Aid to LDCs, LLDCs and SIDS During the Covid-19 Pandemic

As we enter 2021, focus is increasingly turning to the challenges we will be facing this year as we seek to address the devastating economic and social crises caused by the Covid-19 pandemic. There is little doubt that some countries and some people have been worse affected than others and will continue to feel the effects for a long time. This is especially true for the least developed countries (LDCs) whose resilience to crises and shocks was already constrained, landlocked developing countries (LLDCs) who face challenges associated with remoteness and high transportation costs, and small island developing states (SIDS) who are already challenged by the climate crisis.

Financing any crisis response is always difficult – and for those countries facing the greatest impacts from the Covid-19 pandemic aid will be a vital part of enabling a sustainable and long-term response. Domestic resources in developing countries have been (and will continue to be) hit hard by the effects of the pandemic, with our predictions indicating that these countries will see a fall of over US$2.2 trillion in the next two years.1 Levels of debt are also a serious and growing concern. For example, in LDCs gross government debt had already climbed from 39% of GDP in 2008 to over 52% in 2018.2 Global, real-time trends in aid during the Covid-19 pandemic show that bilateral aid commitments have been falling (down 40% for January to September 2020 as compared to the same period in 2019; with official development assistance, ODA, alone falling 26%) while there has been a significant uptick in financing from international financial institutions (IFIs) (34% increase in aid commitments; with a 162% increase in ODA commitments, largely in the form of loans).

Development Initiatives will be updating our tracker showing aid flows in light of the Covid-19 crisis each month. This factsheet seeks to delve deeper into these trends and assesses the changes we are seeing right now for those countries facing particular challenges and constraints. The factsheet looks at near real-time aid trends for LDCs, LLDCs and SIDS, from January to September 2020 compared to the same period in 2019.