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OECD finds slowing ODA growth in LDCs

The Chair of the DAC of OECD published the Development Co-operation Report 2014 : Mobilising Resources for Sustainable Development , on 7 October 2014.  It provides an overview of the financial sources available to developing countries and proposes recommendations on how to mobilise further resources. It also explores how to mobilise resources to finance the provision of global public goods, such as stable climate, peace and security, and a fair and equal trading system. The report finds that “ODA growth is slowing in those countries which need it most – fragile states and least developed countries” and recommends to monitor more attentively the target of allocating...

Grants and concessional loans from Germany

The Federal Ministry for Economic Cooperation and Development  (BMZ) awards grants and concessional loans to LDCs.  KfW Entwicklingsbank, a financial arm for financial cooperation with developing countries within the KfW banking group (a government-owned development bank), has been providing non-repayable grants to LDCs since 1978, as well as concessional loans  to low-income developing countries (including LDCs) that are granted IDA-eligible countries, with the IDA terms.

Development aid at highest level ever in 2013

Official development aid has increased in 2013 by 6.1 %, reaching its highest level ever; a positive turn after two years of decreasing aid volumes. This could however not reverse the trend of a falling share of aid going to the less developed Sub-Saharan African countries. ODA for the LDCs has risen substantially in 2013, but these numbers are influenced by an exceptional debt relief for Myanmar. The numbers for Sub-Saharan Africa, where most LDCs are located, are not promising. In 2013, bilateral aid decreased by 4 %. The DAC survey suggests that this trend will continue in the coming years. DAC members will focus their efforts on middle income countries, while LDCs and LICs will...

Untied ODA to LDCs

In 2001, OECD-DAC members adopted a Recommendation to untie much of the ODA to LDCs. In 2011, 81.1 per cent of DAC bilateral aid to the LDCs was untied, excluding administrative costs, a slight improvement from 2010 (80.3 per cent). In the same year, 84.6 per cent of aid to all developing countries was untied. Source: United Nations MDG Gap Task Force Report 2013

ODA and private sector development for youth employment in LDCs

One of the pledges of the Istanbul Programme of Action (IPoA) focuses on the employment of youth and their participation in the economy. Particularly, the LDCs’ development partners have committed to “provide financial and technical assistance to support least developed countries’ policies and programmes that provide economic opportunities and productive employment to youth” (para. 81 (2a)). A recent report by UNCTAD is proposing a new international support measure to create employment opportunities for youth in LDCs. The support measure would involve a catalytic use of ODA for employment creation through private sector development. In a nutshell, the objective of the support...

Global Environment Facility releases progress report for LDC Fund

Global Environment Facility Releases Progress Report for LDC Fund The Global annual monitoring report for the LDCF and the SCCF provides a summary of results of projects that have been completed or that are currently under implementation. The report describes the substantial progress made in the operations of the LDCF and the SCCF during the period from May to October 2013. Under the LDCF, 50 out of 65 projects endorsed or approved by the GEF CEO provided resources amounting to $201 million. The projects seek to directly reduce the vulnerability of 2.07 million people. During the reporting period, cumulative pledges to the LDCF increased by $174.75 million, reaching $779.50...

UNDP Partners With LDC Fund to Strengthen Climate Information in Africa

UNDP Partners with LDC Fund to strengthen climate information in Africa On 26 September the GEF approved a US$43.63 million LDCF grant for a UNDP-led initiative to strengthen climate information and early warning systems in 10 LDC countries in Africa (Benin, Burkina Faso, Ethiopia, Liberia, Malawi, São Tomé and Príncipe, Sierra Leone, Tanzania, Uganda and Zambia). The UNDP-GEF led initiative will enable target countries to take additional measures to improve existing climate information systems and adopt new and alternative technologies. For instance, the funds will be used by the recipient countries to finance the installation of new observational infrastructure and strengthen...

FDI flows to LDCs increased in 2012

In its latest World Investment Report , UNCTAD  indicates that  FDI inflows to LDCs grew  robustly by 20 per cent and reached $26 billion in 2012. Significant gains in FDI inflows were registered by Cambodia, Democratic Republic of Congo, Liberia, Mauritania, Mozambique and Uganda. LDC Watch, an NGO solely focused on development issues of LDCs, observes that inflows are concentrated in resource-rich countries and are highest in the extractive sector.   Source:  Independent European Daily Express

5 countries pledge $198 million for LDCF/SCCF Climate Change Adaptation

On 20 June 2013, the Council of the Least Developed Countries Fund and the Special Climate Change Fund (LDCF/SCCF) received a combined $198 million in new pledges from 5 countries.  It brought the total commitments for investment in climate change adaptation programmes to about $1.02 billion.   The pledges were made by the following 5 countries. Belgium: $15.8 million for LDCF and $15.8 million for SCCF, Germany: $66.0 million for LDCF and $39.6 million for SCCF, Norway: $3.7 million for LDCF and $2.5 million for SCCF, Switzerland: $1.1 million for LDCF and $1.3 million for SCCF, and United States of America: $25.0 million for LDCF and $10.0 million for...

Do donors favour LDCs in ODA allocation?

As a group, bilateral and multilateral donors have favoured LDCs in their ODA allocation. According to data retrieved from OECD.Sta online data base, ODA flows to LDCs contracted less than flows to non-LDCs in the period 1991-2001, and on average they grew relatively faster in the decade of 2001-2011. ODA flows to LDCs increased from $18.2 billion in 1991 to $49.7 billion in 2011 (when measured in nominal U.S. dollars), which corresponds to a 173 per cent increase during the period.  Meanwhile, flows to non-LDCs grew  by 110 per cent.  At the same time, the share of debt reflief and humaniatrian assistance in total ODA flows to LDCs also increased during the period: from an...

Compliance with the DAC Recommendation on grant element in ODA

Grant element as a ratio of total ODA by OECD's Development Assistance Committee donors to LDCs has been above 99 per cent in 2000-2011. In 2011, all DAC countries, except Portugal, were able to meet the two alternative norms: above 90 per cent annually for all LDCs, above 86 per cent on 3-year average for each LDC. Note: c=compliance, n=non-compliance. Source: OECD, Statistics on Resource Flows to Developing Countries , accessed 12 April, 2013.

ODA flows to LDCs in 2012: bilateral ODA declined significantly but how about multilateral development aid?

by Hiroshi Kawamura (*) Many in the donor community have expressed concern over the news from the OECD DAC that bilateral development aid fell by 4 per cent in real terms in 2012 and to LDCs by 12.8 per cent.  With this, OECD noted that there is an apparent shift in aid allocation away from the poorest countries and towards middle-income countries.  What was not widely reported is the fact that bilateral contributions to multilateral institutions declined by 7.1 per cent in real terms in 2012.  A lower bilateral contribution to multilateral institutions could aggravate the negative impact of the declining bilateral ODA on LDCs by further reducing multilateral ODA to...

ODA to LDCs drops 12.8%

Development aid to poor countries slipped amidst tightening government budgets. Data for 2012 show that bilateral net ODA to the group of LDCs fell by -12.8% in real terms to about USD 26 billion. Source: OECD

Bilateral ODA to LDCs in 2011: Falling short of targets

Recently released OECD data indicates that for several donors there have seen reductions in the bilateral ODA targets to LDCs between 2010 and 2011. Among the 23 DAC countries listed below, 17 countries reduced ODA to LDCs as per cent of GNI between 2010 and 2011. Among the countries that aim to reach the lower bound UN target of 0.15 per cent of GNI, Portugal is the only country that reached the target in 2011. All other countries that had not met the 0.15 target in 2010 moved farther away from the target in 2011. Canada reached the target of 0.15 in 2010, but in 2011, it decreased its ODA to LDCs down to 0.11 per cent of GNI. With respect to the countries that reached the...

Some donor countries' ODA falls below LDC targets

Latest OECD statistics on 2011 resource flows to developing countries show that, in 2011, several donor countries no longer achieved the 0.15 and 0.20 ODA targets to LDCs (as percent of donors' GNI). Compared to 2010 data, Finland and the Netherlands dropped below the 0.20% target whereas Canada dropped below the 0.15% target. After faling below the 0.15% target in 2010, Portugal again reached the 0.15% target in 2011. Source: OECD

Implementation of NAPA; November 2012 update

The UNFCCC Secretariat has recently reported on the  the implementation of the LDCs work programme, including the implementation of NAPAs and access to funds from the LDCF. According to the Secretariat, as of 29 September 2012 49 countries (former and current LDCs)  received funding for the preparation of their NAPAs, with grants amounting to $11.76 million.  Of these, 47 LDCs have completed their NAPAs. As per the two remaining LDCs, Myanmar is in the final stages of NAPA preparation and Somalia in the early stages. Funding for NAPA implementation projects under LDCF was approved for 44 countries, totaling $317.3 million distributed amnog 76 projects, as at 20...

UNCDF announces multi-stakeholders consultation

Following a decision proposed to and endorsed by the Executive Board at its annual session in June 2012, UNCDF announces the beginning of a multi-stakeholders consultation process, aimed at seeking the views of stakeholders on what action UNCDF should take to increase predictability of aid received. “This stakeholders consultation is really about sustaining constructive relationships with our partners,” said Marc Bichler, UNCDF Executive Secretary. “It will not be a single conversation, but a series of opportunities to create understanding about UNCDF’s future interventions among those it will likely affect or interest, and to learn how these external parties view our future plans...

COP18 and the LDC Fund

The 18th session of Conference of the Parties of UNFCCC met in Doha, Qatar from November 26 to December 8, 2012. Among other things, the COP-18 adopted a decision on further guidance to the Least Developed Countries Fund. Among its several provisions, the Decision requests the GEF to continue to support the UNFCCC programme for LDCs, to further faciliate access by LDCs to the LDC Fund and to enhance communication with its implementing agencies on the updated operational guidelines of the Fund.  An unedited version of the decision is available from the UNFCCC website . See also COP-18 Decision on National Adaptation Plans

Untying aid for LDCs: Trends and implication

Between 2000 and 2010, the proportion of untied OECD DAC bilateral aid to LDCs has increased from 57.5 per cent to 84.4 per cent. Despite the progress achieved, at least 30% of the aid disbursed to LDCs and other programme countries is estimated as tied (and reporting is far from complete), when the exempt technical cooperation and food aid are included. Furthermore, donors can in practice tie their programme and project aid informally for various reasons such as lack of capacity of local and regional contractors, which is particularly an important factor in LDCs. Traditionally, many donor countries have seen aid as an opportunity to promote their own commercial interests, by...

LDCF Background and Experience

The LDCF was proposed at the 7th session of the Conference of the Parties to the UNFCCC in Marrakesh, in 2001. The GEF, as a financial mechanism of the Convention, was requested to operate the fund. In 2002 the GEF reported that arrangements had been made for the establishment of the fund. Objective The fund addresses the needs of the 48 LDCs which are particularly vulnerable to the adverse impacts of climate change. As a priority, the LDCF supports the preparation and the implementation of the National Adaptation Programs of Action (NAPAs), which are country-driven strategies that identify the immediate needs of LDCs in order to adapt to climate change. Preparation of NAPAs ...