Aid to poorest falls: Is world's charity going to those who need it most?
In 2014, the world鈥檚 48 poorest countries received 30 percent of all development assistance. Here are some reasons behind wealthy countries' decisions on aid.
A child cries as she awaits hospital treatment at a temporary refugee camp set up for foreign nationals fleeing attacks from South Africans in Johannesburg, South Africa Saturday, April 18, 2015.
Denis Farrell/AP
Washington
If your image of foreign aid is money from the world鈥檚 wealthiest countries flowing to the poorest, think again.
As it turns out, the share of the world鈥檚 pot of foreign aid 鈥� itself near an all-time high last year, at about $135 billion 鈥� that goes to what experts call the 鈥渓east-developed countries鈥� (LDCs) is actually shrinking. In 2014 the world鈥檚 48 LDCs, two-thirds of which are in sub-Saharan Africa, received 30 percent of all development assistance.
The United States is a case in point among donor countries: While the US is the world鈥檚 largest provider of foreign aid, the share of that assistance going to the poorest countries dropped from 37 percent in 2013 to 32 percent in 2014.
Now an international group of development organizations is calling on major donor countries to reverse the aid trend 鈥� and they鈥檙e calling on the wealthiest of the wealthy to set a global example.
Led by the ONE Campaign, an international effort fighting extreme poverty and disease, the organizations are calling on the Group of Seven countries to commit to directing half of their development assistance to the world鈥檚 poorest countries within a few years.
The G7 is set to hold its annual summit in Bavaria, Germany, on June 7 and 8.
Reaching that 50 percent threshold would mean an additional $26 billion in aid (at 2014 totals) to the poorest countries, development experts say, and that could have a substantial impact in reducing extreme poverty 鈥� defined as subsistence on $1.25 a day or less.
鈥淚t鈥檚 worth flagging that this year overall ... we鈥檝e seen aid to LDCs actually fall globally,鈥� says Eloise Todd, global policy director at the ONE Campaign in Washington. 鈥淪omething is going really wrong in the way many donors are allocating their aid.鈥�
The share of the world鈥檚 development aid going to the world鈥檚 poorest countries has been falling since hitting a peak in 2005, according to the Organization for Economic Cooperation and Development (OECD). Yet while the decline is undisputed, the reasons behind it are varied.
One big reason was a shift by donors to debt reduction. Substantial debt relief to Myanmar, also known as Burma, accounted for a major chunk of last year鈥檚 fall in global development assistance, according to the OECD. The OECD鈥檚 annual global economic report, issued last month, found that wealthy countries were earmarking more of their foreign aid as loans to middle-income countries.
Other reasons cited by development experts: a rise in humanitarian assistance to address crises like those in Syria and parts of Africa, which have spawned the world鈥檚 largest displaced and refugee populations in decades, and a shift by some wealthy European countries to addressing development needs and humanitarian crises in their own backyard.
鈥淪ome countries may prefer to target their own region, or where they have geopolitical interests,鈥� Ms. Todd says. She notes that some senior officials she鈥檚 met with have expressed 鈥渟urprise鈥� when informed of the sometimes-sharp drop-offs in their countries鈥� aid to LDCs.
But another crucial reason is many LDCs鈥� inability to put development dollars to good use 鈥� weak 鈥渁bsorptive capacity,鈥� experts say. This is either because of a lack of the infrastructure and institutional development required to get aid to where it needs to go or simply because of corruption.
鈥淭he question of corruption is going to be at the forefront of many people鈥檚 minds鈥� as the effort proceeds to boost aid to the poorest countries, says Paul O鈥橞rien, vice president for policy and campaigns at Oxfam America in Washington.
In addition to conventional forms of corruption 鈥� lining pockets, taking bribes as a gateway to economic activity in a country 鈥� there are other growing scourges such as tax evasion and illicit financial flows (out of a country) that also have to be addressed to win back donor confidence, experts say.
Beyond the effort to get a G7 pledge to boost aid to LDCs, the ONE Campaign will also be pressing for aid to the poorest as United Nations members move toward adopting a new set of global 鈥渟ustainable development goals鈥� in September.
Development experts note that on the receiving end, the poorest countries must commit to doing more to fund basic social services. In particular, governments should formulate plans for directing services and foreign assistance to girls and women, these experts say. Girls鈥� education and women鈥檚 economic opportunities have been increasingly highlighted as key building blocks in constructing a strategy to lift the LDCs.
A critical test of the effort to redirect more aid to the world鈥檚 poorest countries will come in July when UN counties meet in Addis Ababa, Ethiopia, to chart a new course for development financing.
With a two-pronged plan of more aid from the wealthy and greater financial input from the poorest countries themselves, 鈥渨e hope to create a sustainable environment for growth,鈥� Todd says, 鈥渟o that we may eliminate extreme poverty.鈥�