The Executive Board held an intersessional meeting to discuss the use of the OECD DAC list of ODA recipients as the basis for determining whether a country is a ‘developing country’ eligible for funding under the Special Programme terms of reference. This was done in response to paragraph 10 of UNEA resolution 5/7 which encouraged the Executive Board “to review the procedures for application for funding, in light of the needs and challenges expressed by developing countries, including those related to operating costs with a view of promoting an effective and efficient application of the eligibility criteria in line with the terms of reference of the Special Programme without jeopardizing the ability of the special programme to receive funding from existing sources.”
The purpose of the meeting, which was closed to observers, was to allow the Executive Board to discuss the matter openly and freely. A summary of the meeting would be made available for the purposes of transparency.
The Board recalled the Terms of Reference of the Special Programme, paragraph 6 of which specified that “Support from the Special Programme will be available for developing countries, taking into account the special needs of least developed countries and small island developing States, and for countries with economies in transition, with priority given to those with least capacity”. The OECD DAC list of ODA recipients had been adopted by the Executive Board at its fifth meeting as the basis for eligibility for funding under the Special Programme.
The Board considered a legal opinion from UNEP which indicated that the Terms of Reference excluded developed countries from eligibility for funding and which referred to the United Nations World Economic Situation and Prospects Report (the WESP report) as a possible source to inform the decision-making on eligibility. The opinion indicated that while the UN could use a list from another organisation such as the OECD DAC ODA list as a reference point, it should not be binding on decision making because it came from a body external to the UN and could therefore be disputed by some member states. Any list used by the UN to determine eligibility for funding under the Special Programme or eligibility to be a member of the Executive Board must include all developing countries and countries with economies in transition, which could include Landlocked Developing Countries (LLDCs), Least Developed Countries (LDCs), and Small Island Developing States (SIDS).
The Board also considered the impact that changing the eligibility basis from the OECD DAC list to the UN WESP report would have in terms of countries that would be deemed eligible for funding, with 21 countries not on the OECD DAC list of ODA recipients being identified under the UN WESP report as developing economies or otherwise listed as small island developing States.
In the knowledge that while one donor had indicated a certain degree of flexibility with respect to the use of their funds, others were subject to strict constraints, the Secretariat confirmed that it was possible to maintain separate channels of funding in the Special Programme Trust Fund so that these constraints could be respected.
The Executive Board held an open and engaged discussion on the topic during which the following concerns were raised:
a. The use of the OECD DAC list had arisen because some donor countries were strictly bound by the eligibility requirements under the OECD for official development assistance, and not from any unwillingness to fund particular countries.
b. There was concern that some existing donors might not be able to continue supporting the Special Programme if the basis of the eligibility assessment were to change. It was important to maintain and ideally increase the level of contributions otherwise the effectiveness of the Special Programme could be weakened.
c. Any move away from the OECD DAC list of ODA recipients as the basis for determining eligibility would mean that there would require strict follow-up from the Secretariat to ensure that these donors’ funds went only to countries on the OECD DAC list so that they could meet their legal obligations. This would likely severely limit the level of funding available for countries not on the OECD DAC list, causing frustration if expectations were not well managed.
d. The continued use of the OECD DAC list of ODA recipients would continue to prevent some countries in the GRULAC region in particular from accessing the Special Programme.
e. The special situation of small island developing states was noted, with reference to the SAMOA pathway, which aimed to address the unique challenges faced by the small island developing states to support their development.
f. It was important to ensure that support from the Special Programme went to those most in need, in line with the wording of paragraph 6 of the Terms of Reference. Some countries listed as developing economies on the UN WESP list had GDP per capita higher than some donor countries. Broadening the list of eligible countries to include countries with higher GDP per capita could potentially limit support to those that most lack adequate resources. Criteria would need to be developed to take into account the relative needs of applicant countries in addition to the existing appraisal criteria.
g. If the Board were to decide to change the basis for assessing eligibility, very clear and effective communication would be needed to manage the expectations of applicants who might become eligible for consideration for funding but for whom there might not be funds available because of constraints on the donors’ funds.
The matter will be considered again at the eighth meeting of the Executive Board, scheduled from 15-17 February 2023, in the context of the preparations for the seventh round of funding, at which time the Executive Board would be invited to take a decision on the matter.
