Question

If the states in North America, Western Europe, and East Asia all were to meet the target of providing 0.7 percent of GNP in foreign assistance, what might the effects be? How much additional aid would be made available? To whom would it likely go? What effects might it have on the recipient states and on economic development overall?

Answer 1

In 1970 OECD and other developed and industrialized nations at the UN general assembly had agreed to provide 0.7% of their GNP ( Gross National Product ) as ODA ( Official Development Assistence ) to LDCs and other developing and poor nations in order to help reduce poverty, provide opportunity to increase human capital and also most importantly help meet Millenium Development Goals or Sustainable Development Goals by 2015.

However, most of the advanced economies have not met their target of contribution which has led to the LDCs still remaining poor and underdeveloped in terms of most of their policy goals.

If all the states in North America, Western Europe, and East Asia were to meet the target of providing 0.7 percent of GNP in foreign assistance, the additional aid could more than three times the aid being provided to the LDCs. It is likely to go to least developed countries in Africa and South Asia. The aid would lead to an increase in resource availability, thereby leading to an increase in overall economic development level of the LDCs.