April 4, 2008 / 12:06 PM / 11 years ago

Rich country aid down as debt relief slows-OECD

(releads with OECD figures)

By Ingrid Melander

BRUSSELS, April 4 (Reuters) - Development aid from the world’s biggest donors fell again last year largely due to the end of big debt relief packages, the OECD said on Friday, urging rich countries to live up to their commitments to give more.

The 22 member countries of the Organisation for Economic Cooperation and Development gave $103.7 billion in development aid — typically funding for education or projects to spur economic growth — in 2007.

That represented a fall of 8.4 percent from 2006 in real terms, taking into account the fall of the dollar and inflation.

Excluding debt relief, aid rose in 2007 by 2.4 percent but rich countries still need to do more, the OECD added.

Large amounts of debt relief went to Iraq and Nigeria in 2005 and 2006, pushing up the total aid figure for those years.

"Overall, most donors are not on track to meet their stated commitments to scale up aid and will need to make unprecedented increases to meet the targets they have set for 2010," the Paris-based OECD said in a statement.

Aid provided by the United States fell in real terms by 9.9 percent to $21.8 billion, due largely to the lower debt relief, which still leaves it as the world’s largest single aid donor.

Aid from European Union member states fell by 5.8 percent to $62 billion while the amount from the bloc’s executive, the European Commission, rose to slightly over $11 billion.

Major donors have pledged to increase aid to poor countries significantly by 2010.

"They will need to make unprecedented increases to meet their 2010 targets," the OECD said in a statement.


Campaign group ActionAid said counting debt relief artificially inflated aid figures in the previous years.

"This constant failure by rich countries to meet their commitments to the poor must end. It’s time for them to set and stick to yearly targets to increase aid," Action Aid policy director Jesse Griffiths said in a statement.

The EU’s top aid official said a fall of 1.7 billion euros in the bloc’s 27 countries’ development aid was unacceptable.

"2007 was a serious failure for financial aid to development," EU Development Commissioner Louis Michel said together with Luxembourg’s aid minister Jean-Louis Schiltz.

"These 1.7 billion (euros) could have contributed to changing people’s lives," they wrote in a letter to media. The EU executive estimates that the amount could have financed 4,500 schools or 1,200 hospitals.

"It is time for Europeans and other major donors to act," Michel and Schiltz wrote.

As part of the United Nations’ Millennium Development Goals, EU member states pledged to allocate 0.7 percent of their Gross National Income (GNI) to development assistance by 2015.

Aid reached 0.38 percent of the bloc’s GNI last year, below the EU interim target for 2006 of 0.39 percent — which the bloc did fulfil in 2006.

The EU executive said Official Development Assistance in the 27-nation bloc amounted to 93 euros per citizen, compared to 53 euros per person in the United States and 44 euros in Japan. (Editing by Matthew Tostevin)

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