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AID

The words "aid" and "assistance" refer to flows which qualify as Official Development Assistance (ODA) or Official Aid (OA).

AMORTISATION

Repayments of principal on a loan. Does not include interest payments.

ASSOCIATED FINANCING

The combination of Official Development Assistance, whether grants or Loans, with any other funding to form finance packages. Associated Financing packages are subject to the same criteria of concessionality, developmental relevance and recipient country eligibility as Tied Aid Credits (q.v.).

BILATERAL

See Total Receipts.

CLAIM

The entitlement of a creditor to repayment of a Loan (q.v.); by extension, the loan itself of the outstanding amount thereof.

COMMITMENT

A firm obligation, expressed in writing and backed by the necessary funds, undertaken by an official donor to provide specified assistance to a recipient country or a multilateral organisation. Bilateral commitments are recorded in the full amount of expected transfer, irrespective of the time required for the completion of disbursements. Commitments to multilateral organisations are reported as the sum of (i) any disbursements in the year reported on which have not previously been notified as commitments and (ii) expected disbursements in the following year.

CONCESSIONALITY LEVEL

A measure of the "softness" of a credit reflecting the benefit to the borrower compared to a loan at market rate. (cf. Grant Element). Technically, it is calculated as the difference between the nominal value of a Tied Aid Credit (q.v.) and the present value of the debt service as of the date of disbursement, calculated at a discount rate applicable to the currency of the transaction and expressed as a percentage of the nominal value.

CREDITS

See Loans

DAC (DEVELOPMENT ASSISTANCE COMMITTEE)

The committee of the OECD which deals with development co-operation matters. See also :"How the DAC works".

DAC LIST

DEBT REORGANISATION

(also Restructuring) Any action officially agreed between creditor and debtor that alters the terms previously established for repayment. This may include forgiveness (extinction of the loan), or rescheduling which can be implemented either by revising the repayment schedule or extending a new refinancing loan. See also " Notes on Definitions and Measurement" below.

DEFLATORS

DISBURSEMENT

The release of funds to, or the purchase of goods or services for a recipient; by extension, the amount thus spent. Disbursements record the actual international transfer of financial resources, or of goods or services valued at the cost of the donor.

EVALUATION

EXPORT CREDITS

Export credit loans for the purpose of trade and which are not represented by a negotiable instrument. They may be extended by the official or the private sector. If extended by the private sector, they may be supported by official guarantees.

GRACE PERIOD

See Grant Element

GRANT ELEMENT

Reflects the financial terms of a commitment: interest rate, MATURITY (q.v.) and grace period (interval to first repayment of capital). It measures the concessionality of a loan, in the form of the present value of an interest rate below the market rate over the life of a loan. Conventionally the market rate is taken as 10 per cent in DAC statistics. Thus, the GRANT ELEMENT is nil for a loan carrying an interest rate of 10 percent; it is 100 per cent for a grant; and it lies between these two limits for a soft loan. If the face value of a loan is multiplied by its GRANT ELEMENT, the result is referred to as the grant equivalent of that loan. (cf.CONCESSIONALITY LEVEL) (Note: the GRANT ELEMENT concept is not applied to the market-based lending operations of the multilateral development banks.)

GRANT LIKE FLOW

A transaction in which the donor country retains formal title to repayment but has expressed its intention in the commitment to hold the proceeds of repayment in the borrowing country.

GRANT

Transfers made in cash, goods or services for which no repayment is required.

LOANS (ALSO CREDITS)

Transfers for which repayment is required. Only LOANS with maturities of over one year are included in DAC statistics. Data on net LOANS include deductions for repayments of principal (but not payment of interest) on earlier LOANS. This means that when a loan has been fully repaid, its effect on total net ODA over the life of the loan is zero.

LONG TERM

Used of LOANS with an original or extended maturity of more than one year.

MATURITY

The date at which the final repayment of a loan is due; by extension, a measure of the scheduled life of the loan.

MULTILATERAL OPERATIONAL AGENCIES

In DAC statistics, these international institutions with governmental membership which conduct all or a significant part of their activities in favour of development and aid recipient countries. They include multilateral development banks (e.g. World Bank, regional development banks), United Nations agencies, an regional groupings (e.g. certain European Union and Arab agencies). A contribution by a DAC Member to such an agency is deemed to be multilateral if it is pooled with other contributions and disbursed at the discretion of the agency.

NET DISBURSEMENTS

also see Disbursements. Net Flow(s), whence Net Inflow, Net Outflow

OFFICIAL AID (OA)

Flows which meet conditions of eligibility for inclusion in OFFICIAL DEVELOPMENT ASSISTANCE (q.v.), other than the fact that the recipients are on Part II of the DAC List of Aid Recipients (see Recipient Countries and Territories). References to Official Development Assistance in this publication can be taken, mutatis mutandis, to apply to OFFICIAL AID.

OFFICIAL DEVELOPMENT ASSISTANCE (ODA)

Grants or Loans to countries and territories on Part I of the DAC List of Aid Recipients (developing countries) which are: (a) undertaken by the official sector; (b) with promotion of economic development and welfare as the main objective; (c) at concessional financial terms [if a loan, having a Grant Element (q.v.) of at least 25 per cent]. In addition to financial flows, Technical Co-operation (q.v.) is included in aid. Grants, Loans and credits for military purposes are excluded. For the treatment of the forgiveness of Loans originally extended for military purposes, see Notes on Definitions and Measurement below. Transfer payments to private individuals (e.g. pensions, reparations or insurance payouts) are in general not counted.

OFFICIAL DEVELOPMENT FINANCE (ODF)

Used in measuring the inflow of resources to recipient countries: includes (a) bilateral ODA, (b) grants and concessional and non concessional development lending by multilateral financial institutions, and (c) Other Official Flows for development purposes (including refinancing Loans) which have too low a Grant Element (q.v.) to qualify as ODA.

OFFSHORE BANKING CENTRES

Countries or territories whose financial institutions deal primarily with non residents.

OTHER OFFICIAL FLOWS (OOF)

Transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as Official Development Assistance or Official Aid, either because they are not primarily aimed at development, or because they have a Grant Element of less than 25 per cent.

PARTIALLY UNTIED AID

Official Development Assistance (or Official Aid) for which the associated goods and services must be procured in the donor country or among a restricted group of other countries, which must however include substantially all developing countries (substantially all CEEC/NIS countries in the case of Official Aid). Partially untied aid is subject to the same disciplines as Tied Aid Credits and Associated Financing (qq.v.).

PURPOSE OF AID

The DAC statistics on the purpose of aid cover three dimensions: the sector of destination, the form or type of aid, and the policy objective(s) of aid. Data are collected on individual commitments in the Creditor Reporting System (CRS), and in the form of annual commitment aggregates in the DAC Questionnaire.

SHORT TERM

Used of Loans with a maturity of one year or less.

TECHNICAL CO-OPERATION

Includes both (a) grants to nationals of aid recipient countries receiving education or training at home or abroad, and (b) payments to consultants, advisers and similar personnel as well as teachers and administrators serving in recipient countries, (including the cost of associated equipment). Assistance of this kind provided specifically to facilitate the implementation of a capital project is included indistinguishably among bilateral project and programme expenditures, and not separately identified as technical co-operation in statistics of aggregate flows.

TIED AID CREDITS

Official or officially supported Loans, credits or Associated Financing packages (qq.v.) where procurement of the goods or services involved is limited to the donor country or to a group of countries which does not include substantially all developing countries (or CEEC/NIS countries in transition, cf. PARTIALLY UNTIED AID). Tied Aid Credits are subject to certain disciplines concerning their concessionality levels, the countries to which they may be directed, and their developmental relevance so as to avoid using aid funds on projects that would be commercially viable with private finance, and to ensure that recipient countries receive good value.

TOTAL RECEIPTS

The inflow of resources to aid recipient countries (see Table 1 of the Statistical Annex) includes, in addition to ODF, official and private EXPORT CREDITS (q.v.), and long and short term private transactions (see PRIVATE FLOWS). Total receipts are measured net of amortisation payments and repatriation of capital by private investors. Bilateral flows are provided directly by a donor country to an aid recipient country. Multilateral flows are channelled via an international organisation active in development (e.g. World Bank, UNDP). In tables showing total receipts of recipient countries, the outflows of multilateral agencies to those countries is shown, not the contributions which the agencies received from donors.

UNDISBURSED

Describes amounts committed but not yet spent. See also COMMITMENT, DISBURSEMENT.

UNTIED AID

Official Development Assistance for which the associated goods and services may be fully and freely procured in substantially all countries.

VOLUME (REAL TERMS)

The flow data in this publication are expressed in US dollars. To give a truer idea of the volume of flows over time, some data are presented in constant prices and exchange rates, with a reference year specified. This means that adjustment has been made to cover both inflation between the year in question and the reference year, and changes in the exchange rate between the currency concerned and the United States dollars over the same period. A table of combined conversion factors is provided at the end of the Statistical Annex which allows any figure in the Report in current United States dollars to be converted to dollars of the reference year ("constant prices").