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Development policy

A measure of SDG finance

by Michael Krempin

In brief

Solar park near Bangalore in India.

Solar park near Bangalore in India.

One challenge of financing the Sustainable Development Goals (SDGs) is that a growing number of countries are set to lose their eligibility to receive the official development assistance (ODA) on which they have so far based relevant action (see main article). New approaches are required. Additional funds must be mobilised urgently.

Major progress in this debate was made at the Financing for Development conference in Addis Ababa in 2015. Back then, the OECD assumed the task to develop a new category of international finance and ways to measure it. The result is a concept called Total Official Support for Sustainable Development (TOSSD). On the one hand, TOSSD is meant to encompass all kinds of monetary contributions made to drive sustainable development in ODA-eligible countries, including grants, concessional and non-concessional loans, guarantees and equity, public-private partnerships as well as funding from private companies and non-governmental organisations leveraged by public agencies and, finally, humanitarian aid. On the other hand, TOSSD is also designed to cover finance flows beyond ODA if they address global challenges at regional and global levels or promote sustainable development, for example, by providing or preserving global public goods.

OECD donors have committed to spend 0.7 % of their respective gross national incomes on ODA. Therefore, they are doing their best to make most of the resources they invest in international SDG achievement count as ODA.

If TOSSD was established as a second official and equally important finance category alongside ODA, ODA eligibility would become less important. The new finance category would create a major incentive for international cooperation “beyond ODA” and promote the international activities of a whole range of government departments because the allocation of resources could be reported internationally as TOSSD. It is therefore important to adopt TOSSD officially as soon as possible. (mk)

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