Chapter II.C International development cooperation 1. Introduction ration in 2000. However, at 0.3 per cent of donor The 2030 Agenda for Sustainable Development will gross national income (GNI), it falls short of the place significant demands on public budgets and commitment by many donors to achieve the target capacities, which require scaled up and more effec- of 0.7 per cent of ODA/GNI. In the Addis Agenda, tive international support, including both conces- developed countries reaffirm their respective ODA sional and non-concessional financing. To mobilize commitments, and urge all those that have not met this support, the Addis Agenda contains a range of their targets to make additional concrete efforts. commitments and actions on official development ODA providers further commit to reverse the declin- assistance (ODA). It also contains commitments ing trend of ODA to the least developed countries and actions on South-South cooperation, lending by (LDCs) and other countries most in need, many of multilateral development banks (MDBs) and other whom will continue to rely on concessional finance international development cooperation efforts. to meet sustainable development needs. Yet, in 2014, ODA reached an all time high in 2014, at ODA to LDCs decreased by 9.3 per cent in real US$137.2 billion, and has increased by nearly 70 per terms compared to 2013, and aid to other priority cent since the adoption of the Millennium Decla- groups fell as well (see Figure 4). Given increasing Figure 2C Net ODA received by priority groups of countries from Development Assistance Committee donors, 2000 – 2014 (Billions of of 2013 dollars) 40 Africa 35 LDCs 30 LLDCs SIDS 25 20 15 10 5 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Source: OECD/DAC data. 70 Addis Ababa Action Agenda — Monitoring commitments and actions demands on ODA, for example from in-country ages them to support country-driven priorities and refugee costs, there is a risk that ODA to LDCs will strategies. continue to fall. The Addis Agenda also encourages develop- 2. Official development assistance ing countries to strengthen South-South coopera- The Addis Agenda reaffirms ODA commitments. It tion. South-South cooperation has been increas- further commits to prioritizing the allocation of con- ing in recent years according to various estimates, cessional international public finance to those with along with growing South-South trade, investment the greatest needs and least ability to mobilize other and regional integration. Different approaches and resources. The Addis Agenda goes beyond earlier modalities of South-South development cooperation international agreements to include a commitment render reporting on broad global trends challeng- to reverse the recent decline in ODA to LDCs, to ing, but the availability of information about South- encourage ODA of 0.2 per cent of GNI to LDCs, South cooperation is increasing and efforts are under and to recognize those countries that allocate at least way, including within the United Nations System, to 50 per cent of ODA to LDCs. It also highlights the further improve estimates. importance of ODA for the poorest and most vul- Beyond increasing the magnitude of conces- nerable countries. Specifically, the Addis Agenda: sional finance, all providers also commit to increas- Reaffirms existing ODA commitments (0.7 ing the quality, impact and effectiveness of their per cent of GNI to developing countries and development cooperation, including the adherence 0. 15-0.20 per cent of GNI to LDCs) (51, to agreed development cooperation effectiveness MoI 17. 2) principles. They further commit to take into account Commits to reverse decline in ODA to the the three dimensions of sustainable development in LDCs (52); Encourages ODA of 0.2 per cent of all international public finance, and to share knowl- GNI to LDCs (51); is encouraged by coun- edge about their respective efforts. tries that allocate at least 50 per cent of ODA In recognition of their significant potential to to LDCs (51) finance sustainable development, MDBs are encour- Commits to open, inclusive and transparent aged to adapt and be fully responsive to the sus- discussions on the modernization of ODA tainable development agenda. In response, MDBs measurement (55) announced their intention to extend financing for sustainable development at the sidelines of the Third The data to track these commitments can be International Conference on Financing for Develop- drawn from Organization for Economic Coopera- ment, held in Addis Ababa, by making better use of tion and Development (OECD) ODA data, which their balance sheets, among other measures. New covers bilateral flows from the 29 OECD Develop- development finance institutions, recently set up ment Assistance Committee (DAC) members, disag- and welcomed in the Addis Agenda, will provide an gregated by recipient and donor countries on both additional source of international public finance for a commitments and disbursements basis. Progress sustainable development investments, in particular made by members to these commitments is tracked in sustainable infrastructure. and presented on the OECD website. This data will Additional sources of international public be used for sustainable development goal (SDG) finance — including climate finance, humanitarian indicator 17. 2. 1 (net official development assistance, finance, and innovative sources of finance — further total and to least developed countries, as a percentage add to the international public financing landscape of OECD/Development Assistance Committee donors’ for sustainable development. The Addis Agenda gross national income), which will also support the emphasizes both the importance of meeting all exist- work of the Inter-agency Task Force. ing commitments and of achieving greater coherence Reporting on ODA commitments by the Mil- in all development financing. The Addis Agenda also lennium Development Goals (MDG) Gap Task acknowledges the role played by multi-stakeholder Force aggregated this data for LDCs and other partnerships in financing certain sectors and encour- groups of countries most in need and deserving International development cooperation 71 special attention, and this Task Force will continue tion as an increasingly important element thereof. this practice. In particular, it will follow trends in The Addis Agenda welcomes the increased contri- ODA to LDCs to assess whether the decline in ODA bution of South-South cooperation and specifically: to LDCs is reversed. The Task Force, building on Encourages developing countries to voluntarily analysis by the OECD, will also monitor additional step up their efforts to strengthen South-South concrete measures by DAC members to target sup- cooperation (57) port to countries most in need, as foreseen by the Commits to strengthening triangular coop- December 2014 DAC High-Level Meeting (HLM) eration (57) and reaffirmed by the February 2016 HLM. This information will be regularly updated on the HLM South-South cooperation is also an important follow-up site and will be reported by the Task Force. element of SDG 17 on the global partnership and In paragraph 50, the Addis Agenda highlights means of implementation (MoI), but commitments that international public finance is important in par- in SDG 17 are focused specifically on science, ticular in the poorest and most vulnerable countries. technology and innovation (17.6) and capacity As such, the Task Force should also report ODA building (17.9). Two indicators to monitor these flows to other groups of countries, such as land- MoI targets can support the work of the Task Force: locked developing countries (LLDCs), small island 17.6.1 (number of science and/or technology cooperation developing States and African countries (SIDS), agreements and programmes between countries, by type alongside LDCs. In addition, the OECD monitors of cooperation) and 17.9.1 (dollar value of financial and country programmable aid (CPA) from 46 provid- technical assistance (including through North-South, ers of development assistance through the Survey on South-South and triangular cooperation) committed Donors’ Forward Spending Plans. CPA is considered to developing countries). However, calculating dollar to be a good a proxy for aid recorded at the country values is subject to methodological challenges, in level and effectively received by recipient countries part due to the way technical assistance is carried out from different country groups. in the context of South-South cooperation. Southern With regard to the modernization of ODA, 1 experts are usually dispatched by their governments OECD DAC members agreed at the December 2014 to provide technical assistance and their service DAC HLM to introduce a grant equivalent system is rarely procured in an open market. Moreover, for the reporting of ODA loans to more accurately reporting currently is only partial. Nonetheless, compare the effort involved in providing ODA loans these indicators could, in future years, serve to with that of providing grants. Reporting and pub- capture commitments contained in this subsection. lishing of the current headline figure of ODA loans The Task Force will also go further to assess on a cash-flow basis will continue alongside the new trends in South-South cooperation more broadly. grant equivalent based reporting system for trans- Southern partners embrace different approaches parency purposes, and the grant-equivalent system and modalities in South-South cooperation and do will become the standard of reporting of data from not document their cooperation in a comparable way, 2018. Consultation and outreach on ODA moderni- which will render reporting on broad global trends zation included discussions with a wide range of rel- challenging. However, the availability of informa- evant stakeholders, including partner countries and tion about South-South cooperation has improved providers beyond the DAC.