Lingering Economic Crisis Causes Drop in International Aid

aidThe developing world has been dealt another blow. According to a 2013 OECD report, official development aid in real terms fell by 4% in 2012 (including a 12.8% drop in aid to the Least Developed Countries). This marks the largest decline since 1997. It is also the first time since 1996-1997 that aid has fallen in successive years, given the 2% drop in 2011.

To account for the decline, experts point to austerity across the developed world, largely in response to the financial and Euro Zone crises. This led to reductions in foreign aid budgets in 21 of the 32 OECD members, including all 5 top donors by volume (the US, UK, Germany, France, and Japan). Not surprisingly, the largest cuts were in countries affected most by the crises: Spain (-49.7%), Italy (-34.7%), Greece (-17.0%), and Portugal (-13.1%).

Such cuts raise questions about the “appropriate” level of development aid. In 1969, the Pearson Commission recommended a target of 0.7% of Gross National Product (GNP). The target was soon adopted by the United Nations (with exceptions like Switzerland and the US) and the OECD’s Development Assistance Committee (DAC).  As of 2012, however, the DAC average was just 0.29% of Gross National Income (roughly equivalent to GNP). The US and Canada came in at 0.19% and 0.32%, respectively.

Oxfam America
So is this target—or any increase in official development aid—feasible in the near future? DAC Chair Erik Solheim states that “Maintaining aid levels is not impossible even in today’s fiscal climate. The UK’s 2013-2014 budget increases its aid to 0.7% of national income, which gives hope that we can reverse the falling trend.” Luxembourg, Sweden, Norway, Denmark, and the Netherlands also exceed the 0.7% mark.

But development aid can also come from unofficial (non-government) sources. These include private foundations and charitable organizations. If you want to transform lives in the developing world, please consider donating to UNICEF, Oxfam, or one of our Op4G partners: African Soup, Develop Africa, Education for All Children, Great Good Haiti, Plant a Seed Africa, Viveperu, and World Teach.

Flickr photo credit: rogiro

Recent Posts

Test Blog Jan 20th

Testing Testing Testing…blog blog blog

Read Story

This week, children across America are returning to school from . . .

Read Story

Philadelphia is living up to its name. In late October, the . . .

Read Story