Remarks by Angel Gurría
OECD, Paris - 9 April 2018
(As prepared for delivery)
Ladies and Gentlemen, Dear colleagues,
I am delighted to be with you today to present our analysis of global aid trends in 2017. Official development assistance – or ODA – is, and will remain, a crucial pillar of development finance.
This time last year, the headline was a bittersweet one: aid volumes were up on aggregate, but the poorest countries were benefiting less. And when the Syrian refugee crisis hit its peak, we saw a five-fold increase in donors’ spending ODA on supporting refugees within their borders.
This year, I am pleased to say that we have seen some progress – albeit modest.
In 2017, net ODA [by Members of the OECD Development Assistance Committee (DAC)] stood at USD 146.6 billion or 0.31% of gross national income (GNI). While this aggregate figure reflects a slight drop of 0.6% compared to 2016, this is a result of the reduced intensity of the refugee crisis. Donors’ spending on refugees inside their own borders – some of which is reported as ODA – declined this year. Stripping out the in-country refugee costs all other ODA expenditures to developing countries increased by 1.1% from 2016 in real terms.
The good news is also that the 2017 data shows an increase in bilateral aid to the least developed countries (LDCs), thanks to Japan and Sweden, for example, reversing the declining trend in recent years. Bilateral aid to Africa also increased. Yet ODA to middle-income countries (MICs) has increased faster than to LDCs. ODA to LDCs represented about 45% of total country allocable ODA from DAC donors.
Most ODA is in the form of grants, yet the volume of loans to developing countries rose 13% in real terms compared to 2016. For some donors concessional loans accounted for over a quarter of bilateral ODA.
Overall, ODA has remained politically resilient, steadily increasing since the turn of the century, and doubling since 2000, despite the tightening of donor country budgets.
The “new” or “emerging” donors are also playing a growing role. This includes several Arab countries, the BRICS, some central European countries, as well as Latin American and Asian countries, notably China. Development co-operation by countries beyond the DAC membership amounted to around USD 25 billion (in gross terms) in 2015 . And we would be remiss to forget the role of private philanthropy. A recent OECD publication showed that foundations provided USD 24 billion for development between 2013 and 2015.
All of these developments are welcome. But we must not be complacent.
ODA works at its best when it puts itself out of business.
We need to invest aid more strategically, so that it can help those most in need; catalyse additional financing both domestically and internationally; and help countries deal with shocks, such as those inflicted by climate change. Grants remain the modality of choice for the least developed countries. However, it is also vital to unlock and channel other development finance sources toward development priorities and enhance their impact. This will become even more important in the future, given the growing role of other development finance actors.
Measuring and understanding a broader range of financial flows and the impacts of policy on them will be critical to achieve the 2030 Agenda, and the OECD will continue to play a leading role in international efforts in this area.
We have a window of opportunity. An opportunity to defend global solidarity, and the role that well-targeted aid can play within in. An opportunity to scale up and to innovate, using aid to crowd in other resources where possible. And, above all, an opportunity to deliver on the promise of the 2030 Agenda and its Sustainable Development Goals.
In all of these endeavours, rest assured that the OECD will continue to play its part and pursue every opportunity to design, develop and deliver better financing for development, for better lives.
OECD Development Assistance Committee