“Aid” and “aid”

 What it is???-
i) ‘US military Aid to Israel’
ii) ‘Aid given by a private charity to private individuals
following a natural disaster.’
 In the public discourse, frequently what is being talked about
is what can be called Aid with a capital “A”: that is, any
assistance provided from a donor to a recipient (Williamson,
2018).
 These examples are not what the development community
views as aid.
 Development aid is a subset of what the public refers to as
Aid.
 Development aid has a variety of sub-definitions. The most
important and well-known of these is Official Development
Assistance (ODA).
 Official Development Assistance (ODA)
• Those flows to countries and territories on the DAC
List of ODA Recipients and to multilateral
development institutions that are:

i). Provided by official agencies, including state and

local governments, or by their executive agencies;
and

ii). Each transaction of which:

a) is administered with the promotion of the
economic development and welfare of developing
countries as its main objective; and
 b) is concessional in character. In DAC statistics, this
Revised implies a grant element of at least
in  45 percent in the case of bilateral loans to the
official sector of LDCs and other LICs
2018
(calculated at a rate of discount of 9 percent).
 15 percent in the case of bilateral loans to the
official sector of LMICs (calculated at a rate of
discount of 7 percent).
 10 percent in the case of bilateral loans to the
official sector of UMICs (calculated at a rate of
discount of 6 percent).
 10 percent in the case of loans to multilateral
institutions (calculated at a rate of discount of 5
percent for global institutions and multilateral
development banks, and 6 percent for other
organizations, including sub-regional
organizations).
 2. Provider
3. Objectives
Test (Official
Test (Eco Dev
Public
& Wefare)
agency)

1. Income 4. Cost to
Test (PCI Less recipient test.
than US $ (Grant
12236)
ODA Element)
 What Counts as ODA?
ODA
Eg. Refugees
“Humanitarian- settling down./
Development COVID 19
Divide”, Developmental
Humanitarian Aid
Aid.

 The humanitarian and economic development issues are

intertwined.
 Since the 2000s, the annual amount of humanitarian aid
from OECD-DAC members has grown both in absolute
terms and as a share of ODA, from US$2.1 billion in 2000
(4.6 percent of ODA) to US$18.8 billion in 2021 (an
estimated 10.5 percent of ODA) (OECD, 2022e, 2022f,
2022h).
There are some things that are excluded from the definition of
ODA.
-Loans at market rates do not count as ODA. For example,
loans provided by IBRD are not ODA. They are a form of
Development Assistance (DA in OECD’s terminology), and
they are part of Aid with a capital “A”.
-Export credits or trade financing also do not count as
ODA.
-Grants by foundations, such as the considerable amount of
funds provided globally each year by the Gates Foundation,
do not count as ODA.
-NGO development programs are not considered ODA.
- Funds to support a colony or overseas territory cannot be
counted as ODA or aid (In 2017, B & F ~ Islands~
Hurricane)
-One-of cultural events, such as a concert, cannot be
counted as ODA, but the financing of museums, libraries,
art spaces, and music schools can be considered aid.
- COVID-19 vaccine donations, as well as measures for
prevention, treatment, and care have been included in
ODA.
- Importantly, all costs to a donor for administering aid are
included in aid totals.
 ODA Modernization
 Since 2012, the Development Assistance Committee (DAC) of
OECD has launched a process of modernization of ODA.
 Police training and routine civil policing functions /Use of military as last
Peace & resort to deliver humanitarian or dev services (Except salaries) // Not to wage
security
war in any means.

Counting of
Loans
As per DAC Guidelines // Gross vs Net ODA

Basic assistance for 12 months for refugees, asylum-

Refugees seekers. (Due to surge in refugee in recent times)

Promoting Development-oriented private sector finance

the Private to developing countries can be counted as ODA,
Sector

Any part of an official loan is now subject to

Debt Relief concessional debt relief can be counted as ODA,
up to a ceiling of the original amount of the
loan.
 Going Beyond ODA – The Realm of Development Finance
Total Official Support for Sustainable Development

(TOSSD)

 To better support monitoring of the SDGs, that OECD/DAC

began developing a new statistical measure of external
assistance, referred to as TOSSD (Total Official Support for
Sustainable Development).
 It is meant to monitor all “official resources and private finance
mobilized by official interventions in support of developing
countries sustainable development.”
 In 2017, an international working group with both donors and
recipients began working on the TOSSD methodology.
 TOSSD

Resources spent at regional

All cross border official
and global levels to support
resources to developing
international public goods
countries
and meet global challanges.
 The idea of TOSSD is not to replace ODA, but to provide a
complementary measure that more fully captures today’s
complicated external financing scenario for developing countries
and the provision of global public goods.
 Does the advent of TOSSD mean that it is time to forget about
aid and ODA as outdated concepts?
 The answer is – A BIG NO.
 LIC vs UMIC
 The “Packaging” of Aid: Types, Modalities and Channels

Recipient-focused aid for development can take a number of different forms

FORMS OF AID

Technical assistance
Grants and “in-kind” aid eg Food (Genrally tied Non-market rate
Debt relief
concessional loans aid aid~PoorResults ~ guarantee.
India - Afg for Road
Usually, aid is not just about writing checks to recipient
governments.

Modalities of Development Aid

Sectorwide
Program Aid ~ Approaches or SWAPs
Investment projects eg African Dev ~ IDA approved an
Japan ~ US$18.71 SDR360.9 million Global Programs
million~ Fishery
Bank~US$ 51.7
million to Tanjania~ (US$500 million) GFATM ; GAVI
Promotion in Ghana
COVID 19 crisis grant for
(2014-18)
responnse Ethiopia for land
management

Country-based in the sense that they originate from either donor or recipient
country strategies and plans specific to that recipient country
 How Much Aid Is There?
Following figure shows how ODA has evolved since 1990-
Distribution of Aid
Summarizing Donors’ Efforts