"Aid from the 21 donor nation members within the Organisation for Economic Cooperation and Development (OECD) group of industrialised countries is currently at its lowest on record. The 1996 figure, 55.8 billion dollars, adds up to a 4.2 percent cut on 1995's total."
''Aid can and does work, especially when it reaches people living in poverty and when it focuses on things like education, health and clean water."
|ODA lowest on record, says NGO coalition
LONDON, Oct 16 -- The world's wealthiest countries - some of them enjoying a period of unprecedented economic growth -- are steadily slashing their overseas aid budgets in a move that is hitting poorest countries the hardest.
''The world's richest governments are not committed to eradicating global poverty,'' says the new 'The Reality of Aid' report for 1997.
Prepared by a coalition of non-governmental organisations around the world, the report, an annual review of development cooperation, has become a key reference for people working for development in the South.
Aid from the 21 donor nation members within the Organisation for Economic Cooperation and Development (OECD) group of industrialised countries is currently at its lowest on record. The 1996 figure, 55.8 billion dollars, adds up to a 4.2 percent cut on 1995's total.
And it represents only 0.25 percent of total OECD gross national product, indicating what the report called ''a total lack of commitment by the richest governments'' to reach the target of 0.7 percent of GNP, first agreed by OECD countries in 1969 and reaffirmed by the United Nations in June this year.
Total aid from OECD countries fell by 3.8 billion dollars. The deepest cut was made by Japan, the world's largest bilateral donor, which reduced its aid disbursements by 15 percent. ''There is little indication in OECD countries that this decline will be reversed,'' the report adds.
As with the recent years since the collapse of the Soviet bloc, the report finds that insufficient aid is reaching to those countries where it is most needed. Instead, wealthier countries in Central and Eastern Europe enjoyed a 10 percent increase in aid ''while the poorest countries received a smaller share of a smaller aid pot.''
In 1995, only 25.1 percent of total OECD aid reached the world's 48 poorest countries, the so-called Least Developed Countries.
Seventeen out of the OECD's 21 donors actually cut their aid to sub-Saharan Africa.
''It is an historic time,'' said Raj Thamotheram of ActionAid, one of the NGOs which prepared the report. ''The world is witnessing a continuous drive towards liberalising global trade which has left some enjoying greater wealth.
''But it has also resulted in a growing gap between the richest and the poorest. Today the majority of the world's people live in poverty. This is simply unacceptable.''
A simple way to measure the number of people living in poverty, according to the U.N. Development Programme (UNDP) is to look at how many people live on two dollars a day - instead of the conventional approach adopted by the World Bank and others, of one dollar a day.
While 25 percent of the world's population lives on an income of a dollar a day, these surviving on two dollars a day account for a massive 80 percent, according to the UNDP.
''We were encouraged when governments committed themselves to OECD targets to halve abject poverty by 2015,'' said Sabina Siniscalchi of the European NGO network Eurostep, citing past public pledges. ''But we now fear that these were empty promises.
''Aid can and does work, especially when it reaches people living in poverty and when it focuses on things like education, health and clean water.
Instead governments, especially the (Group of Seven richest nations) G-7, are focusing on new markets in developing countries where they can make a profit, and letting the least developed countries fall by the wayside.''
The report says private financial flows to developing countries reached 234 billion dollars in 1996 - more than four times greater than aid flows and a reversal of the situation only five years ago, when the private flow was less than aid. While this increase has been welcomed by a number of developing countries, the report points out that private flows continue to be heavily concentrated in a small number of countries.
In 1996, the top 12 out of 108 developing countries received 73 percent of private capital flows, while countries in sub-Saharan Africa received only 4.8 percent.
''Such concentration of financial flows is likely to exacerbate international inequalities and reinforce the marginalisation of large areas of the globe,'' it adds.
The view is backed by development experts such as Charles Abugre of the Third World Network, who pointed out that foreign direct investment (FDI) generally follows the liberalisation and restructuring of economies -- in many cases by countries that can ill afford to do so.
''There will be more inequality in the coming years,'' he said at the report's launch in London.
''Already, there is a growing apartheid in terms of technology, especially communications technology. And the establishment of the World Trade Organisation has seen the emergence of transnational corporation influence that they have never had before.''
The report suggests that in order to respond to the transformations being brought about by globalisation, international development cooperation will have to change. That needs greater international cooperation between governments, multilateral institutions, peoples and organisations in the North and the South.
''But it is the Northern actors above all who need to face the issue of partnerships squarely,'' it asserts. ''Many forward-looking analysts see the trend in development cooperation needing to move away from patronage, charity and predetermined development models towards genuinely cooperative relationships.''
This partly involves shifting controls of resources to Southern partners in a context where the latter's needs determine development priorities.
But in the longer term, it concludes, this will mean forging more alliances between Southern and Northern actors like ''social movements'' and internationalist NGOs, which are already building ''a real constituency for change''.