Why the latest aid figures mean we must think bigger about development

one orgEloise Todd, Global Policy Director, the ONE Campaign

The world is changing rapidly. With conflicts continuing to erupt, the amount of vulnerable people in the world is increasing, as is the complexity and cost of the response needed to help people survive extreme poverty and danger.

The impact of this on aid budgets is a big concern. Each April marks the annual publication of the OECD DAC’s latest aid figures revealing how much money aid-giving countries have invested in development the year before and how this money was allocated.

In most years trends in aid investments are straightforward to predict, but with the refugee crisis prompting countries to raid their aid budgets to cover expenses at home, we were braced for bad news. However, at first glance, the overall picture looks positive – aid grew by almost 2% even when domestic refugee costs are discounted. The new figures also show that total aid to the least developed countries (LDCs) finally increased last year, rising by 5.8%.

LDCs rely on aid for a large portion of their budget in order to provide even the most essential services. After several years of aid to the poorest countries declining, this rebound shows the first signs of hope that countries are investing in the places and people that need it most. Countries such as Canada, Poland and the Slovak Republic saw their contributions to LDCs increase by more than 25%.

Donor countries’ own refugee costs more than doubled last year – amounting to $12 billion. European countries are absolutely right to be providing the funds needed to support refugees, but these funds should be additional to their overseas aid budgets. Whether the poorest and most vulnerable people live in cities or refugee camps, they deserve protection and the opportunity to live a productive life. Both development and humanitarian needs are urgent, and increasing, and the last thing governments should be doing is claiming their domestic expenses from the precious pot of funds for the world’s poorest people overseas.

International development is our best long-term bet in foreign policy – lifting people out of poverty in turn creates the human security and economic prosperity needed that can help stop countries sliding into crisis. As well as being the right thing to do, fighting poverty is an insurance policy for stability across the developing world. The long-term benefits far outweigh the short-term costs. As Bono said earlier this week after visiting refugee camps in Africa and the Middle East “It is less expensive to invest in stability than to confront instability.”

ONE and many others have called for 50% of overseas aid budgets to be allocated to LDCs and for all aid to be focused on the poorest people, wherever they are – in poor countries or at Europe’s shores..

No deadly trade off should be made by diverting funds from one to cover the cost of the other. Rich countries can and must do both.

(Note: Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows. SSA and LDC imputed multilateral flows in 2015 are estimated by ONE).

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  1. Philip Hodkinson - 18/04/2016 Reply

    These are just figures, but show the increasing difficulty that perceived wealthy countries are having with their budgets.
    Internal support wanes with increased austerity measures that most have had to take. But have they? A lot has been published recently about the 1% of populations owning 90% of the wealth. This has always been the case, however, the gap between rich and poor is growing at an alarming rate.
    This is one of the reasons for the mass migration we are seeing. The wars that are causing the rest of it, are because of the vast exposure to information by the world’s poor, who are fed up of being kept in financial servitude and want change.

    A fundamental change in how the world’s vast wealth is distributed needs to be implemented. To help those in need in a better way will quickly reduce these wasteful circumstances. Getting rid of oppression, improving governance, removing corruption and developing those countries in need, should be a start.
    China’s economy has slowed not just because of a dip in world trade, but because they see this growing gap in the wealth of their own population and realise the consequences of not starting to equalise it.
    I am only an old teacher with his thoughts, but there are many who understand this and have the ability to bring about this change. This is a direction I think the Oecd should keenly focus on.

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