Opening Remarks by Angel Gurría, OECD Secretary General
Wednesday 17 February, 2010
Ladies and Gentlemen,
Development and development assistance have been central parts of the OECD since its inception in 1961. The Development Assistance Committee, the DAC, was even established before the OECD and became one of the founding committees.
The DAC is, as you know, the source of official statistics on official development assistance. It has as a world-wide reputation for its ODA statistics and for its objective assessments of member countries aid efforts through its peer reviews, conducted under its full-time Chair, currently Mr Eckhard Deutscher.
The OECD secretariat is responsible for the technical work that goes into the statistics and for making them publically available. We thus have a key role in assuring transparency and accountability in the aid system.
When Heads of State, at the Monterrey Financing for Development Conference in 2002, began making pledges on their aid levels over the medium term, we began to record these commitments and to quantify them on a common basis and to track performance against them annually. We established, in consultation with each country, an accurate definition of each countries pledge and we made assumptions about future growth in GNI, since many pledges were expressed as a per cent of GNI. Thus we created the tracking chart that you see in the Press Statement, and we have been in a position to create the table attached to the Press Statement which projects aid performance in 2010.
In this way the OECD secretariat is able to help provide transparency and accountability in the aid effort. This is important. The G8 has recently established an Accountability Working Group to track all G8 commitments ansd we are working closely with them. The G20, in its Leaders Statements, has reaffirmed the international aid commitments.
2010 is a special year, since many of the commitments had targets for 2010, or intermediate targets on the way to a larger target, eg the 0.7 target adopted by the EU for 2015. Other countries also have targets going beyond 2010. For example Japan has set a new target for doubling aid to Africa by 2012 and the United States Administration has an ambition of doubling its aid.
Aid performance in 2010 will be thus be a major issue in international discussions throughout the year. Normally, we would have to wait for April 2011 for the 2010 numbers to become available. But we have undertaken a special study of DAC members current aid budget provisions as a basis for projecting the aid numbers for 2010, in order to assist the international discussion processes this year.
When we look at 2010 performance against the targets, as set out in the Press Statement I am issuing to day, what do we see?
There is good news and bad news.
First the good news
- The growth of ODA over the 2005-2010 period in percentage terms is projected at 35 percent, a record for any 6 year period, and amounts to an increase of $27 billion
- The ODA/GNI ratio has risen from 0.26 in 2004 to a projected 0.33 per cent in 2010
- ODA is continuing to rise through 2009-2010. It is not falling as other financial flows to developing countries have fallen during the crisis
- Out of 23 DAC members 16 have meet their aid pledges
Second the bad news
- Seven donors have not meet their aid commitments for 2010
- This includes some large donors - France, Germany, Italy and Japan. They account for most of the underperformance against commitments, which amounts to $17bn
- Moreover because the large European donors have a strong African component in their aid programmes the Gleneagles estimate that ODA to Africa would rise by $25bn has been missed. The figure we are projecting for 2010 is $12bn
- Other countries to miss their commitments are Austria, Greece and Portugal
- More bad news was the recession. This reduced the value of many aid commitments stated as a per cent of GNI. GNI in 2008-2010 is lower than we assuned when we made the original estimates in 2005. We have calculated the loss here at $4bn. (I should say however that at least one country, the UK, has pledged not to reduce the value of its own pledge even in these circumstances)
To draw some conclusions:
Clearly aid pledges work when countries apply themselves to undertaking from the start the political, budgeting and planning work that follow from them. Without that countries fall behind and have difficult catch up problems.
A second lesson is that aid pledges can produce significant overall increases in aid. The pledges outstanding and newly made should produce a further significant expansion of aid if they are properly followed up by Heads of State. As I mentioned, both the G8 and the G20 are reconfirmimg pledges and following up and we will continue to support their accountability efforts with our tracking capacity.
These are lessons to bear in mind as new commitments are made, for example in the areas of climate change and food security.
And they are underpinned by the significant effort being devoted to improving the effectiveness of aid, through the global partnership which we host at the OECD to implement the Paris Declaration on Aid Effectiveness.
Finally, as we enter a time when serious fiscal consolidation in donor countries becomes part of the agenda for exit from the crisis, public expenditures in donor countries risk serious cut backs. At this point, it is crucial that the aid pledges must be honoured. They do not represent very much in terms of per cent of GNI. But they do represent a lifeline for hundreds of millions of poor people in poorer countries. And they represent an investment in the emergence of effective and decent states around the globe, a major imperative as we work for a safer world.