Official Development Assistance (ODA) is most effective when it supports the objectives that people, communities and governments themselves decide are priorities for national development and poverty reduction. Delivering ODA as untied aid to developing countries is the best way to ensure that the recipients themselves are in the driving seat and that all development resources, both external and internal, coherently pursue common objectives. Untying also means that more aid is spent in developing countries themselves. This helps create much needed employment.
The OECD estimates suggest that when overseas aid is tied to the procurement of goods and services from the donor country, its effectiveness and efficiency is significantly diminished. Because of this, they recommend that donor countries untie the bulk of their aid to Least Developed Countries (LDCs) and to Highly Indebted Poor Countries (HIPCs). Food aid and Technical Co-operation are not covered by the recommendation, although many countries, including Ireland, do untie these categories of aid. In 2010 donors reported that 24 per cent of bilateral aid (US$ 26 billion) was still tied.
Ireland’s aid is 100 per cent untied and the OECD has recognised that we are one of only four countries enjoying this distinction. The high quality of our aid programme has been recognised by successive OECD reviews and by other independent assessments on aid quality such as the Commitment to Global Development index and the Real Aid Index.
Ireland’s new policy for international development, One World- One Future, approved by the Government earlier this year, once again reaffirmed our commitment to maintaining a high quality aid programme and to untied aid, in particular. It stipulates that our aid is “not conditional on acquiring goods and services from Ireland”.
Ireland has consistently supported the strengthening of the OECD recommendation on untying aid and the inclusion of untied aid as a key measure of aid quality against which donor progress on aid and development effectiveness should be measured. The commitments that donors made at the 2011 Busan High Level Forum on Aid Effectiveness include accelerating progress and improving transparency on aid untying. Ensuring that these commitments become part of the post-2015 development framework was one of the priorities for the Irish Presidency of the EU – and this is successfully reflected in the EU Council Conclusions of June this year on the Post 2015 Framework.
A number of students from Ireland’s Key Partner Countries and from other developing countries study in Ireland, before returning to their own countries, as part of our overall programme of capacity building. Ireland also provides funding to allow students undertake studies in their own countries or the region. A very small proportion of Ireland’s ODA is made up of specific costs associated with international refugees during their first 12 month of stay seeking asylum in Ireland, in line with the OECD Development Assistance Committee’s ODA reporting directives.