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Developing states must count on domestic resources
PARIS. Feb 12: Developing nations must Increasingly count on domestic resources and sound policies to attract private funds amid growing competition for scarcer offi-
cial aid. a key OEDC commit tee warned today, reports AFP.
The Development Assistance Committee (DAC) said Japan, the world s largest aid donor, accounting for one-fifth of total DAC aid. as well as France and several smaller countries continued to Increase their official aid in 1994
But major donors facing large budget deficits. Includ ing the united States. Ger many. Italy and the Nether lands, cut their Official Development Assistance (ODA) significantly.
"It is hard to Imagine that the volume of ODA will Increase dramatically In the near term." DAC chairman James Michael said In the annual DAC report on development cooperation
DAC set the total 1994 net flow of resources to the developing world at 184 billion dollars, with 164 billion coming from OECD countries.
It said private flows including direct investment, bank leading and equity purchases topped 110 billion, accounting for 60 per cent of the total, with official aid at 59.7 billion dollars or one-third of the total.
Ten years ago. at the height of the Latin American debt crisis. ODA accounted for more than half and pri-
vate flows for barely 34 per cent of net total Hows
Official aid from 22 donors in the 25-nation Organisation for Economic Cooperation and Development (OECD) rose to 59 billion do'lars In 1994 after a 4.3 billion dollar fall to 56.5 billion in 1993. the report said.
But in real terms, taking inflation and exchange rate movements into account, the 1994 figure was unchanged from 1993 and lower than in 1992.
And as a share of their gross national product (GNP). aid from the 22 DAC members dropped from 0.31 per cent to a 22-year low of 0.30 per cent.
The ratio had remained at around 0.35 per cent, half the United Nation's target of 0.7 per cent, for two decades up to 1992. DAC said.
Only four DAC countries — Norway. Denmark. Sweden and the Netherlands — topped the 0.7 per cent target in 1994.
Top donor Japan boosted Ils aid by two billion dollars to 13.2 billion but its ODA to GNP ratio, at 0.29 per cent, remained below the DAC av-
The US, top donor until 1992. cut Its aid to 9.9 billion dollars from 10.1 billion in 1993. and its ratio fell to 0.15 per cent, half the average and the lowest of all DAC donors.
France, the third-ranking donor at 8.5 billion dollars, was the only group of seven (G7) country providing aid in excess of 0.5 per cent of its GNP. Aid from non-OECD countries, including Arab oil producers, fell to 1.4 billion dollars In 1994. one-quarter of the 1990 level.
Sub-Saharan Africa received 37 per cent of world ODA in 1993-94, and Asia about 30 per cent, with China and India accounting for respectively 3.2 and 2.3 billion dollars 14 per cent went to the Middle East and North Africa and 1 1 per cent to Latin America _
The report said East European countries and the former Soviet republics received aid wqrth some 7.5 billion dollars, with Germany accounting for one-third. But this aid was not counted as
&AC chairman Michael said heated budget debates, especially in the US, were grounds for serious concern about future levels of ODA resources." Although the United Sates now has "a significantly reduced budget deficit." continued budget consolidation meant US "aid may be cut yet again the re port said
Michael welcomed sharply increased private flows but stressed that they remained
| "highly concentrated" In a small number of advanced developing economies.