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MDG 8: Develop a Global Partnership for Development

Key trends

Net ODA from all sources to developing members of the Asian Development Bank (ADB) increased marginally by 1.7% to $33.94 billion in 2012. ODA refers to net flows of long-term public and publicly guaranteed debt from official creditors and grants (including technical cooperation grants). The flows to developing ADB member economies were about 17.4% of the official flows going to all developing economies in 2011–2012, a slight increase from 17.1% in 2010 (Regional Trends and Tables, Table 4.16). Figure  8.1 shows ODA to developing non-ADB and ADB member economies between 2005 and 2012.

The largest recipients of ODA in 2012 were Afghanistan ($6.7 billion), Viet Nam ($4.7 billion), and the People’s Republic of China ($3.3 billion), collectively accounting for 43% of official flows to developing member economies. Other member economies receiving substantial amounts include Pakistan ($3.0 billion), India ($2.6 billion), and Bangladesh ($2.4 billion).

Less than 20% of bilateral ODA is allocated to basic social services. Figure 8.2 shows the proportion of ODA that goes to basic social services—education,

Millennium Development Goal (MDG) 8 has six targets. The first three are the focus of this section. Two involve the provision of official development assistance (ODA).

8.A: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system.

8.B: Address the special needs of the least developed countries.

8.C: Address the special needs of landlocked developing countries and small island developing states.

Target 8F, which refers to the availability of new technologies (especially information and communications) is discussed in Part III, the section titled “Transport, Electricity, and Communications”.

Snapshots

• Net official development assistance (ODA) to developing member economies increased by 1.7% to $34 billion in 2012, with Afghanistan being the largest recipient with $6.7 billion. Most donor economies allocate less than 20% of bilateral ODA to basic social services.

• The share of untied ODA increased from 49% in 2011 to 52% in 2012, but remained constant in value terms over 2011–2012.

• Merchandise exports from Asia and the Pacific grew by 1.9% in 2012 and in 2013, 60% higher than that in 2009, when exports dipped due to the global financial crisis.

• Debt–service ratio was highest in Central and West Asia at 18% in 2012, but all other subregions had reduced their debt ratios to single-digit levels.

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The share of untied ODA increased from 49% in 2011 to 52% in 2012. ODA is untied if the recipient country is free to use the funds to buy goods and services anywhere, rather than restricted to purchasing from the donor country. Figure 8.3 shows the amount of untied ODA and total net ODA. While the share of untied ODA to net ODA increased from 2011 to 2012, the value remains constant at about $65 billion due to a decrease in net ODA over the two years. The 2012 share of untied aid was still below the 66% share of untied aid in 2008.

ODA as a proportion of gross national income (GNI) declined in most landlocked and small island economies. The Asia and Pacific region includes 12 landlocked developing members and 12 small island economies. Landlocked economies are often disadvantaged by high transport costs due to lack of direct access to port facilities. Small island economies usually face development challenges due to narrow resource bases, fragile natural environments, lack of economies of scale in production and domestic markets, and high transport costs in international trade. The ODA-to-GNI ratio indicates the importance of ODA relative to the size of the economy.

ADB = Asian Development Bank.Source: RT 4.16.

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2005 2006 2007 2008 2009 2010 2011 2012

Developing non-ADB member economies Developing ADB member economies

Figure 8.1: Official Flows from All Sources to Developing Economies, 2005–2012

$ million (current)

ODA = o�cial development assistance.Source: Table 8.2.

0 5 10 15 20 25 30 35 40 45

Greece Austria

Japan Portugal

France Germany

Finland Italy

Norway Denmark

Switzerland Sweden

New Zealand Spain

Australia Belgium

The Netherlands Luxembourg

United Kingdom Ireland

Canada United States

2012 2005

Figure 8.2: Donor Allocation to Basic Social Services, 2005 and 2012

(percentage of ODA)

primary health care, nutrition, safe water, and sanitation. In 2012, the donor economies, except for five, allocated less than 20% of ODA to basic social services. The United States and Canada had the highest allocation for basic social services at 39% and 28%, respectively.

ODA = o�cial development assistance.Source: Table 8.2.

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2005 2006 2007 2008 2009 2010 2011 2012

Total Net ODA Total Untied ODA

Figure 8.3: Total and Untied Bilateral ODA, 2005–2012$ million (current)

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Among the landlocked economies, ODA contributed more than 40% of Afghanistan’s GNI in recent years until 2010, and dropped to 38.2% of GNI in 2011 (Figure 8.4 and Table 8.4). Aside from Afghanistan, for all other recipient economies, ODA as a percentage of GNI was under 10% in 2011 and 2012.

Compared to landlocked economies, other than Afghanistan, small island economies had much higher ODA-to-GNI ratios (Table 8.4 and Figure 8.5). In 2012, ODA was 43.6% of the GNI of Solomon Islands and about a quarter to a third of GNI in Kiribati, the Marshall Islands, and the Federated States of Micronesia. Fiji and the Maldives, with ODA-to-GNI ratios of 3%, had the lowest dependence on ODA among the 12 island economies.

Merchandise exports from Asia and the Pacific grew by 1.9% in 2012 and in 2013 (Regional Trends and Tables, Table 4.8). After falling during the global financial crisis in 2009, merchandise exports

GNI = gross national income, Lao PDR = Lao People’s Democratic Republic, ODA = o�cial development assistance. Source: Table 8.3.

0

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011 2012

Afghanistan Armenia Azerbaijan Bhutan Kazakhstan Kyrgyz Republic Lao PDR Mongolia Nepal Tajikistan Turkmenistan Uzbekistan

Figure 8.4: ODA Received by Landlocked Developing Economies as Proportion

of their GNI, 2005–2012(%)

rebounded by 31% in 2010 and grew by 18% in 2011. By 2013, merchandise exports were 60% higher than that in 2009. Figure 8.6 shows total exports by subregion. East Asia, which includes the People’s Republic of China, accounted for the largest share (two-thirds) of the region’s total exports in 2013, followed by Southeast Asia at about a quarter. The other subregions had much smaller shares: South Asia, 6.8%; Central and West Asia, 2.9%; and the Pacific, 0.1%. Exports have been a driver of economic growth in many economies in the region and have also contributed to easing the external debt burden of developing economies.

Debt burden of developing member economies generally declined to single-digit debt–service ratios in 2012. The debt–service ratio is the total external debt as a percentage of exports of goods and services, excluding workers’ remittances. Lower external debt burdens give governments more fiscal space to increase spending on development (such as on infrastructure) and social services, improve

0

10

20

30

40

50

60

70

2005 2006 2007 2008 2009 2010 2011 2012

Fiji Kiribati Maldives Marshall Islands FSM Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Vanuatu

FSM = Federated States of Micronesia, GNI = gross national income, ODA = o�cial development assistance.Source: Table 8.3.

Figure 8.5: ODA Received by Small Island Developing States as Proportion

of their GNI, 2005–2012(%)

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national creditworthiness, and reduce the economy’s vulnerability to external shocks. Economic growth and the expansion of trade, better debt management and debt restructuring, and debt relief have reduced the burden of debt service for many developing economies. Figure 8.7 shows the debt–service ratio of the subregions.

Debt–service ratio had been highest in Central and West Asia, though it declined by about half from a high of 34% in 2010 to under 20% in 2012. Except for East Asia, where the debt–service ratio has historically been low at 2%–3%, the other subregions had made progress in reducing their debt–service ratios from 10% or higher in 2007 to single-digit levels in 2012.

Source: Economy sources.

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500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

East Asia Southeast Asia South Asia Central and West Asia The Pacific

Figure 8.6: Total Exports, 2005–2013$ million (current)

Source: Derived from RT 4.22.

-

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010 2011 2012

Central and West Asia East Asia South Asia Southeast Asia The Pacific

Figure 8.7: Debt–Service Ratio, 2005–2012(%)

Data issues and comparability

Data on ODA are collected and verified by the Secretariat of the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD–DAC) from its 23 members. Part of the difficulty in monitoring MDG 8 is the lack of quantitative targets in some areas and of individual country data to track commitment adequately. Effective monitoring of commitments associated with or made under MDG 8 requires a methodology that helps to maintain a current inventory of the different international initiatives and ways to measure the degree of compliance with commitments.

For the proportion of ODA allocated to basic social services, data are compiled on a project basis according to the most relevant sectors; hence, basic social services expenditures in other sectors are not captured. In addition, the data on the tying status of ODA and other official flows, as reported to OECD, are incomplete.

128 Key Indicators for Asia and the Pacific 2014Goal 8 Targets and Indicators

Table 8.1: Target 8.A—Develop further an open, rule-based, predictable, non-discriminatory trading and financial system

Development Assistance Committee Members8.1 Net ODA to the least developed countries, as percentage of OECD/DAC donors’ gross national income

1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 Australia 0.06 0.06 0.08 0.06 0.07 0.08 0.08 0.08 0.10 0.09 0.11 Austria 0.06 0.06 0.06 0.08 0.08 0.07 0.07 0.09 0.12 0.07 0.06 Belgium 0.19 0.10 0.11 0.16 0.18 0.17 0.19 0.20 0.31 0.20 0.14 Canada 0.13 0.08 0.05 0.10 0.10 0.11 0.13 0.11 0.15 0.11 0.11 Denmark 0.37 0.30 0.36 0.32 0.32 0.34 0.32 0.35 0.35 0.32 0.31 Finland 0.24 0.09 0.10 0.13 0.14 0.15 0.15 0.19 0.20 0.17 0.18 France 0.19 0.11 0.09 0.11 0.12 0.11 0.11 0.12 0.14 0.13 0.10 Germany 0.12 0.07 0.07 0.07 0.09 0.09 0.10 0.10 0.11 0.10 0.11 Greece a ... ... 0.03 0.04 0.04 0.04 0.05 0.04 0.04 0.02 0.02 Ireland 0.06 0.12 0.15 0.21 0.28 0.28 0.30 0.28 0.29 0.27 0.24 Italy 0.13 0.04 0.05 0.08 0.04 0.06 0.07 0.05 0.06 0.07 0.04 Japan 0.06 0.05 0.06 0.05 0.08 0.06 0.05 0.06 0.08 0.07 0.08 Korea, Republic of – – 0.01 0.03 0.01 0.02 0.03 0.03 0.04 0.04 0.05 Luxembourg 0.08 0.12 0.22 0.28 0.34 0.36 0.38 0.39 0.40 0.36 0.37 The Netherlands 0.30 0.23 0.22 0.27 0.20 0.24 0.24 0.21 0.24 0.17 0.15 New Zealand 0.04 0.05 0.07 0.07 0.08 0.07 0.09 0.09 0.08 0.08 0.09 Norway 0.51 0.35 0.27 0.35 0.35 0.34 0.33 0.33 0.34 0.31 0.27 Portugal 0.14 0.15 0.15 0.09 0.10 0.10 0.10 0.10 0.13 0.15 0.09 Spain 0.04 0.04 0.03 0.07 0.06 0.08 0.10 0.12 0.12 0.07 0.04 Sweden 0.35 0.22 0.24 0.31 0.29 0.30 0.32 0.35 0.30 0.35 0.29 Switzerland 0.13 0.10 0.10 0.10 0.10 0.11 0.10 0.13 0.11 0.12 0.11 United Kingdom 0.09 0.07 0.11 0.12 0.16 0.15 0.16 0.18 0.20 0.21 0.19 United States 0.04 0.03 0.02 0.05 0.05 0.04 0.06 0.07 0.07 0.08 0.07

... = data not available at cutoff date, − = magnitude equals zero, DAC = Development Assistance Committee, ODA = official development assistance, OECD = Organisation for Economic Co-operation and Development.

a Greece is not an ADB member economy.

Source: United Nations. Millennium Development Goals Indicators Database. http://millenniumindicators.un.org/unsd/mdg/Data.aspx (accessed 8 July 2014).

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Table 8.2: Target 8.B—Address the special needs of least developed countries

Development Assistance Committee Members8.2 Proportion of total bilateral, sector-allocable ODA of OECD/DAC donors to basic social services

(basic education, primary health care, nutrition, safe water, and sanitation)

1996 2000 2005 2006 2007 2008 2009 2010 2011 2012 Australia 10.3 21.8 11.1 9.1 9.7 18.5 14.5 14.6 15.6 16.8 Austria 4.9 3.4 12.8 12.8 9.3 4.7 6.4 3.1 2.7 1.7 Belgium 10.6 17.9 19.3 21.2 21.2 16.7 13.2 12.2 10.3 17.1 Canada 6.3 18.3 32.3 30.9 32.0 19.2 30.4 18.3 42.6 28.5 Denmark 12.6 10.3 11.7 22.9 10.1 12.6 21.3 10.8 11.0 15.0 Finland 5.8 11.5 9.9 10.3 14.0 11.2 5.8 8.4 8.1 10.0 France 0.7 3.7 1.9 4.4 6.1 10.3 11.3 8.4 8.4 8.6 Germany 8.0 11.7 9.2 11.4 10.0 7.7 8.7 6.1 7.4 9.2 Greece a ... ... 19.0 20.4 15.1 3.7 11.2 6.6 0.1 – Ireland ... 20.6 31.4 42.3 35.6 28.7 32.7 23.4 29.2 23.2 Italy 10.4 13.1 10.6 5.5 12.2 9.1 13.4 12.7 12.5 10.1 Japan 2.2 8.8 3.6 4.0 4.2 2.7 18.8 7.1 3.2 6.0 Korea, Republic of ... ... ... 18.0 10.7 13.9 6.7 4.6 8.9 8.0 Luxembourg ... ... 26.2 32.0 33.9 34.4 36.1 34.9 24.1 21.8The Netherlands 14.0 23.6 23.3 38.5 18.9 25.9 11.9 7.7 13.9 17.3 New Zealand ... ... 35.8 18.3 32.0 22.8 27.7 16.6 8.8 15.8 Norway 13.2 10.2 13.6 21.7 21.0 13.6 22.5 11.2 13.5 10.9 Portugal 11.4 2.5 2.6 5.2 3.4 3.0 3.6 6.7 7.5 7.1 Spain 6.9 16.1 21.0 13.7 15.5 20.7 24.4 15.1 10.3 16.1 Sweden 10.3 16.9 15.6 19.7 13.3 11.7 10.8 12.4 14.3 15.6 Switzerland 5.9 18.8 6.7 5.8 5.6 9.4 9.5 11.0 18.0 15.3 United Kingdom 28.8 32.4 24.7 35.6 32.8 19.0 21.2 14.3 11.9 22.2 United States 25.0 18.6 23.5 26.6 33.4 33.2 34.9 34.2 40.4 39.1

... = data not available at cutoff date, − = magnitude equals zero, DAC = Development Assistance Committee, ODA = official development assistance, OECD = Organisation for Economic Co-operation and Development.

a Greece is not an ADB member economy.

Source: United Nations. Millennium Development Goals Indicators Database. http://millenniumindicators.un.org/unsd/mdg/Data.aspx (accessed 8 July 2014).

130 Key Indicators for Asia and the Pacific 2014Goal 8 Targets and Indicators

Table 8.2: Target 8.B—Address the special needs of least developed countries

Development Assistance Committee Members8.3 Proportion of bilateral official development assistance of OECD/DAC donors that is untied

1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 Australia 32.8 ... 77.4 71.9 91.7 98.4 96.7 90.8 ... 100.0 100.0 Austria 32.1 25.0 59.2 88.6 89.4 86.4 81.6 55.2 67.7 60.3 47.7 Belgium ... ... 85.7 95.7 90.7 92.0 91.9 95.5 93.2 95.9 64.3 Canada 46.6 40.8 24.9 66.5 63.0 74.6 90.8 98.3 99.2 99.1 100.0 Denmark ... 61.3 80.5 94.5 95.3 95.5 98.5 96.6 93.5 97.2 96.1 Finland 31.5 75.8 89.5 95.1 86.5 90.7 92.3 90.3 84.3 88.9 96.5 France 63.6 58.4 68.0 94.7 95.6 92.6 81.9 89.5 96.6 95.6 97.1 Germany 61.8 60.3 93.2 93.0 93.3 93.4 98.2 97.1 96.0 92.9 98.1 Greece a ... ... 23.5 73.6 39.1 42.3 37.9 49.8 62.2 93.2 88.2 Ireland ... ... ... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Italy 21.7 59.8 38.2 92.1 77.0 59.8 78.0 56.2 58.5 69.9 81.6 Japan 88.9 96.3 86.4 89.7 95.6 95.1 96.5 94.8 93.7 94.1 86.0 Korea, Republic of ... ... 0.8 2.6 1.9 24.7 35.8 48.4 35.7 51.1 55.1 Luxembourg ... ... 96.7 99.1 100.0 100.0 100.0 100.0 99.0 98.9 98.7 The Netherlands 55.5 78.9 95.3 96.2 100.0 81.1 93.2 80.8 93.2 96.5 98.2 New Zealand 100.0 ... ... 92.3 90.2 87.8 92.7 90.1 89.4 97.2 96.6 Norway 61.3 77.0 97.7 99.6 99.8 99.9 100.0 100.0 100.0 100.0 100.0 Portugal ... 98.1 98.2 60.7 61.3 43.2 76.4 28.1 32.9 11.9 10.2 Spain ... ... 47.2 86.6 82.8 89.1 69.1 76.6 76.2 93.5 83.8 Sweden 87.5 93.9 85.4 98.3 100.0 100.0 99.9 99.9 100.0 96.2 99.3 Switzerland 78.5 91.3 93.6 98.0 96.3 97.8 97.3 99.2 74.0 98.0 97.7 United Kingdom ... 86.2 91.5 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 United States ... ... ... ... 63.5 68.5 74.7 69.8 69.5 67.4 70.5

... = data not available at cutoff date, DAC = Development Assistance Committee, OECD = Organisation for Economic Co-operation and Development.

a Greece is not an ADB member economy.

Source: United Nations. Millennium Development Goals Indicators Database. http://millenniumindicators.un.org/unsd/mdg/Data.aspx (accessed 8 July 2014).

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Table 8.3: Target 8.C—Address the special needs of landlocked developing countries and small island developing states

ADB Regional Members8.4 ODA received in landlocked developing countries and in small island developing states

as a proportion of their gross national incomes1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012

Landlocked Developing EconomiesAfghanistan ... ... ... 45.22 41.96 50.43 47.84 49.93 40.32 38.18 ...Armenia 0.13 (1991) 14.84 10.99 3.38 3.27 3.69 2.49 5.97 3.57 3.74 2.62Azerbaijan 0.60 (1993) 3.93 2.79 1.87 1.13 0.81 0.54 0.57 0.32 0.51 0.57Bhutan 16.36 26.79 12.10 11.15 11.36 7.61 7.08 10.28 8.75 8.24 9.63Kazakhstan 0.07 (1993) 0.32 1.11 0.44 0.24 0.23 0.29 0.29 0.17 0.13 0.07Kyrgyz Republic 0.91 (1992) 17.51 16.67 11.29 11.15 7.32 7.26 6.96 8.55 9.26 7.77Lao PDR 17.22 17.46 16.90 11.31 11.15 9.72 9.55 7.39 6.16 5.07 4.71Mongolia 0.52 14.66 19.17 8.88 6.08 5.77 4.53 8.46 5.37 4.43 4.68Nepal 11.62 9.73 7.00 5.20 5.78 5.78 5.50 6.57 5.09 4.64 3.93Tajikistan 0.62 (1992) 5.50 14.99 11.26 8.84 6.11 5.65 8.32 7.84 5.40 5.69Turkmenistan 0.97 (1993) 1.23 1.29 0.40 0.41 0.23 0.10 0.21 0.22 0.15 0.12Uzbekistan 0.01 (1992) 0.63 1.37 1.19 0.88 0.73 0.63 0.56 0.57 0.43 0.48

Small Island Developing EconomiesFiji 3.84 2.30 1.70 2.17 1.87 1.53 1.29 2.47 2.49 2.14 2.80Kiribati 41.87 16.79 16.24 17.45 16.91 14.80 13.82 16.19 10.70 27.14 26.82Maldives 10.76 15.24 3.22 8.02 3.02 2.88 3.40 1.94 6.08 2.44 3.08Marshall Islands ... 25.44 38.88 31.86 29.89 27.03 27.19 30.52 45.89 38.35 33.98Micronesia, Federated States of 29.28 (1993) 33.04 42.39 40.67 40.44 42.02 34.40 40.58 40.69 41.24 32.84Palau 0.01 (1992) 145.14 29.11 13.63 21.01 12.40 23.45 20.28 14.92 14.86 7.29Papua New Guinea 13.32 8.47 8.33 5.89 5.66 5.18 3.81 5.24 5.52 5.09 4.43Samoa 28.94 22.31 11.32 11.22 11.24 8.27 7.39 16.32 26.62 16.10 18.84Singapore -0.01 0.02 ... ... ... ... ... ... ... ... ...Solomon Islands 22.02 14.87 15.67 47.77 44.37 44.76 40.68 43.51 61.38 49.61 43.60Timor-Leste ... ... 71.56 21.84 16.13 14.23 8.44 8.33 9.20 6.62 5.83Tonga 25.54 18.83 9.85 12.08 7.14 10.01 7.26 12.08 18.90 21.37 16.22Vanuatu 30.46 21.02 17.68 10.70 11.70 11.37 15.30 17.58 15.95 12.03 13.23

... = data not available at cutoff date, Lao PDR = Lao People’s Democratic Republic, ODA = official development assistance.

Source: United Nations. Millennium Development Goals Indicators Database. http://millenniumindicators.un.org/unsd/mdg/Data.aspx (accessed 8 July 2014).