Official Development Assistance

Official Development Assistance is the name given to loans granted in financially favourable conditions by the public bodies of the industrialized countries. A loan has only to be agreed at a lower rate of interest than going market rates (a concessionary loan) to be considered as aid, even if it is then repaid to the last cent by the borrowing country. Tied bilateral loans (which oblige the borrowing country to buy products or services from the lending country) and debt cancellation are also counted as part of ODA. Apart from food aid, there are three main ways of using these funds : rural development, infrastructures and non-project aid (financing budget deficits or the balance of payments). The latter increases continually. This aid is made « conditional » upon reduction of the public deficit, privatization, environmental « good behaviour », care of the very poor, democratization, etc. These conditions are laid down by the main governments of the North, the World Bank and the IMF. The aid goes through three channels : multilateral aid, bilateral aid and the NGOs.