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2010-02-17 03:38:49 |
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Untied Aid |
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When the supplier of goods and services being provided to the recipient country is commissioned to the donor country, it is called tied aid. Untied aid is when there are no such restrictions. In the case of tied aid, there is an advantage of enhancing export capacity on the donor side while it makes it difficult for the recipient country to make independent operations of the development projects and often results in deficit due to non competitive procurement. In 2001 as part of the efforts of the international community to improve aid effectiveness, DAC has recommended its member countries to make the total amount of aid as untied. In the High Level Forum in 2005, the Paris Declaration was adopted in which the recommendation for the utilization of the procurement system of the recipient country is included. The average untied ratio of DAC member countries is about 90%. Korea who is now a DAC member and under the responsibility of observing international guidelines, the ratio is below 50% which calls for urgent measures. The Korean Government has approved a 'Roadmap for the Untying of Development Assistance' in which the increasing of the ratio of untied grant to 40% and credit assistance to 90% by 2015. |
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