The OECDDACs agenda for modernisation CAPE CONFERENCE 12 13 November 2014 Jon Lomøy Director OECD Development Cooperation Todays development finance landscape 1 More diversification and changing relative importance of financial flows to developing countries ID: 345213
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Slide1
1
The future of development finance:
The OECD/DAC’s agenda for
modernisationCAPE CONFERENCE 12 - 13 November 2014
Jon
Lomøy
,
Director, OECD Development CooperationSlide2
Today’s development finance landscape
1) More diversification and changing relative importance of financial flows to developing countriesSlide3
Today’s development finance landscape
2
) New actors and instrumentsSlide4
Today’s development finance landscape
3) Recipients: reliance on ODA varies across developing countries and those most in need are starting to receive less
C
omposition
of external finance in LDCs and other
countries, 2012
ODA growth in LDCs and other
countries, 2000-12Slide5
The 2012 DAC HLM mandate
:
Making the OECD/DAC statistical system fit for purpose, so that it
reflects the broadening of the global development agenda, reflects the new complexity of development finance (actors/instruments) andacknowledges the increased diversity of developing countries and provides the right incentives for ODA allocations.The goal is to maximise resources available
for
development – our statistical system should promote:
t
he right incentives to maximise overall resource envelope
availabe
and to encourage smart allocation and catalytic use of resources,
international
standards for measuring and
monitoring
of development
finance and
transparency and accountability of development finance.Motivation for our agenda for modernisationSlide6
Main pillars:
Modernise the measurement of ODA (in particular
concessionality)Create a new broader measure of Total Official
support for Sustainable Development (TOSD) and better tracking of resource inflows.Valorise of private finance: better capture the use of non-grant instruments (e.g. guarantees and equity) and design an international standard to measure mobilisation/leveraging Making the OECD DAC statistical system fit for
purpose – our reform agendaSlide7
Making the OECD DAC statistical system fit for purpose – our reform
agenda (1)
Working on making ODA credible
and understandable:Restore the credibility of ODA as a reliable measure of « donor effort » by agreeing on a clear, quantitative definition of concessionality (solve the present inconsistency problem)Standardise reporting of in-donor costs: Improve legitimacy, transparency and
comparability and deal
with criticism of some “phantom aid”
componentsSlide8
Making the OECD DAC statistical system fit for purpose – our reform
agenda (2)
Looking beyond ODA: towards a measure of TOSD
Not a replacement for ODA nor for shying away from the 0.7% ODA/GNI target but a more comprehensive measure that can help track the broader development agenda of the SDGs. To be finalised in line with the agreed SDGsIn practice, includes non-ODA finance for development, peace and security, climate and other global challenges in addition to ODA
Seeking
to enhance transparency of concessional and non-concessional resource flows
to developing countries from
DAC, non-DAC and multilateral
institutions (standards, norms and partnerships).Slide9
Leveraging and
incentivising additional development finance
:
The current ODA measure does not valorise the use of risk-mitigation instruments (e.g. guarantees and insurance) and the development of new innovative financial mechanisms that could mobilise significant volumes of private flows for developmentWorking on a proposal to capture the budgetary effort of leveraging instruments is being exploredWorking with multilateral and bilateral development agencies to develop on a methodology for collecting data on private finance mobilised through official actions
Making the OECD DAC statistical system fit for
purpose – our reform agenda (3)Slide10
Effectively contribute to
transparency and accountability for the monitoring of the post-2015 development agenda
Work to assess and measure resources beyond ODA should not be used by donors to back away from existing commitments, including the U.N. target of 0.7%
ODA/GNIBetter targeting of ODA is critically important going forward, especially for LDCs, fragile states and other countries in needDAC HLM in December 2014 is expected to sign off on key elements of the modernisation work as part of the DAC’s contribution to the financing for development conference.
Criteria for
success:
A measurement system that carries the right
incentivesSlide11
THANK YOU
For more information
http://
www.oecd.org/dac/Financing-Development.htm Slide12
The mandate from the DAC ministers (2012 HLM)
Elaborate
a proposal for a new measure of total official support for development.
Explore ways of better representing both “donor effort” and “recipient benefit” of development finance.Investigate whether any resulting new measures of external development finance (including any new approaches to measurement of donor effort) suggest the need to modernise the ODA concept.Agree on a clear, quantitative definition of “concessional in character”=> By end 2014/early 2015