February 24 marked the second year of Russia’s invasion of Ukraine – a conflict that quickly escalated into a humanitarian, financial, military, economic and political crisis on both regional and global levels. It remarkably led to a global grain crisis owing to lessened produce in one of the world’s biggest grain exporters and possibly revitalized the EU’s enlargement process. Even though the compounding effects of a war in the middle of Europe -an ongoing one, at that- was already made obvious, some damage is only visible in hindsight. OECD has released the final Official Development Assistance (ODA) figures for 2022 in late January, following the release of initial data earlier in 2023. ODA 2022 data puts the impact of the Russia-Ukraine conflict on global development in a new perspective.
Official Development Assistance (ODA) is the OECD’s Development Assistance Committee’s (DAC) primary tool for measuring and categorizing international development aid. Originally part of OECD’s predecessor the Organisation for European Economic Co-operation (OEEC), the “Development Assistance Group” evolved into the DAC with the inception of the OECD itself. DAC later adopted ODA as an official tool in 1969. Although OECD has more than 200 bodies, DAC is perhaps the most visible and well-known one. Once described as “the venue and voice of the world’s major bilateral donors” by Michael Roeskau, former Director of the OECD’s Development Cooperation Directorate, DAC is indeed the largest formal gathering of the world’s biggest development aid providers – the world’s donors’ club. It counts among its 32 members both very prominent aid-providers such as Germany and the USA as well as the European Union itself, alongside participant and observer states and organizations.
Although the DAC counts among its members and partners most of the world’s prominent development aid providers, countries outside of the DAC also contribute significantly to international development aid including Türkiye, Saudi Arabia and Qatar among others.
DAC members and those that voluntarily report ODA figures to the OECD provide annual development assistance figures to the OECD, who then collates, verifies and analyses the global annual ODA figures and trends and publishes the results to the public.
As ODA has been widely regarded as the gold standard of international aid, it made its way into the United Nations’ Sustainable Development Goals (SDG) Agenda. SDG17 Partnerships for the Goals places an annual ODA goal of 0.7% of gross national income (GNI), although annual total ODA regularly falls short of hitting 0.7% of donors’ combined GNI.
2022 data shows that DAC contribution to global ODA amounted to USD 211 billion, reaching an all-time high in 2022. Yet, only reached 0.37% of DAC’s combined GNI, with only four countries including Luxembourg, Sweden, Norway and Germany hitting the 0.7% GNI target. Outside of DAC members, Türkiye consistently reached or passed the 0.7% ODA/GNI target in the last decade, including in 2022. USD 17.9 billion was provided by non-DAC members that voluntarily report ODA figures.
A trend of sharp increase in ODA provided by DAC was observed since 2020, largely due to global events including the COVID-19 pandemic and the war in Ukraine. 2022 data show a 17% increase over 2021, and a 32% increase over 2019. However, the increased amount of funding is not distributed evenly across all ODA components. For one, spending on in-country refugee costs increased by an astounding 147% from 2021 to 2022. Although not to the same extent, spending on bilateral development programmes, humanitarian aid, and multilateral ODA also increased. On the contrary, contributions to multilateral organisations’ budgets actually decreased by 5% in the span of a year. [1]
It must also be noted that the amount of ODA allocated to addressing COVID-19 peaked in 2020 and continues to decrease steadily, mainly due to declined funding for vaccine supply and development in third countries. Both the overall increase in the annual total ODA in 2022 as well as increased spending on in-country refugee costs were mainly driven by the conflict in Ukraine. Receiving a total of USD 17.8 billion in ODA, Ukraine was the largest recipient of development assistance in the world.
Displacement pushes ODA away from the least developed
While increased ODA is great news and shows international sensitivity to humanitarian efforts and development, the increasingly disproportionate allocation of ODA most likely does not herald positive developments for international development efforts.[1]
Firstly, an increasingly visible trend of spending ODA on in-country refugee processing costs had already made itself known since the peak of the Syrian refugee crisis around 2016 and was subjected to great criticism from international development partners as increased domestic spending means less funding available to ODA recipients and the least developed countries, in particular, for whom foreign assistance is still vital.
The war in Ukraine actually reflected directly on developing and least developed countries (LDC) with decreased levels of ODA since the beginning of the conflict and net ODA to the LDCs actually decreased by 4%, hitting the lowest proportion of ODA for LDCs since 1972 with 21.4%.
ODA is generally well-planned in advance through national and supranational frameworks, meticulously allocated according to thematic priorities for which the EU’s Neighbourhood, Development and International Cooperation Instrument-Global Europe (NDICI) is a good example. However, it is clear that ODA is still quite vulnerable to sudden shocks including disasters or conflict and the current methodologies are not adaptable and flexible enough to consistently and adequately account for possible shocks that occurred frequently on a global scale in the last decade. Instead of allocating a different budget with a different source of funding to face shocks, plenty of DAC members such as the United Kingdom as well as non-DAC ODA providers like Türkiye found themselves allocating ODA funds to in-country migrant and refugee costs in the last decade due to both the Syrian and Ukrainian crises.
The discrepancy between aid provided for previous similar regional conflicts with effects that echoed globally versus the immense amount provided for Ukraine also begs the question of methodology, equality and perception in terms of migration and humanitarian efforts. Similarly massive numbers of displacement took place in both Syria and Ukraine, and equally similar amounts of ODA for humanitarian assistance was allocated to both. However, as opposed to Yemen and Syria, Ukraine received developmental aid almost nine times larger than the humanitarian aid it received; almost USD 26 billion. This reveals an inconsistent methodology in ODA allocation when faced with similar conflicts. It is also reminiscent of the debate on whether blue-eyed blond refugees of Caucasian descent are more preferable to the others and whether tragedy that strikes closer to home is held dearer.
Putting aside any and all considerations, the war in Ukraine shook the world in many aspects. As one of the grain warehouses of the world, Russia’s invasion led to an aggravated food crisis that mainly affected the LDCs. Coupled with the COVID-19 pandemic, the global economy has also been in dire straits, with countries facing increased inflation and costs for several consecutive years now and the developing world is no exception. LDCs and developing countries are also the ones that are typically most vulnerable to climate change.
Less ODA for multilateral organizations could also hurt potential projects carried out with LDCs. Therefore, neither the international community nor the LDCs can afford to face the consequences of less ODA allocated to international development efforts owing to a funding methodology that seemingly cannot adapt to an increasingly tumultuous world. As it currently stands, ODA 2022 data shows that conflict and displacement all over the world, but particularly in Ukraine, displaced funds that would ordinarily go towards international development. ODA is still the golden standard for international development – a more robust and flexible ODA, therefore, is still key to mitigating further conflict and displacement in the future owing to stalled development.
Ayşenur ALİŞİROĞLU
References
2022 final Oda statistics. OECD. (2024). https://public.flourish.studio/story/2150513/
DAC in Dates: The History of OECD’s Development Assistance Committee. OECD. (2006). https://www.oecd.org/dac/1896808.pdf
Official Development Assistance (ODA). OECD. (2024). https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/official-development-assistance.htm
Walters, R. (2023, March 22). The international development sector needs to think twice when talking about “in-country refugee costs” and ODA. Bond. https://www.bond.org.uk/news/2023/03/why-the-international-development-sector-needs-to-think-twice-when-talking-about-in-country-refugee-costs-and-oda/
