TUAC welcomes the OECD Guidance on Reducing Poverty and Inequalities through Development Co-operation, launched on 19 October, which sets out how decent jobs and strong labour institutions should be central to poverty eradication and inequality reduction strategies. Four in ten workers in low-income countries live in extreme poverty despite having a job, according to the ILO. With aid continuing to collapse, the Guidance is an important tool for defending the core purpose of development co-operation.
Preliminary OECD data show that official development assistance from DAC member and associate countries fell by 23.1% in real terms in 2025, the largest annual drop on record. Total aid came to USD 174.3 billion, just 0.26% of donors’ combined gross national income and far below the UN target. The OECD projects a further 6.9% fall in 2026.
In this context, the eradication of poverty and the reduction of inequality should be prioritised, especially in the countries most in need. TUAC calls on DAC members to reverse the cuts and recommit to the 0.7% target.
TUAC also warns against aid allocations being driven by commercial or geopolitical interests. The Guidance itself notes that DAC members increasingly pair poverty reduction with interest-based arguments on trade, investment, security and migration, and that geopolitically driven allocations may bypass the poorest countries.
Aid providers mobilised a record USD 76.8 billion in private capital in 2024, but the Guidance notes that attention has largely gone on volume rather than impact. Trade unions value the Guidance’s advice to prioritise partners and projects committed to adequate wages, decent working conditions and respect for labour standards throughout value chains. Its emphasis on responsible business conduct, including risk-based due diligence on impacts on human rights and decent work, is equally welcome.
TUAC fully shares the Guidance’s view that labour policy is key to making poverty reduction last. A meaningful wage floor, stronger bargaining power, and protections for informal workers all shape how income is distributed before redistribution is needed. The Guidance also links living wages and social protection to higher consumption and stronger domestic demand. It explicitly lists collective bargaining and wage-setting institutions as instruments donors can support – echoing the case TUAC made in its chapter of the OECD’s 2024 Development Co-operation Report.
The Guidance recognises the role of trade unions in shaping labour, wage and social protection policy through social dialogue and tripartite negotiations. TUAC challenges DAC members to take concrete action to implement the Guidance and scale up funding for poverty and inequality reduction projects.
The OECD has set out what works. Now donors need to act on it. Strong, independent trade unions, collective bargaining and living wages are indispensable levers of sustainable development.
Governments now need to turn the Guidance’s principles into action, TUAC insists, with explicit decent work and just transition objectives in development strategies and budgets, and the Guidance built into DAC peer reviews.
