Development Cooperation
Report 2003
Presentation by Richard Manning,
Chair of the Development Assistance
Committee to the OECD
Presentation to the
Overseas Development Institute
Friday, 30 January 2004
London
1
Report Highlights
 Aid
in Context
 Aid
volume
 Aid
allocation
 Aid
effectiveness
 Aid
policy controversies
2
Aid in Context (1)
Progress towards Millennium Development Goals
 Significant
progress in poverty
reduction, notably Asia
 Serious
shortfalls in health and
environment
 Mixed
picture on education and on
gender
3
MDG Charts
People living on less than $1/day
(%)
30
20
10
0
1990
1995
2000
2005
2010
2015
Progress 1990 - 1999
Average path to goal
4
MDG Charts
People living on less than $1/day
in Sub-Saharan Africa (%)
60
50
40
30
20
10
0
1990
1995
2000
2005
2010
2015
Progress 1990 - 1999
Average path to goal
5
MDG Charts
Deaths of children under 5 per 1000
live births
120
100
80
60
40
20
0
1990
1995
2000
2005
2010
2015
Progress 1990 - 2001
Average path to goal
6
MDG Charts
7
MDG Charts
Net primary enrollment (%)
100
90
80
70
60
50
1990
1995
2000
2005
2010
2015
Progress 1990/91 - 2000/01
Average path to goal
8
MDG Charts
Ratio of girls to boys in primary
school (%)
100
90
80
70
60
50
1990
1995
2000
2005
Progress 1990/91 - 2000/01
Average path to goal
9
Potential impact of additional ODA on MDGs’
achievement
With current policies, institutions, and external
resources
With better policies, institutions and additional
external resources
Poverty
Poverty
Education
Health
Environment
Education
Health
Environment
Benin
Burkina Faso
Ethiopia
Madagascar
Mali
Mauritania
Mozambique
Tanzania
Uganda
All targets are met
At least one target is met
None of the targets is met
Data sources: Sudhir Shetty’s study, September 2003.
10
Aid in Context (2)

The Importance of Policies
Development first and foremost the
responsibility of developing countries.

Their policies and institutions critical to
progress.

Roles for Governments, Parliaments, Private
Sector, Civil Society.

But OECD policies also critical in setting
enabling environment:
- trade/ agriculture/ debt/ migration/security.

Need “policies as if development mattered”.
11
Aid in context (3)
Aid and private flows
1.2
Share of DAC GNI (%)
1.0
0.8
0.6
Other
Private
Direct
investment
Net Grants
by NGOs
0.4
0.2
0.0
Other
Official
Flows
ODA
Chart 2.2: DAC members' resource flows to developing countries, 1980-2002
12
Evolution of Aid Flows 1980-2006
0.40
80
80
0.34
70
70
0.25
60
60
ODA as
as aa %
% of
of GNI
GNI
ODA
(left scale)
scale)
(left
0.29 50
50
0.23
0.22
0.20
40
40
Total ODA
ODA
Total
(right scale)
scale)
(right
0.15
30
30
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1997
1996
1996
1995
1995
1994
1994
1993
1993
1992
1992
1991
1991
1990
1990
1989
1989
1988
1988
1987
1987
1986
1986
0
1985
1985
0.00
1984
1984
10
10
1983
1983
0.05
1982
1982
20
20
1981
1981
0.10
1980
1980
% of GNI
0.30
ODA (2001 USD billion)
0.35
13
2006 outcome depends crucially on five donors
Table 1.1 Anticipated ODA - 2006
US$ billion (at 2002 prices and exchange rates)
United States
United Kingdom
France
Italy
Germany
Sub-total
All other DAC members
TOTAL
Net ODA
2002
13.3
4.9
5.5
2.3
5.3
31.4
26.9
58.3
Anticipated ODA
2006
19.5
6.9
7.4
4.2
7.1
45.1
31.7
76.8
Increment
6.2
2.0
1.9
1.9
1.8
13.8
4.8
18.6
14
Aid Allocation
Aid is becoming:
 more
performance-linked
Share to quintiles 1 and 2
80%
60%
40%
20%
0%
1995
1996
1997
1998
1999
2000
2001
2002
Share to quintiles 4 and 5
25%
20%
15%
10%
5%
0%
1995
1996
1997
1998
1999
2000
2001
2002
15
Aid Allocation
 more
allocated to governance and
health
35
30
%
25
20
15
10
5
0
1980-81
Education
1985-86
Water
1990-91
Health
1995-96
2000-01
Governance and other
16
Aid Allocation
 at
the expense of production
sectors, including agriculture and
energy
25
20
20
15
%
%
15
10
10
5
0
1980-81
5
1985-86
1990-91
Agriculture
1995-96
Industry
2000-01
0
1980-81
1985-86
Transport
1990-91
Energy
1995-96
2000-01
Banking&Business
17
Aid Allocation
 food
and commodity aid are down but
humanitarian aid up ; debt relief
fluctuates
40
%
30
20
10
0
1980-81
1985-86
1990-91
1995-96
2000-01
Emergency Assistance
Debt Relief
Commodity Aid and Programme Assistance
Food Aid
18
Aid Allocation
 the
share to least developed and
low-income countries is little
changed
Share of total ODA to least developed
and low-income countries
60%
50%
40%
30%
20%
10%
0%

but some evidence of shift towards
Africa
19
UK
US
A
D
Au AC
str
ali
Au a
st r
Be ia
lgiu
Ca m
na
da
De
nm
ar
Fin k
lan
Fra d
nc
e
Ge
rm
an
y
Ir e
l an
d
Ita
ly
Ja
Lu
xem pan
Ne bour
g
th e
rla
Ne
n
ds
wZ
ea
lan
No d
rw
ay
Po
r tu
ga
l
Sp
ain
Sw
Sw eden
i tze
rla
nd
Aid Allocation
- multilateral share is little changed
80%
70%
60%
50%
40%
1992
30%
20%
2002
10%
0%
20
Aid Allocation
- the share to the UN system and to
the EC has risen slightly
IDA & RDBs share
50%
40%
30%
20%
10%
0%
1990
EC Share
40%
30%
1992
1994
1996
1998
2000
2002
2004
20%
10%
UN Share
0%
1990
40%
1992
1994
1996
1998
2000
30%
20%
10%
0%
1990
1992
1994
1996
1998
2000
2002
21
2002
Aid Allocation
- but concessional spending by
multilateral development banks has risen
because of recycling of repayments
10
9
Constant 2000 $ bn
8
7
6
1992
5
2001
4
3
2
1
0
EC
UN
IDA & RDBs
- European Commission the third largest
source of funds after US and Japan
22
Aid Effectiveness (1)

Crucial issue and central to DAC role

Hard to assess : need for better evaluation

Surprising range of aid and activities
% by value
% by number
Over $100m
$10-100m
$1m to $9.99m
Under $1m
25
0.2
42
2
24
12
9
85
23
Aid effectiveness (2)

Some progress around
- Poverty Reduction Strategies
- Medium Term Expenditure Frameworks
- Harmonisation and Alignment

Important Work of DAC Aid Effectiveness Working
Parties
- turning principle into practice
- predictability
- financial management and procurement
- managing for results

Tackling the problems of weak states, post-conflict,
and poor performers

From Rome to Paris
24
Constructive Policy Dialogue

Growth or poverty reduction?

Public or private?

Social sectors or production and
infrastructure?

Projects or programmes?
25
My hopes for 2006

Aid at least USD 75 billion (at 2002 prices and exchange rates).

Significant increase in proportion to least developed and other
low income countries, and particularly to the good performers.

Well-considered interventions in the poor performers.

Declining proportion of emergency and humanitarian aid.

Increase in untied aid.

Developing countries improving services to the poor but also
mobilising greater domestic resources.

Much more aid aligned to local priorities, programmes and
systems, and shown in recipient budgets.

Much more harmonisation.

Bulk of increased aid involves a genuine transfer of resources
and Technical Cooperation demonstrably more efficient.

More progress towards MDG’s, especially in Africa, as a result.
26