Magazine article New Internationalist

Upside-Down Aid

Magazine article New Internationalist

Upside-Down Aid

Article excerpt

It has become commonplace to talk about aid as a problem that needs to be phased out over time. Even Liberia, one of the poorest countries in the world, plans to have shaken off aid dependency in 10 years' time. But researchers at the Overseas Development Institute (ODI) suggest the desire to do away with aid is misguided. They propose a fresh way of looking at donor funds.

We would do better, say researchers Jonathan Glennie and Annalisa Prizzon, to think about donor money in relation to the receiving country's overall income levels - not in terms of how much is dished out.

Traditionally, aid is counted in proportion to the Gross National Income (GNI) of the giving country - the 0.7 per cent target for rich nations. While this measure is useful politically, the benchmark fails to tell us what impact the money is having.

The ODI paper says this categorization should be up-ended. We should look instead at what percentage of a receiving country's GNI is made up of aid - its 'aid-to-GNI ratio'. …

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