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Development Co-operation Report 2014

Mobilising Resources for Sustainable Development

image of Development Co-operation Report 2014

The Development Co-operation Report (DCR) is a yearly report by the Chair of the Development Assistance Committee (DAC) that addresses important challenges for the international development community and provides practical guidance and recommendations on how to tackle them. Moreover, it reports the profiles and performance of DAC development co-operation providers and presents DAC statistics on official development assistance (ODA) and private resource flows.

The Development Co-operation Report 2014: Mobilising resources for sustainable development is the second in a trilogy (2013-15) focusing on “Global Development Co-operation Post-2015: Managing Interdependence”. The report provides an overview of the sources of finance available to developing countries and proposes recommendations on how to mobilise further resources. It also explores how to mobilise resources to finance the provision of global public goods: for example, to combat climate change, promote peace and security, and create a fair and equal trading system.

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Keeping ODA focused in a shifting world

As the international community works towards a new global sustainable development framework to replace the Millennium Development Goals, one of the main questions is how it will be financed. The relative importance of official development assistance (ODA) is declining for many developing countries – especially middle-income ones – in comparison to other sources of external finance (low-interest loans, direct foreign investment, official export credits, private grants, remittances, etc.). This chapter argues that while 148 developing countries are eligible to receive ODA, they are not all the same in terms of their needs and relative access to ODA and other sources of external finance. By categorising these countries into five groups according to their degree of fragility and income levels, the authors find that ODA growth is slowing in those countries which need it most – fragile states and least developed countries. They call for more to be done to target ODA where it is needed most. The United Nation’s target of allocating 0.15-0.20% of gross national income as ODA to least developed countries needs to be more closely monitored. In middle-income countries, ODA can be better used for eliminating stubborn pockets of poverty and inequality and leveraging other types of development finance, while being careful that the increasing use of loans does not create unsustainable debt for these countries.This chapter also includes two opinion pieces by: 1) Gyan Chandra Acharya, United Nations Under-Secretary-General, on how half of all ODA should go to the least developed countries; and 2) Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, on the structural gap approach as a new model for co-operation with middle-income countries.

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