G8 overseas aid down by $2.9 billion between 2011 and 2012

Overseas Development Institute warn of ‘fading commitment’ but other observers optimistic that aid levels will rebound

Members from the IF campaign wear masks representing world leaders dressed as chefs, outside the City Hall, Belfast on Saturday. Photograph: Ben Birchall/PA Wire

Members from the IF campaign wear masks representing world leaders dressed as chefs, outside the City Hall, Belfast on Saturday. Photograph: Ben Birchall/PA Wire

Mon, Jun 17, 2013, 17:05

The amount of money the world’s richest countries give to developing nations fell by $2.9 billion between 2011 and 2012.

The G8 countries reduced their collective official development aid, with only Canada increasing the amount of money it provided in overseas aid.

Preliminary figures published earlier this year by the Organisation for Economic Co-operation and Development (OECD) show that six G8 countries - namely France, Germany, Italy, Japan, the United Kingdom and the United States - reduced their collective spending on official development assistance (ODA) in 2012 by $3.1 billion.

G8 & Ireland Development assistance figures 2012

Canada was the only country to have bucked the trend, increasing its development assistance by $223 million or 4.1 per cent between 2011 and 2012.

Russia is not a member of the OECD’s Development Assistance Committee (DAC)therefore it is excluded from the statistics.

The UK-based Overseas Development Institute warned earlier this month in its analysis of the G8 Accountability Report that there “are clear warning signs of fading commitment” around development assistance.

It noted that overall G8 development assistance had fallen for two consecutive years, adding that the projections indicate that aid will increase by 9 per cent in 2013 before stagnating between 2014 and 2016.

Gideon Rabinowitz, research officer with the institute’s centre for aid and public expenditure noted that, some countries, including the United States, the United Kingdom, France and Japan cut aid last year for the second year running.

He warned that the effect of G8 donors “tightening their belts” could have serious consequences for aid recipients. “The question is how these countries, in a relatively short time period, can subsidise the aid they are losing,” he said.

Although 16 of the 25 Development Assistance Committee countries have met or have set out a timetable to meet the UN-set benchmark that 0.7 per cent of countries’ national income to development assistance Mr Rabinowitz said it was now unlikely that countries which had committed to doing so by 2015 would make that target.

However, he said it was important that countries “do not abandon their commitments altogether but to take a pragmatic and concrete approach to raise the required resources to meet that commitment” as close to that date as possible.

Frank Barry, professor of international business and economic development in the School of Business in Trinity College Dublin says the drop in development assistance among the relevant G8 countries is worrying but said he believes it is short term.

“I don’t read the retreat of the G8 as anything other than a response to the global economic crisis,” he said.

He added that a serious issue for the summit should be capital flight out of Africa which “absolutely dwarfs” the total amount of development aid received by countries on the continent.

Jamie Drummond, executive director of ONE conceded that convincing countries to keep prioritising development assistance given the global downturn has become harder. However he said he is optimistic that aid will stabilize and even increase as long as there is a “view expressed by citizens and taxpayers about these issues”.

Mr Drummond said there are two “falsehoods” circulated about development assistance:

“We are told that it involves a vast amount of donor countries’ budgets. It doesn’t. We are also told by the naysayers that aid doesn’t achieve much. It does. When people learn how much is achieved with so little and are reminded what it’s really like to live in extreme poverty, they want to express solidarity.”

However, he said that, while it is “incredibly important that we keep all our aid promises” that it isn’t all about aid adding that one of the main priorities for the organisation at this summit was around transparency issues.

The organisation is calling for greater transparency in the oil, gas and mining sector; a multilateral agreement on tax transparency; public registries of the beneficial owners of companies and trusts and open data standards so that citizens’ groups and governments can make use of.

“The G8 are best when they work together to get things done, like they did in response to drop the debt, like they did on Make Poverty History, and hopefully like they are today in responding to the transparency revolution people are demanding,” he said.

Mr Drummond also commended Ireland for its continued commitment to overseas aid noting that, despite a cut to Ireland’s aid development budget between 2011 and 2012 that the country had continued to display a “professed desire” to achieve the UN-set aid target of 0.7 per cent of gross national income, adding that the fact that Ireland hadn’t cut its development budget by more in the wake of the recession was a testament to its commitment to aid development.

“Ireland plays a moral leadership role in fighting hunger and poverty in the poorest countries,” he said.

ODA is defined by the Development Assistant Committee of the OECD as flows to countries and territories on a specified list of recipient countries and multilateral institutions provided by official agencies, each transaction of which is administered with the promotion of the economic development and welfare of developing countries.