Better foreign aid starts with re-defining ‘aid,’ says ONE Campaign

CaptureAfrican governments and donor countries are not living up to their commitments to invest in health, agriculture and education, finds a report released Monday by the ONE Campaign.

A lack of transparency and antiquated definitions of what counts as foreign aid are among areas in need of reform before the Millennium Development Goals expire at the end of 2015, says the U.S.-based advocacy group. That is in addition to the fact that foreign aid money is not reaching the people who need it the most.

“Until governments are focusing political and financial emphasis on those key areas, we are not going to see lasting change,” said Eloise Todd, global policy director for the ONE Campaign. “We really need to do a lot more to bolster funding for the poorest countries.”

Sub-Saharan African governments are failing to meet the commitments they made to spend 15 percent of their budgets on health, in 2006. Only six countries out of 43 met the target also known as the Abuja commitment. The story is the same for targets to spend 10 percent of national budgets on agriculture and 9 percent on education.

However, many of the needed changes starts with the donor countries, explained Todd. Foreign aid is not necessarily reaching the poorest countries. Some of the money never leaves the donor countries at all. ONE finds that 17 percent of money claimed as aid spending did not reach developing countries.

That is mostly because countries can count debt relief as foreign aid. Countries can claim the amount of a loan, plus interest, forgiven as a part of its aid spending for a given year.

Capture2

“Forgiving debt is not the same thing as injecting funding and finance that will improve vital services and kick-start the economy,” said Todd.

A more precise definition of what constitutes foreign aid will help show just how much or how little countries are actually spending. For example, France claimed that it provided $5.9 billion in official development assistance in 2012. Tightening up the definition, by excluding things like loans and debt forgiveness, leaves France with having spent $1.5 billion in official development assistance in 2012. Germany and the EU would also see similarly dramatic declines in their totals.

Changing the rules may be out in the weeds for some, but it is an important discussion, said Todd. David Roodman, formerly of the Center for Global Development and the Gates Foundation, has been working on the topic of defining foreign aid for some time.

“Not to be melodramatic, but the official system for counting foreign aid is in crisis,” wrote Roodman in a blog post for CGD in June.

Roodman’s involvement in the ONE report is evident in the call for change in defining aid. It also ties closely to increased transparency, a point that Todd returned to numerous times in an interview with Humanosphere. A standard for reporting foreign aid spending set out by the International Aid Transparency Initiative is slowly gaining traction, but we are a long way off from knowing how and where aid money is being spent.

“The truth is aid needs to be spent well. That means being transparent and delivering results,” said Todd. “There is a lot that donors can do to make their aid more effective.”

ONE concludes its report by making 11 calls to action. All are aimed to contribute to the conversations about what will replace the MDGs. Consultations and negotiations will continue through next year in order to establish the Sustainable Development Goals, as they are being called at the moment. The stakes are high.

“In the end, a more stable, functioning, security society are the minimum that is needed to have more security for everyone writ large,” said Todd.

Share.

About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.