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  • 30 October 2017

The UK’s 'Irma exemption' should prompt a broader discussion at the DAC on the role of ODA in responding to crisis

An opportunity for the DAC to start evidence-based discussions about the long-term need for ODA that’s responsive to crises in aftermath of Hurricane Irma
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Written by Cordelia Lonsdale

Today the UK is making the case at the High Level Meeting of the OECD DAC to give official development assistance (ODA) to some British Overseas Territories (BOTs) – including Anguilla, Turks and Caicos and British Virgin Islands – which have all been ineligible for ODA for some years. The idea is that the BOTs are given special dispensation to return to the list of ODA-eligible countries for 36 months. This ‘emergency waiver’ would allow the UK to report as ODA the money it wants to spend on helping the BOTs in their response to Hurricane Irma.

In DI’s view, there are two decisions to be made by the DAC. First: whether the current ODA eligibility architecture enables an adequate response to countries experiencing crises – and if not, how we could improve it. And second, whether or not to grant the UK’s request for a waiver.

On the first point, we think this is a valuable and important discussion to have. Gross national income (GNI) data is not a particularly useful indicator of need or development progress, and therefore not the best guide for decision-making about aid, particularly in a crisis setting. Developing countries trying to achieve the sustainable development goals (SDGs) are looking to make progress on a range of indicators – not just income; and the official GNI of the BOTs was calculated before the disaster, so it probably bears little resemblance to the reality on the ground today. There is a case to be made for a more sophisticated approach to allocation decisions, which takes into account developmental indicators (poverty rates; health and wellbeing indicators; a country’s vulnerability to crisis and fragility). For countries that are making progress towards the SDGs, providing a quicker response to an emergency – not waiting for the GNI figures to put a country back on the list, but acting now – might help prevent a long-term developmental backslide caused by a crisis. Such a slide could have a serious impact on the wellbeing of affected populations (and may be more costly for donors and countries in the long-term). In this regard, DFID’s proposals are on the right track.

That said, it’s critically important to ensure ODA is not diverted from the poorest countries. They also face significant challenges responding to crises, such as hurricanes like Irma. DI analysis shows that most people living in extreme poverty are also living in countries affected by fragility, environmental vulnerability or both (87%, or 661 million people). Some long-term ‘forgotten crises’, such as that in Algeria, remain in need of international support, while new ones, such as in Libya, emerge. Additionally, forthcoming DI research highlights a set of countries, many in Africa, that global efforts to end poverty are likely to leave behind – unless something in the current financing picture changes. DAC members need to have this context in mind as they take decisions.

Having an evidence-based discussion about the long-term need for ODA that’s more responsive to crises is a good idea but rushing through a short-term, one-off decision is not. Decisions with potential long-term impacts need to be made by consensus. Proposals should also be based on evidence, data and careful discussion, and subject to input from civil society, parliamentarians, developing countries and independent experts.

So what would a good short-term outcome at the DAC HLM this week be? The ‘Irma exemption’ proposal from the UK should prompt a long-term, comprehensive review of how well ODA rules reflect the needs of middle-income countries experiencing crises. In response to the UK’s immediate proposal, the DAC could set up a short-term working group to examine what additional criteria should be considered alongside GNI to gauge ODA eligibility of non-ODA eligible countries in crisis (they could also determine whether an exemption or waiver for BOTs is appropriate). In the long-term, they should also commit to more far-reaching dialogue, to develop recommendations for how international assistance could be improved to respond to crises. The DAC could consider setting up a standing committee that considers temporary ‘emergency status’ re-entry to the ODA eligibility list, so that countries can provide ‘emergency ODA’ for countries experiencing crisis. (Such a committee would need to possess certain key features including responsiveness and transparency.)

To avoid negative impacts on aid quality and quantity, there would need to be appropriate principles and caveats. ‘Emergency ODA’ would need to be verifiably focused on reconstruction and development. It should be additional to existing ODA (perhaps achieved by having a separate line reported to the DAC CRS). It should be untied, and reported to the International Aid Transparency Initiative. There also needs to be some explicit strategy for linking emergency response to long-term development goals of affected countries, including through supporting domestic investments in disaster preparedness.

In a changing global landscape – where national income is failing as an indicator of the needs of countries’ populations, and where crises are impacting on an ever-broadening group of people and countries – there is a real need to revisit the criteria defining access to international assistance (including, though not limited to, ODA). The UK can take a lead in these wider discussions, and should prioritise this over short-term efforts to adapt existing aid rules.

Image: MOD