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ONE proposes strategy to increase ODA flows to LDCs

ONE, the international campaigning and advocacy organization, released a new report on the recent trend of declining ODA flows to LDCs. ONE makes a series of recommendations to reverse this trend. Based on OECD data, ONE reports that in 2014, ODA to LDCs dropped by two per cent compared with 2013. Compared with 2010 levels, flows fell by six per cent. The trend is more pronounced when one looks at bilateral ODA flows which dropped by 15 per cent between 2013 and 2014. ONE advocates a twofold strategy to reverse the negative trend. DAC Donors should commit to allocating 0.7 per cent of their GNI to ODA, ideally by 2020, and 50 per cent of ODA should go to LDCs, also by 2020. ...

Korea provides favorable loan conditions to LDCs

The Economic Development Cooperation Fund of Korea, administered by the Export-Import Bank of Korea and the Ministry of Strategy and Finance, provides concessional loans to LDCs to facilitate their industrial development and economic stability. The Fund offers five types of loans: (i) development project loans, (ii) equipment loans, (iii) public-private partnership loans, (iv) two-step loans and, (v) commodity loans. The Bank also provides compact loans, co-financing loans and mixed credit loans. The concessional loan mechanism identifies five groups of countries for which different interest rates and repayment periods apply. The LDCs are the group receiving the most favourable...

50 percent of Irish ODA will go to LDCs in 2015

Ireland promises to contribute half of its development assistance to LDCs in 2015. A target that the country also reached last year. 600 million Euro was granted to LDCs such as Ethiopia, Sierra Leone and Zimbabwe. Like most other OECD DAC members, Ireland's allocation of development aid did not reach 0.7 % of its GNI. In 2014, 0.39 % of the Irish GNI was spent on ODA. The LDC specific target, allocating at least 0.15 to 0.20 percent of the GNI as ODA to LDCs, was met. Source: Utv Ireland

Bilateral aid from DAC members to LDCs fell by 16 per cent in 2014

Member countries of OECD-DAC spent over US$135 billion on development assistance in 2014. When compared to 2013, ODA flows declined by 0.5 per cent in real terms in 2014. The decline was disproportionately large in the case of ODA flows allocated to the LDCs. Bilateral aid to LDCs fell by 16 per cent in 2014. The drop in assistance to LDCs can partly be explained by the debt relief for Myanmar in 2013, which had pushed the flows to a historic high. However, even after controlling for debt relief, flows to LDCs dropped by 8 per cent in real terms. A survey on aid spending plans indicates that country-level aid to LDCs will recover in the coming years. Source: Public Finance...

When should concessional loans be reported as ODA?

Members of the Development Assistance Committee of the Organization for Economic Cooperation and Development (DAC-OECD) met in Paris on 15-16 December 2014.  The main objectives of the meeting were to agree on how the measurement of official development assistance (ODA) could be revised to ensure greater transparency and comparability of data as well as to make the concept of ODA better adjusted and fit to today's global context and the needs of the upcoming United Nations sustainable development agenda.  In particular, members agreed to revise how concessional loans should be reported as ODA. Under the current system, concessional loans are reported as ODA only if they meet...

Financing for Development: what is at stake for the LDCs

The Permanent Mission of Benin and Chair of the Global Coordination Bureau of the Group of Least Developed Countries (LDCs) and the Office of the High Representative for the LDCs, LLDCs and SIDS (OHRLLS) are co-organising a briefing session entitled 'Financing for Development: What is at stake for LDCs?’. The briefing session takes place on Tuesday, 9 December from 1.15 to 2.45 pm in Conference Room 6, UN Headquarters, New York.

Targeting ODA towards LDCs: larger flows or smaller commitments?

The donor community has been increasingly interested in addressing shortcomings in the access to concessional development finance that LDCs are granted. Accordingly, the Secretariat of OECD/DAC has been asked to explore additional targets and incentives that would direct ODA towards this group of countries. One recent proposal is centered on the idea of having an LDC target determined by  a given share of OECD/DAC members' volume of ODA flows to developing countries. Currently, ODA targets to LDCs are based on a share of the donors' GNI. As specified in the Istanbul Plan of Action adopted at the IV UN Conference on the LDCs in May 2011, donors are to provide 0.15 to 0.20 per cent...

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 2012, 85.9 per cent of DAC's bilateral aid to the LDCs was untied, excluding administrative costs, a slight improvement from 2011 (81.5 per cent). In 2012, 82.6 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...

The ODA flows to LDCs recovered in 2013

According to data released by the OECD, gross ODA flows to LDCs recovered in 2013 after the decline to $47.6 billion in 2012. Data for 2013 indicates that LDCs regained its share in total ODA. Gross flows reached $54.5 billion, a 16 per cent increase from the 2012 level.   

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