By Julio Godoy
Inter Press ServiceMay 16, 2002
The world's richest countries failed last year to meet their commitments to reducing poverty, a new report says.
The report from the Organisation for Economic Co-operation and Development (OECD) that represents the 29 most industrialised countries reveals a 2.3 billion dollar drop in aid from member countries last year from the year 2000.
The report released in Paris Thursday by the Development Assistance Committee (DAC) of the OECD shows that bilateral aid by OECD countries fell from 53.7 billion dollars in 2000 to 51.4 billion dollars last year.
The DAC report shows that only five countries meet the United Nations (U.N.) target of giving at least 0.7 per cent of their gross national income (GNI) to development assistance. These countries are Denmark, Norway, the Netherlands, Luxembourg and Sweden. All other OECD countries remain far below the U.N. target as established by the General Assembly 30 years ago and reaffirmed at the Earth Summit in June 1992 in Rio de Janeiro, Brazil, and by the Millennium Summit in New York two years ago.
The U.S. gives only 0.11 per cent of its GNI for ODA, Japan 0.23 per cent, Germany 0.27 per cent and France 0.34 per cent.
In a parallel development at the OECD ministerial summit in Paris Wednesday and Thursday, the member accountries failed to reh consensus on rules to cover state export agencies. These agencies provide heavy subsidies to OECD exporters. In most industrialised countries, particularly in Europe, these export credit agencies (ECAs) even subsidise arms sales. The OECD did not produce any binding set of rules on subsidies, but has offered a set of norms to guide ECAs.
The parallel developments on Thursday amount to a double blow to poor countries, analysts say. "The lack of consensus on the export credit agencies and the decrease of official development assistance add up to a major scandal," says Aaron Goldzimmer, representative of the U.S. non-governmental organisation (NGO)Environmental Defence.
"On the one hand, OECD countries such as the U.S., Germany or France continue through the ECAs to subsidise exports with taxpayers' money, often in detriment to the competitiveness of the poorest countries of the world," says Goldzimmer. "On the other hand, the official development assistance which is one way to support the countries of the South to find a sustainable path to development and progress is being reduced."
In both cases, he says, "the OECD countries have failed." Government subsidies mean considerable cost reduction for major companies and amount to around 10 per cent of annual world trade. In the year 2000, subsidies through ECAs added up to 64 billion dollars of exports from industrialised countries, well above the official development assistance granted last year of 51.4 billion dollars.
Ken Deyhon, a senior OECD official said European members will follow norms set to govern ECAs. "We have formulated a flexible set of environmental and social rules to subsidise exports," Deyhon said. "The U.S. government is not ready to use our proposal, because it would mean degrading their standards already in place," Deyhon said. "Therefore, we cannot speak of an OECD consensus on this matter. But the European states will use these rules, following their own criteria."
But NGOs say that a set of rules that is not binding is useless rhetoric. Antonio Tricarico from the Italian group 'To Reform the World Bank' which represents 45 NGOs accused European governments, particularly France and Germany, of blocking the revision of the ECAs. Tricarico says that in 1998 the Group of 8 most industrialised countries had agreed to establish a set of binding rules for export credit agencies by the end of last year. "This mandate expired five months ago," Tricarico said.
But despite the lack of a policy on subsidies, and the cut in aid, the OECD ministerial council repeated past pledges on poverty reduction and sustainable development. "Both are urgent priorities for the international community," the final communique on Thursday states. Belgian Prime Minister Guy Verhofstadt who presided over the OECD ministerial council said after the meeting that the organisation's role in a "shared development agenda" entails "improving the effectiveness of aid and ensuring an adequate aid volume", as well as "strengthening the policy coherence for development and the developing countries' governance and policy capacities."
Verhofstadt also said that in view of the World Summit on Sustainable Development to take place in Johannesburg August 26 to September 4, "the OECD countries strongly reaffirm their commitment to policy recommendations conducive to development and growth and against poverty."
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