Changes to official aid rules
Changes to official aid rules puts the world in a better place to tackle extreme poverty and create global stability.
A historic agreement reached today (19 February 2016) means that the rules governing how Official Development Assistance (ODA) can be spent will be updated to better tackle the pressing global development issues of the 21st century.
The UK has been at the forefront of work to reform the ODA system which was originally established over 40 years ago. The rule changes will ensure the international community is best placed to fight the underlying causes of poverty and instability in today’s world, in line with the UK’s Aid Strategy.
The changes were agreed at a High Level Meeting (18-19 February 2016) of the OECD’s Development Assistance Committee (DAC), which concluded a 4-year process to update the rules on ODA.
International Development Secretary Justine Greening said:
It is firmly in Britain’s national interest to fight disease and conflict and promote global stability which is why the UK government has been at the forefront of work to modernise the international rules which govern how overseas aid is spent.
We welcome the fact that these remain focused on the primary principle of tackling extreme poverty and supporting the economic aspirations of developing countries, while ensuring the new Global Goals are delivered in the most effective possible way.
The updates to the ODA rules agreed at the 2016 High Level Meeting both better recognise the detrimental impact that conflict, fragility and insecurity have on efforts to tackle poverty and reflect the importance of private sector investment for development. The changes mean that:
- official aid can be used to support the military in fragile countries on issues that promote development, such as human rights and the prevention of sexual violence; this means the international community is better equipped to meet Global Goal 16 which calls for the stronger governance in developing countries to prevent violence and combat terrorism and crime
- tackling violent extremism is now formally recognised as a development activity; more than 90% of terrorist attacks occur in states with weak governance and poor human rights records
- donors are incentivised to work more with the private sector to boost economic development and create jobs in some of the world’s poorest countries.
The core principle of the ODA system remains unchanged. To count as ODA, an activity must support the economic development and welfare of a developing country as its main objective.
Full details of the agreement to update the ODA rules in these areas is available in the High Level Meeting communique, pdf 598KB.
The UK strongly supports the agreement made at the High Level Meeting that the ODA system needs to remain relevant and credible, with scope to make future reforms to the system if necessary.
Notes
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ODA is the internationally agreed measure of funds provided to developing countries to fight poverty and promote development. Often referred to as “aid”, its criteria are agreed by the DAC
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The new Global Goals for Sustainable Development, were agreed by the UN in September 2015
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Under UK leadership, a High Level Meeting of the DAC in December 2014 had already agreed to revise the ODA rules on sovereign lending to incentivise donors to provide loans on the most concessional terms to the poorest countries.