The DAC & Official Development Assistance (ODA)

1. The DAC &Official Development Assistance (ODA) Kimberly Smith, Administrator Development Cooperation Directorate OECD 28 May 2008 Moscow, Russia

2. What is the DAC? • Development Assistance Committee (DAC) of the OECD. • 22 Bilateral Donors, plus European Commission (EC). • Objective: improve development assistance through coordination and collaboration with major stakeholders. • Collect and synthesize data on aid and foreign assistance and deliver the data to the public.

3. DAC Statistics • Measure resources for development (not just aid) including; • Official Development Assistance (ODA) • Other Official Flows (OOF) • Private Flows (NGOs) • Net Private Grants • DAC statistics are the only reliable source of both total and comparative data on aid performance

4. DAC Reporters • Data is collected data from: • All DAC Member Countries • Non DAC Donors (voluntary) • Multilateral Agencies (voluntary) • Limited data on aid only (ODA) from non-DAC members. • In the future, we hope to improve reporting from non-DACs, multilaterals and foundations.

5. Current DAC Members

6. Collection Methods – DAC Members • DAC questionnaire – aggregate level data • Creditor Reporting System (CRS) – activity level reports • CRS++ Method • Both systems based on instructions agreed by members detailed in Statistical Reporting Directives • Reports supplied by members and other reporters

7. DAC Questionnaire The full DAC Questionnaire consists of the following 7 Tables: • 1 – Disbursements and Commitments of Official and Private Flows • 2a – Destination of Official Development Assistance – Disbursements • 2b – Destination of Other Official Flows – Disbursements • 3a – Destination of Official Development Assistance – Commitments • 4 – Destination of Private Direct Investment and Other Private Capital • 5 - Official Bilateral Commitments (or Gross Disb.) by Sector of Destination • 7b – Tying Status of Bilateral Official Development Assistance – Commitments

8. Creditor Reporting System CRS Form 1 reports on annual obligations, while CRS Form 2 reports on gross disbursements. Over 30+ variables per form including; • Recipient Countries (possibility of grouping by continent or by income group) • Donors (grouped into bilateral and multilateral) • Sectors and Sub-Sectors Codes • Activity/Project Titles and Descriptions • Flows: Grants, Loans, ODA, OOF • Channels of Delivery • Policy Markers (gender equality, environment, PD/GG) • RIO Markers (biodiversity, climate change, desertification)

9. Data Collection Timeline • Advanced Questionnaire (AQ) • Data solicitation – Jan/Feb each Year • Reporting Deadline – March 15th • DAC Press Release - April (preliminary figures) • Full DAC Questionnaire • Data solicitation – Jan/Feb each Year • Reporting Deadline – July 15th • DAC Press Release - December

10. Statistics on Non DAC Members • Abbreviated reporting form. • Records disbursements (and commitments) of aid by recipient. • Limited presentation of data in DCR; but supplemented by textual information: draft supplied by donor. • Reporting is voluntary. Current reporters include all non-DAC OECD members except Mexico, Arab donors, Israel, Thailand and Baltic states.

11. Current Non-DAC Reporters Bolded countries are the non-DAC OECD Members * Only textual information reported, no data

12. Collection Method – Non DAC Members Abbreviated DAC Table 1

13. Collection Method – Non DAC Cont. Abbreviated DAC Table 2a/3a

14. Statistical Outputs • Annual Development Co-operation Report (DCR) • Geographical Distribution of Financial Flows • Statistical analysis in Peer Reviews of DAC member’s aid programme • CD-ROM and on-line access • External uses, including World Bank publications, Millennium Development Goals and other UN documents, databases and publications International Development Statistics Online

15. What is ODA? • The official measure of foreign aid. • Only internationally comparable measure of donor assistance. • Reported by donor countries to the OECD/DAC on an annual basis.

16. ODA Targets & Performance • 1970 UN Resolution urged advanced countries to provide 0.7% of their national income as ODA. • The average ODA/GNI ratio for DAC countries was only 0.31% in 2006. • Only five countries achieve the 0.7% target, but several others have plans to do so. • The EU has set ambitious ODA targets of GNI of 0.17% of GNI by 2010 and 0.33% by 2015 for the 12 new members.

17. Explanation of ODA ODA are official flows to or for developing countries that are provided: • for developmental purposes • by the official sector (Government, public funds) • as grants or • as “soft loans” (ODA loans are at terms significantly softer than commercial transactions, and bear a “grant element” of at least 25% compared with a loan at 10%.)

18. Official Definition of ODA “Those flows to countries and territories on DAC List of ODA Recipients and to multilateral institutions which are; I. Provided by official agencies, including state and local government, or by their executives agencies; and II. Each transaction of which; a) Is administered with the promotion of the economic development and welfare of developing countries as its main objective; and b) is concessional in character and conveys a grant element of at least 25 per cent (calculated at a rate of 10 per cent).”

19. ODA Eligible Countries • Specifically defined set of countries • Includes all low and middle income countries • Exceptions: G8 members, EU Members and countries with a firm date of accession to the EU • Reviewed every three years by the DAC • Countries may graduate from the list, or change income groups

20. ODA Eligible International Organizations Agencies to which core contributions are reported as ODA in whole or in part include: • Many United Nations & UN Administered Funds • European Commission • International Monetary Fund (concessional windows only) • World Bank (IDA) • World Trade Organization (technical assistance activities) • Regional Development Banks • Other Multilaterals

21. Definition of ODA Flows • Commitment: Firm undertaking to provide specified funds • Disbursement: Actual payment or expenditure of funds • Grant: Non-repayable • Loan: Initial Loan plus Repayments. Only report repayments of loan principal, not interest • Performance assessed on net disbursements • Net disbursements= disbursements of grants+disbursements of loans-repayments of loan principal

22. Important Notes • ODA is a measure of donors’ expenditures on aid. • It is NOT a measurement of the amount of value received by a recipient country. • ODA is a subset of foreign assistance.

23. Examples of ODA Activities • Development Projects – schools, clinics, water supply systems etc… • Emergency Aid for Natural or Man-made Disasters • Contributions to Multilateral Development Agencies • Food Aid, Emergency and Developmental • Aid to Refugees and IDPs • Debt Relief outlined by Paris Club Agreement • Officially Financed Scholarships for students in developing countries

24. Non Eligible ODA Activities • Military or Security Assistance • Cultural programmes for the donor’s nationals resident in other countries • Aid from NGOs financed from private sources • Foreign Direct Investment • Official export credits or other commercially motivated transactions • Guarantees on private export credits or investments • Reduced tariffs or other concessions on imports from developing countries

25. Importance of Data • Domestic and Foreign Policy/Diplomacy • Fosters Accountability • Improves Transparency • Provides a Platform for Dialogue • Recipient Countries • Other Donors • Alignment with International Standard • Drives Future Policy Decisions

26. Establishing a Database • Collection of facts, both financial and descriptive. • Living entity – flexible, updatable, ever-expanding. • Requires a lot of up-front work. • ASSET. Tool for answering questions and provides the basis for in-dept analysis, and future policy implications.

27. Data Collection • Who will collect the data? • What is the current mandate for data collection? • Is this type of reporting mandated by law? • Agreement between government and international organization? • How is the message of importance conveyed?

28. Further Information & Resources • General User Guide for DAC Statistics: www.oecd.org/dac/stats/dac/guide • Short Guide to ODA Eligibility: “Is it ODA”:www.oecd.org/dataoecd/21/21/34086975.pdf • List of ODA-eligible International Organisations: http://www.oecd.org/dataoecd/36/16/31724727.pdf • DAC List of ODA Recipients: www.oecd.org/dac/stats/daclist • DAC Statistical Database:www.oecd.org/dac/stats/idsonline • DAC Statistical Tables:www.oecd.org/dac/stats/dac/reftables

29. Contact Information Kimberly Smith Kimberly.Smith@oecd.org