In its just published 1999 Development Cooperation report, the Paris-based inter-governmental think-tank of 29 rich industrial countries said several of its DAC (Development Assistance Committee) members have, in the meanwhile, set out ``interim targets'' well below this level, ``postponing any attempt to reach the actual target''.

While underlining the effectiveness of ODA, the report said that the diversity of examples in Asia-emerging countries, as well as India and China-suggests that aid has played a decisive role in laying the foundations for development-the creation of highly qualified human capital and basic infrastructure and distribution of a ``critical mass'' of financial resources sufficient to trigger financial dynamics.

It said that India, Indonesia and Brazil together accounted for 23 per cent of DAC members' net bilateral aid in 1969, but this had fallen to 7 per cent by 1998. China is a special case. Until the late 1970s, its communist government did not accept aid. China was added to the list of aid recipients in 1980 and aid played a catalytic role in opening its economy to foreign contact.

China's net ODA receipts from DAC members topped $1 billion annually before the end of the 1980s and have regularly exceeded India's since the early 1990s and peaked at $2.5 billion in 1995, representing 6 per cent of all bilateral aid, the report noted.

Over the period 1992-98, the cumulative drop in DAC members' ODA effort amounted to $88.7 billion, compared with what would have flowed to developing countries had the average DAC ODA/GNP ratio of the previous 20 years been maintained.

As practically every country that has achieved a substantial rise in per capita income over the last 30 years was initially a substantial recipient of ODA, it might well be contended that if more donors had met the ODA target, ``the mass poverty and humanitarian emergencies which persist in many parts of the developing world today might have been largely avoided''.

Laying out the ``priority issues'' for donors, the report said that since developing countries are adopting strategies to become more deeply integrated in the global economy, two elements of a mutually beneficial partnership between OECD and developing countries take on particular significance: The need for coherent OECD policies towards developing countries' efforts to integrate into the global economy and approaches to international rule-making founded on greater cooperation with developing countries.

``By addressing the macro-economic imbalance within and between countries, OECD members could work to avoid economic shocks, which disrupt the international financial environment of OECD countries,'' the report said. It further said developing countries would benefit in particular from further reductions in tariffs for the goods where they are best able to compete, such as agriculture, textiles and clothing, rubber, leather and footwear.

Quoting a study, it said that rich countries' average tariffs on manufactured imports from poor countries are four times higher than those on imports from other developed countries. Further reduction in tariff escalation would also encourage developing countries to add value to raw materials.

OECD tariffs on finished industrial products are about eight times higher than those on raw materials, offering scope for further improvement in developing countries' situations. These barriers delay entry into the export-oriented industries, which are most accessible to developing countries, such as commodity processing, light manufacturing and textiles and clothing, the report said.