Global Policy Forum

By Thalif Deen

The anticipated increase is from around 80 billion dollars in 2004 to an estimated 130 billion dollars in 2010, says Jose Antonio Ocampo, U.N. under-secretary-general for economic and social affairs. But the more important factor that has to be stressed, he told reporters, is the quality of such aid. Ocampo said the amount of aid going to "normal" development projects had not significantly increased since 1990. "It is important, therefore, to ensure that increases in aid this year went toward development projects."

"After many years of scandalous decline, the increase in aid described in the new U.N. report represents a welcome increase in aid," Jonathan Hepburn, policy advisor to Oxfam International, told IPS. This increase, he pointed out, could provide education and life-saving medicines to millions of the world's poorest people. "Sadly, though, the additional money will come too late and fall far short of the resources needed to meet the Millennium Development Goals (MDGs)," he added.

The MDGs include a 50 percent reduction in extreme poverty and hunger; universal primary education; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; the promotion of gender equality; environmental sustainability; the reversal of the spread of HIV/AIDS, malaria and other diseases; and a global partnership for development between the rich and the poor.

"The composition of ODA must thus be changed to finance the specific expenditures needed to achieve the MDGs," says the 219-page U.N. report titled "World Economic and Social Survey 2005". The annual study, published by the U.N.'s Department of Economic and Social Affairs, also points out that during the 1990s a large proportion of ODA went to finance debt relief, emergency aid and technical assistance. "While these (aid) flows have important objectives, emergency aid is not designed to assist long-term development, and debt relief does not generally provide fresh money to debtor countries," it adds.

The study also argues that ODA has been a declining source of budgetary resources for the developing countries, limiting their efforts to pursue the MDGs. "The call to increase ODA must thus be qualified to refer to real cash to support the Goals," it noted. "It is unfortunate that the discussion about the MDGs has been reduced to adding up dollar amounts, as if development or poverty eradication is simply a matter of reaching a magic number," says Soren Ambrose, director of research and analysis for the Nairobi-based Solidarity Africa Network in Action.

Even when "quality of aid" is thrown in, he told IPS, the debate serves as a distraction from the political questions that are the most important factors in development. "So long as we remain within a paradigm of 'aid', and so long as the donor countries believe that they have the answers for the impoverished ones, we will make little progress," he added. What is required, he argues, is systemic change in the global economy to restore policy sovereignty to countries that have been controlled from outside for too long. "Not every path they choose will succeed, but success will only come from within," he added.

According to the U.N. report, the 25-member European Union (EU) continues to be the largest source of aid, providing more than half of total ODA. But only five countries -- Denmark, Luxembourg, the Netherlands, Norway and Sweden -- have met or exceeded the 0.7 percent target of their gross national incomes (GNI) dedicated to ODA. In mid-2005, all member states of EU undertook to achieve or maintain the 0.7 target by 2015. But no such assurances have come from two of the largest aid donors: the United States and Japan.

Hepburn of Oxfam International told IPS that the United Nations has clearly stated that poor countries will need an immediate substantial boost in aid followed by a further steady increase to 0.46 percent of GNI by 2010 and 0.7 percent of GNI by 2015. This means an immediate boost of 70 billion dollars more in 2006 than 2004 levels, rising to 90 billion dollars more than 2004 levels by 2010.

Even if reached, the MDGs will only halve poverty. Rich countries must therefore go further and give 0.7 percent of their national income as ODA by 2010 at the latest, Hepburn said. "They promised to give this amount in 1970, and 35 years later this promise remains broken," he added. Hepburn said that it is vital that donor countries also take steps to improve the quality of the aid they provide. Large amounts of donor aid are not focused on the poorest countries; are tied to goods from the donor country; or are used on ineffective and expensive technical assistance, among other issues.

Furthermore, he said, debt relief continues to be taken from ODA budgets despite the commitments made by rich countries to stop this inexcusable double counting. Campaigners will continue to push hard for dramatic increases in aid quality to ensure that the ODA increases agreed are used to fight poverty and are not wasted, according to Hepburn.

At the summit in Gleneagles, Scotland early this year, the G8 countries -- the United States, Britain, France, Germany, Italy, Canada, Japan and Russia -- recognised that developing countries should be allowed to decide, plan and sequence their economic policies. This represents a milestone in the fight to end the imposition of economic policy conditions, and now needs to be translated into practical action by rich country governments as well as by multilateral donors, such as the World Bank and the International Monetary Fund (IMF), he said.

Donors also need to be held accountable for the full implementation of the Paris Declaration on Aid Effectiveness from February 2005, and a clear mechanism must be established to ensure that donors can actually be held to account for failing to make their aid more effective, Hepburn added.

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