Oxfam welcomes aid increases

Oxfam is welcoming a 10% increase in global aid to developing countries.
But the development agency warns it is nowhere near enough to fulfil existing promises or respond adequately to the increased threat poor people face as a result of the global economic crisis.

The UK increased annual its annual aid budget to £6.2 billion, keeping it on-track to meet its commitment to spend 0.7% of national income on aid by 2013. But Oxfam warned other countries need to raise their game at the G20 summit later this week and the UK should also give more in response to the economic crisis.

Max Lawson, Oxfam Head of Development Finance, said: “The UK deserves real credit for increasing aid to developing countries but, like other rich countries, it can and must do more.
“The £6.2bn spent by the UK annually on aid is less than half the £14.5 the Government had earmarked for ID cards and less than a third of the £20bn it plans to spend on Trident.
“Aid is an absolutely vital lifeline for poor people, especially in these brutal economic times. The UK public`s record response to Comic Relief earlier this month shows they remain committed to overseas aid. Providing help to developing countries now is a win-win proposal – it will help millions of people at risk of poverty as well as providing a much needed boost for the global economy.”

The global aid figures, published today by the Organisation for Economic Cooperation and Development, show total annual global aid is now $120 billion. But rich countries still gave a lower proportion of their national incomes to developing countries last year than they did when they promised to ‘Make Poverty History` in 2005.[1] At 0.3% of national income, aid is at the same level it was in 1993.

The figures also suggest that increases in aid are being used for political purposes rather than going where they are needed most. Despite being the poorest region on Earth, Sub-Saharan Africa saw a tiny increase in aid of just 0.4% to $22.5 billion.

Overall assistance to developing countries still remains tiny compared with the money rich countries have spent bailing out bankers. The $8.4 trillion mobilised to prop up ailing banks is 70 times more than the amount given to developing countries in aid each year.

Lawson said: “The global increase in aid is particularly welcome after two years in which aid to poor countries has been cut. However, aid spending still only accounts for around 0.3% of the total value of rich countries’ economies, despite their promises to increase contributions to 0.7%.   Indeed, they were giving more aid as a proportion of economic output in 2005 and the same as far back as 1993.
“Rich countries can come up with the money when they want to. [Former royal Bank of Scotland CEO] Fred Goodwin`s pension would pay for 25,000 new teachers, enough to teach one million African children. Gordon Brown must press his fellow G20 leaders to rescue babies not just bankers,” Lawson said.

The economic crisis is hitting poor countries hard and threatens to roll back progress in reducing poverty. Foreign Direct Investment into developing countries has fallen by over $700 billion since 2007 – almost seven times total aid levels.  Remittances are also falling rapidly as unemployment rises in the rich world; and global trade has ground to a virtual halt. Rich countries must keep their promises on aid and go beyond them to meet increased needs.