2015 aid statistics: Many EU countries become the biggest recipients of their own aid
- Today's OECD figures show diversion of aid to domestic costs in rich countries massively increased in 2015 - with $12 billion being spent in donor countries to cover domestic refugee costs.
- This overshadows the fact that international aid expenditure increased in real terms but remained at 0.3% of donors' gross national income (GNI). This is less than half of the 0.7% targets donors have signed up to.
- The OECD must overhaul rules on what can be reported as aid so funds truly contribute to poverty reduction and development in the world’s poorest countries.
April 13 2016
Figures published today by the Organisation for Economic Cooperation and Development (OECD) purport to show a rise in aid, but in fact in actual net dollar terms, it fell from $137 billion in 2014 to $132 billion in 2015. The OECD reports that “development aid continued to grow” as they have adjusted the figures to include the effects of inflation and exchange rate changes, giving a real terms increase in aid.
Critically, the figures show that in 2015, $12 billion of aid went to internal domestic refugee expenses – a massive increase compared to $6.6 billion in 2014. Most of this was due to EU countries. For example, Austria spent 27% of their aid in Austria to cover refugee costs. They were not alone in this massive redirection of finance: the Netherlands spent over 22% of their aid in the Netherlands, and Italy over 25% in Italy for example. Clearly, far more needs to be done to ensure that aid is targeted towards achieving poverty eradication as the largest increases were due to rises in-donor costs.
The figures show that while several countries claim to have reached, or be close to, their 0.7 per cent of gross national income (GNI) target to development aid, their figures are being distorted by including many items that should not be counted as aid. The main current issue is the huge amounts of money being diverted to domestic refugee costs.
Jeroen Kwakkenbos, Policy and Advocacy Manager at the European Network on Debt and Development (Eurodad) said: “While it is very important that we care for refugees arriving on our shores, our own costs should not be classed as international development aid, and money to cover this must come from other sources. We must stop raiding aid budgets to solve our own problems at the expense of the poorest people which desperately need more and better aid. The figures presented today show clear issues with the reporting rules as the largest increases were for domestic budget gaps related to the refugee crisis.”
Member States of the Organisation for Economic Cooperation and Development set the rules on what can be reported as aid (known as the OECD Development Assistance Committee or DAC). In February 2016, Members again expanded the rules in several areas, agreeing to spend more aid on security costs such as policing, and opening the door for more aid to be spent on the private sector, which Eurodad and other NGOs fear will mean a significant increase in aid being used to subsidise companies based in rich countries.
Kwakkenbos said: “Right now the immense diversion of aid to address the domestic costs of the refugee crisis has dramatically inflated the latest figures. But this could be only the start. The decisions made in February at the OECD risk even more aid being diverted to our own corporations through ‘tied aid’. It is time for OECD members to clean up the rules on aid reporting and make sure they stick to their commitment to end poverty.”
Eurodad recommends that the OECD DAC excludes any donor country refugee and student costs from the rules governing aid, and ends the practice of tying aid in future to prevent the subsidising of countries’ own multinationals to carry out work in developing countries.
ENDS Media contact: Julia Ravenscroft, Communications Manager at Eurodad, on email@example.com and Tel: +32 2 893 0854.
Notes to editors:
Why is aid important
- The aid figures can be found on the OECD DAC website at http://www.oecd.org/dac/stats/
- The rules on what could be reported on aid were changed at the OECD DAC High Level meeting in February. The communique was published on 19 February 2016.
- Eurodad published an in-depth analysis and press release in reaction to the OECD DAC communique.
- Petition: ONE, Oxfam, Global Citizen and others have launched a joint petition to ask European leaders to meet the needs of refugees arriving at our borders without doing so at the expense of the world’s poorest. The organizations are calling on governments to make sure aid is focused on fighting extreme poverty and prioritizes the countries and people that have the least. According to ONE, so far more than 115,000 people have signed the petition.
- International aid has been central to financing universal essential services: support to health as a share of aid rose from under 2% in 1990-91 to almost 14% in 2010-11; and aid now covers 40-45% of public health expenditure.
- Progress against the key MDGs included the following:
In 1990, 37% of the world's population lived in extreme poverty, this rate has dropped to 12.7%.
The proportion of undernourished people in developing regions has almost halved.
The primary school enrolment in developing regions has reached 91%.
The proportion of people who lack access to improved sources of water has halved.
Maternal mortality has been reduced by 41% as compared to 20 years ago.
The spread of HIV has been halted and reversed. Between 2000 and 2013 the number of new infections dropped by 40%, from an estimated 3,5 million cases in 2000 to 2.1 million cases in 2013
- Aid is vital source of public finance for LDCs. Despite the continued importance of aid for LDCs and an overall increase in global aid levels, the share of aid money going to LDCs has slumped in recent years. Already low levels of aid to LDCs have declined for the second year in a row in 2014 and the proportion of aid going to LDCs is at its lowest in ten years. It is good to see that this trend appears to have halted in the latest preliminary figures. Unfortunately the DAC has not published the actual figures, just reporting an increase in real terms.
- Aid remains important for Middle Income Countries (MICs): While many MICs are less dependent on aid to meet basic needs of their people, aid is an important instrument to strengthen active citizenship and the work of civil society in these countries. Civil society in MICs is critical to ensuring accountability by governments to realize rights, access to decision making, better governance, budget monitoring and vital service delivery.
- Further resources: Bond UKAN publication Aid to Z: https://www.bond.org.uk/resources/aid-z
- Eurodad (the European Network on Debt and Development) is a network of 46 civil society organisations (CSOs) from 20 European countries, which works for transformative yet specific changes to global and European policies, institutions, rules and structures to ensure a democratically controlled, environmentally sustainable financial and economic system that works to eradicate poverty and ensure human rights for all.