Business cares about how finance for development is measured. The OECD (Organization for Economic Cooperate and Development) Development Assistance Committee (DAC) recently agreed to modernize its development finance measurement framework to ensure that it is credible and practicable in today’s global context.
This decision and the actions taken at the DAC’s 2014 High Level Meeting on December 15 and 16 in Paris will enable OECD members to make an important contribution to future monitoring of the financing framework underpinning the United Nations’ forthcoming Sustainable Development Goals.
“Today the world’s leading donors have made a commendable step towards using aid more efficiently and effectively while at the same time catalyzing more private investment into developing countries”, said Thomas de Man, chair of the BIAC (Business and Industry Advisory Committee to the OECD) Development Task Force, at the High Level Meeting of the DAC. “This is a crucial element of the Post-2015 development agenda”, he added.
To date, private-sector instruments such as credit guarantees have not been properly captured in official development statistics. Now new methodologies will be adopted to reveal the budgetary effort involved in using these instruments.
“While many businesses can welcome the modernization of the development finance statistical frameworks, reaching agreement on the details will now be of critical importance”, said de Man.
The DAC improves global access to reliable statistics on different types of financing into developing countries. This work sheds light on the full range of financial options available to these countries and helps them to plan their development strategies.
In October 2014, BIAC submitted a paper to the DAC presenting private sector views on the mobilization of development finance. It emphasizes the creation of enabling environments for private investment, efficient use of donors’ development finance, and means to incentivize the use of credit guarantees that result in positive impacts on countries’ development.