The precarity of ODA budgets in times of crisis

Ichsan Wikacsono

There is an emerging constant in the world of development cooperation: if a crisis emerges, the official development assistance (ODA) is reliably there to soften the impact. But at what cost and to whom?

In these last few years of crisis after crisis, we have witnessed two distinct phenomena when it comes to ODA budgets – inflation and diversion. The COVID-19 pandemic and the distribution of excess vaccines being counted as ODA has made ODA figures look much greater than they are.  More recently, Russia’s invasion of Ukraine and the resulting refugee crisis has some providers reallocating existing resources as opposed to increasing them. The consequences for Low-Income Countries who depend on ODA in some cases for up to two-thirds of external development financing cannot be understated.

Susanna Moorehead, Chair of the OECD Development Assistance Committee recently said, “Multiple crises mean multiple demands on ODA. ODA must support people in need in all partner countries – those forced to flee because of conflict, those who are hungry and those who are particularly poor and vulnerable, especially women and children who suffer most.” ODA remains the most stable form of external finance to developing countries and its integrity and purpose must be safeguarded.

When the OECD-DAC released its ODA Figures for 2021, there was some relief that ODA had increased to an all-time high. This relief was only due to the earlier perceived risk that ODA might contract as a consequence of changes in country GNI levels being hampered by the pandemic. Yet, the numbers are still far off from the 0.7% commitment and nowhere near the levels needed to meet demands of the moment. CSOs argue that the consequences of the COVID-19 pandemic, geopolitical, conflict and climate crises, requires the DAC community to considerably increase its ODA levels.

Unfortunately, what we are seeing, when there is fresh urgency to deliver on ODA commitments, are providers missing the mark. Amid the war in Ukraine, some governments have given indications that support to refugees will come at the expense of ODA budgets. This is by no means a way to suggest that Ukrainians fleeing a heinous act of aggression by the Russian government should not be supported, but rather to insist that ODA budgets are not sacrificed.

Beyond the immediate support to refugees and the impact this will have on ODA, in the medium- to long-term significant resources are also likely to support reconstruction efforts. This will have possible implications to public budgets with governments indicating that they will be heightening defense spending as a result of the invasion.

CPDE, and civil society organisations (CSOs) in general, are sounding the alarm bells about the impact of these short-sighted measures on the medium- and long-term development outlooks for countries highly dependent upon ODA. The sustainable development goals (SDGs) were already off-track and under threat due to the COVID-19 pandemic. Further cuts to development financing only worsen the world’s odds of delivering the Agenda 2030. #

Photo by Ichsan Wikacsono from Unsplash


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