Prominent aid-providing foreign countries agreed in Paris on Tuesday to establish a process that could lead to disaster-battered jurisdictions like the Virgin Islands receiving assistance that was previously off limits.
In the wake of Hurricane Irma’s destruction, the VI and other small Caribbean states have had difficulties accessing international financing and development assistance grants due to their relatively high gross domestic products per capita.
Organisation for Economic Co-operation and Development criteria even prevented the United Kingdom from using its official development aid to assist British overseas territories.
Because of that, UK officials put pressure on other international donors to update the rules. On Tuesday, it looked like they at least in part succeeded.
“As a result of our influence, we’ve made huge progress on ensuring official development assistance can be used when vulnerable nations are struck by crises or natural disasters,” said Priti Patel, the UK secretary of state for international development.
Background
Rough calculations based on 2014 GDP estimates put the VI’s per capita figure in the low-to-mid-$30,000s, which would likely rank between the 40th and 60th highest of the 220-plus countries and territories tabulated.
Before Irma, that metric prevented the VI from tapping into certain European Union development funding.
After the storm in September, the UK government announced that it could not spend any of its £13 billion aid budget on the British overseas territories because that earmark was legally bound by the OECD Development Assistance Committee’s international aid rules. Those rules deemed the OTs too wealthy to take advantage of that allocation.
Instead, the UK was forced to shell out general treasury cash to aid the Caribbean territories, pledging about £62 million for the region.
In theory, developed countries in the United Nations strive to donate at least 0.7 percent of their gross national income for OECD official development assistance purposes. These donations can only be sent to a country or territory on the OECD’s periodically updated list of developing jurisdictions.
Currently, that list only contains states with GDP per capita figures less than $12,235, according to OECD data. This cut-off point — certainly much less than the VI’s per capita number — prevents the territory from accessing cash any country has earmarked for that purpose, as was the case with the UK.
Too wealthy
On Tuesday, however, the DAC agreed to consider a way to temporarily provide funding to disaster-ridden “recently graduated” high income countries, which means jurisdictions — like the VI, Turks and Caicos, and Anguilla — that used to receive official development assistance but are too wealthy to be on the list now.
“The DAC will, in consultation with relevant stakeholders, establish a process to examine short-term financing mechanisms available to respond to catastrophic humanitarian crises in recently graduated high-income countries, including, without prejudice, a possible role for official development aid spending based on objective criteria while ensuring no diversion of resources from existing ODA recipients,” a DAC communique read.
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