Participants at a UN event on Interfaith harmony and the Sustainable Development Goals. Credit: UN Photo/Manuel Elias.

By Lyndal Rowlands
UNITED NATIONS, Apr 21 2016 (IPS)

The traditional definition of aid is being eroded at the same time that governments have committed to achieving the UN’s ambitious Sustainable Development Goals (SDGs), Jeffrey Sachs special adviser to the UN Secretary-General on development told IPS Thursday.

“A lot of governments have a kind of magical thinking which is, we’re all for the Sustainable Development Goals but don’t come to us if you want to achieve them, go borrow from the private markets,” said Sachs.

Aldo Caliari who represents civil society in UN Financing for Development (FfD) negotiations told journalists here Monday that there has been a “significant shift in the language” in these negotiations towards “a larger presence of the private sector”.

“We are concerned about states withdrawing their responsibility and saying the private sector should do it,” said Caliari who is also director of the Rethinking Bretton Woods Project at the Washington DC-based Center of Concern.

“Loans usually go for commercial projects rather than public service delivery so this is an entirely different way of utilising the financing,” he said.

While private sector financing will provide part of the funds needed to achieve the sustainable development goals, there are definitely some areas where public funds remain essential.

“If you want to achieve universal health coverage in poor countries, which is SDG 3, that is a public sector function and the poor countries do not have enough domestic revenues to achieve that on their own,” said Sachs.

“For the poorest countries the Official Development Assistance should be overwhelmingly in the form of grants because putting absolutely impoverished countries into debt makes no sense,” he said.

Sachs said that there are examples right now where donor governments are reducing funding to development programs in favour of domestic refugee costs, peacekeeping budgets and climate financing.

“I know cases where contributions to The Global Fund (to Fight AIDS, Tuberculosis and Malaria) and GAVI (The Vaccine Alliance) were cancelled in favour of climate financing because the government wanted to check the box on climate financing,” said Sachs.

He said that even Scandinavian countries, which he described as “some of the world’s best donors”, were reallocating their development funds to refugee programs.

Jeroen Kwakkenbos, Policy and Advocacy Manager at the European Network on Debt and Development (EURODAD) expressed concerns that some of the biggest increases in the recently published 2015 Organization for Economic Cooperation and Development (OECD) Official Development Assistance (ODA) figures were for areas not traditionally defined as aid.

“One of the largest increases aside from refugee costs was for non-grant financing which is basically loans which increased by 26 percent,” said Kwakkenbos.

Kwakkenbos said that there is a trend towards loans replacing grants in country’s overseas development assistance budgets.

These changes are reflected in donor government aid policies. For example, the Australian government states on its website, that aid represents “an increasingly small proportion of development finance” and that Australia’s aid program will achieve it’s purpose by “supporting private sector development and strengthening human development.”

Kwakkenbos said that the inclusion of refugees in ODA accounting started in the 1990s, “but at the time it was a very small proportion of ODA so everyone just kind of ignored it.”

Overall, the OECD figures showed a small increase in ODA in 2015, without including the refugee costs, although some OECD countries did individually reduce the development assistance in favour of refugee programs.

The OECD told IPS by email that there has “not been any change of rules to allow more refugee costs to be counted as ODA” and that the OECD Development Assistance Committee told donor countries in February they were concerned that refugee costs should not “eat into ODA”.

Despite the small overall increase, most donor countries remain a long way from meeting their commitments to increase aid to 0.7 of one percent of their Gross National Income (GNI).

Kwakkenbos said that the target to reach 0.7 has now been revised to 2030, the same year governments have agreed to achieve the Sustainable Development Goals.

“You have to remember that the original 0.7 target was 1980 and no later than 1985,” he said.

South Africa is one of the most unequal societies in the world. It is estimated that nearly 40 percent of the population lives below the poverty line. Credit: Kristin Palitza/IPS

By John Fraser
JOHANNESBURG, May 17 2013 (IPS)

Commentators and business leaders in South Africa believe that the recent announcement of an end to the United Kingdom’s aid programme to South Africa may be the start of a new trend to cut back on aid to this country, and possibly to the rest of Africa.

“This British announcement was not entirely unexpected,” Neren Rau, the head of the South African Chamber of Commerce and Industry, told IPS.

“There is currently a lot of discussion of Africa as a whole being vulnerable to less aid – the funding just isn’t there.”

The announcement in April by the U.K.’s International Development Secretary Justine Greening that her country’s direct aid to South Africa, which is currently worth 19 million pounds a year, will cease in 2015 has drawn widespread criticism in the U.K. and elsewhere, not least because there was no prior dialogue with the South African government.

“There is a high probability of other donors following suit,” Rau said.

“The (possible) loss of aid from the European Union and the United States is something we have been debating for a while. I think that African countries should have planned for this, and expected this. It is very naive to expect aid to flow indefinitely.”

Former Belgian ambassador to South Africa Jan Mutton, who is a research associate in the Department of Political Sciences at the University of Pretoria, told IPS that it would be wrong for any country to depend forever on handouts.

“South Africa is a perfect example to consider for a mixture of trade and aid together,” he suggested.

“There is a classical opportunity to see how we can work together in a new way. So what the U.K. is doing is most appropriate – to look at the most appropriate way of helping South Africa.”

Pretoria-based economist Dawie Roodt of the Efficient Group told IPS: “I have plenty of sympathy with the U.K.’s decision. It doesn’t make sense that a recipient has to agree before aid is halted. That decision is the prerogative of the donor only.

“But apart from that, I am very sure there are, in the view of the British, more urgent aid cases than to give money to South Africa.”

Spokesman at the EU Embassy in Pretoria Frank Oberholzer told IPS that currently EU aid is continuing as planned, but that there are discussions on how best to handle longer-term assistance to South Africa.

“The current EU programme in SA is 980 million euros (1.2 billion dollars), from 2007 to 2013,” he told IPS.

Head of the South African Chamber of Commerce and Industry, Neren Rau, says the U.K.’s cutting of aid to South Africa was not unexpected. Credit: John Fraser/IPS

“While all commitments under this programme come to an end this year we expect to continue disbursing on average some 100 million euros (129 million dollars) per year until 2015.

“Discussions on future assistance in terms of funding and the areas of cooperation are currently ongoing at European Parliament, European Commission and European Council of Ministers level – it is too early to predict an outcome at this time,” Oberholzer said.

“While I do not believe there is debate on development assistance, there is a discussion on how best to assist middle income countries, South Africa being one of these,” he added.

Britain’s opposition Labour Party has been fiercely critical of the aid decision, with a leading Labour member of the European Parliament, Michael Cashman, attacking it in a statement on his website.

Cashman, the chair of the European Parliament Delegation for Relations with South Africa, protested that the decision “was taken unilaterally”.

“It is clear (Greening) is either ignorant of the depths of poverty in South Africa or she is badly advised. Either way she should review this decision immediately, or at the very least work a solution bilaterally with her South African counterpart.”

He confirmed that the EU is reviewing its own development cooperation strategy and stated that “fights have begun to differentiate countries who should still benefit from aid and those who should not, South Africa being one of the most controversial cases.”

“The country is somewhat of a development success story and is the continent’s largest and most developed economy,” Cashman said.

“However, it remains one of the world’s most unequal societies and is blighted by high unemployment and widespread poverty. It is estimated that nearly 40 percent of the population lives below the poverty line,” he added.

Privately, some diplomats in Pretoria suggested that one reason for the U.K.’s decision to end aid to South Africa has been the inability of some government departments to handle it, and to report back efficiently to the donor on how the aid has been spent.

There is also a suspicion that South Africa’s recent enthusiastic alliance with the Brazil, Russia, India and China grouping of leading emerging nations might have sent the wrong signals to traditional development partners such as the U.K.

NGOs fear the poorest in India will bear the brunt of aid cuts. Credit: Manipadma Jena/IPS

By A. D. McKenzie
PARIS, Dec 5 2012 (IPS)

As India forges ahead with a host of trade agreements with various European countries, including France, some Indian commentators say the country can well do without the “paltry” sum in financial aid it currently receives from the United Kingdom.

But for others, the 320 million dollars in direct aid  that the U.K. government plans to terminate by 2015 could affect the welfare of the Asian nation’s most poverty-stricken residents.

“India still has major challenges. Millions of Indian people live in extreme poverty and a shocking number of children die each year,” said Guillaume Grosso, director of the French branch of the anti-poverty group ‘ONE’.

“As Britain reduces aid, it must be very careful to ensure the plight of those children is not made worse,” he told IPS.

According to United Nations figures, India had the highest number of under-five child deaths in 2011, despite advances in health care.

World Vision, a Christian relief and development group, has questioned the UK’s decision. According to Head of Policy David Thomson, “At the moment nearly half of India’s children under five are stunted by lack of nutritious food. That is more than 60 million children….equivalent to the entire population of the UK.

“Unlike acute malnutrition during famine, which can be treated, children never recover from stunting. Their brains and bodies never fully develop, making them much less likely to earn a decent income as adults,” he added.

Grosso said that ONE, founded by the singer Bono, and other NGOs fighting against poverty would like to see “a day when development aid is no longer needed”. But in the meantime, “aid helps people escape poverty and get access to things we take for granted such as vaccines and clean water”, he said.

“It is a temporary solution, but it plays a very important role in kick-starting development. In many countries the resources are simply not available to provide those basic services, so aid is essential,” Grosso stressed.

Still, he agreed that India is increasingly able to do without aid, as its “strong economic growth” means that the country now has an expanding pool of domestic resources.

“India (is an example of) how poor countries can transform themselves. As this happens, over time, aid funding can be directed to those countries with the greatest need,” Grosso told IPS.

India’s “changing place in the world”

This was likely the thinking behind the British Department for International Development (DFID)’s announcement in early November that Development Secretary Justine Greening would not “sign off on any new programmes” and that financial aid to the Asian country would end completely in 2015.

“After reviewing the programme and holding discussions with the Government of India…we agreed that now is the time to move to a relationship focusing on skills-sharing rather than aid,” Greening stated.

The move has annoyed Indian officials and brought them closer to the UK’s fellow EU member, France.

A few days after the announcement, while Indian officials were in France for the annual commemoration ceremony for Indian soldiers who lost their lives in Europe during the First World War, closer ties between the two countries were on display.

According to the Indian Embassy in Paris, “India and France are quite strategic partners” especially in defence and security issues, and the relationship is growing closer.

India’s proposed controversial Jaitapur Nuclear Power Project, for instance, is a joint project with France. If realised, Jaitapur would be the largest nuclear power generating station in the world, with French nuclear engineering company Areva holding the contract to build several reactors.

India is also scheduled to purchase 126 French-built Rafale fighter jets from the French company Dassault Aviation in a deal reported to be worth more than 10 billion dollars. The company recently set up a subsidiary in India, Dassault Aircraft Services India Private Limited.

Indian embassy officials here told IPS that France neither “receives nor gives any bilateral aid to India”. But India does provide a few French students with scholarships in the fields of traditional Indian medicine and arts.

“India has stopped accepting aid from many countries, including France,” an embassy spokesperson said.

These steps are just one sign of India’s “changing place in the world”, according to Greening. For their part, Indian commentators like the Times of India have suggested that the time is now ripe for their country to say, “No thank you to the paltry aid” from the UK.

But while officials haggle over political details, NGOs fear that the 360 million people still living in crushing poverty in India will bear the brunt of this abrupt change in policy.

“India may be a middle-income country now, but it still has the highest child malnutrition levels in the world,” said Matt Davies, head of international policy and advocacy for ATD Fourth World, a France-based organisation that works to eradicate chronic poverty.

“We have to look at where the aid is going and make sure that the poorest of the poor don’t suffer from funding cuts as governments try to cut corners,” he told IPS. “Ending financial aid can have serious consequences for those most at risk, in a country where one of the big issues is income inequality.”