Where did all the aid go?

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The latest figures on aid released by the OECD are less than encouraging. The overall levels of aid fell for a second year running, from US$104.4bn in 2006 to US$95.6bn in 2007 (adjusting for inflation), representing a fall of 8.5% in real terms. Part of the reason for this is the particularly high levels of aid over the previous few years as large amounts of debt for Iraq and Nigeria were written off. The UK’s figures do not make good reading, with aid standing at $9.9bn in 2006 (once debt relief is removed) falling to US$8.8bn in real terms in 2007. This despite the pound rising against the dollar, which will serve to inflate the dollar value of the UK’s 2007 figures.

This pushes us further away from the target of aid reaching 0.7% of GDP. Some countries continue to do well, notably Norway at 0.95%, Sweden at 0.93% and Luxembourg at 0.90%. The UK has reached half-way, at 0.36% of GDP. Though they give the most in absolute terms (at $21.8bn), the US languishes at the bottom of the chart with only 0.16% of GDP given to aid. A number of European countries have pledged to reach the 0.7% target, notably Belgium (by 2010), Finland (2010), France (2012), Spain (2012) and the UK (2013), but on current trends this may seem like empty words. Furthermore, as Oxfam have pointed out, the G8 countries pledged at the Gleneagles summit in 2005 to give an additional $50bn in aid by 2010, but look likely to miss this target by as much as $30bn.

If there is to be any hope of achieving the Millennium Development Goals, aid budgets will need to increase. The UN is currently organising a follow-up conference to examine progress since the Monterrey Conference of 2002 on finance for development. Perhaps the opening session should ask why, when only one of eight regional groups is on track to meet all the MDGs, aid from the rich countries is declining.

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