Glossary

Definitions of Terms

Absolute Poverty

A level of poverty when only the minimum levels of food, clothing and shelter can be met.

Accession Countries

Countries in the process of joining the European Union.

Administrative Costs

DFID administration costs include costs of DFID Headquarters, overseas costs of staff in agreed diplomatic posts concerned with full time aid administration, including Staff Appointed in country employed by DFID; expenditure in respect of residual rent liability on the Chatham Maritime arising from the terms agreed for the privatisation of DFID’s former next steps agency, the natural Resources Institute; and those elements of Foreign and commonwealth Office and CDC Capital partners , formally known as Commonwealth Development Corporation, administration costs which are related to aid delivery.

African Development Bank

A regional bank started in 1966 to support the development of Independent African states through loans and assistance

Aid Untying

The ending of practice of most donors to insist that aid is spent on goods and services from the donor country in favour of giving unrestricted access to those who can compete on price, quality and service.

AIDS

Autoimmune Deficiency Syndrome

Bilateral Aid

Bilateral aid is provided to developing countries and countries in transition of the Development Assistance Committee List on a country to country basis, and to institutions, normally in Britain, working in fields related to these countries.

Budgetary assistance or budgetary support

See Direct Budget Support or General Budget Support.

Civil Society Organisations

All Civic Organisations, associations and networks, which occupy the ‘social space’ between the family and the State who come together to advocate their common interests through collective action. It includes volunteer and charity groups, parents and teachers associations, senior citizens groups, sports clubs, arts and culture groups, faith-based groups, workers clubs and trade unions, non-profit think tanks and ‘issue-based’ activist groups.

Concessional Resources

Development assistance with a grant normally greater than 35%.

Countries in transition

Term used to describe former Soviet countries in Eastern Europe the former Soviet Union.

Country Assistance Plans

DFID has produced or is producing Countries Assistance Plans for countries where we provide development assistance programmes. These papers, produced in consultation with governments, business, civil society, and others within the country concerned and within the UK, set out how we aim to contribute to achieving the international development targets in the country in question. Country Strategy Papers are normally intended to cover a 3-4 year period. For some groups of countries a Regional Strategy Paper is produced.

Debt Relief

Debt Relief may take the form of cancellation, rescheduling, refinancing or re-organisation. Interest and principal foregone from debt cancellation forms part of DFID programme expenditure whilst other debt relief is funded from other official sources.

1. Debt cancellation (or Retrospective Terms Adjustment) is relief from the burden of paying both the principal and interest on past loans.
2. Debt rescheduling is a form of relief by which the dates on which the principal and interest are due are delayed or rearranged.
3. Official bilateral debts are re-organised in the Paris Club of official bilateral creditors, in which the UK plays its full part. The Paris club has devised increasing generous arrangements for reducing and rescheduling the debts of the poorest countries; most recently agreeing new terms for the enhanced Heavily Indebted Poor Countries Initiative.

Developing Countries

See Development Assistance Committee: List of Aid recipients below.

Development Assistance Committee: List of Aid Recipients

This list is in two parts, Part 1 shows developing countries and territories eligible to receive official development assistance. Part 11 shows countries and territories eligible to receive official aid. This list is designed for statistical purposes and not as guidance for aid or other preferential treatment.

Part 1: Developing Countries This list comprises all countries and territories in Africa; in America except the United States, Canada, Bahamas, Bermuda, Cayman Islands and Falkland Islands; in Asia except Japan, Brunei, Hong Kong, Israel, Kuwait, Qatar, Singapore, Taiwan and United Arab Emirates; In the Pacific except Australia and New Zealand; plus Albania, Armenia, Azerbaijan, Georgia, Gibraltar, Malta, Moldova, Turkey and the states of former Yugoslavia in Europe.

Part 11: Countries and Territories in Transition The list comprises Belarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia and Ukraine, plus the more advanced developing countries which have moved from Part 1 of the list, namely Bahamas, Bermuda, Brunei, Cayman Islands, Cyprus, Falklands Islands, Hong Kong, Israel, Kuwait, Qatar, Singapore, Taiwan and United Arab Emirates. Note that Moldova moved to Part 1 of the list on 1 January 1997.

Direct Budget Support

Direct Budget Support is a form of programmatic aid in which:

1. Funds are provided in support of a government that focuses o growth and poverty reduction and transforming institutions, especially budgetary.
2. The funds are provided to a partner government to spend using its own financial management, procurement and accountability systems.

It can take the form of General Budget Support, which is a contribution to the overall budget, or Sector Budget Support, which is financial aid, earmarked to a discrete sector.

European Community

The 15 member states (rising to 25 in 2004) and the common institutions, notably the European Commission, co-operation on a range of economic and other issues in supra-national integration.

European Development Fund

The European Development Fund is the main route though which funds committed under the EC’s Cotonou Convention are channelled.

European Union

Created by the treaty Maastricht 1992, which enhanced the integration of the European Community but also enabled the member states to co-operate together in an inter-governmental, not supra-national, way in the areas of Common Foreign and Security Policy Justice and Home Affairs.

Fiduciary Risk

The risk that expenditure, for example through budget support, will not be properly accounted for or will not be used for the intended purposes.

Financial Aid

Financial Aid in the wider sense is defined as a grant or a loan of money, which is the subject of a formal agreement with the recipient government or institution .In practice it is all bilateral aid except technical co-operation and administrative costs.

G7/G8 Group

The G7 Group of major industrialised democracies comprises Canada, France, Germany, Italy, Japan, the UK and the United States of America. The Group of Eight (G8) includes Russia. Their Heads of Government meet annually at the G7/G8 Summit to discuss areas of global concern.

Gross Domestic Product (GDP)

The total value of goods and services produced within a country.

Gross National Income (GNI)

Previously known as Gross National Product (GNP), Gross National Income comprises the total value of goods and services produced within a country (i.e. its GDP) together with its income received from other countries (notably interest and dividends), less similar payments made to other countries.

Heavily Indebted Poor Countries Initiative

An initiative launched by the International Monetary Fund and the World Bank in 1996 to provide debt relief to the poorest countries. Revised in 1999 to deliver twice as much debt relief as the original initiative.

Humanitarian Assistance

Humanitarian Assistance comprises food aid and other disaster relief. It generally involves the provision of material aid (including food, medical care and personnel) and finance and advice to save and preserve lives during emergency situations and in immediate post-emergency rehabilitation phase; and to cope with short and long term population displacements arising out of emergencies.

Income Groups

The classification of aid recipient countries by income groups is based on Gross National Income per capita figures in 1998 according to the thresholds set out below.

Low-income group: countries with a Gross National Income per capita in 1998 of below $760.

Lower middle-income group: countries with a Gross National Income per capita in 1998 of $761 - $3030.

Upper middle-income group: countries with a Gross National Income per capita in 1998 of $3031 - $9360.

High-income group: countries with a Gross National Income per capita in 1998 of $9361 and above.

Institutional Strategy Papers

Institutional Strategy Papers are designed to set our partnership with multilateral development institutions in a strategic framework. The papers are prepared in consultation with that institution and other interested parties and set out the objective for our partnership with that institution. Institutional Strategy Papers have been or are being prepared for our main partner institutions and will normally be produced every 3-4 years.

Intellectual Property Rights

National and international Systems provide for the protection and enforcement of intellectual property rights. Intellectual property rights constitute private rights over ideas and inventions. The principal Intellectual Property Rights are copyrights (material which can be reproduced only with permission of the owner, who can charge for it), trademarks (registered marks that exclusively identify a product or economic entity, which cannot be used by others), and industrial design.

International Development Association

Part of the World Bank Group that makes loans to countries at concessional rates (i.e. below market rates) of interest.

Least developed Countries

Least developed countries are those assessed as having particularly severe long-term constraints to development. Inclusion on the list of the Least Developed Countries is now assessed on two main criteria: economic diversity and quality of life.

Low-income Countries

Countries in the low income group, as defined in Income Groups.

Millennium Development Goals

A set of eight international development goals for 2015, adopted by the international community in the UN Millennium Declaration in September 2000, and endorsed by IMF, World Bank and OECD.

Multilateral Aid

Aid channelled through international bodies for use in or on behalf of aid recipient countries. Aid channelled through multilateral agencies is regarded as bilateral where DFID specifies the use and destination of the funds.

National Poverty Line

This is the percentage of people living below the national poverty line. National estimates are based on population-weighted subgroup estimates from household surveys.

Non-Government Organisations

They are private non-profit making bodies, which are active in development work. To qualify for official support UK non-governmental organisations must be registered charities.

Official Aid

This is the equivalent, for countries on Part ii of the Development Assistance Committee List, of official development assistance to countries on Part I of the Development Assistance List (i.e. developing countries). To qualify as official aid, resource flows should have the same concessional and qualitative features as official development assistance.

Official Development Assistance

Official Development assistance is defined as those flows to developing countries and multilateral institutions provided by official agencies or by their executive agencies, which meet the following tests;

1. It is administered with the promotion of the economic development and welfare of developing countries as its main objective.
2. It is concessional in character and conveys a grant element of at least 25%.

Only aid to countries on Part I of the Development Assistance List is eligible to be recorded as official development assistance.

Organisation for Economic Co-operation and Development (OECD)

A group of major industrial countries promoting growth and high employment among its members, fostering international trade and contributing to global economic development.

Population below $1 and $2 a day

These are percentages of the population living on less than $1.08 and $2.15 a day at 1993 international prices (equivalent to $1 and $2 in 1985 prices adjusted for purchasing power parity [PPP]).Poverty rates are comparable across countries but as a result of revisions in PPP exchange rates they cannot be compared with poverty rates reported in previous years for individual countries.

Poverty Reduction Strategy Papers

Poverty reduction Strategy Papers are prepared by the member country government in collaboration with the World Bank and International Monetary Fund as well as civil society and development partners. These documents describe the country’s macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs and major sources of financing.

Programme Aid

Programme aid is financial assistance specifically to fund (i) a range of general imports, or (ii) an integrated programme of support for a particular sector, or (iii) discrete elements of a recipient’s budgetary expenditure. In most cases, support is provided as part of a World Bank/International Monetary Fund co-ordinated structural Adjustment Programme.

Public Service Agreement

A set of measurable targets for the Department’s work, as required by the White Paper Public Services for the Future: Modernisation, Reform, Accountability (CM4181) .

Public/Private Partnership

A Public/Private Partnership brings public and private sectors together in partnership for mutual benefit. The term Public/Private Partnership covers a wide range of different partnerships, including the introduction of private sector ownership into businesses that are currently state-owned, the Private Finance Initiative, and selling Government services into wider markets.

Regional Development Banks

International Development Banks, which serve particular regions, for example the African Development Bank or the European Bank for Reconstruction and Development.

Sector Wide Approaches or sector investment programmes

A Sector Wide Approach is a process that entails all significant donor funding for a sector supporting a single, comprehensive sector policy and expenditure programme, consistent with a sound macroeconomic framework, under government leadership. Donor support for a sector wide approach can take any form – project aid, technical assistance or budgetary support – although there should be a commitment to progressive reliance on government procedures to disburse and account for all funds as the procedures are strengthened.

Security Sector

The security sector is defined as those who are, or who should be, responsible for protecting the state and communities within the state. This includes military, paramilitary, intelligence and police services as well as those civilian structures responsible for oversight and control of the security forces and for the administration of justice.

Service Delivery Agreement

A document that defines the outputs and subsidiary targets, which will contribute towards delivery of the targets in the Public Service Agreement.

Spending Review

A fundamental re-evaluation of priorities, objectives and targets by the UK government, which establishes a three-year planning cycle, including spending plans, for all departments, for all departments. The 2000 Spending Review runs from 2003/04 – 2005/06.

Target Strategy Papers

These papers set out the key development challenges to be addressed in order to achieve the international development targets. The papers also explore the action needed by the international community, developing country governments, civil society, the private sector and others in order to achieve the targets. Finally the papers explain what DFID will do to contribute to that effort.

Technical Co-operation/Technical Assistance

Technical co-operation is the provision of advice and /or skills, in the form of specialist personnel, training and scholarship, grants for research and associated costs.

Utstein Group

The Utstein Group is a group of ministers responsible for Development Co-operation, working in a concerted way to drive the development agenda forward, focusing on implementing the international consensus. Although the group is by no means exclusive, the core consists of the respective Ministers of Germany, The Netherlands, Norway, and the United Kingdom.

World Bank

The term World Bank is commonly used to refer to the International Bank for Reconstruction and Development and the International Development Association. Three other agencies are also part of the World Bank, the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Centre for Settlement of Investment Disputes. Together these organisations are referred to as the World Bank Group.

World Trade Organisation (WTO)

The World Trade Organisation exists to ensure that trade between nations flows as smoothly, predictably and freely as possible. Decisions in the WTO are typically taken by consensus among 146 member countries and are ratified by members’ parliaments.