Wednesday, 17 February 2010

Broken promises: Aid shortfall of $21bn

Aid to developing countries in 2010 will reach record levels in dollar terms after increasing by 35% since 2004. But it will still be less than the world’s major aid donors promised five years ago at the Gleneagles and Millennium+5 summits. Though a majority of countries will meet their commitments, the underperformance of several large donors means there will be a significant shortfall, according to a new OECD review. Africa, in particular, is likely to get only about $12bn of the $25bn increase envisaged at Gleneagles, due in large part to the underperformance of some European donors who give large shares of official development assistance (ODA) to Africa.

In 2005, the 15 countries that are members both of the European Union and of the OECD Development Assistance Committee (DAC) committed to reach a minimum ODA country target in 2010 of 0.51% of their Gross National Income (GNI). Some will surpass that goal: Sweden, with the world’s highest ODA as a percentage of its GNI at 1.03%, is followed by Luxembourg (1%), Denmark (0.83%), the Netherlands (0.8%), Belgium (0.7%), the United Kingdom (0.56%), Finland (0.55%), Ireland (0.52%) and Spain (0.51%) – all figures are in 2004 dollars and relate to net ODA. But others will fall short: France (0.46%), Germany (0.40%), Austria (0.37%), Portugal (0.34%), Greece (0.21%), and Italy (0.20%).

Other DAC countries made varying ODA commitments for 2010, and most, but not all, will fulfil them. The United States pledged to double its aid to sub-Saharan Africa between 2004 and 2010. Canada aimed to double its 2001 International Assistance Envelope level by 2010 in nominal terms. Australia aimed to reach $A4bn. New Zealand plans to achieve an ODA level of $NZ600m by 2012-13. All four countries appear on track to meet these objectives. Norway will maintain its ODA level of 1% of its GNI, and Switzerland will likely reach 0.47% of its GNI, exceeding its previous commitment of 0.41%. Japan’s Gleneagles promise was to give $10bn more over the period 2005 – 2009 than if they had stayed at their 2004 base-line. In 2008 it was still $4bn short of this undertaking. Japan’s ODA for 2010 is not yet known, and the OECD calculations are based on an assumption that it will maintain the same level as in 2008.

Overall, these figures result in additional aid of $27bn from 2004 to 2010, but a $21bn shortfall between what donors promised in 2005 and the OECD estimates for the 2010 outcome. Of this shortfall, $17bn is the result of lower-than-promised giving by the donors and $4bn is the result of lower-than-expected GNI because of the economic crisis. All these figures are estimates based on countries’ national 2010 aid budget plans where available and on early GNI estimates.

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