what is oda

what is oda

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Nature

Official Development Assistance (ODA) is a term used to describe government aid designed to promote the economic development and welfare of developing countries. It is a concept established by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) and has been in use since 1969 as a standard measure of international aid flow. Key points about ODA:

  • It is provided by official government agencies of wealthier countries.
  • It aims primarily at the economic development and social welfare of developing countries.
  • The aid can be given as grants or concessional loans (loans with favorable terms, such as low interest rates and long repayment periods).
  • ODA is concessional in character, meaning if loans are involved, they must have a grant element of at least 25%.
  • It includes bilateral aid given directly to countries or multilateral aid through international organizations.
  • Aid counted as ODA excludes military assistance or aid that is not primarily aimed at development.
  • ODA supports sectors such as health, education, sanitation, infrastructure, and poverty reduction.

ODA is considered the "gold standard" of foreign aid and serves as the main source of development financing for many low- and middle-income countries. It is tracked annually by the OECD to measure donors' commitment and the effectiveness of international aid efforts. The list of countries eligible for receiving ODA is maintained and reviewed by the DAC every three years. In 2019, total global ODA amounted to around US$168 billion, demonstrating its importance in international development cooperation. In summary, ODA is official government aid that specifically targets improving the economic and social conditions of developing countries through financial support on concessional terms.

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