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Financial crisis curbs global aid - OECD

Apr 04 2012 17:12 Reuters

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Paris - Spending on foreign aid by the world’s major donors fell for the first time since 1997, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday, as developed economies tightened budgets in the wake of the global financial crisis.

The OECD said aid to developing countries dropped 3% in 2011, with poor sub-Saharan African nations in particular receiving less than promised.

Aid flows last year equated to 0.31% of the gross national income (GNI) of the 23 wealthy donor countries which make up the OECD Development Assistance Committee (DAC).

“The fall of (aid) is a source of great concern, coming at a time when developing countries have been hit by the knock-on effect of the crisis and need it most,” said OECD secretary general Angel Gurria.

Programme aid flows could grow by 6% in 2012, although those figures are skewed as they take into account soft loans from multilateral agencies funded by injections of fresh capital during 2009-2011.

Aid flows are expected to stagnate from 2013, the OECD said.

Flows to Africa were likely to stay similar, although events in the Sahel region and North Africa could mean more assistance would be needed in those regions.

Bilateral aid to sub-Saharan Africa was $28bn, representing a fall of 0.9% compared to 2010. Aid to the African continent as a whole rose by 0.9% to $31.4bn as donors provided more aid to North Africa after the revolutions in the region.

The United States, Britain, France, Germany and Japan remained the biggest aid donors in 2011, with Washington alone contributing some $30.7bn in aid, down 0.9% year-on-year.

G7 countries provided 69% of aid, while European Union states gave 54% despite the eurozone crisis.

“I commend the countries that are keeping their commitments in spite of tough fiscal consolidation plans,” Gurria said. “They show that the crisis should not be used as an excuse to reduce development cooperation contributions.”
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