Graduating from ODA: country experiences and lessons

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BLOG POST: What happens to a country when their economy is considered strong enough that they are no longer in need of official development assistance (ODA)? How can they move away from aid in the most productive way possible? Are there any common experiences and advice for how other development partners – donors, banks, the UN- can help support this transition?

On Monday morning, policy experts and international cooperation agency representatives met at the Overseas Development Institute (ODI) in London to discuss these questions through a project by ODI and the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ). 

The project is completing four in-depth country case studies to help shed light on these issues- Botswana, Mexico, Chile, and the Republic of Korea. 

What was most striking to me as I listened to the presentation of initial findings was how different these countries experiences were. They ranged from countries who are objecting to and trying to re-define the ODA criteria (so that they can continue to receive aid) and those who have no issue with graduating and do not consider ODA as an important financing mechanism and accept donors leaving in a different way. 

Furthermore, there is not a clear cut linkage between this classification and decreased ODA- some countries continued to receive assistance, sometimes even higher, even though it was no longer classified as ODA. 

There were many interesting points made during the discussion, which took place under Chatham House Rules. One participant pointed out that there is a big difference between those who are moving away from access to aid but do not have access to the capital market, and those that do.

Also, there is a danger in graduating countries just to have them later face crises that require international assistance – an example was the hurricane season which caused major shocks but impacted countries to whom assistance would not qualify under ODA.

I liked the notion raised by one participant on the need for development partners to change their attitudes and approaches – are donors capable of moving away from aid to economic diplomacy? Do they have the instruments to be a strong partner and peer?

The report will be finalized later this year, and we look forward to seeing it

Linnea van Wagenen is a Special Assistant to the Secretary-General Envoy on South-South Cooperation and Director of UNOSSC at United Nations in New York. At UNOSSC, she supports the Director’s mandate by coordinating activities and meetings with senior management of UNDP and other partners. She is a strategic communications professional and previously worked at United Nations in Sierra Leone and Denmark, providing communications support through social media, website development, and external relations. Ms. Wagenen attended the event and shared her experience through this blog post.