14 C E N T E R F O R WO M E N ' S G LO B A L L E A D E R S H I P Indicators for Impact of ODA on Available Resources A useful indicator for how far governments extend international assistance is the value of ODA as a proportion of GDP. A widely used benchmark is that high income countries should provide ODA amounting to 0.7 percent GNI (gross national income). According to the OECD Development Co-operation Directorate, in 2010, net official ODA flows from members of the OECD Development Assistance Committee (DAC) reached USD 128.7 billion, representing an increase of 6.5 percent over 2009. This is the highest real ODA level ever, surpassing even the volume provided in 2005 which was boosted by exceptional debt relief. Net ODA as a share of the GNI of members of the DAC was 0.32 percent, equal to 2005 and higher than any other year since 1992. Though this is an increase, it is not half way to the promise of 0.7 percent.19 In 2010, the largest donors by volume were the United States, the United Kingdom, France, Germany and Japan. Only Denmark, Luxembourg, the Netherlands, Norway and Sweden met the United Nations ODA target of 0.7 percent of GNI. The largest increases in real terms in ODA between 2009 and 2010 were recorded by Australia, Belgium, Canada, Japan, Korea, Portugal and the United Kingdom. It is worth noting that extraterritorial obligations are generally more controversial under international human rights law than obligations of a state to its own population. International cooperation and assistance can easily be identified in treaties, but quantifying and allocating responsibilities across countries is more complex. The impact of ODA on available resources will be reduced if ODA is tied to purchases of imports from donor countries that cost more than goods and services available locally or on the international market. The proportion of bilateral aid that is formally untied rose from 46 percent in 1999-2000 to 76 percent in 2007; however, research has found that in most investment projects, the main contract and technical assistance are still procured from donor countries, so some of the ODA that has flowed into a recipient country, almost immediately flows back out again to the donor.20 It is sometimes argued that recipient countries may not be able to absorb additional amounts of ODA because they lack the capacity to spend it effectively. However if this is the case, ODA can be directed towards increasing this capacity. A further argument is that if countries spend their additional ODA, it will lead to inflation rather than mobilization of real resources. The IMF, for instance, argued that low-income countries should keep much of their additional ODA in their foreign exchange reserves rather than spend it, unless they have very low rates of inflation. Another concern is that ODA may substitute for tax revenue rather than augment available resources. Large amounts of aid could serve as a disincentive for governments to increase the effectiveness of their tax collection systems. However, the policy conditions attached to aid may themselves make tax collection