ODA and innovative financing to meet the SDGs

Paul HorrocksHead of Financing for Sustainable Development Development Cooperation DirectorateOECD

Contents

Overview of ODA trends

Innovative Financing to meet the SDGs

1

2

1. Overview of ODA trends

5

Total net flows from DAC countries to developing countries, 1976-2017

0

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1976

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Cons

tant

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7 U

SD b

illio

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ODA OOF Officially Supported Export Credits Private flows Net private grants

ODA Trends

(a) Total DAC excludes debt forgiveness of non-ODA claims in 1990, 1991 and 1992.

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0

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1960

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(a)

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(p)

OD

A a

s pe

rcen

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GN

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Cons

tant

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SD b

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Net official development assistance, 1960-2018

Total ODA(left scale)

ODA/GNI(right scale)

Components of net ODA from DAC countries

0

20

40

60

80

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120

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160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (p)

Co

nst

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7 U

SD

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Bilateral development projects, programmes and technical co-operation Multilateral ODA Humanitarian aid In-donor refugee costs Net debt relief grants

Donor Performance in 2018 - Volume

34.26

24.99

19.40

14.17

12.15

5.84 5.625.01 4.65 4.26

3.12 3.09 2.87 2.58 2.35 2.291.18 0.98 0.93 0.76 0.56 0.47 0.39 0.32 0.28 0.19 0.13 0.08 0.08

0

5

10

15

20

25

30

35

USD billion

ODA in 2018 on a grant equivalent basis- amounts

153.0

Donor Performance in 2018 – ODA/GNI ratio

1.04

0.980.94

0.720.70

0.61 0.61

0.44 0.43 0.43

0.360.31 0.31

0.28 0.28 0.280.26

0.24 0.230.20

0.17 0.17 0.16 0.15 0.14 0.14 0.14 0.13 0.13

0.31

0.0

0.1

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1.0

1.1

As % of GNI

ODA in 2018 on a grant equivalent basis - as a percentage of GNI

Average country effort 0.38

ODA percent change between 2017 and 2018

-30

-20

-10

0

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20

30

Perc

enta

ge c

hang

e in

real

ter

ms f

rom

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7 to

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8

Share of loans for loan giving countries, 2018

0%10%20%30%40%50%60%70%80%90%

100%

Shar

e of

loan

s in

gro

ss b

ilate

ral O

DA

Grants Loans

12

ODA Distribution by income group from all donors 2015-16

Least Developed Countries

29%

Other Low Income2%

Lower Middle Income

23%

Upper Middle Income

12%

Unallocated34%

2. Innovative financing to meet the SDGs

The challenge: Shifting the Trillions

The trillions are in the system. However, the inconsistencies must be addressed.

USD 529 billion

USD 149

billion

USD USD 6.1

billion

USD 49

billion

Remittances

ODA

Philanthropicflows

Funds and facilities

*2018 figures are provided where available.

USD 519 billion

USD 4.1 trillion

Tax revenue

FDI

SDG financinggaps

A Call to Action for all Actors

The 2019 Global Outlook on Financing for Sustainable Development provides the full breadth ofOECD work on domestic resource mobilisation, private investment, ODA, remittances,philanthropic flows, etc called upon by Addis to help the poorest achieve sustainabledevelopment.

It sounds the alarm that all actors must work together to successfully implement the call to action.OECD plays a role as “best supporting actor” to the UN system.

Innovative finance requires integratedfinance

Policy makers should consider to adopt a moreinnovative and integrated approach by fixinginconsistencies across resources to finance sustainabledevelopment.

Innovation is needed to support all three pillars:

• Mobilization – unlocking additional resources andestablishing a comprehensive picture of all financialflows available for the SDGs e.g. TOSSD andBlended Finance

• Alignment – improve understanding of how much isaligned with the SDGs and the Paris Agreement. e.g.Transition Finance, SDG labelling

• Impact – a common framework to evaluate andenhance impact, e.g. Social impact investment

Multilateral providers

(MDBs and other IFIs, UN agencies, Other multilateral

organisations)

Bilateral providers

(DAC, other bilateral providers,

South-South, Triangular)

PILLAR ICross-border flows to

TOSSD eligible countries

PILLAR IIGlobal and regional

expenditures for international public

goods and global challenges

TOSSD

ODA

OOF(other official flows)

International Public Goods(e.g. research and peace &

security)

Private finance mobilised

South-South co-operation

Triangular co-operation

Sustainable Development Filter

Sustainable Development Filter

A framework to measure resources in support of Sustainable Development

Private financed mobilised

The TOSSD Framework

Pillar 1: Mobilisation and Blended Finance

The Tri Hita KaranaRoadmap for BlendedFinance increases theeffectiveness andefficiency of blendedfinance operations.

Blended finance can play a critical role in mobilising commercial finance and strengthening financing systems for sustainable development.

OECD DAC Blended Finance Principles for Unlocking Commercial Finance for the Sustainable Development Goals to better design and implement policies and approaches

How can blended finance make a difference in SDG sectors? • Blended Finance in the Least Developed Countries 2019• Making Blended Finance Work for Water and Sanitation 2019 • Blended Finance for agri-SMEs and Smallholder Farmers 2020

Pillar 2: Alignment and Transition Finance

Aligning donor finance in support of country-owned INFF implementation

Pillar 3: Social Impact Investment

.

Four main action areas must be advanced:

1. Financing – ensure no one left behind

2. Innovation – promote experimentation, including in the public sector

3. Data – develop a common framework to assess

4. Policy – advance substantive commitments (voluntary andregulatory)

The OECD is part of the Impact Management Project Structured Network, along with other keystakeholders including UNDP and IFC coordinating efforts to provide standards for impactmeasurement, management and reporting.

The way forward

Together, we could campaign to shift the trillions, bringingfinance in line with our shared agenda and future

The Leading Group on Innovative Financing for Developmentcan play a key role to advance proposals to deliver innovativeand integrated financing approaches that are supportive ofthe UN SG Roadmap for the 2030 Agenda.

“International publicand private financefor development aswell as otherinnovative financingmechanisms,including blendedfinance, can play animportant role inupscaling ourcollective efforts’’- G20 Osaka Leaders’Declaration

Thank you.

For more information visit:http://www.oecd.org/dac/financing-sustainable-development/