This week the Organisation for Economic Co-operation and Development (OECD) has published the preliminary data for 2020 on Official Development Assistance (ODA). The release echoes findings from our recent research that shows ODA flows holding up better than some had initially feared early last year when DAC members committed not to increase, but to ‘striv[e] to protect ODA budgets’. In 2020, estimated ODA flows from the members of the Development Assistance Committee (DAC) to low and middle income countries totalled $161.2 billion, from $152.8 billion in the previous year.
While this week’s press release of the ODA figures trumpeted ‘record levels’ of assistance, it is a signal of just how far expectations of ODA have fallen that this is being perceived as a relative success story. When compared to the fiscal measures taken by national governments to provide domestic relief during the crisis, it’s a drop in the ocean. The increase in ODA flows over the past 12 months across all DAC members has been $8.4 billion, equivalent to one twentieth of a percentage point (0.05%) of the $16 trillion (that is a mind-boggling $16,000,000,000,000) of fiscal measures taken by national governments to address the pandemic. A growing share of ODA flows are also loans, to be repaid in the future.
The need for international public finance in global vaccination
The muted enthusiasm for development assistance has been evident in the limited financial support to date for global vaccination efforts. Throughout 2020 and 2021, pledges to purchase vaccines through COVAX have totalled $8.6 billion. To put that in perspective, as at the end of 2020, the UK government had already spent £12 billion on the vaccination programme for the UK population alone.
It is difficult to think of a cause where there has ever been clearer need for international public finance than in ‘mass vaccination of the world’. At a global level, the benefits of containment of Covid-19 clearly outweigh the costs. It becomes clearer with each mutation of the virus that ‘nobody is safe until we are all safe’. Once supply constraints of vaccines ease, benefits for both the global common good and national self-interest will be clearly aligned.
However, the highly uneven distribution of resources across nations means that not all individual governments will necessarily be able to pick up the bill of mass vaccination of population. Two shots of a $4 vaccine (before costs of roll-out are considered) is a lot of money in low-income countries where average per capita annual current health spending is $36. Much of the finance that has been made available to combat the crisis has come in the form of emergency loans (via the International Monetary Fund, IMF), or freezing debt repayments. Yet the sustained containment and control of Covid-19 will require a redistribution of resources across nations and not just a temporary line of credit.
Rolling out vaccination programmes across populations is also much more complicated than simply buying a lot of vaccines. Administering national large vaccination programmes calls upon state capability and complex systems: it cannot be outsourced to a management consultancy. Again these can potentially be supported through ODA-funded investment in systems strengthening and building bureaucratic capabilities.
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This publication first appeared on the ODI site.
Authors: Mark Miller, Annalisa Prizzon.
The views are those of the authors and not necessarily those of ETTG.