Remarks by Eckhard Deutscher, Chairman, OECD Development Assistance Committee
Press Conference, Tokyo, 4 April 2008
Good Evening, Ladies and Gentlemen,
As the Secretary General has just explained, the preliminary figures on aid in 2007 are disappointing. On the whole, donors are not on track to meet their stated commitments to scale up aid, and need to achieve unprecedented increases to meet the targets they have set.
Let me just recall the scale of these targets. At the 2005 G8 summit at Gleneagles, donors made a series of individual pledges that, combined with the known commitments of other countries, would have lifted aid from USD 80 billion in 2004 to USD 130 billion in 2010, at constant prices – an increase of more than 60 per cent over six years.
The figures released today show that half way through those six years, total aid has only risen by 15 per cent. So the rate of increase needs to more than double to meet the 2010 targets.
The salient feature of the data this year is that, as anticipated, there has been a large fall of USD 10 billion in debt forgiveness, following the exceptional debt relief operations for Iraq and Nigeria in 2005-6. This more than explains the 8.4% fall in aggregate ODA. Excluding debt forgiveness, there was in fact a small rise of 2.4% in aid from 2006 to 2007 (see Table 2 of accompanying News Release). But this is far short of the acceleration in aid spending needed to meet the ambitious targets donors have set for their ODA in 2010.
Donor performance varies considerably. There have been large increases from Germany (USD 1.9 billion) and Spain (USD 2.2 billion). In fact, Spain is making outstanding progress, raising net ODA by nearly 50% in 2007 (all these three figures are excluding debt relief). There is also moderate progress by other non-G8 donors, notably Australia. Five DAC members – Denmark, Luxembourg, the Netherlands, Norway and Sweden – continue to meet the United Nations aid target of 0.7% of national income.
But the 2007 data for G7 countries present at best a mixed picture, especially in the light of the ambitious global aid volume prospects held out at Gleneagles:
The largest donor, the United States, made no overall volume pledge at Gleneagles, and its aid excluding debt relief fell slightly in 2007. Yet its total aid has increased substantially in recent years, doubling in real terms since 2000, and its promise to double aid to sub-Saharan Africa by 2010 appears to be on track.
Germany’s substantial increase in 2007 is promising and a further increase (excluding debt relief) appears likely in 2008, but medium-term budgetary commitments would need to be substantially raised to meet its 2010 EU target of 0.51% of GNI.
France promised at Gleneagles that its aid would reach 0.5% of its national income by 2007, but the actual figure is only 0.39%, and the new government has shifted to the EU commitment of 0.51% by 2010.
Aid from the United Kingdom fell back slightly, excluding debt relief, and now stands at 0.36% of its national income, barely half of its Gleneagles target of 0.7% by 2013 – though substantial increases have recently been firmly programmed up to 2010/11.
Japan promised an overall volume increase of USD 10 billion spread over the years 2005 to 2009, and achieved about 80% of this in 2005 and 2006 through exceptional debt relief. However, the overall increase now looks difficult to achieve, given the drop of 24 per cent in 2007, excluding debt relief, and its 2007 ODA/GNI ratio (0.17%) is the lowest since 1964.
Italy’s aid (0.19% of its GNI in 2007) has risen somewhat but is still far short of the minimum level it promised as an EU member for 2006 (0.33% of GNI), and even further short of its EU and Gleneagles pledge for 2010 (0.51% of GNI).
Canada is just keeping pace with its aim to double aid by 2010.
There are some bright spots in the overall picture. Aid to sub-Saharan Africa is increasing at a faster rate than total aid, but still not fast enough to double by 2010 as was pledged at Gleneagles. The UNITAID scheme to raise aid funds from airline ticket taxes, and the IFFIm initiative to fund vaccinations, are both adding to resources for global health. New donors are also contributing an increasing share of aid, though complete figures on this are not available.
We should also not lose sight of the fact that aid is not the only source of financing for development, and that impressive development progress is being made in many countries. The first of the Millennium Development Goals, to halve poverty by 2015, is within reach, and there has been progress on the other goals, though not fast enough to guarantee their achievement within the time envisaged.
But this progress brings further challenges. Rising incomes in the developing world have pushed up the prices of staple foods, tightening the financial pressure on relief agencies providing humanitarian aid. High energy prices are stretching the foreign exchange reserves of energy-importing countries. The need for foreign aid, especially for the most disadvantaged countries, remains. As we look towards the Financing for Development Conference to be held in Doha in December, I join the Secretary General in urging DAC members and other donors to redouble their efforts to meet their aid commitments.
“We must do better” Trends in Development Assistance