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b'International development assistance, or "aid",\\xa0is the transfer of resources at concessional rates of interest, which means rates of interest that are lower than those that could be obtained on financial markets.\\xa0The Development Assistance Committee of the Organization of Economic Co-operation and Development goes further than this in formally defining aid,\\xa0when it says that a least 25\\xa0per cent of the transfer must take the form of a grant,\\xa0that the transfer must have improvements in human welfare through economic development\\xa0as its objective,\\xa0and the transfer must take place between official bilateral and multilateral agencies.

International development assistance is a complex and messy business.\\xa0Nonetheless,\\xa0it can have dramatic impacts on human well-being.\\xa0It is notable, for example,\\xa0that when South Korean officials speak of their development experience since the end of the Korean War,\\xa0they always highlight the role of aid in being a catalyst of social transformation.\\xa0But in order to have a catalytic impact,\\xa0the state receiving aid must be capable of absorbing it -- and that is often not the case.

Part 1 of this Episode defines international development assistance and distinguishes it from private aid.'