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Why the golden era for overseas aid is over – for now

Make Poverty History

Powered by article titled “Why the golden era for overseas aid is over – for now” was written by Larry Elliott, economics editor, for on Wednesday 4th April 2012 15.05 UTC

It hardly comes as a massive shock that flows of aid were down last year. No western country has been left unscathed by the downturn of the past five years and that financial pressure is reflected in the development assistance figures released by the Paris-based Organisation for Economic Co-operation and Development (OECD).

Cuts to aid budgets in Spain and Greece – two countries where the belt-tightening has been severe – were of the order of 40%, but countries that have weathered the storm more easily were also less generous last year. Austria cut its aid budget by more than 14%, France by 5.6% and there was even a small reduction of 0.8% in UK financial assistance.

The big picture was that aid flows fell by $3.4bn (£2.14bn) in real (inflation-adjusted terms) to $133bn in 2011. According to Oxfam, once exceptional factors such as the timing of debt relief are stripped out, it was the first fall in development assistance since 1997.

What do the figures tell us? In terms of the UK, not all that much. The government is still on course to hit its target of increasing aid to 0.7% of national income by 2013: the intention was always to have a big jump in assistance between 2012 and 2013.

Globally, however, the OECD data does suggest that the golden era for aid is now over, for the time being at least. Pledges made at Gleneagles in 2005, when the economic outlook was benign and western countries were flush – have not been met. The financial climate is now a lot more hostile, and politicians in rich countries are finding it hard to justify spending more on poor people in poor countries when they are cutting spending on poor people at home.

Apart from the budgetary pressures, there are a number of reasons why western donors are making less of an effort than they were in the middle of the last decade. One is the sense that parts of the developing world are doing fine and therefore don’t need the help they once did. This is a pretty shallow argument, since what applies to China does not apply to the poorer countries of sub-Saharan Africa, which have enormous physical and human infrastructure needs.

A second reason is that there is no individual or government in the west that is pushing the aid agenda in the way that Gordon Brown and Tony Blair once did. Finally, it has to be said that the fizz has gone out of the anti-poverty campaign groups. They were making a big fuss today when the OECD aid figures came out, but need to have a look at their own performance, which in recent years has been distinctly lacklustre. Even in the good years, politicians had to be pushed into action, and this was nearly always the result of public demands for change orchestrated by development groups. Until the spirit and the energy that led to Jubilee 2000 and Make Poverty History is rekindled, western politicians will be able to get away with breaking their promises. © Guardian News & Media Limited 2010

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