While official development assistance continues to represent a significant source of funding for fragile states and economies, other kinds of financial flows emerge as the dominant resources in some situations.
According to an Organization for Economic Cooperation and Developmentreport on “states of fragility” — a name change that reflects the reality that “fragility exists in all states in different ways and to different degrees,” Alan Whaites, team leader of the effective and accountable institutions team at the OECD’s Development Cooperation Directorate, told Devex — per capita ODA to fragile situations has nearly doubled since 2000, but aid has not been distributed evenly.
Afghanistan and Iraq, for example, received the bulk of ODA flows — 22 percent — to fragile states and territories in the era of the Millennium Development Goals. Foreign direct investment, however, overshadowed aid to Iraq in 2012, the latest year for which comparison of different financial flows to fragile situations could be made.
In certain countries that have witnessed a surge of aid in recent years — Haiti in the aftermath of the 2010 earthquake, Guinea, Liberia and Sierra Leone amid the scramble to contain the Ebola epidemic, and Nepal after the April 2015 earthquake — ODA notably assumes a subsidiary role to either remittance inflows or FDI.
Anna Patricia Valerio is a Manila-based development analyst focusing on writing innovative, in-the-know content for senior executives in the international development community. Before joining Devex, Patricia wrote and edited business, technology and health stories for BusinessWorld, a Manila-based business newspaper.
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