Financing for sustainable development

Modernisation of the DAC statistical system

 

 

 

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The modernisation of the DAC statistical system contributes to broader global efforts to monitor international resource mobilisation for implementing the post-2015/2030 agenda. The DAC has embarked on a process of modernising its system for measuring official‌ development assistance (ODA). The way in which ODA is measured can incentivise development spending and improve its targeting. 

 

At the 2014 HLM, DAC members approved clarifications in the reporting of concessional loans to promote lending on highly concessional terms to low-income countries – in particular the least developed among them. Members had also committed to further improving the system for measuring ODA. They also agreed to capture in OECD DAC statistics, the wide array of support provided beyond concessional finance through a measure of Total Official Support for Sustainable Development, TOSSD. Such a measure would encourage visibility and understanding about development financing options and impacts, enhance transparency and foster accountability beyond ODA, and facilitate information-sharing with providers of development co-operation beyond the DAC. 

 

At the February 2016 HLM, DAC members followed up on these decisions, as outlined in the 2016 HLM Communiqué, by agreeing to:

  • definitions that clarify the boundaries of what can be counted as ODA in peace and security efforts,
  • a series of principles whose intention is to offer the right incentives (and to remove disincentives) for the public sector to use private sector instruments (loans, guarantees, mezzanine finance and equity) to support activities in developing countries 
  • to further develop, with the participation of representative external stakeholders, a proposal for a comprehensive TOSSD measurement and monitoring mechanism for endorsement at the DAC Senior Level Meeting (SLM) in October 2016.

DAC members also agreed to:

  • identify best practice and develop guidance to support the use of public funds to catalyse private capital (an approach known as "blended finance"),
  • improve reporting on ODA for refugee costs within the provider country, making it more comparable across countries and more consistent in coverage and
  • adapt their policies to address the root causes of conflicts, forced displacement and refugee flows.
 

Modernising the measurement of ODA

‌The DAC statistical system is being modernised to better reflect the new global development landscape. The new ODA measure is part of this modernisation and will help to ensure that the right incentive frameworks, and financing and investment tools, are in place to help all countries achieve a successful financing for development strategy and realise the ambitious and transformative post-2015 Sustainable Development Goals (SDGs).

 

The modernisation of the ODA measure comprises 3 key elements:

In addition, the streamlining of in-donor costs will be discussed in the October SLM. An important part of this discussion also refers to refugee costs.

Total official support for sustainable development (TOSSD) 

TOSSD aims to complement ODA by increasing transparency and monitoring important new trends that are shaping the international development finance landscape, including:

i) the leveraging/catalytic effect of ODA,

ii) the use of blended finance packages, and

iii) the use of innovative risk mitigation instruments in development co-operation.

TOSSD would incentivise broader external finance for development as a complement to developing countries’ own domestic resources.

More about Total official support for sustainable development (TOSSD)

Cross-cutting issues

 

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