Carsten Staur Chair, OECD Development Assistance Committee (DAC)
Lisbon, 12 October 2023
“At the mid-way point to 2030 – 8 years after 2015 where we, as members of the UN, adopted the 2030 Agenda for Sustainable Development – the SDGs are in deep trouble. The UN’s preliminary assessment is that of the 140 targets where we have data, only about 12% are on track. More than half are moderately or severely off track.
It’s crucial to understand that ODA is only a fraction of the global economy: actually ODA, and the 200 billion dollars last year, is less than 0.2 % of the global economy. ODA will never be able to cover the financing need of developing countries – and it was never meant to do so either.
The key challenge is how to maximize the strategic, smart and innovative use of the limited ODA resources to help get partner countries over the line – how to make ODA work harder and develop true development cooperation partnerships going forward.
ODA may help make this possible, through support for designing sustainable finance taxonomies; building well-functioning local financial markets; developing a pipeline of bankable SDG-compatible projects to attract investments; and other targeted investments.
One of the challenges in this context is that the current risk profiles of developing countries are too high and therefore prohibits investments from large institutional investors such as pension funds and insurance companies. I would welcome if the DAC – together with other partners – could contribute to improving the risk assessment and help bring forward more transparency and predictability of credit ratings.
Going forward the DAC will continue to strengthen its cooperation to engage with the private sector in order to help pave the way for more blended finance and increased investments. One way is by using ODA to help build more enabling environments for investments. I already mentioned anti-corruption. The OECD/DAC blended finance principles are another important piece that aims to help streamline efforts and ensure that blended finance meets quality standards and achieves impact.
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