Debt relief makes 2005 aid total a record-smasher

According to the Development Assistance Committee, aid to developing countries topped $106.5 billion in 2005, up from $79.5 billion in 2004. This is an extraordinary, record-smashing total. A spurt of aid responding to the Asian tsunami and U.S. aid to Iraq account for some of the increase. But the biggest factor, discussed in an earlier post, arises from an accounting quirk. Formal write-offs of Iraqi and Nigerian loans that long ago went bad totaled $19.1 billion, and are considered aid for 2005.The DAC has kindly shared details (pdf) on the breakdown of these “debt relief grants.” Ordinarily, this data would have been released in late 2006, after donors report their final, revised aid figures for 2005.