Poor countries get short straw on foreign aid growth

The world’s poorest countries are getting poorer when it comes to expanding global foreign aid spending, shows new data from the Organization for Economic Cooperation and Development (OECD). Global official development assistance grew to $137.2 billion in 2014, beating out the all-time high set in 2013. But money going to the least developed countries fell by $2 billion and its overall share was at a decade-low.

“What a depressing start to the new year,” said Adrian Lovett, Europe executive director for The ONE Campaign, in a statement. “Last year, world leaders promised to reverse the decline in aid to the least developed countries. Instead, it has got worse – and increasing numbers of refugees in 2015 means the problem has almost certainly got even more serious.”

Excluding debt relief, the increase in development assistance is even more significant from 2013 to 2014. But that more readily available money, as well as already allocated sums, were in response to the growing refugee crisis affecting the countries surrounding Syria. Domestic refugee costs grew by $1.8 billion between the two years, and potentially grew by more in 2015.

The ONE Campaign advocated for more money to least-developed countries earlier this year, in part a response to preliminary OECD numbers. A report by the advocacy group stressed the need to provide more assistance to poor countries given that the burden of the world’s poor will shift towards them over the next 15 years.

“If the point of official development assistance is to help countries develop and meet basic needs, increases in spending will be needed sooner than at the end of the [Sustainable Development Goals in 2030],” said Sara Harcourt, policy director for ONE, in an interview with Humanosphere. “The U.K. has shown with a conservative government that it is possible for countries that have the political commitment to make this reality. We need all the countries to make that a priority.”

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In addition to simply allocating more money to poor countries, there is a movement for donor countries to commit 0.7 percent of their gross national income on foreign aid. The $137.2 billion in aid is a giant number, but represents only 0.29 percent of the $46.3 trillion in global income in 2014. Reaching the spending target may increase aid spending, technically, but it comes with its own set of problems – and the fact that aid alone is not going to end global poverty.

The U.K. is one of the few countries to commit to and reach the 0.7 percent spending target. The government revealed a new aid strategy which involved moving some of the aid budget away from the Department for International Development and into other ministries. It also responds to the global refugee crisis and by placing more emphasis on fragile and conflict-affected countries.

Both changes come with their challenges. The government’s internal watchdog will keep track of all aid spending, but coordination across ministries is crucial to achieving larger aid and development goals set by the government. And working in countries that are the least-developed and/or experience conflict holds the potential for significant impact and failure.

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“These are riskier environments in which it is harder, and more expensive, to achieve results,” blogged Owen Barder, head of the Center for Global Development Europe, a think tank. “The strategy missed an opportunity to warn readers of the costs and risks, as well as the benefits, of focusing more of our aid effort on those countries. Furthermore, the government should be wary of swinging the pendulum too far in response to the latest crisis, which is dealing with refugees and asylum seekers.”

Underlying the discussion is how aid money is spent and what actually counts as “official development assistance.” New changes enacted by the OECD tweaked the criteria, but as economist David Roodman showed, the change on totals is negligible. Critics argue that loans and aid that does not have to be paid back are not quite the same thing.

Money meant for aid does not always end up where it is supposed to go. The increasing pressure caused by the surge of refugees in mid-2015 forced countries to dedicate more money to the problem. With budgets already set for the year, some countries resorted to re-allocating money pledged for other areas to the crisis. The same was seen for Ebola in West Africa the year prior.

For more about 2014 ODA, check out the data by country:

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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.