Aid to poorest countries dropped in 2014

U.K. Prime Minister David Cameron and Mexican President Enrique Peña Nieto look on as foreign ministers Philip Hammond and José Antonio Meade Kuribreña sign a joint declaration outlining future collaboration between the two countries. The United Kingdom was among the five donors that allocated 0.7 percent of their gross national income on foreign aid. Photo by: Arron Hoare / U.K. Prime Minister’s Office / CC BY-NC-ND

Official development assistance dropped 0.5 percent in real terms in 2014, as donor nations continued to face economic difficulties and implement austerity measures.

This is according to the latest provisional ODA data from the Organization for Economic Cooperation and Development. Released April 8, figures from the Paris-based institution indicate that while net global ODA from members of OECD’s Development Assistance Committee reached $135.2 billion — a slight uptick from 2013’s record-breaking high of $135.1 billion — aid flows to the world’s poorest countries dropped 16 percent to $25 billion.

Yasmin Ahmad, manager of OECD’s data collections unit, explained to Devex that this drop is mainly as a result of massive debt relief to Myanmar, the international development community’s newest donor darling. But that doesn’t explain the decrease in ODA in other regions, such as in Africa.

“Aid to Africa continues to fall and aid to [least-developed countries] continues to fall as well,” she said. “There’s less debt forgiveness in general in 2014 so that also accounts for falls for certain donors for whom debt is still part of their ODA budget.”

Meanwhile, net ODA as a share of gross national income dipped from 0.30 percent in 2013 to 2014. Only five OECD member countries met the U.N. target of allocating 0.7 percent of GNI to development assistance: the United Kingdom, Denmark, Norway, Luxembourg and Sweden — the same countries that met the target in 2013. The Netherlands, which had been meeting the target since 1974, fell from the list in 2013 and failed to make it back in 2014.

“We have a number of donors that are maintaining their targets of 0.7 percent of GNI and we have a number of members that are maintaining volume targets,” Ahmad said, adding that the Paris-based institution’s survey of donor’s forward-spending plans reveals “there will be an increase in aid over the coming years … and that there will be a shift in the way that aid is distributed so there should be more of a focus to LDCs.”

Even so, the obvious effect to the poorest nations of the world is “alarming” and should not be tolerated, ONE’s Europe Executive Director Adrian Lovett told Devex, adding that the decline in overall foreign aid flows means money lost that could be used for vital development programs in the countries that need them the most.

“We’re seeing there a drop [of] about $6.7 billion from 2013 to 2014, which works out to about $128 million every week — and that’s enough to vaccinate 6 million children every week,” he told Devex. “The real concern here is that the very poorest countries that have the least are the hardest hit in this shift in the aid money away from those countries.”

It is important to highlight, Lovett added, how the people and countries that “rely most on aid” and “who don’t have access to private investments or to the ability to raise revenue domestically through taxation” are affected the most by the drop in aid spending.

Ahmad is optimistic however that aid will increase in the short term.

“If we look forward, we do expect an increase in 2015, at least, for country programmable aid,” she concluded. “This will boost the level of ODA this year and it may boost it to the level that it was in 2013 which was the highest level it ever attained.”

Check Friday’s Money Matters for an analysis of the OECD’s 2014 preliminary data on overseas development assistance.

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About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a former Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. He previously covered Philippine and international business and economic news, sports and politics.