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Development Connecting to Growth:
Sustainable Economic Development of Air Transport
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Development Assistance for Air transport
Aviation is a powerful engine of economic and social development. It directly contributes to the creation of 8.5 million jobs and to around 700 billion dollars to global gross domestic product (GDP). Because of its cross-cutting nature and multiple links to other economic sectors, the total economic impact of aviation reaches some 3.5 per cent of GDP —2.4 trillion dollars—with the creation of 58.1 million jobs, nearly the same size of Italy’s population.
Despite being a high impact economic activity, aviation has so far received limited attention regarding official development assistance (ODA).
ODA is defined as government aid designed to promote the economic development and welfare of developing countries. Whether disbursed bilaterally or through a multilateral development agency such as the United Nations or the World Bank, ODA in the form of grants, “soft” loans with a substantial grant component, or technical assistance plays a key role in eradicating poverty and forming the foundation for sustainable growth.
Major ODA contributions are coming from the Development Assistance Committee (DAC) members, a unique international forum which became part of the
Organisation for Economic Co-operation and Development (OECD) in 1961. The Committee has the mandate to promote development co-operation, poverty reducing measures and pro-poor economic growth. The DAC currently comprises of 29 members, 28 States and the European Union.
The international community has repeatedly pledged to contribute 0.7 per cent of their gross national income (GNI) to support low and middle income countries.
All Donors*, Total in million $
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Air Transport
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4 665.21
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4.19%
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Road Transport
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60 897.64
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54.70%
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Rail Transport
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25 999.01
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23.35%
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Water Transport
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5 337.62
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4.79%
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Storage
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251.24
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0.23%
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Transport policy & admin. management
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14 093.18
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12.66%
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Educ./trng in transport & storage
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94.76
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0.09%
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Total ODA to transport sector 2003-2013
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111 338.65
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100%
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*include DAC and non-DAC countries, multilaterals and private donors; data from CRS OECD
Air transport received a mere 4.2 per cent (USD 4,6 billion) of the total ODA provided by all donors for economic infrastructure and services for the past decade (2005-2013). In comparison, road transport was allocated a share of 54,7 per cent which amounts to USD 60.9 billion.
As air traffic is now projected to double by 2030, States and the international community should use aviation as an effective tool to foster sustainable economic development and ultimately to achieve the UN Sustainable Development Goals (SDGs) [more information here].
For Landlocked Developing Countries (LLDCs) and Small Island Developing States (SIDS) especially, aviation represents an essential lifeline to enhance connectivity, which in turn promotes greater tourism, trade and other vital business activities.
ODA contributions by DAC country
Major ODA country contributions to the air transport sector in the last decade came from Japan (47.9 per cent), followed by the United States (8 per cent), France (2.6 per cent), Republic of Korea (2.2 per cent) and Denmark (1 per cent). Donations from Multilateral and private actors account for 31.1 per cent.
The table below shows the countries’ contribution of ODA to the different transport sectors: Air, Road, Rail and Water[1]. The table furthermore illustrates that the total contributions by countries to road transportation were nearly eight times higher than the funds allocated to the air transport sector.
Its largest donor was Japan with 24.1 per cent, followed by the United States with 5.7 per cent. The second largest recipient sector was rail transportation, having received USD 22.7 billion in the last decade.
Unit:US Dollar, millions (2005-2013)
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DAC countries
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Air
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Road
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Rail
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Water
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Australia
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18.49
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665.60
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42.84
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80.26
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Austria
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0.17
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44.25
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48.85
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4.72
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Belgium
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2.80
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242.24
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16.37
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88.77
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Canada
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1.19
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148.03
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2.27
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0.62
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Czech Republic
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0.02
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0.07
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1.25
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0.00
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Denmark
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48.48
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349.91
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0.00
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45.16
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Finland
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0.04
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23.16
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0.11
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0.22
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France
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120.28
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931.93
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5245.93
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263.22
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Germany
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35.75
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422.85
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1196.01
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161.66
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Greece
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0.09
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76.21
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0.00
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0.34
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Iceland
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0.00
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0.00
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0.00
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0.00
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Ireland
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0.69
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11.24
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0.00
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0.00
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Italy
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1.25
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310.52
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9.26
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52.30
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Japan
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2232.53
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14690.91
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14791.43
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2144.32
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Korea
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103.33
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2157.91
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203.06
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126.28
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Luxembourg
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0.00
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11.33
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0.00
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0.00
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Netherlands
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38.58
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36.60
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15.69
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47.37
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New Zealand
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48.15
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27.81
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0.00
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94.03
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Norway
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0.31
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89.14
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1.15
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14.46
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Poland
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0.00
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0.00
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0.00
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0.00
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Portugal
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18.01
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195.86
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11.00
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1.17
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Slovak Republic
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0.00
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0.01
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0.00
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0.00
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Slovenia
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0.00
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0.00
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0.00
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0.00
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Spain
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14.06
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87.46
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814.33
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53.52
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Sweden
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5.69
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215.63
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1.64
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3.06
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Switzerland
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0.00
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13.43
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1.66
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0.00
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United Kingdom
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47.78
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476.80
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0.00
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17.61
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United States
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372.88
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3476.78
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316.41
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171.91
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Total
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3110.60
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24705.66
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22719.26
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3370.99
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ODA contributions by multilateral donors and non-DAC countries
On a multilateral scale, the top donors were the Arab Fund (AFESD) with 10 per cent, the International Development Association (IDA) with 8.5 per cent, followed by the Asian Development Bank’s (AsDB) Special Funds with 3.5 per cent and the African Development Fund (AfDF) with 3.2 per cent.
Recipient countries of ODA dedicated to air transportation
On the recipient side, Viet Nam received the major portion of ODA dedicated to air transport with a share of around 15 per cent. Sri Lanka was allocated 8 percent and Thailand 7 per cent.
Nearly one third of ODA disbursed to air transport infrastructure projects was therefore distributed to 3 South/South-East Asian countries.
Storage, Transport policy and administrative management are not considered.
