Good afternoon,
Thank you for joining us for this launch of the preliminary 2023 figures of Official Development Assistance.
Developing countries are navigating a highly disrupted and uncertain environment.
Despite the many challenges over the past several years, the global economy has proven remarkably resilient.
While at a lower rate compare to historical standards, the global economy has continued to grow. After global growth at 3.1% last year we are projecting growth to moderate slightly to 2.9% this year and 3.0% next year.
Developing economies are projected to grow by just 3.9% this year, which is one percentage point below the average growth achieved over the previous decade.
With slower growth and rising debt servicing costs, developing countries are facing additional fiscal pressures and increasing risks of debt distress.
In emerging economies, excluding China, debt due in the next three years has grown substantially, at the end of 2023 at USD 4.1 trillion.
At the same time, globally around 40% of sovereign bonds will mature by 2026, necessitating further borrowing from markets at higher interest rates.
Compounding these pressures, longstanding structural challenges like those related to climate change and deepening economic and social disparities, will create new demands on developing countries’ finances and risk holding back development progress.
In 2022, a total of 712 million people globally were living in extreme poverty, which was an increase of 23 million people compared to 2019.
By 2050 more than 143 million people could be driven from their homes by conflict over food and water insecurity and climate-driven natural disasters.
Climate change also risks pushing an additional 50 million people in fragile states into hunger by 2060.
The annual financing gap to achieve the Sustainable Development Goals has increased by 60%, from USD 2.5 trillion in 2015 to USD 4 trillion in 2023.
This widening gap reflects the impact of global shocks and pressures, including inflationary pressures, which have strained financial resources.
In the wake of these setbacks, Official Development Assistance has remained an important, stable and reliable source of external finance for developing countries.
It supports countries in dealing with short-term needs arising from economic shocks, conflicts and extreme weather events, while remaining focused and committed to help accelerate progress on long-term development and growth priorities.
It will help protect the world’s poorest and most vulnerable from the effects of future shocks.
And it serves as a foundation for a more dynamic, inclusive, and sustainable pathway to global growth.
Despite budgetary pressures, Member countries of the OECD’s Development Assistance Committee have demonstrated resilience in delivering Official Development Assistance – which in 2023 reached another record level for the fifth year in a row.
Since 2019, Official Development Assistance has risen by 34 % to respond to the consecutive crises, from USD 160 billion to USD 214 billion in 2023.
Preliminary data indicates that development aid from Development Assistance Committee donors rose to USD 223.7 billion in 2023, equivalent to 0.37% of their combined gross national income.
In 2023, when adjusted for inflation and exchange rate fluctuations against the US dollar, Official Development Assistance rose by 1.8% in real terms from 2022.
The increase was due in large part to a rise in:
- support to Ukraine – from USD 17.8 billion in 2022 to USD 20 billion, including USD 3.2 billion of humanitarian aid, representing 9% of total Official Development Assistance in 2023;
- spending on humanitarian aid, which amounted to USD 25.9 billion in 2023, up by 4.8% compared to 2022; and
- contributions to the core budget of international organisations up by 4.0%, in part driven by increased contributions to the World Bank.
However, spending on processing and hosting refugees within donor countries – what is termed as “in-donor refugee costs” – fell by 6.2% in 2023 compared to 2022.
This amounted to USD 31 billion in 2023, representing 13.8% of total ODA, down from 14.7% in 2022.
Development Assistance Committee donors are providing more aid to countries that need it the most.
Our preliminary data show that bilateral Official Development Assistance to least-developed countries reached USD 37 billion in 2023, an increase of 3% in real terms compared to 2022 when it fell by 6.2% compared to the previous year.
The unprecedented levels in Official Development Assistance reflects both a commitment to assisting those directly impacted by recent crises and a recognition of the untapped investment potential in developing countries.
In closing,
Commitment to long-term aid is not only beneficial for recipient countries but also contributes to global stability, security and prosperity.
Official Development Assistance will help promote sustainable development, reduce poverty and foster a more equitable and resilient world.
The OECD will continue to support global efforts to monitor Official Development Assistance flows, identify emerging trends, evaluate the impact of aid programmes and promote effective development cooperation to ensure the most effective use of these resources.
I will now hand the floor to the OECD’s Director for Development Co-operation, Ms. Pilar Garrido, to present further detail on the data and trends.
Thank you.
