Facts -- New Internationalist

new internationalist 126 August 1983

REAL AID

Introduction

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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

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

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.

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 ($)	GNP per capita ($)

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.