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31st Oct 2020

EU short $19bn on development pledges

Western European countries are skipping out to the tune of $19 billion (€14bn) on the aid pledges they made to developing countries five years ago at a landmark G8 meeting, according to the Organisation for Economic Co-operation and Development.

Aid to poor countries in 2010 will be lower than donors promised five years ago at the 2005 Group of Eight meeting in Scotland - largely as a result of the economic crisis, says a report published on Tuesday by the OECD, the international club of wealthy countries.

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  • The OECD spent $4.1 trillion on bailouts during the economic crisis and €107 billion on development aid in 2010 (Photo: Notat)

With national budgets squeezed in the wake of the crash, many governments believe that charity begins at home, resulting in a shortfall of $21 billion (€15bn) from OECD nations.

According to the OECE review of 2010 aid budget plans, donors are to disburse $107 billion (€78bn) this year (in 2004 dollars), instead of the $128 billion (€93bn) committed in 2005.

Some $19 billion of the overall shortfall will come from the EU15 - the old, wealthier member states that made the original pledges.

At the time, all EU15 states committed to achieve a minimum level of overseas development assistance (ODA) of 0.51 percent of the gross national income (GNI).

A number of EU countries actually far surpassed this goal: Sweden, for its part, has the world's highest ODA, reaching a full 1.03 percent of GNI.

Luxembourg is just pipped by Sweden, but it also manages a full percentage point of GNI in aid delivery (1%), followed by Denmark (0.83%), the Netherlands (0.8%), Belgium (0.7%), the United Kingdom (0.56%), Finland (0.55%), Ireland (0.51%) and Spain (0.51%) - all of which meet or exceed their 2005 commitment.

Other states however have welched on the pledges: France will achieve 0.46 percent of GNI, and Germany 0.40 percent. Rounding out the bottom are Austria (0.37%), Portugal (0.34%), Greece (0.21%), and Italy (0.19%).

While this is disappointing, development NGOs point out that the EU states gave themselves much more ambitious targets in 2005 than other OECD members.

OECD Secretary-General Angel Gurría said of the shortfall: "Some have set the bar very low and others are failing to meet their international pledges. As we head into new rounds of discussions about funding climate change and food security concerns, I encourage all donors to carry through on their development promises."

Catherine Ray, the European Commission's development spokeswoman, told EUobserver: "We have to remember that many countries have been put in a difficult situation by the economic crisis, but the EU already commits 60 percent of total global aid."

"Nevertheless, the commission will continue to push member states not to decrease or backtrack on their commitments."

Aid agency Oxfam described the result "a scandal."

"Rich countries have no excuse for failing to deliver the aid increases they promised five years ago at Gleneagles," said Oxfam's Max Lawson.

In comparison, OECD countries have spent $4.1 trillion bailing out financial institutions and major industries threatened by the economic crisis, according to a tally by the Institute for Policy Studies, a US-based centre-left think-tank.

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