Several member countries of the Development Assistance Committee (DAC) at the OECD, which delivers some 95% of global bilateral aid, have pledged to increase their aid as part of a drive to achieve the Millennium Development Goals and cut global poverty in half.

According to OECD calculations, these commitments would raise DAC official development assistance (ODA) by 31%, or by US$16 billion, in real terms, by 2006. This would increase ODA from 0.22% of gross national income in 2001 to 0.26% in 2006, still below the UN recommended target of 0.7%.

EU members decided at their Barcelona Council meeting before Monterrey to raise EU bilateral aid to at least 0.33% of GNI by 2006, with EU members already above the UN target of 0.7% maintaining their performance. Some EU members made subsequent individual commitments exceeding the Barcelona target. If all such commitments are realised, then EU ODA would average 0.41% of GNI in 2006, higher than the EU average of 0.39% predicted at Barcelona.

The United States, for its part, has announced the creation of a Millennium Challenge Account, devoted to projects in nations that govern justly, invest in their people and encourage economic freedom. The account is to have an annual budget of US$5 billion by 2006. The US also recently committed an additional US$15 billion in funding over five years for an Emergency Plan for AIDS Relief. Though still subject to Congressional assent, these two initiatives would push US ODA to around 0.15% of GNI by 2006 from 0.11% in 2001.

Canada has committed to doubling its ODA by 2010, Norway to increasing its ODA to 1% of GNI by 2005 and Switzerland to raising its ODA to 0.4% of GNI by 2010. Japan, in contrast, is reducing its ODA budget due to fiscal constraints.

©OECD Observer No 237, May 2003