Mr. Gass opened the panel by stating that the discussion on the future of Official Development Assistance (ODA) is an important one, for “ODA will be critical, but not sufficient” for the implementation of the SDGs. He also recognized that ODA is outshined by other sources of financing for development. However, he added that as long as the total funding channeled to developing countries meets the demand, it is not necessarily a change for the worse.
Mr. Kwakkenbos stated that 2013 saw a huge increase in ODA, but the increase came in form of loans but not gratuitous grants. Further, while ODA to middle-income countries increased, ODA to the least developed countries (LLDCs) suffered a setback in the last decade. Mr. Guillaumont suggested that one way to redress to lack of attention to LLDCs is to provide more loans to the LLDCs, as it is often difficult for them to access commercial lending market. Dr. Chaturvedi responded to the calls for redirecting loans from middle-income country to the LLDCs, saying that middle-income countries like India will still need ODA in forms of loans in support of infrastructural projects.
Mr. Solheim brought to the panel two messages. The first is the recognition of the new sources of financing, including private funding and South-South cooperation funding. The second contains some proposals on the ways in which the future definition of the ODA may be redefined. He proposed that future government encouragement of private investment into developing countries may be counted towards ODA. Further, there should be consensus on whether loans should be considered as part of the ODA. The current calculus only consider the difference between the commercial and concessional interest rate as part of the ODA, which means contribution from donors lending to countries with high possibility of default are not taken account into the ODA.
Meeting Title: New measures for development financing in a Post-2015 world
Speakers: His Excellency Mr. Thomas Gass, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs; Mr. Erik Solehim, Chair of the Developmental Assistance Committee of the Organization for Economic Cooepration and Development; Dr. Sachin Chaturvedi, Research and Information system for Developing Countries; Mr. Jeroen Kwakkenbos, Policy and Advocacy Manager, Eurodad; Mr. Patrick Guillaumont, President, Fondation pour les etudes et recherches sur le developpement international (FERDI)
Location: Conference Room 5, North Lawn Building, United Nations Headquarters
Date: 10 July 2014
Written By WIT Representative: Harrison Chung
Edited By WIT Representative: Marli Kasdan