0.7%: The commitment of donor governments to dedicate 0.7% of their gross national income (GNI) to official development assistance (ODA). The Development Assistance Committee (DAC) has been measuring this indicator since the UN adopted the standard following the Pearson Commission recommendations in 1970.

20/20: An initiative proposed at the World Summit for Social Development (WSSD) in Copenhagen, 1995, for bilateral agreements between donor and recipient governments whereby donors would agree to allocate 20% of their ODA to basic social services (BSS) if recipients agreed to allocate 20% of public expenditure to enable universal access to these services.

How are the G8 doing against their 0.7% targets? Read about our work with DATA here

African, Caribbean and Pacific States (ACP): See Cotonou Agreement.

Agencia Española de Cooperación Internacional (AECI): The body that manages Spain's international aid and development programmes. See: www.aeci.es

Aid: Assistance provided to communities or countries in the event of a humanitarian crisis or to achieve a socioeconomic objective.

Emergency (or 'humanitarian') aid is usually intended for emergency relief, while development aid aims to create long-term sustainable economic growth.

Aid might come from and/or be channelled through governments, NGOs, multilateral organisations or individuals.

See also: official development assistance; bilateral aid; multilateral aid.

Associated financing: the combination of ODA, whether grants or loans, with any other funding to form finance packages. Associated financing packages are subject to the same criteria of concessionality, developmental relevance and recipient country eligibility as tied aid credits.

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A is for aid

Basic social services (BSS): Defined for the purposes of the 20/20 initiative, BSS include education, health, nutrition, safe water and sanitation services.

Bilateral aid/assistance: Aid that is controlled and spent by a donor country at its own discretion. This may include staff, supplies, equipment, funding to recipient governments and funding to NGOs. It also includes assistance channelled as earmarked funding through international and UN organisations.

Compare: multilateral aid/assistance.

Bond lending: Net completed international bonds issued by countries on the DAC list of aid recipients.

Budgetary aid: General financial assistance given in certain cases to dependent territories to cover a recurrent budget deficit.

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Cash transfer: Provision of assistance in the form of cash with the objective of increasing a household's real income.

See also: conditinal cash transfers.

Central emergency response fund (CERF): A UN emergency relief fund that aims to provide urgent and effective humanitarian aid to regions threatened by, or experiencing, a humanitarian crisis.

A central emergency revolving fund was first established in 1991 as a one-off donor contribution of US$50 million. By 2004, due to the accumulation of interest, the CERF had US$50 million in the bank and US$15 million on loan.

In December 2005 a new expanded CERF (this time the central emergency response fund) was approved by the General Assembly and officially launched on 9 March 2006.

The new CERF has a grant element of US$450 million in addition to a US$50 million loan element. Up to two-thirds of the grant facility can be allocated to rapid response to emergencies while the remaining third will be devoted to addressing underfunded emergencies. See: http://ochaonline.un.org/cap/

Cluster approach: A mechanism introduced by the UN in December 2005 to improve collaboration between UN agencies, the International Red Cross and Red Crescent Movement and NGOs in humanitarian response.

An agency is appointed as a lead for a certain sector (or 'cluster') and is responsible for ensuring that work within that sector addresses priority needs. The cluster lead also acts as provider of last resort.

The cluster approach should help address 'gaps' in particular sectors within humanitarian response (e.g. water and sanitation, camp management and protection) and also the need to ensure global capacity for a systematic humanitarian response. See: http://ochaonline.un.org/cap/

Commitment: A firm, though not legally binding, pledge of assistance.

Common humanitarian action plan (CHAP): A strategic plan for humanitarian response in a given country or region and the foundation of a consolidated appeal.

Under the leadership of the humanitarian coordinator, a CHAP is developed at the field level by the Inter-Agency Standing Committee (IASC) country team.

Concessionality level: A measure of the softness of a credit reflecting the benefit to the borrower compared to a loan at market rate.

The concessionality level is calculated as the difference between the nominal value of a tied aid credit and the present value of the debt service as of the date of disbursement, calculated at a discount rate applicable to the currency of the transaction and expressed as a percentage of the nominal value.

Compare: grant element.

Conditional cash transfer: A cash transfer where payment is made conditional upon certain behaviours of the beneficiaries, such as regular school attendance or regular health centre visits.

Consolidated appeal: A tool for structuring a coordinated humanitarian response to complex and/or major emergencies within the consolidated appeals process (CAP).

Consolidated appeals are triggered by the UN's Emergency Relief Coordinator (ERC) and the IASC in consultation with the humanitarian coordinator, and IASC country team. The government of the affected country is also consulted.

Compare: flash appeal.

Consolidated appeals process (CAP): A common strategy for implementing a coordinated response to complex emergencies and natural disasters.

The CAP aims to coordinate: strategic planning leading to a common humanitarian action plan (CHAP); resource mobilisation (via a consolidated or flash appeal); programme implementation; and joint monitoring, evaluation and reporting.

The CAP's ability to fulfil its objectives depends on the extent to which the programmes within the CAP are funded. See: http://ochaonline.un.org/cap/

Constant prices: Also called 'real terms' prices, constant prices show how expenditure has changed over time after removing the effects of exchange rates and inflation.

DAC deflators and annualised exchange rates, are available at: www.oecd.org/dac

Cotonou Agreement: The basis for development cooperation between the EU and ACP countries that entered into force in June 2002. It supersedes the Lomé Convention (1975–2000).

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C is for chronic poverty

Debt refinancing: A form of debt relief where a new loan or grant is arranged to enable the debtor country to meet the service payments on an earlier loan.

Debt relief: Relief from the burden of repaying both the principal and interest on past loans and may take the form of cancellation, rescheduling, refinancing or reorganisation of debt.

Debt rescheduling: A form of debt relief where principal or interest payments are delayed or rearranged.

Developing countries: This refers to all countries and territories in Africa; all countries in the Americas except the Bahamas, Bermuda, Canada, Cayman Islands, Falkland Islands and the US; all countries in Asia and the Middle East except Brunei, Hong Kong, Israel, Japan, Kuwait, Qatar, Singapore, Taiwan and United Arab Emirates; all countries in the Pacific apart from Australia and New Zealand; and the European states of Albania, Armenia, Azerbaijan, Georgia, Gibraltar, Malta, Moldova, Turkey and ex-Yugoslavia.

Department for International Development (DFID): The body that manages the UK's international aid and development programmes. See: www.dfid.gov.uk

Development Assistance Committee (DAC): The principal body through which the Organisation for Economic Development (OECD) deals with issues related to cooperation with developing countries.

The 23 DAC members are: Australia, Austria, Belgium, Canada, Denmark, the EC, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Sweden, the UK and the US.

The members have agreed to "secure an expansion of aggregate volume of resources made available to developing countries and to improve their effectiveness". The DAC, set up in 1960, sets the rules for what can and cannot be counted as ODA. See: http://www.oecd.org/

Disbursement: The release of funds to, or the purchase of goods or services for, a recipient.

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Economic and Social Council (ECOSOC): The UN's central forum for discussing international economic and social issues, and for formulating policy recommendations. See: www.un.org/docs/ecosoc/

Emergency Relief Coordinator (ERC): The head of the UN's Office for the Coordination of Humanitarian Affairs (OCHA). The postholder is also the UN's Under-Secretary-General (USG) for Humanitarian Affairs.

Emergency response funds (ERFs): Project funds managed by OCHA in-country for short-term NGO and UN agency projects.

The ERF mechanism has come into increasing use since its first appearance in 1993. Development Initiatives completed a review of OCHA's ERF mechanism in January 2007.

European Bank for Reconstruction and Development (EBRD): A development bank that finances banks, industries and businesses in market economies and democracies in central Europe and central Asia. See: www.ebrd.com

European Development Fund (EDF): An intergovernmental fund managed by the EC to finance development cooperation with the African, Caribbean and Pacific States (ACP) under the Cotonou Agreement. It is financed on a voluntary basis by the EU member states.

European Investment Bank (EIB): The EIB implements the financial components of agreements concluded under European development aid and cooperation policies. See: www.eib.org

Export credits: Loans for the purpose of trade. They may be extended by the official or the private sector. If extended by the private sector, they may be supported by official guarantees.

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E is for ERF

Financial tracking system (FTS): The OCHA system that captures voluntary statements of contributions to humanitarian assistance from over 60 countries.

FTS data primarily covers contributions to countries that are the subject of a CAP appeal. It also captures other responses to natural disasters that have been reported either by the donor or by the recipient agency. See: http://www.reliefweb.int/FTS/

Flash appeal: A tool for structuring a coordinated humanitarian response to sudden onset emergencies.

Flash appeals are issued within two to four weeks of an emergency. They are designed to cover urgent life-saving needs and early recovery projects that can be implemented within the first three to six months of an emergency.

Flash appeals are triggered by the UN's humanitarian coordinator in consultation with the IASC in-country team and following endorsement by the Emergency Relief Coordinator (ERC). The government of the affected country is also consulted. Compare: consolidated appeal.

Foreign direct investment (FDI): Investment made to acquire or add to a lasting interest in an enterprise in a country on the DAC list of aid recipients. In practice, it is recorded as the change in the net worth of a subsidiary in a recipient country to the parent company as shown in the books of the latter.

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G8: The grouping of eight of the world's leading industrialised nations – Canada, France, Germany, Italy, Japan, Russia, the UK and the US.

Gini coefficient: An indicator of income distribution, where 0 represents perfect equality and 1 perfect inequality.

Global Humanitarian Assistance (GHA): An independent project of Develoment Initiatives to monitor flows of international humanitarian assistance. See: www.globalhumanitarianassistance.org

Global humanitarian assistance: A definition of humanitarian assistance that includes:

The definition excludes local response and remittances from family members and diaspora communities.

Compare: humanitarian asssistance; total humanitarian assistance.

Good Humanitarian Donorship (GHD): A forum for donors to discuss good practice with the idea of working towards achieving efficient and principled humanitarian assistance funding.

GHD drafts principles and standards as a framework to guide official humanitarian aid and as a mechanism for encouraging greater donor accountability.

The initiative was created by donor governments at a meeting in Stockholm in 2003. See: www.goodhumanitariandonorship.org

Grant element: A measure of the concessionality (softness) of a loan, calculated as the difference between the face value of a loan and the discounted present value of the service payments the borrower will make over the lifetime of the loan, expressed as a percentage of the face value.

The grant element reflects the financial terms of a transaction – interest rate, maturity (interval to final repayment) and grace period (interval to first repayment of capital).

Source: http://stats.oecd.org/glossary/

Gross domestic product (GDP): The value of goods and services provided in a country during a year.

Gross national income (GNI): The total value of goods and services provided by a country during a year, together with net income from foreign investment. (Formerly referred to as gross national product (GNP)).

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G is for Global Humanitarian Assistance

Heavily indebted poor country (HIPC): Least developed countries (LDCs) that are the subject of international debt relief measures aiming to reduce their external debt to sustainable levels.

The HIPC initiative is administered by the World Bank and currently identifies 40 countries, most of them in sub-Saharan Africa, as eligible to receive debt relief.

Debt relief is conditional on the national governments of these countries meeting a range of economic management and performance targets.

High income countries (HIC): Countries with an annual per capita income of US$10 726 or more.

Humanitarian assistance: Aid and action designed to save lives, alleviate suffering and maintain and protect human dignity during and in the aftermath of emergencies.

Compare: global humanitarian assistance; total humanitarian assistance.

Humanitarian coordinator: OCHA's in-country (or 'field-based') representative.

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Inter-Agency Standing Committee (IASC): An interagency forum for coordination, policy development and decision-making involving the key UN and non-UN humanitarian partners. Reports to the head of the UN's Office for the Coordination of Humanitarian Affairs (OCHA), the Emergency Relief Coordinator.

Inter-American Development Bank (IDB): A regional development bank that provides multilateral financing for economic, social and institutional development projects as well as trade and regional integration programmes in Latin America and the Caribbean.

Internally displaced (IDPs): Someone who has been forced to leave their home but who has remained within their national border.

International Bank for Reconstruction and Development (IBRD): The arm of the World Bank that focuses on middle income and creditworthy poor countries.

International Committee of the Red Cross (ICRC): An impartial, neutral and independent organisation with an exclusive mandate to protect the lives and dignity of victims of war and internal violence and to provide them with assistance.

The ICRC, together with Red Cross national societies and the International Federation of Red Cross and Red Crescent Societies (IFRC), make up the International Red Cross and Red Crescent Movement. See: www.icrc.org

International Development Association (IDA): The arm of the World Bank that focuses on the world's poorest countries.

International Federation of Red Cross and Red Crescent Societies (IFRC): The world's largest humanitarian organisation, the IFRC focuses on disaster response; disaster preparedness; health and community care; and promoting humanitarian values;

The IFRC, together with Red Cross national societies and the International Committee of the Red Cross (ICRC), make up the International Red Cross and Red Crescent Movement. See: www.ifrc.org

International Finance Corporation (IFC): An arm of the World Bank that provides loans, equity, structured finance, risk management products and advisory services to the private sector in developing countries. See: www.ifc.org

International Finance Facility (IFF): A way of frontloading resources for development by issuing government bonds on financial markets – a way of funding aid.

International financial institutions (IFIs): IFIs include: African Development Bank (ADB-Africa); Asian Development Bank (ADB-Asia); European Bank for Reconstruction and Development (EBRD); European Investment Bank (EIB); Inter-American Development Bank (IADB); International Monetary Fund (IMF); and the World Bank Group (WBG).

International Labour Organization (ILO): The UN agency that deals with the promotion of social justice and internationally recognised human and labour rights. See: www.ilo.org

International Monetary Fund (IMF): The IMF states its mandate as: "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty."

The IMF was established in 1945 (following the UN conference at Bretton Woods in 1944) and currently has 184 member countries. See: www.imf.org

Islamic Development Bank (IDB): The purpose of the IDB is to "foster the economic development and social progress of member countries and Muslim communities individually as well as jointly in accordance with the principles of Shari'ah law". See: www.isdb.org

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Japanese International Cooperation Agency (JICA): The body that manages Japan's international aid and development programmes. See: www.jica.go.jp

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Least developed countries (LDCs): The UN uses the following three criteria for the identification of LDCs:

• a gross domestic product (GDP) of less than US$750 per capita for inclusion and aboveUS$900 for graduation
• income criterion, based on a three-year average estimate of the human resource weakness criterion, involving a composite augmented physical quality of life index (APQLI) based on indicators of: nutrition; health; education; and adult literacy
• an economic vulnerability criterion, involving a composite economic vulnerability index (EVI) based on indicators of: the instability of agricultural production; the instability of exports of goods and services; the economic importance of non-traditional activities (share of manufacturing and modern services in GDP); merchandise export concentration; and the handicap of economic smallness (as measured through the population in logarithm) and the percentage of population displaced by natural disasters.

To be included on the LDC list, which is reviewed every three years, a country must satisfy all three criteria.

To qualify for graduation, a country must meet the thresholds for two of the three criteria in two consecutive triennial reviews.

There are currently 50 countries on the LDC list.

See: www.un.org/special-rep/ohrlls/ldc/

Lomé Convention: The basis of development cooperation between the EU and ACP countries from 1975 to 2000. It has been superseded by the Cotonou Agreement.

Low income countries (LICs): Countries with a GNP of less than US$875 per capita (2005).

Lower middle income countries (LMICs): Countries with a GNP of between US$876 and US$3465 per capita (2005).

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Millennium Development Goals (MDGs): Time-bound, quantified targets for addressing extreme poverty that were agreed by world leaders at the Millennium Summit in September 2000.

The eight MDGs, which have a target date of 2015, are:

See: www.un.org/millenniumgoals.

Multilateral agencies: International institutions with governmental membership that conduct all or a significant part of their activities in favour of development and aid recipient countries.

Multilateral aid/assistance: Aid channelled through international bodies for use in or on behalf of aid recipient countries.

Compare: bilateral aid/assistance.

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Net present value (NPV): A standard financial method of evaluating long-term projects, based on the present value of a sum of money, as opposed to a future value (with compound interest).

Non-governmental organisation (NGO): Private, not-for-profit- agency that is active in development and relief work – sometimes also referred to as 'voluntary bodies'.

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N is for

Office for the Coordination of Humanitarian Affairs (OCHA): The UN office that facilitates the work of operational agencies that deliver humanitarian assistance to populations and communities in need.

OCHA supports the UN's field-based humanitarian coordinators in needs assessments, contingency planning and the formulation of humanitarian programmes. It also provides advocacy and information services.

OCHA solicits donor support mainly through the consolidated appeals process (CAP) and issues emergency appeals on behalf of countries affected by disasters.

OCHA is headed by the Emergency Relief Coordinator (ERC).

See: http://ochaonline.un.org/.

Official assistance (OA): Government assistance for countries and territories in transition – that is, former aid recipients, Central and Eastern European countries and the newly independent states (NIS).

OA has the same terms and conditions as ODA but does not count towards the 0.7% target.

Official development assistance (ODA): Money spent on development and humanitarian assistance by members of the DAC in a defined list of developing countries.

ODA is made up of grants or concessionary loans. The promotion of economic development and welfare must be the main objective. If a loan is given, the grant element must be at least 25%.

DAC members are required to comply with a strict set of rules that govern ODA reporting.

ODA statistics and reporting dates back to 1960. See: www.oecd.org

Official development finance (ODF): A measure of the inflow of resources to recipient countries that includes: bilateral ODA; grants and concessional and non-concessional development lending by multilateral financial institutions; and other official flows that are considered developmental (including refinancing loans) which have too low a grant element to qualify as ODA.

Office of the UN High Commissioner for Human Rights (OHCHR): A department of the UN secretariat with a mandate to promote international human rights laws and treaties.

The mandate includes preventing human rights violations, securing respect for all human rights and promoting international cooperation to protect human rights. See http://www.ohchr.org

Organisation for Economic Co-operation and Development (OECD): A forum for debate and research on global economic, social and governance issues. See: www.oecd.org

Other official flows (OOF): Defined as flows to aid recipient countries by the official sector which do not satisfy both the criteria necessary for ODA or OA.

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Pan American Health Organization (PAHO): An international public health agency with a mission to improve health and living standards of the countries of the Americas.

PAHO is a regional office of the World Health Organization (WHO) and enjoys international recognition as part of the UN. See: www.paho.org

Paris Club: An informal group of 19 country creditors whose role is to find coordinated and sustainable solutions to the payment difficulties of debtor nations. See: www.clubdeparis.org

Partially tied aid: Aid that is given on the condition that it is used to purchase goods from either the donor country or from a restricted group of other countries, which must include substantially all developing countries (substantially all Central and Eastern European countries and new independent states (NIS)).

The Development Assistance Committee (DAC) has produced a policy brief on tied aid and publishes an annual report on progress on aid untying to least developed countries (LDCs). See www.oecd.org/dac and go to 'untied aid'.

Compare: tied aid; untied aid.

Phare: An EU initiative that provides grant finance to support its partner countries in Central and Eastern Europe through the process of economic transformation and strengthening of democracy to the stage where a country is ready to assume EU membership. See: http://ec.europa.eu/enlargement/

Poverty reduction and growth facility (PRGF): An low-interest lending facility of the IMF for low-income countries. The PRGF replaced the enhanced structural adjustment facility (ESAF) in November 1999.

Poverty reduction strategy papers (PRSPs): Papers that are intended to promote broad-based growth and reduce poverty as well as associated external financing needs and major sources of financing.

PRSPs are prepared by IFI member countries through a participatory process involving domestic stakeholders and external development partners such as the World Bank and the IMF.

Updated every three years with annual progress reports, interim PRSPs (I-PRSPs) summarise a country's poverty situation, describe the existing poverty reduction strategy, and lay out the process for producing a fully developed PRSP.

PRSPs replace the World Bank's policy framework papers (PFPs).

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P is for poverty

P is for PRSPs

Real terms: A figure adjusted to take account of exchange rates and inflation, allowing a real-terms comparison over time – sometimes referred to as constant prices.

Recipient countries and territories: The current DAC list of aid recipients. See: www.oecd.org/countrylist

Remittances: Private transfers from individuals in one country to individuals (often relatives or friends) in another country.

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Safety net programmes: Non-contributory transfers that target the poor or those vulnerable to poverty and shocks. Sometimes also referred to as 'social assistance' or 'social welfare'.

Soft loan: A loan with more favourable terms than those attached to commercial market terms. It is described as concessional and the degree of concessionality is expressed as its grant element.

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S is for social protection

Technical cooperation: Assistance in the form of grants to nationals of aid recipient countries receiving education or training at home or abroad and payments to consultants, advisers and similar personnel as well as teachers and administrators serving in recipient countries, (including the cost of associated equipment).

Tied aid: Aid that is given on the condition that it is used to purchase goods from the country providing the aid.

The Development Assistance Committee (DAC) has produced a policy brief on tied aid, which explains the practice in further detail. The DAC also produces an annual report on progress on aid untying to least developed countries (LDCs). See www.oecd.org/dac and go to 'untied aid'.

Compare: partially tied aid; untied aid.

Total humanitarian assistance: There is no official definition or calculation of total humanitarian assistance. Development Initiatives and its independent project, GHA, therefore uses a working definition, which calculates it as: total bilateral ODA for emergency and distress relief from all DAC donors; ODA from the EC for emergency and distress relief; total multilateral contributions to UNHCR and UNRWA; and multilateral contributions to WFP in proportion to the share of WFP’s operational expenditure allocated to relief.

Compare: humanitarian assistance; global humanitarian assistance.

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United Nations (UN): The body that has an international mandate to: maintain international peace and security; develop friendly relations among nations; cooperate in solving international problems and in promoting respect for human rights; and to be a centre for harmonising the actions of nations.

The UN has 192 members, which means that nearly every nation is represented. See: www.un.org

Untied aid: Aid that can be used by the receipient country to procure associated goods and services fully and freely in substantially all countries.

The Development Assistance Committee (DAC) has produced a policy brief on tied aid, which explains the practice in further detail. The DAC also produces an annual report on progress on aid untying to least developed countries (LDCs). See www.oecd.org/dac and go to 'untied aid'.

Compare: partially tied aid; tied aid.

Upper middle income countries (UMICs): Countries with a GNP of between US$3466 and US$10 725 per capita (2005).

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Voluntary Service Overseas (VSO): An international development charity that works through volunteers. See: www.vso.org.uk

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World Bank Group: The World Bank provides low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and other purposes.

The World Bank comprises the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

World Food Programme (WFP): The UN food agency. See www.wfp.org

World Health Organization (WHO): The UN agency for health. See: www.who.int

World Summit for Social Development (WSSD): Held in Copenhagen in 1995, the summit concentrated on four core issues - poverty alleviation, unemployment, social exclusion and an enabling environment for social development

World Trade Organisation (WTO): A forum for discussing the rules of trade between nations at a global or near-global level. See: www.wto.org

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