What is aid?
When we talk about aid in Norway, we generally mean public funds that support social and economic development in poorer countries (low-income countries). The purpose is broad, and there is therefore an ongoing discussion about what aid actually is.
International standard – ODA
Among both providers and recipients of aid, opinions often differ on what drives development, when, and how.
To address this, the Development Assistance Committee (DAC) has established an international standard for what may be counted as aid. This standard is called Official Development Assistance (ODA). This is the international term for aid.
DAC is the development committee of the Organisation for Economic Co-operation and Development (OECD), and the most important forum for donor countries. Most traditional donor countries, including Norway, are members.
Increasing welfare
According to the DAC definition, the main objective of aid is to increase economic and social development. This happens through support in various forms. It can include basic services for the population, large and small development programmes, budget support to governments, material assistance, different kinds of activities, or services based on knowledge and expertise that help improve welfare in one or more developing countries.
Developing countries are countries defined as low- or middle-income countries. The list of countries eligible to receive ODA is updated every three years. Countries that have been high-income countries for three consecutive years are removed from the list.
Many different forms of support
Provided that aid aligns with the objective of contributing to improved welfare (well-being) in developing countries, it is up to the donor country to determine the content of the support. Ever since the OECD’s Development Assistance Committee was established in 1960, there has therefore been a large number and a large variety of aid projects.
Different themes, different projects, different initiatives and, not least, different budgets. That is the nature of aid. New conflicts and development trends in low-income countries have led to changing priorities over time. New ideas and knowledge, or shifts in political direction in donor countries, can change these priorities.
Today, ODA includes everything from the construction of wells and pipelines to climate action, guarantee schemes for private investment, support for democracy and institutions, and the protection of vulnerable groups and minorities.
Military activities and expenditures are, for the most part, not counted as aid, even if military efforts may aim to protect peace and stability in developing countries.
Norway provides limited direct support to individual countries, but instead supports projects through organisations such as the UN, civil society organisations, and development banks.
Target of 0.7 per cent
In 1970, the United Nations General Assembly adopted a resolution that all wealthy countries should aim to allocate 0.7 per cent of their Gross National Income (GNI) to aid, with the target to be achieved by 1975. Sweden, the Netherlands, Norway and Denmark had reached this target by 1980, but the average among DAC countries has never exceeded 0.4 per cent.
Regardless of which government is in office, Norway has long had a target of allocating one per cent of GNI to aid.
Development assistance and humanitarian aid
An important principle within ODA is the distinction between long-term development assistance and humanitarian aid. Long-term development assistance should contribute to economic growth and poverty reduction. Ideally, political and professional assessments in the donor country should harmonise with the political priorities of the partner/recipient country and be well coordinated with other donor countries.
Humanitarian aid, by contrast, is short-term and needs-based, and should be impartial and independent of the priorities of national authorities.
Aid in transition
Traditional aid, as defined by ODA, is under pressure. Major donor countries such as the United States, the United Kingdom, Germany and France have made significant cuts to their aid budgets.
Internationally, and here in Norway, there is clear expectations to make aid more efficient and better targeted. To deliver aid, it is necessary to innovate through partnerships and collaboration with private sector actors.
Rising levels of conflict and climate change are important development trends that are contributing to the reshaping of traditional aid.