oversight

Foreign Assistance: International Resource Flows and Development Assistance to Developing Countries

Published by the Government Accountability Office on 1990-10-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      Fact, Slwttt for the Honorable
GAO   I.,w H. Hamilt(jn Chairman, Joint,




      FOREIGN
      ASSISTANCE
      International Resource
      Flows and
      Development
      Assistance to
      Developing Countries


                                     III
                                     142672
..
      Uuited States
GAO   General Accounting Office
      Washington, D.C. 20648

      National Security and
      International Affairs Division

      B-240424

      October 23,199O

      The Honorable Lee H. Hamilton
      Chairman, Joint Economic Committee
      U.S. Congress

      Dear Mr. Chairman:

      As you requested, we obtained information on the amounts of interna-
      tional economic assistance provided to developing countries between
      1980 and 1988. Specifically, we have provided the total value, composi-
      tion, and distribution of development assistance and resource flows
      from all major donors. You expressed particular interest in the develop-
      ment assistance levels of the United States and Japan. The data in this
      report is limited to economic development assistance and excludes
      grants, loans, and credits for military purposes, and loans and credits
      with maturities of less than one year.

      Net global public and private economic resource flows to developing
      countries, which consist of official development finance flows, private
      flows and export credits, have generally declined from $128.4 billion in
      1980 to $101.8 billion in 1988.1 The decrease resulted largely from a
      drop in private flows, which generally take the form of direct invest-
      ments and international bank loans. While official development finance
      flows increased 38 percent, from $45.5 billion to $66.0 billion between
      1980 and 1988, private flows declined 50 percent, from $66 billion to
      $32.9 billion, substantially increasing the relative share and importance
      of official flows. Export credits declined from $16.9 billion to $3 billion
      during this period. The decline in private flows is due primarily to
      reduced demand for international lending by those countries with rela-
      tively sound economies and curtailed access to capital markets for those
      with debt service problems. A drop in global export credits also contrib-
      uted to the decline in total net resource flows to developing countries.

      Development Assistance Committee members2 continued to provide
      about 80 percent of official development assistance. Between 1980 and
      1988, the U.S. share of official development assistance increased from
      16.3 percent to 18.3 percent., Japan increased its official assistance by

      ‘All dollar values in this report are expressed in current dollars unless otherwise stated.
      “The Committee members are Australia, Austria, Belgium, Canada, Demark, Finland, France, West
      Germany, Italy, Ireland, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, IJnited
      Kingdom, United States, and the Commission of European Communities.



      Page 1                                                      GAO/NSIAD-91.26FS       Foreign   Assistance
B240424




172 percent, and its share of global official assistance increased from
10.4 percent to 15 percent. While contributing proportionately more of
their gross domestic products, the Organization of Petroleum Exporting
Countries,3 nonetheless, decreased their shares of global official assis-
tance from 23 percent to 9 percent. The Soviet Union and East European
nations accounted for about 8 percent of all official assistance, with
about 90 percent of this assistance coming from the Soviet Union.

Overall, since 1980, donor nations have redirected their resource flows
to developing nations away from upper middle income countries
(defined by the World Bank as countries with over $1,300 annual per
capita income) and toward lower income countries (countries with under
$600 annual per capita income). The redirection was largely the result
of reductions in private flows to middle income countries, and increased
disaster relief measures to lower income countries.

Regionally, Sub-Saharan Africa received 35 percent of the global official
development assistance, while Asia received 33 percent, North Africa
and the Middle East received 13 percent and Latin America received less
than 2 percent. (The remaining 18 percent was not allocated by region.)
Development assistance represents about 7.5 percent of the gross
national product of Sub-Saharan Africa, 1.2 percent for Asia, 20 percent
for Oceania, 1 percent for North Africa and the Middle East, and less
than 1 percent for Latin America. Developing countries’ dependence on
donor resource flows has increased. For example, in Sub-Saharan
Africa, dependence on donor resource flows was only 4.1 percent of
gross national product in 1980.

While nearly all developing countries receive some development assis-
tance, the distribution of this assistance remains largely independent of
the relative development resource needs of these countries. In fiscal
year 1988, for instance, 5 percent of the developing countries received
nearly 21 percent of the global official bilateral assistance distributed
bilaterally, and only one of these countries-Bangladesh-was          among
the 42 countries recognized by the United Nations as least developed. In
fiscal year 1986, India, Israel, Egypt, Vietnam, and Bangladesh led all
other developing countries in assistance received, totaling 21 .l percent
of all official development assistance provided. During this period, the
United States tended to concentrate its disbursements in the Middle
East, while Japan focused its assistance mostly in the Far East.

3The Organization of Petroleum Exporting Countries include Algeria, Ecuador, Gabon, Indonesia,
Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.



Page 2                                                   GAO/NSI.AD-Bl-2iWS     Foreign   Adstance
B240424




Multilateral assistance distribution patterns also show that 15 percent
of developing countries received 28 percent of the official development
assistance.

Over time, donor nations tended to favor particular recipient countries.
For instance, Japan disbursed an average of 14 percent of its official
development assistance to Indonesia in the 1960s 11 percent in the
197Os, and 6 percent in the 1980s.

The United States, on the other hand, disbursed an average of 18
percent of its net official development assistance to Israel in the 1960s
8 percent in the 197Os, and 13 percent in the 1980s.

Donor nations tended to direct their official assistance to differing
sectors. In 1987, the latest year for which data were available on
sectoral commitments of donors, the United States provided 33 percent
of its official development assistance to program assistance-general
program loans, loans to purchase commodities, and government budget
support- and 5 percent to economic infrastructure development. In con-
trast, Japan directed about 64.6 percent of its aid to economic infra-
structure development and industrial production, and only 14 percent to
program assistance. Economic assistance from the Organization for
Petroleum Exporting Countries concentrated on general program sup-
port, and Soviet assistance favored infrastructure development and min-
eral exploration and extraction.

Appendixes I through VII provide more detailed information on each of
the above topics.

Information in this report is based on data compiled between 1978 and
1988 by the Development Assistance Committee of the Organization for
Economic Cooperation and Development. The Development Assistance
Committee is an organization of donors that monitors the flow of eco-
nomic assistance to developing countries. It collects and publishes data
on both donors and recipients. Its annual publication, Development
Cooperation, contains a standardized data base that we used for com-
paring types, amounts and purposes of developing assistance. We used
another committee publication, Geographical Distribution of Financial
Flows to Developing Countries, to trace the flow of development assis-
tance to all developing countries.

As requested, we did not obtain official agency comments. We conducted
our review from February 1989 to March 1990.


Page 3                                     GAO/NSIABB132F6   Foreign   Asdatance
B-240424




As arranged with your office, unless you publicly announce its contents
earlier, no further distribution of this report will be made until 30 days
from its issue date. At that time, copies will be sent to the Adminis-
trator, Agency for International Development, and to other interested
parties upon request.

Please call me on (202) 276-6790 if you or your staff have questions on
this report.

Major contributors to this fact sheet were David Martin, Assistant
Director, and Gezahegne Bekele, Project Manager.

Sincerely yours,




Harold J. Johnson
Director, Foreign Economic
  Assistance Issues




Page 4                                     GAO/NSIADBl-26FS   Foreign   Assistance
Page 6   GAO/NSIAD-9135FS   Foreign   As&tame
Contents


Letter                                                                     1

Appendix I                                                                10
Introduction
Appendix II                                                               11
ResourceFlows to
Developing Countries
Appendix III                                                              19
Official Development
Assistance to
Developing Countries
Appendix IV                                                               26
Development
Assistance Donor
Burden Sharing
Appendix V                                                                29
Development
Assistance
Distribution Patterns
Appendix VI                                                               34
Development
Assistance
Geographical
Distribution




                        Page 6   GAO/NSIAD-Bl-26FS   Foreign   Adstance
Appendix VII
Development
Assistance Sectorial
Distribution
Tables                 Table I. 1: Selected Indicators of Economic and Financial                     10
                           Relationships With Developing Countries Expressed
                           as Percent of Donors’ GNP, 1986 and 1987
                       Table 111.1:Bilateral Official Grants U.S. Dollars in                         23
                           Billions
                       Table V. 1: Major Recipients of Bilateral Official                            29
                           Development Assistance in 1988 by Percentage of
                           Donors’ Gross Disbursements
                       Table V.2: U.S. Net Disbursements of Foreign Economic                         30
                           Assistance to Major Recipients
                       Table V-3: Japan’s Net Disbursements of Economic                              31
                           Assistance to Major Recipients
                       Table V.4: Major Recipients of DAC Member Economic                            32
                           Assistance, Excluding Japan and the United States
                       Table V-6: Major Recipients of Non-DAC Donors                                 33
                       Table VII. 1: Development Assistance by Major Purpose,                        40
                            1986-1987 Percent of Total Commitments

Figures                Figure 11.1:Net Global Resource Flows to Developing                           12
                            Countries
                       Figure 11.2:Composition of Private Flows to Developing                        13
                            Countries
                       Figure 11.3:Net Export Credits                                                14
                       Figure 11.4:Net Total Resource Flows by Major Donors                          16
                       Figure 11.6:Net Private Flows by Major Donors                                 16
                       Figure 11.6:Distribution of Global Net Total Resource                         17
                            Flows to Developing Countries by Income Group
                       Figure 11.7:Regional Distribution of Global Net Total                         18
                            Resource Flows
                       Figure 111.1:Official Development Assistance and Net                          20
                            Resource Flows in Current and Constant Dollars
                       Figure 111.2:Official Development Assistance by Major                         21
                            Donors




                       Page 7                                    GAO/NSIAIMl-ZISFS   Foreign   AtwMame
Figure 111.3:Official Bilateral Development Assistance by                      22
     Members of Donor Organizations and Multilateral
     Assistance
Figure 111.4:Distribution of Official Development                              24
     Assistance by Income Groups
Figure 111.6:Regional Distribution of Official Development                     26
     Assistance
Figure IV. 1: Shares of Global Official Development                            26
     Assistance of Selected Donors
Figure IV.2: Ratios of Official Development Assistance to                      27
     Gross National Product of Selected Donors
Figure IV.3: Distribution of Development Assistance                            28
     Among Selected DAC Members
Figure VI. 1: Distribution of Official Development                             36
     Assistance to Sub-Saharan Africa
Figure VI.2: Distribution of Official Development                              36
     Assistance to North Africa and the Middle East
Figure VI.3: Distribution of Official Development                              37
     Assistance to South Asia
Figure VI.4: Distribution of Official Development                              38
     Assistance to the Far East and Oceania
Figure VI.6: Distribution of Official Development                              39
     Assistance to Latin America and the Caribbean




Abbreviations

DAC       Development Assistance Committee
GNP       Gross National Product


Page 8                                    GAO/NSIADBl-25FS   Foreign   A.&stance
Page 9   GAO/NSIADBl-26FS   Foreign   Assistance
                                         Development assistance consists of transfers of resources to less devel-
                                         oped countries on concessional terms. Nearly all industrialized countries
                                         participate in providing development assistance. Donors provide devel-
                                         opment assistance for a number of reasons, including responding to
                                         humanitarianconcerns, obtaining commercial access to growing mar-
                                         kets, and for political and strategic purposes. In 1988, total net resource
                                         flows to developing countries averaged 3.6 percent of the per capita
                                         income of all recipient countries. Table I. 1 shows some of the economic
                                         and financial relationships between developing countries and selected
                                         development assistance donors.

Table 1.1: Selected Indicators of
Economic and Financial Relationships                                                           DACb        United States         Japan
With Developing Countries Expressed as   Net resou(ce flows                                     0.64                0.36            1.Ol
Percent of Donors’ QNP, 1988 and 1987’
                                         Net official development assistance                    0.35                0.51            0.30
                                         Imports from developing countries excluding
                                           oetroleum                                            2.35                 2.58           1.62
                                         Exports to developing countries                        2.91                 1.76           3.63
                                         Debt claims on developing countries excluding
                                           official develooment debts                           1.39                 1.03           0.85
                                         aAverage values for 1986 and 1967
                                         “Average of Development Assistance Committee (DAC).

                                         Development assistance is a complex global program without a global
                                         coordinating body. Dozens of donor organizations, multilateral develop-
                                         ment banks and funds, United Nations agencies, and several hundred
                                         nongovernmental organizations currently provide development assis-
                                         tance. Additionally, export credit agencies and commercial banks pro-
                                         vide finance to countries of their choice.

                                         The allocation of development assistance funds is complicated by com-
                                         peting international and domestic priorities of donors. Economic assis-
                                         tance is generally recognized as being in the national interests of donor
                                         nations. The November 1983 report of the Commission on Security and
                                         Economic Assistance concluded that development assistance “makes an
                                         indispensable contribution to achieving foreign policy objectives.” How-
                                         ever, the beneficial effects of economic assistance are often overshad-
                                         owed by skeptical evaluations of the efficiency of donor resources.
                                         While 40 years of development assistance have had dramatic impacts in
                                         such areas as life expectancy and literacy rates in many developing
                                         countries, some developing countries achieved very little in economic
                                         development and some are worse off now than 10 years ago.



                                         Page 10                                               GAO/NSIAD-Ql-26FS   Foreign   Assistance
Appendix II

FtesourceFlows to Developing Countries~


               Total resource flows to developing countries, in addition to aid,’ include
               grants from private agencies, commercial bank lending and portfolio
               investment by residents or institutions in donor countries; direct invest-
               ment (including reinvested earnings); and purchases of securities of
               international organizations active in development. Net resource flows
               are total resource flows, excluding capital repayments on earlier loans.

               Net global private and public resource flows to developing countries
               have declined from $128.4 billion in 1980 to $101.8 billion in 1988 (see
               fig. 11.1). The largest decreases occurred between 1981 and 1985, when
               developing countries experienced a decrease of 41 percent in net
               resource flows largely due to a drop in private financial flows (see fig.
               11.2). Flows from the private international bank sector to developing
               countries in 1988 stood at 10 percent of their 1981 value, a decrease of
               $47 billion. The combination of reduced demand for international
               lending by countries with relatively sound economies and curtailed
               access to capital markets for those with debt service problems contrib-
               uted to the decline in private flows.




               ‘Aid refers only to flows that qualify as official grants or loans; in addition to financial flows, tech-
               nical cooperation is included. Technical cooperation comprises grants (and a very small volume of
               loans) to nationals of developing countries receiving education or training at home or abroad, and
               grants to defray the costs of teachers, admiitrators, advisers, and similar personnel serving in
               developing countries.



               Page 11                                                      GAO/NSIAD-91-25FS        Foreign Assistance
                                           AppendixII                                                                                      ,
                                           ltesouree Flows to Developing           Coun*




Flgure 11.1:Net Qlobal Rerource Flowr to
DovelopIng Countries
                                           160      Blllionm U.S. dollar.




                                             1980            1981           1982       1983   1984     lOB5       10S6      1987
                                            YOM@

                                                    -    OHkial Dewbpment Finance
                                                    ---- ExportCmdiu
                                                    B    PrivateFbwa
                                                    mmmm TotalNetfWourceFlow




                                           Page 12                                                   GAO/NSIAD-91.26FS   Foreign   A.ssistance
                                           Appendix       II
                                           ltesoume      Flowt~ to Developing    Chuntrie~




Figure 11.2:Comporltlon of Private Flowa
to Developing Countrlea
                                           80     Sllliom U.S. dollan

                                           70




                                           60

                                           40                           ;-.
                                                                        .
                                              c
                                           a0 .

                                           20

                                           10 -

                                            0

                                                  1980

                                                             other
                                                             Bonds
                                                             International Sank Sector Flows
                                                             Direct Investment


                                           As shown in figure 11.3,a decline in export credits also contributed to
                                           the decline in total net resource flows to developing countries. Global
                                           export credits, whose primary sources are members of the Organization
                                           for Economic Cooperation and Development, decreased from 13.2 per-
                                           cent of the total to approximately 3 percent.




                                           Page 13                                             GAO/NSIAD-91.26FS   Foreign   Assistance
Appendix II
Resoures Flow8 to Developing        Countries




       Bllllonr U.S. dollan




   I           A!+ P                P           Q h                h       P       B
       I-J       Organization for Economic Cooperah   and Development
                 Others

Enttbs are sums of official and private export credits


Global net resource flows are greatly influenced by trends and events
within DAC member countries, because over one-half of all resource flows
come from these countries (see fig. 11.4). Since 1980, net resource flows
from these countries have exhibited large fluctuations, primarily
because of a rapid buildup and subsequent declines in private flows (see
fig. 11.6). Private flows, which were the largest component resource
flows until 1986, declined from their peak of $54 billion in 1981 to $9
billion in 1986 before posting a mild recovery in 1988. Moreover, bilat-
eral private investment in developing countries by DAC member countries
reversed course, from a $25-billion inflow to developing countries in
1981 to net outflows of $4.5 billion in 1985, and $2.4 billion in 1987.




Page 14                                                       GAO/NSIAD-Sl-26FS   Foreign   Assistance
                                          Appendix    II
                                          Rem-.      Flows to Developing    Cmntriee




Flgure 11.4:Net Total Resource Flow8 by
Major Donor8
                                          120   Bllllons U.S. dollars

                                          140

                                          120

                                          100

                                           90

                                           60

                                           49

                                           20




                                                1       1 others
                                                          DAC. exduding the United States and Japan

                                                          Japan
                                                          United States




                                          Page 16                                                     GAO/NSIAD-9115FS   Foreign   AmMance
                                                          Appendix II
                                                          Etesource Flows to Developing   Cmntrles




Figure 11.5:Net Private Flow8 by Major Donor8
40    BIlliona U.S. ddlam




-20

      1950-92 AVQ.           1953                    1994                    1955                    1995        1997                1990

      I      I Unbd State8

               Japan
               DAC, excluding the United StatesandJapan
               other8




                                                          U.S. resource flows exhibited a similar trend. These increased from 1980
                                                          through 1982 due to the proliferation of private bilateral investments in
                                                          developing countries, and subsequently declined. In 1985, 1987, and
                                                          1988, private bilateral flows from the United States were negative, indi-
                                                          cating that developing countries actually experienced an outflow of
                                                          these investments to the United States.

                                                          Since 1986, Japan’s net resource flows-public      and private-to  devel-
                                                          oping countries have exceeded those of the United States. Between 1980
                                                          and 1988, Japan more than tripled its net resource flows to developing
                                                          nations, from $6.8 billion to $21.4 billion. The largest component of the
                                                          increase in Japan’s resource flows occurred in private flows, which
                                                          increased from approximately $2 billion in 1980 to $12.8 billion in 1988.
                                                          Unlike the United States and other members of DAC, this increase in pri-
                                                          vate flows was accompanied by an increase in net official development




                                                          Page 16                                           GAO/NSIAD-91-26FS   Foreign   Assistance
                                         Appendix     II
                                         lt4xwurce    Flows to Developing    Ckmntrk~




                                         finance flows, from $4.8 to $8.5 billion, Japan’s official development
                                         finance flows, however, continue to lag behind that of the United States.

                                         The decrease in net resource flows has not been uniformly distributed
                                         across recipients. As shown in figure 11.6,countries defined by the
                                         World Bank as upper middle income countries, which until 1984 had
                                         received over 60 percent of net flows, have experienced a dispropor-
                                         tionate decrease in net resource flows. Net flows to upper middle income
                                         countries were approximately 30 percent in 1988. Low income countries
                                         were the beneficiaries of the decreased distribution to upper middle
                                         income countries, receiving 52 percent of total net resource flows and 69
                                         percent of all official development assistance.


Figure 11.6:Distribution of Global Net
Toial Resource Flows to Developing
Countries by Income Group                209    Billions U.S 1997 constant dollars

                                         100

                                         150

                                         149

                                         129

                                         100

                                          00

                                          50

                                          40

                                          20




                                                I
                                                -
                                                         1 Umer
                                                            ”
                                                                Middle lname Countries
                                                           Law Middle Income Countries
                                                           Omer Lcw Income Countries

                                                111        Least Developed Countries

                                         The total for Low Income Countries is the sum of Least Developed and other Low Income Countries.


                                         Net flows to developing countries in the Western Hemisphere experi-
                                         enced a decline of $55 billion (in 1987 dollars) from 1980. Sub-Saharan



                                         Page 17                                                GAO/NSIAD-91.26FS      Foreign   Assistance
                                       Appendix   II                                                                           I
                                       Besource   Flows to Developing      Cmntriee




                                       Africa experienced a slight increase in net resource flows. (See fig. 11.7.)
                                       The decrease in net resource flows to upper middle income countries and
                                       the Western Hemisphere may reflect their debt service problems and the
                                       subsequent reluctance of private lending institutions to provide new
                                       loans.


Figure 11.7:Regional Distribution of
Global Net Total Resource Flows
                                       199   Billlons U.S. 1997 constant dollars

                                       160

                                       140

                                       129

                                       100

                                        00

                                        69

                                        40

                                        20

                                         0




                                                   J   Regiinallyunallocated
                                                       The Western Hemisphere
                                                       Asia
                                                       North Afrka and the Middle East
                                                       SubSaharan Africa




                                       Page 18                                           GAO,‘NSIADsl-!&FS   Forei@   Assistance
Appendix III                                                                                    -

Official Development Assistance to
Developing Countries

                Official development assistance is defined by DAC as those resources pro-
                vided to developing countries and multilateral institutions by official
                agencies, including state and local governments. Official development
                assistance must (1) promote the economic development and welfare of
                developing countries as its main objective and (2) be concessional in
                character and contain a grant element of at least 25 percent. It consists
                of grants (e.g., technical assistance, food aid, administrative costs),
                development loans, loans for food, debt reorganization, and contribu-
                tions to multilateral institutions.

                As shown in figure III. 1, the decrease in private flows and export credits
                discussed earlier substantially increased the relative share and impor-
                tance of official development finance flows. The share of official devel-
                opment finance flows increased from 35.5 percent in 1980 to 65 percent
                of global net resource flows in 1988. Until 1985, private flows were the
                largest component of net resource flows. Global official development
                assistance increased from $37.5 billion in 1980 to $51.6 billion in 1988,
                equivalent to a decrease of $2 billion in constant 1987 dollars (see fig.
                111.2).




                Page 19                                    GAO/NSIAB91-25FS   Foreign   Amidstance
                                       Appendix III
                                       Official Development       Asdrdance     to
                                       Developing Conntries




Figure 111.1:Official Development
Assistance and Net Resource Flow8 in
Current and Constant Dollars           200   BIllions U.S. dollars

                                       180

                                       160

                                       149

                                       120

                                       100

                                        90

                                        so

                                        40

                                        20

                                         0

                                         1999            1991        1992            1983      1994        199s       1999      1997         1999


                                                -         Net Rtxwurw Flows in Current Dollars
                                                I I II    Net Rssource Flows in Constant 1987 Dollars
                                                m         Offidal Development Assistance: 1967 Dollars
                                                n n mn    Cffidal Development Assistance




                                       Page 20                                                           GAO/NSIAD-91-26FS   Foreign   Assistance
                                    Appendix IlI
                                    Officid  Development         Assistance    to
                                    Developing Countries




Figure 111.2:Official Development
Assistance by Major Donors
                                    60   Sllllon8 U.S. dollar9




                                    O-B-B                                                   aa--
                                         1999       1961          1932        1933   1934      1985       1999    1937     1939

                                         n         Non-DAC Donors
                                                   DAC. exduding the United States and Japan




                                    Official development assistance from DAC members has shown a steady,
                                    but slow, growth since 1980. US. official development assistance
                                    increased by approximately $3 billion.

                                    In 1988, bilateral official development assistance represented 78 percent
                                    of official development assistance and 40 percent of all net resource
                                    flows to developing countries (see fig. 111.3).Between 1980 and 1988,
                                    bilateral official development assistance increased 35 percent. This
                                    growth was achieved mostly because members of the Organization for
                                    Economic Cooperation and Development increased their share of official
                                    bilateral assistance from 60 to 83 percent by increasing their net bilat-
                                    eral disbursements from $18 billion to $33 billion. The share of bilateral
                                    official development assistance from the Organization of Petroleum
                                    Exporting Countries, on the other hand, declined from 29 percent in
                                    1980 to 4.9 percent in 1988.




                                    Page 21                                                           GAO/NSIAD-91-26FS   Foreign   Assistance
                                                                                                                                                   I




                                       Appendix Ill
                                       Offlcld  Development         Adstance       to
                                       Developing c4luntrles




Figure 111.3:Official Bilateral
Development Assistance by Members of
Donor Organizations and Multilateral   60   Bllllo~   U.S. dollwn
Assistance
                                       50




                                       10


                                       0
                                                      A             A          A          A         A            L          A          A
                                                          1991          1992       1993       lw4       1985         1999       lQ87       1999

                                                       MulUhtsral Aseistanw
                                                       Members of Other Bilateral Organkatiana
                                                       Coundl for Mutual Economic Assistance
                                            m          OPEC
                                                       Organization for Economic CooperaMn and Devebpment



                                       The grant component of INC bilateral official development assistance
                                       also shows a gradual growth throughout the decade, largely due to the
                                       growth of special bilateral assistance arrangements, such as the U.S.
                                       Economic Support Fund (see table 111.1).U.S. bilateral official grants, for
                                       instance, have increased by approximately $3.6 billion since 1980.
                                       Between 1980 and 1988, U.S. official development assistance contained
                                       an average of 62 percent in bilateral grants compared to 27 percent for
                                       Japan. On the other hand, Japanese official development assistance
                                       averaged 40 percent in development loans, as compared with 23 percent
                                       for the United States.




                                       Page 22                                                                 GAO/N&W-91-2SFS         Foreign    Assistance
                                                         API.=-    m
                                                         Offldd   Development   Aw3Mance     to
                                                         Developlngconntriee




Table 111.1:Bilateral Official Grants U.S. Dollars in Billions
                                     1980        1981          1982                 1983                1984     1985          1986        1987          1988
Technical Assktarce
  DAC                                            55.48    $5.25        $5.39        $5.84               $5.92    $6.03      $7.49         $8.96         $10.22
  ""iled siates         -_--'-..-.--.-..-o.72
                                  ..-. .--.---             0.95         1.08         1 .43               1.61     1.46       1.51          1.75           2.13
  Japan                                           0.28     0.34         0.35         0.39                0.44     0.42       0.60          0.74           1.09
Food Aid
  DAC        _... _.~......- . .__._~____ 0.80             0.85         0.84         0.94                1.22     1.35         1.50         i .48          1.83
  United States                                   0.47     0.43         0.39         0.49                0.65     0.78         0.84         0.81           0.99
  Japan                                           0.01     0.02         0.04         0.05                0.05     0.05         0.07         0.10       --- 0.09
Administrative Cost
  DAC             .._...~...-....                 0.81     0.45         0.84         0.90                0.94     0.98         1.22          1.44      1.60
  United siaies                    --.------~.32           0.35         0.39         0.41                0.44     0.47         0.48         0.49       0.51
  Japan                                           0.05     0.04         0.04         0.07                0.08     0.09         0.16         0.21    -- 0.27
Other                                                                                                                    -__                     _____-
  DiC                                             5.89     6.41         6.27         6.30                9.05     9.48         10.87       11.40      12.39
  United Statesa                                  1.46     1.78         1.94
                                                                        ___--        2.14                2.95     4.60          4.22        3.65   .- 2.85
  Japan                                           0.36     0.41    _____---
                                                                        0.37         0.49         --     0.49     0162          0.88 --     1.05       1.46
Totals
  DAC                         -.     ._.~~. -$14.12
                                              .._.       $13.18       $13.41      514.13               $17.13   $17.84      $21.06        $23.25        $26.04
  United Stat&                                  2.98       3.52         3.79        4.47                 5.64     7.31        7.03          6.69          6.47
  JaDan.                                        0.70       0.81         0.81        0.99                 1.06     i.18        1.70          2.11          2.91
                                                         aThese amounts primarily are Economic Support Fund disbursements


                                                         Figures III.4 and III.5 show the distribution of official development
                                                         assistance by recipient countries’ income levels and regions, respec-
                                                         tively. Figure III.4 shows that upper middle income countries’ began
                                                         receiving proportionately decreased official development assistance,
                                                         relative to lower income countries, as the decade progressed. Figure III.5
                                                         shows that during the 1980s the Asia and Sub-Saharan Africa regions
                                                         received larger proportions of official development assistance than
                                                         other recipient regions.




                                                         Page 23                                                   GAO/NSIADSl-26FS       Foreign   Asdstance
                                        Appendix III
                                        Offlcid  Development    Assistance    to
                                        Developing Countries




Figure 111.4:Distribution of Official
Development Arslstance by Income
Groups                                  90   Bllllone eonstmt 1987 U.S. dollam


                                        60                                                       I



                                        40


                                        30


                                        20


                                        10


                                        0
                                                     L          L        A            L          A            L        A       B
                                             1980        1981    1962        1983         1984       1985       1985    1967   19w


                                             I        Upper Middle Income Countries
                                                      Low Middle Income Countries
                                                      Other Low Income Countries
                                                      Leaat Dewloped Countries




                                        Page24                                                              GAO/NSIAD91-26FS   Foreign   Assistance
                                        Appendix llI
                                        Offlclal Development    Ad.stance     to
                                        Developing Countries




Figure 111.5:Regional Distribution of
Official Development Assistance
                                        so   Bllllons Constant 1987 U.S. dollars


                                        SO


                                        40


                                        30


                                        20


                                        10


                                         0
                                                                                                         A
                                             1980      1883       1984        l9ss       1986   1987       1988

                                             I-       Other and Unallocated
                                                      The Western Hemisphere

                                                    I Asia
                                                    I North Africa and the Middle East
                                                    I Sub-Saharan Africa




                                        Page 25                                                        GAO/NSIAD-91-26FS   Foreign   Assistance
Appendix IV

Development Assistance Donor Burden Sharing ’


                                        Development Assistance burden sharing among industrialized countries
                                        is measured using two indices designed to reveal their relative and abso-
                                        lute “generosity.” One index is the ratio of a donor’s official develop
                                        ment assistance to its gross national product. This index shows whether
                                        a donor participates in development assistance in proportion to its eco-
                                        nomic stature. A second index measures the extent to which each donor
                                        contributes to the total official development assistance relative to other
                                        donors, such as the ratio of a donor’s official development assistance to
                                        the total official development assistance.

                                        Members of DAC contribute roughly 80 percent of development assis-
                                        tance to less developed countries (see figs. IV.1 and IV.2).


FIQU~OIV.l: Shares of Qiobai Offlciai
D&eiopment Assistance of Wetted
Donors                                  40 Perwntags


                                           n




                                                   19rol71                  197W76
                                                   Fiscal Yom


                                               I
                                                         II Unlted States

                                                             Japan
                                                             European Economic Community
                                               m             OPEC
                                                             The Soviet Union




                                        Page 20                                            GAO/NSIAD-91-26FS   Foreign   AssMance
                                      Appendix IV
                                      Development   Assistance        Donor
                                      Burden Sharing




Figure IV.2: Ratios of Official
Development Assistance to Gross
National Product of Selected Donors   II   Percwbtage



                                      4




                                           197Offl                   i976n6          1060/81          1905i06            1887/88
                                           Flwal Yearn

                                                     United States

                                                     Japan
                                                     European Economic Community
                                                     OPEC
                                                     The Soviet Union

                                      1987K38data for the Soviet Union is not availlable.


                                      Organization of Petroleum Exporting Countries members dominate
                                      assistance relative to gross national product. However, between 1980
                                      and 1988, their share of global official development assistance declined
                                      from 23 percent to 5 percent.

                                      The U.S. share of global official development assistance has decreased
                                      despite a 42-percent increase in US. official development assistance
                                      since 1980. This occurred primarily because of increases in the economic
                                      assistance of other donors. The United States, in 1970 and 1971, was
                                      responsible for over one-fourth of all official development assistance,
                                      but accounted for 18 percent in 1988. Nevertheless, in 1988, the United
                                      States was the largest single donor, accounting for 21 percent of official
                                      development assistance from DAC members (see fig. IV.3). The United




                                      Page 27                                                  GAO/NSIAD-Bl-25FS   Foreign   Assistance
                                Appendix IV
                                Development   Aseietance     Donor
                                Burden Sharing




                                States, however, provided less official development assistance as a per-
                                centage of gross national product than most other DAC members.



Assistance Among Selected DAC
                                100   Percentage
Members
                                 so

                                 so

                                 70

                                60

                                50

                                40

                                30

                                20

                                10

                                 0

                                      1970-71      1976-76   1980.81   1987.88
                                      Fiscal Yearn


                                      r         United States
                                            m FraflCe

                                                United Kingdom
                                                West Genany




                                Japan has continued to increase its levels of development assistance. In
                                1962, Japan’s official development assistance was one percent of the DAC
                                members’ official development assistance, while in fiscal years 1981,
                                1986, and 1988 it accounted for approximately 8, 12.4, and 15 percent,
                                respectively. Since 1980, Japan has increased its official development
                                assistance by 172 percent.

                                Historically, the Soviet Union and East European nations contributed
                                relatively small portions of their gross national products to development
                                assistance. They typically accounted for 8 percent of all official assis-
                                tance. In 1987 and 1988, the Soviet Union’s allocation to development
                                assistance was roughly 45 percent of that of the United States.


                                Page 28                                          GAO/NSLAD91-2SFS   Foreign   Assistance
Appendix V

Development Assistaxe Distribution Patterms


                                           There are significant differences among donors in the patterns of distri-
                                           bution of their development assistance. Most developing countries
                                           receive some kind of development assistance. Some, such as India, Paki-
                                           stan, Bangladesh, Indonesia, and Egypt, tend to consistently rank as
                                           major official development assistance recipients. Some redirection and
                                           redistribution of assistance, due to shifts in political and economic rela-
                                           tionships between donors and recipients, are also noticeable.

                                           As shown in table V. 1, Indonesia, Egypt, India, Israel, and China
                                           accounted for 15 percent of I countries’ gross disbursements in 1988.
                                           Israel, Egypt, El Salvador, Philippines, and Pakistan received nearly 30
                                           percent of U.S. disbursements, while Indonesia, China, the Philippines,
                                           Thailand, and Bangladesh received 32 percent of Japan’s gross
                                           disbursements.


Table V.l: Major Recipients of Bilateral Official Development Assistance in 1988 by Percentage of Donors’ Gross Disbursements
Figures in percents
                       U.S.                                    Japan                                               DAC’
~-..            ____
Israel                            12.0       Indonesia                              11.9         Indonesia                                3.7
ESYPf                              9.4       China                                   6.6         Egypt                                    3.4
El Salvador                        3.3       Philippines                             5.7         India                                    2.9
Pakistan                           2.7       Thailand                                4.3         Israel                                   2.8
Philippines                        1.8       Bangladesh                              3.9         China                                    2.2
India                              1.7       India                                   3.6         Banaladesh                               2.0
Pacific Isles                      1.6       Pakistan                                2.7         Pakistan                                 1.9
Honduras                           1.5       Malaysia                                2.6         Philippines                              1.8
Guatemala                          1.4       Burma                                   2.5         Tanzania                                 1.4
Costa Rica                         1.3       Korea                                   2.4         Mozambiaue                               1.2
Bangladesh                         1.3       Sri Lanka                               1.8         Kenya                                    1.2
Sudan                              0.9       Turkey                                  1.8         Reunion                                  1.2
                                           BDACdisbursements, including those of the United States and Japan

                                           A decade by decade comparison of distribution patterns of net official
                                           development assistance disbursements shows that donor and recipient
                                           relationships have generally remained stable, although some adjust-
                                           ments have occurred that reflect changes in political or economic rela-
                                           tionships. Table V-2 shows, for example, that during 1962 through 1969,
                                           Israel, Vietnam, Pakistan, Korea, and Brazil received an average of
                                           about 42 percent of the annual net disbursements of U.S. official assis-
                                           tance. In the 197Os, Israel, Vietnam, Egypt, India, and Bangladesh



                                           Page 29                                                 GAO/NSIAD91-25F’S   Foreign   Assistance
                                           Appendix V
                                           Development Adatance
                                           DMrlbution  Patterns




                                            received 26 percent of the US. assistance, and in the 19SOs,30 percent
                                            of US. net disbursements went to Israel, Egypt, El Salvador, Ban-
                                            gladesh, and the Pacific Isles trust territories.


Table V.2: U.S. Net Dlabunementr   of Foreian Economic Assistance to Major Recipientsa
Figures
-..-    in percents
                1962-1969                                     1970-1979                                        1980-1986

Israel                             17.1      Israel                                     7.7    Israel                                 13.4
Vietnam
  .-....--                          8.3      Vietnam                                    6.8    Egypt                                  11.4
Pakistan                            7.1      Eavpt                                      5.5    El Salvador                             2.0
Korea                               4.7      India                                      3.3    Bangladesh                              1.8
Brazil
--_                                 4.5      Bangladesh                                 2.8    Pacific Isles                           1.7
Turkev                              3.1      Indonesia                                  2.8    Sudan                                   1.6
Eavpt                               2.8      Pakistan                                   2.4    Turkev                                  1.6
Yugoslavia                          2.5      Cambodia                                   2.1    Philippines                             1.4
Chile                               2.0      Korea                                      2.0    Costa Rica                              1.2
Indonesia                           1.9      Pacific Isles                              1.4    Pakistan                                1.1
Colombia                            1.6      Turkey                                     1.3    Honduras                                1.0
Tunisia                             1.1      Brazil                                     1.3    Peru                                    1.o
Laos
---                                 1.1      Jordan                                     1.1    Jamaica                                 0.9
Dominican Rep.                      1.1      Colombia                                   1.1    Indonesia                               0.8
Morocco                            1 .o      Philippines                                1.0    India                                   0.8
Taiwan
---                                1.o       Portugal                                   0.8    Dominican Rep.                          0.7
Jordan
-_  _...
       -__-~-                      0.9       Laos                                       0.8    Sri Lanka                               0.7
Israel                             0.8       Svria                                      0.6    Liberia                                 0.6
Zaire--
___..._.                           0.8       Morocco                                    0.5    Kenya                                   0.6
Thailand
_.--_                              0.8       Greece                                     0.5    Somalia                                 0.6
Bolivia                            0.7       Bolivia                                    0.5    Morocco                                 0.6
Venezuela
  . .---.--                        0.7       Sri Lanka                                  0.4    Bolivia                                 0.6
Nigeria                            0.6       Chile                                      0.4    Haiti                                   0.5
Afghanistan
-,---_~.-                          0.6       Nigeria                                    0.4    Portugal                                0.5
Philippines                        0.6       Peru                                       0.4    Seneca1                                 0.5
                                            aPercentages are annual averages for the period.

                                            Table V.3 provides similar analysis for Japan’s official bilateral eco-
                                            nomic assistance. It shows, for example, that between 1962 and 1969,
                                            Japan directed 49 percent of its average net annual official development
                                            assistance disbursements to Indonesia, India, Korea, the Philippines, and
                                            Pakistan. Between 1970 and 1979, 29 percent went to Indonesia, Korea,
                                            Philippines, Bangladesh, and Burma, and from 1980 through 1986,25



                                            Page 30                                              GAO/NSIAI&91~2fWS   Foreign   Assistance
                                                          Appendix V
                                                          Development     Assintance
                                                          Dlatrlbution   Patterns




                                                          percent went to China, Indonesia, Thailand, Philippines, and
                                                          Bangladesh.


Table V.3: Japan’s Net Dlrburrements                 of Economic Assistance to Major Recipients
Figures in percents
                      1962-1969                                              1970-1979                            1980-1986

Indonesia                                     13.5         Indonesia                         10.8   China                                   6.4
India                                         11.5         Korea                              6.1   Indonesia                               5.3
Korea                                          9.7         Philippines                        4.4   Thailand                                5.0
Philippines
  ..__..- .-.__--.. .--____                    8.4         Bangladesh                         4.3   Philippines                             4.5
Pakistan. . -_. -.-..--                        6.0         Burma                              3.3   Bangladesh                              3.7
Braz.i,.__           ._.II...--.--             5.2         Thailand                           3.2   Burma                                   3.1
Burma._..-- ..-_-.                             4.2         India                              3.0   Korea                                   2.8
Taiwan          __..._-_.----.- _              2.7         Egypt                              2.6   Pakistan                                2.3
Vietnam
    ..__._.._.         .^ -_. --. ...-         2.1         Pakistan                           2.5   Malaysia                                2.2
Thailand
   _._-. .- ___-....-__. ..--.-_---            1.4         Malaysia                           2.1   Egypt                                   1.9
Sri
 .^ Lanka
      _ l,_l_-__--. ^ ___--.-. -.-_--__-       0.6         Vietnam                            1.5   Sri Lanka                               1.6
Laos
__...-. .- ~. ..-._                            0.6         Brazil                             1.4   India                                   1.5
Malaysia                                       0.5         Iran                               1.3   Nepal                                   0.9
Cambodia                                       0.3         Sri Lanka                          1.0   Tanzania                                0.8
Chile
  __._,........__
               -~ ..._-           - ---        0.3         Iraq                               0.9   Turkey                                  0.8
Yugoslavia
      ._        ..^I_^.-.__.--.-.---.--        0.3         Peru                               0.8   Brazil                                  0.8
Mexico                                         0.2         Kenya                              0.5   Kenya                                   0.7
Iran         __ -_._..   -            ..-..    0.1         Zambia                             0.5   Mexico                                  0.7
Tanzania                                       0.1         Nigeria                            0.5   Bolivia                                 0.6
Kenya                                          0.1         Yugoslavia                         0.5   Zaire                                   0.6


                                                          Table V-4 shows that the remaining DAC members concentrated their
                                                          annual net disbursements on Reunion, Papua, New Guinea; Martinique,
                                                          Guadaloupe, and Algeria during 1962 through 1969; Reunion, Marti-
                                                          nique, Guadaloupe, Guiana, and French Polynesia from 1970 through
                                                          1979; and on Reunion, Martinique, French Polynesia, Guadaloupe, and
                                                          Guiana during the 1980s.




                                                          Page 31                                     GAO/NSIAD-91-2BFS   Foreigu   Assistance
                                                                                                                                             .
                                                    Appendix V
                                                    Development   A&stance
                                                    Dlstrlbution Patterns




Table V.4: MaJor Reciplentr of DAC Member Economic AsBistanCe,               Excluding Japan and the United States.
Figures in percents
                     1962-1969                                       1970-1979                                     1980-l 996

Reunion                                      7.0     Reunion                             13.9       Reunion                                 15.4
Papua New Guinea                             6.0     Martinique                           8.9       Martinique                               7.7
Martinique                                   5.0     Guadaloupe                           6.7       French Polynesia                         3.9
Guadaloupe                                   4.0     Guiana                               2.8       Guadaloupe                               3.5
Algeria                                      2.2     French Polynesia                     2.6       Guiana                                   2.7
India                                        1.8     New Caledonia                        2.6       New Caledonia                            2.3
Guiana                                       1.6     Paoua New Guinea                     2.0       India                                    1.6
Israel
    ..-..-__ ____--__ ---                    1.3     India                                1.8       Netherlands Antilles                     1.2
French Polynesia                             1.1     Surinam                              1.4       Indonesia                                1.1
Surinam                                      1 .o    Bangladesh                           1.0       Tanzania                                     1 .o
New      Caledonia
    . ..._^...
             -. -_-.--.. ...~                0.9     Netherlands Antilles                 1.o       Bangladesh                                   1.0
Yemen,       Democratic
_. ..___.-..-.   ._-.._-..I-._-..-Republic
                                  _____-     0.8     Indonesia                            1 .o      Papua New Guinea                             0.9
Pakistan
 _ ....__ ~..-._-. -...-___-__~-             0.8     St. Pierre and Micquelon             0.8       St. Pierre and Micquelon                     0.9
Zaire                                        0.7     Mayotte                              0.7       Turkey                                       0.9
Virgin
     -..-. Islands
            .-..._..___..__-- .._____-__     0.7     Tanzania                             0.7       Zaire                                        0.8
Netherlands Antilles                         0.7     Djibouti                             0.7       Mayotte                                      0.7
SpainI.__. -.. .-.--.--.-------__            0.6     Pakistan                             0.7       Morocco                                      0.7
Djibouti
     ..-. .-                                 0.6     Zaire                                0.7       Egypt                                        0.7
Comoros                                      0.6     Morocco                              0.6       Kenya                                    0.6

                                                    aNet disbursements

                                                    Donors other than DAC members distributed 35 percent of their average
                                                    annual net official development assistance disbursements to India, Paki-
                                                    stan, Brazil, Jordan, and Mexico during the 1960s; 13 percent to Egypt,
                                                    India, Syria, North Korea, and Jordan during the 1970s; and 13 percent
                                                    to India, Syria, Jordan, Bangladesh, and Morocco during the 1980s. (See
                                                    table V.S.).




                                                    Page 32                                           GAO/NSIAD-Sl-26Fs    Foreign   Assistance
                                                        Appendix V
                                                        Development   Aadihnce
                                                        Distribution Patterna




Table V.6: Major Reclplent8 of Non-DAC DonoW
Figures
.._.      in percents
   - __._--..~
                     1962-l 969                                          1970-1979                             1980-1986

India              ..~.                          19.2    Egypt                         4.0      India                                   3.7
Pakistan                                          5.7    India                         2.5      Svria                                   3.4
Brazil                                            4.1    Syria                         2.4      Jordan                                  2.7
Jordan
 . .. .       _. _-.------~                       3.5    North Korea                   2.1      Bangladesh                              1.5
Mexrco                                            2.1    Jordan                        1.4      Morocco                                 1.4
Turkev                                            2.0    Pakistan                      1.3      Pakistan                                1.3
Argentina
-.--..-_-         ..__ --__-__-                   1.8    Bangladesh                    1.1      Sudan                                   1.2
Chile
..-.-.- .._---.-                                  1.8    Oman                          0.7      China                                   1.0
Eavpt                                             1.8    Sudan                         0.7      Yemen                                   1 .o
Zaire                                             1.7    Yemen                         0.6      Bahrain                                 0.9
Colombia
 _- ..-___-  ..^._                                1.5    Morocco                       0.6      Oman                                    0.8
Lebanon
____  - __..___
              ..._.. --.-----                     1.3    Indonesia                     0.5      Guadaloupe                              0.7
Reunion                                           1.3    Bahrain                       0.4      Martiniaue                              0.7
Nigeria                                           1.1    Mauritania                    0.4      Somalia                                 0.7
Iran
  ..-. .-._ ._.. -               .._-----         1.1    Somalia                       0.4      Ethiopia                                0.6
Syria                                             1.0    Lebanon                       0.3      Egypt                                   0.6
Peru
  _. ..- ._. __...    -~ .-...- .----. .-_        0.9    Brazil                        0.3      Lebanon                                 0.6
Israel                                            0.9    Mexico                        0.3      Tanzania                                0.5
Kenya                  -. _..._~~..__-.-.         0.9    Yemen, Democratic Republic    0.3      Turkey                                  0.5
Korea.._ _ . . -. ..- -_-                         0.9    Zaire                         0.3      Sri Lanka                               0.4
Tanzania
    - .._           ^_- .-.. .~--I_       _...           Vietnam                       0.3      Reunion                                 0.4
Algeria
._. .._-. .__........._..___- .__--_.. -_____            Turkey                        0.2      Burma                                   0.4
Bolivia                                          13      Senegal                       0.2      Indonesia                               0.4
Madagascar                                       0.7     Burma                         0.2      Kampuchea                               0.4
Indonesia                                        0.7     Thailand                      0.2      Mali                                    0.4

                                                        ‘Net disbursements

                                                        Compared to earlier years, disbursements are no longer concentrated in
                                                        a few developing nations. In 1970 and 1971, for instance, the five
                                                        largest recipients of Japan’s assistance received 65 percent of its dis-
                                                        bursements, compared to 32 percent in 1987 and 1988. The five top
                                                        recipients in 1970 and 1971 received 32 percent of DX members’ dis-
                                                        bursements, as compared to 15 percent in 1987 and 1988. The share of
                                                        the top five global official development assistance recipients (Egypt,
                                                        India, Pakistan, Bangladesh, and Indonesia) in 1975 and 1976 was 32
                                                        percent, as compared to 21 percent a decade later.




                                                        Page 33                                   GAO/NSIAD-91-25FS   Foreign   Assistance
Appendix VI

Development Assistance
Geographical Distribution

                The geographical distribution of official development assistance,
                excluding emergency relief, is primarily determined by historical and
                commercial links between the donor and recipient, as well as the stra-
                tegic value of the recipient to the donor. For example, Australia and
                New Zealand allocate over 80 percent of their assistance to Oceania;
                Italy sends over 66 percent of its assistance to Africa, and the United
                States distributes over 45 percent of its assistance to the Middle East.
                Japan concentrates 79 percent of its development assistance in Asia and
                distributes the balance fairly equally to other regions.

                As shown in figure VI. 1, all DAC member nations have increased their
                bilateral assistance to Sub-Saharan Africa. Italy, France, and the Nordic
                Countries (Denmark, Finland, Norway, and Sweden) are the major bene-
                factors of Sub-Saharan Africa, with Japan, Australia, and New Zealand
                trailing all others that assist Sub-Saharan Africa. Africa also figures
                prominently in distribution of assistance from multilateral institutions,
                receiving approximately 60 percent of the European Community’s multi-
                lateral assistance.




                Page 34                                   GAO/NSIAD-Bl-26FS   Foreign   Assistance
                                        Appendix VI
                                        Development AasLetnnce
                                        Qeo&ra~hid DLstribution




Figure VI.1: Dlrtributlon ot Official
Development Arsistancs to Sub-Saharan
Africa                                  loo   Pm4ntago

                                         90



                                         70
                                         00
                                         60
                                         40

                                         30

                                         20

                                         10

                                          0

                                              197w70                   lBEoB1   1oBlvl           1087/W
                                              Fiscal Yom

                                                       United States

                                                       Japen
                                                       DAC
                                                       All Donora
                                                       UN Agendes


                                        The Middle East and North Africa received approximately 50 percent of
                                        U.S. bilateral development assistance in 1986 and 1986, an increase
                                        from about 32 percent in 1976 and 1976 (see fig. VI.2). Italy was the
                                        major donor to the Middle East in 1976 and 1976, but has since drasti-
                                        cally reduced its assistance.




                                        Page 36                                          GAO/NSJ.AWU-26F8   Foreign   As&tame
                                         Appendix VI
                                         Development  A~~btance
                                         Geographical Metrlbutlon




Flgure Vl.2: Distribution of Offlclal
Development Assistance to North Africa
and the Middle East                      loo    Polwnt8go

                                          90

                                          90

                                          m

                                          90

                                          60

                                          40

                                          30

                                          20

                                          10

                                           0

                                                197&76               lwoml
                                                Flaoal Ym

                                                      I United States

                                                         Japan
                                                         DAC

                                                      I All Donora
                                                      I UN Agendee

                                         Reported values include assistance   to the small European developing   nations.


                                         Virtually all DACmember countries have reduced the percentages of
                                         their development assistance to South Asia (see fig. VI.3). U.S. assis-
                                         tance, for instance, has fallen from 28 percent to 12 percent.




                                         Page   a6                                                 GAO/NSIAJHl-2SPS         Foreign   Assidance
                                        AppendJx VI
                                        Development  Assistance
                                        Geographical Retribution




Figure Vl.3: Dlrtrlbution of Official
Development Assistance to South Asia
                                        100   Porcontago

                                         90

                                         90

                                        m

                                        60

                                        60

                                        40

                                        30

                                        20

                                        10

                                         0

                                              1975m                  1wom   19&i/86           1987/88
                                              Fbcal years




                                                       DAC
                                                       All Donors
                                                       UN Agencies



                                        As shown in figure VI.4, the Far East and Oceania receive a large share
                                        of assistance from Australian and Japanese. France, Netherlands, and
                                        the United States are the main donors of economic assistance to Latin
                                        America and the Caribbean (see fig. VI.5).




                                        Page 37                                       GAO/NSIALbSl-25FS   Foreign   Assistance
                                                                                                                             ,

                                                                                                                                    I



                                         Appendix VI                                                                                    l

                                         Development  A.8sMance
                                         Geographical Distribution




Figure Vl.4: Distribution of Official
Development Assistance to the Far East
and Oceania                              1M)   Pwcentago

                                          80

                                          80

                                          m

                                          60

                                          60

                                          40

                                          80

                                          20

                                          10

                                           0

                                                107w76                     1880181   lQ85l86           1Q87l88
                                                Fiscal Yoan
                                               I       1
                                               ’     J     United States
                                                           Japan
                                                           DAC
                                                           All Donors
                                                           UN AQendes




                                         Page 38                                               GAO/NSIAD-91-26FS   Foreign       Assistance
                                        Apwndix VI
                                        Development   Addance
                                        Geographical Distibution




Flgure Vl.6: Distribution of Official
D&lopment      Assistance to Latin
America and the Carlbbean               100

                                         90

                                         80

                                         m

                                        60

                                         60

                                        40

                                        30

                                        20




                                              197MB                 1980/61
                                              Floeal Yom

                                                       United States
                                                       Japan
                                                       DAC
                                                       All Donon
                                                       UN Agendea




                    Y




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                                                                                                                    c
Appendix VII                                                                                                            I.

Development Assistance Sectorid Distribution


                                         Donors are guided by different aid philosophies in distributing their eco-
                                         nomic assistance. Some direct their assistance toward meeting the basic
                                         necessities of living; others address long-term economic development
                                         problems; and still others prefer to build institutional infrastructure
                                         such as stable government and improved educational opportunities.

                                         In 1986 and 1987,51.2 percent of U.S. development assistance was com-
                                         mitted for program assistance (commodity loans, budget support and
                                         general program loans); 4.1 percent to economic infrastructure (Le,
                                         transportation, communication, energy, etc.); 10 percent to agricultural
                                         production; 14 percent to food aid; and less than 1 percent to industry,
                                         mining, and construction. The United States led all major donors in per-
                                         centage commitments to food aid and program assistance, but trailed
                                         other donors in commitments to industry and economic infrastructure.
                                         In contrast, 21.8 percent of Japan’s official development assistance was
                                         committed to program assistance; 43.9 percent to economic infrastruc-
                                         ture; 7.6 percent to industry, mining, and construction; and 1.3 percent
                                         to food aid. These percentages are compared with those for DAC as a
                                         whole, multilaterals and overall global figures in table VII.1.

Table Vll.1: Development Assistance by
Major Purpose, 1966-l 987 Percent of                                 United
Total Commitments                        Type                        States   Japan    DAC’        Multilaterals        Global
                                         Social and Administrative
                                            infrastructure             20.2     15.4    24.7                 17.6            21.3
                                         Economic infrastructure        4.1     43.9    20.0                 28.5            24.1
                                         Agriculture                   10.0     10.0    12.1                 24.1            17.9
                                         Industry and Production        0.5      7.6     5.1                 14.2             9.8
                                         Food Aid                      14.0      1.3     5.4                  3.1             4.3
                                         Program Assistance            51.2     21.8    32.0                 12.5            22.6
                                         %xludes all DAC members.




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