Official Development Assistance

Development Assistance Committee (DAC) and Sustainable Development Goals (SDGs)

Introduction

Set up as the Development Assistance Group in 1960, the Development Assistance Committee (DAC) has become a key pillar in the OECD’s strategy of furthering economic development in so-called developing countries and consists of 32 of the OECD’s 38 members. In 2023, according to preliminary figures, DAC members disbursed around $213 billion of the total $224 billion in development aid handed out by all OECD and non-OECD members as well as the DAC participants Bulgaria, Romania, Qatar and the United Arab Emirates. The highest-spending donor countries alone were responsible for 70 percent of the total DAC disbursements. But which projects and programs do these countries direct their funds to?

Allocation of Funds

The largest shares of each country’s spending relate to bilateral projects and technical cooperation. These can include, for example, investments in social infrastructure and services like education, economic infrastructure like the energy industry or production like agriculture and tourism. While the OECD doesn’t disaggregate specific bilateral projects on a micro level in its annual roundup, it does highlight some key avenues of aid spending related to exceptional crises like wars or natural disasters. The United States, for example, spent one third of its development aid on in-donor refugee costs ($6.2 billion) and humanitarian aid ($14.5 billion). According to the UN definition, the former includes “cost for the first year of receiving refugees and asylum seekers in donor countries”. The latter is a broader and more vague term including a variety of aid programs.

Germany’s share of refugee costs and humanitarian aid stood at around 28 percent of the total spending of $32.2 billion, while Japan, a nation notoriously unwilling to recognize refugees and having only granted the status to about 1,000 people between 1982 and 2022, spent less than $30 million on in-donor refugees and provided about $1.1 billion in humanitarian aid out of a total of $19.3 billion.

Focus on Ukraine

As with the year prior, a primary target for development assistance due to the ongoing war in the country is Ukraine. In 2023, around $20 billion or nine percent of the total development aid disbursements went to the Eastern European country, 16 percent of which went towards humanitarian aid. In terms of the countries contributing the most spending on humanitarian assistance to Ukraine, Japan ranked second behind the United States and ahead of Germany and Norway.

Criticism of Development Aid

Even though development aid is likely thought of as a net positive on first glance, this perspective is often inhabited by members of the nations giving out said aid. The efficacy of development aid has long been criticized on a variety of aspects. For example, critics claim that some governments receiving aid funnel them towards other causes and that development aid can spark corruption and dependencies rather than enable economic growth of the recipient countries.

Infographic: How Is the OECD’s Development Aid Used?

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This chart shows the net official development assistance by the biggest DAC member donors.

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SDGs, Targets, and Indicators in the Article

1. SDGs addressed or connected to the issues highlighted in the article:

• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 4: Quality Education
• SDG 7: Affordable and Clean Energy
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 16: Peace, Justice, and Strong Institutions

The article discusses the development assistance provided by DAC members to developing countries. The issues highlighted in the article include poverty reduction, hunger eradication, education improvement, energy infrastructure development, economic growth promotion, and support for countries affected by crises and wars. These align with the Sustainable Development Goals mentioned above.

2. Specific targets under those SDGs based on the article’s content:

• Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Target 4.1: By 2030, ensure that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes.
• Target 7.1: By 2030, ensure universal access to affordable, reliable, and modern energy services.
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
• Target 16.1: Significantly reduce all forms of violence and related death rates everywhere.

The article indirectly addresses these targets by discussing the allocation of development assistance towards poverty reduction, hunger eradication, education improvement, energy infrastructure development, economic growth promotion, and support for countries affected by crises and wars.

3. Indicators mentioned or implied in the article:

• Indicator 1.1.1: Proportion of the population living below the international poverty line, by sex, age, employment status, and geographical location.
• Indicator 2.1.1: Prevalence of undernourishment.
• Indicator 4.1.1: Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex.
• Indicator 7.1.1: Proportion of the population with access to electricity.
• Indicator 8.1.1: Annual growth rate of real GDP per capita.
• Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.
• Indicator 16.1.1: Number of victims of intentional homicide per 100,000 population, by sex and age.

The article doesn’t explicitly mention these indicators, but they can be used to measure progress towards the identified targets. These indicators provide specific metrics to track the outcomes and impact of development assistance in various areas.

Table: SDGs, Targets, and Indicators