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Aid to world’s poorest nations drying up

20 January 20170 comments

Financial aid to the world’s poorest countries has fallen for the second year in a row as donor governments prioritise refugee costs on their own soil, according to anti-poverty group the ONE Campaign.

The latest figures for 2015 show wealthier countries are increasingly spending aid funds on refugee costs at home.

Data, published last month by the OECD, that showed a 6.6 per cent real term rise in the overall amount of official aid delivered in 2015.

But it also showed that the proportion of that figure going to the world’s least developed countries (LDCs) and Africa is declining.

Overall, in 2015 $US12.1 billion in aid never left donor countries. Excluding these refugee costs, official development assistance (ODA) rose by just 1.3 per cent in real terms compared to 2014. In cash terms, total aid has declined since 2013.

The ONE Campaign said the figures showed that aid, which should be used to fight poverty, is being redirected towards covering the cost of hosting refugees.

“It’s absolutely right that we protect people fleeing war and insecurity, but it is wrong to do this by shifting resources away from the world’s poorest,” said the organisation’s policy director Sara Harcourt.

Under aid rules set by the OECD, refugee-hosting governments are allowed to count the amount spent on a refugee in their first year in the country as ODA. Costs associated with repatriation are also allowed.

But it is often unclear what this means. There is almost always doubt over when that 12 month period begins. This could be when the refugee enters the country, or when their application for asylum is accepted.

Amid an unprecedented spike in the number of refugees in 2015, especially into donor countries in Europe driven by the conflict in Syria, the lack of clarity around these definitions has become an issue.

In 2014, the influx of refugees to the world’s major donor countries saw their aid to the LDCs and Africa, where many of the LDCs are located, decline. The most recent figures show the amount of ODA spent on refugees has doubled in recent years.

According to the OECD’s interpretation of the figures, total net ODA to the LDCs, countries that are the least able to lift themselves out of poverty, was $US43 billion in 2015 – a figure that would mark a rebound of almost 8 per cent in real terms on the year before.

Similarly, the OECD puts 2015 aid to sub-Saharan Africa at $US42.8 billion – an increase of 6.3 per cent in real terms since 2014.

But in the ONE Campaign says this is a significant overestimation. The OECD’s figures include all donors: traditional donor countries, members of the OECD’s Development Assistance Committee (DAC); international institutions like the World Bank; and non-DAC donors, such as the United Arab Emirates.

Instead, ONE used the OECD’s data to measure only DAC donor contributions, including those they deliver through international financial institutions. Using these calculations, aid to the LDCs increased by as little as 0.8 per cent, while aid to Africa dropped by 2 per cent.

ONE also excludes debt relief from its calculations and takes into account aid to the whole of Africa, rather than just the sub-Saharan region.

Ms Harcourt said that the world was “shying away” from solving the global health, security and prosperity challenges facing an increasingly connected world.

“Donor countries must prioritise efforts to tackle extreme poverty and preventable disease, ensuring their focus is squarely on those with the least ability to lift themselves out of poverty,” she said.

“Doing so will bolster the fight against extreme poverty and efforts to overcoming the challenges we’re faced with in today’s world.”

Only six DAC nations covered by the OECD’s figures reached a long-standing United Nations target to spend 0.7 per cent of gross national income on ODA. They were the UK, Denmark, Luxembourg, the Netherlands, Norway and Sweden. The UAE has also exceeded this target. Overall, net ODA as an average share of GNI stood at 0.3 per cent.

By volume, the biggest donors were the US, the UK, Germany, Japan and France. The largest recipient of ODA was Syria, at $US4.9 billion, followed by Afghanistan ($US4.3 billion), Pakistan ($US3.8 billion), Ethiopia ($US3.2 billion) and India ($US3.2 billion).

Laurie Nowell
AMES Australia Senior Journalist