Poverty and official development assistance

There has been a considerable change in the make-up of financial flows to the developing countries over the past decade. Official development assistance (ODA), which only accounted for 30% of the total in 1980, went past the halfway mark between 1984 and 1991, but slipped back to just over 40% in 1992 when bank loans surged, although it still represents three quarters of the amounts received in the low-income nations and almost all of them in the least developed group.

The grants (non-debt generating flows) total also increased regularly, from 28% in 1980 to 61% in 1991, although they came back down again, to 53%, in 1992.

However, from the point of view of the recipient countries themselves, the total amount of official development assistance has gone up very little, because of the collapse of supply from donors who do not belong to the OECD Development Assistance Committee, i.e. mainly the Arab countries, the former USSR and the countries of Central and Eastern Europe, whose ADC has fallen from $20 billion in 19801981 to less than $3 billion today.

Although the destination of aid is not a sufficient criterion to determine its anti-poverty content, details of its relative use in the poorest countries are still the best indication of what the donors actually intend.

The percentage of official development assistance which goes to the low-income nations is relatively small (64% of all ODA in 1989 1991 and only 60% of that from the Community and its Member States). These countries, in fact represent 82% of the total developing world population. This gives slightly more than $10 per capita p.a., as against an average of nearly $13 for the developing world as a whole.

Official development assistance to the (currently 47) least developed countries represented 29% of total aid in 1989-1991 and 33% of the aid from the Community and its Member States, making the average per capita assistance in these countries (which only have about 12% of the population of the developing world) almost $30 p.a.

A brief look at the breakdown of aid by major developing regions shows that sub-Saharan Africa, which has the acutest poverty problem and the bleakest outlook, is benefiting from a large and increasing flow of ODA, with almost a third of the present total, more than $36 per capita (2.5 times the average in the developing world as a whole), representing almost 11% of GNP (as against less than 2% in the developing world as a whole).

ODA from the Community and the Member States

The Member States of the Community together are the developing world's biggest supplier of ODA, some of which is bilateral and some Community and some distributed through multilateral organisations. They actually provide something like 46% of the ODA paid by the 21 members of DAC, which is about 43% of world ODA. The Community gives 0.43% of its GNP as official development assistance, as compared to the 0.33% average for all the DAC countries. The ODA commitment, however, is to pay 0.7% of GNP, a figure reached only by the Scandinavian countries and the Netherlands.

In the anti-poverty campaign, priority must be given in the future to a debate, on the implementation of ODA and external support in general. A broad and open discussion should be the opportunity to join with all the partners to define the right vehicles for anti-poverty operations. One of the main things to consider will be opening up to non-governmental partners, the involvement of recipients at every stage (and particularly the identification, execution, monitoring and evaluation of schemes), the promotion of decentralised development and, of course, better integration of economic and social policies and guidelines for the social sectors themselves.

D. D.