18th February 2010

Bridges Weekly | Western Nations Fall Short of Aid Promises to Developing World: OECD

Discuss this itemShare your views with other visitors, and read what they have to say

The Organisation for Economic Co-operation and Development (OECD) estimates that most of the world’s major donors will keep their aid promises for 2010, according to statements made by OECD Secretary-General Angel Gurría at a Paris press conference this morning. However, some large donors will fall far short of their pledges, causing a substantial shortfall in aid commitments, according to the OECD.

The OECD has projected that Official Development Assistance (ODA) will grow by 35 percent from 2005 through 2010, pushing aid to developing countries to record levels. Gurría called this a “very, very brisk rate of increase for a six-year period” but noted that it occurred largely over a period of strong global economic growth.

Gurría commended donors, noting that aid continued to increase over 2009 “even in the face of the crisis.” Aid has not fallen as other financial flows have. Sixteen donors have managed to meet their aid commitments, although seven have not.

“We are encouraging all member countries to meet their commitments. It is more needed than ever before,” Gurría said. “Aid is only part of the solution…But it is a very important part of the solution.”

At the G8 Summit in Gleneagles, Scotland in 2005, G8 leaders promised that their countries would together increase aid to developing countries by approximately US $50 billion a year by 2010, US $25 billion of which would go to Africa.

Also at Gleneagles, the 15 EU countries that are also members of the OECD Development Assistance Committee (DAC) established a minimum ODA target of 0.51 percent of each country’s gross national income (GNI) as a halfway point towards their eventual goal of 0.7 percent by 2015.

Overall, the OECD tallied a US $17 billion gap between what donors promised and what they delivered. Gurría said that this situation was “not at all satisfactory.”

The nominal shortfall is actually US $21 billion, but US $4 billion of that total is due to national economies shrinking and thus is not counted in the tally of donor commitments that were made in percentage terms.

“The shortfall is focused on Africa,” Gurría said, “because many of the countries that have a shortfall had focused their aid to Africa.” Africa is likely to get only about US $12 billion of the promised US $25 billion.

Nine EU countries are expected to meet or surpass the 0.51 percent goal, according to an OECD press release: Sweden (ODA of 1.03 percent of GNI), Luxembourg (1 percent), Denmark (0.83 percent), the Netherlands (0.8 percent), Belgium (0.7 percent), the UK (0.56 percent), Finland (0.55 percent), Ireland (0.52 percent), and Spain (0.52 percent).

Six EU countries, however, will not reach their commitments: France (0.46 percent), Germany (0.40 percent), Austria (0.37 percent), Portugal (0.34 percent), Greece (0.21 percent), and Italy (0.20 percent).

Other countries set individual goals for themselves at Gleneagles. The US, Canada, New Zealand and Australia are all predicted to meet their commitments. Norway will maintain its ODA pledge of 1 percent of GNI, and Switzerland is likely to surpass its commitment of 0.41 percent and donate 0.47 percent of GNI.

Japan is likely to be the largest underperformer. It had promised to increase ODA by US $10 billion more than 2004 levels, but the OECD estimated it would fall US $4 billion short based on 2008 levels.

The major donors of the OECD are the 24 members of its Development Assistance Committee (DAC). The full table of the DAC members’ commitments and performance is available here. The table does not include data on Korea because it joined the DAC on 1 January 2010 or on the Commission of the European Communities.

ICTSD reporting.

More Bridges Weekly headlines

More ICTSD highlights