Western donors continue aid cuts to developing nations, says OECDC
PARIS, Feb - The world's rich nations continue to slash development aid to the poor, according to the latest statistics revealed by the Organisation for Economic Cooperation and Development (OECD).
The Development Assistance Committee (DAC) of the OECD said that donors cut aid even further in 1996, making it more difficult to reduce poverty to globally agreed levels.
The DAC said that declining official development assistance (ODA) now means that a new and ''colossal effort'' is needed, particularly to help the world's 66 poorest countries, so that the international community's pledge to cut poverty by half by the year 2015 can be met.
According to Committee (DAC) chairman James Michel, the implications achieving these goals or not are far-reaching. ''What is at stake is whether the ongoing process of globalisation will be inclusive, participatory and unifying or will instead be exclusive, divisive and unsustainable.''
Overall ODA flows in 1996 from DAC member countries to developing countries and multilateral organisations reached 55 billion dollars, down from 59 billion in 1995. This represents a four percent decline in real terms, and a fall of 16 percent in real terms since 1992.
ODA flows in 1996 represented some 0.25 percent of the DAC member countries' combined GNP, the lowest ratio recorded for nearly 30 years since the United Nations established the target of 0.70 percent of GNP. Only four countries reached the U.N. target in 1996: Denmark, the Netherlands, Norway and Sweden.
The global decline in ODA in 1996 is largely explained by the fall of five billion dollars in current prices, or 25 percent in real terms, in aid from Japan.
By far, Japan had been the largest donor in recent years. France's aid also fell by 11 percent in real terms, partly due to cuts in bilateral programmes. Australia, Austria, Canada and Portugal also cut their assistance significantly.
On the other hand, the aid by Italy and the United States increased in 1996. Both countries' ODA had been unusually low in 1995 because of the timing of subscriptions to multilateral agencies.
Aid levels fell fastest in countries which had been running the largest fiscal deficits and a number of factors explain the large fiscal deficits. Aging populations have increased pension and health care budgets. Many have also had to increase expenditures on unemployment benefits.
At the same time, some countries have expanded education and training programmes to combat unemployment.
Preliminary studies by the DAC suggests that in order to reduce relative poverty by half by 2015, per capita income in the 33 poorest countries will have to double over the next 20 years.
This means that their annual growth rate must increase from the 0.5 percent registered over the past two decades to 3.5 percent over the next 20 years.
Because the absence of data did not permit ranking in terms of populations subsisting on less than one dollar a day, the DAC survey ranked countries according to their GNP per capita and grouped countries to 33 per group.
Many African and Asisan countries have been included in the first group and the second group.
For the second group of 33 poorest countries, the improvement is less dramatic but still substantial. Per capita growth rate must increase from the present 1.7 percent to 3.3 percent.
The 66 poorest countries must also show major improvements in education and health goals. The first group of 33 countries still need to record universal enrollment in primary school. Gender imbalance is also still strong in the two groups of the poorest countries.
Other alarming trends also add to the gravity of concerns. At present rates of deforestation, two-thirds of the remaining tropical forests will disappear by the middle of the next century.
If fish stocks continue to decline, thousands of livelihoods and the food security of up to a billion people will be threatened.
Supplies of clean water are also reaching dangerously low levels in at least 20 countries and this figure is expected to double by 2020.
The DAC stresses therefore the need to reverse the persistent decline in ODA. Private capital flows, while essential for development and which reached record high levels in 1996, are not a substitute. Especially for the poorest countries, to which commercial flows are negligible, ODA remains a vital resource.
Attention must also be given to how concessional resources are allocated. At present, one-fourth of these resources go to countries which, as a group, have almost or have already achieve the goals set for 2015.
''To be sure, external partners should not withdraw needed support from those who are demonstrating the will and the ability to make good use of it,'' stresses Michel.