Austerity among rich countries hit developing world: OECD

Agence France-Presse
Rich countries applying budget austerity cut their aid to developing countries by 2.7% in 2011

PARIS – Rich countries applying budget austerity cut their aid to developing countries by 2.7% in 2011, the OECD says, and aid group Oxfam warns that this is putting lives at risk.

The cut in development aid, the first for 14 years, looks likely to continue at a time when poor countries are already suffering from a slowdown in global economic activity, trade and investment, the OECD said.

Last year, the 34 OECD members gave $133.5 billion (102.1 billion euros) in official development assistance, or 0.31% of their combined national incomes, the Organisation for Economic Cooperation and Development said in a report this week.

The drop-off “is a source of great concern, coming at a time when developing countries have been hit by the knock-on effect of the crisis and need it most,” OECD secretary general Angel Gurria said.

“Aid is only a fraction of total flows to low-income countries, but these hard economic times also mean lower investment and lower exports.

“I commend the countries that are keeping their commitments in spite of tough fiscal consolidation plans. They show that the crisis should not be used as an excuse to reduce development cooperation contributions.”

The largest donors in cash terms were the United States, Germany, Britain, France and Japan, the OECD report said.

The OECD is a research body for advanced nations which it advises on policy in a wide range of activities.

Relative to the size of their economies, Denmark, Luxembourg, the Netherlands, Norway and Sweden were the most generous, exceeding the United Nations’ aid target of 0.7% of gross domestic product.

The biggest cuts to aid were made by Austria, Belgium, Greece, Japan and Spain, the report said.

Aid group Oxfam International said that the ability of some countries to meet their commitments and increase aid showed that cutting aid was “usually a political choice rather than an economic necessity”.

Oxfam’s executive director Jeremy Hobbs said: “This cut in aid is a global scandal.”

He commented: “Rich countries are using the economic crisis as an excuse to turn their backs on the world’s poorest at a time when they need help.

“Cutting aid is no way to balance the books. Even small cuts in aid cost lives as people are denied life-saving medicines and clean water.

“Aid is such a tiny part of budgets that cutting it has no discernible impact on deficits — it is like cutting your hair to lose weight.”

He added that countries including Spain, the Netherlands and Canada must reverse decisions they have made to cut back on future aid.

“We also need rich countries like Italy, Japan and the US, who currently give only a tiny proportion of their incomes, to do more to help the poorest.”

Until 2011, worldwide aid had been steadily increasing for more than a decade and reached its peak in 2010, said the OECD report.

It warned that recession in some donor countries “severely squeezed their aid budgets and pressure may mount on other donors in the years ahead”.

Looking ahead, the OECD said that global aid may rise somewhat this year, as money already in the pipeline is disbursed, before stagnating from next year onward as the full effects of the global downturn are felt. – Agence France-Presse

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