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OPTIONS FOR MODERNISING THE ODA measure

OPTIONS FOR MODERNISING THE ODA measure . Expert Reference Group on Development Finance, 23-24 January 2014. Julia Benn Manager, Statistical Policy, Analysis and Engagement Unit Development Co-operation Directorate. Outline of the presentation. Option 1: Focused ODA. 1. 2.

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OPTIONS FOR MODERNISING THE ODA measure

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  1. OPTIONS FOR MODERNISING THE ODA measure Expert Reference Group on Development Finance, 23-24 January 2014 Julia Benn Manager, Statistical Policy, Analysis and Engagement Unit Development Co-operationDirectorate

  2. Outline of the presentation Option 1: Focused ODA 1 2 Option 2: New ODA 3 Option 3: Updated ODA ! List of ODA Recipients session 2 !! Concessionality  session 3 !!! Total official support for development session 4 N.B.

  3. Option 1: Focused ODA • Excludesfromreportingin-donorexpendituresthat do not result in, or relate to, flows to developing countries • Reflectsbudgetaryexpendituresincurred by the government in developmentco-operation • Includein the broadermeasure (TOSD) types of support removedfrom ODA, face value of non-grant instruments (and more generallyoutflowsfromDFIs) • Capture entire cash flow in data on developingcountries’ resourcereceipts

  4. Option 2: New ODA • Reflectsbudgetary effort of developmentco-operation • For non-grant instruments, onlyincludes the grantequivalent(instead of the face value) of the flow • Applyrisk-adjusted discount rate implications on debt relief • Tightenseligibility of in-donorcosts • Coverageof the broadermeasure and developingcountries’ resourcereceiptssimilar to option 1

  5. Option 3: Updated ODA • Maintains ODA measurement on a cash basis, but modernising it on a number of items: • Revises concessionality assessment to reflect the prevailing market rate conditions (grant element threshold for ODA eligibility could also be revised) • Gross disbursements (e.g. equity acquisitions counted at face value) • Guarantees not reflected in ODA but amounts mobilised included in the broader measure (if defined as « development finance resulting from official efforts »)  • Mismatchwith ODA/GNI target

  6. Scenarios (to befurtherelaborated) • Scenario 1 (focused ODA) = decline of 10% • Scenario 2 (new ODA) = slightincrease (2%) • Scenario 3 (updated ODA) = increase of 9% • Complete assessment of the impact of each option wouldrequire a simulation over a number of years and additional data

  7. Which option(s) wouldbe fit for purpose? • Recallingthat cash flow wouldbecapturedin TOSD and receipts, which option would best: • measure provider effort (and « clean up » the mostcontroversial ODA items)? • ensurefaircomparisonsbetweenproviders? • incentivisemarket-likefinancingwhereappropriate (and ensurethat ODA isdirected to whereitismostneeded)? • Which option wouldbecrediblefrom the viewpoint of: • Partner countries? • South-south providers?

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