ODA

Official development assistance

Posted on Posted in 3) Info - rich societies

38 of the richest states spend 0.5% of their revenue (on average) on Official Development Assistance (ODA) for 162 countries and territories.

This aid represents 3% of the total income of the 70 poorest countries. With ODA their average national income per capita is $ 1717, and without this year’s grant it would be $ 1684 (the world average is $ 10850).

However, this small (compared to needs) aid makes a difference, especially in fast-growing countries. Economic growth increases the invested funds each year.

Over the long term, greater effect would be to boost economic growth than increase development aid. Eg. increasing the rate of growth of 2.2% after 13 years would give greater effects than doubling development aid, and increasing the rate of growth of 3% after 6 years would have greater effects than doubling ODA.

Growth Options for Developing Countries

Growth-boosting aid does not have to mean more spending. Successful actions include increasing the import from an assisted country, creating preferences for it, investing in it, consulting business, mediating in the event of conflicts of interest with other entities.

Developing countries should meet business interests because their average growth rate is 7%, while rich countries 3%.

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