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Development aid stagnates in 2017 – and rules governing how it is spent mean the poorest are still missing out

Added 09 Apr 2018

Brussels, April 9 2018. The amount of aid going to countries in the Global South was stagnant in 2017, according to new figures published by the OECD today. The rules that govern aid also mean that a large proportion of Official Development Assistance (ODA) is still being spent in the donor countries themselves instead of reaching the poorest countries - with around 10% spent on the cost of hosting refugees.

The figures, published by the OECD’s Development Assistant Committee (OECD DAC), show that most countries still failed to spend 0.7% of GNI on ODA – a commitment made almost half a century ago. Bilateral (country to country) ODA going to the world’s poorest nations rose slightly, but it still stood at 0.055% of GNI. The UN target is 0.15-0.2%.

Commenting on the figures, Jeroen Kwakkenbos, Policy and Advocacy Manager at the European Network on Debt and Development (Eurodad), said:

“The rules that govern aid mean that rich countries are still not meeting their commitments to the world’s poorest.   

“The main problems are that firstly, the rules that govern aid allow rich countries to direct ODA to their own domestic costs. This distorts their aid figures and has created an unreliable reporting system. In-donor costs should not be classed as development aid.

“Secondly, aid is often ‘tied’ to goods or services from rich countries, which puts the priorities of wealthy businesses ahead of those of nations in the global south.

“Under rules that are being developed at the OECD, this major problem could increase. Rich countries increasingly use ODA to invest in the private sector through private sector instruments and blended finance – investments which tend to prioritise commercial objectives in middle- income countries. This could make it easier for donors to subsidise businesses in their own countries by the back door.”

 The latest statistics show that:

  • Net ODA from OECD countries fell from 0.32% of GNI in 2016 to 0.31% in 2017. This is way below the 0.7% target established in 1970.
  • Bilateral ODA reaching the least developed countries increased to 0.055% of GNI, but it still fell short of the UN target of 0.15-0.2%.  
  • In-donor refugee costs fell in 2017, but they still represent almost 10 per cent of all ODA.

Kwakkenbos added: “Last year, the OECD’s General Secretary Angel Gurria called for close attention to be paid to where aid is going. It is vital that rich countries reform the rules so that self-interest does not come above poverty eradication.”

The OECD DAC is planning to publish statistics on tied aid later this month. Eurodad will be analysing these outcomes.

ENDS

Media enquiries: Julia Ravenscroft, Communications Manager at Eurodad on jravenscroft@eurodad.org or +32486356814/ +32 2 893 0854.

Notes to editors: 

  • The 0.055% figure for bilateral ODA to the least developed countries was calculated by Eurodad. This is based on the figures provided by the OECD DAC on April 9 2018. 
  • For further information on tied aid please see the following blog - A Knotty Problem: Turning Worlds into Action on Tied Aid