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Though global Official Development Assistance (ODA) jumped by 22 per cent to a record $287 billion in 2022, aid specifically targeted to developing regions dropped by 2 per cent or $4 billion, during the year under review.
Nevertheless, the big jump in overall aid missed the target of the Sustainable Development Goals (SDGs). In 2022, Development Assistance Committee (DAC) donors devoted 0.37 per cent of their gross national income (GNI) to ODA, which was around 50 per cent below the SDG 17.2 aid target of 0.70 per cent of donor countries’ GNI.
Only four DAC countries (Luxembourg, Sweden, Norway, and Germany) achieved the target. Had all members of the DAC met the target in 2022, an additional $143 billion could have been available worldwide.
A new report, ‘Aid under Pressure’, prepared and published by the United Nations (UN) on Monday, unveiled the figures and findings.
The report also showed that the aid flow witnessed a significant shift as grants fell by 8 per cent to $109 billion while concessional loans increased by 11 per cent to $61 billion in 2022.
The shift added additional fiscal strain on developing nations as the countries are still grappling with the economic aftermath of the COVID-19 pandemic, according to the report.
The report also highlighted the ‘problematic nature of increasing loan-based aid amid rising international interest rates and growing debt distress.’
It said that at present, nearly half of the world’s population, or around 3.3 billion people, lives in countries where governments spend more on debt interest payments than on health or education.
"This worsens debt sustainability, particularly for countries at high risk or in debt distress," the report says.
The UN report also showed that the share of grants in total ODA dropped to 63 per cent in 2022, marking the smallest percentage in two decades. The exception was the initial year of the Covid-19 pandemic, which saw a 62 per cent decline.
Historically, the peak year for grant-based ODA was 2006, bolstered by significant debt relief under initiatives such as the Heavily Indebted Poor Countries Initiative (HIPCI) and the Multilateral Debt Relief Initiative (MDRI).
The latest report pointed out two more shifts in ODA to developing countries in 2022.
It showed that multilateral donors increased their support during crises, but bilateral donors still account for the largest share of ODA. Between 2021 and 2022, ODA increased only from multilateral donors, while it declined for members of the Development Assistance Committee (DAC) and non-DAC bilateral donors. Nevertheless, bilateral donors remain the biggest source of aid to developing countries, according to the report.
It further showed that the need for crisis responses puts pressure on sustainable development financing.
Regarding Bangladesh, the UN report did not mention anything, as there was no country-specific focus. Nevertheless, statistics available from the country’s central bank showed that the stock of gross external debt stood at US$ 96.25 billion at the end of 2022.
It also showed that the stock of the public sector debt was around 75 per cent or $71.94 billion at the end of December 2022 whereas the rest 25 per cent or $24.31 billion was stock of the private sector external debt.
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