Why Lithuania wants to join the OECD aid donor club

Lithuania has written to the Organisation for Economic Co-operation and Development asking to become the 31st member of its Development Assistance Committee. It would be the first new member of the Paris-based committee since Hungary joined in 2016. As well as peer-reviewing each other’s aid spending, DAC members set the rules on what the group of mostly western donors can count as official development assistance. Thirty of the OECD’s 38 members are DAC members, including the likes of Australia, France, Germany, Slovenia, South Korea, the United States, and the European Union — the only nonstate member. Approached by Devex, the Lithuanian foreign ministry set out its rationale for joining in an emailed statement earlier this month. “The main strength of our development cooperation activities lies in our recent transitional experience, recognized professional expertise in Eastern Partnership region as well as [a] strong case for democracy support,” it wrote. “We are also ready to share our expertise in such policy areas as energy independence and diversification, digital transformation, fight against corruption and disinformation, etc. Therefore we believe that Lithuania’s contribution could help the international organisations such as OECD to address the new geopolitical challenges, especially the war consequences in Ukraine, by adjusting and adopting respective policy tools.” Justina Kaluinaitė, policy and advocacy officer at Lithuanian’s National Non-Governmental Development Cooperation Organisations’ Platform, told Devex by email that the move was significant as Lithuania would be the first Baltic state to join the DAC. She said it would help other European donors strengthen their ties with central and Eastern Europe, as well as improve Lithuania’s own development cooperation policy. According to the established procedure, once a country writes to OECD asking to join the committee, a preliminary analysis takes place. If this is positive then OECD conducts an accession review and prepares a report on the country’s readiness to join for decision by the committee. Like all DAC decisions, accession decisions require a consensus. Donors wishing to join are required to have “appropriate strategies, policies and institutional frameworks for development co-operation … an accepted measure of effort (e.g. ODA/GNI ratio over 0.20% or ODA volume above USD 100 million) … [and] a system of performance monitoring and evaluation.” The Lithuanian foreign ministry told Devex that it has held the status of an ODA donor since 2004, with the Lithuanian Central Project Management Agency implementing a budget of €116 million between 2009 and 2021. It said Lithuania has “a strong political commitment” to hit a 0.33% ODA/GNI ratio by 2030. Last year it provided €70.44 million to low- and middle-income countries, representing 0.13% of GNI. The ministry told Devex that it had expressed its intent to start the accession process in January of this year. “We are encouraged by DAC, which also expressed their support and interest in Lithuania’s expertise,” it wrote. “We fully understand that development is a dynamic process, development cooperation policies and instruments have to be constantly adapted to meet new challenges, therefore Lithuania is keen to improve its system further and use OECD’s expertise in this field.” A July 2020 paper by the Baltic policy research center AfriKo, looking at the pros and cons of DAC membership, argued that Baltic states could overcome their occasional “inferiority syndrome” about being a small donor by building in-depth experience in niche areas. The paper argued specializing in the likes of e-governance, for instance in the case of Estonia, could be more fruitful than relying on “transitional” experience which the authors argued is “often understood as a buzzword among professionals [even] if it has no further clarifications in terms of more specific areas of relevant expertise.” In a speech last year, Lithuanian President Gitanas Nausėda argued that the country’s development cooperation should continue to focus on nearby countries such as Moldova and Armenia. Yet he said Africa and Central Asia should not be forgotten as aid to those regions would eventually produce political, economic, and social returns too. “Being a small donor Lithuania historically is very much oriented towards multilateral initiatives (around 80 % of the total ODA are channelled through the multilateral organizations),” the ministry wrote. “However, we aim to get more involved in development cooperation and adopted considerable legislative changes in 2021 to strengthen our capabilities and make [a] strong basis for implementation of large-scale projects, that would have considerable economic impact in our partner countries and at the same time would ensure a greater convergence between bilateral and multilateral assistance.” DAC Chair Susanna Moorehead told reporters earlier this month that she has regular conversations with OECD members who are not yet part of the DAC, adding that others are considering whether to join. Moorehead said that “[some], to be honest, say ‘look, we've just joined the OECD … we need a bit of time to get our knees under the desk, to get used to working in the OECD and in the fullness of time we will join the DAC’. And if we look historically, that's definitely what's happened.” Moorehead predicted that in five to 10 years, “I'm sure the DAC will be much bigger than it is today.”