Dac Journal - Development Co-operation Report 2003. Vol. 5, No. 1.

237 Pages·2.102 MB·English

by  OECD

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Development Co-operation A The DAC Journal
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2003 REPORT o Development
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Development is the business of the people and governments of the countries concerned. a
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Their own policies and institutions will remain the key to sustainable improvements in 2 Co-operation
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people’s lives. The development community can merely help the process, and in particular 0
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facilitate faster progress. The two key ways the development community can do so are by ,
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promoting positive changes in the conditions that poor countries face in the world – the o
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“coherence” agenda – and by delivering more, and more effective, development assistance u 2003 REPORT
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where it can be put to good use. The DAC can and should play a role in both – a role e

of advocacy and support to the first and one of leadership in the second. The DAC Chair’s 5
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overview in Chapter 1 of this report is built around these issues. The report goes on to N
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analyse, in Chapter 2, the evolution of aid flows to developing countries, including recent
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trends in the volume and allocation of DAC members’ aid and attempts to isolate the factors 1
that determine the size of their efforts, and to assess the impact of policy ideas in shaping
their development co-operation programmes. Chapter 3 shows the progress that still needs
to be made to meet the Millennium Development Goals, while Chapter 4 gives information
on the aid strategies, programmes and policies of DAC members – and non-DAC OECD
members – in terms of aid volume and programme objectives. It shows that aid increased
by 7.2% in 2002, the highest real level achieved in a decade. And prospects are good for
improved aid volume and effectiveness.
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ISSN 1563-3152 ISBN 92-64-01961-8
The DAC Journal 2004 SUBSCRIPTION 43 2004 31 1 P -:HSTCQE=UV^[VY:
(4 ISSUES)
2004, Volume 5, No. 1 2004, Volume 5, No. 1
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Efforts and Policies
of the Members
of the
Development Assistance Committee
Development
Co-operation
2003
Report
Report by Richard Manning
Chair of the Development Assistance Committee
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into
force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD)
shall promote policies designed:
– To achieve the highest sustainable economic growth and employment and a rising standard of
living in member countries, while maintaining financial stability, and thus to contribute to the
development of the world economy.
– To contribute to sound economic expansion in member as well as non-member countries in the
process of economic development.
– To contribute to the expansion of world trade on a multilateral, non-discriminatory basis in
accordance with international obligations.
The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries
became members subsequently through accession at the dates indicated hereafter: Japan
(28thApril1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18thMay1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland
(22ndNovember 1996), Korea (12thDecember 1996) and the Slovak Republic (14th December2000). The
Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD
Convention).
In order to achieve its aims the OECD has set up a number of specialised committees. One of these is the
Development Assistance Committee, whose members have agreed to secure an expansion of aggregate volume of
resources made available to developing countries and to improve their effectiveness. To this end, members
periodically review together both the amount and the nature of their contributions to aid programmes, bilateral and
multilateral, and consult each other on all other relevant aspects of their development assistance policies.
The members of the Development Assistance Committee are Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway,
Portugal, Spain, Sweden, Switzerland, the United Kingdom, the United States and the Commission of the European
Communities.
Publié en français sous le titre :
Coopération pour le développement
Rapport 2003
© OECD 2004
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PREFACE BY THE SECRETARY-GENERAL
Preface by the Secretary-General
The2003 Development Co-operation Report is the first to appear under the responsibility of
Richard Manning, the new Chair of the Development Assistance Committee (DAC). It was a great
pleasure to welcome our new chair to this important post, he being singularly well qualified to lead
the DAC during this important period.
OECD contributes to development in many ways. Certainly by giving a home to the DAC where
bilateral donors, i.e.the providers of close to USD60billion in official development assistance
in2002, co-ordinate their strategies on how to help developing countries achieve economic growth
and poverty reduction. Indeed, the development process in many of these countries will continue to
depend on ODA support for the foreseeable future.
At the same time, we know that growth and development will only be sustainable if based on
trade and investment. Here, OECD and its member countries have an enormous amount of expertise
and experience to share. And there is growing readiness among various other Committees of OECD
to take the specific problems of developing countries into account when discussing technical issues.
The OECD Initiative on Investment for Development is a recent example of this changing mindset.
Beyond trade and investment issues, a great deal of work within the OECD should contribute to
Development. Think of Information and Communication Technology, biotechnology, agriculture, the
environment and so on. The DAC is especially well placed to identify these resources of the OECD and
to marshal them in support of Development. The DAC can count upon the support of management of
the OECD to facilitate this critical and continuing challenge.
It is gratifying to seethat, more and more, the work of the DAC and other important OECD
committees is indeed focusing on the potential synergies between various drivers of economic growth
in the interests of developing countries.
Donald J. Johnston
Secretary-General
2003 DEVELOPMENT CO-OPERATION REPORT – ISBN 92-64-01961-8 – © OECD 2004 3
FOREWORD
Foreword
For over forty years, the OECD’s Development Co-operation Report has charted, under the
guidance of successive Chairs of the Development Assistance Committee, the progress of the
development enterprise, and particularly of the role of one of its pillars, the provision of official
development finance. It is written from a donor perspective but informed by insights from many
quarters.
As the report recognises, the efforts of partner countries themselves will continue to be the main
driver of progress, along with the wider international environment within which they have to work.
Central to the thinking of the Development Assistance Committee and the OECD more widely is that
official aid is only one –and for many countries not the most important– element in external
financing. But the Committee takes seriously the need to account for the nearly USD60billion a year
now going into official development assistance, and to improve its effectiveness and impact,
particularly in view of the distance that must be travelled if developing countries are to get close to
the goals set by the world’s leaders at the Millennium Summit. This report is designed to provide as
much transparency as possible about the emerging shape of this international effort. It also provides
a way of bringing to wider attention the overall work of the Development Assistance Committee,
which remains the central body for collective discussion of many policy issues within the bilateral
donor community, increasingly in partnership with the multilateral donor community.
As a new Chair of the Committee, I should like first to recognise the contribution of my many
predecessors, and most recently Jean-ClaudeFaure, to the evolution of thinking in the donor family
which is reflected, however imperfectly, in the report. Secondly, I should like to express my great
appreciation to MichaelRoeskau and the many members of the Secretariat who have contributed the
material of this report, and not least to Kerry Burns, for her work in pulling it together and ensuring
delivery to a very tight timetable.
Richard Manning
DAC Chair
2003 DEVELOPMENT CO-OPERATION REPORT – ISBN 92-64-01961-8 – © OECD 2004 5
ACKNOWLEDGEMENTS
Acknowledgements
Acknowledgements
Main authors and contributors to this year's report were: Yasmin Ahmad, Safiye
Akalin, Stephanie Baile, Hilary Balbuena, Julia Benn, Eric Bensel, Virginia
Braunstein, Kerry Burns, Richard Carey, Sean Conlin, Sara Dahlsten, Jean-Louis
Grolleau, Brian Hammond, James Hradsky, Paul Isenman, Michael Laird, Frans
Lammersen, Hans Lundgren, Richard Manning, Hunter McGill, Carola Miras, Simon
Mizrahi, Diana Morales, Aimée Nichols, Marjolaine Nicod, John Noonan, Madeleine
Paris, Rudolphe Petras, Sandra Philippe, Michael Roeskau, Simon Scott, Elisabeth
Thioléron, Ann Zimmerman.
6 2003 DEVELOPMENT CO-OPERATION REPORT – ISBN 92-64-01961-8 – © OECD 2004
TABLE OF CONTENTS
Table of Contents
Preface by the Secretary-General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1. Overview by the DAC Chair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Making policies more coherent for development . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Making development assistance more effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Delivering more aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Fostering constructive dialogue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Growth or poverty reduction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Public or private? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Social sectors or production and infrastructure?. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Projects or programmes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2. Trends in Aid Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
The overall flow picture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
DAC and non-DAC donors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Aid by region and income group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Multilateral share of ODA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Aid by sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Trends in forms of aid delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Aid is back. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Annex: Falling Aid to Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3. Progress Towards the Millennium Development Goals . . . . . . . . . . . . . . . . . . . . 51
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Progress towards the Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Goal 1– Eradicate extreme poverty and hunger. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Goal 2 –Achieve universal primary education. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Goal 3 –Promote gender equality and empower women. . . . . . . . . . . . . . . . . . . 55
Goal 4 –Reduce child mortality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2003 DEVELOPMENT CO-OPERATION REPORT – ISBN 92-64-01961-8 – © OECD 2004 7
TABLE OF CONTENTS
Goal 5 –Improve maternal health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Goal 6 –Combat HIV/AIDS, malaria and other diseases. . . . . . . . . . . . . . . . . . . . 56
Goal 7 –Ensure environmental sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Goal 8 –Develop a global partnership for development. . . . . . . . . . . . . . . . . . . . 58
Improving aid effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Alignment and harmonisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Public financial management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Strengthening procurement capacities in developing countries. . . . . . . . . . . . . 68
Managing for development results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4. Policies and Efforts of Bilateral Donors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Trends in DAC members’ aid volume and programming. . . . . . . . . . . . . . . . . . . . . 72
Notes on DAC members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
European Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Luxembourg. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Netherlands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Sweden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
United States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Notes on non-DAC members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Iceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Korea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Poland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Slovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Turkey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
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TABLE OF CONTENTS
The DAC at Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
The Development Assistance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Key Activities of the DAC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
DAC Subsidiary Bodies’ Mandates andWorkProgrammes . . . . . . . . . . . . . . . . . . . 116
The Development Co-operation Directorate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Statistical Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Technical Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Glossary of Key Terms and Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
Notes on Definitions and Measurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
DAC List of Aid Recipients –For 2002Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
List of Acronyms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
List of Boxes
1.1. Progressive increase in bilateral aid to good performers . . . . . . . . . . . . . . . . . . . 18
1.2. Aid effectiveness and selectivity: Integrating multiple objectives
into aid allocations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.3. No trend towards greater concentration of bilateral aid among DAC members 23
3.1. Millennium Development Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.2. PARIS21 –From modelling to measuring results . . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.3. A gender perspective on the MDGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.4. The Millennium Development Compact –A plan of action aimed at countries
most in need of support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.5. Progress with the2001 DAC Recommendation on Untying ODA
to the Least Developed Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.6. Rome Declaration on Harmonisation – 25February 2003. . . . . . . . . . . . . . . . . . . 65
4.1. DAC Peer Review of Denmark, 22May 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
4.2. DAC Peer Review of Finland, 17June 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
4.3. DAC Peer Review of Ireland, 17November 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4.4. DAC Peer Review of Japan, 12December 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
4.5. DAC Peer Review of Luxembourg, 18March 2003. . . . . . . . . . . . . . . . . . . . . . . . . . 94
4.6. Joint Assessment in Tanzania of the aid programmes of Denmark,
Finland, Ireland and Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
List of Tables
1.1. Anticipated ODA–2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
A.1. Aid to agriculture by donor and share in total aid; commitments, 1980-2001. . 45
3.1. Overview of progress towards the Millennium Development Goals. . . . . . . . . . 54
3.2. DAC members’ ODA prospects for 2006: Latest projections. . . . . . . . . . . . . . . . . 62
4.1. DAC members’ net official development assistance in2002 . . . . . . . . . . . . . . . . 73
List of Charts
2.1. DAC members’ total net ODA at 2001prices as a share of GNI, 1980-2002. . . . . . . 30
2.2. DAC members’ resource flows to developing countries, 1980-2002 . . . . . . . . . . 31
2.3. Donor breakdown of DAC members’ ODA in real terms, 1980-2002 . . . . . . . . . . 33
2.4. Share in net DAC bilateral ODA by recipient region, 1970-71 to2000-01 . . . . . . 35
2.5. DAC members’ ODA shares to multilateral agencies, 1992 and2002 . . . . . . . . . 36
2.6. Share of multilateral ODA to the EC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2003 DEVELOPMENT CO-OPERATION REPORT – ISBN 92-64-01961-8 – © OECD 2004 9