Foreign Aid Insufficient, Poor in Quality

Donor governments have failed not only to improve the quality of aid but also even to make progress towards delivering committed amounts, according to independent think-tank IBON Foundation.

As it is, donors avoided addressing key development issues in the Accra Action Agenda (AAA) adopted at the 3rd High Level Forum on Aid Effectiveness organized by the Organization for Economic Cooperation and Development (OECD). But they are also US$30 billion short of meeting aggregate programmed commitments for 2010. These underscore the limits of the global aid regime in addressing underdevelopment in the Third World.

Over two billion people worldwide live in deep poverty. A billion lack even just access to safe drinking water and more than two billion lack access to proper sanitation. Some 800 million adults can neither read nor write. This situation is because people by and large have no sovereignty and control over their socioeconomic policies. The “free market” policy conditionalities attached to aid for instance have greatly contributed to the problem, the think-tank said.

At the same time, OECD Development Assistance Committee (DAC) statistics even show that donors are off track to meet declared commitments to scale up aid and that targets set for 2010 will not be met unless dramatic increases are forthcoming. Net ODA flows from the 22 member countries of the OECD-DAC, the world’s major donors, fell for the second straight year in 2007 when they provided just US$104 billion in aid.

This amount is only 0.28% of their collective gross national income (GNI) compared to the US$104.4 billion or 0.31% of their GNI in 2006. It is also an 8.4% drop in real terms from the year before. This is just 56% of the total ODA commitment of 0.50% of their GNI by 2010. Donor countries will have to double their effort in the next three years to make up the shortfall– or an unprecedented 25% increase in ODA yearly in order to reach their commitment by 2010.

The character of the global aid system will remain questionable as long as aid is of poor and even destructive quality and as long as the amounts provided are so limited. Fundamental reforms are needed if aid and the global aid regime are to cease being instruments of big power intervention and control, and if they are to deliver on the development promises so often made. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

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