Rethinking Humanitarian and Development Assistance

The world is not in a very good. Increasing tensions between countries. Disruptions. Growing global instability. That is the way the chair of the OECD-DAC, Carsten Stauer, started his presentation at the recent DAC High Level Meeting, attended by the Heads of OECD countries' development agencies. He further continuee to note, the strong pressures on the rules-based international system; and on the multilateral institutions through which we pursue peace, sustainable growth and development, and universal values.

The thought below are an edited version of his speech at the high-level meeting.

We - the development community - need to work closely together. And as providers of development co-operation, we still need to do it better.

After the highest level of Official Development Assistance (ODA) ever in 2023 – some, but not all, OECD DAC members are now signaling declining levels in the years to come; in Europe primarily due to budgetary constraints, partly resulting from the need to increase defense spending to protect against the growing Russian threat.

The likely decrease of ODA comes at a time, where all low- and middle-income countries prepare for the finishing stretch towards 2030 and the attainment of the SDGs.

With only 17 % of SDGs on track, fewer resources for development cooperation will clearly make that stretch even more challenging.

Mobilising private capital for development

ODA has never been the solution in, and of, itself. Even if all DAC members provided 0.7 percent of GNI in development assistance, ODA would account for less than ten percent of the SDG-financing gap by 2030.

Filling that gap calls for more domestic resource mobilization, more domestic savings and foreign investments, more foreign trade and higher value added, better use of remittances, and more borrowed capital well invested in a growing economy. This will be even more important going forward

In all these areas, ODA can help catalyse action, by mobilizing and leveraging other sources of funding – and by providing technical assistance and capacity building.

This is not a new issue. It was at the top of the Addis Ababa Action Agenda ten years ago and while some progress has been made, it is far from enough. And while instruments and vehicles have been created, they have not been taken to scale, and they are not well coordinated.

Now is the time to double down. The DAC has a lot to offer in support of the mobilisation of different sources of finance for sustainable development.

We can convene relevant stakeholders and professional communities. Provide data-based analysis. Develop new norms and standards. Improve coordination.

In this context, we need to zoom in on how we can motivate stronger donor support for domestic resource mobilization, and for public financial management, including debt management.

We also need to focus more on the institutional and regulatory environments, that are key to increase domestic savings and external investments, and on how to put more emphasis on coherence, standardization and coordination of blended finance – and the increasing range of instruments developed under that heading.

And we will need to reform our development finance institutions and ensure better coordination between them, and, of course, to focus on the continued reform processes in the multilateral development banks, facilitating increased lending to developing countries, leading to further economic growth and job creation.

An "informal" global social contract leaving no one behind.

DAC’s work has always been centered on ODA, including the 0.7 % UN target, being part of a – very informal – global social contract between those the haves and the have nots.

That informal social contract; that expression of global solidarity; was never the only argument for development cooperation. It was always an important foreign policy tool as well; a projection of soft power; a means to increase global security and stability, part of long-term peace and security strategies, focusing on conflict prevention through development, and supported by a commonality of internationally agreed norms and standards, including for gender equality, human rights and democratic governance.

Arguments for development cooperation also reflect its capacity to help expand economic and trade relations with partner countries, promote trade-led growth and integrate more actors into the global marketplace – and to counter climate change and protect nature, to the benefit of both present and future generations.

Within this patchwork of arguments and motives for development cooperation – and driven by the solidarity at its core – there has always been a strong political emphasis on ‘the poorest, most fragile and most vulnerable countries’.

An emphasis on saving lives in humanitarian situations, improving the lives of the 700 million people who live in extreme poverty, and helping the poorest and most fragile countries which have few other sources of external finance but ODA.

There are around fifty countries where ODA accounts for more than 5 % of GNI - primarily countries in Africa and among small island states.

And for the countries in ‘extreme fragility’, two thirds of all external finance come from ODA and the last third from remittances.

For the poorest and most fragile contexts, there is no substitutes for ODA at this point in time, and this will need to be reflected in our choices and priorities as donors.

If we look at results and impact, international development cooperation has been very successful, playing a key role already in the green revolution of the 60’s and 70’, which also started the massive efforts to drive down extreme poverty to now account for less than 10 percent of the global population.

Key social indicators like life expectancy, under five child mortality, maternal mortality, literacy rates, primary school enrolment – have also changed dramatically for the better since 1990, strongly supported by the Millenium Development Goals and their emphasis on health, education and gender equality.

But the job is not yet done. As of now, there will still be hundreds of millions living in extreme poverty by 2030, living at 2.15 US dollar a day, most of them in fragile and conflict-affected countries.

The world has come far in ‘making poverty history’, but partner countries need to finish the job - and they need our support to do so. We cannot turn our backs to the challenge of leaving no one behind.

Development effectiveness: Renewal of a key agenda

Development cooperation has been successful, but we can still do better and improve the quality of our efforts – increasing aid effectiveness.

Twenty years ago, we adopted the Paris Declaration on Aid Effectiveness - and the principles of country ownership, alignment and better coordination.  However, the evidence provided by the OECD Development Co-operation Directorate clearly indicate that we have lost some of the determination of the Paris 2005 ambitions. Development cooperation is increasingly becoming fragmented, spread over too many smaller projects, in too many countries, less aligned to country plans and priorities, less well coordinated, more short-term and less predictable. We need to urgently address this.  Yes indeed

As donors, we work with taxpayer money, and we must always do our utmost  to make ODA work harder and increase value for money – and make sure that our partners are able to fully benefit from our support.

Country ownership is key. One of the main calls from our partners in the ongoing negotiations in New York for the Fourth Financing for Development Conference is more ODA – but also for ODA to be better aligned with country strategies and objectives, and provided through country systems, well-coordinated and with more standardized modalities.

While we argue for a more whole-of-society approach to country ownership, we also need to walk the talk and respond to this call, if we want to pursue impact. exactly

During the HLM discussions, I was delighted to see the determination and support among participants for this as a priority for the DAC’s work going forward. I see this as a recognition that, also in times of unprecedented crisis, we need to pursue stronger and more effective international development cooperation, including though the multilateral system.

Stronger Together

DAC members clearly recognize that we need to work better with others in an ever more elaborated international development architecture. Participating at HLM were a number of other providers of development co-operation, beyond the DAC membership, and it was a pleasure to welcome perspectives in discussions.

As DAC members, we want to engage closely with other development cooperation providers, with international organizations, with foundations, with civil society and with the private sector. In short: With all those who play a role in the development architecture, supporting partner countries.

We have a lot to bring to the table – and so have others. We seek to strengthen our regional dialogues with Arab providers, with Latin American providers, with other emerging providers, for example in South East Asia, and also our dialogue with CSOs – all in the interest of co-creating more synergies and ultimately more sustainable development.

We want to be open and inclusive, and to exchange with others, including partners in Triangular and South/South cooperation, in pragmatic and practical ways, that will benefit all of us.

There is a great potential in that. And some hope for the future.

Final reflections

But let me end where I started: The world is not in a good shape right now. The current and global situation remain rather grim. Ukraine needs our support. The Russian security threats are real.

But these challenges right in front of us – fundamental and imminent as they are – do not make other challenges go away. They do not make climate change disappear, nor conflict, nor instability, nor global poverty or inequality.

The challenges to the global community, including to DAC members, are not only short-term and regional in scope. They are also long term and global.

Climate change. Armed conflicts. New pandemics. Irregular mass migration. Terrorism. Autocracy. Attacks on democratic values and human rights.

These global challenges must be addressed simultaneously, as part of the same policy framework, and with the same determination, stressing the interlinkages between security and development.

We must think beyond today and tomorrow – and be prepared also for the day after tomorrow.

We must invest in climate, in pandemic preparedness, in conflict resolution and in poverty alleviation – and we need to do it now. Not postpone it.

It is important for me to underscore that reducing current levels of ODA is not the right step to take. If we want to keep the planet together, we must not only think - but act - globally. We must think and act long-term, and we must think and act holistically.

It is a huge ask from all of us, to all of us.

But it is the only way forward.