OECD to update methodology for official aid statistics
 
The OECD Development Assistance Committee (DAC) has agreed to update its methodology for official aid statistics to improve the quality of reporting and help mobilise private finance for development. The DAC’s February meeting also set out clearer reporting rules for development aid so it can be used more effectively in conflict or crisis situations and agreed to address the pressure the refugee crisis is putting on aid budgets. “Last year we reached a historic agreement to modernise the measurement of development finance,” Erik Solheim, Chair of the OECD Development Assistance Committee, told Development Finance. “One major improvement involves counting only the grant portion of concessional loans rather than the full face value. This year we came to an agreement on how ODA may be used to encourage more private investment in poor countries. To reach the ambitious 2030 Agenda for Sustainable Development, aid money must encourage private investment strategically and effectively.” Regarding aid measurement, the DAC agreed to start counting efforts to mobilise private sector finance as official development assistance (ODA) and to start tracking private flows for development in a new measure of total aid. The DAC will clarify the boundaries for counting as ODA any spending involving military or police activities to prevent violent extremism and development-related training of military staff. The new guidelines maintain that the financing of military equipment or services is generally excluded from ODA reporting and that ODA must not be used to promote donor countries’ security interests. They make clear that while exceptional circumstances can make it necessary or more effective to use the military to deliver emergency humanitarian aid, only the specific extra costs of such a mission can be counted as ODA, excluding military salaries, regular expenses or equipment costs. The training of recipient country military personnel and the use of the military to control civil disobedience are also excluded from being counted as ODA. “We made small adjustments to make the aid work more efficiently in countries affected by fragility and conflict, for example being able to use military aircraft for the delivery of medical assistance in health emergencies, such as the recent Ebola crisis,” added Solheim. “But aid cannot be used to pay for military efforts. Security is crucial for development, but military expenditure must be kept outside ODA to make sure aid is focused on health, education, infrastructure and other vital civilian tasks.” The 29-member DAC also agreed to work on ways donor countries could better respond to the current refugee crisis, with the aim of ensuring that in-donor refugee costs do not eat into foreign aid budgets.
By Nick Michell
SHARE THIS ARTICLE
SHARE THIS ARTICLE
Photo: OECD