TWN Info Service on WTO and Trade Issues (Jul16/14)
20 July 2016
Third World Network

UNCTAD-14: ODA shortfall of $2 trillion since 2002, says UNCTAD
Published in SUNS #8286 dated 20 July 2016

Nairobi, 19 Jul (Kanaga Raja) -- The gap or shortfall between pledged and delivered official development assistance (ODA) since 2002 equates to just over US$2 trillion and the ODA gap for 2014 alone came to more than US$192 million, according to a new report released by the UN Conference on Trade and Development (UNCTAD) at the UNCTAD-14 conference here.

UNCTAD said the developing countries would be better able to finance the Sustainable Development Goals (SDGs) if the developed countries were to meet their 2002 target to put 0.7 percent of their gross national income (GNI) into overseas aid.

[A study released at the Commodities forum (see separate story) brings out that South countries lose billions of dollars in annual export earnings on primary commodities because of "misinvoicing", much of this facilitated in taxation and other systems in developed countries, and the misuse of it by transnational corporations, resulting in capital flight and lost earnings that could easily plug development resources gap of developing countries. SUNS]

According to UNCTAD, this year's "Development and Globalization: Facts and Figures" report is the first major effort to measure progress in achieving the SDGs.

UNCTAD Secretary-General Dr Mukhisa Kituyi said that if rich countries had consistently met the 0.7 percent target since 2002, the developing countries would have been $2 trillion better off.

"The Sustainable Development Goals represent the outcome of long, serious discussions on how we want our world to look in 2030, but this vision needs serious finance," he said.

Kituyi added in a press release, "The 0.7 percent target will be a hard sell for many rich Governments, but these are a daring, ambitious set of Goals, and they require an equally ambitious response."

Speaking at the launch of the report on Monday (18 July), Joakim Reiter, Deputy Secretary-General of UNCTAD, said that the report is unique in its kind.

He made special mention of Steve MacFeely, UNCTAD Head of Statistics, and Richard Kozul-Wright, Director of UNCTAD's Globalization Division, who, he said, had worked very hard to establish the baseline - the starting line - "for what we measure with the SDGs."

This report is the first UN report on the start-line for SDG implementation. "Therefore, it provides the floor upon which we will constantly measure our progress towards the fulfilment of the SDGs. That in itself is a very unique feature," he said.

UNCTAD, he further said, has also calculated the accumulated debt from rich countries in terms of their fulfilment of the failed delivery on the promise of ODA, i. e. aid.

"We have calculated that the cumulative shortfall since the establishment of the Millennium Development Goals (MDGs) in 2002 amounts to some US$2 trillion today. This is of course money that would have made a massive difference for developing countries on their journey over eradicating poverty and meeting the Sustainable Development Goals."

"It is even more shocking considering that US$2.5 trillion in annual investment is needed to achieve the SDGs in developing countries. We are talking about a very significant shortfall by the failure to live up to the commitment to provide 0.7 percent assistance from traditional donors," said Reiter.

"As we are moving towards the effective and efficient implementation of the SDGs, we will have to be very honest about the gaps where we currently don't have all the facts and figures needed in order to benchmark ourselves and constantly improve towards the fulfilment."

One very important gap that UNCTAD is identifying in the report is that "we don't know much frankly about South-South cooperation."

He highlighted that there is a risk that less inclusive and less universal organisations of a regional or plurilateral nature will try to start to monitor non-Members. "And since UNCTAD has a universal membership and has a magnificent statistical capacity, we are happy to shoulder this responsibility."

Also speaking at the report's launch, Dr Kituyi said that "we as an organisation pride ourselves by our ability to be ahead of the curve."

According to UNCTAD, by focussing on the SDGs, this year's report puts numerical values on roughly a third of the Goals' 230 indicators.

Referring to SDG Target 17.2 on ODA commitments, the report said that the need to establish a stable flow of ODA was recognized as far back as the 1960s.

In fact, a target of official flows equivalent to 0.75 per cent of each developed country's gross national product (GNP) was initially adopted at the second conference of UNCTAD in New Delhi in 1968. This proposal was accepted by most, but not all, developed countries.

But after further negotiations, this initiative was approved by the United Nations General Assembly on October 1970, although the target was lowered to 0.7 per cent of GNP.

Following a period of decline and stagnation in the 1990s, despite a call for renewed efforts from the Monterrey Consensus on Financing for Development (in 2003), registered ODA flows to developing countries increased significantly in the 2000s, said the report.

Net disbursements by members of the Development Assistance Committee (DAC) of OECD rose from US$89 billion in 2002 to US$134 billion in 2014 (in constant 2013 United States dollar terms) - a 51 per cent increase, though an amount slightly below the record levels in 2010 and 2013.

However, said the report, this still represents only 0.29 per cent of members' GNI , which is far short of the committed target of 0.7 per cent of GNI and is lower than the shares in the early 1990s.

Moreover, this percentage has been on a declining trend since 2010, both for total ODA and for ODA to the LDCs. Around one third of ODA has been directed towards these countries, where, on average, it accounts for over 70 per cent of external financing.

In constant dollar terms, it more than doubled between 2000 and 2010, but it has been falling in recent years.

Indeed, bilateral aid to LDCs declined by 16 per cent in 2014, said UNCTAD.

Moreover, spending plans by major donors suggest that there is unlikely to be a significant growth of ODA flows in the medium term.

Since the 2002 Monterrey Consensus, approximately US$1.4 trillion in ODA has been delivered, representing an average effort of 0.29 per cent of GNI .

"During this period, the gap or shortfall between pledged and delivered ODA, between 0.29 per cent and 0.7 per cent of GNI, equates to just over US$2 trillion (in current prices). The ODA gap for 2014 alone was more than US$192 million," said the report.

The report also highlighted SDG Target 17.18 on capacity-building for reliable data availability.

It said that the Millennium Development Goals were comprised of 8 Goals, 19 targets and 61 indicators.

Even after 15 years, sizeable data gaps exist across all Goals, particularly for Goal 8 where average data availability for developing regions was only 29 per cent in 2015. Across all the Goals, in 2015, the average data availability was only 68 per cent.

The Sustainable Development Goals are a much more ambitious and complex proposition comprising 17 Goals, 169 targets and 230 indicators. This represents an almost three-fold increase in the number of indicators required by the new monitoring framework, said the report.

But such a simple volume measure underestimates the real data challenge ahead, as the widening of scope and complexity of the Sustainable Development Goals compared with the Millennium Development Goals has greatly added to the task.

For example, the UN Statistics Division (UNSD) estimates that just less than half (47 per cent) of the indicators agreed by the United Nations Statistical Commission in March 2016 are categorized as tier 1 indicators meaning concepts, methodologies, standards and data exist for compiling the indicator.

While UNSD notes that this estimate is very preliminary in nature, it nevertheless gives an indication of the magnitude of the task that awaits the global statistical community, said the report.

The gaps in data availability to measure progress towards the Millennium Development Goals suggest that populating the Sustainable Development Goal monitoring framework will be very challenging.

"In turn this suggests that a very significant investment in both national and international statistics, data infrastructures and capacity-building, including statistical literacy, will be necessary to fulfil the requirements of the Sustainable Development Goal monitoring framework," said the report.

The Goals have four times the number of indicators as their predecessors, the Millennium Development Goals, said MacFeely, UNCTAD Head of Statistics, in the press release. "The global community has major gaps in its data and must find ways to use the existing data much better," he said. He added that this year's report would help to move measurement forward.

"This report is online and interactive and has already thrown out some interesting results," he said. (The full UNCTAD report can be found at: <http://stats.unctad.org/Dgff2016/

E-TRADE FOR ALL INITIATIVE

Meanwhile, at a separate event at the UNCTAD-14 conference, UNCTAD launched a new e-commerce initiative called "eTrade for All".

According to an UNCTAD press release, the initiative brings international organisations, donors and businesses under one umbrella, easing developing country access to cutting-edge technical assistance and giving donors more options for funding.

The initiative will help developing countries in seven policy areas, including e-commerce assessments, information and communications technology infrastructure, payments, trade logistics, legal and regulatory frameworks, skills development and financing for e-commerce.

"A huge divide is opening between countries that are exploiting these opportunities and those that are not," said UNCTAD Secretary-General Dr Mukhisa Kituyi.

"I am delighted by this collaboration with our partners, which finally gives the global community an effective platform for helping developing countries access and benefit from e-commerce," he added. +