The toll that tying takes on the global south is too far-reaching to quantify in full. However, Eurodad estimates conservatively that the immediate cost– that is, the cost of being unable to shop around for the best price – was between $1.95 billion and $5.43 billion in 2016. And that is before factoring in the far greater cost of missed opportunities to catalyse local economic, social and environmental development over the long term.
Simple strategies for opening up procurement to firms in the global south have been well documented for many years. Yet evidence from 18 donor agencies who responded to our survey shows that such strategies are often ignored. Donors do not consistently advertise contracts in the local media, they still set very large contract sizes, and the procurement processes are often only conducted in the languages of donor countries, but not the local languages of countries in the global south.
Meeks said: “If donors are really committed to maximising the catalytic impact of aid for development in the global south – not just for their own companies – they should urgently take action to untie their aid and improve their procurement processes.”
To read the full report or a summary briefing, click here.
To organise an interview with Polly Meeks or for further information please contact Julia Ravenscroft on firstname.lastname@example.org or +32 486356814. Notes to editors
* These are the findings of the report Development, Untied, which analyses the latest data available (generally from 2016). This figure relates to bilateral aid only (not to multilateral aid or aid spent directly through country systems in the global south.) The figure also only capture contracts reported to the OECD Development Assistance Committee (DAC). With more complete reporting, it is likely that even more awards to donor country firms would be exposed.
** ‘Real ODA’ is the value of ODA that is genuinely available for initiatives to reduce poverty and inequalities in the global south (see report).