OECD sees another poor year for overseas aid

By Kathryn Blanchflower
THE GUARDIAN , LONDON
Monday, Apr 07, 2008, Page 9

Growing over the amount of global aid to the developing world was justified on Friday when the Organization for Economic Cooperation and Development (OECD) said financial assistance to the world's poorest countries had fallen for the second year in a row.

Campaigners the figures showed that G8 and EU targets for tackling global poverty by doubling aid flows by 2010 were in serious jeopardy. Aid rose every year for the past decade until 2006.

The OECD said aid totaled US$103.7 billion last year, a fall of 8.4 percent in real terms.

At the 2005 Gleneagles summit, G8 leaders, led by then British prime minister Tony Blair, committed to a doubling of their aid and to provide an additional US$50 billion a year by 2010.

Three on, this target looks likely to be missed by as much as US$30 billion a year, Oxfam said, enough to save 5 million lives.

"These figures leave us in no doubt that the world's richest countries are failing to meet their promises to the poorest countries, especially in Africa," said Max Lawson, policy adviser at Oxfam. "The human cost is huge."

The EU's spending target on aid of 0.7 percent of national income by 2015 also looks badly off track, with aid from the world's richest countries falling from 0.31 percent in 2006 to 0.2?8 percent last year.

MISSED GOALS

The OECD report shows only seven countries met or surpassed the 0.7 percent target, with Norway (0.95 percent) and Sweden (0.93 percent) topping the chart.

Although the US made the largest donation (US$21.75 billion), it contributed lowest percentage of national income, coming bottom of the charts at 0.16 percent.

The US spends the equivalent of US$73 per American each year on aid, but US$1,763 a person on defense.

Aid but still fell short of the projected targets in nine countries, including Germany and Ireland.

Not all figures in the report, however, spoke of doom. Aid to sub-Saharan Africa (excluding debt relief) increased by 10 percent in real terms after last year's 5 percent drop.

Britain's Department for International Development (DFID) insisted it remained well on track to raise aid spending to 0.7 percent by 2013, although it acknowledged that aid had dropped last year to 0.36 percent from 0.51 percent of national income in 2006 because debt relief agreements with Iraq and Nigeria fell out of the comparison.

But even allowing for that, UK aid spending fell by 2 percent, the figures showed. That is equivalent to every Briton spending US$165 a year on overseas aid, compared to US$984 spent on defense.

DFID's data in showed an increase of about 1 percent, to £4.9 billion (US$9.8 billion), but that was less than inflation and so represented a fall in real terms.

The British government last year pledged to raise aid spending to £9 billion by 2010.

British. International Development Secretary Douglas Alexander said: "The UK is keeping its promises to the world's poor. Thanks to the comprehensive spending review, DFID now has the largest development budget in the UK's history."

Development have never liked the fact that after Gleneagles countries included debt relief in their aid calculations, saying that was a distortion of the real aid spending.

MISLEADING RELIEF

"One-off debt relief deals have disguised the fact that underlying aid levels have not increased," said ActionAid spokesman Jesse Griffiths.

"Now major debt cancellation deals are over, and debt relief is no longer a major part of the aid figures, the real aid numbers are revealed," he said.

The OECD agreed that last year's total reflected the end of high levels of debt relief.

The Paris-based body has warned that "unprecedented increases" in spending were required if there is to be any hope of getting back on track and restoring what Oxfam called the "crumbling credibility of the Gleneagles promises."

The European commission urged member states to increase aid levels in a bid to ensure they kept their promises.

European Commission President Jose Manuel Barroso said: "We cannot afford to reduce aid while trying to achieve the UN millennium development goals. We need more money to cut extreme poverty by half. We need more predictable and sustained aid."

Campaigners the increasing of aid levels was absolutely crucial to meeting the millennium goals.

"Oxfam's experience is that quality, long-term aid is making an enormous difference," Lawson said.