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Aid to the least developed countries

Aid to the least developed countries. Presentation by Simon Scott, OECD/DAC United Nations, New York, 18 November 2008. Aid to LDCs has risen sharply since 2000. …led by steep rises in aid from the United States. …as well as from IDA and the EC.

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Aid to the least developed countries

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  1. Aid to the least developed countries Presentation by Simon Scott, OECD/DAC United Nations, New York, 18 November 2008

  2. Aid to LDCs has risen sharply since 2000

  3. …led by steep rises in aid from the United States

  4. …as well as from IDA and the EC

  5. But smaller donors give highershares of their aid to LDCs

  6. Nine donor countries met the 0.15% of GNI target for aid to LDCs in 2007

  7. LDCs received almost a third of all aid in 2007

  8. Per capita aid to LDCs is far higher than to other income groups

  9. 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.

  10. Aid goes mainly to social sectors (education, health, water supply) and debt relief

  11. Sectoral emphasis varies widely

  12. Aid to education is mainly for tertiary studies in donors or basic education in recipients…

  13. In health, aid goes largely to HIV/AIDS programmes, and basic health

  14. Water aid goes to both policy development and installation

  15. Further rises in ODA are projected to 2010

  16. 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

  17. 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

  18. 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.

  19. Thank you for your attention. For more information on aid flows, visit the DAC website at www.oecd.org/dac/stats

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