Official Development Assistance and Foreign Aid

When you think about foreign aid what comes to mind first? Most people link foreign aid with feeding the hungry, helping the poor, and curing the sick. But where does does the money to come from? While non-government organizations (NGOs) such as World Vision fund and promote aid initiatives in developing countries, the majority of the funds provided to developing countries come from governments.

Aid provided by governments to developing countires is called net official development assistance (ODA). According the The World Bank, ODA “ consists of f disbursements of loans made on concessional terms (terms that are more generous than market terms/ below market rates) and grants by official agencies of the members of the Development Assistance Committee (DAC), by multilateral institutions, and by non-DAC countries to promote economic development and welfare in countries and territories in the DAC list of ODA recipients”(1).

Types of Foreign Aid

• Bilateral Aid: assistance given by governments to governments of developing countries. In other words funds flow from a develop nation to a developing nation.

• Multilateral Aid: assistance provided by numerous governments, or international institutions that represent a group of countries to reduce poverty in developing nations. (i.e. the World Bank, United Nations, and the International Monetary Fund).

• Tied Aid: a type of foreign aid that requires the recipient country to invest the aid in the donor country) or use the donated aid to buy goods and services from the donor country.

• Project aid: used to fund specific projects such as school, hospital, or a specific program.

What Countries Received the Most Foreign Aid in 2014?

According to OECD.org from 2013-2014 the following countries were recipients of ODA from all the DAC countries:

Table Credit: OECD.org

Canada’s Foreign Aid 2014

According to OECD. org from 2013- 2014 the following countries were Canada’s top ten recipients of ODA:

Table Credit: OECD.org

Declining Canadian Foreign Aid Assistance

In the past, Canada was known as an altruistic and generous country in the world of foreign aid. However this has changed over the years. According to the Canadian International Development Platfrom (CIDP), Canada’s foreign aid spending has decreased from CAD $5.4 billion in 2013 to $4.9 billion in 2014.

For the CIDP, recent data on Canada’s foreign aid activity shows that Canadian aid is “more reactive or emergency focused”(2). This can be an issue for countries for countries living in poverty. While some countries may not need emergency relief, citizens in many developing countries continue to live in poverty.

Although DAC countries do play a major role in foreign aid due to their financial capabilities, it is important to not forget the value of NGO’s who work directly with those affected by poverty and underdevelopment. NGO’s help raise awarness to local issues that may be overlooked by international governments.

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