Options for modernising the Official Development Assistance Measure

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This presentation introduced Options for modernising the Official Development Assistance Measure. The presentation was given by Ms. Julia Benn, Manager, Statistical Policy, Analysis and Engagement Unit of the OECD's Development Co-operation Directorate on the 23rd of January, 2014, to the Expert Reference Group on Development Finance.

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Options for modernising the Official Development Assistance Measure

  1. 1. OPTIONS FOR MODERNISING THE ODA MEASURE Expert Reference Group on Development Finance, 23-24 January 2014 Julia Benn Manager, Statistical Policy, Analysis and Engagement Unit Development Co-operation Directorate
  2. 2. Outline of the presentation 1 Option 1: Focused ODA 2 Option 2: New ODA 3 Option 3: Updated ODA N.B. ! List of ODA Recipients  session 2 !! Concessionality  session 3 !!! Total official support for development  session 4
  3. 3. Option 1: Focused ODA  Excludes from reporting in-donor expenditures that do not result in, or relate to, flows to developing countries  Reflects budgetary expenditures incurred by the government in development co-operation  Include in the broader measure (TOSD) types of support removed from ODA, face value of non-grant instruments (and more generally outflows from DFIs)  Capture entire cash flow in data on developing countries’ resource receipts
  4. 4. Option 2: New ODA  Reflects budgetary effort of development co- operation  For non-grant instruments, only includes the grant equivalent (instead of the face value) of the flow • Apply risk-adjusted discount rate  implications on debt relief  Tightens eligibility of in-donor costs  Coverage of the broader measure and developing countries’ resource receipts similar to option 1
  5. 5. Option 3: Updated ODA  Maintains ODA measurement on a cash basis, but modernising it on a number of items: – Revises concessionality assessment to reflect the prevailing market rate conditions (grant element threshold for ODA eligibility could also be revised) – Gross disbursements (e.g. equity acquisitions counted at face value)  Guarantees not reflected in ODA but amounts mobilised included in the broader measure (if defined as « development finance resulting from official efforts »)  Mismatch with ODA/GNI target
  6. 6. Scenarios (to be further elaborated)  Scenario 1 (focused ODA) = decline of 10%  Scenario 2 (new ODA) = slight increase (2%)  Scenario 3 (updated ODA) = increase of 9%  Complete assessment of the impact of each option would require a simulation over a number of years and additional data
  7. 7. Which option(s) would be fit for purpose?  Recalling that cash flow would be captured in TOSD and receipts, which option would best:  measure provider effort (and « clean up » the most controversial ODA items)?  ensure fair comparisons between providers?  incentivise market-like financing where appropriate (and ensure that ODA is directed to where it is most needed )?  Which option would be credible from the viewpoint of:  Partner countries?  South-south providers?

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