Session 2: Country eligibility and
towards a better targeting of
concessional finance
Suzanne Steensen
Senior Policy Analyst, DCD, OECD
The DAC List of ODA Recipients - Large
Heterogeneity
IBRD graduation spans across groups 3, 4 and 5.
Large heterogeneity in the List in terms of
access to external resources
1) Aid-dependency divide between LDCs and non-LDCs.
For LDCs ODA is still over 70% of external finance
2) ODA growth is accelerating for most MICs..
…but not for LDCs and fragile states
The post-2015 debate on eligibility and
targeting
 Greater focus on countries most in need, particularly if
poverty is to be eradicated by 2030;
 While continuing to support middle income countries
in meeting their development challenges, incl. reducing
inequality and financing global public goods.
 How do we achieve this?
1. Reform the graduation process from the DAC List of ODA
Recipients? Or keep status quo?
2. Set ODA (or ODA modalities) targets for specific groups of
countries?
3. Valorise a broader provider effort and recipient
benefits?
Tighter standards for ODA graduation?
 Graduation from the DAC List only happens at
USD 12 615 in 2012 or join the EU or G8;
 A solution could be to move to the threshold at
which countries start the graduation from IBRD
lending – currently set at USD 7 115 (this will
also enhance consistency between bilateral and
multilateral finance);
 Impact: 18 countries off the list and DAC net ODA only
reduced by 1.7% (mostly Brazil, Mexico, Turkey, Chile)
Donor impact of different graduation scenarios
Effect on DAC members' ODA of excluding:
countries above the
IBRD threshold
(GNI/capita > 7115
USD)
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
United Kingdom
United States
DAC countries
EU Institutions
-0.5%
-4.0%
0.0%
-0.4%
-0.5%
0.4%
-0.3%
-9.4%
-2.5%
-1.1%
0.0%
-0.1%
-0.4%
2.3%
-0.2%
-0.8%
0.0%
-3.4%
-5.3%
-0.1%
-1.2%
-0.1%
-0.7%
-0.4%
-0.3%
-1.2%
-1.1%
-1.7%
-19.1%
UMICs
(GNI/capita > 4085
USD)
-1.3%
-8.3%
-1.6%
-1.5%
-4.1%
1.4%
-2.0%
-14.3%
-5.3%
-2.3%
-0.2%
-1.3%
-1.3%
2.1%
-1.9%
-3.7%
-0.9%
-4.7%
-6.5%
-3.7%
-1.3%
-3.9%
-2.7%
-2.7%
-3.1%
-1.7%
-6.2%
-4.3%
-30.3%
non-IDA eligible
countries
-20.0%
-12.3%
-5.3%
-5.9%
-6.7%
-2.6%
-5.1%
-25.6%
-15.2%
-19.4%
-5.4%
-2.9%
-2.7%
18.5%
-12.6%
-9.5%
-2.1%
-16.5%
-10.6%
-18.5%
-13.0%
-5.8%
-11.8%
-6.9%
-8.9%
-4.7%
-15.5%
-9.8%
-47.4%
Status quo? Countries will be graduating
anyway…
 28 countries are expected to graduate from the DAC list by
2030
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
* Libya exceeded the threshold in 2012, but is predicted to drop below for a year again in 2013.
FYROM – Former Yugoslav Republic of Macedonia
27
28
29
30
We also need better targeting and focus…
Options:
 Give more prominence to the UN target of providing 0.15%
- 0.20% of GNI as ODA to LDCs, and perhaps increase the
level ambition, but there is an inherent challenge for it to
co-exist with the 0.7% target;
• Establish a spending target for LDCs, e.g. at least 50% of ODA to
LDCs;
• If ODA in the future measures the “grant equivalent” of loans
(instead of their face value), automatically less ODA would be
reportable to MICs;
• Monitor modalities e.g. grant allocations?
 Increased focus and targeting would need to be coupled
with more prominent measures of provider efforts (TOSD)
and recipient benefits, which will also incentivise
continued efforts toward MICs!
For more information
www.oecd.org/dac
Aggregate impacts of different ways of
revising the DAC List