Which OECD-DAC donors give the most to LDCs?

As the third Conference on Financing for Development in Addis Ababa, Ethiopia, draws near, the financial needs of developing countries, particularly the least-developed countries, to end extreme poverty by 2030 are increasingly taking center stage. In a recently released report, the ONE Campaign laid out what it calls the “five key elements of an Addis mutual accountability”: a nationally owned minimum per capita spending level to deliver basic services to all, particularly for the poorest countries; revenue-to-gross domestic product targets for greater domestic resource mobilization; a revival of the 0.7 percent target and a commitment to allocate at least 50 percent of aid to LDCs; inclusive growth; and strong accountability through a data revolution. These goals highlight the importance of both domestic and external funding in LDCs. But as FHI 360 CEO Patrick Fine pointed out in a recent op-ed, “without external finance, LDCs can’t afford the modern institutions and infrastructure necessary to increase productive capacity and attract private capital.” And yet despite LDCs’ need for donor support, aid to LDCs has actually been declining. Official development assistance steadily increased from 2005 to 2010, when it peaked at $48.3 billion. But since then, aid to the world’s poorest countries has gradually declined. Last year, the amount of aid for LDCs even fell short of the level of assistance for the same group of countries in 2008. Among members of the Development Assistance Committee of the Organization for Economic Cooperation and Development, the United States, United Kingdom and European Union have been the top three donors to LDCs. Below, we take a closer look at all of these donors. United States Aid to LDCs (2014): $10.3 billion Percentage change (2013-2014): -0.4 percent Although its aid to LDCs fell by more than $6 billion last year, the United States is still the largest donor to the poorest countries in 2014. Still, it targets just around a third of its ODA to this particular group of countries, according to ONE. U.S. President Barack Obama’s nomination of Gayle Smith for USAID administrator — a move that has been controversial for some because of Smith’s close connections to what Obama has called Africa’s “strongmen” — could also significantly impact U.S. assistance in sub-Saharan Africa, where the majority of LDCs are located. United Kingdom Aid to LDCs (2014): $7.4 billion Percentage change (2013-2014): 12 percent When the ratio of aid for LDCs to gross national income is considered, the United Kingdom ranked first among G-7 donors last year. While it was a late entrant to the 0.7 percent donors club, it remains the only country to have committed the target into law. In a recent op-ed for Devex, Fabian Hamilton, who was re-elected as Labour MP for Leeds North East in the election earlier this month, noted that “never before have the manifestos of the main parties made such strong commitments to the wide spectrum of global development problems” and that the effort to enshrine the 0.7 percent target into law involved cross-party collaboration. European Union Aid to LDCs (2014): $4.5 billion Percentage change (2013-2014): 15.7 percent The European Union and its member states channeled $4.45 billion in aid to LDCs in 2014 — a 15.7 percent increase compared with ODA to LDCs in 2013. This, however, accounts for less than a third of their ODA. While home to most of the countries that have achieved and even exceeded the 0.7 percent target, the EU, according to ONE, should “re-commit to meeting its 0.7 percent target, ideally by 2020.” Japan Aid to LDCs (2014): $3.7 billion Percentage change (2013-2014): -18.5 percent As a percentage of total aid, Japan’s assistance to LDCs was the highest among G-7 countries in 2014. In 2013, Japan even met the 50 percent target that ONE recommends to donors. Still, its aid to LDCs fell considerably last year. While still among the world’s most generous donors, Japan saw one of the biggest declines in ODA last year, according to OECD data. Germany German aid to the world's poorest countries has ranged from $2 billion to nearly $4 billion between 2005 and 2013. While Berlin did not provide information on its 2014 ODA to LDCs in time for the release of preliminary OECD-DAC donor data in April, the government’s announcement of an increase of 8.3 billion euros ($7.6 billion) in ODA in the next four years was seen a welcome move, especially as Germany’s aid increase in 2014 was mainly driven by greater lending to middle-income countries. France Aid to LDCs (2014): $2.6 billion Percentage change (2013-2014): 1.3 percent France gave 25 percent of its total ODA in 2014 to LDCs, up 1.3 percent increase from the 2013 level. But despite what ONE calls France’s “leadership in innovative finance” — France, for example, is the largest donor to UNITAID, a drug purchase facility for HIV and AIDS, tuberculosis and malaria medicines financed by an air ticket levy — and its place among the top bilateral donors in 2014, its ODA has been decreasing since 2012. Last year, it also announced that it would cut contributions to UNITAID. Canada Aid to LDCs (2014): $1.5 billion Percentage change (2013-2014): -16.4 percent Canada’s ODA, including assistance to LDCs, suffered severe cuts last year, pushing Canada to the bottom of the list of top OECD-DAC donors. Like Japan, Canada also had one of the largest decreases in ODA last year. ONE recommended reversing this dramatic decline in the upcoming federal election. Sweden Aid to LDCs (2014): $1.7 billion Percentage change (2013-2014): -2.9 percent Sweden continued to exceed the 0.7 percent target in 2014. Through the Swedish International Development Cooperation Agency, it supports democracy, human rights, gender equality and the environment, among other themes, in the countries that it helps. SIDA is also part of Sweden’s advocacy efforts and engages in dialogue with donors, international organizations and recipients. Netherlands Aid to LDCs (2014): $1 billion Percentage change (2013-2014): -22.3 percent Security and the rule of law, water management, food security, and sexual and reproductive health rights are the four primary areas of Dutch development cooperation policy. The Netherlands consistently met the 0.7 percent target from 1975 to 2012, but has fallen short of this goal in the past two years. Norway Aid to LDCs (2014): $1.6 billion Percentage change (2013-2014): 8.5 percent Like the United Kingdom and Sweden, Norway has again gone beyond the 0.7 percent target last year. Afghanistan and Malawi, two of the top recipients of Norwegian aid in 2014, are LDCs. As Oslo prepares to narrow the reach of its aid program to 84 countries — a recommendation from an OECD-DAC peer review — assistance from Norway could “be more effective and thereby ensure that the aid … reaches more of those in need,” according to Minister of Foreign Affairs Børge Brende. 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