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Donor countries urged to step up spending as national goals go unmet

The world’s major powers have failed to make progress towards meeting their commitments on aid spending, according to new data, prompting calls for countries to step up in the face of the Covid-19 outbreak.

The Organisation for Economic Cooperation and Development’s (OECD) update on spending in 2019, published on Thursday, showed aid contributions by its forum of the largest donors were less than half the targeted 0.7% of their gross national income.

Only five countries, including the UK, met or surpassed the 0.7% spending goal.

Development advocates are calling for donor countries to meet their aid commitments to poor countries in order to help them meet the challenges of Covid-19, which researchers have warned could overwhelm health systems and set back the fight against poverty by decades.
“If we are not going to do it now, then when are we going to do it?” said Jan Van de Poel, policy and advocacy manager at the European Network on Debt and Development.

“This recession is going to hit developing countries particularly hard and risk erasing any progress we’ve made in the past decade. This is the time for donors to step up and increase their efforts.”

He said the recent commitment to maintain spending levels made by the OECD’s development assistance committee, a forum of 30 major aid providers, was not enough in the circumstances, since countries would need to strengthen health systems and public infrastructure.

The OECD’s secretary general, Angel Gurria, praised a 1.4% overall increase in spending as “an important first step, particularly as we now have an additional duty to step up support to those countries facing the harshest impacts of all from the coronavirus crisis”.
However, spending as a proportion of income actually fell in 2019, from 0.31% to 0.3%.

Van de Poel welcomed Wednesday’s announcement by the G20 that it would suspend debt repayments for low-income countries but warned that debt relief should not be included in any increase in aid contributions, because it will do little to improve developing countries’ capacity to invest in critical infrastructure.

He also said the required funding increases should be provided through grants rather than loans.

Oxfam International last week called on the G20 to provide an international rescue package including $1tn (£80bn) in funding to countries and another $1tn in debt relief.

Van de Poel said it was important that funding for the global coronavirus response was not focused solely on the disease and did not pull resources away from other serious issues.

The EU has been criticised for creating a $15bn package for the global pandemic response by reallocating existing funds for other purposes.

“We find this insufficient in effectively tackling this crisis and meeting the immediate health and socio-economic needs of the most vulnerable countries and people globally,” said Riccardo Roba of Concord Europe, a confederation of European civil society groups.

Robba also highlighted debates about how aid is used, with coronavirus leading to calls for donors to move away from funding single-issue campaigns to focus more on fundamental improvements in sectors such as healthcare.
“Donors need to move towards a more comprehensive, coherent and integrated approach, which addresses the health, social and economic impacts of the crisis,” he said.

“We need broader and long-term system change that benefits everyone. We need a radical change of course: these unique circumstances offer an opportunity to fundamentally rethink our models in order to achieve a sustainable future for people and the planet.”

Spending rose in more than half of the development assistance committee countries though the largest donor, the US, spent 0.4% less because of a reduction in bilateral aid.

Germany and Sweden were among several countries that also reduced spending, because of a reported reduction in costs for refugees living within their countries.

Gurria said maintaining spending levels was now key because of the coronavirus pandemic, despite the domestic difficulties facing many donor countries.

“The response of development providers in the weeks and months ahead will be a critical force in the global battle against Covid-19. Overseas Development Assistance has proved to be recession-proof in the past, including during the 2008 financial crisis, and I am confident it can be again.”