Flawed OECD reporting and analysis of HIPC transactions

(ECA Watch, Paris, 29 September 2006) The OECD's Export Credit Group (ECG) agreed in July 2001 to a Statement of Principles designed to discourage the provision of officially supported export credits for "unproductive" expenditures in "Heavily Indebted Poor Countries" (HIPCs) and to report on and review these transactions. The release of flawed statistics raise questions about the commitment of the OECD to properly monitor these expenditures.

OECD Watch data on OECD Commitments to IDA countries 2002 - 2010.

(ECA Watch, Paris, 29 September 2006) In July 2001, the Export Credit Working Group of the OECD agreed to report transactions hosted in Heavily Indebted Poor Countries (HIPCs) with a view to bringing these countries' debt burdens to sustainable levels, and to review them on an annual basis. Export credit debt made up a third of the external public debt of aid receiving countries in 2002 according to OECD External Debt Statistics for 1998-2002.

On June 19, 2006, the OECD's ECG Secretariat released the 2001 - 2005 data on these HIPC committments showing that SDR 2.1 billion (US$3.1 billion) in credits with over 2 year repayment terms for 356 transactions in 38 countries over 42 sectors had been approved in this 5 year period.

However, the original posting of this data on the OECD web site provided geographic data for 68 countries and 589 transactions, and sectoral data for 38 countries and 356 transactions. A classical comparison of apples and bananas!

The World Bank HIPC initiative currently identifies 40 countries as potentially eligible to receive debt relief under the Debt Initiative for HIPCs mentioned in the OECD Statement of Principles for unproductive expenditure. The OECD lists 38 countries, two of which (Laos and Myanmar) are not on the World Bank list, leaving 4 HIPC countries missing from the OECD list (Eritrea, Haiti, Kyrgyzstan and Nepal). OECD statistics for 2004 however provide data for Haiti, Kyrgyzstan and Nepal, indicating that this information is available, even if not included in their HIPC specific reports.

Following ECA Watch queries about these discrepancies, the ECG revised the published data.

The OECD claims it is "best known for its publications and its statistics", and that "Dialogue, consensus, peer review and pressure are at the very heart of OECD". However, based on this very loose approach to the publication of data as demonstrated above, ECA Watch questions the seriousness of the OECD's commitment to properly monitoring ECA lending to HIPCs and therefore of bringing their debt burdens to sustainable levels.

In this context, recent G7 warnings to China and India to not overload poor countries in Africa and elsewhere with high-interest loans would appear to be somewhat hypocritical unless they are prepared to seriously strengthen their own debt monitoring through their membership in the OECD's Export Credit Working Group.