copy the linklink copied!3. Austria’s financing for development

This chapter looks at Austria’s official development assistance (ODA) figures, including the overall level and components of aid, the level of bilateral and multilateral aid, and geographic and sector allocations of bilateral aid. In line with commitments in the Addis Ababa Action Agenda and the emerging concept of total official support for sustainable development, it also looks at Austria’s efforts to mobilise finance for sustainable development other than ODA.

It begins by reviewing Austria’s ODA volumes and its efforts to meet domestic and international ODA targets. It then considers the extent to which Austria allocates bilateral aid according to its statement of intent and international commitments, as well as the effectiveness of Austria’s use of multilateral aid channels. Finally, the chapter reviews financing for sustainable development, looking at how Austria promotes and catalyses development finance other than ODA.

    
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In Brief

Austria’s official development assistance (ODA) remains well below its commitment to spend 0.7% of gross national income (GNI) on development co-operation. Since the last review in 2015, no plan has been developed to meet this commitment and Austria continues to tie a significant proportion of its bilateral ODA. The quality of Austria’s statistical reporting has improved, however.

Most of Austria’s bilateral ODA is not programmed at the country or regional level and falls outside the scope of the three-year programme. The small share of ODA delivered as Austrian Development Cooperation aligns well with Austria’s geographic priorities. However, greater geographic and thematic focus would increase impact in Austria’s priority areas. ADC has strengthened efforts to integrate cross-cutting priorities into programming, especially gender.

Austria prioritises working through the multilateral system, and core and assessed contributions to multilateral organisations comprise a significant portion of its budget. A few organisations – the European Union institutions and World Bank – together receive almost half of Austria’s total ODA. Given that Austria is a relatively small donor, prioritising multilateral channels is a rational approach. Austria also channels additional bilateral funding through multilateral organisations in line with its priorities.

Austria’s approach to private sector development has improved, with a stronger focus on supporting an enabling environment for private sector growth, and efforts to ensure a greater development perspective across its initiatives. Austria could step up its efforts to support domestic resource mobilisation and could do more to reduce the high cost of remittances.

copy the linklink copied!Overall ODA volume

Austria still lacks a plan to meet its ODA-GNI commitment

Austria maintains its commitment to spend 0.7% of gross national income (GNI) on official development assistance;1 however, the volume and share of its ODA dropped from USD 1.38 billion (0.35% of GNI) in 2015 to USD 1.10 billion (0.26%) in 2018 on a net flows basis (2017 constant prices).2 While in-country refugee costs contributed to higher reported spending in 2015-16, and therefore account for much of this drop,3 Austria’s ODA as a share of GNI is now at its lowest level since 2004 (Figure 3.1). Aid to least developed countries (LDCs) amounted to 23.4% of total ODA and 0.07% of national income in 2017 (Table B.7, Annex B), well below the United Nations target of providing between 0.15% and 0.20% of national income to LDCs, and also below the European Union (0.12%) and DAC (0.09%) averages.4

The last peer review in 2015 commended Austria’s commitment to develop a binding roadmap to meet its 0.7% target (OECD, 2015[1]); however no plan has been established. While the current Three-Year Programme for Austrian Development Policy reiterates Austria’s commitment, it fails to provide interim targets or a clear plan to achieve this commitment.5 The inclusion of debt relief (e.g. for Sudan) in forecasts published in the three-year programme has also tended to inflate figures.6 Developing a longer-term plan (e.g. up to 2030) with interim targets and clear directives that encompass all ministries’ ODA contributions would help Austria to increase its ODA. Increasing the volume of funding that is country programmable and targets priority countries and territories would help make Austrian ODA more effective and efficient.

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Figure 3.1. The volume and composition of Austrian ODA fluctuate
Figure 3.1. The volume and composition of Austrian ODA fluctuate

Note: “Bilateral” includes all other types of bilateral ODA not disaggregated in the figure. “Bilateral” for 2018 is not disaggregated by imputed student costs, debt relief or refugee costs.*: preliminary

Source: Based on data from (OECD, 2019[2]), Creditor Reporting System, https://stats.oecd.org/Index.aspx?DataSetCode=crs1

 StatLink https://doi.org/10.1787/888934084475

The quality of statistical reporting has improved

The Austrian Development Agency (ADA) is responsible for collecting the ODA data of all contributing ministries, agencies and actors. This is reported to the OECD by the Federal Ministry of Europe, Integration and Foreign Affairs (Ministry of Foreign Affairs, MFA). While the timeliness and completeness of Austria’s reporting have returned to their previously strong levels, the information provided could be improved by avoiding repetition between long and short descriptions – i.e. only using long descriptions to provide additional project information (OECD, 2019[3]).

Austria performs very well in providing retrospective data to the OECD, and performs well in terms of its forward-spending survey (OECD, 2019[4]). However, it could still improve the transparency of ODA-funded activities (Chapter 5). This is an important part of Austria’s commitment, frequently cited in policy documents, to the Busan Principles for effective development co-operation (Fourth High-level Forum on Aid Effectiveness, 2011[5]).

Austria continues to tie a significant portion of its aid

Successive peer reviews have recommended that Austria address the high share of its ODA that is tied (OECD, 2004[6]) (OECD, 2009[7]) (OECD, 2015[1]) (OECD, 2017[8]). Overall, the share of Austria’s bilateral ODA that is untied increased from 36.4% in 2015 to 50.1% in 2017 (OECD, 2018[9]), yet this is still significantly below the DAC average (82.1%). Austria performs especially poorly on the DAC Recommendation on Untying Official Development Assistance [OECD/LEGAL/5015], which covers ODA to LDCs and other heavily indebted poor countries (HIPCs) (OECD, 2014[10]). Only 26.9% of Austria’s ODA covered by the recommendation was untied in 2016 (OECD, 2018[9]), increasing to 62.4% in 2017 yet still well below the DAC country average of 90.5% (OECD, 2019[2]). This was due to the smaller amounts of tied soft loan finance provided by Austria in 2017.

In 2017, USD 226 million of Austria’s total USD 452 million in bilateral ODA (excluding administrative and in-donor refugee costs) was tied, with imputed student costs accounting for around half of this. Almost all ODA reported as tied and covered by the DAC Recommendation on Untying ODA was provided by the Ministry of Finance in the form of interest subsidies, with much smaller amounts provided as grants by the Länder and ADA.7 These interest subsidies – USD 60.3 million over 2016-17 – are part of Austria’s export promotion system, administered by the export credit agency under the Oesterreichische Kontrollbank (OeKB). Also referred to as mixed credits, they have the effect of softening the terms of loans to LDCs and HIPCs8 and aim to assist Austrian businesses to enter markets.

Tying aid in this way risks preventing recipient countries and territories from receiving good value for money, a concern raised during the review team’s visit to Kosovo (Annex C).9 If Austria continues to provide interest subsidies and report them as part of its ODA, it will need to increase significantly the other elements of its ODA that have development as the primary objective, such as country programmable aid, in order to address its weak performance under the recommendation.10

copy the linklink copied!Bilateral ODA allocations

Most ODA is not programmed with partner countries

Both the volume and composition of Austria’s bilateral ODA have tended to fluctuate, reflecting the high share of bilateral assistance not managed by Austrian Development Cooperation. Only a small share of Austria’s total reported bilateral ODA is delivered in priority countries and territories (Figure 3.2).

In 2018, USD 487 million (41% of Austria’s net ODA disbursements) was provided as bilateral assistance, down from USD 600 million (48%) in 2017 (preliminary figure in constant prices, 2017). While Austria has made some progress in increasing the share of country programmable aid – reaching 13% of bilateral ODA, or USD 74.8 million in 2017 – compared to USD 69.5 million (8.5%) in 2015 (constant prices, 2017), this is still significantly below the DAC country average of 48% and below Austria’s levels prior to the increase in refugee costs (OECD, 2019[4]) (OECD, 2019[2]).11 Imputed student costs and in-country refugee costs comprised almost half of total bilateral ODA in 2017 (45.3%), despite refugee costs falling 75% between 2016 and 2017. Debt relief, previously a large share of Austria’s ODA, has significantly declined in recent years (Figure 3.1).12

While the Austrian Development Agency and Ministry of Foreign Affairs are responsible for most programmable ODA, they together contributed only 27% of total bilateral commitments in 2017, with another eight institutions contributing to bilateral ODA. The Ministry of Science, Research and Economy was responsible for 18.8% of commitments (scholarships and imputed student costs), the Ministry of Interior for 14.9% (largely in-donor refugee costs), and the Ministry of Finance for 14.8% (primarily debt relief, bilateral ODA channelled through pooled programmes and funds, and project type interventions). The Austrian Development Bank (4.8%) and the Ministry of Education and Women’s Affairs (3.5% for KulturKontakt, an education exchange programme) also made relevant commitments. The Länder and local governments were responsible for a further 10.7% (in-donor refugee costs and funding for non-government organisations).

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Figure 3.2. Many institutions contribute to Austria’s bilateral ODA
Figure 3.2. Many institutions contribute to Austria’s bilateral ODA

Note: 2017 commitments. “Other in-donor expenditures” includes Administrative costs not included elsewhere and Development awareness. Only institutions responsible for at least 0.5% of total bilateral ODA are included.

Source: Based on data from the OECD Creditor Reporting System (OECD, 2019[2]).

 StatLink https://doi.org/10.1787/888934084494

Only ADC’s geographic allocations tend to reflect priorities

Poverty reduction is one of the key objectives of Austria’s development assistance, as stated in both the act and successive three-year programmes. The share of bilateral ODA going to LDCs and other low-income countries remains low, and has declined in recent years.13 In 2017, Austria provided USD 63 million of bilateral ODA to LDCs – 20% of total bilateral ODA allocable by income group – similar to 2015 levels but down from USD 90 million (29%) in 2009 (Table B.3, Annex B) (OECD, 2009[7]). Most bilateral ODA continues to go to middle-income countries (80% in total), with upper middle-income countries receiving the highest share (46%) in 2017.

Only a small share of total bilateral ODA, mostly funding allocated by MFA and delivered by ADA as Austrian Development Cooperation (ADC), is channelled to Austria’s priority countries. In 2017, 8 of ADC’s 11 priority countries and territories were among the top 10 recipients of ADA funding. Uganda received the highest share, at USD 10.6 million (10.7% of ADA funding), followed by Ethiopia at USD 8 million (8%) and Burkina Faso at USD 5 million (5%). ADA’s country programmable aid is especially aligned with the geographic priorities in the three-year programmes. In 2017, all of ADC’s 11 priority countries and territories were among the highest recipients of country programmable aid (OECD, 2019[2]).

Overall, however, Austria’s ODA went to a total of 118 recipients in 2017, with only 13% of Austria’s total bilateral ODA provided to priority countries and territories.14 While around a quarter (26.9%) of bilateral ODA went to Austria’s top 10 recipients in 2017 (OECD, 2019[4]), only 3 of these were among the priority partner countries defined in the three-year programme – Albania, Ethiopia and Uganda (ADC, 2016[11]). Further, while crisis-affected regions and fragile states are a geographic priority of the programme, Austria does not have a budget dedicated to fragility and stabilisation, and fragile countries received only 20% of gross bilateral ODA in 2017 (Chapter 7). The largest share of total bilateral ODA continues to be allocated to countries and territories in eastern and southern Europe (USD 145.6 million in 2017), in line with Austria’s focus on its immediate neighbourhood (OECD, 2015[1]).15

Despite Austria’s commitment to strengthening partner systems, a falling share of bilateral ODA is disbursed using government channels (Chapter 5). In 2017, Austria channelled 39.8% of gross bilateral ODA through public sector institutions, down from 69.2% in 2016; 21.6% was channelled through universities or other teaching and research institutions and 15.5% through non-government organisations. Only 4.3% was channelled through private sector institutions.

Austria’s small programmable budget needs greater focus on core themes

The array of priorities expressed in the three-year programme are reflected in Austria’s sectoral allocations. In 2017, excluding imputed student costs and in-donor refugee costs, USD 38 million (around 11.6%) of bilateral ODA disbursements targeted education in developing countries, one of the thematic priorities listed in the current and previous three-year programmes (ADC, 2016[11]) and a priority sector in several country strategies. A further 8.5% targeted government and civil society, with the remainder spread thinly across a range of sectors.16 In all, 8.5% of ODA was unallocated by sector. Humanitarian assistance, which has increased steadily over the last few years, reached USD 54.8 million in 2017, amounting to 8.6% of bilateral ODA (Chapter 7).

ADA’s allocations alone covered more than 10 different sectors in 2017, including government and civil society (15.7%), agriculture (11.9%), water supply and sanitation (8.3%), education (6.4%), and energy (3.6%). At the country level, ADA’s engagement is more focused and reflects country strategy priorities, which tend to be based on its historical engagement with partners.17 Nevertheless, given its small programmable budget, focusing on fewer sectors relevant to Austria’s core areas of expertise and ensuring co-ordination among the various ODA-contributing actors could increase impact in priority sectors and countries. While most ADA expenditure occurs in priority countries and territories, greater thematic focus should be considered in light of ADA’s capacity constraints (Chapter 4). This is particularly relevant where pressure exists to move into new areas, e.g. as a result of delegated co-operation opportunities.

Austria is strengthening efforts to integrate cross-cutting priorities into sectoral programming

Gender and women’s empowerment are priorities in the current programme, and in 2017 USD 116 million of bilateral ODA had gender equality and women’s empowerment as a principal or significant objective, amounting to 40% of gross bilateral allocable aid (OECD, 2019[4]). This is a decrease from 45% in 2016 due to Austria’s strengthened reporting, and above the DAC average of 36%. Allocable ODA supporting the environment increased to 35% in 2017, from 27% in 2016. Support for climate also increased, up to 24% in 2017 from 18% in 2016 (OECD, 2019[4]). Austria’s support for climate was most prominent in the economic infrastructure and services sectors, and for environment in the health and water and sanitation sectors (Figure 3.3).

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Figure 3.3. Cross-cutting themes are more integrated in some sectors than others
Policy focus of Austria’s bilateral ODA commitments by sector, 2017
Figure 3.3. Cross-cutting themes are more integrated in some sectors than others

Source: Developed from data published in (OECD, 2019[4]), Development Co-operation Profiles, https://dx.doi.org/10.1787/2dcf1367-en.

 StatLink https://doi.org/10.1787/888934084513

copy the linklink copied!Multilateral ODA allocations

Core multilateral funding is a consistently large share of Austrian ODA

In 2018, USD 688 million (59%) of Austria’s total ODA was provided as core funding to multilateral organisations, significantly above the DAC average (26%) and up from 52% in 2017. While five different federal ministries were responsible for providing core contributions in 2017, the Ministry of Finance, which manages Austria’s contributions to international financial institutions, provided the greatest share (93%), as in previous years.

Most core contributions go to the European Union (EU) institutions and the World Bank, which received 52% and 29% of total core funding in 2017, respectively.18 In addition, Austria channels significant amounts to several regional development banks, notably the African Development Fund (USD 47 million in core and capital subscriptions in 2017) and the Asian Infrastructure Investment Bank (USD 16 million; Table B.2, Annex B). Austria seeks to maintain its shareholding in multilateral development banks and its contributions to replenishment are enshrined in law, ensuring the funding is predictable.19 Austria is also a strong supporter of the Global Environment Facility, providing USD 14 million in 2017. The MFA manages contributions to EU development co-operation and the remaining funds are managed by the Ministry of Finance.

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Figure 3.4. Most core multilateral funding goes to the European Union and World Bank
2017 disbursements, USD millions
Figure 3.4. Most core multilateral funding goes to the European Union and World Bank

Note: “Other multilateral institutions” includes contributions mainly to the Global Environment Facility, Green Climate Fund, and the Organisation for Security and Co-operation in Europe. IDA-HIPCs refers to the World Bank International Development Association’s Heavily Indebted Poor Countries Debt Initiative Trust Fund. Not labelled is the World Trade Organisation (USD 225 000).

Source: Based on data reported to the OECD Creditor Reporting System (OECD, 2019[2]), https://stats.oecd.org/Index.aspx?DataSetCode=crs1.

 StatLink https://doi.org/10.1787/888934084532

The Ministry of Foreign Affairs is responsible for managing most of Austria’s funding for the United Nations system, contributing USD 24 million (3.6% of Austria’s core contributions) in 2017. This funding tends to be fragmented, with small amounts going to several different agencies. The Federal Ministry of Sustainability and Tourism provided funding to the United Nations Food and Agriculture Organisation, and to various climate-related organisations, including the Green Climate Fund and the Multilateral Fund to support implementation of the Montreal Protocol.

Austria’s multi-bi funding reflects its priorities

In addition to its high share of core multilateral funding, Austria channelled USD 108.6 million, amounting to 18% of bilateral ODA, through multilateral organisations in 2017 (known as multi-bi funding). This continues the steady increase over the past several years, partly reflecting Austria’s increased funding targeting refugees and migration. In 2017, significant contributions were made to the sub-window for refugees of the World Bank’s International Development Association and to several European Union Trust Funds related to migration (Chapter 7). The World Bank’s International Bank for Reconstruction and Development, United Nations Development Programme, European Bank for Reconstruction and Development and the Office of the United Nations High Commissioner for Refugees received the largest shares of Austria’s non-core funding in 2017, after the European Commission.

copy the linklink copied!Financing for development

Austria is working to mobilise additional development finance

Austria is committed to implementing the Addis Ababa Action Agenda on financing for development, and is stepping up efforts to mobilise additional development finance through a broad range of instruments. In 2017, ADA and Austria’s development finance institution, the Development Bank of Austria (OeEB), mobilised USD 58.9 million from the private sector – a sharp increase over previous years (OECD, 2019[4]). While most of these funds target middle-income countries (OeEB, 2019[12]), a growing share (23%) targeted LDCs in 2017.

OeEB, established in 2008, provides both ODA and other official flows and states that none of its activities is tied to Austrian businesses. In 2018, its overall portfolio reached EUR 1.19 billion. It uses a range of instruments to mobilise finance, including shares in collective investment vehicles, syndicated loans, and direct investment in companies and special investment vehicles. OeEB also offers technical assistance. It recently set an internal target of investing at least 40% of new business in climate-related projects over 2019-23. In addition to renewable energy and micro, small and medium-sized enterprises, it added infrastructure to its thematic areas in 2019, with a focus on private, economic infrastructure (OeEB, 2019[12]). OeEB seeks to co-operate closely with other European development banks via the European Development Finance Institutions (OeEB, 2019[12]). Recent efforts to consider innovative or new approaches to mobilising finance for development, such as by engaging pension funds, are also promising.

Private sector development is among ADC’s priorities and ADA’s approach focuses on supporting the enabling environment for private sector development in partner countries. This is good practice. In addition, ADA engages in co-financing with the private sector through the Business Partnerships programme, which targets enterprises in Austria and the European Economic Area seeking to engage in developing and transition countries (ADA, 2013[13]). Available support includes business grants for up to three years, funding for feasibility studies and larger scale strategic alliances for projects covering more than one country.

Better linkages among the various parts of the system supporting private sector development, which are often active in the same country, would strengthen Austria’s approach. Recent efforts to create the Austrian-African Small and Medium Enterprise Facility, a new form of funding that fills the gap between the Business Partnerships programme and OeEB’s larger funding modalities, are promising. In strengthening Austria’s approach, particularly in LDCs, it will be important to continue to assess levels of risk appetite and seek complementarities across the range of Austrian actors and instruments (Chapter 4).

Austria could increase its support to domestic resource mobilisation

Austria has hosted one of the six OECD Multilateral Tax Centres since 1992, and funds the in-country costs for training course participants from developing countries and territories in Eastern Europe and Central Asia, as well as Africa and East Asia. Austria is not a member of the Addis Tax Initiative, which aims to enhance domestic revenue mobilisation in partner countries. Austria could complement its support for private sector development and investment in developing countries and territories with greater support to domestic resource mobilisation. In 2017, its support for domestic revenue mobilisation was just USD 196 000. Austria continues to request tax exemptions in partner countries, unlike some other DAC members.

Austria could also do more to reduce the cost of sending remittances, in line with the Sustainable Development Goal target to reduce to less than 3% the transaction costs of migrant remittances by 2030. According to the World Bank, remittance outflows from Austria totalled USD 5.5 billion in 2017. For all Austria’s main remittance-receiving economies – Bosnia and Herzegovina, Croatia, Hungary, Kosovo, Serbia and Turkey – the average cost of sending remittances remained above 5% in 2019 (World Bank, 2019[14]). 20

Austria’s tracking and reporting of non-ODA flows have improved

Austria is one of only 14 DAC members to fulfil the requirement to report on officially supported export credits (OECD, 2019[3]). Data from ADA and OeEB on amounts mobilised are now fully integrated into Austria’s data submission to the OECD. Austria’s engagement with this statistical reporting has improved and mobilisation data are now of a high quality and have good coverage. The 2018 mobilisation data set has also been screened against various international objectives, such as gender equality and climate change mitigation and adaptation, which is good practice.

References

[13] ADA (2013), Business Partnerships Guideline: An Instrument of Austrian Development Cooperation, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Unternehmen/Englisch/Guidelines_for_Business_Partnerships.pdf (accessed on 22 May 2019).

[11] ADC (2016), Three-Year Programme on Austrian Development Policy 2016-2018, Austrian Development Cooperation, http://www.entwicklung.at (accessed on 1 April 2019).

[21] Clay, E., M. Geddes and L. Natali (2009), “Untying aid: Is it working? An Evaluation of the Implementation of the Paris Declaration and of the 2001 DAC Recommendation of Untying ODA to the LDCs”, Danish Institute for International Studies, Copenhagen, https://www.oecd.org/dac/evaluation/dcdndep/44375975.pdf (accessed on 12 August 2019).

[22] European Commission (2019), “Europe remains the world’s biggest development donor - €74.4 billion in 2018”, Press Release, https://europa.eu/rapid/press-release_IP-19-2075_en.htm (accessed on 13 August 2019).

[5] Fourth High-level Forum on Aid Effectiveness (2011), Busan Partnership for Effective Development Co-Operation, High Level Forum on Aid Effectiveness, Busan, http://www.busanhlf4.org (accessed on 10 April 2019).

[20] Fritz, L. and W. Raza (2017), “Living up to Policy Coherence for Development? The OECD’s disciplines on tied aid financing”, Development Policy Review, Vol. 35/6, pp. 759-778, http://dx.doi.org/10.1111/dpr.12264.

[17] Government of Austria (2017), IFI-Beitragsgesetz 2017, Government of Austria, Vienna, https://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2017_I_85/BGBLA_2017_I_85.pdfsig (accessed on 26 August 2019).

[15] Government of Austria (2017), Zusammen. Für unser Österreich. Regierungsprogramm 2017–2022, https://www.bundeskanzleramt.gv.at/documents/131008/569203/Regierungsprogramm_2017%E2%80%932022.pdf/b2fe3f65-5a04-47b6-913d-2fe512ff4ce6 (accessed on 2 May 2019).

[19] IMF (2019), Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative, Factsheet, https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/11/Debt-Relief-Under-the-Heavily-Indebted-Poor-Countries-Initiative (accessed on 6 August 2019).

[23] Lammersen, F. and A. Owen (2001), “The Helsinki Arrangement: Its impact on the provision of tied aid”, International Journal of Finance and Economics, Vol. 6/1, pp. 69-79, https://onlinelibrary.wiley.com/doi/pdf/10.1002/ijfe.144 (accessed on 19 July 2019).

[16] MFA (2019), Working together. For our world. Three-Year Programme on Austrian Development Policy 2019-2021, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/3_JP/Englisch/3JP_2019-2021_EN.pdf (accessed on 25 June 2019).

[18] OECD (2019), Arrangement on Officially Supported Export Credits (January 2019), OECD, Paris, http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg(2019)1 (accessed on 13 August 2019).

[3] OECD (2019), DAC Statistical Reporting Issues in 2018 on flows in 2017, OECD, Paris, https://one.oecd.org/document/DCD/DAC/STAT(2019)11/en/pdf (accessed on 5 August 2019).

[4] OECD (2019), Development Co-operation Profiles, OECD Publishing, Paris, https://dx.doi.org/10.1787/2dcf1367-en.

[2] OECD (2019), International Development Statistics, https://stats.oecd.org/Index.aspx?DataSetCode=crs1 (accessed on 19 July 2019).

[9] OECD (2018), 2018 Report on the DAC Untying Recommendation, OECD, Paris, https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/DCD-DAC(2018)12-REV2.en.pdf (accessed on 6 August 2019).

[8] OECD (2017), Austria Mid-Term Review, 27 April, Vienna, OECD, Paris, https://www.oecd.org/dac/peer-reviews/Mid-Term-Review-Austria-2017.pdf (accessed on 2 August 2019).

[1] OECD (2015), OECD Development Co-operation Peer Reviews: Austria 2015, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264227958-en.

[10] OECD (2014), DAC Recommendation on Untying Official Development Assistance, OECD Legal Instruments, Paris, http://legalinstruments.oecd.org (accessed on 12 April 2019).

[7] OECD (2009), Austria: Development Assistance Committee (DAC) Peer Review, OECD, Paris, https://www.oecd.org/dac/peer-reviews/42857127.pdf (accessed on 16 July 2019).

[6] OECD (2004), DAC Peer Review Austria, Organisation for Economic Co-operation and Development, Paris, https://www.oecd.org/dac/peer-reviews/34225768.pdf (accessed on 16 July 2019).

[24] OECD (1993), Aid Review 1992/93: Report by the Secretariat and Questions for the Review of Austria, OECD, Paris, https://www.oecd.org/dac/peer-reviews/ (accessed on 28 August 2019).

[12] OeEB (2019), Strategy of the Development Bank of Austria 2019-2023. Financing our Shared Future, Oesterreichische Entwicklungsbank Ag, Vienna, https://www.oe-eb.at/en/about-oeeb/our-focus.html.

[26] OeKB (2019), Financing on Concessional Terms (soft loans), OeKB, Vienna.

[14] World Bank (2019), Remittance Prices Worldwide Database, World Bank, Washington DC, https://remittanceprices.worldbank.org/en (accessed on 6 September 2019).

[25] World Bank (2018), Data on Outward Remittance Flows, World Bank, Washington DC, https://www.knomad.org/publication/migration-and-development-brief-31 (accessed on 6 September 2019).

Notes

← 1. The previous government’s programme restated Austria’s commitment to reach 0.7% (Government of Austria, 2017[15]).

← 2. 2018 data are preliminary. For comparability, the figures cited reflect the “cash-flow” methodology in use prior to 2019, rather than the new “grant-equivalent” methodology. See: http://www.oecd.org/newsroom/development-aid-drops-in-2018-especially-to-neediest-countries.htm.

← 3. Austria’s significant expenditure on in-country refugee costs in 2015-16 declined to 12.2% of total ODA in 2017. Based on preliminary figures, this fell further to 5.4% of total ODA in 2018.

← 4. Member States of the European Union (EU) committed to collectively provide ODA amounting to between 0.15% and 0.20% of EU gross national income to LDCs in the short term, and 0.20% by 2030. In 2017, the EU’s collective ODA to LDCs grew to 0.12% of GNI (European Commission, 2019[22]).

← 5. The current Three-Year Programme for 2019-21 provides a forecast for 2017 to 2022, but notes that since the financial framework for 2021 onwards is not yet set, the figures could be higher or lower (MFA, 2019[16]).

← 6. For example, in the 2015-18 Three-Year Programme, debt relief for Sudan was included in the forecasts for the years 2016, 2017 and 2018. In the 2017 update, this was pushed back further to 2018, 2019. In the current three-year programme, published in 2019, it was included for 2018, 2019 and 2020, yet as of mid-2019 Sudan remains ineligible (IMF, 2019[19]). This has the general effect of artificially inflating Austria’s projections.

← 7. These tied grants were provided mostly in the education and health sectors, in Uganda, Gambia, and Cameroon, among several other countries (OECD, 2019[2]).

← 8. Borrowers under these loans are usually the ministries of finance, other ministries or designated banks in the recipient countries. These loans are used to finance public sector projects (not private sector projects), e.g. for public hospitals/medical equipment, vocational training centres or public transport. Under the OECD Arrangement (OECD, 2019[18]), concessionality must be between 35% and 80%, with a minimum of 50% for LDCs. According to the Ministry of Finance, the minimum concessionality level for Austria is 35%, and 50% for LDCs (OeKB, 2019[26]).

← 9. Untying ODA removes barriers to open competition for ODA-funded procurement, thereby reducing project costs and increasing efficiency (OECD, 2018[9]). Untying aid is also generally seen as increasing aid effectiveness, by improving the ability of partner countries to set their own course (Clay, Geddes and Natali, 2009[21]).

← 10. Austria is one of just two DAC members to have provided interest subsidies in 2017. The links between development objectives and officially supported export credits remains contested (Lammersen and Owen, 2001[23]), (Fritz and Raza, 2017[20]). The 1992/3 peer review also recommended that concessional export credit activities that are reported as ODA should be more closely integrated with aid activities, e.g. through their inclusion in country programming, to achieve a coherent strategy (OECD, 1993[24]).

← 11. For example, 15% in 2012 and 20% in 2009.

← 12. The share of debt relief has significantly declined from historical levels, averaging 37% of bilateral ODA in the period 2001-12, and now just 6% in 2013-17.

← 13. Total ODA to other low-income countries declined from USD 641 000 in 2009 to USD 418 000 in 2017 (2017 constant prices) (OECD, 2019[2]).

← 14. Turkey is by far the biggest recipient of Austria’s bilateral ODA, receiving USD 41 million on average a year over 2016-17, with the largest shares provided by the Ministries for Science, Research and Economy (imputed student costs), Foreign Affairs (the EU Facility for Refugees in Turkey), and for Education and Women's Affairs (tied technical assistance). Bosnia and Herzegovina (USD 20 million per year) and Ukraine (USD 14 million per year) were the second highest recipients, with imputed student costs comprising the largest share in each (OECD, 2019[2]).

← 15. Smaller amounts were allocated to sub-Saharan Africa (USD 73.2 million), South and Central Asia (USD 45.6 million) and the Middle East (USD 42.5 million).

← 16. This included health and population policies (3.2%), water and sanitation (2.7%), government and civil society (5.7%), energy (3.9%), agriculture (3.7%) and humanitarian aid (8.6%), with several ministries often active in each.

← 17. For example, in Uganda where ADA was responsible for 78% of Austria’s ODA expenditure in 2017, funding covered five main sectors, with most going to just two: water supply and sanitation (33.8%), and government and civil society (52.1%). In some smaller sectors, e.g. agriculture, several different parts of the Austrian system were active.

← 18. The World Bank figure does not include the International Development Association’s Heavily Indebted Poor Countries Initiative (IDA-HIPC), which accounted for a further 0.9% of Austria’s core contributions in 2017.

← 19. Unlike its bilateral funding, Austria’s contributions to international financial institutions are enshrined in law and are therefore more binding on the Ministry of Finance than the various contributions by other ministries to Austria’s total ODA budget. See for example (Government of Austria, 2017[17]).

← 20. Based on figures published in the World Bank’s Remittance Prices Worldwide database, second quarter 2019, with costs calculated based on the transfer of EUR 140, the average cost of sending remittances from Austria to Bosnia and Herzegovina is 7.1%; Croatia, 5.5%; Hungary 5.3%; Kosovo 6.2%; Serbia 6.5% and Turkey 5%. According to the World Bank, remittance outflows totalled USD 5.5 billion and accounted for around 1.3% of Austrian gross domestic product in 2017 (World Bank, 2018[25]).

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