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Aid to the least developed countriesPresentation by Simon Scott, OECD/DACUnited Nations, New York, 18 November 2008
Aid to LDCs has risen sharply since 2000
0
5
10
15
20
25
30
35
40
45
2000 2001 2002 2003 2004 2005 2006 2007
Cons
tant
200
6 U
SD B
illio
ns Other LDCs
Congo, Dem. Rep.
Bangladesh
Uganda
Mozambique
Sudan
Ethiopia
Tanzania
Afghanistan
…led by steep rises in aid from the United States
0
1
2
3
4
5
6
7
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Cons
tant
200
6 U
SD B
illio
ns
USA
UK
Germany
France
Japan
Canada
…as well as from IDA and the EC
0
1
2
3
4
5
Cons
tant
200
6 U
SD B
illio
ns
IDA
EC
AfDF
Global Fund
AsDF
But smaller donors give higher shares of their aid to LDCs
2005 2006 20073-year
averageLDCs as % of total
country allocable ODA
2005-2007
1 Ireland 1,155 1,394 1,617 1,389 83%2 Norway 2,869 2,944 3,231 3,015 68%3 Denmark 2,112 2,195 2,403 2,237 63%4 Portugal 377 383 374 378 61%5 Luxembourg 305 343 401 350 59%6 Finland 520 599 700 606 58%7 Belgium 1,455 1,952 1,817 1,741 58%8 Sweden 2,487 2,735 2,549 2,590 57%
Constant 2006 USD millions
Nine donor countries met the 0.15% of GNI target for aid to LDCs in 2007
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Perc
ent o
f don
or's
GN
I
2000
2007
Target 0.15
LDCs received almost a third of all aid in 2007
33%
16%24%
4%
23% Least Developed Countries
Other Low Income
Lower Middle Income
Upper Middle Income
Unspecified Income Group
Per capita aid to LDCs is far higher than to other income groups
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007
Cons
tant
200
6 U
SD p
er c
apita
LDCs
LMICs
Other LICs
UMICs
The quality of aid to LDCs has improved• In 2007, all DAC members met the 1978 DAC Terms
Recommendation, by giving the bulk of their aid to LDCs as grants (at least 90% annually – or 86% of their aid to each LDC over the preceding three years – grant-equivalent).
• In 2001, the DAC agreed a Recommendation on Untying Aid to the Least Developed Countries, which is being carefully monitored.
• This means that practically all aid to LDCs is now in the form of grants which can be used to buy goods and services at the lowest prices available.
Aid goes mainly to social sectors (education, health, water supply) and debt relief
38% 16% 9% 7% 5% 9% 7% 10%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Social Economic ProductionMultisector General Programme Aid DebtEmergency Others
Sectoral emphasis varies widely
38
52
46
32
29
54
31
25
13
4
3
5
5
5
11
5
4
12
2
3
3
2
3
5
20
2
58
16
6
13
10
58
2
17
0% 20% 40% 60% 80% 100%
Afghanistan
Bangladesh
Congo DR
Ethiopia
Mozambique
Tanzania
Social Economic Production Multisector
Gen. Prog. Aid Debt Humanitarian aid Other
Aid to education is mainly for tertiary studies in donors or basic education in recipients…
20%
26%
10%
44%
Education policy training/research
Basic education
Secondary education
Post-secondary education
In health, aid goes largely to HIV/AIDS programmes, and basic health
14%
32%54%
Health general
Basic health
Population policies incl. HIV/AIDS control
Water aid goes to both policy development and installation
39%
36%
22%
3%
Water resources policies
Large water supply & sanitation systems
Basic drinking water
Rivers/Waste/Education
Further rises in ODA are projected to 2010
Hopeful signs for aid to LDCs
• 2005 G8 and Millennium Summit promised to double aid to Africa – where most LDCs are located – by 2010
• Aid to LDCs has risen noticeably in real terms since 1999
• 16 LDCs have received massive debt relief under MDRI – totalling $29 billion (2006)
• Global funds retargeting aid to health systems and neglected diseases
Warning signs for aid to LDCs
• Several major aid donors still well short of meeting aid targets, and likely to miss them for 2010
• Recession may cut donor budgets in 2009• Obama/Biden promised to double total US
ODA to $50 billion by 2012, but have pulled back since financial crisis
• Governance and security concerns impeding aid to some LDCs, especially fragile states
Importance of aid quality
• Paris Declaration (2005) set targets for monitoring aid quality
• Accra Agenda for Action (2008) commits donors to use partner systems and disclose planned aid levels
• Avoid pushing “hobby horses” through earmarking, conditionality and vertical funds
• Concentrate aid on real problems of hunger, disease and lack of freedom and opportunity.
Thank you for your attention.
For more information on aid flows, visit the DAC website at www.oecd.org/dac/stats