Definition
Official development assistance (ODA) comprises grants or loans to developing countries and territories on the Organisation for Economic Co-operation and Development/Development Assistance Committee (OECD/DAC) list of aid recipients that are undertaken by the official sector with promotion of economic development and welfare as the main objective and at concessional financial terms (if a loan, having a grant element of at least 25 percent). Technical cooperation is included. Grants, loans and credits for military purposes are excluded. Also excluded are aid to more advanced developing and transition countries as determined by the DAC.
Donors’ gross national income (GNI) at market prices is the sum of gross primary incomes receivable by resident institutional units and sectors. GNI at market prices was called gross national product (GNP) in the 1953 System of National Accounts. In contrast to gross domestic product (GDP), GNI is a concept of income (primary income) rather than value added.
As agreed by the United Nations Economic and Social Council, the General Assembly, on the recommendation of the Committee for Development Policy, decides on the countries to be included in the list of least developed countries (LDCs). As of January 2003, they include Africa: Angola, Benin, Burkina Faso, Burundi, Cape Verde, Central African Republic, Chad, Comoros, D. R. of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Saő Tomé and Principe, Senegal, Sierra Leone, Somalia, Sudan, Togo, Uganda, U.R. of Tanzania and Zambia; Asia and the Pacific: Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Lao P.D.R., Maldives, Myanmar, Nepal, Samoa, Solomon Islands, Tuvalu, Vanuatu and Yemen; Latin America and the Caribbean: Haiti.
Goal/targets addressed
Goal 8. Develop a global partnership for development.
Target 12. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system. Includes a commitment to good governance, development and poverty reduction—both nationally and internationally.
Target 13. Address the special needs of the least developed countries. Includes: tariff and quota-free access for least developed countries’ exports; enhanced programme of debt relief for HIPCs and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction.
Target 14. Address the special needs of landlocked countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the twenty-second special session of the General Assembly).
Target 15. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term.
Rationale
Goal 8 addresses the way developed countries can assist developing countries to achieve the other seven goals through more development assistance, improved access to markets and debt relief. The 2002 Monterrey Conference on Financing for Development stimulated commitments from major donors to start to reverse the decline in official development assistance and focus more on poverty reduction, education and health to help countries realize the Millennium Development Goals.
Method of computation
GNI is equal to GDP (GDP at market prices represents the final result of the production activity of resident producer units) less primary incomes payable to non-resident units plus primary incomes receivable from non-resident units. In other words, GNI is equal to GDP less taxes (less subsidies) on production and imports, compensation of employees and property income payable to the rest of the world plus the corresponding items receivable from the rest of the world.
Data collection and source
Data are compiled by OECD/DAC.
References
Development Cooperation Report, annual, Organisation for Economic Co-operation and Development/Development Assistance Committee (www.oecd.org/dac).
International Development Statistics (CD-ROM), (technical notes, glossary and table of aid recipients), annual, Organisation for Economic Co-operation and Development/Development Assistance Committee (www.oecd.org/dac).
United Nations, Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, www.un.org/special-rep/ohrlls/ohrlls.
Periodicity of measurement
Annual.
Agency
Organisation for Economic Co-operation and Development/Development Assistance Committee.