April 05, 2007	Thursday	Rabi-ul-Awwal 16, 1428

LONDON, April 4: Total official development assistance (ODA) from the rich to the poor countries fell by a hefty 5.1 per cent in 2006 to $103.9 billion, according to figures released here this week by the Organisation of Economic Cooperation and Development (OECD).

The fall represents 0.30 per cent Development Assistance Committee (DAC) members’ combined gross national income. In real terms this is the first fall in ODA since 1997, though the level is still the highest recorded with the exception of 2005.

ODA was exceptionally high in 2005 due to large Paris Club debt relief operations (notably for Iraq and Nigeria) which boosted ODA to its highest level ever at $106.8 billion.

In 2006, net debt relief grants still represented a substantial share of net ODA, as members implemented further phases of the Paris Club agreements, providing a little over $3 billion for Iraq and nearly $11 billion for Nigeria. Excluding debt relief, ODA fell by 1.8 per cent.

Preliminary data shows that bilateral net ODA to sub-Saharan Africa rose by 23 per cent in real terms, to about $28 billion. However, most of the increase was due to debt relief grants. Excluding debt relief for Nigeria, aid to sub-Saharan Africa increased by only two per cent.

The only countries to reach or exceed the United Nations target of 0.7 per cent of GNI were Sweden, Luxembourg, Norway, the Netherlands and Denmark. The largest donor in 2006 was the United States, followed by the United Kingdom, Japan, France and Germany.

In 2006, net ODA by the United States was $22.7 billion, a fall of 20 per cent in real terms. Its ODA/GNI ratio also fell to 0.17 per cent. The fall was mostly due to debt relief which was exceptionally high in 2005 as the United States forgave all its outstanding debt with Iraq in 2005 rather than spreading it over several years.

US disbursements to Sub-Saharan Africa ($5.6 billion) reached a record high mainly due to debt relief ($1.4 billion, of which Nigeria was $0.6 billion) and increased disbursements for education, HIV/AIDS and malaria programmes. Net ODA flows to Iraq remained substantial ($4.8 billion), to Afghanistan increased ($1.6 billion) and to the least developed countries were at their highest level ever ($ 5.5 billion).

In 2005, the G8 leaders pledged to increase funding by approximately $50 billion each year to 2010 after the high-profile Live8 campaign for debt relief, aid and fair trade. But Oxfam warned that aid figures were still "massively inflated" by the deals to write off debts to Nigeria and Iraq, and accused rich countries of breaking their promises to the world's poorest nations.

ODA is expected to fall back slightly again in 2007 as debt relief for Nigeria and Iraq tapers off. It is expected that other types of aid should then increase as donors fulfil their more recent pledges.

The EU agreed in 2005 to scale up its aid further to provide 0.56 per cent of its members’ combined GNI by 2010, or a minimum target of 0.51 per cent for Development Assistance Committee (DAC) EU members. The overall EU target takes into account commitments of some DAC EU members to increase or maintain aid levels beyond the minimum country target, as well as pledges by the non-DAC EU countries to participate in the scaling up of aid by moving to specified minimum aid levels.