Donors throw out the aid rule book - Oxfam reaction to OECD preliminary stats

Published: 12th April 2022

Today, the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD DAC) published its preliminary figures on the amount of development aid provided in 2021. 

In response, Jeroen Kwakkenbos, Oxfam EU aid expert said:

“Donors have thrown out the rule book by counting vaccine donations in aid budgets. Over 350 million vaccine doses came from hoarded stocks, some of which, were donated far too close to their expiry date. Many more were donated without essential equipment such as syringes making them almost useless. Including these ‘donations’ in aid budgets inflates aid. It is merely donors patting themselves on the back for a job that may have cost lives.

“The war in Ukraine poses a risk to future aid budgets. Aid is already being pulled from countries like Syria to fund the reception of Ukrainian refugees in Europe. We are left with the bizarre situation where European countries could become the largest recipients of their own aid. Instead of cherry-picking humanitarian crises, donor governments need to boost aid budgets to meet the challenges of today.” 

Notes to editors

The 2021 aid figures are available on the OECD website.

New OECD data shows that overall aid spending from 30 OECD members summed 179 billion dollars in 2021. This was a 4.4 percent increase from 2020 figures. Rich countries only committed 33 percent of their gross national income (GNI) to development aid, the same as 2020, and well below the 0.7 percent they promised back in 1970. In 2021, just 5 countries – Luxembourg, Norway, Germany, Sweden and Denmark – have lived up to this promise.

Recently, Oxfam has expressed concern that some donor governments are already shifting aid budgets to pay for Ukrainian assistance and the costs of hosting more than 4.5 million people who have fled the country recently. Compared to 2020, aid for hosting refugees has not changed and is stabilising at 5.2 percent since its peak in 2016 when it amounted to 11 percent of aid. The current statistics do not take into account 2022 aid which has seen this shift towards aid diversion. 

Vaccine donations made up a total of 3.5 percent of aid (6.3 billion USD) - that equates to 857 million doses, of which 357 million doses (2.3 billion USD/1.3 percent) were domestic vaccines hoarded by countries. Oxfam responded to an OECD statement in February which says that countries will be able to count donations of unwanted vaccine doses as part of their foreign aid commitment. 

During the pandemic, the world’s 10 richest men have seen their fortunes double, rising at a rate of 1.3 billion dollars a day, or 15,000 dollars a second while 160 million people have been pushed into poverty – equivalent to the population of Germany, France and Belgium combined.

More than 50 years after rich countries agreed on 0.7% target, only seven have ever met or exceeded it. Oxfam estimated in 2020 that this has cost poor countries $5.7 trillion in undelivered aid.

A new methodology is used to assess the concessionality of loans. Previously, loans were calculated on a cash flow basis. This means donor countries got the full amount of the loan listed as ODA and they lost ODA as the loan was paid back. The new method uses a fixed interest rate to judge the grant element. The fixed interest rate is high so donors are getting more credit for their loans than they should, which, in turn, encourages them to give more loans.

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