard to assess : need for better evaluation • Surprising range of aid and activities

  24. Aid effectiveness (2) • Some progress around - Poverty Reduction Strategies - Medium Term Expenditure Frameworks - Harmonisation and Alignment • Important Work of DAC Aid Effectiveness Working Parties - turning principle into practice - predictability - financial management and procurement - managing for results • Tackling the problems of weak states, post-conflict, and poor performers • From Rome to Paris

  25. Constructive Policy Dialogue • Growth or poverty reduction? • Public or private? • Social sectors or production and infrastructure? • Projects or programmes?

  26. My hopes for 2006 • Aid at least USD 75 billion (at 2002 prices and exchange rates). • Significant increase in proportion to least developed and other low income countries, and particularly to the good performers. • Well-considered interventions in the poor performers. • Declining proportion of emergency and humanitarian aid. • Increase in untied aid. • Developing countries improving services to the poor but also mobilising greater domestic resources. • Much more aid aligned to local priorities, programmes and systems, and shown in recipient budgets. • Much more harmonisation. • Bulk of increased aid involves a genuine transfer of resources and Technical Cooperation demonstrably more efficient. • More progress towards MDG’s, especially in Africa, as a result.

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