New Internationalist

Facts

Issue 126

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REAL AID [image, unknown] Introduction

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The FACTS

Aid - a question of quality
Despite the rhetoric of ‘poverty-focused aid’, the quality of official development aid is eroded by a combination of political and commercial interests on the part of most donor and recipient countries.

 

The Aid Target: OECD countries, 1981
On the arrow: value ($ million) On the target: % of GNP

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What kind of aid?
‘Tying’ aid reduces its real value and distorts the development priorities of poor countries. Multilateral aid is less susceptible to having political strings attached by donor governments, but constitutes less than a third of the total.

Official aid from OECD countries, 1981 % grants % untied % multilateral
(1978-80)
US/Strong emphasis on political and commercial benefits to US
93
39
26
France/40% allocated to Frenchdependencies
90
43
15
West Germany/Emphasis on increasing technical assistance
85
69
25
Japan/70% concentrated on Asian countries
75
53
28
UK/Emphasis on political and commercial benefits to the UK
97
36
37
Netherlands/High priority for agriculture, public utilities and education
95
59
24
Canada/Increasing emphasis on technical assistance
97
42
36
Sweden/Bilateral grants concentrated on poorest countries
100
86
32
Italy/Rapidly increasing aid budget
91
62
90
Australia/80% concentrated on S.E. Asia and South Pacific
100
65
27
Belgium/Technical assistance accounts for half aid budget
97
38
32
Norway/Concentration on poorest countries
100
81
45
Denmark/High multilateral contributions
95
70
42
Switzerland/High multilateral contributions
97
62
38
Austria/High proportion of tied aid
55
23
37
Finland/Rapidly growing aid budget. High multilateral contribution
96
87
40
New Zealand/Over 75% concentrated on South Pacific
100
52
24
TOTAL
90

50

29
Source: OECD. Development Cooperation 1982 Review

Spot the Aid givers

In 1981 grants and loans from 19 Western countries belonging to the OECD* made up more than two-thirds of worldwide development assistance.

OPEC countries contributed large amounts of aid in terms of GNP per capita. Communist countries provided only slightly more aid than non-governmental agencies in the West.

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*Organisation for Economic Cooperation and Development

Source.- CECO Development Cooperation 1982 Review


How much aid goes to the poorest countries?

Just over 50% of all official aid from the West goes to 66 low income countnes. But this amounts to only $7.6 per person, compared with $18.2 per person received by people of 69 middle income countries —who are already three times richer.

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How much aid goes to the poorest people?

Reliable information about the impact of aid projects on the poorest people is difficult to obtain. A recent World Bank report, however-., gives a fairly realistic assessment of the experimental ‘poverty oriented projects supported bythe VVorld Bank since the mid-i 970s. Here are the reports main findings:

World Bank lending to poverty-oriented’ projects, mid 1970s-1981

Sector
% of World Bank lending
Benefits for poorest groups

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Rural development
15.3
Few direct benefits for the landless,for tenants and for near-landlessfarmers.
Urban poverty projects
3.4
No benefits for the poorest 20% of the population.
Small-scale, non-farm enterprises
1.7
No information on distribution of benefits.
Water and sanitation
6.7
Only 30% of benefits go to the poorest 40% in urban areas only.
Education
1.6
Less benefit to the poor than to better-off families. (Children of poor families work full-time).
Population. health and nutrition.
0.3
Not yet fully evaluated.
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TOTAL
29.0
 

Source: World Bank, Focus on Poverty. 1983


Top 50 aid recipients from OECD countries, 1981
The political interests of the donor countries carry great weight in the allocation of official aid. Israel receives over $200 per person.

 
Total aid
($ million)
Aid per capita ($)
GNP per capita ($)

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1 Egypt
1 529
38.4
580
2 India
1419
2.1
240
3 Turkey
850
18.7
1460
4 Bangladesh
838
9.3
120
5 Indonesia
838
5.7
420
6 Israel
826
211.8
4500
7 Pakistan
477
5.8
300
8 Tanzania
453
25.0
260
9 Sri Lanka
446
30.1
270
10 Philippines
412
8.6
720
11 China
403
0.4
290
12 Thailand
396
8.5
670
13 South Korea
388
10.0
1 520
14 Sudan
348
18.9
470
15 Brazil
332
2.8
2050
16 Morocco
325
16.0
860
17 Burma
317
9.5
180
18 Papua New Guinea
303
101.0
780
19 Zaire
273
9.6
220
20 Kenya
260
16.3
420
21 Senegal
244
42.8
450
22 Somalia
234
60.0
380
23 Zambia
218
37.6
560
24 Zimbabwe
217
29.3
630
25 PeRi
200
11.4
930
26 Upper Volta
189
33.1
190
27 Jamaica
171
77.7
1030
28 Niger
169
31.9
330
29 Mali
167
24.2
190
30 Malaysia
166
12.3
1670
31 Tunisia
162
25.3
1310
32 Mexico
162
2.4
2130
33 Ivory Coast
156
18.1
1150
34 Algeria
155
8.2
1920
35 Mozambique
154
14.7
270
36 Cameroon
146
17.4
670
37 Nigeria
132
1.6
1010
38 Madagascar
121
14.0
350
39 Nepal
115
8.0
140
40 Rwanda
113
22.1
200
41 Sunnani
112
320.0
2840
42 El Salvador
108
24.0
590
43 Burundi
93
22.6
200
44 Vietnam
92
1.7
190
45 Ethiopia
92
2.9
140
46 Malawi
91
15.4
230
47 Uganda
90
5.8
280
48 Ghana
90
7.7
420
49 Portugal
86
8.7
2350
50 Haiti
83
16.6
270

Source: OECD Development cooperation 1982 Review


GLOSSARY
A guide through the maze of aid jargon

Official development assistance consists of grants and loans at concessional rates (low interest arid long term) to promote economic developrnent and welfare. Not included: military aid, batik loans at commercial rates and grants from non-government agenci es.

Bilateral aid is provided directly by a donor to a recipient country. About 70% of all official aid.

Multilateral aid is channelled via international organisations such as the UN agencies and the World Bank. About 30% of all official aid.

Tied aid means that goods and services must be procured in the donor country; untied aid may be used to ‘shop around’ for the best deal on the open market. About half of all official aid is tied.

Project aid is for clearly defined projects, e.g. roads, water supplies and health facilities. This form of aid is attractive to donors because they can exercise greater control over its use. About 65% of all official aid.

Programme aid is non-project development assistance, usually to help countries out of balance of payments difficulties, This form of aid is most attractive to recipient countries because of its flexibility. About 35% of all official aid.

Technical assistance involves the provision of development-oriented skills by experts, the supply of relevant equipmerit and the training of local technical personnel. About 25% of all bilateral aid.

Food aid consists of cereals and dairy products from food-surplus countries, sent niainly to Egypt, Bangladesh, Indonesia and India. 70% is sold locally and used to support government budgets; 20% is used as project aid; 10% is used for emergency aid. Amounts to 11% of total official aid.

Emergency assistance is aid to people (e.g. refugees) in countries suffering from natural disasters, wars or other major Lipheava Is. About 5% of official aid.


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