Development aid, sometimes known as Official Development Assistance (ODA), is a form of foreign/international assistance that aims to help improve the living standards in the poorest regions of the world.
ODA is used to fund projects that improve social, economic, political, and ecological sectors (access to clean water, healthcare, education, and so on) in certain regions. It can concentrate on minor local initiatives or large national-level policies.
Many people associate international aid with the image of a volunteer offering medical care or distributing goods in the wake of a storm or disaster. While emergency assistance is essential, it is not the sole type of assistance, nor is it considered as a ‘development’ aid because it has different goals.
Defining development aid
Today, development assistance can take numerous forms – money and technical skills to assist in the construction of infrastructure or it may also aid in upgrading the skills required for infrastructure maintenance and construction.
ODA can be assimilated and implemented by ministries, local governments, banks, NGOs, and even private businesses but the goal is always to assist local communities.
Development aid can be delivered directly from the donor nation to the recipient government. Such a process is known as “bilateral” assistance.
Help can also be provided by foreign governments through various international organizations like the World Bank and the Asian Development Bank that have the goal of implementing certain development programs. This form of assistance is dubbed “multilateral aid”.
Development aid statistics for 2023
Official Development Assistance (ODA) from Development Assistance Committee (DAC) member nations once again reached an all-time high in 2023 to US$223.3 billion, according to the OECD’s final development finance data.
In real terms, total ODA increased by 1.6% in 2023 over 2022 hitting a record high for the fifth year in a row.
In 2023, Ukraine was the top recipient of ODA for the second year in a row and accounted for US$38.9 billion, a 28.5% increase compared to 2022 .
Biggest ODA donors in 2023
With US$64.69 billion, or 30% of the total assistance, the United States remained the top ODA donor among DAC member nations in 2023. Germany came second with US$37.9 billion, followed by Japan with US$19.6 billion.
Other major ODA contributors in 2023 included: the United Kingdom with US$19.07 billion, and France with US$15.05 billion (see the table below for data on all ODA donor countries in 2023).
The rise in the net ODA from DAC nations from 2022 to 2023 was fueled in part by humanitarian aid (+5.9%) and core contributions to multilateral organizations (+15.2%), according to OECD.
ODA donors in 2023 in USD billions
Green bars indicate that providers met or surpassed the UN objective of 0.7% ODA/GNI in 2023.
Source: OECD
The countries that surpassed the United Nations’ ODA as a share of the GNI target of 0.7% were:*
- Denmark (0.73%)
- Germany (0.82%)
- Luxembourg (0.99%)
- Norway (1.09%)
- Sweden (0.93%).
*Not all members of the DAC have established a domestic goal for ODA as a percentage of GNI.
Here’s a full list of the countries ODA countries, reflecting the assistance as a percentage of GNI
Source: OECD
Of the total ODA, 76% from G7 countries: Canada, France, Germany, the United Kingdom of Great Britain and Northern Ireland, Italy, Japan, and the United States of America.
Considerable ODA is also provided by nations outside of the DAC. In 2023, the total sum of ODA that 15 nations voluntarily donated was US$17.4 billion, which is around 8% of the total ODA amount. Outside DAC member states, Turkey is the biggest ODA donor with almost US$7 billion being committed in 2023.
Why is development aid important?
First of all, it aims to stimulate economic growth and thus reduce poverty which is goal #1 on the international agenda. Development aid’s usefulness has long been a debated issue with multiple pros and cons expressed by various experts. Some key points on the importance of development aid are:
- It helps to tackle various diseases such as Ebola and malaria
- In some of the Earth’s poorest regions, development aid helps deal with the consequences of calamities
- It brings hope to the displaced people
- Food aid is being given to the world’s poorest countries facing famine and helps to feed, educate and keep children healthy.
Foreign aid and the Sustainable Development Goals
60 years of ODA resilience amidst economic crises
Source: OECD
Following a dramatic reduction in ODA in the last decade of the 20th century, in 2000 the UN established the eight Millennium Development Goals (MDGs) to help to revitalize foreign aid which now focuses on social and, notably, medical aims.
The 17 Sustainable Development Goals (SDGs) were implemented 15 years later. Today these serve as the foundation for all nations’ political, economic, social, and climate change policies as well as for foreign aid involvement.
Tackling poverty and starvation, and providing access to safe drinking water, healthcare and education remain the critical challenges of SDGs.
Final word
The general level of development of nations around the globe has significantly improved. Even those nations described as poor have achieved significant development over the last four decades. The Resilience through Enhanced Adaptation, Action-learning and Partnership Activity (REAAP) program managed to assist over 475,000 people after the drought in Ethiopia, and the Catholic Relief Services (CRS) has funded nutrition and education initiatives for children in Laos via the US FFE initiative among others. While there are always failures to be found, the history of development aid has largely been a success.
