Official Development Assistance (ODA) is used as a means to measure reception of aid. In some cases, the level of such support can be a significant factor in a nation's Gross National Income (GNI). The GNI is the sum of all value which is added by the producers who are residents of a particular country, in addition to value added from foreign investment. The aid included within net ODA totals usually consist of disbursements of any loans a nation has received that were made on concessional terms. The terms are a net of the repayments of principal and are considered as grants by regulatory agencies overseeing ODA. Such agencies can include countries and other official entities that are members of the Development Assistance Committee (DAC). Along with the DAC, other groups can include multilateral institutions as well as non-DAC countries that similarly work to enhance the development, as well as the overall welfare, in countries and territories on the DAC’s list of those eligible to receive official development assistance. The concessional terms of these loans are typically accompanied by an element to the grant of at least 25% and a discount rate of 10%.
Countries Receiving the Most ODA Relative to GNI
A combination of factors, especially the establishment of a need for aid, the ability to repay loans, and diplomatic relations with prospective foreign donors, determine a country’s procurement of ODA. The countries receiving the most foreign aid relative to GNI are located mostly in Oceania, Africa, and the Middle East. They have typically reached out to foreign entities and other countries as a result of internal strife. Topping the list, Tuvalu, the Federated States of Micronesia, the Marshall Islands, Liberia, Malawi, the Solomon Islands, and Afghanistan each receive ODA in excess of one-fourth of their respective Gross National Incomes.
The Central African Republic: A Country Putting ODA to Use
The countries with the largest net official development assistance relative to GNI include many countries which seem to offer high prospects of improving their economies. One such country that meets these requirements is number 22 on our list, the Central African Republic. One of the primary considerations for other countries who lend aid to the Central African Republic is in the way the country faces certain types of adversity. China, for instance, has recently decided to invest in the country in larger amounts, and is viewing the nation as an increasingly important trading partner. The European Union also sees reason to lend the them support as well. Nonetheless, even with the support that the CAR has attained, they still face many challenges in terms of growth as a country. The issue of poverty still causes great concern, as do the the uneven trends in progression of the health and educational fields. Another factor to reflect on is that, with the considerable population growth to be expected over the next few decades within the CAR’s borders, creating a greater number of jobs will be required in order to sustain better living conditions across the country as a whole. Even with these challenges and adversities that the Central African Republic faces, the European Union and China still find it a worthy investment to continue to offer them official development aid. With that ODA, the CAR may be able to utilize their funding to enhance their economic growth by formation of a plan that proves to be the most beneficial.
Development Assistance: A Stepping Stone on the Path to a Stronger Future
Countries with largest net official development assistance relative to GNI have been partly determined by how likely their economic growth plans are to succeed. For many receiving aid, their sheer willpower and courage in the face of challenge has been applauded by other countries who have been able to lend them help. The more that a country strives to improve their conditions, even without the proper funding on their own, the more likely they will be to receive ODA from foreign sources to secure their economic futures.