The First Tranche

Welcome to the First Tranche, the AidData blog--a forum for analysis and discussion of information about development finance, and how it can be used to improve development practice and research. The First Tranche publishes independent views and analysis from a variety of bloggers who are interested in aid transparency, aid effectiveness, and better/more accessible aid information.
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The First Tranche | a blog by the staff of AidData

Thursday, July 29, 2010


Brazil gives as much aid as Canada and Sweden? Maybe not...

The following is a post by one of our research assistants at the College of William and Mary, Eva Baker ('12)

As policymakers and observers discuss the practices of non-DAC donors and their intentions, many of those donors are meanwhile becoming increasingly wealthy and increasingly involved in aid. A recent Economist article on Brazil’s vast, and growing, development funds pegged the total amount for 2010 near $4 billion, which the author suggested is “similar to generous donors such as Sweden and Canada.” For most readers, it’s a surprising comparison, and it has already been used in further discussions of Brazil’s aid.



However, the Economist’s comparison is somewhat misleading. Total aid figures for most Western donors are calculated according to the definition of Official Development Finance (ODA) set by the OECD’s Development Assistance Committee’s definition of Official Development (DAC) . In 2008, the last year of DAC statistics available, Canada and Sweden spent $5.5 billion and $4.2 billion USD on foreign aid, respectively. Applying ODA guidelines to Brazil’s aid calls into question the $3.3 billion in loans by the BNDES. According to the DAC, an ODA-eligible loan is “concessional in character and conveys a grant element of at least 25 per cent”. Without project level data specifying the interest rate, repayment schedule, and grace period, it’s impossible to calculate the grant element of the BNDES’ loans. Dropping them completely puts Brazil’s foreign aid budget back to $1.2 billion, closer to the company of Finland, Ireland, and new DAC member Korea.

While we’re left making estimates of Brazil’s total aid for 2010, the project level information that ABC is reporting to AidData gives us a more detailed view of Brazil’s recent aid. The Economist article highlights Brazil’s focus on agriculture, social aid, and renewable energy like ethanol. Using the information we’ve received from 1998 through part of 2009, we can see just how much attention those sectors have received.


Brazil’s aid to agriculture and social programs (health, education, population programs, and social services) comprised 56% of its $42,266,773 in reported commitments.

For providing aid for renewable energy like bio-fuels, the picture is even clearer:


Of the $910,813 Brazil donated in energy generation and supply, 84% went to promoting renewable energy.

So what’s the data saying at the end of the day? First, that ABC’s actions really are following its rhetoric. Brazil isn’t acting like more traditional non-DAC donors such as Kuwait, Saudi Arabia, and India, which rely on large cash transfers and heavily structured infrastructure projects. Instead, as the head of ABC stated in the article, Brazil is leveraging its comparative advantages to provide assistance to other developing countries. Most of these projects are consultancies and technical assistance in areas that Brazil has seen considerable success. Brazil and many other middle income countries see this as a new era in "South-South Cooperation", where developing countries exchange resources and expertise.

Monday, July 19, 2010


A Tale of Two Deltas: Part Two

As we noted a couple weeks ago, the response to oil spills in the Niger Delta has received considerably less funding than the Deepwater Horizon Spill in the Gulf of Mexico, despite the fact that considerably more oil has spilled over the last 50 years, with no signs of letting up. Others have picked up on this comparison as well, including Josh Keating over at Foreign Policy, and the Center for Global Development's wonkcast. With the possibility the containment cap may hold until relief wells are finished in the next month, we wanted to update our numbers and take a new look at these two spills.




As you can see, up to this point, the volume of oil spilled in the Gulf still has not reached Niger Delta proportions. Spending on "the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs" has risen to $3.95 billion USD, according to a statement released today by BP. Of course, this number is certain to rise as efforts to protect coastal wetlands and cleanup the rest of the oil continue.



Meanwhile, half a world away from the Mississippi Delta, the oil keeps on leaking...



Friday, July 16, 2010


Conflict and Aid Beyond Kyrgyzstan

Last week, Renard Sexton over at FiveThirtyEight analyzed the recent constitutional referendum adopted in the wake of severe ethnic conflict in Kyrgyzstan. Examining provincial election returns and demographics, he shows that the Uzbek minority was highly underrepresented, possibly sowing seeds for more strife. He concludes that “the international community…will have to take rapid and decisive action to resolve the situation and find a stable way forward.”


International development assistance will likely play a key role in building the foundation for a more stable Kyrgyzstan. But this isn’t the first time observers have called for donors to realign aid to address security and governance concerns in the region. Prior to the current predicament, multiple reports warned of the risk of further clashes. As early as 2001, a Conflict Assessment by Tony Vaux and Jonathan Goodhand predicted that tensions in Central Asia’s Fergana Valley, which includes southern Kyrgyzstan, could continue to escalate unless external aid for conflict prevention was increased. As usual, we used AidData to see what we can learn about the extent to which aid was allocated for projects directly related to conflict and governance, both in Kyrgyzstan and in neighboring countries.



Your browser may not support display of this image.First, we ran a series of queries to aggregate projects in Kyrgyzstan aimed at conflict prevention, strengthening civil society, developing stronger judicial systems, and improving law enforcement. We also conducted keyword searches to identify any projects that specifically mention regions with sizable Uzbek populations such as Osh and Batken where ethnic violence broke out. Without the geographic information field envisioned in Phase III of the International Aid Transparency Initiative, it’s highly likely we’re under-counting the amount allocated to these provinces (until IATI is implemented though, AidData researchers are working to fill the gap by imputing geo-codes using existing information and donor project documents). We also don’t have data on Russia’s activities in the region, which may be significant.


As you can see, only a small share of aid to the country came from projects that fit the above criteria. What’s even more striking is that only two of the projects found in the conflict and governance searches were also found in the geographic search. While it’s certainly true that money allocated to conflict and governance at the national level would have an impact in Osh and the surrounding areas, it’s clear that in general the international community did not focus its development assistance on activities specifically intended to reduce the possibility of violent conflict in that region. Compared to the total aid portfolio of Kyrgyzstan, relatively little money has gone toward direct prevention of the kind of situation that has unfolded over the last few months.


We expanded our search for conflict and governance aid to the other four Central Asian republics, all of which share diverse ethnic makeups and emerging institutions. As the graph reveals, this sector has not been a priority for development assistance to the region.




Of course, there are a variety of measures that need to be taken to reduce instability and ethnic conflict in these countries. But given the history of tensions and relatively slim portfolio of aid for conflict prevention, a reassessment of the composition and geographical distribution of aid may be appropriate as the international community considers how to prevent strife from stifling development in Central Asia.

Friday, July 9, 2010


System Maintenance: AidData Research Releases Unavailable July 11, 2010 6am-1pm EST

AidData's Research Release server will be unavailable on July 11, 2010 from 6am to 1pm EST for network maintenance. The main AidData website will operate normally, but users will be unable to access AidData's Research Releases during that period. If you need assistance, please email us at info@aiddata.org.

Thursday, July 1, 2010


A Tale of Two Deltas

As the Deepwater Horizon spill continues in the Gulf of Mexico, attention has dramatically shifted to look at the direct environmental cost of drilling for oil all around the world. The fact is that oil spills happen more often than governments or oil companies would like to admit, and often there is no one to take responsibility—especially if US coastlines are out of range. A number of journalists and bloggers have been drawing attention to these lesser-known oil spills such as those in the Niger Delta. Like the Mississippi Delta and Gulf Coast, the Niger Delta is a valuable natural resource, providing livelihoods in agriculture and fishing. However, the area is also plagued by large oil spills that threaten those rich natural resources and the very livelihood of those who depend on them. The continuing environmental crisis, along with poor governance and a volatile security situation, has led UNDP to conclude in 2006 that the region’s development has stagnated for the last two decades—despite its immense hydrocarbon wealth.

Unlike the Deepwater Horizon spill, the continuing crisis in the Niger Delta is happening across vast stretches of wetlands and creeks where millions of Nigerians live. No submarines are needed to see what’s happening in these National Geographic and New York Times slideshows. As 24 hour coverage continues in the Gulf of Mexico, Nigerian activists like Ken Tebe pointed out to CNN that there has been “little or no concern even from the U.S. government”, despite the fact that Nigeria is the fifth largest exporter of oil to the U.S.

As data people, we wanted to look at data behind the stories and pictures of the painful disconnect between North and South at this intersection of extraction, environment, and poverty. Is the magnitude of the Deepwater Horizon Spill similar to that of the Niger Delta crisis? How has the international aid community responded to the Niger Delta, and how does that compare to efforts in the Gulf of Mexico? More specifically, how have the large oil consuming nations responded?

First, we compared the total volume of oil that’s been spilled in the two regions. In both cases, estimates have been varying widely, and so the best we can do is establish upper and lower bounds. For the Deepwater Horizon Spill, we used the daily flow rate estimates from the Flow Rate Technical Group, both from their June 10th assessment, and the revised figures reported after the riser was cut and the flow increased. For the Niger Delta, we used the UNDP Human Development Report’s estimate (115,000 barrels/year) as the lower limit, and the estimate of government and independent experts (200,000 barrels/year) as the upper limit.





As you can see, the Deepwater Horizon spill has had tremendous impact for a single incident, but it hasn’t yet matched the cumulative effect of 5 decades of continual spills and leakages. Based on the current flow rates, the spill volume will be comparable to the situation in the Niger Delta sometime between August 9th, 2010 and February 19th, 2011. While the volume of the oil spill in the Gulf is still considerably smaller, the efforts to clean it up have certainly eclipsed any previous efforts to clean up any oil spill in the Niger Delta.

On June 25th, BP reported that “the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs” has amounted to $2.35 billion USD. Data is unavailable on the response by the Nigerian government and oil companies to the Niger Delta crisis, but using AidData, we’re able to do some back of the napkin analysis of foreign aid flows toward environmental protection and spill cleanup in Nigeria.

Using keyword searches and the purpose codes assigned to individual development projects, we identified and aggregated projects that developed the oil industry or contributed to cleanup and environmental protection. Since the project descriptions donors provided can be somewhat ambiguous, we excluded a number of large ombudsman projects that mentioned oil development as one of many activities, and we and included any project that could potentially benefit or build capacity for spill response efforts. This methodology could underestimate commitments for oil and gas development, and overestimate commitments towards spill response. In the case of World Bank projects, we accounted for their practice of mainstreaming environmental spending into infrastructure projects that are likely to have negative environmental impacts. Other AidData researchers found that in environmentally risky ventures, like oil and gas exploitation, about 18% of a World Bank’s project budget is spent on environmental protection, and we apply this percentage to IDA and IBRD projects.

Here we compare the aggregate amounts to the cost of the Deepwater Horizon response.




As you can see, despite the markup from mainstreamed WB environmental spending, the spending mismatch between petroleum and the environment is huge. The amount committed by the international community towards cleanup and environmental protection in Nigeria is 6 times smaller than what’s spent on the oil industry, and over 13 times smaller than the cost of the Deepwater Horizon cleanup, which is only going to rise. Again, since we’re probably overestimating spending on cleanup efforts and underestimating spending on the oil industry, this discrepancy is probably even higher.

Here you can see the breakdown of these sectors by donor:








Ken Tebe is right. It looks like the US government isn’t that concerned. Of the nearly 5 billion dollars of aid that the US has committed to Nigeria over the past 40 years, less than a million has gone towards oil spill response efforts. But not all signs point to disaster--there may be a good environmental outcome for the Niger Delta from the hype created by the Gulf oil spill: the governor of the Delta State recently called for a criminal investigation of oil companies operating in the Delta, citing developments in the US response to the Deepwater Horizon Spill as inspiration. We’ve seen how poor regulation and weak response capacity can exacerbate the impact of oil catastrophes in the Gulf of Mexico. Perhaps now that we’ve learned this lesson at home, we’ll finally be willing to help those who deal with these realities every day, no matter where they are.


This post was a collaborative effort by myself and two of our William and Mary research assistants, Jillian Feirson ('11) and Brian O'Donnell ('11). You can view the project lists and underlying data we used for this post here