First global aid cut in 14 years will cost lives and must be reversed

Hundreds of thousands of poor people will go without life-saving medicines and many more children will miss out on school because of the first cuts in aid since 1997, Oxfam warned today.

The international agency was responding to figures from the OECD that showed aid from rich countries was $133bn in 2011 - a real terms fall of $3.4bn.  Aid as a share of national income fell from 0.32 per cent to 0.31 per cent leaving rich countries even further off-track to meet their promise to give 0.7 per cent of their national income to the poorest.

The biggest cuts were made by Greece and Spain, with Austria and Belgium also slashing aid budgets. And the picture is even bleaker than shown by these figures with Spain, Canada having already announced further aid cuts and the Netherlands, which currently exceeds the 0.7 per cent target debating further cuts.

Missing aid targets

Analysis by Oxfam shows that at current rates of progress, donors as a group will not hit the 0.7 target for 50 years.

By contrast, Norway, Denmark and Luxemburg continue to meet their pledge to give more than 0.7 per cent of national income in aid, the UK remains committed to meeting the target by 2013 and Germany, Australia and Sweden have increased their aid budgets.

Oxfam said the ability of some countries to meet their commitments and increase aid showed that cutting aid was usually a political choice rather than an economic necessity. It called on rich countries to act urgently to reverse cuts and deliver on their promises to the world’s poorest.

Jeremy Hobbs, Executive Director of Oxfam International, said: “This cut in aid is a global scandal. Rich countries are using the economic crisis as an excuse to turn their backs on the world’s poorest at a time when they need help.

"Cutting aid is no way to balance the books. Even small cuts in aid cost lives as people are denied life-saving medicines and clean water. Aid is such a tiny part of budgets that cutting it has no discernible impact on deficits – it is like cutting your hair to lose weight.

“Countries such as Spain, the Netherlands and Canada which are making severe cuts in their aid must consider the human cost and immediately reverse their decisions.

“We also need rich countries like Italy, Japan and the US, who currently give only a tiny proportion of their incomes, to do more to help the poorest.”  

Where does aid money go

It is estimated that €1,000 ($1330US) in aid is enough to save a child’s life.
Oxfam calculates that the missing $3.4bn would be enough to provide a full year treatment for half of the children infected with HIV.

Aid also places a vital role in providing the educated, healthy workforce, infrastructure and support for entrepreneurs that is vital to economic development.

At $133bn, total global aid spending is dwarfed by rich countries’ $1trillion annual military spend and is less than a third of the $400bn that is spent worldwide every year on cosmetics.

Failure of governments to meet their commitments to the world's poorest comes in stark contrast to the $18 trillion found to bailout the world's financial sector in the wake of the 2008 crisis.

The World Bank has said that tens of millions of people have been pushed into extreme poverty by the economic crisis.

More money in tight times

The World Bank has said that tens of millions of people have been pushed into extreme poverty by the economic crisis.

Oxfam is calling for a financial transaction tax (FTT) to help poor people hit by the economic crisis. The EC has proposed a Europe-wide FTT that would raise €57bn-a-year.

Hobbs said: “Governments have shown that they can find large sums of money to bail out banks but with notable exceptions - Denmark, Norway and the UK – most are failing dismally to find much smaller sums for the world’s poorest people.

“Rich countries should meet their aid commitments and also make the financial sector pay to repair the damage done in poor countries. An FTT offers a real opportunity to raise additional revenue which is needed more than ever.”

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Oxfam's analysis of the 2011 OECD aid figures (pdf, 120kb)

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