Development aid still sluggish

OECD Observer

Despite the pressing need to reduce global poverty, official development assistance continued to decline in 2000. In fact, all kinds of official funding for development – totalling US$65.5 billion – were at their lowest level since 1990.

The picture should have been better, but was perhaps not quite as bad as the overall figures suggest. For a start, net aid to developing countries from the 23 OECD countries that make up the Development Assistance Committee in 2000 was US$53.7 billion, slightly higher than the preliminary figure of US$53.1 billion. In real terms the flow was little changed from 1999: down 0.4%. In fact, there would have been a slight rise if some countries had not been removed from the list of countries eligible to receive ODA (see table via the OECD Newsroom, link below).

Robust economic growth of 3.7% in donor countries in 2000 boosted gross national income (GNI) and hence the ODA/GNI ratio decreased from 0.24% to 0.22%. Only Denmark, Luxembourg, the Netherlands, Norway and Sweden met the long-standing UN target for ODA of 0.7% of national income.

Other notable features of the 2000 data are the fall in Japan's aid (15% in real terms), and France (16% in real terms), the latter fall being exaggerated somewhat by the removal of French Polynesia and New Caledonia from the list of ODA-eligible countries and territories. Aid from the United Kingdom rose by 38%, partly as a result of the timing of contributions to multilateral agencies that had artificially reduced ODA in 1999, but also reflecting the UK government's commitment to substantially increasing aid. The real increase over the last two years totalled 22%. US aid ODA to the least developed countries rose slightly.

In the second largest donor, the United States, ODA rose by 7% in real terms in 2000 without affecting the ratio of aid to national income of 0.10%. Proposals have been advanced in Congress to increase aid spending in the medium term. Other donors, including Canada, Greece, Ireland, Sweden, Switzerland and the United Kingdom, have specific targets for raising ODA in the short to medium term. Others, including the Netherlands and Norway, have fixed targets that match economic growth, and Germany has announced a real increase in ODA in budgetary outlays for development in 2002, continuing its recent upward trend.

For more on this story, see the Newsroom. 

©OECD Observer December 2001

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