Development aid

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Development aid by rich countries is an important chance to help close the gap between poor and rich countries. This gap is currently so huge, that if the GNP per head of Ethiopia would grow at an astronomic 10% per year, it would need 65 years to attain the one Luxembourg has right now¹ (actually the GNP of Luxembourg is growing faster than the one of Ethiopia).

The by far largest share of international development aid comes from OECD countries² . Development aid is provided from one country to another or through multilateral organisations (UNDP, WHO, World Bank, OECD, EU). Besides governmental aid also private aid is provided through organisations of various size. An often important role for the economic development is played by foreign private investments, which should not be however confused with development aid.

Almost all rich countries provide some form of development aid, which can take different forms, like:

• emergency aid in case of famine crisis or natural catastrophe

• credits for the development of local infrastructure like communications or transports

• grant programs for professionals who need additional training in the donor country

• exchange and partnerships between cities or regions

In a historic perspective, development aid tends to diversify, because the experience until now has been disappointing: the gap between poor and rich countries has been growing larger for decades. So there is a need to try out new ways and find better solutions.

Lately the perspective on development has changed from a mainly economic one to a more complete one, encompassing aspects of equity and justice, income distribution, social development (basic education and health care), efficient and transparent government, environment protection and human rights³.

Unlike with economic development, this holistic understanding of development is less uncontroversial. There are various reasons for this.

First is that if economic growth is accepted world-wide as something basically „good“, a multilateral development is more difficult to understand and agree upon. Governments in underdeveloped countries sometimes feel threatened, if development aid makes some social groups less dependent upon government's goodwill.

Another reason is that western development experts who have worked in classic projects of technical cooperation, building roads and hospitals, are sometimes reluctant to get involved in more complex projects with various, sometimes conflicting local stakeholders.

In Eastern Europe the bulk of development aid currently is provided in one of the following ways:

• private humanitarian aid by nongovernmental initiatives, including local authorities

• financial help for macroeconomic stabilisation (like fighting inflation or foreign trade deficits)

• infrastructure projects

• projects for institutional reforms (like helping the authorities to be more efficient and more transparent)

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