108/YOUR MONEY OR YOUR LIFE!
ODA is usually 'tied aid'. This means that funds given or loaned will
be used to buy products or services from the donor country. This has
led some critics to say the bilateral ODA is actually assistance
provided by industrialised countries to their exporters. Such a
critique is backed up by the fact that contracts between companies
from the North and countries of the South are usually guaranteed by
government bodies (as with Ducroire in Belgium) or private concerns
acting on behalf of the government (as with the COFACE in France,
which was privatised in 1994). In the US, the analogous body is the
Eximbank, in Germany it is Hermes, and in Britain it is the ECGD. If
the aid recipient in the South defaults on payment, these bodies step
in to compensate the exporter from the North with public money. In
general, the compensation also goes down in the books as ODA.
ODA has dropped by more than 10 per cent since 1994
(AlternativesEconomiques, March 1997), even though the Northern
heads of state present at the 1992 Rio Summit had promised to
increase annual ODA by S125 billion (Toussaint and Comanne,
19 94, p. 4). That would have meant tripling annual ODA volume. In
fact, according to a 19 9 7 UNICEF report, ODA has sunk to its lowest
level for 45 years (Lajornada, 22 July 1997, Mexico City).
ODA provided by industrialised countries and multilateral institu
tions to the Third World is very low. In 1991, it totalled S4 7.2 billion.
This figure is obtained by calculating the difference between aid that
has been provided - S 5 7.2 billion - and the sums that have been paid
by Third World countries to reimburse previous aid, about S10
billion (World Bank, 1994). ODA is far less than debt servicing
payments made by Third World countries, which come to about 200
billion dollars annually.
The More a Country in the South Spends on Arms, the
More ODA it Receives
One of the most striking examples of 'tied' bilateral aid is that of the
arms trade.
The more arms a Third World country buys, the more aid it
receives from industrialised countries. Industrialised countries have
an iron grip on most of the global arms trade. The US alone controlled
72.6 per cent of this trade in 1993. These are government-to-
government sales, which account for the lion's share of arms
spending in the world (Lajornada, 3 August 1994). Following the US