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Unkept promises on aid

The Development Cooperation Report 2007 reinforces claims that rich countries are not doing enough to honour their commitments of aid. This is all the more unacceptable because at least some of their poorest counterparts are moving away from extreme dependence on overseas funding. In particular, sub-Saharan Africa has raised revenues surpassing Official Development Assistance (ODA) between 2001-06, while other recipient states have increased their expenditure on basic educ ation and healthcare. These findings of the Organisation for Economic Cooperation and Development (OECD) should help take a realistic view of progress towards the 2015 Millennium Development Goals. To begin with, the world’s richest countries, barring a few in the Nordic region, are averaging less than the contribution target of 0.7 per cent of the GDP set at the 2002 Monterrey Consensus. For instance, the OECD aid given by the United States in 2006 — $77.8 billion — may seem significantly higher than what it was earlier in the decade, around $50 billion. But it counts for much less if the proportion of the reconstruction effort in Iraq and the write-off of Nigeria’s commercial borrowings are discounted. In any case, the bulk of aid flows are largely by way of debt relief rather than new transfer of resources.

In relation to Africa, the actual programmable aid is far from adequate to meet the G8 commitment to double the assistance to the continent (from the 2004 levels) by 2010. The OECD would have to double the funding to $50 billion a year until 2010 to deliver on the promises they made at the 2005 Gleneagles summit. Notwithstanding the recent five per cent annual increase in ODA, the addition of special categories of aid allocation — humanitarian relief, reconstruction of conflict zones, and coverage of the cost of debt — tends to inflate the volume of aid flows beyond contributions for specific programmes aimed at eradication of poverty. In addition, there is a growing apprehension that aid budgets are influenced more by considerations of national interest and support for friendly regimes than by lofty objectives of alleviating hunger and disease. Increasing aid to promised levels is the first step towards enhancing the credibility of the global initiative.

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