Decrease in development aid will fuel poverty

 

Cutting development aid costs lives, and it will exacerbate poverty, inequality and instability across the globe, said Oxfam today in response to the publication of new aid figures by the Organisation for Economic Cooperation and Development (OECD).

Reacting to the news, Oxfam’s OECD policy and advocacy advisor, Julie Seghers, said:

“Total aid from all rich countries in 2018 was just a bit more than the fortune of the world’s richest man, Jeff Bezos. What better evidence of our broken economy designed for the 1%, not the 99%? It’s shameful that most rich countries still fail to meet the level of development aid agreed over fifty years ago.

“The cut in aid to the poorest and most vulnerable countries is alarming. The world’s richest nations cannot turn their backs on the poorest.

“Many rich countries use their development aid to subsidise the private sector – in too many cases this means big companies at home. We need better rules on aid to the private sector to guarantee that these investments put people before profits.

“Evidence clearly shows that economic and gender inequality is holding back poverty reduction. While more aid is needed, donors also have to go beyond the mere numbers and make sure they invest in truly inequality-busting aid. For instance, more support for government spending on nurses and teachers can save and transform lives and help elevate people's voice to challenge the unfair rules that perpetuate inequality. At the same time, rich countries have to make sure their policies in areas like trade, tax or climate don’t thwart their development efforts.”

 

Notes to editors: 
  • The 2018 aid figures are available on the OECD website.
  • OECD data shows that overall aid spending from 30 OECD members totalled USD 153 billion in 2018. This was a 2.7 percent decrease from 2017, in part due to less money being spent on hosting refuges in donor countries. Rich countries only committed 0.31 percent of their gross national income (GNI) to development aid, same as the 0.31 percent in 2017, and well below the 0.7 percent they promised to deliver in 1970. In 2018, just 5 countries – Sweden, Norway, the UK, Luxembourg and Denmark – have lived up to this promise.
  • Many donors use aid money – in the form of grants, loans, guarantees or equity – to encourage private sector engagement in development. For the first time, the OECD is including data on this spending together with their preliminary aid statistics. The overall share of aid spent on subsidising private sector activities remains relatively small at 2.5 billion USD. However, the current OECD rules on ‘Private Sector Instruments’ are too lenient and do not guarantee that only activities that truly put people before profit are counted as aid, says Oxfam and calls on the OECD to tighten up the rules.
  • This year, the OECD is implementing a new method, agreed in 2014, to count loans given to governments. For some major donors – like Japan – the figures would have been significantly lower using the old reporting method.
  • Inequality is a significant barrier to poverty reduction. A new Oxfam report, ‘Hitting the target, an agenda for aid in times of extreme inequality’, sets out a 10-point action plan for donors that shows how their development aid can successfully beat poverty by putting inequality front and centre of aid strategies and programs. This includes spending more in sectors that are proven to tackle inequality, including health, education, social protection, water and sanitation and support to small scale agriculture; helping developing countries raise taxes progressiley and spend them accountably; supporting active citizenship and fighting gender inequality.
  • According to the Forbes magazine, Amazon.com founder Jeff Bezos is currently the richest man in the world: his fortune was worth $131 billion in 2018, and even if his fortune shrank to USD 110 billion following his recent divorce, he remains the world’s wealthiest man. Total development aid in 2018 amounted to USD 153 billion USD, which in real terms is a 2.7 percent decrease from 2017.

 

Contact information: 

Sofia Hansen | Brussels | sofia.hansen@oxfam.org | office +32 2 234 11 29 | mobile +32 456 14 34 28

 

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