Methodological and Technological Issues in Technology Transfer

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9.3.2 Official Development Assistance and Other Flows

Annual official development assistance (bilateral and multilateral) has averaged about 60 B$ since 1990 (UNIDO, 1990), of which only a small part is invested in industrial development (see also Section 2.2.2 in Chapter 2 and 5.2 in Chapter 5 on ODA and public sector finance). In the 1970s about 10% of foreign aid was invested in industrial infrastructure, but this decreased sharply during the 1980s and 1990s. Approximately 2% of bilateral and 6% of multilateral aid is spent on industrial development (UNIDO, 1997), or US$820 million (M$). Major recipients of development aid earmarked for industry are low to medium income countries, e.g. Bangladesh, China and Indonesia. In 1995 45% of the total budget was spent in these three countries (UNIDO, 1997). Official development assistance funds have been reduced in real terms in the past decade. Future trends in development aid are unclear.

Other financial flows include development loans and export credits, used primarily to finance the export of capital goods and equipment. In 1994 the lending of export credit agencies to developing countries and CEITs has increased to 420 B$ (UNIDO, 1997), but it is unclear what part is spent on industrial development and technology. Export credits and loans seem to be heavily concentrated in large low-income but creditworthy countries, and increasingly in countries that have (gained) access to international financial markets. However, the majority of low income developing countries have no access to these funds. Finally, the lending by multilateral financing banks to industry has decreased from 8.5 B$ in 1990 to about 4 B$ in 1994 (UNIDO, 1997). The reduction seems to be due to the reduced role of project lending by these banks, as well as the increased access of developing countries/CEITs to international capital markets (UNIDO, 1997).

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