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DEVELOPMENT: Three Decades of Missed Aid Targets
By Thalif Deen
UNITED NATIONS, Apr 18 (IPS) - The world's 22 rich nations claim that their collective official development assistance (ODA) to developing countries has risen significantly: from an average of about 55 to 60 billion dollars in the late 1990s to 69 billion in 2003 and 78.6 billion dollars in 2004.
But in a new report released Monday, U.N. Secretary-General Kofi Annan warns against any premature rejoicing over the rising numbers.
"While the nominal figures for increases in ODA are encouraging," he admits, "they have to be interpreted with some caution."
Adjusted for depreciation of the fast-falling U.S. dollar and worldwide price inflation, the 18.4 percent annual increase of ODA reported for 2003 relative to 2002 "falls to around a quarter of that figure," he notes.
Arabella Fraser, policy advisor for the international humanitarian organisation Oxfam, is equally guarded.
"Rich country self-congratulation is unwarranted," Fraser told IPS. "Aid levels are still pitiful, at an average of 0.25 percent of national income, and way below the promise of 0.7 percent, which was made 35 years ago."
Still, Oxfam commends the recent aid increases, and Fraser admits that there is a renewed effort on the part of the international community to provide financing for the Millennium Development Goals (MDGs), "and this marks a real change in comparison to the aid cuts of the 1990s."
However, rich countries have not yet committed themselves to provide the additional 50 billion dollars a year needed to meet the MDGs and help end poverty, Fraser said.
"Furthermore, the quality of the aid that is given is still far too poor. Currently, only 40 cents in every dollar spent on overseas aid reaches the poorest countries," she added.
The MDGs include a 50 percent reduction in poverty and hunger; universal primary education; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; the promotion of gender equality; and the reversal of the spread of HIV/AIDS, malaria and other diseases. The deadline for achieving these goals is 2015.
"The increases in aid that are touted by the United States and other rich countries are grossly inadequate, and are also misleading," Ann-Louise Colgan, director for policy analysis and communications at the Washington-based Africa Action, told IPS.
She said that recent reports show "that aid flows are largely dictated by geo-strategic concerns rather than by efforts to reduce poverty."
In addition, Colgan said, when up to 70 percent of U.S. foreign aid is tied to an obligation to use that money to buy goods and services from the United States, this immediately undermines development efforts - specifically in the poorer countries in Africa.
"Africa's needs for development assistance are great, and the United Nations has already noted that Africa is still at least 150 years away from meeting the Millennium Development Goals of reducing poverty even by half," she added.
In his report, Annan says that although ODA is normally expected to provide new cash resources for recipient countries to increase development spending, "an increasing portion of the recent increases of ODA has taken the form of expenditures on emergency relief in countries that donors have deemed critical for security reasons."
Notwithstanding the recent trend increase in ODA, current levels still fall far short of all estimates, including the amount deemed necessary to achieve the MDGs, he adds.
Annan points out that some of the increases in ODA are also due to the large amounts of aid given to Afghanistan and Iraq.
When the increase in aid to these two countries is taken into account, "ODA in 2003 barely increased in real terms, suggesting that the increase in resources available to meet the MDGs has been quite modest."
According to the 22-member Organisation for Economic Cooperation and Development (OECD), described as the rich nations' club, ODA is expected to reach about 88.4 billion dollars by 2006, and could reach 100 billion dollars by 2010.
In his report, Annan points out that only five countries - Denmark, Luxembourg, Netherlands, Norway and Sweden - have met or exceeded the 0.7 target of their national incomes dedicated to ODA.
But a number of other rich nations, including Belgium, Finland, France and Ireland, have set precise target dates for meeting the target. Spain and Britain have indicated their intention to do so by 2012 and 2013, respectively.
Annan recently urged industrial nations that have not already done so to establish fixed time tables that would involve significant increases no later than 2006 and reaching 0.5 percent by 2009, in order to achieve the 0.7 percent target by 2015.
Jeffrey Sachs, a senior adviser to Annan and a professor at Columbia University, says that 2005 marks the 35th year since the U.N. General Assembly first affirmed the target of 0.7 of gross national product (GNP) as ODA.
Still, about 11 of the world's 22 rich nations, including the United States, Japan and Germany, have failed to make any commitments to meet this target.
The world's most neglected region is Africa, which draws little foreign direct investment and even smaller amounts of development aid.
Colgan of Africa Action told IPS that despite U.S. promises to increase foreign aid, its contribution remains far short of what Washington can and should provide, and is only a tiny fraction of what Africa needs.
Africa's poverty and the debate about development assistance must also be understood in the context of the continent's debt crisis, which undermines Africa's development efforts and results in a greater outflow of resources from the continent than the assistance that trickles in.
"As African countries struggle to respond to the HIV/AIDS pandemic, most are required to spend more money on debt service payments than they can spend on health care for their own people," Colgan said.
While aid increases are important, debt cancellation is an essential step toward freeing African countries' resources for use on their own human development priorities, she added.
(END/2005)
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