How much of the $56 billion that OECD countries counted as Official Development Assistance (ODA) in 1999 was 'real aid'? The question of whether aid is really reaching poor people is fundamental.

Since 1993, NGOs from North and South have worked together on the Reality of Aid project to answer this question. But as the project has progressed, the limitations of aid have become very clear.

Alongside the efforts of developing countries themselves, aid has sometimes made a difference for individual communities. It has contributed to improved social indicators over the past three decades. If aid had not existed, the human impact of many wars and disasters would have been worse - even more people would be in poverty.

But it is equally obvious that with poverty and inequality continuing to increase, there is a need for more fundamental change in economic and political priorities.

In this [new] Report, our aim is not to belittle the progress that has been achieved. Rather we want to do a modest reality check - to begin addressing some key questions in a way that will highlight the limitations on aid - whilst pointing to ways in which a reformed aid regime could become a catalyst for wider change.

* What are the true motivations for aid?
* How much aid is 'real aid'?
* What are the underlying reasons for the co-existence of aid and debt?
* Why is it OK to cancel debt for the rich but not for the poor?
* Why are donors so addicted to conditions?
* Can ownership be reconciled with conditionality?
* Democracy and hypocrisy: who sets standards on governance ?

These questions pose real challenges to donors in the North (including NGOs). They point to the gap between the claims of what aid can do, the policies of donors, which are outlined in the national reports from OECD NGOs, and the experience and observations of civil society in the South, which are described in reports from developing countries.

In the next full Reality of Aid Report, to be published in late 2001, we will be exploring these issues further, focusing particularly on the issues of ownership and conditionality. In the past, aid has too often been a part of the problem, an integral part of a wider economic and political order in which poverty and inequality are inherent. The aid regime has the right words... empowerment, participation. The question is, can it help people, North and South, challenge the orthodoxies and structures that perpetuate poverty?

The report, which is available on-line, has the following content:

* Introduction by Elin Enge, Chair Reality of Aid
* Poverty, inequality and aid: rhetoric and reality.
* Overview from the Reality of Aid Management Committee
* Data on aid and poverty
* OECD Reports
* Perspectives from the South on Development Cooperation - includes the following articles:
* International cooperation, poverty and democracy by Mariano Valderrama, CEPES -ALOP
* International Cooperation and Poverty in Latin America by Dorian Garay, CEPES -ALOP
* Exclusion, Inequality and Poverty in Latin America and the Carribean by Eduardo
* Ballón, CEPES - ALOP
* Economists and Power at the World Bank by Humberto Campodónico, DESCO
* Loan to restructure grains sector threatens small farmers and food security by Tony Tujan, IBON
* A gender perspective on conditionality by Thoko Matshe, ZWRCN
* Aid and Poverty Reduction Strategies by Warren Nyamugasira, Uganda Debt Network
* An aid/debt trade-off is one of our best options by Opa Kapijimpanga, AFRODAD