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If you're interested in international development cooperation you are probably familiar with the OECD statistics on official development assistance or Odd the data on international aid published every year these statistics are the only source of official verified and comparable data on aid they are reported by 30 members of the OECD development assistance committee or the DAC and about a hundred other providers of development cooperation including other countries multilateral organizations and private foundations in April 2000 19 we are releasing preliminary figures for Odd in 2018 for the first time the figures are calculated using a new method the grant equivalent which replaces the previous method known as the flow basis this video explains in a nutshell what the changes are and why they were made Oh ta can take the form of grants where financial resources are provided to developing countries free of interest and with no provision for repayment or loans which have to be repaid and carry an interest although significantly lower than if developing countries had to borrow from commercial banks in the past under the flow basis grants and loans were valued in the same way by recording the flows of cash that were granted or the face value of loans that were lent to developing countries deducting any repayments on the loans it was simple, but it did not reflect actual efforts by donor countries after all a grant represents a bigger effort than alone and alone with a very low interest rate and a long repayment period represents a bigger effort than alone with a higher interest rate and a short repayment that is why the DAC decided a few years ago to adopt a new methodology to better reflect the actual effort by donor countries and their taxpayers only the grant equivalent of loans is now recorded as Odd the more generous the loan the higher the ODD value why change this new method should encourage donors to extend grants and softer loans to poor countries to put it simply when measured in a grant equivalent are relatively safe loan to a richer developing country will represent a lower Odd value than a riskier loan to a poorer country and any loan will represent a lower Odd value than a grant the new grant equivalent headline figures are no longer comparable with the historical series on a flow basis for transparency purposes the OECD will continue to publish the old data series and the repayments on loans, but Odd on a cash basis will no longer be referred to as the headline figure two items are still outstanding private sector instruments and debt relief private sector instruments or Psis are finance which donors use to encourage investment by private companies in developing countries some can count as Odd debt relief may also count as Odd until an agreement has been reached on how to report these two items PSI and debt relief may be reported according to the Odd cash basis method to sum up dag members have agreed on a methodology for counting the...
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