Cooperation and solidarity for progress towards the 2030 Agenda
Supporting development is intricately linked to poverty eradication, a key element of inclusion and an overarching goal of the 2030 Agenda for Sustainable Development. “The great finance divide” -—
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—-. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. In 2009, they set out the basic requirements for a pandemic: • New virus emerges in humans
• Minimal or no population immunity
• Causes serious illness; high morbidity/mortality
• Spreads easily from person to person
• Global outbreak of disease.
The US Centre for Disease Control uses a similar approach, but with a reduced set of criteria. It is very difficult to gauge whether the spread of a disease should be termed an outbreak, epidemic or pandemic. In other words, when to declare a pandemic isn’t a black and white decision -—
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—-. raises concerns relating to financing development, especially in the most vulnerable economies.
Given the overall lack of financing for sustainable development, compounded by the many crises, including the economic fallout from the COVID-19 pandemic, war, conflicts and related refugee costs, supporting developing economies’ progress towards the 2030 Agenda requires significant rethinking, including since official international assistance still fails to reach its commitments. South-South cooperationBroad framework of collaboration among countries of the Global South in the political, economic, social, cultural, environmental and technical domains. It includes trade, FDI, regional integration efforts, technology transfers, sharing of solutions and experts, and other forms. Involving two or more developing countries, it can take place on a bilateral, regional, intraregional or interregional basis -—
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—-. with its focus on peer-to-peer partnership and in-kind support is becoming central and critical to sustainable development for all.
Table of contents
Despite new highs, ODA flows far from agreed targets
The Bridgetown Covenant -—
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—- reiterates the importance of ODAOfficial Development Assistance (ODA) are resource flows to countries and territories which are: (a) undertaken by the official sector; (b) with promotion of economic development and welfare as the main objective; (c) at concessional financial terms (implying a minimum grant element depending on the recipient country and the type of loan). In addition to financial flows, technical co-operation is also included -—
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—-. providers to ”reaffirm their respective ODA commitments, including the commitment by many developed countries to achieve the target of 0.7 per cent of ODA/gross national income (GNIGross national income) and 0.15 to 0.20 per cent of ODA/GNI to the least developed countries, as outlined in the Addis Ababa Action Agenda”.
ODA and OOFsOther official flows (OOF) are transactions by the official sector with countries and territories which do not meet the conditions for eligibility as ODA, either because they are not primarily aimed at development or because they do not meet the minimum grant element requirement -—
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—-. remain relatively small when compared to domestic public resources or private flowsPrivate flows consist of flows at market terms financed out of private sector resources and private grants. They include FDI, private export credits, securities of multilateral agencies and bilateral portfolio investment. Private flows other than FDI are restricted to credits with a maturity of greater than one year -—
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—-. (see Investment flows). However, they play an essential role since they frequently function as “seed funds” or catalysers of additional resource mobilization in sectors or projects where other funding options are limited, or where investors are reluctant to participate. Furthermore, for some countries in vulnerable situations, official funds are frequently the only source of financing available. Thus, their importance is often highlighted in the 2030 Agenda. They are referred to in 11 targets, including sector-specific official support to agriculture1, health2, water and sanitation3, clean energy4, biodiversityBiodiversity refers to the diversity within species, between species and of ecosystems -—
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In 2023, total ODA reached a record high of $223.7 billion, amounting to a real-terms annual increase of 1.8 per cent -—
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—-. Despite this being a fifth consecutive year for ODA to surpass its previous record levels, the share of ODA in GNI still lags significantly behind the committed 0.70 per cent by developed economies, as it only reached 0.37 per cent in 2023 (figure 1). As such, it remains at a level insufficient to support recipient countries in their efforts to recover from the long-term challenges planted by the pandemic and other compounding crises.
In 2023, preliminary data from DACDevelopment Assistance Committee countries indicated a 9 per cent increase in net ODA to Ukraine in real terms compared to 2022, totalling $20 billion. Within this amount, $3.2 billion were allocated as humanitarian aid. Additionally, EUEuropean Union institutions disbursed $20.5 billion for Ukraine, constituting 54 per cent of their total ODA, primarily in the form of highly concessional lending to support macro-financial stability in the country. The proportion of bilateral sovereign loans, on a grant equivalent basis, by DAC countries (which had risen to an average of 10 per cent of total bilateral ODA in 2020-2021 due to some exceptional loans in support of the COVID-19 pandemic) fell by 6.5 per cent in real terms compared to 2022, accounting for 8 per cent of bilateral ODA. However, sovereign lending by EU institutions surged by 63 per cent in real terms, attributed to increased lending to Ukraine, and represented 35 per cent of its bilateral ODA -—
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Whereas ODA to developing countries exhibits a modest increase, ODA flows to LDCsLeast developed country for 2022 continued its downward trend: developed economies devoted just above 0.05 per cent of their GNI to ODA to LDCs (figure 1), below the over 0.08 per cent recorded in 2009 and falling short of their commitment to allocate from 0.15 to 0.20 per cent exclusively to LDCs.
Figure 1. While ODA flows to developing countries slightly increased, flows to LDCs have been slowly decreasingSource: UNCTAD calculations based on -—
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In-donor refugee costs remain high
After a significant increase in debt relief reported in ODA in 2020 (0.87 per cent of total ODA), it contracted to 0.16 per cent as a share of total ODA in 2022 (figure 2). ODA debt relief has reached its lowest point in over a decade, plummeting from 6.2 per cent in 2011. In 2022, net debt relief remained low at $61.8 million -—
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In recent years, many donor countries rechannelled their ODA domestically to assist refugees fleeing war and conflicts6. In-donor refugee costsIn-donor refugee costs include the cost for the first year of receiving refugees and asylum seekers in donor countries. OECD DAC rules have allowed DAC members to report in-donor refugee costs as ODA for decades, but it was considered an exceptional item of ODA reporting, not envisaged to be a major component -—
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—-. peaked at 14.1 per cent of total ODA in 2016 during the Syrian refugee crisis. However, the war in Ukraine led to a new record high in in-donor refugee costs, reaching 17.7 per cent in 2022 (figure 2). Preliminary data indicate that ODA for in-donor refugee costs fell by 6.2 per cent in 2023 compared to 2022 and amounted to $31 billion, representing 13.8 per cent of DAC member countries’ total ODA. For seven countries, in-donor refugee costs still represent more than 25 per cent of their ODA in 2023 -—
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Figure 2. In-donor refugee costs on the rise again and skyrocketing in 2022Source: UNCTAD calculations based on OECDOrganization for Economic Cooperation and Development -—
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UN Secretary-General Guterres has urged “all countries to reconsider making cuts that will affect the world’s most vulnerable” -—
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—-. Finally, “DAC members still have the option to decide that such costs are additional to their planned development budgets. This is what for example Austria and Germany have done in their preliminary 2022 ODA reporting – meaning that these costs did not have a negative effect on already budgeted ODA programmes and contributions” -—
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—-. These considerations are not to be taken lightly to ensure no one is left behind in efforts to progress towards the 2030 Agenda.
Aid for trade disbursements reached a new high in 2023
The Aid for TradeMeasures aimed at assisting developing countries to increase exports of goods and services, to integrate into the multilateral trading system, and to benefit from liberalized trade and increased market access. It is considered as part of ODA. Effective Aid for Trade will enhance growth prospects and reduce poverty in developing countries, as well as complement multilateral trade reforms and distribute the global benefits more equitably across and within developing countries -—
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—-. It is measured as gross disbursements and commitments of total ODA from all donors for Aid for Trade -—
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—- supports developing countries, particularly LDCs, in building capacity to benefit from WTOWorld Trade Organization agreements and engage in international trade. Assistance targets enhancing national trade policies and regulations, developing infrastructure, and building productive capacityUNCTAD defines productive capacities as consisting of the productive resources, entrepreneurial capabilities and production linkages that together determine a country’s ability to produce goods and services that will help it grow and develop -—
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—-. Positive impacts of Aid for Trade have been identified by studies, such as the -—
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In 2022, Aid for Trade reached a new high, with over $55.3 billion disbursed to developing economies out of the $69.6 billion committed (figure 3). Aid for Trade commitmentsAid for Trade commitment is a firm obligation, expressed in writing and backed by the necessary funds, undertaken by an official donor to provide specified assistance to a recipient country or a multilateral organisation -—
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—-. for developing economies rose by 15 per cent in 2022 compared to 2021. However, the Aid for Trade Gap increased again after a significant drop in 2021, slightly surpassing the long-term average at $14.4 billion. Aid for Trade disbursementsAid for Trade disbursements refer to the release of funds to or the purchase of goods or services for a recipient; by extension, the amount thus spent. Disbursements record the actual international transfer of financial resources, or of goods or services valued at the cost to the donor -—
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Aid for Trade disbursements to LDCs totalled $15.1 billion in 2022, 2.8 times higher than in 2006 when the initiative was launched. It reached a new peak in 2022, following the previous peak in 2019 at $15 billion. The Aid for Trade gap for LDCs remained at $5.6 billion in 2022, leaving disbursements 27 per cent short of commitments.
Figure 3. The Aid for Trade gap returned to its long-term average in 2022Source: UNCTAD calculations based on data from -—
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Notes: Aid for Trade gap is calculated as the difference between Aid for Trade commitments and disbursements.
New framework enables the quantification of South-South cooperation alongside other development support
The Bridgetown Covenant -—
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—- emphasized the crucial role of strengthening South–South and triangular cooperation to leverage relevant experience and expertise in development cooperation, enhancing its effectiveness. SSCBroad framework of collaboration among countries of the Global South in the political, economic, social, cultural, environmental and technical domains. It includes trade, FDI, regional integration efforts, technology transfers, sharing of solutions and experts, and other forms. Involving two or more developing countries, it can take place on a bilateral, regional, intraregional or interregional basis -—
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—-. encompasses political, economic, social, cultural, environmental, and technical domains among countries in the global South, complementing North-South cooperation by narrowing the technological and knowledge gap.
As reiterated by the 21st session of the High-Level Committee on South-SouthBroad framework of collaboration among countries of the Global South in the political, economic, social, cultural, environmental and technical domains. It includes trade, FDI, regional integration efforts, technology transfers, sharing of solutions and experts, and other forms. Involving two or more developing countries, it can take place on a bilateral, regional, intraregional or interregional basis -—
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—-, SSC is “an important element of international cooperation for development and as a complement to, not a substitute for, North-South cooperation”. It signifies solidarity among peoples and countries of the South, based on their shared experiences and objectives, aligning with the commitments to the 1978 Buenos Aires Plan of Action -—
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In March 2020, the UN Statistical Commission established a Working Group on Measurement of Development Support to agree on a methodology to measure it in SDG indicator 17.3.1. The Working Group set up a dedicated sub-group to develop methods to measure SSC in a process led by the global South and with representation from all regions. Countries invited UNCTAD to provide the secretariat to this effort. The result is the initial, voluntary Framework to Measure South-South Cooperation -—
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—- developed by and for the global South.
The Framework stands as a significant milestone, empowering each country for voluntary data collection and reporting in alignment with national development plans and priorities. It empowers the global South to provide “South-South Data” developed, compiled and endorsed by the global South and reflecting their realities. It recognizes the diverse modalities of South-South Cooperation, including financial and in-kind contributions:
- Group A: Financial modalities of South-South cooperation (reported directly through monetization)
- Group B: Non-financial modalities of South-South cooperation (including items that may be monetized)
- Group C: Non-financial modalities of South-South cooperation (the same items as in Group B, subject to quantification by non-monetized methods).
The Framework advocates for the inclusion of all forms of cooperation which supports sustainable development between developing economies, as achieved within the Framework itself.
After the historic development and agreement on a voluntary Framework to Measure South-South Cooperation, further support will be essential for enabling data collection and reporting to fill the Framework with data and inform SDG indicator 17.3.1 on development support, including with data on South-South cooperation. Member States at the 53rd United Nations Statistical Commission (E/2022/24), in March 2022, requested for ‘further work on the initial voluntary Framework to Measure South-South Cooperation, including on global reporting and capacity-building, be enabled by the custodianship of the UNCTAD and led by countries from the global South, building on country-led mechanisms, and included under indicator 17.3.1 in the future’. Moreover, the 78th session of the General Assembly (A/RES/78/167) requested UNCTAD, ‘to strengthen capacity-building’ based on country-led mechanisms, and ‘recommend that the United Nations development system support the efforts of the UNCTAD’.
Since UNCTAD became the co-custodian of indicator 17.3.1 and a custodian of the Framework to Measure South-South Cooperation, it has engaged in UN-wide collaboration, especially with the UN Regional Commissions, the UNOSSCUnited Nations Office for South-South Cooperation and UN Statistics Division to support countries of the South and established a project to enable pilot testing of the Framework by eight countries in total across four regions. Two inter-regional meetings on the measurement of SSC were organised by the UNCTAD and hosted by Brazil, for the first one, in July 2023, and by Qatar, for the second one, in June 2024 (see Solidarity at the roots of South-South cooperation).
Participating countries discussed among other things data collection, analysis, and reporting on South-South cooperation, in a country-led approach, requiring enhanced coordination among national development cooperation agencies, national statistical offices, and relevant ministries, and close collaboration with UNCTAD and partner organizations. Countries also considered the possibility of establishing an institutional arrangement hosted by UNCTAD with support from the UNOSSC and other United Nations entities as appropriate, for regular consultation and exchange among developing countries on common and voluntary statistical concepts, methodologies, tools, and technologies for measuring South-South cooperation, in alignment with national official statistics quality standards. This would also enable informing the debates of the High-level Committee for South-South Cooperation, Financing for Development Fora, and the General Assembly with the data of the global South to amplify their voices.
Solidarity at the roots of South-South cooperation
UNCTAD, alongside its close partners, the UN Regional Commissions, organised several events on the importance of measuring SSC for sustainable development. During the Development Account project, two activities were focusing on bringing together experts from Southern countries to discuss the feasibility and challenges of measuring SSC, as well as exchange on lessons learned and knowledge among countries of the South.
The first inter-regional expert meeting on the statistical measurement of SSC was hosted by the IPEAInstitute for Applied Economic Research in Brazil, in association with the ABCBrazilian Cooperation Agency, in Brazil, in July 2023. It laid the groundwork for the pilot testing and requested the development of a Manual to support countries fill their data in the Framework. 16 Member States joined the event, in person or online, namely: Argentina, Brazil, China, Colombia, Ecuador, Egypt, Ghana, Jordan, Kenya, Malaysia, Mexico, Namibia, Nigeria, Peru, Qatar, South Africa. In addition to the UNCTAD, 10 international organisations also participated in the event in person or online, namely: ECAUnited Nations Economic Commission for Africa, ECLACUnited Nations Economic Commission for Latin America and the Caribbean, ESCAPUnited Nations Economic and Social Commission for Asia and the Pacific, ESCWAUnited Nations Economic and Social Commission for Western Asia, IsDBIslamic Development Bank, OECD/TOSSDOrganization for Economic Cooperation and Development/Total Official Support for Sustainable Development, PAHOPan American Health Organization, SEGIBIbero-American General Secretariat, UNOSSC and UNSDUnited Nations Statistics Division.
Member States at the Brasilia meeting requested the UNCTAD to promote capacity building approaches and develop information systems and tools that support countries develop national data ecosystems allowing reporting for multiple purposes, as relevant for and decided by each country. They also underlined the need to pursue early reporting of SSC data to UNCTAD to inform the global SDG indicator.
Brazil, Colombia and Mexico expressed their readiness to report data by early 2024 in time for the global data collection for the UNSD Global SDGsSustainable Development Goal Indicators Database. Since the meeting in Brasilia, the three countries, with the UNCTAD support, have produced a draft Manual for the Framework to measure SSC for pilot testing. The three countries tested the Framework and shared their feedback with the UNCTAD on the challenges of reporting in-kind flows.
The second inter-regional expert meeting was hosted by the Ministry of Foreign Affairs of Qatar, in Doha, in June 2024, bringing together over 70 member States which shows the increased momentum to bring the voices of the global South to the development support debates, where the Manual as well as the reporting challenges have been presented and discussed. The meeting was divided into three segments:
- A preparatory expert meeting discussing development of methodologies and tools with pioneering and pilot countries.
- A high-level segment involving dignitaries of Southern countries and international organizations to discuss the strategic importance of country-owned data to amplify the voice of the global South.
- A two-days technical capacity development workshop to guide Southern countries on how to apply the Framework and its Manual.
In total, 158 people participated in the expert meetings held in Brasil and in Qatar. The high-level segment of the Qatar meeting brought together 146 people from 71 countries to discuss and share on the importance of SSC.
Table 1. 71 countries met during the high-level segment of Qatar meeting| Type of meeting | Number of countries | Number of organisations | Total number of participants | Total share of women |
|---|---|---|---|---|
| 1st Inter-regional expert meeting, Brazil, July 2023 | 16 | 10 | 51 | 45% |
| 2nd Inter-regional expert meeting, Qatar, June 2024 | ||||
| - Pre-expert meeting | 17 | 9 | 43 | 35% |
| - High-level segment | 71 | 15 | 146 | 28% |
| - Training workshop | 35 | 15 | 107 | 47% |
Source: UNCTAD
Note: Table refers to in-person and online participation in both Brazil and Qatar meetings.
At the meeting, countries stressed the importance of scaling up support to strengthen national capacities for data collection, analysis, and reporting on South-South cooperation, emphasizing a country-led approach, particularly to support countries with limited statistical capacities. In this context, the countries requested UNCTAD to develop harmonized tools for data collection, analysis, and reporting, as well as mechanisms for global data reporting, including support for development of interoperable national data systems. Participants also used words such as solidarity, development, and cooperation to describe the meaning of SSC to the countries of the South (figure 4).
Figure 4. South-South cooperation is about solidarity, development, and cooperation, said Qatar meeting participants
Source: UNCTAD
Among other activities, ECA, in collaboration with ESCWA and the UNCTAD organised an event during the monthly StatsTalk-Africa webinar on the measurement of SSC, joined by 90 people. The event updated heads of NSOsNational statistical office and international cooperation agencies across Africa as well as other participants of the StatsTalk-Africa webinar on progress and challenges regarding the measurement of SSC, as part of the new SDG indicator 17.3.1. After the event, Namibia and Nigeria confirmed their interest to become pilot countries to test the Framework during the Development Account project.
Notes
- SDG indicator 2.a.2: Total official flows (official development assistanceOfficial Development Assistance (ODA) are resource flows to countries and territories which are: (a) undertaken by the official sector; (b) with promotion of economic development and welfare as the main objective; (c) at concessional financial terms (implying a minimum grant element depending on the recipient country and the type of loan). In addition to financial flows, technical co-operation is also included -—
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—-.) to the agriculture sector. - SDG indicator 3.b.2: Total net official development assistance to medical research and basic health sectors.
- SDG indicator 6.a.1: Amount of water- and sanitation-related official development assistance that is part of a government-coordinated spending plan.
- SDG indicator 7.a.1: International financial flows to developing countries in support of clean energy research and developmentResearch and development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge -—
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- OECD DAC rules allow DAC members to report in-donor refugee costs as ODA. When specific instructions were first introduced in 1988, it was agreed that “the first-year costs of sustaining developing country refugees arriving in donor countries could be reported as ODA. The rationale behind this agreement is to reflect the financial effort of hosting refugees and the sharing of responsibility with developing countries whoWorld Health Organization host the vast majority of the world’s refugees” -—
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References
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