How much aid actually reaches low- and middle-income countries? – Devex

Analysis of Country Programmable Aid (CPA) in 2023 and its Alignment with Sustainable Development Goals

Executive Summary: CPA as a Tool for the 2030 Agenda

In 2023, total bilateral aid from Development Assistance Committee (DAC) member countries amounted to $178.4 billion. Of this, $76.9 billion was disbursed as Country Programmable Aid (CPA), which represents the portion of aid over which recipient countries have significant control. CPA is a critical metric for assessing the effectiveness of development finance in achieving the Sustainable Development Goals (SDGs), as it reflects a commitment to recipient-led priorities, a core principle of SDG 17 (Partnerships for the Goals). This report analyzes the distribution of CPA in 2023, examining its alignment with the broader 2030 Agenda for Sustainable Development.

Overall CPA Trends in 2023: A Challenge to SDG Implementation

Total CPA experienced a 3.3% decrease in 2023, falling from $79.5 billion in 2022 to $76.9 billion. This reduction in predictable, country-managed funding poses a significant challenge to the progress of the SDGs in low- and middle-income countries. The majority of CPA was allocated to specific, long-term development projects essential for sustainable progress.

• Project-Type Interventions: $62.9 billion (81.8%), funding tangible infrastructure and programs central to goals like SDG 9 (Industry, Innovation and Infrastructure) and SDG 4 (Quality Education).
• Core Contributions and Pooled Programs: $6.3 billion, supporting multi-stakeholder partnerships under SDG 17.
• Budget Support: $5.2 billion, providing direct financial resources to governments to pursue national development strategies aligned with the SDGs.
• Technical Assistance: $2.5 billion, focused on building institutional capacity, a key target of SDG 16 (Peace, Justice and Strong Institutions).

Donor Contributions: Assessing Commitment to SDG 17

The proportion of bilateral aid allocated to CPA varies significantly among DAC donors, indicating different approaches to partnership and country ownership. Eight donors dedicated over half of their bilateral aid to CPA, demonstrating a strong commitment to recipient-led development priorities.

Top Donors by Percentage of Bilateral Aid as CPA:

• Japan: $15.9 billion (77.8% of its bilateral aid)
• South Korea: $2.0 billion (76.0% of its bilateral aid)
• New Zealand: $439.7 million (68.7% of its bilateral aid)

In contrast, several countries allocated less than 10% of their bilateral aid to CPA, including the Czech Republic (9.1%), Ireland (7.8%), Poland (5.5%), and Greece (0.2%). The United States was the largest donor in absolute terms, contributing $25.8 billion to CPA, which accounted for 43.1% of its total bilateral aid.

Geographical Distribution: Targeting Aid for Maximum SDG Impact

CPA distribution highlights a focus on countries facing significant development, climate, and security challenges. Small Island Developing States (SIDS), which are particularly vulnerable to the impacts of climate change, demonstrated a high CPA ratio, aligning with SDG 13 (Climate Action).

Top Recipients of Country Programmable Aid in 2023:

1. Ukraine: Received $13.1 billion, primarily directed towards strengthening governance and civil society, directly supporting SDG 16 (Peace, Justice and Strong Institutions).
2. India: Received $5.0 billion, with a significant portion funding rail transport projects that advance SDG 9 (Industry, Innovation and Infrastructure) and SDG 11 (Sustainable Cities and Communities).
3. Bangladesh: Received $2.9 billion, targeting projects related to climate resilience and poverty reduction, in line with SDG 13 and SDG 1 (No Poverty).
4. Indonesia: Received $2.3 billion.
5. Philippines: Received $2.0 billion.

Sectoral Allocation: Prioritizing Key Sustainable Development Goals

The sectoral allocation of CPA in 2023 reveals a clear prioritization of governance, infrastructure, and health, which are foundational pillars of the 2030 Agenda.

Top Sectors by CPA Funding:

1. Government and Civil Society: $18.1 billion. This funding is fundamental to achieving SDG 16 (Peace, Justice and Strong Institutions) by strengthening public institutions and promoting democratic governance. Ukraine was the primary recipient in this sector.
2. Rail Transport: $5.6 billion. Investment in sustainable infrastructure like rail is crucial for SDG 9 (Industry, Innovation and Infrastructure) and SDG 11 (Sustainable Cities and Communities). India and the Philippines were major recipients.
3. Basic Health: $4.0 billion. This allocation directly supports SDG 3 (Good Health and Well-being) by funding essential health services and systems. Top recipients included Nigeria, the Democratic Republic of Congo, and Ethiopia.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 17: Partnerships for the Goals: The entire article is centered on Official Development Assistance (ODA), bilateral aid, and Country Programmable Aid (CPA), which are fundamental components of global financial partnerships for sustainable development. It analyzes the flow of financial resources from developed (DAC member) countries to developing nations.
• SDG 16: Peace, Justice and Strong Institutions: The article explicitly states that the largest portion of CPA in 2023, amounting to $18.1 billion, was allocated to “projects in the government and civil society sector.” This funding directly supports the goal of building effective, accountable, and inclusive institutions.
• SDG 9: Industry, Innovation and Infrastructure: A significant portion of CPA, $5.6 billion, was directed towards “Rail transport.” This investment in infrastructure development in recipient countries like India, the Philippines, and Egypt is directly related to building resilient infrastructure.
• SDG 3: Good Health and Well-being: The article identifies “Basic health” as a priority sector for CPA, receiving $4 billion in 2023. This funding is crucial for strengthening health systems and improving health outcomes in recipient countries such as Nigeria, the Democratic Republic of Congo, and Ethiopia.
• SDG 10: Reduced Inequalities: The article’s focus is on aid flows to “low- and middle-income countries” and specifically mentions “Small island developing states, or SIDS” as recipients. This aligns with the goal of reducing inequality by directing resources to countries where the need is greatest.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 17.2: “Developed countries to implement fully their official development assistance commitments…” The article directly analyzes the ODA commitments of DAC member countries by detailing their total bilateral aid ($178.4 billion) and the portion classified as CPA ($76.9 billion), providing a measure of how these commitments are being met.
• Target 16.6: “Develop effective, accountable and transparent institutions at all levels.” The allocation of $18.1 billion to the “government and civil society sector” is a direct contribution to achieving this target by providing financial resources to strengthen governance structures in recipient countries like Ukraine and Jordan.
• Target 9.1: “Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.” The article highlights the $5.6 billion in CPA spent on rail transport projects, which is a clear example of financing for infrastructure development under this target.
• Target 3.c: “Substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries…” The $4 billion in CPA dedicated to “basic health” represents a direct financial contribution to strengthening health systems in developing countries, which is a core component of this target.
• Target 10.b: “Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries…” The article’s analysis of which countries received the most CPA, specifically identifying “Small island developing states” and top recipients like Ukraine, India, and Bangladesh, directly relates to tracking financial flows to nations in need.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 17.2: The article provides data points that are used to calculate Indicator 17.2.1 (Net official development assistance… as a proportion of the… donors’ gross national income). It specifies the total bilateral aid ($178.4 billion) and the total CPA ($76.9 billion) for 2023. It also provides country-specific data, such as Japan’s CPA accounting for “77.8% of Japan’s total bilateral aid,” which serves as a direct measure of ODA flows.
• Indicator for Target 16.6: The article provides a clear financial indicator of support for institutional development. The total amount of CPA allocated to the “government and civil society sector” ($18.1 billion) serves as a quantitative measure of the financial resources being directed towards building effective and accountable institutions.
• Indicator for Target 9.1: A direct financial indicator for infrastructure investment is provided. The article states that “$5.6 billion” was spent on “Rail transport,” which can be used to track financial commitments toward infrastructure development in recipient countries.
• Indicator for Target 3.c: The article offers a financial indicator for health system support. The “$4 billion” in CPA allocated to “basic health” is a specific monetary value that can be used to measure the level of international financial assistance for health sectors in developing countries.
• Indicator for Target 10.b: The article provides explicit data on financial flows to specific countries and groups. The amounts of CPA received by top recipients (e.g., “Ukraine was the largest recipient of CPA, with $13.1 billion”) and the mention of SIDS receiving high ratios of CPA serve as indicators for tracking the volume and direction of development finance.

4. Summary Table of SDGs, Targets, and Indicators

Source: devex.com