Half full, half empty

HONORING commitments to increase international aid is critical at a time of economic crisis.

The Millennium Development Goal target is to address the special needs of the least developed countries, landlocked countries and small island developing states.

Net disbursements of official development assistance (ODA) in 2008 increased 10.2 percent to $119.8 billion, the highest dollar figure ever recorded. That is equivalent to 0.30 percent of developed countries’ combined national income.

Expenditures on bilateral aid programs and projects have been on the rise in recent years and increased 12.5 percent in real terms between 2007 and 2008—an indication that donors are scaling up their core aid programs.

That said, total aid remains well below the United Nations target of 0.7 percent of gross national income. In 2008, the only countries to reach or exceed the UN target were Denmark, Luxembourg, The Netherlands, Norway and Sweden.

The United States was the largest donor by amount in 2008, followed by Germany, the United Kingdom, France and Japan.

At the Gleneagles summit meeting of the Group of Eight in 2005 and at the UN World Summit later that year, donors committed to increasing their aid. The pledges they made, combined with other commitments, implied that aid would increase from $80 billion in 2004 to $130 billion in 2010 (at constant 2004 prices).

While a few countries have reduced their targets slightly since 2005, the majority of these commitments remain in force. However, some of them were expressed as a percentage of national income.

This means that if the global economy contracts in 2009, as anticipated, the absolute amount of such commitments would diminish.

Taking this into account, existing commitments expressed, as a percentage of donors’ gross national income—would translate into an ODA level of $121billion in 2010.

Some further increase in aid is anticipated. For instance, the latest available OECD survey of donors’ forward spending plans indicates an expected 11-percent rise in programmed aid between 2008 and 2010, including some larger disbursements by certain multilateral agencies.

However, if aid in 2010 is to reach the dollar value expected when the commitments were made (before the economy contracted), donors would need to add at least $10 billion to $15 billion to their current spending plans.

The Millennium Development Goals Report 2009