Aid over USD 100 billion – new figures released today

Official Development Assistance (ODA) from OECD countries to developing countries rose to a record high of USD 106 billion in 2005.

This total represents 0.33% of the DAC countries’ combined GNI in 2005, up from 0.26% in 2004.

Today’s preliminary 2005 figures are evidence of delivery on the promises made in 2005 by the European Union and at the G8 summit in Gleneagles to increase aid by some USD 50 billion by 2010.

April 2006

Has the downward trend in aid for water reversed?
Statistics for 2004 show an increase in aid allocations but no change in the share of aid for water in total bilateral aid.

But a good deal of this apparent boom in aid does not yet mean enhanced resource transfer to the vast majority of developing countries. As the analysis in this year’s Development Cooperation Report shows, we need to be aware of the debt relief bubble.

In 2005, OECD DAC member countries provided debt forgiveness grants of nearly USD 14 billion to Iraq and a little over USD 5 billion to Nigeria.

Despite this exceptional debt relief, there was still a substantial increase in ODA of 8.7% in real terms. This is good news.

The OECD predicts that donors will need to keep increasing aid by a substantial 60% between 2004 and 2010 – an average increase of over 8% per year; and do it at a time when OECD budgets are under great pressure. Once the debt deals are done, donors will need to increase other forms of aid sharply if they are to get near the levels set for 2010.

Based on current information, the OECD estimates that DAC member countries will reach nearly USD 130 billion by 2010 – an increase of nearly USD 50 billion from 2004.  On top of that, so called "Emerging Donors" like China and India are also contributing significant funds.  Richard Manning, OECD DAC Chair asks, will these donors change the face of aid?

This year's Development Co-operation Report includes a user-friendly analysis of the latest OECD statistics on aid.

Please use this on-line version of the DCR.

You are invited to add this link http://www.sourceoecd.org/developmentreport
on your agency intranets.

Also in this issue...

Environment and development ministers joined forces this week at the OECD headquarters for the first time in fifteen years. A lot has happened in 15 years, not least the scale and urgency of environmental threats to development have increased. In low income countries where the poorest people live, environmental resources contributed a far greater share – some 26% - of national wealth than in OECD countries, where the comparable figure is only 4%. In some developing countries, the portion of aid directed at activities potentially affected by climate change risks can be as high as 50-65%.

Also this week, development ministers and heads of agencies will meet at the annual High Level Meeting to discuss how to handle aid increases in a predictable way so developing countries can plan poverty reduction initiatives; how to work better in fragile states, especially where human rights and corruption are significant risks; how best to promote pro-poor growth; and whether to endorse "The Principles and Good Practice of Humanitarian Donorship".
 

Peer Reviews – Review of the Development Co-operation Policies and Programmes of Germany. Germany is urged to undertake a major shake-up of the overall structure of its development co-operation system...

Main findings and recommendations.

What is a Peer Review?

News in Brief

• 9-10 May OECD will host a conference on the findings - released the same day - of an independent evaluation of donors' support of developing countrys' general budgets. The evaluation is based on seven country studies and asks to what extent, and under what circumstances, is budget support effective in reducing poverty and encouraging growth?

• Next OECD DAC Peer Review - Portugal, April 2006

• G8 Conference hosted by the Russian Presidency (6-7 April 2006) on "Emerging Donors in the Global Development Community"

• OECD's International Development Statistics CD-ROM, 2006 Edition

• Geographical Distribution of Financial Flows to Aid Recipients 2000-2004

• Aid Extended by Local and State Governments

• Miracle, Crisis and Beyond. A Synthesis of Policy Coherence Towards East Asia

OECD DAC Statistics including Aid at a Glance charts for DAC members and recipient countries.

About Us

The OECD DAC  is the main global forum where bilateral donors, alongside multilateral donors, work together to achieve real development progress for poorer countries.

More information about OECD Development work.

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