Development aid recovers

Development Co-operation Directorate (DCD)

After more than five years of continuous decline, Official Development Assistance (ODA) rose in 1998 by nearly 10% in real terms, to US$52 billion, according to the 1999 Development Co-operation Report, published in February. However, the rise reflects both specific measures in the wake of the Asian financial crisis and

decisions by several countries to stabilise or rebuild aid programmes. But although ODA may have gone up, the ODA of members of the Development Assistance Committee – which includes most OECD countries and the European Union – has in fact fallen as a proportion of GNP, to around 0.25%. That is well below the 0.33% average recorded for the 1970s and 1980s. This means there is US$20 billion per annum less in aid than would have been the case had the higher 0.33% ratio been maintained. Private flows continued their decline to US$147 billion in the aftermath of the Asian financial crisis. Still, private flows will continue to be far larger than aid flows.

One of the key messages of the Development report is the importance of poverty reduction rather than structural adjustments per se, and the key role of partnerships (governments, agencies, business, civil society) in implementing those poverty reduction strategies. And integrating developing economies into the global economy, including in trade negotiations, is also paramount. 

©OECD Observer April 2000 




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