Developing countries' aid leaps by 23%

PARIS (Reuter) - Financial flows to developing countries jumped 23 per cent in 1992 to a record dollars 176bn ( pounds 116.5m) as a result of an explosion in bank lending, the Organisation for Economic Co-operation and Development said yesterday.

With direct investment also rising, private money flows reached dollars 99.8bn and exceeded official aid for the first time since 1983, the OECD's Development Assistance Committee said in its annual report.

The panel welcomed the increase, which it said reflected positive economic and political trends in developing countries.

But it cautioned that the boom might not be sustainable. In any case, only a few better-off developing countries were benefiting from the sudden interest.

'The ability of the vast number of the poorer developing countries to attract external resources, particularly private flows, is little changed,' the committee said.

The volume of grants and soft loans rose 1.1 per cent in real terms to dollars 60.8bn, described as 'a positive response to continuing challenges in developing countries'.

About half of the rich nations that make up the committee boosted their official development assistance in 1992.