In international relations, aid (also known as international aid, overseas aid, foreign aid, economic aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another. The type of aid given may be classified according to various factors, including its intended purpose, the terms or conditions (if any) under which it is given, its source, and its level of urgency. For example, aid may be classified based on urgency into emergency aid and development aid.
Emergency aid is rapid assistance given to a people in immediate distress by individuals, organizations, or governments to relieve suffering, during and after man-made emergencies (like wars) and natural disasters. Development aid is aid given to support development in general which can be economic development or social development in developing countries. It is distinguished from humanitarian aid as being aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term.
Aid may serve one or more functions: it may be given as a signal of diplomatic approval, or to strengthen a military ally, to reward a government for behavior desired by the donor, to extend the donor's cultural influence, to provide infrastructure needed by the donor for resource extraction from the recipient country, or to gain other kinds of commercial access. Countries may provide aid for further diplomatic reasons. Humanitarian and altruistic purposes are often reasons for foreign assistance.
Donors Aid may be given by individuals, private organizations, or governments. Standards delimiting exactly the types of transfers considered "aid" vary from country to country. For example, the United States government discontinued the reporting of military aid as part of its foreign aid figures in 1958.
Classification of Flows Flows of aid are commonly classified into three categories:
1. "Official Development Assistance" (ODA). The largest by volume of the three categories, consisting of grants, debt relief, zero interest loans, or concessional (below market rate) loans given to developing countries or multilateral institutions to promote welfare and economic development (OECD, 1972).
2. Other Official Flows (OOF). Other loans and grants that do not fit the definition of ODA, including military aid and export credits.
3. Private Flows, often financed out of external private sector resources and private grants (ie. grants by non-governmental organizations and other private bodies).
Definitions and purpose The Development Assistance Committee of the Organisation for Economic Co-operation and Development defines its aid measure, Official Development Assistance (ODA), as follows: "ODA consists of flows to developing countries and multilateral institutions provided by official agencies, including state and local governments, or by their executive agencies, each transaction of which meets the following test: a) it is administered with the promotion of the economic development and welfare of developing countries as its main objective, and b) it is concessional in character and contains a grant element of at least 25% (calculated at a rate of discount of 10%)." Foreign aid has increased since the 1950s and 1960s (Isse 129). The notion that foreign aid increases economic performance and generates economic growth is based on Chenery and Strout's Dual Gap Model (Isse 129). Chenerya and Strout (1966) claimed that foreign aid promotes development by adding to domestic savings as well as to foreign exchange availability, this helping to close either the savings-investment gap or the export-import gap. (Isse 129).
Carol Lancaster defines foreign aid as "a voluntary transfer of public resources, from a government to another independent government, to an NGO, or to an international organization (such as the World Bank or the UN Development Program) with at least a 25 percent grant element, one goal of which is to better the human condition in the country receiving the aid."
Types
The type of aid given may be classified according to various factors, including its level of urgency and intended purpose, or the terms or conditions (if any) under which it is given.
Aid from various sources can reach recipients through bilateral or multilateral delivery systems. Bilateral refers to government to government transfers. Multilateral institutions, such as the World Bank or UNICEF, pool aid from one or more sources and disperse it among many recipients.
By urgency and intended purpose Aid may be also classified based on urgency into emergency aid and development aid. Emergency aid is rapid assistance given to a people in immediate distress by individuals, organizations, or governments to relieve suffering, during and after man-made emergencies (like wars) and natural disasters. The term often carries an international connotation, but this is not always the case. It is often distinguished from development aid by being focused on relieving suffering caused by natural disaster or conflict, rather than removing the root causes of poverty or vulnerability. Development aid is aid given to support development in general which can be economic development or social development in developing countries. It is distinguished from humanitarian aid as being aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term.
Official aid may be classified by types according to its intended purpose. Military aid is material or logistical assistance given to strengthen the military capabilities of an ally country.
Humanitarian aid and emergency aid
Humanitarian aid is material or logistical assistance provided for humanitarian purposes, typically in response to humanitarian crises such as a natural disaster or a man-made disaster.
The provision of emergency humanitarian aid consists of the provision of vital services (such as food aid to prevent starvation) by aid agencies, and the provision of funding or in-kind services (like logistics or transport), usually through aid agencies or the government of the affected country. Humanitarian aid is distinguished from humanitarian intervention, which involves armed forces protecting civilians from violent oppression or genocide by state-supported actors.
The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) is mandated to coordinate the international humanitarian response to a natural disaster or complex emergency acting on the basis of the United Nations General Assembly Resolution 46/182. The Geneva Conventions give a mandate to the International Committee of the Red Cross and other impartial humanitarian organizations to provide assistance and protection of civilians during times of war. The ICRC, has been given a special role by the Geneva Conventions with respect to the visiting and monitoring of prisoners of war.
Development aid
Development aid is given by governments through individual countries' international aid agencies and through multilateral institutions such as the World Bank, and by individuals through development charities. For donor nations, development aid also has strategic value; improved living conditions can positively effects global security and economic growth. Official Development Assistance (ODA) is a commonly used measure of developmental aid.
Technical assistance is a sub-type of development aid. It is aid involving highly educated or trained personnel, such as doctors, who are moved into a developing country to assist with a program of development. It can be both programme and project aid.
By terms or conditions of receipt Aid can also be classified according to the terms agreed upon by the donor and receiving countries. In this classification, aid can be a gift, a grant, a low or no interest loan, or a combination of these. The terms of foreign aid are oftentimes influenced by the motives of the giver: a sign of diplomatic approval, to reward a government for behaviour desired by the donor, to extend the donor's cultural influence, to enhance infrastructure needed by the donor for the extraction of resources from the recipient country, or to gain other kinds of commercial access.
Other types Aid given is generally intended for use by a specific end. From this perspective it may be called: Project aid: Aid given for a specific purpose; e.g. building materials for a new school. Programme aid: Aid given for a specific sector; e.g. funding of the education sector of a country. Budget support: A form of Programme Aid that is directly channelled into the financial system of the recipient country. Sector-wide Approaches (SWAPs): A combination of Project aid and Programme aid/Budget Support; e.g. support for the education sector in a country will include both funding of education projects (like school buildings) and provide funds to maintain them (like school books). Food aid: Food is given to countries in urgent need of food supplies, especially if they have just experienced a natural disaster. Food aid can be provided by importing food from the donor, buying food locally, or providing cash. Faith-based foreign aid: aid that originates in institutions of a religious nature (some examples are, Salvation Army, Catholic Relief Services) Private giving: International aid in the form of gifts by individuals or businesses are generally administered by charities or philanthropic organizations who batch them and then channel these to the recipient country.
Scale
Most official development assistance (ODA) comes from the 30 members of the Development Assistance Committee (DAC), or about $150 billion in 2018. For the same year, the OECD estimated that six to seven billion dollars of ODA-like aid was given by ten other states, including China and India.
Top 10 aid recipient countries (2009–2018)
+ Foreign aid received (2009–2018) Country US dollars (billions) 51.8 44.4 37.9 32.0 28.7 27.5 27.4 25.2 24.1
Top 10 aid donor countries (2020)
Official development assistance (in absolute terms) contributed by the top 10 DAC countries is as follows. European Union countries together gave $75,838,040,000 and EU Institutions gave a further $19.4 billion. The European Union accumulated a higher portion of GDP as a form of foreign aid than any other economic union.
– $75.8 billion – $34.6 billion – $23.8 billion – $19.4 billion – $15.5 billion – $12.2 billion – $5.4 billion – $5.3 billion – $4.9 billion – $4.7 billion – $4.3 billion
Official development assistance as a percentage of gross national income contributed by the top 10 DAC countries is as follows. Five countries met the longstanding UN target for an ODA/GNI ratio of 0.7% in 2013:
– 1.07% – 1.02% – 1.00% – 0.85% – 0.72% – 0.67% – 0.55% – 0.47% – 0.45% – 0.45%
European Union countries that are members of the Development Assistance Committee gave 0.42% of GNI (excluding the $15.93 billion given by EU Institutions).
By nation
Australian Agency for International Development Canadian foreign aid China foreign aid Indian foreign aid Israeli foreign aid Foreign aid institutions of Japan Qatari foreign aid Saudi foreign assistance Swedish International Development Cooperation Agency Department for International Development (United Kingdom) United States foreign aid
Quantifying aid
Official development assistance
Official development assistance (ODA) is a term coined by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure aid. ODA refers to aid from national governments for promoting economic development and welfare in low and middle income countries. ODA can be bilateral or multilateral. This aid is given as either grants, where no repayment is required, or as concessional loans, where interest rates are lower than market rates.