Summary of the latest DEVE Committee discussion on the modernisation of ODA

On Tuesday 21 January, the Development Committee of the European Parliament (DEVE) discussed the Study on the Modernization of ODA in the framework of the post-MDG agenda, its challenges and opportunities written by Sudwind Institute and CEPS. The Study, commissioned by the DEVE Committee, seeks to contribute to the current debates on the ODA definition taking place in the OECD DAC.
2015 will mark an important milestone in international development cooperation. It is the deadline for both the achievement of the current Millennium Development Goals (MDGs) as well as the European Union’s (EU) formal undertaking to collectively commit 0.7% of Gross National Income (GNI) to Official Development Assistance (ODA). At the same time, a new development framework will be adopted in 2015, which will set the international community’s development agenda until 2030.
The Study stresses that the current context represents an opportunity to assess the strategic role of ODA and to adapt it to the changing global landscape of development finance. In addition, the study suggests that the European Parliament, in collaboration with the Council and the Commission, should develop a common line to support efforts for a coherent framework to financing poverty eradication and sustainable development. Moreover, the study recommends that the EU accentuates the transferable nature of ODA and supports the revision of the ODA concept and reporting in order to avoid the inflation of ODA, and allows for transparent accountability of all instrument and sources of Financing for Development focusing in the public contributions. Therefore, as an initial step the EU should revise the Agenda for Change (AfC) and the Consensus in order to develop a strong vision and to report its own contributions to development and climate financing in a transparent manner.
The discussion chaired by Ms Iva Zanicchi (MEP, vice-chair of DEVE) started with the presentation of the main outcomes of the Study followed by reaction from the European Commission- represented by Mr Martín Prada (Director General, DG DEVCO, Directorate A – EU Development Policy)- and CONCORD AidWatch- represented by Jeroen Kwakkenbos.
The EC stressed the importance of recognising that we are moving away from the traditional North-South approach based on ODA, to a broader one that seeks sustainable development and should also focus on broader flows, especially innovative financial instruments. The EC highlighted that one of its priorities is to boost synergies of all development flows and recognised the essentiality of total donor effort on development. Finally, they agreed with the authors of the study that transparency should play the key role in the future measurement framework.
CONCORD AidWatch stressed that we are not necessarily against incorporating innovative finance instruments to the new development measurement framework but they need to have a clear added value to development and not just be casually linked to development. Additionally, the instruments have to be backed by a transparent and accurate tracking methodology. Furthermore, CONCORD AidWatch highlighted the importance of Domestic Resource Mobilisation for developing countries which needs to be understood not only as promotion of fair tax systems but also as the need to mobilize SMEs and national firms; on the need to not substitute ODA –which still is crucial for development countries as highlighted at the CONCORD AidWatch 2013 Report – by the covering of broader development flows, and the need of assessing broader flows from an additionaly and pro-development goals perspective on a credible, transparent, and easy to measure manner; On the essentiality of CSOs in ensuring accountability and ownership; On the importance of updating concessionality requirements in order to make them create proper incentives; On the need of harmonising the way of reporting aid to avoid inflated aid figures; And on the of developing an international institutions to monitor development flows since OECD DAC has the capacity to do it but lacks legitimacy.
Concord AidWatch especially welcomed the interest of the European Parliament in the ODA modernisation process as the EP has a key role in monitoring the European Commission positions and holding them to account in OECD DAC level negotiations.
The presentations were followed by an interesting debate between DEVE Members. Mr Cortes Lastra pointed out that we are in a historical moment for development cooperation; the increasing importance of private sector role in development is driving towards a paradigm shift. Mr Cortes Lastra agreed with CONCORD AidWatch position and stressed that we should not be against innovative financial instrument, but we should be cautious with them and not forget the immense importance of transparency and additionality. He also demanded that the DEVE Committee should be more involved and regularly informed on the EC’s work on ODA reform issues. Finally, Mr Goerens highlighted the importance of reaching harmonised position together with Member Stats for the OECD DAC debates.

See the video of the session here.