Executive summary
Coronavirus (COVID-19): One pandemic, different realities
The year 2020 will always be synonymous with COVID-19 – both the pandemic and the global health, economic and social crises it triggered. Looming large among these is that achieving the Sustainable Development Goals by 2030 is suddenly much more challenging. While progress on the global development trajectory was already too slow before the pandemic, it has now reversed. Over 100 million more people will enter into extreme poverty and 270 million people will go hungry this year. Some estimate that the crisis will erode all human development gains made in the last decade.
For many of the world’s poorest and most vulnerable women, men and children, COVID-19 is not the primary threat to their lives and livelihoods. Instead, the crisis is exacerbating pre-existing inequalities between and within countries. These inequalities have shaped the distribution and severity of multidimensional impacts, creating different realities. Disparities in national capacities to finance containment and other measures to suppress the pandemic have also limited countries’ abilities to soften its socio-economic effects on livelihoods and on vulnerable groups. OECD countries account for 84% of the total global stimulus funding that has been raised to respond to the pandemic and developing countries face a funding gap of at least USD 1 trillion. All of the issues that development co-operation was grappling with before 2020 – increasing inequality and marginalised populations, women’s economic empowerment and gender-based violence, precarious employment, humanitarian crises, and rising numbers of displaced persons – left populations and countries exposed when this virus, though forecasted, bore down on an unprepared world.
Development co-operation put to the test
The pandemic put development co-operation to the test in unique ways. It has shaken up working practices, partnerships and business models and put unprecedented strain on public finances. Against this backdrop, development co-operation agencies showed impressive agility in responding to the health and humanitarian aspects of the pandemic while also ensuring programme continuity. They also displayed creativity in reallocating budgeted funds and raised new resources. Initial estimates in this report suggest that Development Assistance Committee (DAC) members mobilised USD 12 billion for COVID-19 support to developing countries. Looking to the future, signs are emerging that a funding crisis may be on the horizon. Though many actors indicated they would protect official development assistance (ODA) budgets and some have even increased development co-operation budgets in this period, the global economic impacts of the crisis make it uncertain whether ODA volumes can rise or hold steady to meet growing needs.
There were also missed opportunities as the COVID-19 crisis unfolded, with implications that will become clear only with time. Many of the appeals for funding throughout 2020 did not meet their targets. The gap for the Global Humanitarian Response Plan, for example, is USD 6.1 billion. Limited sharing of evidence and data meant that decisions had to be taken in the face of extreme uncertainty. And while international co-ordination has been successful to a degree, for example in devising a mechanism such as the Access to COVID-19 Tools (ACT) Accelerator for the development, production, and equitable access to COVID-19 tests, treatments, and vaccines, the international community struggled to broker co-ordinated responses and action at a time when they were needed most.
Building resilience: A to-do list for development co-operation in 2021 and beyond
COVID-19 confirms lessons that international development actors know, and relearn, with each new crisis. International debates on the future of development co-operation reiterate the pressing need to work together to beat the virus and emerge from the pandemic better prepared and equipped to tackle and mitigate global threats. By placing renewed emphasis on strengthening resilience – the ability to withstand, absorb and be transformed positively by shocks – in communities, institutions, and economic, social and environmental systems, international development can play a critical capacity-building role. Topping the to-do list for development co-operation are five key actions to contribute to resilience building:
Integrate climate action in multi-sector development strategies. Policies must enable governments and policy makers to tackle several problems at once: beat the virus and support recovery, ease the multiple stressors that cause crises, and improve resilience to other global threats. Addressing environmental degradation and the climate emergency is a prerequisite for more resilient recovery and sustainable development. There are many examples of multi-sector strategies that could be brought to scale, such as the One Health approach centred on simultaneously keeping animal, human and environmental dimensions of health in balance.
Provide long-term support for country systems. A clear lesson from COVID-19, and previous crises, is that government capacity is a key factor in shaping effective crisis responses. Reforms leading to strong and well-functioning country systems are critical to build resilience to future crises, both within countries and to avoid negative externalities more globally. There are strategic opportunities to build on emergency measures to strengthen health, social protection, and data and evidence systems.
Avoid a development finance crisis. International finance has not been sufficient to close gaps in response to this crisis. Actors should continue working together towards solutions to unmanageable debt and to increase sources of new financing. Finance must be focused on the countries and people most in need and increasing the transparency on funding flows in times of crisis.
Step up collective action to provide and protect global public goods. The lack of preparedness for high-impact but infrequent events is due in part to underinvestment in global public goods. COVID-19 has pushed health security – a global public good – to the top of the international agenda. At the same time, it highlights the urgency of investing in other global public goods, such as biodiversity and adaptation or mitigation of climate change to ensure their adequate provision which will help avoid similar or worse crisis. New and inclusive multilateral initiatives established for COVID-19 treatment and access to vaccines could provide a blueprint for co-ordination and financing mechanisms for other global public goods.
Develop strategies and contingencies for international crisis co-ordination. Development co-operation actors have an opportunity to learn from co-ordination shortcomings and develop strategies and contingencies for responding to global challenges, shocks and crises. Such strategies should enable actors to quickly share data, evidence, plans and intelligence to inform responses and fast-paced decision making that will meet the needs of the world’s poorest people and countries most in need.
Delivering on an agenda that results in more integrated cross-sectoral programmes, builds country systems, increases development financing, steps up action on global public goods and improves co-ordination would put the development co-operation community on track to support a strong, resilient, green and inclusive recovery.