In the close of my last post, I indicated that I had more to say about how best to count loans as aid. Now I’ll say it.
In the close of my last post, I indicated that I had more to say about how best to count loans as aid. Now I’ll say it.
The Development Assistance Committee (DAC) currently handles loans this way:
Continue reading “What’s the best way to count loans as aid?”
Last April, former Development Assistance Committee chair Richard Manning penned a scorching alarum in the Financial Times. Unbeknownst to the public, donors were inflating their aid totals by including loans that would profit the donors if paid in full. And the DAC, whose job it is to validate and publish these tallies, had proved feckless in defending the principle that for a loan to count as aid, it should profit the recipient not the donor.
The OECD must put in place a definition of concessionality that reflects the real cost of capital and requires real fiscal effort. It is shocking that the OECD should publish official statistics that allow “different practices” on such a key issue and which make a mockery of its own requirement that loans are concessional in character. It is encouraging OECD finance ministries to get away with murder as they seek to massage reported aid upwards at minimum cost. If the OECD cannot do a professional job on this, the UN should take over the reporting for international aid flows.
Continue reading “Undue credit: Are France, Germany, and Japan subverting the definition of aid?”
