Official development finance

18. Official development finance (OF) includes official (multilateral and bilateral) debt and official grants.

(c) Overall financial flows have expanded by 184 percent in the 1990s, particularly from the private sector, while official financial flows have decreased by 27 percent.

Official financial flows have decreased by 27 percent since 1990.

However, these flows tend to be more volatile than official flows and pro cyclical.

Private capital flows have come to play the dominant role in development finance, eclipsing both official bilateral and multilateral flows.

The decline in official finance flows is due mainly to cutbacks of ODA in developed countries.

However, the distribution of private flows is far from even with many low income countries continuing to rely on official development finance.

17. The major types of long term financial flows to Africa can be broadly categorized as official development finance (OF), foreign direct investment (FDI), and private loans.

Official development assistance, innovative sources of finance and debt

The only activities clearly identified are those which receive public funds and are therefore classified as part of PDA.

OF remains the major source of resource flow into Africa, particularly since Africa s access to international capital markets is limited.

In its second report, Guatemala indicated that the freezing of funds is done by a judge at the request of the Office of the Public Prosecutor.

Official flows make up almost half of the total financial transfer to these countries, though the share is declining (see table 5).

In the OECD official flows to countries with economies in transition are considered as official aid rather than official development assistance.

Official development assistance (ODA) is the most important source of financing for the poorest countries.

Most of those non core funds do not fall into the category of ODA.

Official development assistance (ODA) remains the main source of external finance for landlocked developing countries.

The share of OF in aggregate net resource flows declined from a high of about 98 per cent in 1993 to 74 per cent in 1996 (table 2).8

In many countries, ODA finances up to 80 per cent of the development budget.

9 IMF, Official financing of developing countries , February 1998.

However, the trend had not been universal and official development assistance as a proportion of such resources had barely risen.

ODA financed development in sectors not reached by private flows, and the 0.7 per cent target have lost none of their importance.

In 1990, official development finance accounted for 56 percent of the total amount of financial flows, while in 1996 this percentage was 14 percent mainly due to the strong growth of private capital flows.

These resources could be complemented by external financing through international trade and investment and official development assistance.

Sub theme 3 Official development assistance, innovative sources of finance and debt

The situation of official development assistance as a source of financing was also getting worse.

Some of the new sources of funding from ODA could include newly industrialized countries

Educating publics and officials as to how the financial system can be abused to finance terrorism and move criminally derived funds.

We also note that analyses of the flow of funds and the development potential of the transfer of foreign workers' funds, which should not be confused with official development assistance flows, continue to be the subject of particular attention.

Except for a slight increase in medium term and long term borrowing, the main categories of financial flows did not exhibit any major deviation from recent trends, i.e., there were smaller official inflows and there was very little foreign direct investment.

In several cases, public funds, especially those established in addition to present official development assistance and contributions to the financial mechanism of the Convention, are made available to activities.

Lieutenant Kincaid.

Lieutenant Kincaid?

In addition, financing could be provided by public sector organizations such as countries' official development assistance (ODA), the GEF or the GM.

With respect to the financing of official development assistance, the Millennium Project report notes that we would still have a financing gap even if existing commitments for financing official development assistance were met over the next five years.

That could not happen, however, without adequate private and official financial transfers.

It should be noted that international funds derive from increases of official development assistance (ODA) and from developing other innovative financing mechanisms.

For many countries, official development assistance could not be replaced by private capital flows.

It is clear that the degree of official funding being disbursed in response to debt crises has escalated rapidly and threatens to become unsustainable.

The three sub themes were (i) Policies and strategies (ii) Trade, investment and private flows and (iii) Official development assistance (ODA), innovative sources of financing and debt.

Despite an increase in private capital flows, official development assistance remains an essential source of external funding.

In the 1990s, while OF was declining, private flows (debt and non debt creating) into developing countries surged continuously, from 42 billion (43 per cent of net long term flows) in 1990 to 247 billion (87 per cent of total flows) in 1996, and to an estimated 256 billion (83 per cent of total flows) in 1997.

It was pointed out that ODA ensures external financial flows to countries that have difficulties in mobilizing domestic resources and in attracting foreign direct investment.

The amount of Japan's official development assistance directed to projects and programmes for disaster reduction has been at the highest levels among donors, with some 300 million in fiscal year 2003.