April 12, 2005
U.S. Continues to Lead in Foreign Aid Giving, Official Says
2004 amount is double 2000 U.S. aid funding level
The United States continues to lead other donor countries in providing development assistance, giving more than $19 billion in 2004, says State Department spokesman Richard Boucher.
The 2004 aid amount was double the amount the United States committed in 2000, Boucher said in an April 11 statement.
Official development assistance (ODA) from the United States is 24 percent of world official aid contributions, he said.
Boucher spoke following the release of a report from the Organization for Economic Cooperation and Development on world levels of ODA. (See related article Official Aid to Developing Countries Rose 4.6 Percent in 2004 )
The amount of U.S. aid is projected to rise further in 2005, due to contributions to countries affected by the December 2004 Indian Ocean tsunami disaster and because the Millennium Challenge Corporation (MCC) will begin to expend its funds.
The MCC administers the Millennium Challenge Account (MCA), which targets aid to countries that have demonstrated a commitment to making economic and social reforms.
Following is the text of Boucher's statement:
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UNITED STATES LEADS THE WORLD IN DEVELOPMENT ASSISTANCE
On April 11, the Organization for Economic Cooperation and Development released its summary of official development assistance for the year 2004. This report demonstrates the United States has been and remains the world leader in providing assistance to the developing world.
We are pleased to see that worldwide official development assistance in 2004 rose to its highest level ever, surpassing $78.6 billion for an aggregate increase of 4.6 percent. Once again, the United States is the leading donor nation with an increase of 14.1 percent in our official development assistance, bringing our total aid program to more than $19 billion. Official development assistance from the United States constitutes 24 percent of the world total, the highest share of such support in nearly 20 years. Since 2000, the United States has nearly doubled its aid to the developing world. Our current assistance levels are more than twice the commitment made by President Bush at the Monterrey Financing for Development Conference in 2002.
These levels are due to rise again significantly in the year 2005 because of the funds we have contributed to tsunami disaster relief and reconstruction and because the Millennium Challenge Corporation will begin to expend its funds. These figures demonstrate the strong U.S. commitment to development assistance. We will continue to ensure that this money is spent effectively and that it also is used to help galvanize support from the private sector.
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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
Related Article
11 April 2005
U.S. still largest aid donor, OECD reports
Donor countries' official aid to developing countries increased in 2004 to $78 billion, the highest level ever, according to the Organization for Economic Cooperation and Development (OECD).
Accounting for inflation and the fall in the value of the U.S. dollar, the amount of official development assistance (ODA) represented a 4.6 percent increase from 2003 to 2004, following a rise of 4.3 percent from 2002 to 2003, the OECD reported April 11.
U.S. ODA in 2004 amounted to $19 billion, a 14.1 percent increase from 2003, OECD said in a press release. The United States remained the largest aid donor, followed by Japan, France, the United Kingdom and Germany, it said.
The OECD also noted that several countries that are members of OECD's Development Assistance Committee (DAC), including the United States, France and the United Kingdom, have significantly expanded bilateral aid.
For example, the U.S. Millennium Challenge Account (MCA), which targets aid to countries that have shown a commitment to economic and social reforms, is now in operation, according to the OECD.
The Millennium Challenge Corporation (MCC) -- the MCA's administrative agency -- received $1.5 billion in funding in fiscal year 2005. In March, MCC selected Madagascar as its first aid recipient and the agency expects to announce additional recipients from among eligible countries in coming months. The MCC is seeking $3 billion in funding in the fiscal year beginning October 1.
Statistics from the report are available at: http://www.oecd.org/dataoecd/59/51/34700392.pdf
Following is the text of the OECD press release:
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Organisation for Economic Co-operation and Development
Building Partnerships for Progress
Official Development Assistance Increases Further
-- But 2006 Targets Still a Challenge
April 11, 2005 -- Official Development Assistance (ODA) to developing countries increased to USD 78.6 billion in 2004, its highest level ever. Taking into account inflation and the fall in the U.S. dollar, this represents a 4.6 percent rise in real terms from 2003 to 2004 and follows a 4.3 percent increase from 2002 to 2003.
The total represented 0.25 percent of Development Assistance Committee (DAC) members' combined gross national income (GNI), the same level as in 2003, but up from 0.23 percent in 2002 and 0.22 percent in 2001.
Several factors accounted for the USD 3.1 billion rise in real terms in 2004. Among these were:
-- Contributions to international organizations increased by USD 3.7 billion
-- Aid to Afghanistan and Iraq was up by a total of at least USD 1.5 billion
-- Technical co-operation grants rose by USD 1.2 billion
-- Gross debt relief grants fell by USD 2.1 billion, and
-- Net lending fell by USD 1.3 billion.
Fifteen of the twenty-two DAC member countries reported increased ODA in 2004. The United States remained the largest aid donor in volume terms, followed by Japan, France, the United Kingdom and Germany. The only countries to exceed the UN target for ODA of 0.7 percent of GNI remain Denmark, Luxembourg, the Netherlands, Norway and Sweden.
The United States' net ODA in 2004 was USD 19 billion, a 14.1 percent increase in real terms from 2003. Its ODA/GNI ratio rose from 0.15 percent to 0.16 percent. Most of the increase was due to a USD 1.8 billion contribution to the International Development Association (IDA), the grant and soft-loan arm of the World Bank. Aid to Afghanistan (USD 875 million) and Iraq (USD 2.9 billion) also rose substantially. United States ODA comprised 24.2 percent of the DAC total in 2004, its highest share since 1986, and nearly double the low point of 12.5 percent reached in 1995.
Japan's net ODA fell by 4.8 percent in real terms to USD 8.9 billion or 0.19 percent of its GNI. However, in gross terms its ODA rose by 24.5 percent to USD 16.1 billion. This was due partly to aid for reconstruction of Iraq, though mainly to greatly increased debt relief to some of the most heavily indebted countries in the world. But this debt relief had little effect on net ODA since the bulk of the forgiven loans were counted as ODA when they were extended. Increased repayments of ODA loans, notably by countries that have recovered from the Asian financial crisis, also affected Japan's net ODA.
The 15 DAC countries that are members of the European Union (EU) increased their combined ODA by 2.9 percent in real terms to USD 42.9 billion -- some 55 percent of DAC ODA. It represented 0.36 percent of these countries' combined GNI, up from 0.35 percent in 2003 and broadly on track towards the EU target of 0.39 percent by 2006, although five EU members still need to increase their ODA substantially to reach the minimum country target of 0.33 percent. EU members committed themselves to these targets before the 2002 Monterrey International Conference on Financing for Development.
Among EU member countries Belgium has committed to meeting the UN target of 0.7 percent by 2010 and France by 2012 (with an interim target of 0.5 percent by 2007). Sweden has announced its goal to reach an ODA/GNI ratio of 1 percent by 2006, Spain to attain 0.33 percent in 2006 and 0.5 percent in 2008, and the United Kingdom to reach 0.47 percent by 2007-08 and 0.7 percent by 2013.
The largest rises in aid in real terms in 2004 by EU countries were in:
-- Austria (22.0 percent), mainly due to debt relief grants
-- Greece (13.1 percent), due to increased technical co-operation and emergency relief
-- Luxembourg (10.5 percent), due to increased contributions to regional development banks
-- Portugal (an exceptional 187.5 percent), due to a large debt relief operation for Angola
-- Spain (14.5 percent), due to the timing of contributions to international organizations
-- United Kingdom (8.8 percent), due to higher project and program aid expenditure and debt relief.
-- ODA also rose in real terms in Denmark (3.5 percent), Finland (5.9 percent), France (4.3 percent), Ireland (2.2 percent) and Sweden (1.4 percent), and remained practically unchanged in Germany (-0.4 percent).
ODA fell in real terms in Belgium (-30.3 percent), after the peak in 2003 caused by a large debt relief operation for the Democratic Republic of Congo. The fall in Italy (-9.7 percent) was mainly due to reduced debt forgiveness (down about USD 400 million). ODA from the Netherlands fell (-4.0 percent) as India repaid all its outstanding Dutch aid loans. These early repayments brought the Netherlands' ODA down to 0.74 percent of its GNI, below its target of 0.8 percent, which it intends to maintain, on average, over the period 2004-07 through above-target performance in 2005-07.
Aid managed by the European Commission (EC), funded by EU members from the amounts shown above, increased by 7.1 percent in 2004, continuing a trend towards more efficient disbursement of their resources.
Other DAC members saw the following changes in real terms in their ODA:
-- Australia's ODA rose slightly by 2.3 percent
-- Canada's ODA rose by 12.2 percent as reimbursements declined compared to 2003 when India had repaid its Canadian ODA loans
-- New Zealand's ODA rose by 8.2 percent. This included a significant increase in grants to South Pacific Agencies.
-- Norway's ODA fell slightly (-2.9 percent)
-- Switzerland's ODA fell (-3.0 percent). However, this figure may be revised substantially if Switzerland decides to report the initial costs of asylum-seekers from developing countries arriving in Switzerland.
Among non-DAC OECD donors, only Poland has provided preliminary data showing that its ODA rose to USD 124 million in 2004 as Poland joined the EU and started contributing to its development budget.
-- Further substantial rises in ODA are expected in 2005-6. If members meet the ODA volume commitments they made at and after the Monterrey conference, the ODA/GNI ratio should improve from 0.25 percent in 2004 to 0.30 percent in 2006. The main sources of the rises are likely to be:
-- Contributions to the World Bank's International Development Association. In February 2005, donors agreed to contribute USD 18 billion to IDA to increase its grants and loans by at least 25 percent.
-- Increases in bilateral aid budgets. Several DAC members are implementing significant expansions of their bilateral aid programs. For example, the United States' Millennium Challenge Account is now operational and two other large donors -- France and the United Kingdom -- are increasing their bilateral ODA as part of ambitious plans to meet the UN 0.7 percent target by 2012-13.
-- Tsunami aid. The devastating Indian Ocean tsunami has led to exceptional mobilization of both private and official resources for relief and reconstruction. The DAC will track disbursements arising from the pledges made.
-- Debt relief for Iraq. At the end of 2004, the Paris Club agreed to relieve much of the debt owed by Iraq. Depending on the pace of bilateral agreements between Iraq and its creditors, up to USD 15 billion of this relief may be reportable as ODA by DAC members in 2005.
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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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