April 2012

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Delivering the results we need

As experts and policy makers increasingly focus their attention on rethinking the role of aid in development, the effects of the crisis are manifesting themselves in donor budgets. Important challenges ahead – such as the sustainable development issues that will be debated in Rio de Janeiro in June – call for ever better, more robust and innovative approaches. Important lessons and experience in sectors such as health, for example, together with clear guidance for engaging in fragile and challenging contexts can make the difference in delivering the results we need.


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Aid to developing countries falls in 2011

DAC policy statement for Rio+20

The private sector and development co-operation

Lessons from monitoring aid effectiveness in health

Point of view: Rethinking policy and changing practice in post-conflict transition

Feature article

News in brief

The DAC in recent blogs and articles

Peer reviews

Publications

Vacancies


Aid to developing countries falls in 2011

Major donors’ aid to developing countries fell in 2011 by 2.7% in real terms. Disregarding years of exceptional debt relief, this was the first drop since 1997, reflecting fiscal constraints in several DAC countries.

OECD Secretary-General Angel Gurría encouraged donors not to give in to pressures on their aid budgets and to stand by their commitments: “The fall of ODA is a source of great concern, coming at a time when developing countries have been hit by the knock-on effect of the crisis and need it most. Aid is only a fraction of total flows to low-income countries, but these hard economic times also mean lower investment and lower exports. I commend the countries that are keeping their commitments in spite of tough fiscal consolidation plans. They show that the crisis should not be used as an excuse to reduce development cooperation contributions.”

Key aid totals in 2011

In 2011, DAC members provided USD 133.5 billion in net official development assistance (ODA), representing 0.31% of their combined gross national income (GNI).

J. Brian Atwood, Chair of the OECD Development Assistance Committee (DAC), observed: “While I am disappointed that some countries have failed to maintain their commitments, the overall level reflects the growing awareness that global challenges – from disease to security threats to climate change – cannot be resolved without development progress.”

Within total ODA, bilateral aid to sub-Saharan Africa – at USD 28.0 billion – fell by 0.9% compared to 2010. By contrast, aid to the African continent increased by 0.9%, to USD 31.4 billion as donors boosted assistance to the North African region. The group of least developed countries (LDCs) saw a fall in net bilateral ODA flows of 8.9%, to USD 27.7 billion.

ODA outlook

Country programmable aid (CPA) is a useful measure of development finance, representing actual receipts by developing countries. CPA in 2011 is estimated at USD 93.1 billion, a fall of 2.4% compared to 2010.

Looking ahead, the OECD DAC Survey on Donors’ Forward Spending Plans 2012-15 (accessible here) suggests that global CPA may rise somewhat (6% in real terms) in 2012. From 2013, global CPA is expected to stagnate, thus confirming earlier findings that it takes several years from the onset of a recession for the full impact to be felt on aid flows.

In addition to quantity, the quality of development finance is fundamental. The Global Partnership for Effective Development Co-operation (see DACnews, December 2011), forged in Busan at the end of 2011, sets a clear path to future development through wide and inclusive partnerships led by developing countries. The OECD’s new development strategy, to be released in May, will help to gather the organisation’s efforts and expertise behind this challenge.

Last year, members of the DAC-approved a Recommendation on Good Pledging Practice (DCD/DAC(2011)12/REV1, accessible here), designed to help providers of development assistance make credible and feasible commitments, enhancing the accountability and transparency of aid.

Read more

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DAC policy statement for Rio+20

Rio+20 is an important opportunity to assess progress, identify gaps and renew commitments to sustainable development. In a policy statement endorsed at their recent Senior Level Meeting (SLM, 3-4 April 2012), members of the OECD Development Assistance Committee (DAC) pledged to strengthen collaboration on new and emerging challenges so as to promote economic and social transformation for sustainable development.

This was the most inclusive DAC SLM ever, with the participation of the Trade Union Advisory Committee (TUAC) and the Business and Industry Advisory Committee (BIAC) to the OECD, regional banks, multilaterals, observer countries from within and outside the OECD and the Gates Foundation.

Fully committed to the three pillars of sustainable development – social development, economic growth and environmental protection – DAC members agreed to contribute to the delivery of clear and significant outcomes from the Rio+20 United Nations Conference on Sustainable Development (15-18 June 2012) by building a post-2015 global development framework on the lessons learned from the Millennium Development Goals (MDGs).

The statement recognises developing country concerns regarding the environmental challenges they are facing. DAC members share these concerns, recognising that many developing countries have taken the lead in the responsible use of natural resources and are learning lessons from the shortcomings of conventional development models. They also recognise the particularities of green growth in developing countries, where it must deliver on national development, poverty reduction and job creation objectives in the context of sustainable development.

In the policy statement, DAC members reaffirmed their belief that green growth can deliver on these objectives, but only if context-specific strategies are defined through national policy and planning processes, led by developing country governments.

The policy statement will be presented to the OECD Ministerial Council Meeting for endorsement on 23-24 May 2012.

Read the full statement

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The private sector and development co-operation

For developing countries to generate wealth, they need the right balance of viable private markets, government oversight, regulation and human development. At the Fourth High-Level Forum on Aid Effectiveness in Busan, Korea (DACnews, December 2011), a joint statement on “expanding and enhancing public-private partnership for broad-based, inclusive and sustainable growth” was endorsed by over 40 representatives from the public and private sector and multilateral organisations − a significant step forward in defining how the private sector can best contribute to development co-operation.


This statement comes at an opportune time:

  • Today, members of the private sector have more awareness of what it means to engage in development, be it through corporate social responsibility, core business or the value chain. Consumers have also become increasingly aware of the implications of sustainable development to the supply chain and to production. And the multilateral system now supports more development-friendly private sector investment (e.g. the EITI, or Extractive Industries Transparency Initiative).

  • Several donors are looking at how to leverage aid and de-multiply the impact of public money through public-private partnerships (PPPs) and other innovative mechanisms, seeking opportunities to share lessons and scale up.

  • Developing countries are focusing more and more on private sector development and growth as a way out of long-term aid dependency. They are active in South-South co-operation, willing to make trade relations more open and balanced, and building partnerships, especially in the areas of infrastructure, food security, climate change and health.


But challenges remain:

  • It is important to turn the five principles for effective development endorsed in Busan into a balanced, effective arrangement that will benefit all.

  • More and broader participation needs to be enlisted from partner countries.

  • It is fundamental to determine arrangements that work for all parties involved, in consultation with the private sector, and building on effective communication and trust.

  • Progress needs to be monitored based on clear agreement on what should be assessed and reported.

  • As much as possible, duplication of work done by the World Trade Organization (WTO) and the International Labour Organization (ILO) must be avoided by focusing on country actions and sector-specific activities.

Going forward, a strong coalition of actors from the international and local private sectors, donors, international organisations and trade unions will work on translating the joint statement in concrete action. The platform on public-private co-operation agreed in Busan offers an opportunity to reach out to the G20, in particular to the emerging economies of Brazil, Russia, India, China and South Africa (BRICS).

Find out more

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Lessons from monitoring aid effectiveness in health

From 2007 to 2011, the OECD led a senior-level, multi-stakeholder working group − the Task Team on Health as a Tracer Sector (TT HATS) – that regularly reviewed and promoted progress towards more effective aid in the health sector. The task team presented its final report at the Fourth High-Level Forum on Aid Effectiveness (DACnews, December 2011).

What are the lessons and recommendations?

 

1. Establishing co-ordination and mutual understanding among aid effectiveness and sector-level concerns is often challenging. The task team found that policy makers did not necessarily focus on health over other sectors, and health experts were probably challenged by the “tracer” concept – i.e. using the health sector to draw out lessons in aid effectiveness that can be valuable to other sectors even though it aims to formulate recommendations in a language easily understood by all.

2. Sector-level monitoring of aid effectiveness can provide relevant evidence on results because developing country and donor governments alike are organised by sectors, and so is aid. Yet most of the discussion on aid focuses on processes; appropriate attention has not yet been given to cross-sector approaches in priority areas such as health, climate change or food security.

3. Using health as a tracer sector has deepened the understanding of the risks and benefits of diversity and proliferation of new aid providers, calling for a more co-ordinated and coherent approach to the global aid architecture. Lessons from health can inform global efforts to tackle climate change or food security.

There is evidence that effective aid is improving health sector planning, budgeting and governance capacities, strengthening national systems, and contributing to better results through more efficient and sustainable implementation of national plans. The dialogue and mutual understanding developed by the TT HATS on issues and concerns shared by bilateral, multilateral and civil society organisations, as well as by developing countries, can contribute to more strategic decisions on how aid can best encourage progress to improve the well-being of people across the world.

Learn more on health as a tracer sector

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Point of view: Rethinking policy and changing practice in post-conflict transition

By Asbjorn Wee, Policy Analyst in the Policy Division of the OECD Development Co-operation Directorate

OECD member countries provided USD 46.7 billion in official development assistance to fragile states in 2009. This is a significant investment, but we still struggle to work with our partners in ways that support transformative results in fragile states. The fact that no low-income fragile state has yet achieved a single Millennium Development Goal (MDG) is a stark reminder both of the needs that drive all sides to focus on fragility, and of the daunting challenges that remain.

Evidence shows that effective support to transition requires collective and parallel engagement by different policy communities. Despite decades of experience, we have still not been able to build a response that effectively links humanitarian and development assistance, and that reconciles different principles and operational modalities in a way that supports transitions from conflict to peace. A change in both policy and practice is needed.

From Afghanistan to Haiti, and most recently in the Horn of Africa (DACnews, September 2011), we have witnessed the results of development approaches that are not designed to meet the challenges of fragile states in a timely and flexible manner. We know that in many of these countries, unrealistic expectations about capacities and ownership frequently cause delays in development assistance. In the absence of better development funding, humanitarian actors have been left to fill the void; yet humanitarian instruments are neither designed nor well-equipped to promote peacebuilding and statebuilding. This, in turn, has a negative impact on the prospects of a successful transition.

If we know all this, why has so little changed? Some of the problem might have to do with our risk aversion. Transitions are high-risk environments for development investments and action, yet more often than not, the risks of not engaging in these contexts — both for the countries themselves and for the international community — outweigh the risks of engaging in the first place. The question, therefore, is not whether to engage, but how to engage in ways that are context-specific and do not come at an unacceptable cost.

The Fourth High-Level Forum on Aid Effectiveness in Busan (DACnews, December 2011) was a watershed moment for international development co-operation. More than 40 fragile states and development partners came together to endorse a New Deal for Engagement in Fragile States, which gives clarity on priorities in these difficult contexts by setting out a roadmap for better use of both international and domestic resources. Built on a set of agreed peacebuilding and statebuilding objectives, the New Deal also recognises the need for focused approaches that support country-led transitions out of fragility, and for accepting the risks of engagement with fragile countries.

Developed by the DAC International Network on Conflict and Fragility (INCAF), the publication entitled International Support to Post-Conflict Transition provides the guidance that development partners need to make good on the commitments they made at Busan. To ensure that development resources are used to support the essential objectives of peacebuilding and statebuilding, we need to bridge the divide between policy and practice to deliver more rapid, flexible and risk-tolerant support. And because the vastly diverse contexts from one country to another can turn blueprint approaches into recipes for disaster, we cannot afford to take a “one-size-fits-all” approach. With these challenges in mind, this guidance calls for support focused on peacebuilding and statebuilding, Reimagining Development &and Development Co-operation a gradual shift to national ownership, and a smarter mix of development, humanitarian and security-related expenditure to enable donors to deliver better results to those who need it most.

Download the policy note

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Feature Article by Stephen Killelea

Stephen Killelea is the founder of the Institute for Economics and Peace, a non-profit research organisation dedicated to shifting the world’s focus to peace as a positive, achievable and tangible measure of human well-being and progress. He is the originator of the Global Peace Index, which ranks the world's nations and regions in terms of their peacefulness. He also sits on the advisory board of the Alliance for Peacebuilding.

Why peace?

Although peace is one of our most cherished concepts it still proves to be an elusive goal. With the dawn of the 21st century, new challenges are facing humanity – many on a scale that we have never faced before. Because these challenges are global in nature, unless we have a world that is basically peaceful, we will never achieve the levels of trust, co-operation and inclusiveness necessary to solve them, nor can we empower our international institutions to create the processes and governance that are key to success.

This is why peace is a pre-requisite for the survival of society as we know it in the 21st century, unlike any other period in human history. In the past, peace may have been the domain of the altruistic; today, it is in everyone’s self-interest.

This raises a fundamental question: What do we know about peace and how do we create it?

Recent failures to achieve peace in fragile states, such as in Afghanistan and Iraq, underscore the inadequacies of many “peacekeeping” interventions.

While it is obvious to most people that peace fuels economic prosperity, you can go into any of the major universities in the world without finding a Chair in Peace Economics.

Although peace and conflict centres have been established in many universities, they are in many ways silos − peace is not germane to other disciplines. Peace should be looked at as an inter-disciplinary field, drawing on business, economics, sociology, politics and international relations, as well as on many other topics. Yet our academic institutions – in an environment that is not conducive to providing inter-disciplinary research – struggle with it.

My own personal experience underpins this. My background is in business and after achieving some success, I set up a family foundation to support developmental aid. Some years ago this took me to East Kivu, where I had to ask myself which nations were the most peaceful and what could be learnt from them. To my utter amazement, I couldn’t find anything that measured peacefulness – which demonstrates how little we know about peace. And that is how the Global Peace Index was born.

Without the ability to measure peace, how can we truly understand it? Similarly, if there are no measures, then how do we know whether the actions we are taking are helping or hindering in the achievement of our goals? Without the correct measurements, we are acting blindly.

Yet studying peace is different from studying conflict; by the same measure, the institutions that thrive in peace are fundamentally different than those that thrive in conflict. Stopping violence alone does not create peace. The Institute for Economics and Peace (IEP) was established to help us to understand the intersection between business, peace and economics, with an emphasis on measuring peace.

The measurement of “negative peace”, which is basically a measurement of the presence or absence of different kinds of violence, allows us to rank nations or smaller geographic areas according to their levels of peacefulness. While useful, this ranking on its own does not help us understand what creates peace. “Positive peace”, on the other hand, comprises the structures, institutions and attitudes that create and sustain peace. These can be ascertained by formally analysing multiple datasets, indices and attitudinal surveys against peace indexes to determine what is statistically significant, and then grouping the findings into a meaningful taxonomy.

Research conducted by IEP has isolated eight “Structures of Peace” that are needed to create and sustain a peaceful environment:

 

1. well-functioning government

2. strong business environment

3. equitable distribution of resources

4. free flow of information

5. low levels of corruption

6. respect for the rights of others

7. good relations with neighbours and neighbouring states

8. high levels of participation in secondary education.

None of these structures are counter-intuitive, yet for a society to achieve high levels of peace, all eight structures must be well functioning. It’s similar to a brick wall: remove one brick and 30% of the strength of the wall is lost.

The DAC-supported New Deal for Engagement in Fragile States – endorsed in Busan, Korea, at the end of last year – similarly places emphasis on fundamental structures for peace. Its five Peacebuilding and Statebuilding Goals affirm the importance of:

 

1. legitimate politics

2. security

3. justice

4. economic opportunities

5. domestic revenues and efficient basic services such as education and health.

The IEP’s Structures of Peace and the New Deal goals describe similar environments. These are environments characterised by superior economic performance, societies that are socially cohesive and ones that are resilient when faced with abrasive shocks. Peace, therefore, can be seen as a proxy for describing the optimal environment for human potential to flourish.

Conservative estimates of the economic benefits of peace indicate that in 2009, global gross domestic product (GDP) would have been 8.7% higher – USD 4.9 trillion – if the world had been basically peaceful. This contrasts with the actual contracting of the global economy by 0.5% during the global financial crisis.

It is difficult to imagine a world that is totally at peace. Nonetheless, a world that is 25% more peaceful is definitely within our reach. This would generate USD 2 trillion dollars in additional economic activity. Just half of that amount is enough to pay out the Greek, Portuguese and Irish debts, achieve the Millennium Development Goals, and fund the EU 20-20-20 carbon reduction targets, leaving approximately USD 1 trillion for addressing other urgent global challenges.

Peace is economically beneficial not only to the developing world. Research into the economic costs of violence within the United States indicates that USD 485 billion of savings and additional economic activity would be generated if the country had no violent crime. Similar types of savings could also be achieved in Europe.

In summary, peace is not only highly desirable in and of itself. It also provides the optimal environment for human potential to flourish, both socially and economically.

 

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Also in this issue...


News in brief

Roundtable on Transparency with J. Brian Atwood, DAC Chair

In the context of the new Global Partnership for Development, on 25 April, Development Initiatives organised a roundtable with DAC Chair J. Brian Atwood to set out his vision for transparency and discuss political and practical opportunities for the post-2015 development agenda. Mr Atwood discussed:

  • the case for transparency in terms of the behavioural changes it can bring and the benefits to partner countries

  • the need for full and speedy implementation of the Busan Partnership Agreement (DACnews, December 2011)

  • the practical issues and political rationale for action on transparency, as well as a view of where we should be on this subject in 2015.

In the words of the organisers: “This meeting comes at a time of rapid change in global architecture – from G8 to G20; from donor-recipient to a much more complex pattern of global resource flows and influence. As we build on the MDGs post 2015, [it provides] an opportunity to have a thoughtful high-level discussion on the role of transparency and access to information alongside the delivery of the services – as key components of a renewed global commitment to poverty elimination.”

Read the speech here

Watch the webcast here

Between expectations and reality: Aid to the health sector

On the occasion of World Health Day (7 April 2012), the DAC Network on Evaluation highlighted recent evaluation findings in the health sector, focusing on Uganda and Botswana. Uganda (see video) still faces challenges despite having achieved better co-ordination between donors and the government: improvements are still needed at the local level, where health centres are understaffed and lack service delivery capacity. Find out more

 

Launch of the DAC Development Debates

The DAC kicked off the DAC Development Debates (DDD), designed to contribute to the exercise of re-imagining development, with two events:

On 15 March, Lawrence Haddad, Director of the Institute for Development Studies (IDS), and Hege Hertzberg, Director for Development Policy in the Norwegian Ministry of Foreign Affairs, shared insights on “Reimagining Development and Development Co-operation”.

On 22 March, Jean-Michel Severino, CEO of Investisseurs et Partenaires, and Françoise Moreau, Head of the Policy Formulation Unit of EuropeAid, concentrated on “the Resurrection of Aid” within the context of a post-2015 global agenda.

For more information, write to dac.contact@oecd.org. 

Workshop on a post-2015 development paradigm

On 10-11 April, the DAC co-hosted a workshop with the Bellagio Group, a consortium of think tanks and CSOs from North and South, entitled “Post-2012 Development Goals: Potential Targets and Indicators”. The workshop focused on the targets and indicators the Bellagio Group is proposing as potential successors to the Millennium Development Goals (MDGs). Drawing on its expertise in measurement, the OECD was invited to comment on this proposal in the areas of poverty reduction, food and water, universal literacy, healthier lives, violence and vulnerability, gender equality, environmental sustainability, universal connectivity, disaster reduction, political and civil rights, global governance and equitable economic rules.

For more information, write to dac.contact@oecd.org.

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The DAC in recent blogs and articles

There was wide coverage of the release of the 2011 ODA figures, including:

 

"Aide publique au développement : première baisse en quinze ans", Les Echos, 5 April 2012.

 

"Development aid to poor nations falls", The Financial Times, 4 April 2012.

 

"Value of OECD aid drops for first time in 15 years", The Guardian, 4 April 2012.

 

"Global aid fall sparks cash call", The Independent, 4 April 2012.

 

"OECD links fall in development aid to financial crisis", BBC, 4 April 2012.

 

"The crisis in Europe took a big bite out of foreign aid", The Washington Post, 4 April 2012.

 

"Cuts to Global Aid Are Unjustified - Even in the Current Climate", The Huffington Post, 4 April 2012.

 

"Aid to developing countries falls in 2011 due to economic recession: OECD", China Daily, 4 April 2012.

 

"S. Korea's development aid up 5.8 pct in 2011: OECD report", Yonhap News Agency, 4 April 2012.

 

"L'aide au développement en baisse, victime de la crise", Le Figaro, 4 April 2012.

 

Other blogs and articles:

 

"OECD urges EU to spell out its aid message more clearly", The Guardian, 24 April 2012.

 

"Slovenia Should Open Up in Development Coop", The Slovenia Times, 18 April 2012.

 

"How to keep score when donors make promises", Oxfam America blog, 18 April 2012.

 

"War or Peace in Heglig, South-Sudan?", OECD Insights blog, by DCD Policy Analyst Erwin van Veen. 16 April 2012.

 

"Korea, new role model for development assistance", Korea.net, 16 April 2012.

 

"Is there a case for a fresh approach to aid measurement?", Poverty Matters blog, The Guardian, 13 April 2012.

 

"The Benefits of Transparency in Development", OECD Insights blog, by DAC Chair J. Brian Atwood. 3 April 2012.

 

"For the people…", OECD Insights blog, by DAC Chair J. Brian Atwood. 14 March 2012.

 

Find a more complete list of blogs and articles featuring the DAC online here.

 

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Peer reviews

European Union: Since the last review in 2007 the EU, a major player in global development, has taken steps to make its aid more effective and give it more impact. The OECD Review notes, however, that more progress in needed in a number of areas.

 

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Publications

Managing Risks in Fragile and Transitional Contexts: The Price of Success? provides evidence to help donors understand how to balance risks and opportunities in order to protect the integrity of their institutions when engaging in fragile contexts, while delivering better results to those who need it most.

 

Aid Effectiveness 2011: Progress in Implementing the Paris Declaration (Better Aid series). As the international community takes stock of what has been achieved on the occasion of the Fourth High Level Forum on Aid Effectiveness in Busan, Korea
(29 November to 1 December 2011), this report sets out evidence of progress and challenges in making aid more effective.

 

International Drivers of Corruption: A Tool for Analysis introduces an analytical tool to help readers identify drivers of corruption and suggests opportunities for international actors to improve governance and fight corruption at the country level.

 

International Support to Post-Conflict Transition: Rethinking Policy, Changing Practice presents clear policy recommendations to improve the speed, flexibility, predictability and risk management of international support during post-conflict transition.

 

Geographical Distribution of Financial Flows to Developing Countries 2012: Disbursements, Commitments, Country Indicators provides comprehensive data on volume, origin and types of aid and other resource flows to some 150 developing countries.

 

Strategic Environmental Assessment in Development Practice: A Review of Recent Experience presents nine case studies in strategic environmental assessment, based on the 2006 guidance endorsed by OECD DAC members.  

 

Other releases: 

DAC Special Review: Slovenia. This special review of Slovenia’s development co-operation was conducted at the request of the Slovenian Ministry of Foreign Affairs. It recommends that Slovenia seize existing reform opportunities to innovate, balancing its resources and capacity through a more focused programme.

 

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OECD DAC countries' net ODA in 2011

USD 133.5 billion, down by -2.7% in real terms and
0.31% of DAC members’ combined GNI

OECD DAC Statistics including Aid at a Glance charts for DAC members, recipient countries, and by region.


Vacancies
Communication/Outreach officer (Reference 08177): The Communication/Outreach Officer will help to increase the visibility and impact of priority DAC policy work by targeting selected key audiences.

Communication officer (Reference 08188): In collaboration with the Development Co-operation Directorate’s (DCD) communication team, the successful candidate will assist with the reorientation from a principally publication-centered approach to web-based communication; synthesise and clarify language and messages; apply professional editorial standards to publications, and support communication planning and evaluation.


About Us
The OECD Development Assistance Committee (DAC) is a unique forum for defining and monitoring global standards in key areas of development, sharing views and exchanging lessons. The Development Co-operation Directorate (DCD) supports the DAC, contributing to developing better policies for better lives through transparent data on development finance, and improved development co-operation practices and policies.

For more information visit www.oecd.org/dac.


 

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