♠ Posted by Emmanuel in Development at 10/26/2010 12:05:00 AMMy curiosity about regarding official development aid was piqued by a recent New York Times article profiling Dr. Rajiv Shah, the head of the US Agency for International Development (USAID). In recent years, USAID's stature within American policy circles has diminished somewhat, though it is supposedly in the ascendant once more given its closer ties nowadays to the State Department. Hopefully, USAID's efforts may become less politicized as well. That is, instead of aid being predicated on pet American causes as it's been in the past, it can move towards more impartial determinants of disbursing aid.
One of my more popular posts over the years is, appropriately enough, a summary of aid contributions in 2007 by Development Assistance Committee (DAC) members composed of several developing countries. Three years on, I though it's about time I visited the OECD site and figured out what's been happening ever since. As it turns out, there is a new OECD report discussing fifty years of development assistance from 1960 to 2010. Of course, final 2010 data is not yet available but only estimates. Still, the picture that emerges is not entirely satisfying for those of you who believe that aid should be constantly increasing and reach at least 0.7% of industrialized countries' annual gross national income (GNI). What you can immediately grasp from the image above [click for a larger image] are two: First, ODA has actually increased in inflation-adjusted terms--especially towards the end of the new millennium's first decade (blue LHS). Second, ODA has not, however, increased in line with increases in national income among DAC donors (green RHS). Currently, we are marginally above the 0.3% contribution level. Putting these two observations together, ODA as a percentage of these industrialized countries' GNI has been falling as of late.
At any rate, here is the OECD blurb:
From 1960 to 1990, official development assistance (ODA) flows from DAC countries to developing countries rose steadily. By contrast, total ODA as a percentage of DAC countries' combined gross national income (GNI) – a target to measure aid flows – fell between 1960 and 1970, and then oscillated between 0.27% and 0.36% for a little over twenty years.There are also interesting individual donor profiles. And speaking of Iraq, checking the recipient profile of the United States in recent years reveals that the Cold War mentality is still very much alive. From giving large amounts of money to self-styled champions of freedom 'n' growth jibba-jabba so beloved by the Yankees like Zaire's Mobutu Sese Seko, today's beneficiaries are self-styled "tough on terror" American puppets like Hamid Karzai and...whatever sort of "head of government" they have in Iraq. I guess some things never change. Let's just say Rajiv Shah has his work cut out for him at USAID.
Between 1993 and 1997, ODA flows fell by 16% in real terms due to fiscal consolidation in donor countries after the recession of the early 1990s. Aid then started to rise in real terms in 1998, but was still at its historic low as a share of GNI (0.22%) in 2001.
Since then, a series of high-profile international conferences have boosted ODA flows. In 2002, the International Conference on Financing for Development, held in Monterrey, Mexico, set firm targets for each donor and marked the upturn of ODA after a decade of decline. In 2005, donors made further commitments to increase their aid at the Gleneagles G8 and UN Millenium + 5 summits.
In 2005 and 2006, aid peaked due to exceptional debt relief operations for Iraq and Nigeria. Despite the recent financial crisis, ODA flows have continued to rise to 2009, and are expected to reach USD 126 billion in 2010, demonstrating how effective aid pledges can be when they are made on the basis of adequate resources and backed by strong political will.