Middle-Income Countries
In 2019, the United States donated $8.1 billion in official development assistance (ODA) to the global health sector, according to the Organization of Economic Co-operation and Development (OECD). This kind of government aid, alongside other contributions, explicitly aims to promote economic development and welfare in developing nations as the OECD has defined. The Development Assistance Committee (DAC) of the OECD, an international forum of some of the largest providers of aid, including the United States, adopted ODA as the “gold standard” of foreign aid in 1969 and continued to be the primary source of financial assistance for development in other nations. Foreign support for health often prioritizes low-income countries over middle-income countries (MICs). According to a policy report, the national average income level for nations fails to reveal poverty and inequality. Millions of people living in poverty in MICs end up behind as donors focus on the poorest countries.

Who are the Middle-Income Countries

According to the World Bank, MICs are home to around 75% of the global population and 62% of the world’s poor. Middle-income countries also have two categories: lower-middle-income and upper-middle-income economies. Finally, the gross national income (GNI) per capita for MICs ranges between $4,046 and $12,535. Middle-income countries are diverse in terms of region, size, population and income level. Countries considered MICs could be nations with small populations such as Belize to larger countries such as China and India. Since the category of MIC expands to a multitude of different nations, there are a variety of other challenges. For those in the lower-middle-income category, one of the most significant issues may be providing citizens with essentials, such as water and electricity. The most critical challenges could potentially be corruption and governance for upper-middle-income nations.

How Health Donors Target Poverty

Duke University’s Center for Policy Impact in Global Health “analyzed donors’ allocation policies to determine if they reflect subnational poverty trends.” In addition, researchers aimed to identify ways funders can adapt their policies to ensure that no one ends up behind.

The researchers found four key features of the allocation policies including an overreliance on national poverty indicators, focus on critical and vulnerable populations, future subnational targeting and health system strengthening.

Health aid funders relied on national-level economic indicators for a country’s aid eligibility. There was also a high correlation to most health donors prioritizing epidemic control over poverty elimination, especially for organizations that target specific diseases. Through targeting diseases, health aid funders define populations by their epidemiological risk profile rather than making an explicit link to subnational poverty that may be causing a higher exposure to the diseases. Many donors also direct their funds to two different pathways of either “a ‘health systems strengthening (HSS) window or a cross-cutting HSS approach.” Organizations including the Global Fund to Fight AIDS, the World Bank’s International Development Association (IDA) and the United States Agency for International Development (USAID) use HSS to reach people considered the poorest. Unfortunately, the organizations do not often track poverty-specific metrics linked to their HSS portfolios even while trying to reduce poverty.

Due to a focus on elements that poverty or national-level economic indicators cause, donors often overlook the poor in middle-income countries.

The Importance of Donors

To ensure impoverished people can benefit from health aid, eliminating poverty should be a central goal for donors. They should use geospatial data sources and methods, consult the citizens living in poverty and use other indicators and factors to assess poverty. This would ensure that donors deliver the best aid to the community. However, donors should also acknowledge that poverty is a “complex, multidimensional and context-dependent social phenomenon that cannot be captured by monetary indicators alone.” Donors have to realize that the value for money approach may not align with the idea of ensuring that no one ends up behind.

Donors should also work alongside domestic policymakers to achieve long-term sustainability for a clear action plan for vulnerable groups. The donors have to define who will receive the program, how these people will access the program and what benchmarks will determine progress. The donors should also ensure that the community involves itself in a meaningful way to create change. In addition, medical interventions including vaccines should have mechanisms in place to set reasonable prices.

The United Nations Conference on Trade and Development (UNCTAD)

Middle-income countries have garnered the attention of the United Nations Conference on Trade and Development (UNCTAD). As U.N. General Assembly President Volkan Bozkir said that “The international community must urgently address the structural obstacles holding back progress…” Specifically, when middle-income countries experience exclusion from relief initiatives, they cannot respond effectively to the COVID-19 pandemic and the other social and economic effects. UNCTAD Acting Secretary-General Isabelle Durant said, “If the international community fails to support middle-income countries, the debt crisis will threaten global efforts to tackle poverty, inequality and climate change for years to come.” To help, UNCTAD developed the Productive Capacities Index (PCI) that would measure “how far productive capacities and benchmark their achievements.” This will help nations to formulate and implement better policies and benchmarks in terms of development and country-specific conditions.

Hope exists that the correct aid will uplift the community and implement sustainable solutions to today’s health issues ranging from parasites to chronic and infectious diseases. Middle-income countries will continue to grow their health infrastructure to give their citizens the best future possible.

Gaby Mendoza
Photo: Flickr

South Korea’s Foreign Aid
South Korea, or the Republic of Korea officially, is stepping forward as a global leader in delivering foreign aid. During the COVID-19 pandemic, South Korea’s foreign aid will amount to $400 million USD donated to programs dedicated to improving health in developing countries, according to South Korea’s fiscal chief Moon Jae-In in April 2020. In 2017, he was the chief of staff to President Roh Moo-hyun. The country has also enacted foreign aid by pledging to extend the due dates of international loans and payments.

Where South Korea’s Foreign Aid is Going

South Korea’s foreign aid has helped South Korea emerge as a world leader, and especially since the Development Assistance Committee (DAC) recruited it. Another thing that has helped South Korea emerge as a world leader was its swift detection, containment and treatment of COVID-19. South Korea lowered the number of cases in the county to 61 cases on October 24, 2020 – all without imposing a full lockdown.

In Tanzania, South Korean foreign aid is implementing a project to empower rural women. It will facilitate this project from 2020 to 2023, with $5 million USD. Agricultural facilities will undergo construction, and female farmers will receive marketing and technical education. This will improve women’s access to land. South Korea will also establish a center for victims of gender-based violence.

South Korea has undergone a radical transformation. It has gone from being a recipient to a significant donor of international aid. In the 1960s, South Korea received over $1,400 million USD in foreign aid. Decades later, in 1987, South Korea adopted democracy, and institutions received new designs to better serve the interests of the public. In 1987, it donated $25 million in foreign aid, but this does not include aid to North Korea, or else this amount would be far larger. This change was due to South Korea’s official adoption of democracy in 1987 when June demonstrations forced the government to announce democratic reforms. A free market allowed for competition, and therefore, innovation to take place, thus sustaining the economy and bolstering the GDP per capita, from $2,835 USD in 1986 to $13,403 USD in 1996.

South Korea as an ODA Donor

In 1987, South Korea became a donor for official development assistance (ODA). ODA is government aid to encourage the economic development of developing countries. In 1987, South Korea’s foreign aid totaled $25 million. Contributions steadily increased, with yearly percentage increases ranging from 30% to 79% in the next 20 years. It continues to flourish and thrive as an emerging significant country in global aid.

South Korea and the OECD

South Korea became a member of the Organization for Economic Co-operation and Development’s (OECD) prestigious Development Assistance Committee (DAC) in 2010. The OECD is an international group of the biggest providers of assistance towards developing countries and the DAC is a forum to discuss issues of international aid focused on inclusive and sustainable growth.

In 2011, one year after becoming a member of DAC, South Korean president Lee Myung-bak stated that South Korea intends to give more aid to the world than what it has ever taken. To exemplify this promise, in 2015, Korea partnered with USAID to commit $5 million to the Ethiopian government to encourage its efforts to mitigate child and maternal death there. It mainly focused on heightening the numbers of healthy mothers and successful births, giving more access to application and acceptance of family planning, and increasing healthy birth rates.

South Korea also pledged in July 2020 to give $4 million in humanitarian assistance to countries in East Africa that experienced locust swarms, resulting in food crises for over 25 million people. The World Bank recommended that social and productive safety-net programs – a subset of social protection mechanisms – be instilled to bolster food and nutrition security. Safety nets include cash, social pensions, public works and school meal programs.

South Korea’s growth in foreign aid increased significantly after the county adopted democracy, and it became a member of the OECD. It is stepping forward as a global leader in delivering foreign assistance, as proven by its inclusion into the DAC. It is combating issues such as maternal deaths in Ethiopia and food scarcity in the East African region due to food scarcity caused by locusts.

– Madeline Drayna
Photo: Unsplash

Development AssistanceThe Development Assistance Committee (DAC) is a division of the Organisation for Economic Co-operation and Development (OECD). It facilitates economic development worldwide, partly by providing financial assistance to developing countries. The DAC currently has 30 members, including the U.S., Japan and the European Union. According to analysis organization DevelopmentAid, 155 countries received development assistance from these members and of other non-member donors in 2018.

Development Assistance Programs

Official Development Assistance (ODA) distributes financial assistance annually to low-income, lower-middle- and upper-middle-income status countries. Eligibility is based on national per capita income. Countries transcend eligibility once they exceed the high-income threshold set by the World Bank for three consecutive years.  The highest Gross National Income (GNI) was $12,376 as of 2018.

Many countries have graduated from being ODA recipients to become donors themselves. Researchers from the Overseas Development Institute found countries become donors when possible both out of morality and the recognition that aid can “lubricate commercial, trade and investment opportunities” for a donor country. But, it’s not just high-income countries that recognize this. Some nations have become development donors even while still being ODA recipients. Below are five such countries that are both aid donors and recipients simultaneously, proving foreign aid is often a two-way street.

Five Countries That Prove Foreign Aid is a Two-Way Street

  1. Brazil. With a 2019 GNI of $9,130 dollars, Brazil is an upper-middle-income country. It is an ODA recipient, receiving about $430 million in net ODA and official aid in 2018. According to the data organization Development Initiatives, Brazil’s biggest donors are Japan, Norway and Germany. Most of its ODA capital is directed to improving water and sanitation, agriculture and food security and infrastructure. However, Brazil has long been a donor nation, too. In 2010, the Brazilian government found that from 2005-2009 the country invested “more than $1.8 billion dollars into international development” efforts. In 2010 alone, Brazil disbursed $1 billion in aid abroad. One year later, it received that same amount itself in ODA financing. Brazil’s donations largely go to Latin America, the Caribbean and sub-Saharan Africa, particularly for peacekeeping and humanitarian purposes.
  2. South Africa. South Africa is an upper-middle-income ODA recipient with a 2018 GNI of $5,750. It received about $915 million in net ODA and official aid in 2018. In 2011, it received $1.5 billion, but it disbursed $209 million, according to Development Initiatives. Accurate assessments of total contributions and contribution breakdowns are hard to acquire because South Africa’s foreign aid programs are managed by various government organizations. Nevertheless, the country has several successful programs like the African Renaissance and International Cooperation Fund, which have steadily increased contributions since launching in 2001. South Africa’s foreign aid primarily fosters development across Africa. Conversely, as an ODA recipient, the country gets most of its ODA aid from the U.S., EU Institutions and Germany. It is directed primarily toward health issues.
  3. India. As of 2018 data, India is considered a lower-middle-income country. Its GNI for 2019 was $2,130, an all-time high for the country. However, as a nation far from the high-income threshold, it still receives substantial foreign aid. In 2018, it received $2.45 billion in ODA and official aid. The biggest ODA donors to India are the International Development Association, Japan and Germany. These funds are primarily spent on improvements in infrastructure, health and education. However, in 2011, while India took the third-largest share of ODA aid with $5.4 billion received, it also became the sixth-largest non-DAC member donor country. It disbursed $787 million toward international development cooperation. India’s contributions primarily support technical and economic development in Africa. 
  4. Chile. Chile was removed from the ODA eligibility list in 2018, having reached high-income status. It remained at $14,670. However, before achieving this status, Chile’s international development cooperation had been bilateral. The country was helping other nations throughout the world. Though its main beneficiaries are in Latin America and the Caribbean, Chile disburses money to a variety of areas for various purposes as needed. For example, it contributed $100,000 toward the crisis in Syria. The OECD estimated that in 2010, Chile’s overall contributions reached $42 million. However, it still received ODA at that time. In 2012, Chile was an upper-middle-income country and received $126 million in net ODA, largely from France and European Union institutions.
  5. Indonesia. With a 2018 GNI of $3,840, Indonesia is a lower-middle-income country that received just under $950 million in ODA and official aid in 2018. In 2011, Indonesia received $3.7 billion, making it the tenth-largest recipient of ODA. Japan is its largest donor. Almost 25% of all aid goes toward improving the country’s infrastructure. Despite still receiving such a large amount of foreign aid, Indonesia is seeing some growth. ODA’s share of national GNI has steadily decreased while government spending has increased. Moreover, in 2019, Indonesia created the Indonesian Agency for International Development to ramp up the country’s own participation in foreign aid. The agency will manage a $283 million endowment fund the government has set aside for development cooperation.

Development assistance benefits both national and global economies because it allows countries that don’t have sufficient funds internally to build domestically as well as participate in trade with other nations. This supports the logic in development aid flowing both ways in several countries. Brazil, South Africa, India, Chile and Indonesia are just five countries that exemplify such a circumstance.

– Amanda Ostuni
Photo: Wikimedia

10 Facts About Foreign Assistance
Foreign assistance is funding from one country to other countries for the purpose of security, development, humanitarian relief and/or bolstering of global diplomacy. Moreover, foreign assistance is an investment in global trade to increase the vitality of a country’s domestic economy through the support of the global economy. The following 10 facts about foreign assistance will paint a clearer picture of the history and scale of foreign assistance in the global economy.

10 Facts About Foreign Assistance

  1. The Marshall Plan: The Marshall Plan paved the way for the modern foreign assistance framework in 1948, financing more than $15 billion in assistance to help rebuild a war-ravaged Europe. Emerging from the Marshall Plan and the Conference of Sixteen, the Organization for European Economic Co-operation (OEEC) emerged in April 1948. The OEEC established an organization to work on a recovery program and a way to supervise the distribution of aid.
  2. Creation of the Development Assistance Group (DAG): In January 1960, the Special Economic Committee of the OEEC created the Development Assistance Group (DAG) to serve as a forum for a consultation to aid donors. In September 1961, the Organization for Economic Co-operation and Development (OECD) superseded the OEEC and the DAG became the Development Assistance Committee (DAC). Since then, the DAC has been the foreign assistance venue for the world’s major donor countries and the leading authority in foreign aid statistics. The DAC currently consists of 30 country members, such as Australia,  Canada, Japan, Korea and the United States along with other more developed nations. Without the OECD’s DAC, this list of 10 facts about foreign assistance would be dramatically different.
  3. The Official Development Assistance (ODA) Standard: The DAC defined and adopted the Official Development Assistance (ODA) in 1969 as the gold standard metric for foreign aid. The OECD maintains a list of developing countries and territories that receive ODA. If foreign assistance goes to a country or territory not on the list, people do not consider it ODA. The list is periodically updated and currently contains over 150 countries or territories with per capita incomes below $12,276, as of 2010.
  4. ODA Contributions: From 1960 to 2017, DAC countries contributed $29 trillion in ODA. In 2017 alone, DAC countries contributed $162 billion in ODA and the top three recipients were India, Afghanistan and Syria.
  5. Contribution Rates: People measure the contribution rate for each DAC country based on the country’s ratio of ODA to Gross National Income (GNI). The United Nations outlines in Sustainable Developments Goals, Goal 17 to revitalize the global partnership for sustainable development with a target contribution rate of 0.7 percent. In 2018, only three DAC countries exceeded this benchmark including Sweden (1.04 percent), Luxemburg (0.98 percent) and Norway (0.94). Averaged among the 30 DAC countries, reports determine that ODA is 0.31 percent of GNI.
  6. Africa and Global ODA: Between 2010 and 2017, African countries received the largest share of Global ODA, receiving over $27 billion. Ethiopia, Nigeria and Tanzania were the top three recipients of this foreign assistance. Within African foreign assistance, social sector investment receives the highest volume of commitments typically falling between 30 to 50 percent of the total ODA. Social sector commitments include investments for education, health, population, water quality, civil society and infrastructure services. These investments work to alleviate poverty and improve less developed country’s abilities to participate in the global market.
  7. China and ODA: Over the last three decades, China has transformed from a recipient of aid to one of the most influential foreign policy players in the world. Although not measured as ODA, China has contributed an estimated $354 billion in foreign assistance between 2000 and 2014, in comparison to approximately $394 billion in U.S. foreign aid (USAID). China has remained non-transparent in its funding of overseas projects, creating an informational black hole for those trying to understand where the country’s money goes.
  8. The United States and ODA: The United States of America currently and historically ranks as the highest-grossing ODA contributor of the DAC countries, investing $34 billion in 2018. Today, the U.S. maintains foreign assistance programs in over 100 countries across the globe through the oversight of more than 20 different U.S. government agencies. These investments further America’s foreign policy interests on issues ranging from free-market expansion, ensuring stable democracies, combating extremism and confronting the root causes of poverty, while simultaneously fostering global goodwill.
  9. USAID and Foreign Aid: By sector, USAID devotes the most spending to Emergency Response, HIV/AIDS and Operating Expenses. Since 1986, USAID’s HIV/AIDS program has been at the forefront of the global AIDS crisis. As a key implementer of the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), more than 13.3 million people are on life-saving antiretroviral treatment; 85.5 million people receive HIV testing and counseling, including more than 11.2 million pregnant women; 6.4 million orphans and vulnerable children receive care and support; and more than 250,000 health care workers have received training to deliver HIV and other health services.
  10. USAID Spending: By country, USAID spent the most ODA on Jordan ($815 million), followed by Ethiopia and Afghanistan. USAID devoted $519 million of this ODA to Government and Civil Society. Its development strategy focuses on programs in education, water, economic development and energy, democracy, rights and governance, health, gender equality, female empowerment and addressing challenges resulting from the influx of refugees.

These 10 facts about foreign assistance illustrate the international history of investing in other countries’ welfare as an extensive and time tested practice. Without ODA and other avenues of foreign investment, the global economy would likely be a less robust and democratic market. Foreign assistance is not simply charity, but a viable avenue for sustainable global development and international diplomacy. For these reasons, the Borgen Project advocates for the acknowledgment and expansion of USAID for the sake of the world’s future prosperity.

– Adam Weaver
Photo: Flickr

Development Assistance Committee
The Development Assistance Committee is an arm of the Organization for Economic Co-operation and Development (OECD). Founded in 1961 by the OECD to better organize and execute its agenda, the Development Assistance Committee also has the duty of innovating and monitoring future and ongoing development projects.

These projects target sustainable economic growth in countries who seek the committee’s aid. It also monitors how members of the committee and the OECD use development aid. The Development Assistance Committee is made up of 30 member nations, as opposed to the OECD’s 35 members.

The World Bank, the International Monetary Fund and the UNDP are all observing members of the committee. The members, along with the observing members of the Development Assistance Committee form the world’s leading forum for bilateral economic development and cooperation. It is known for its neutrality.

Official Development Assistance is the or ODA is the term used by the Development Assistance Committee (DAC) to define all assistance rendered by member nations that target sustainable economic development. Due to the fact that the Committee is dedicated to furthering bilateral relations between member nations and nations it deems in need of assistance, ODA is not the only form of aid.

Member nations foster development in areas that are important to their national agendas. For example, Canada, which is a member of the DAC, will focus its foreign aid towards girls’ and women’s rights over the next five years. Denmark, another member nation, will be spending much of its aid in combating the refugee crisis.

This is not the only difference between member nations. Because there is no legally binding agreement holding a nation to the amount of money it must spend each year, there is a wide range in the percentage of assistance money spent. The DAC uses a percentage of a nation’s gross national income.

In 2014, Sweden, Luxembourg, Norway and Denmark all donated more than 0.07 percent of their GNI, a target set in 1974 by the DAC. Germany spent 0.04 percent of its GNI on foreign aid and South Korea spent just 0.01 percent.

The OECD agenda is mostly economic. They focus on economic stability within nations. Currently, it is focusing on re-establishing confidence in markets, promoting public financing as a strong driver of economic growth, developing green strategies for economic growth and ensuring job growth and security for people of all ages.

In 2016, saw the appointment of a new chair of the DAC, Petri Gornitzka, who was the former head of the Swedish Foreign Aid Agency. Gornitzka is pushing for reform within the DAC and she hopes to bring smaller member nations into the fold when making decisions about future projects and funding. She also plans to make the private sector a more viable partner.

In the 2016 DAC Global Plan, the DAC also states that it wants to survey nations who receive aid linked to the DAC on what can be improved. The DAC also plans to bring the smaller donors into the fold by helping them improve the effectiveness of their aid. This is also one of the incentives that the DAC boast to countries who wish to become members.

The last members who joined the committee were Iceland, the Czech Republic, the Slovak Republic, Poland and Slovenia in 2013 and Hungary in 2016. The European Union has made it a goal of all member nations to work towards joining the DAC.

Although the DAC does not do much direct work, its work behind the scenes promoting cooperation greatly benefits the world. The continued growth of the organization will also benefit the world. 

– Nick DeMarco
Photo: Flickr


Five Countries That Give the Largest Foreign AidAccording to the Organization for Economic Co-operation and Development’s (OECD) report, in 2016, 30 countries in Development Assistance Committee (DAC) contributed a total of $142.6 billion as financial assistance to poorer countries, with the United States, Germany, the United Kingdom, Japan and France giving the largest foreign aid.

On average, the United States’ government has given approximately one percent of its federal budget — about $34 billion — each year over the past decade to countries in need of foreign aid.

Out of the aid amounts from all donor countries, U.S. foreign aid ranked at the top of the list. Non-DAC countries, like China, are also responsible for a significant part of the total aid amount.

Each year, developing countries receive aid in tens of billions of dollars from governments in other countries. From obtaining diplomatic approval to business access, this aid can serve various purposes for the donor countries. From agriculture, to education and public health, recipient countries use aid towards a wide variety of issues and projects.

Here is a rundown of the five countries that offered the largest foreign aid and how that aid was spent by its intended nations. Due to the lack of detailed information for 2017 fiscal year, the list will be based on previous-year statistics.

1. China

A surprise to many, the winner on the “aid list” is China rather than the United States. As a non-DAC country, China has not officially disclosed its aid information; however, in a recent publication, researchers from AidData at William & Mary claimed that during the year between 2000 and 2014, China offered $350 billion-worth of aid to 140 countries and territories, sponsoring more than 4000 projects – the largest foreign aid program in the world.

In 2009, China’s total financial commitment to development aid reached a whopping $69.9 billion, two times that of the U.S. foreign aid in the same year.

A large chunk of China’s aid is categorized by AidData as “Other Official Flows,” indicating that though counted as foreign aid, these financial assistances are primarily intended for commercial access rather than for development and welfare.

Top recipients of Chinese aid are largely members of the One Belt One Road Initiative, a program by President Xi that aims to reinforce trading routes across continents.

As a result, almost half of the aid was spent on infrastructure sectors including energy generation and supply, transportation, storage and communication. The spending on agriculture, forestry and fishing only took up 3 percent of the aid.

2. The United States

From 2002, the United States Agency for International Development (USAID) has gradually boosted the total foreign aid budget to a steady amount that rests around $32 billion. With the Department of State and USAID as the nation’s main donors, the U.S. government distributed — not counting fiscal worth of military assistance — $34 billion official development aid (ODA) to over 100 foreign governments during the 2016 fiscal year.

Such an amount makes the U.S. the largest foreign aid donor among DAC countries.

Israel, Afghanistan and Egypt are the largest recipients of the U.S. foreign aid, receiving $3.10 billion, $1.51 billion and $1.46 billion of assistance, respectively. More than one-third of the U.S. budget is spent on long-term projects that promote economic growth and public health programs.

About 23 percent of such aid is used as humanitarian aid, and aims to fund short-term disaster relief programs.

3. Germany

With a volume of $24.67 billion in 2016, Germany’s foreign aid ranked the second largest in OECD’s report. Compared to 2015, Germany’s aid budget experienced an impressive 36.1 percent increase, making Germany’s ODA to gross national income (GNI) ratio hit the 0.7 percent mark.

An important factor in accounting for this major boost is the wide-ranging social benefits provided to the large influx of refugees.

Starting from 2016, the German government reclassified this in-house spending on refugee assistance as international development aid, aiming to hit United Nations’ 0.7 percent ODA/GNI target.

4. The United Kingdom

Before it was made a legal obligation by the U.N., the U.K. hit the 0.7 percent ODA/GNI mark in 2013 and has since maintained this ratio very well.

In fiscal year 2016, the U.K. spent a total of $18.01 billion in development aid, thus becoming the third largest foreign aid donor among DAC countries.

Pakistan, Ethiopia and Afghanistan each received more than $300 million in U.K. aid, and Nigeria, Syria, Sierra Leone, South Sudan and Tanzania all received more than $200 million. The aid is largely used for humanitarian programs and other crisis-relief projects in nations close to the European Union.

5. Japan

As the third-largest economy in the world, Japan contributes the fourth-largest ODA among DAC countries. Though Japan ranked high on the list of total aid volume, its $10.37 billion aid in fiscal year 2016 merely took up 0.2 percent of its GNI compared to the United States’ criticized 0.18 percent.

As a close tie to China in overall economy, Japan also engages in competition with China for potential markets in developing countries by giving out development aid. While China desires more of natural resources in recipient countries of its aid, Japan wants cheap land and labor so that it can compete with the world’s leading manufacturing industry in China.

Humanitarian Aid is on the Rise

As OECD’s report indicates, the world’s total development aid is on the rise. This trend is so prominent that DAC Chair Charlotte Petri Gornitzka expressed her delight in the ever-increasing trend and the generous contributions of the largest foreign aid donors.

With an increasing amount of ODA being spent on short-term humanitarian and refugee aid, Gornitzka urged countries to also focus on long-term development programs.

Regardless of the purposes of aids, this healthy trend of increasing aid showcases the collective efforts of the world in reaching the U.N.’s Sustainable Development Goals

– Chaorong Wang

Photo: Google

South Korean foreign aid
South Korea, a country which used to rely heavily on foreign aid, is now giving its own. The increasing prominence of South Korean foreign aid is proof that the impact of U.S. foreign aid extends well beyond the period during which it gives.

On July 5, 2016, South Korea’s Ministry of Foreign Affairs greenlighted $21 million in projects aimed at helping refugees in Africa and improving health care across the continent. The money will come from a 1,000 won ($0.87) solidarity tax on airline tickets for outbound international flights.

The air ticket levy is not the only source of funding for South Korean foreign aid. According to the Australian Institute of International Affairs, the country has donated a total of $1.8 billion in official development assistance (ODA) as of 2016, equivalent to 0.14 percent of its gross national income.

South Korea kicked off its donations with a $25 million contribution in 1987, the same year it became a democracy. In 2010, only 23 years after it became a donor, the country became a member of the Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development (OECD). It remains the only country on the DAC that had been a recipient of development assistance.

It is hard to imagine that South Korea, which is now the world’s 11th largest economy and leads the globe in innovation, was at one time among the world’s poorest countries.

In 1960, the country’s per capita income stood at $70. Adjusted for purchasing power parity, South Korea’s GDP per capita in 1960 was still a dismal $1,420. In fact, according to a case study by the Embassy of the United States in Seoul, it was only ahead of one-third of the countries in sub-Saharan Africa.

South Korea started receiving U.S. foreign assistance in 1952, which was meant to assist the war-torn country on the path to recovery. It was entirely dependent on the United States for food supplies in the following ten years, and USAID missions continued through the 1970s.

The recent increase in South Korean foreign aid is proof of the lasting impact of U.S. development assistance. An initial injection of foreign aid in a country will multiply itself down the line as that country develops and becomes self-sufficient.

When John F. Kennedy became president in 1961, he specifically called for “aid to end aid” and to “help people help themselves” concerning South Korea. More than fifty years later, South Korea not only no longer requires assistance from the U.S. but is now making its mark as a donor of foreign aid.

Philip Katz

Photo: Flickr

Global aid, formally known as Official Development Assistance (ODA), continued to decline in 2012 as wealthy countries struggled with the global financial crisis. Global aid decreased by four percent in 2012, following a two percent decline in 2011.

Global aid totaled about $125 billion USD in 2012. Most of that came from members of the Organization for Economic Cooperation and Development’s (OECD) Development Assistance Committee (DAC), which includes most of the world’s wealthiest countries: the United States, Japan, and much of Europe. However, contributions of the BRICS countries (Brazil, Russia, India, China, and South Africa) are becoming increasingly important to poverty reduction and assistance efforts.

In 2012, Australia, Austria, Iceland, Korea, and Luxembourg increased their donations to global aid. Countries hit the hardest by the financial crisis, including Italy, Spain, Greece, and Portugal, decreased their contributions.

Donations can be measured both by total quantity of donation and percentage of gross national income (GNI). The US was among the largest donors in total monetary value, but did not reach the minimum threshold of 0.7% of GNI. Smaller countries such as the Netherlands and Denmark surpassed 0.7%. In some cases, donations from non-traditional donor countries such as Saudi Arabia and Turkey surpassed individual donations from DAC-member countries.

The percentage of OECD global aid dedicated to humanitarian causes has increased from 3.3 percent to 8.6 percent over the last two decades. Global aid is distributed to many different sectors, including economic development, social and administrative infrastructure, food aid, transportation, and agriculture.

Global aid distribution has also shifted in recent years. The share of aid going to sub-Saharan Africa, traditionally the largest beneficiary, decreased from 47.8% to 41.8%. Meanwhile, aid to South and Central Asia increased from 11.5% to 19.8%.

The OECD’s official report on global aid trends can be found here. Call your senator or representative and let them know that you’d like to see the US contribute more, not less, to global aid.

– Kat Henrichs

Source: IRIN
Photo: The Fact File