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Poverty & SDGs

As Aid Shrinks, U.N.’s Development Goals Under Threat

Water is supplied by the military in Old Dhaka, Bangladesh. Credit: UN Photo/Kibae Park

UNITED NATIONS, Sep 20 2012 (IPS) - If the developing world fails to meet the targets set in the eight Millennium Development Goals (MDGs) – relating mostly to poverty, hunger, education, health care, gender empowerment and the environment – the primary blame for the failure would be on Western donors who have reneged on their aid commitments, according to a new report released here.

After reaching a peak in 2010, the volume of official development assistance (ODA) fell by about three percent in 2011 due to fiscal restraints by the 23 donor nations whose traditional – but mostly failed – commitments amount to 0.7 percent of their gross national income (GNI).

“The protracted global economic crisis has begun to take its toll on international development cooperation,” warned Secretary-General Ban Ki-moon.

Addressing a press briefing Thursday, and directing his comments at donors, he said, “Fiscal austerity should not be on the backs of the poor.”

Last year, ODA fell for the first time in many years, he said, while trade protectionist measures increased.

“There has also been too little progress in fulfilling other key aspects of the global partnership for development,” Ban said, in a preface to the 84-page report released here.

He said the report presents “a troubling picture” of a “weakened” global partnership with donors spelled out in the last of the eight MDGs.

The goals include eradication of extreme poverty and hunger; achieving universal primary education; promoting gender equality and empowering women; reducing child mortality; improving maternal health; combating HIV/AIDS, malaria and other diseases; ensuring environmental sustainability; and developing a global partnership for development.

The deadline for meeting these goals is 2015.

The 23 donor nations, which are members of the Development Assistance Committee of the Paris-based Organisation for Economic Cooperation and Development (DAC/OECD), provided about 133.5 billion dollars in ODA in 2011, leaving a shortfall of about 167 billion dollars.

The largest declines were attributed to Greece (39.3 percent), and Spain (32.7 percent), which are caught up in an ongoing economic crisis that erupted back in 2008.

But these shortfalls were followed by Austria (14.3 percent decline) and Belgium (13.3 percent), primarily due to reduced debt-forgiveness grants.

Meanwhile, Japan’s ODA also suffered a large decrease (10.8 percent) after a significant rise in 2010, according to the new report titled “The Global Partnership for Development: Making Rhetoric a Reality” released Thursday by the MDG Gap Task Force.

The only five countries which continue to exceed the U.N. target of 0.7 percent of GNI as ODA are Sweden, Norway, Luxembourg, Denmark and the Netherlands.

The donors lagging behind include the UK, Belgium, Finland, Ireland, France, Switzerland and Germany.

The five top aid recipients in 2010 were Afghanistan (6.37 billion dollars), Democratic Republic of Congo (3.54 billion dollars), Ethiopia (3.52 billion dollars), Haiti (3.06 billion dollars) and Pakistan (3.01 billion dollars).

The task force has called on donor governments to honour their ODA commitments despite budgetary constraints and make multi-year forward spending plans publicly available in order to increase transparency and reduce volatility of aid.

Additionally, it has urged an increase in other sources of development financing, including non-DAC ODA, including philanthropy and innovative financing, while ensuring these are stable and aligned with recipient country priorities and strategies.

Asked if the United Nations expects the decline in ODA to continue, Rob Vos, director of Development Policy and Analysis Division at the U.N.’s Department of Economic and Social Affairs (DESA), told IPS, “The odds do not look good because many donor countries are pursuing further fiscal austerity.”

In several cases, like the Netherlands, it is already known this will further affect aid budgets in this and coming years, he pointed out.

On the other hand, some countries are committed to do more: Australia, Germany, Italy, South Korea, Sweden and Switzerland in fact increased aid amidst greater fiscal austerity.

Also the UK remains committed to step up aid to reach the target level of 0.7 percent of gross national income (GNI).

“So, if it’s a political priority, fiscal austerity need not affect aid flows. But then, commitments have to be followed through,” Vos said.

Last year, at least, the UK’s aid budget dropped slightly from 0.57 to 0.56 percent of GNI.

“Hopefully, from here on the UK government indeed will put money where the mouth is,” Vos said.

On the brighter side, the report points out that despite the global economic downturn, resources available for the provision of essential medicines through some disease-specific global health funds increased in 2011.

There was new funding pledged to the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Global Alliance for Vaccines and Immunisation.

“While the funding challenges are enormous, global targets on poverty, water, slums and parity between girls and boys in primary education, have been met,” according to the U.N. MDG report released last July.

Asked if it is the first time a U.N. report has named and shamed countries which have failed to meet their ODA targets, Vos told IPS: “No, the MDG Gap Task Force has named and shamed each year since its first report in 2008.”

This year’s report is no different, he said, but perhaps it is now more visible because total aid flows have declined, “where we had seen an upward trend (at least in the absolute size of the flows) until last year.”

The task force also has always been explicit about the countries which consistently have met the 0.7 percent target.

It now also more continuously provides this accountability (not only for aid, but also regarding commitments to provide export market access, debt relief, and access to medicines and technology) on an interactive website.

Asked about the status of innovative sources of financing, Vos said such sources have become increasingly important even though it is difficult to give precise updates because they are not as consistently measured as traditional official aid.

In 2010, aid from non-traditional donors was estimated at around 7.0 billion dollars, still only a small fraction of what traditional OECD donors give (133.5 billion dollars in 2011).

It is probably more, because the estimate does not include important “new” donors like China.

“Private philanthropy also has grown, but again we lack precise estimates,” he said. Some put it between 30 billion and 56 billion dollars in 2010.

Then there has also been an expansion of innovative mechanisms to channel development assistance, including for large-scale vaccination programmes like the International Finance Facility for Immunization (IFFIm) and programmes fighting specific diseases like UNITAID.

These programmes are effectively serving their particular purposes, he said.

However, they do not mobilise much, if any, new funding as they mostly intermediate existing ODA as UN/DESA extensively analysed in another report released this year, the World Economic and Social Survey 2012: In Search of New Development Finance.

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