OECD-DAC response to a post-Covid recovery by Julia Sánchez and Leo Atakpu
Note: It has been a month since the High-Level Meeting (HLM) of the Organisation for Economic Co-operation and Development's Development Assistance Committee (OECD DAC), but the issues and resolutions raised in the meeting remain as relevant as ever, especially given the fact that the world is still reeling from the impact of the COVID-19 crisis while trying to deal with the worsening climate emergency. Projections suggest that vaccines will become publicly available in developed countries far earlier than the least developed ones, reflecting the long-standing inequality among nations, even in a matter that is supposedly a fundamental human right. As the year ends, it becomes necessary to reflect on the statements and commitments of the OECD DAC related to matters of healthcare and other aspects of pandemic response and recovery, as well as climate change, shrinking civic spaces, and development effectiveness. These reflections could inform -- or inspire -- advocacies, campaigns, and other actions of civil society organizations in the coming year, especially those that work on issues of aid and debt.
The following piece contains reflections on the proceedings of the OECD DAC HLM, written by Leo Atakpu and Julia Sánchez, who represented civil society organizations at the meeting last November 9-10. Atakpu is the executive deputy director of the African Network for Environment and Economic Justice based in Nigeria. He has long been deeply involved in environmental advocacy and debt campaign initiatives in West Africa. Sanchez, meanwhile, is the secretary-general of ActionAid International.She has held leadership positions in the international development sector and has been a development practitioner in both Global North and South settings for 25 years.
The OECD is often described as a club of rich nations, so when representing over 100 civil society organisations at the group's Development Assistance Committee High-Level Meeting last week, we appealed to the historic opportunity for it to support a green and just recovery in developing countries by living up to its commitments.
The stakes could not be higher. Developing countries may lose an estimated US$700 billion in external financing this year - more than four times the value of this groups' Official Development Assistance (ODA). As the official communique recognised: "For the first time in decades, poverty is increasing - especially for women and girls. Between 83 and 132 million more people are hungry this year. Hundreds of millions of people in developing countries will lose their livelihoods and fall back into poverty."
And yet, while DAC members all agree with the severity of the pandemic, compounded by the climate emergency, the HLM concluded with lackluster commitments on ODA levels and instead overemphasized the role they hope private sector flows can play to save the day.
Spending more on foreign debt repayments than on health and education combined
Many OECD nations are looking inwards during this pandemic, susceptible to populist nationalist sentiments and suffering budget constraints following expensive national stimulus packages. Despite the acknowledgment by most delegates to the HLM of the severity of the debt crisis amid covid-19, several countries chose to prioritise loans and private finance rather than grants to assist the world's poorest countries. This reaction is short-sighted, given that many countries are heading for a debt crisis "unlike anything we have seen."
Zambia is on the verge of becoming the first African country to default on its debt since the start of the pandemic. Civil society organizations are calling for urgent debt cancellation to prevent the suffering of millions of Zambians. We are gravely concerned that many other countries could also default in the absence of urgent action to address the new debt crisis. But this must not be conflated with aid.
DAC's recent agreement on reporting debt relief as ODA could artificially inflate ODA amounts while not actually resulting in new money for developing countries. Countries cannot afford to rob Peter to pay Paul – low-income countries need money to pay for nurses and teachers now, not more crippling debt dressed up as assistance.
Profiting from the pandemic
Meanwhile, foreign direct investment may decline by up to 40% this year, states the OECD-DAC HLM Communiqué 2020, which commits to "working with partner countries, the private sector and multilateral organisations to improve business environments, share risks and rewards fairly when collaborating with businesses investing in developing countries."
There was much emphasis on private financing and private sector instruments (PSI) during the HLM, without acknowledging that the most crucial ingredient for low-income countries' response and recovery from Covid-19 is public finance for public services.
2020 has shown us that strong social services, healthcare, insurance, and protection measures are the backbone to resilience in the face of a pandemic. Even rich nations have proven fallible in the face of Covid-19, with 1.2 million deaths from the virus and inequities in quality of care and access to treatment deepening even in countries with cutting edge health systems.
While promoting private sector solutions at the HLM, there was little mention of establishing safeguards and accountability mechanisms. Yet vigilance is warranted, as history is laden with cases of public-private partnerships that posed more risk to the public purse and the quality of public service. Even the case made for 'blended finance' is questionable, as data shows that it "generally had only a modest impact on poverty." The current crisis should not be seen as an opportunity for profit-making by private players.
'Walk the talk'
This month, the U.S. formally withdrew from the Paris Climate Agreement - hopefully to be reversed by the new administration next year - even as the most vulnerable communities bear the brunt of the climate emergency, as seen in the massive destruction left by consecutive typhoons in the Tropical Pacific and the Caribbean. There is strong scientific consensus on climate change being a trigger for increasing destructive weather phenomena. As chair Susanna Moorehead put it, in this context the DAC has to "walk the talk." For civil society organisations, this means both new and additional climate finance and refusing to finance activities harmful to the environment.
The DAC also needs to "walk the talk" by committing to concrete steps for protecting shrinking civic space, as some governments continue to use the pandemic as a pretext to suppress civil liberties through increased regulatory and extra-judicial attacks.
We welcome the opportunity to engage with the OECD-DAC, as we monitor commitments made and call for greater ambition. In the spirit of multi-stakeholder dialogue and effective development cooperation, our eyes will remain on the prize of a green and just recovery, for all.