News roundup – Why do we need to know more about financial intermediaries?
Welcome to our newsletter, bringing together news from the world of aid and development transparency.
Why do DFIs invest in financial intermediaries and why do we need to know more?
Our new blog outlines why financial intermediaries are a significant aspect of DFI investments. Farzana Ahmed considers the importance of transparency of financial intermediary investments in order to understand their impact and allow community accountability efforts. She also sets out how the DFI Transparency Tool will support and measure progress towards greater transparency of financial intermediary investments.
Save the date: launch of the 2022 Aid Transparency Index
We are excited to share news of the launch of the 2022 Aid Transparency Index, which will take place on Wednesday 13th July. Further details of the event and the line-up of speakers will follow. For all the latest updates, follow us on Twitter or LinkedIn.
Here’s a selection of news stories we’ve been reading over the last few weeks:
The Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) has released preliminary data for official development assistance (ODA) in 2021. ODA from DAC members rose to an all-time high of US$ 178.9 billion in 2021, up 4.4% in real terms from 2020. This included US$ 6.3 billion spent on providing COVID-19 vaccines. Excluding ODA for donated COVID-19 vaccines, ODA was up 0.6% in real terms from 2020. The 2021 ODA total is equivalent to 0.33% of DAC donors’ combined gross national income. Humanitarian aid amounted to US$ 18.8 billion. Debt relief recorded as ODA remained low at US$ 545 million. ODA spent on refugees hosted in donor countries was US$ 9.3 billion.
However, according to Devex, the DAC Chair Susanna Moorehead said that demand for ODA is rising exponentially, and the world was seeing a reversal in progress on the 2030 Sustainable Development Goals. NGOs raised concerns about levels of ODA, pointing out that the number of people in need of humanitarian assistance more than doubled in the past year.
The International Aid Transparency Initiative (IATI) will be holding its third Virtual Community Exchange (VCE 3) on Tuesday 28 June 2022. It is now possible to register, or propose sessions, for this informal, interactive event for shared learning and discussion.
The Center for Global Development and Data2X have reviewed 20 women’s economic empowerment and gender equality indexes, and come up with a series of recommendations to improve their transparency and quality.
Only two banks have disclosed information through the lending transparency scheme of the Institute of International Finance (IIF) and OECD, according to Jubilee Debt Campaign, which it describes as a failure of the voluntary approach. The OECD has created the registry for IIF members to disclose details of loans to governments, particularly 70 lower income country governments. In 2019, lenders first committed to disclose details including the repayment profile, a guide to the interest rate, the intended use of proceeds of the loan, governing law and whether there is any collateral attached to the loan.
In a new report, Eurodad states that recent developments in the use and reporting of private sector instruments (PSIs) pose serious threats of an increase in tied aid – i.e. ODA which is restricted to the procurement of goods and services of the country providing the assistance through different channels – and other forms of commercially motivated ODA. The report identifies three overlapping sets of risks that threaten to inflate tied aid levels in the years to come.
The EU Ombudsman has called for the European Investment Bank (EIB) to improve its transparency on the environmental impacts of the projects it finances. ClientEarth, CEE Bankwatch Network and Counter Balance have welcomed the move, saying that the EIB should be open to public scrutiny and be accountable for its environmental impacts.