Oxfam hits out at irresponsible aid critics and tells G8 leaders to stop dithering about poverty

Pressure on G8 Development Ministers meeting in Canada today to deliver

Rich donors must rediscover how high-quality bilateral aid can help poor countries strengthen their people and economies – a key to how the world might emerge from the global economic crisis in better shape.

In a major new report, international agency Oxfam hits out at wrong-headed and irresponsible critics who argue against all forms of aid and challenges G8 leaders meeting in Canada in June to stop dithering at the margins of human poverty.

This year alone, rich countries owe the world’s poor $151 billion – the difference between their 40-year-old promise that they would reach 0.7% of gross national income on aid, and what they actually put on the table in 2009.

Aid must be improved and reformed

“For poor countries these missing billions are the currency of human suffering,” said report author Jasmine Burnley, “the dollar expression of more poor people falling ill and dying needlessly, missing an education, and losing the chance to be part of a productive economy.”

Oxfam’s report analyzes why well-targeted aid works, for example in Mozambique, where quality aid has led to a 50% increase in health spending, helping to cut child deaths by 20% in 10 years. Oxfam argues that aid must be improved and reformed, and must not be driven by geopolitical and tied interests, or squandered on expensive consultants or delivered in inefficient ways.

The report challenges arguments that poor countries should refuse aid and instead rely on more foreign investment, government borrowing and taxation. These actions, while important, are not alone enough to meet the basic and immediate development needs of many poor countries.

“Aid it is vital in strengthening the ability of poor countries to reduce poverty, mobilize domestic revenues, and promote good long-term private and public investment,” Burnley said.

A new political narrative

The report follows a flurry of media headlines about “aid” in the past two weeks:

• The OECD revealed that more than half its country members cut their aid spending in 2009;
• The World Bank said that sub-Saharan Africa still lags behind poverty reduction targets;
• The IMF outlined a tax on banks that Oxfam says needs to be linked to fighting poverty, and published data suggesting poor countries were having to slash their budgets to bail themselves out of the economic crisis;
• The EU said it was considering rules to protect aid from budget cuts;
• G8 Development Ministers meeting today (26th) to discuss what the G8 will say about aid and poverty in June.

“These kinds of stories suggest a new political narrative is emerging that reasserts the importance of aid. There is talk about finding new sources and protecting existing sources of aid,” Burnley said. “Oxfam agrees, and calls for aid to be increased, better targeted, made more predictable and governed more accountably.”

33 million more children in school

“Not all aid works and a lot could work better but that’s an argument for it to be improved, not abandoned,” Burnley said. “Aid is not the sole answer to poverty but – when given and spent properly – it can save and improve people’s lives. Aid has helped create some remarkable successes, such as 33 million more children in school in the past decade and a ten-fold increase in ARV treatments for HIV/AIDS since 2004.“

The report says that 2010 is an historic year for the G8 which is reviewing the aid commitments it made in Gleneagles five years previously. “This G8 review comes at a time when poor countries are being savaged by the financial crisis,” Burnley said. “As a consequence of the economic crisis, poor countries now need an additional $32 billion to cover their financing needs. There could not be a worse moment for rich countries to turn their backs on the poor – or a better time for them to honor their promises.”