The Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) has clarified the rules surrounding aid spending on refugees at high-level meetings held this week in Paris. The meetings sought to address the issue of how and when money spent on refugees can count as ODA, both in developing countries and developed donor countries. For the first time, the DAC has provided a comprehensive list of ODA-eligible and non-eligible expenditure:
- Security-related costs, including detention centers, border patrol, and the cost of repatriation, are now clearly excluded from ODA.
- Any spending on failed asylum seekers or refugees determined to be "in transit" to other countries for resettlement will also be non-eligible.
- In regard to in-donor spending on refugees, the DAC retained the one-year limit, which means that ODA can only be used to support refugees during their first year in the host country, but clarified that the year begins from the date an asylum application is submitted.
- No cap was implemented on in-donor refugee costs.
No decisions were made regarding the use of private-sector instruments (PSIs) in ODA, with delegates unable to reach a consensus on how to establish the grant equivalents of PSI investments when determining eligibility. However, the DAC did approve non-binding guiding principles on the use of blended finance, which recommend that blended financing be anchored to a development rationale and tied to a local context.
A controversial proposal tabled by the UK to allow humanitarian spending in wealthier island states vulnerable to climate change and natural disasters was withdrawn hours after being proposed. Sources present at the meetings say that the proposal sparked a debate around the "reclassification" of countries eligible for development assistance following a crisis.
Any changes to the DAC's spending rules must be agreed on unanimously by members.
News article - Devex