Official development assistance
(ODA) is a
statistic compiled by the Development Assistance
of the Organisation
for Economic Co-operation and Development
to measure aid
. The DAC first compiled the statistic in 1969. It is
widely used by academics and journalists as a convenient indicator
of international aid flow. It includes some loans.
The full definition of ODA is:
In other words, ODA needs to contain the three elements:
(a) undertaken by the official sector
(b) with promotion of economic development
and welfare as
the main objective; and
(c) at concessional
financial terms (if a loan, having a
grant element of at least 25 per cent).
This definition is used to exclude development aid from the two
other categories of aid from DAC members:
- Official Aid (OA): Flows which meet conditions
of eligibility for inclusion in Official Development Assistance
(ODA), other than the fact that the recipients are on Part II of
the Development Assistance Committee (DAC) List of Aid
- Other Official Flows (OOF): Transactions by
the official sector with countries on the List of Aid Recipients
which do not meet the conditions for eligibility as Official
Development Assistance or Official Aid, either because they are not
primarily aimed at development, or because they have a grant
element of less than 25 per cent.
If a donor
country accords a grant or a concessional loan to Afghanistan it is classified as ODA, because
it is on the Part I list.
If a donor country accords a grant or a
concessional loan to Bahrain it is
classified as OA, because it is on the Part II
If a donor country gives military assistance to any
other country or territory it is classified as
, because it is not aimed at development.
There are normally two ways of looking at the volume of ODA:
real terms the United States is by far the largest donor.
- In real terms - the amount
- As percentage of GNP - aid burden-sharing
It is also the
country that produces the greatest value of goods and services,
. However, the U.S. federal government's
aid budget is ~0.2% of its GNI, whereas Sweden's is ~1%.
percentage Sweden is the
largest donor among developed countries, and together with Luxembourg, Norway, the Netherlands and Denmark it meets the
International Aid Target of
dedicating 0.7 percent of GNP. As percentage of GDP,
Arab states of the Persian Gulf are the most generous, with Kuwait contributing
8.2% of its gross national
product and Saudi
Arabia contributing 4% in 2002.
Official development assistance in
reports that Iraq was the top
recipient of development aid in 2005 followed by Nigeria. However,
this is due to the significant debt relief deals that were granted
to these nations that year - when donor countries write off a
portion of a recipient country's debt, it is counted as official
development assistance from the donor country.
Official development assistance has been criticized by several
economists for being an inappropriate way of really helping poor
countries. The Hungarian economist Peter Thomas Bauer
has been one of the
most vocal of them.