Paris, 16/05/2001 (Agence Europe) - Whereas in Brussels on Monday, the third United Nations Conference on the Least Developed Countries (LDCs) got under way, the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) formally adopted a recommendation on "untying" aid to LDCs.
Under the terms of this recommendation, a range of activities (such as capital equipment, sector assistance and import support) financed by loans and gifts of aid will now be open to international competition and no longer reserved to suppliers in donor countries. Bilateral aid earmarked for LDCs today attains some $8 billion: of this total, 5 billion will now take the form of untied aid, due to the adoption of the recommendation of 14 May. This should also allow for a better return on the money spent. According to OECD estimates, tied aid is said to cost on average between 20-25% more than if the goods and services in question were procured through international competition. Implementation of the recommendation will, moreover, enable the beneficiary countries to have greater ownership of their development process and create the possibility to shape more efficient and rational public procurement capabilities. Finally, the recommendation aims at promoting a balanced share in efforts between donors, and provides for all offers of aid under its field of application being made public.