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Economic Aid to Developing Countries - The Stats

World economics has been an interest of mine for a long time and I will start blogging about it here. Questions like how and if the US can continue its dominance and prosperity, what role China and India will play in the world and what the future holds for the likes of Ethiopia and Eritrea fascinate and worry me quite a bit. To the best of my non-economist abilities, I will address these questions in the future.

My first entry derives some general conclusions from statistics on economic aid from developed countries to developing and third-world countries that I found on BBC.


It is no surprise the US leads in this category and a better measure of generosity would be one where the amount of aid is given as a percentage of the country's GDP or revenues. Considering this aid is coming from governments as opposed to NGO's, it would be more informative to calculate this aid as a percentage of a government's revenue. Unfortunately, what BBC reports is the amount of aid as a percentage of a nation's GDP. Oh well ... In fact using the GDP instead of revenues is not so bad considering these countries unanimously practice free market economy despite perhaps slight differences in the role of the central government and taxation rules.


Hail the Scandinavians (and the Dutch)!! I have always known they were most devoted to helping mobilize poor countries out of the hole. What's more amazing is that these countries have had no colonial ambition or base in the world, yet they do the most to help. I was mildly impressed with France and England's contributions, but it probably has a lot to do with their close relationships with their vast ex-colonies. On the flip side, countries like Germany, Japan, US and Italy, who did not have a great colonial base and ambitions in the early 1900s contribute a much smaller portion.

While I lack more complete statistics to comment much on most of these countries, the ($19 billion) 0.16% the US gives is atrocious . In comparison, the government tax revenue is $2200 billion, its GDP is $13000 billion, its defense budget is $350 billion, the war in Iraq costs $100-200 billion every year, and Bush has given 10 year tax cuts of $120+ billion/year ... and the list goes on. So, helping poorer countries does not seem to be much of a priority for the US government, unless there is a political motivation as is the case with Egypt and Israel who get $3 billion/year aid from the US.

I believe the American people are much more generous than their government and I look forward to stats showing the contribution of American NGOs to poor countries.


Well, it is good to see increasing aid even though the rate of its growth and its real impact in the face of inflation and other factors is hard to gauge for me.


It is encouraging the aid is going to places that need it most, namely Africa and Asia.
Comment 4


Way to make an embarrassing entrance, Ethiopia and Eritrea!! Ethiopia has historically been a magnet for foreign aid, even though the impact of the aid has usually been fairly dim. Eritrea, on the other hand, has been a country preaching self-reliance to the point of evicting many NGOs and enforcing strict cash-for-work policies to those that remained. The Eritrea government's ulterior motives aside, I would argue that these stats don't reflect direct foreign aid to Eritrea, but probably the 2% income tax the Eritrean government charges Eritreans in exile, which exceed well over 20% of the population. But then, what do I know ...


Figures from http://news.bbc.co.uk/2/shared/spl/hi/pop_ups/05/business_aid_and_development/html/1.stm

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