By Julio Godoy
PARIS, May 4 2004 (IPS)

Developed countries are proposing new aid instruments without honouring earlier commitments, aid experts say.

Senior officials from developed countries acknowledged at meetings at the World Bank in Washington and at the Organisation for Economic Development and Cooperation (OECD, a group of 30 industrialised nations) last month that the millennium development goals will not be met unless present levels of aid are doubled.

The OECD estimates that about 68.5 billion dollars was provided by way of overseas development assistance (ODA) last year.

The OECD meeting confirmed that only a handful of countries – Norway, Sweden, Denmark, Luxembourg and the Netherlands û have met the United Nations target of providing 0.7 percent of gross national income (GNI) for aid.

Development assistance grew 11 percent over the past two years, but that was only after sharp decline in the 1990s, OECD officials said. And of the additional 2.3 billion dollars provided over the last two years, about two billion dollars went to Iraq. At the same time contributions to multilateral funds were cut 2.1 billion dollars.

“The Monterrey process is in peril,” head economist of the World Bank Francois Bourguignon said at the annual meeting of the bank last month. Rich nations had pledged a development assistance of at least 0.29 percent of GNI at a summit in the Mexican city Monterrey in 2002.

Poverty is rising in sub-Saharan Africa and in vast regions of Latin America, the Caribbean, Eastern Europe and Central Asia, Bourguignon said.

“Although we are likely to reach the first millennium development goal (MDG) of reducing poverty by half at world scale by 2015, much more aid (is) needed to achieve all the MDGs in all countries,” Bourguignon said at the World Bank meeting.

The MDGs agreed at the United Nations General Assembly in 2000 call for eradication of extreme poverty, hunger and child illiteracy, and for reduction of child mortality. They call also for fighting gender inequality, for promoting girls’ education and for the empowerment of women.

Other goals are to reduce maternal mortality by three-quarters, reverse the spread of HIV and AIDS, ensure environmental sustainability, and expand access to world markets for poor countries.

But at the present rate sub-Saharan Africa will have to wait until 2129 to guarantee primary education for all children, and until 2147 to reduce child mortality by two-thirds.

“Most of the countries of the northern hemisphere, in Western Europe and North America, continue to conceive development in ideological terms, asking for more growth, and for more market-oriented reforms, thus ignoring the historical reality, and the actual needs of the poorest countries of the world,” says Ann Kathryn Schneider, development expert at the German non- governmental organisation World Economy, Ecology and Development (WEED) in a report.

Most aid experts say these needs must include debt relief, and a substantial increase in development assistance.

Juergen Kaiser from the German NGO Schuldenerlass (‘Debt Remission’) says the poorest countries are facing a new debt crisis. “Some countries such as Bolivia and Uganda are resorting to non-concessional multilateral money and are therefore firmly on their way into a new debt problem,” Kaiser told IPS..

“Despite this reality, the international financial institutions see no options for the poorest countries to achieving debt sustainability and fulfilling the MDGs, other than resorting to radical market policies,” Kaiser said.

But despite this some European governments are proposing new instruments to finance development aid. British Chancellor of the Exchequer (finance minister) Gordon Brown and French finance minister Nicolas Sarkozy proposed creation of a new facility last month to enable countries to borrow more from international financial markets.

Under the plan developing countries could get long-term loans from international markets with the richest countries providing collateral to the tune of about 60 billion dollars.

Several aid experts find the proposal cynical and unnecessary.

“With this proposal, France and Britain suggest that the poorest countries of the world continue increasing their international debts,” Damien Millet from the French Committee for Debt Relief told IPS.

“Worse, in their cynicism, both governments recommend asking financial speculators for help for relieving the world’s misery,” Millet said. “Actually what is really necessary is the relief of the present debt, and not the creation of a new one.”

Of the present 68.5 billion dollars in ODA only about half goes to the South, Millet said. “This official sum includes the salaries of government officials in Europe and North America, and the costs of transportation of material aid,” Millet said.

On the other hand countries in the North are trying to stifle an independent source of financing û the money migrants from Latin America, Africa and Asia transfer to their countries of origin, Millet said.

“These transfers, paid for by the work of immigrants in the northern hemisphere, add up to more than 80 billion dollars, three times the present actual ODA,” he said.

The governments are stifling this flow by trying to get rid of immigrants, he said. But increased aid and immigrant money could together provide necessary funds for the MDGs, he said.

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