Seventh Special Report
On 5 June 2018, the International Development Committee published its Fifth Report of Session 2017–19, on the Definition and administration of ODA (HC 1011). The Government response was received on 6 September 2018. The response is appended below.
Appendix 1: Government Response to Committee recommendations on definition of ODA
General Points
The UK strongly supports a rules-based international system for international development. Our efforts to work with the OECD DAC on ODA reform is reflective of this commitment as we seek to ensure the DAC is fit to address the challenges of the 21st century and to deliver the Sustainable Development Goals (SDGs).
The DAC oversees the definition of ODA and its accompanying rules, which guarantee the consistency and credibility of global aid spending. As one of the few leading countries to honour our promise to invest 0.7% of national income as aid, it is in our interests to ensure that the quality, poverty-focus and value for money of other countries’ aid investments match our own high standards.
Working alongside DAC members, we have been able to institute changes to better reflect the scale of our development efforts and ultimately improve the impact of the aid we spend. We have secured agreement in several areas and the Government will build on these successes considering the valuable contributions made by the IDC as we work to ensure the global aid system keeps pace with new challenges and the rapidly changing world we live in.
Response to specific IDC recommendations on Definition of ODA
The Government should continue to use its influence within the OECD-DAC to ensure that a reverse graduation mechanism is established as soon as possible.
Government position: Agree
The Government has every intention to ensure that an agreement on reverse graduation is made at the OECD DAC as soon as possible. The OECD DAC Secretariat has put forward a proposal for a reverse graduation which we support. Having been discussed in Paris at official-level by OECD DAC member delegations on 14 June, it is possible that will be signed off at a OECD DAC senior level meeting for later in the year.
The Government should oppose any proposals which would allow all humanitarian assistance - irrespective of the economic status of the recipient country - to be counted as ODA.
Government position: Disagree
The context of any humanitarian crisis is important. Small, undiversified economies are particularly vulnerable and can suffer economy-wide crises from which they cannot be expected to recover without assistance. The government position is that in such cases humanitarian and recovery assistance could appropriately and exceptionally be defined as ODA. We are working to prepare an evidence-based proposal for further consideration. A DFID secondee has started at the OECD DAC to help conduct this analysis. However, we do not expect a quick decision on this.
The UK should continue to provide humanitarian assistance where it judges it appropriate to do so, irrespective of the ODA eligibility status of the recipient countries and territories. In particular, the UK should continue to provide whatever assistance is necessary to its Overseas Territories, as required under the International Development Act 2002.
Government position: Agree
The ODA rules have not and will not hamper our response to humanitarian crises, as was demonstrated in HMG’s response to the hurricanes in the UK Overseas Territories (OTs) in 2017. Across the region, the UK Government delivered 827 tonnes of urgent humanitarian supplies, and deployed over 40 additional staff to oversee the response. Royal Fleet Auxiliary Mounts Bay and HMS Ocean provided essential support to the three affected OTs (British Virgin Islands, Anguilla and Turks and Caicos Islands) with around 2,000 military personnel, 40 UK aid experts, 20 prison officers, and more than 50 police officers deploying to the Caribbean to provide assistance. In the aftermath of the hurricanes, DFID and the FCO designed a financial package for recovery and reconstruction (including £70m of grants for Anguilla and the British Virgin Islands and £300m of loan guarantees for the British Virgin Islands) and are assisting the territories to put their public finances on a sustainable footing. The UK Government has always met, and will continue to meet, all its obligations under the International Development Act.
We therefore recommend that the Government support the current GNI-based system: low-income and middle-income countries should remain eligible for ODA, and high-income countries should remain ineligible.
Government position: Partially Agree
We are not proposing to change the current GNI-based system that’s calculated and determined by the World Bank. But, we are listening to others, including Small Island Developing States (SIDS), who are trying to make the case for a system that better addresses certain vulnerability considerations.
We recommend that the Government oppose any further increase in the proportion of UN peacekeeping operations which can be counted as ODA.
Government position: Disagree
The nature and location of poverty is changing, and extreme poverty is increasingly concentrated in fragile and conflict affected states. Fragility, conflict and violence risk donor efforts to promote prosperity and end extreme poverty. Peace and security are crucial for sustainable development, as recognised by SDG 16 (Peace, Justice and Strong Institutions). According to projections from DFID’s Chief Economist, 80% of those living in extreme poverty will be concentrated in fragile and conflict affected states by 2030.
Collective action is required to address the challenges set. The OECD DAC and its members have an integral role in responding to this. We are committed to working to ensure that ODA is fit for purpose and allows donors to be as effective as possible in tackling the underlying drivers of instability and creating the necessary conditions for sustainable development.
The Government has already secured an increase in the ODA peacekeeping coefficient, rightly recognising a greater share of the contribution of peacekeeping to ODA objectives, but believes there is further scope to capture and incentivise these efforts. We are proposing a further review of peacekeeping missions to see whether more activities could be counted as ODA.
The Government should continue to use the internationally-recognised ODA definition even if it fails to secure the changes it is seeking to the current rules.
Government position: Partially Agree
The UK is a strong supporter of the OECD DAC, which is a fundamental part of the rules-based international system for international development. It is vital that this system, including the ODA rules, is fit to address the challenges of the 21st century and to deliver the Sustainable Development Goals (SDGs). As one of the few leading countries to honour our promise to invest 0.7% of national income as aid, it is in our interests to ensure that the quality, poverty-focus and value for money of other countries’ aid investments match our own high standards.
The UK Government has shown that we are able to deliver reform whilst working within the system to raise global standards. The reforms agreed by the DAC at the October High Level Meetings – together with earlier agreements – mark significant change and demonstrate the willingness of our international partners to work together to modernise ODA. We are committed to working with our partners at the DAC on further reforms, but we will continue to reassess our approach to ensure we are effectively delivering on our ODA modernisation agenda.
The Government should encourage the OECD-DAC to establish a credible and consensus-based process for reviewing the ODA definition at regular intervals, such as every five years, and should oppose any proposals for ad hoc changes in the interim.
Government position: Partially Agree
The UK has argued for the OECD DAC to conduct regular reviews of the ODA system at recent High-Level Meetings, and will continue to do so. However, as last year’s hurricane season in the Caribbean demonstrated that there remains a need for the OECD DAC to act quickly and flexibly to issues concerning the ODA system.
Published: 13 September 2018