Draft International Development (Official Development Assistance Target) Bill - International Development Committee Contents

Examination of Witness (Question Numbers 26-39)


24 FEBRUARY 2010

  Q26 Chairman: Good morning and thank you very much for coming. Again, just for the record, perhaps you could introduce yourself.

  Ms Jorgensen: I am Karen Jorgensen. I am the Head of the Peer Review and Evaluation Division in the Development Co-operation Directorate in the OECD.

  Q27  Chairman: Thank you very much for coming in to help us with this report. You will have heard the discussion and the reference to your own organisation in the first panel session. I suppose the starting point is definition, and you have heard some of the cross-currents of discussion. Are you satisfied that the OECD/DAC definition of ODA is appropriate? I am sure it is not an absolutely rigid definition but is it appropriate and does it, in fact, reflect all the activities that might be defined as aid, or should it be narrowed or should it be broadened? What is your fundamental take on definition, because you have already heard how important it is that we know what we are talking about when we are talking about official development assistance?

  Ms Jorgensen: The definition of ODA in fact was established in 1969 and it has only changed marginally since in 1972. The definition is basically that official development assistance has to come from official sources, government, obviously, and it has to be for improving economic growth and welfare in developing countries. There is a clause around concessionality that refers to it being grants, or, if loans are given, a certain amount of the loan also has to be in grant form. That is the basic definition. The OECD then has established reporting guidelines and those define what qualifies as reportable as ODA and what does not. That is a very strict set of reporting directives against which all our members report annually. When new activities come up they are discussed in a committee of the OECD to decide whether or not they meet the basic definition of official development assistance and whether they should then be included in the reporting directive, so the definition of ODA is there. Everyone who is concerned with reporting it understands it. They know what they can report as ODA and what they cannot. It has not changed, as I say, and there has been very little movement also in reporting directives over the years, so it is a pretty stable regime. I think the definition that you refer to here is how is it viewed in the UK, and that is what was set out by your Act in 2002, which I think has given, from what we see, very clear guidance to your administration in terms of programming the budget that has been given to the department. I think we feel that compared to other donors it has great strength in meeting the objectives of policy that has been set and the objectives that have been laid out overall in international commitments as far as the Millennium Development Goals are concerned, as mentioned earlier.

  Chairman: That is obviously helpful to state, that it is clear and it has been well established over a long period of time, but there are some pressures that you might want to respond to questions about.

  Q28  Andrew Stunell: You heard from the previous panel, I am sure, that it was speculated that there was going to be pressure at the international level to broaden ODA definitions in order to make it easier for other countries in general to reach preset targets. Is it your sense at OECD that that pressure is there and that those discussions are likely in the foreseeable future?

  Ms Jorgensen: I understand that there are continuous discussions in the network of statistical reporters, and I think there are issues around what was mentioned by Mr Maxwell around security and around climate change, continuous discussions around what is reportable that would still meet the basic ODA definition. We are not seeing any great appetite to loosen those parameters at the moment. We think there are some who might like to see it but there are equally others who resist it, so I think there will be a continuous discussion but we are certainly not seeing the definition widening or even taking on board more than what is already being reported. When it comes to climate change we have had for some years already what we call a climate change mitigation marker in our reporting system and that allows for the identification of activities that are undertaken with development assistance that will have an impact on mitigating climate change. In December the Development Assistance Committee agreed a similar marker on climate change adaptation so it will now allow identifying those activities that contribute to climate change adaptation, but that does not change the overall reporting structure. It does not change the definition of what is ODA. It simply allows within the reported activities the identification of those that also have a purpose to mitigate or adapt to climate change.

  Q29  Andrew Stunell: So it will not be possible for a country to invest in a climate change project and claim it is ODA unless there are clear poverty reduction or economic growth elements to it? Is that what you are saying?

  Ms Jorgensen: That is correct.

  Q30  Chairman: Does that also apply to peacekeeping operations and the like? You have got so many countries engaged, for example, in Afghanistan who might feel that they want to extend the definition. The same criteria would apply and they would have to meet those?

  Ms Jorgensen: That is correct. There was a couple of years ago a debate about contributions to the UN peacekeeping operations and, as happens with several international organisations this is a coefficient that can be counted as ODA, a proportion of donations or contributions to those organisations, and there was a slight shift in the coefficient from 6% to 7% when it came to the DPKO or the Department for Peacekeeping Operations contributions, but that was as far as that reached and I do not think there is much appetite to widen that out at the moment, so, as you say, it has to contribute to economic growth and the welfare of populations in developing countries.

  Chairman: Okay; that is helpful.

  Q31  Mr Lancaster: The 0.7% target was set back in 1970 and very few countries have met that now, some 40 years on, which some have interpreted as a lack of enthusiasm for it, but do you think that target is still appropriate?

  Ms Jorgensen: That is a really difficult question to answer because I think it depends on how you measure appropriateness for a particular target. I think it is appropriate because even if we calculate what a 0.7% target would give us in overall global aid flows, and I think the panel before me would have been better placed to answer this, I think that would still fall short of what we estimate are needs required for development and bringing the billion people who are still living in poverty above that level. The UN Secretary General recently reconfirmed this as a target that the UN is very committed to and so I think generally internationally it is regarded as still being a relevant target.

  Q32  Mr Lancaster: But do you think the criteria for coming up with 0.7% should be changed? Do you think we should be looking at it from a different angle?

  Ms Jorgensen: I am not sure I understand what you mean by the criteria for looking at it.

  Q33  Mr Lancaster: Back in 1970 the figure was set at 0.7%. Do you think that the world has changed significantly now and that perhaps the criteria that were used back then should be reviewed as to how we come to 0.7%?

  Ms Jorgensen: I am not sure that it is my place to speculate because it would be speculation.

  Q34  John Battle: I think some feel that the EU is not actually on track to meet its interim 2010 target of providing 0.56% GNI. Do you concur with that? Do your figures support that analysis to say the EU is well behind?

  Ms Jorgensen: That is correct. The EU collectively is not set to meet the target in 2010 based on the projections that we have received for aid in 2010. There are some countries that will not meet the target.

  Q35  John Battle: So what do you think the UK can realistically do to bring people into line and to push for the target to be met?

  Ms Jorgensen: I think the UK is recognised as being a leader on a number of dimensions that have to do with development, certainly not just on the quantity of aid but also on the quality of aid. I think the UK sets the bar for what other donors should achieve and I think a lot of donors look to what the UK is doing both on the quality and the quantity of the aid, and I think it is really important to keep in view both. I think the UK has taken its leadership from Gleneagles and going forward, really promoting aid commitments and sticking to those commitments, and the fact that the UK was able to put forward projections into the spending for three to four years, which was something that I am aware that only one other donor actually could do and it is a much smaller donor, really sent a signal to others that this was a commitment that we should take and we can take, and so some of them have tried to follow that. Others have not, but I think the leadership position that the UK has played out gives it weight to really keep pushing other donors to follow suit and honour their commitments. You ask will the legislation make other donors enact similar legislation. I think it will help us in our work in DAC, particularly when we conduct peer reviews, to hold this up as an example for other donors and we can recommend that they take similar action if we feel that this is helpful. However, I think one should also look to the opposite and that is what would happen if the UK did not meet its commitments, and there is, of course the issue: will the legislation help the UK Government in this or not, but I think if the UK did not meet its commitments then large donors would be saying, "The leader in this business was not able to meet its commitments, so how are we supposed to do it?" You really should be thinking of what would be the backlash of the UK not meeting its commitment.

  Q36  Chairman: Professor Haddad was picking up the danger that it might have an effect on the British population saying, "Why on earth are we struggling to achieve 0.7% when Italy is tearing up its targets and everybody else is falling behind?"

  Ms Jorgensen: It would have been interesting if you had sat in on a recent peer review that we did on Italy which was, I have to say, the toughest that I have delivered, and I have delivered about 18 now, because I have never heard the committee be so critical of a government's lack of performance. It is in the report and it was clear in the committee room that the committee felt that Italy's performance needs to improve significantly and that there was little excuse for not having done that.

  Q37  Chairman: Just as a digression, and I know it is early days, to what extent do you think that the committee's view will affect the Italian government because that is another point, how effective is OECD in punishing its members.

  Ms Jorgensen: That remains to be seen. Of course, that all plays into local politics in Italy. I think the administration certainly heard the messages very clearly. Whether they can carry political weight, of course, is a different story, but this is where I think the UK at political level can weigh in with moral authority because you are realising your commitments. That would be much harder to do if you were not doing that.

  Q38  John Battle: Does the Belgian legislation on the 0.7% target provide any lessons for our draft Bill that we are proposing to put through Parliament?

  Ms Jorgensen: The Belgian legislation is a little bit different because it is a clause in an administrative law that requires that a solidarity note, as it is called, accompanies the annual budget to explain how the government is moving forward on achieving the target. What we hear anecdotally is that that note has in fact been quite instrumental in keeping attention on moving forward on the commitment, so I would say, talking to our Belgian colleagues, that they feel it has been quite helpful.

  Q39  John Battle: If I were to push you on your previous answer, in a sense the difference that the Government made in 1997 was that we introduced a three-year Comprehensive Spending Review of all budgets. The big problem for administrations everywhere is annual, if not sub-annual, budgets—budgets going from 1 April to 31 March every year and you not knowing whether you are getting the money next year, so no real running-on commitments, and within a narrow span of four to five years of a Parliament. So the three-year Comprehensive Spending Review to give commitments over two or three years across all government departments was one thing but passing into law to meet that particular commitment is another order of magnitude altogether, is it not? It makes it a law to say that money has to be spent regardless of who is in government. Do you see any other government in Europe going down that road?

  Ms Jorgensen: I am not aware of anyone else proposing—I have to be careful because there are some bills that are being introduced at the moment of which we do not know the exact contents so it is possible that targets will be there. These are for some of the smaller EU donors so in any case the impact on ODA would not be as significant as yours. However, I think we can look to agreements that have been reached in other countries cross-party in parliaments on setting minimum aid targets, and so they have not been enshrined in legislation but they have been cross-party and they have been agreements that have actually stuck, and I think you can look to Denmark and the Netherlands as very good examples of that. In Denmark, for example, aid came under significant threat some years ago and because there had been this cross-party understanding over a number of years they managed to keep the baseline of what they had agreed earlier.

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