POLITICS & INSTITUTIONS - ECONOMY

OECD: Luxembourg is second most generous aid donor



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52% of Luxembourg development aid goes towards least-developed countries.Picture credit: cooperation.lu 

After Norway, Luxembourg is the most generous donor, spending 1% of its gross national income on official development assistance, an intergovernmental organisation has found.

According to a new OECD review, released on 19 October, Luxembourg has strengthened its development co-operation in recent years. It could build on this by setting out a clear vision for the future that factors in new risks of instability in fragile countries and ensures no vulnerable groups are overlooked.

The OECD said in a press statement:

“The DAC Peer Review of Luxembourg says that concentrating official development assistance (ODA) on a limited number of countries and social sectors, and being focused on the effectiveness of its aid, enables Luxembourg to maximise its visibility, impact and  international influence. Partner countries praise the predictability and flexibility of its aid.”

“Luxembourg is also one of the few to have reached a target to send 0.20% of GNI as ODA to least-developed countries, and unusual in that it does not count the cost of hosting refugees within its borders or funds for combating climate change as ODA.”

It continued:

“Luxembourg’s unwavering commitment to development aid, which it keeps separate from funding for refugees and climate finance, sets an example to other DAC members,” said DAC Chair Charlotte Petri Gornitzka. “Looking ahead, Luxembourg could use its experience in green finance to explore possibilities offered by its financial sector to mobilise additional funding and partnerships for development.”

Luxembourg spent $384 million in ODA in 2016, up from $363 million in 2015. In 2015, Luxembourg programmed 62% of its aid at country level, sending 59% to sub-Saharan Africa and 52% to least-developed countries. Around half of Luxembourg’s bilateral aid goes into health, education and local development.

The top five recipients of Luxembourg’s aid in 2015 were Burkina Faso, Niger, Senegal, Laos and Cape Verde.

Luxembourg also has a strong track record on humanitarian aid.