When we undertake humanitarian programmes, the aim is to reach the most distressed populations in order to help them as best we can, to help them live and even survive in crises for which they have no responsibility, but which hit them hard. We’re thinking of Gaza, Sudan and Ukraine, as well as natural disasters. Under the current system, this involves large-scale cash transfers that go well beyond humanitarian aid. Countries whose populations receive humanitarian aid receive even greater amounts of non-humanitarian Official Development Assistance (ODA).
International aid from official donors continued to grow in 2023, reaching USD 223.7 billion, compared with USD 211 billion in 2022. The increase is due to aid flows to Ukraine as well as an overall increase in humanitarian aid. All this is well counted, each year with a sometimes imperfect but always clear definition of what constitutes aid. Discussions within the Development Assistance Committee (DAC) are ongoing to ensure that the 32 member countries agree on what is ODA and what is not. Definitions are evolving slowly, so as not to create statistical breaks, but they are evolving in line with the crises we are experiencing and the major issues of the day. Is aid to refugees in donor countries aid or not? Is support for peacekeeping missions ODA or not? What part of loans to countries is ODA? Are private sector guarantees counted on the amount of the guarantee alone, or on the total investment that would not be possible without the guarantee? Everything quickly becomes very technical and complex in this area. Some donor countries want to count as much as possible to get closer to the commonly accepted target of 0.7% of gross national income dedicated to ODA. Other countries have this target set by law and therefore want to exclude as much ODA activity as possible in order to preserve their budgets. Everything quickly becomes a bit political too. But at the end of the day, the rules exist, they are reliable and if you put the counter at donor level, you get a good idea of the volumes of aid generated each year.
As for the country receiving the aid, that’s another story.
Development aid has long ceased to be a direct transfer of resources from donor budgets to the budgets of recipient countries. Originally, development aid was intended to compensate for the lack of national savings in newly independent countries, in order to finance the economic infrastructure necessary for their economic and human development. It was impossible to finance a port, a road or a social security system with non-existent national savings and still nascent tax resources. Countries received external resources from their sponsors at the time – the USSR, the USA, the former colonial power, and then the EU.
Gradually, these resource transfers have gone less and less directly into the budgets of developing countries, and are now mobilised through numerous channels, so that it is virtually impossible for anyone – starting with the governments concerned – to know how much a country receives from external sources and how.
For each country, and particularly for countries in crisis where the aid channels are even more complex, there is therefore a very large gap between the amounts indicated by the OECD and donors and what the government is actually informed of. This is important to understand, because it feeds suspicions and resentments that have a direct impact on trust – or lack of trust – between international players who suspect systemic misappropriation of aid and national authorities who suspect that aid benefits its providers more than its recipients.
The diagram below is a simplification of the mechanisms, but it helps us to understand this hiatus. On the left is what comes out of donors’ pockets. All DAC donors, a large proportion of non-DAC donors and the largest private foundations report their aid to the OECD. With a year and a half’s delay, the time it takes to count everything, we now know the precise amounts. By aggregating all these amounts, we know that in 2023, Ukraine will have become the world’s largest recipient of ODA, with around 20 billion dollars in aid.
On the right, governments have a precise idea of the amounts of direct aid, budget support or loans, since it is the central government, often the Ministry of Finance, that signs the loans and manages the budget. For the rest, they have little or no idea.
Donors or multilateral organisations sometimes support technical ministries directly, or regional authorities, and there is not always a system in place for them to inform someone who would centralise the information somewhere. The donors all support multilateral organisations, development banks or United Nations agencies, which sometimes inform the central government (the arrow is blue) and sometimes do not (the arrow is green). These agencies often become donors themselves and fund other multilateral organisations or NGOs to implement programmes. Humanitarian programmes, operating in contexts of heightened mistrust, are rarely reported. With large sums of money in some contexts, generally untaxed, there is often obvious frustration.
Beyond the aspects of mistrust that this lack of clarity causes, it also has an impact on the budgetary priorities of the countries concerned. To stay with Ukraine, the country has an urgent need for generators and other electrical equipment, which is now particularly targeted. It also urgently needs civil and military equipment. If the government prioritises the purchase of generators while the country receives generators from other sources, there will be stocks of generators and a lack of equipment for hospitals or the front line. Even if Ukraine is a special case, given the sums involved and the geographical and political proximity of most of the donors, setting up an aid management system is an important step in helping a country regain its budgetary autonomy. Understanding this complexity is also important for humanitarian actors involved over long periods.
Cyprien Fabre.
Cyprien Fabre is Head of the Crisis and Fragility Unit at the OECD. After several years on humanitarian missions with Solidarités, he joined ECHO, the European Commission’s humanitarian department, in 2003, and has held a number of positions in crisis contexts. He joined the OECD in 2016 to analyse the involvement of DAC members in fragile or crisis countries. He has also written a series of “policy into action” and “Lives in crises” guides to help translate donors’ political and financial commitments into effective programming in crises. He is a graduate of Aix-Marseille Law School.
Nicolas Petit
Christophe Peyrichou
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