Development aid stable in 2014 but flows to poorest countries still falling
08/04/2015 - Development aid flows were stable in 2014, after hitting an all-time high in 2013, but aid to the poorest countries continued to fall, according to official data collected by the OECD Development Assistance Committee (DAC).
Net official development assistance (ODA) from DAC members totalled USD 135.2 billion, level with a record USD 135.1 billion in 2013, though marking a 0.5% decline in real terms. Net ODA as a share of gross national income was 0.29%, also on a par with 2013. ODA has increased by 66% in real terms since 2000, when the Millennium Development Goals were agreed.
Bilateral aid to the least-developed countries fell by 16% in real terms to USD 25 billion, according to provisional data. Much of this drop is explained by exceptionally high debt relief for Myanmar in 2013, but even excluding debt relief ODA to the poorest countries fell by 8%. Bilateral aid is channelled directly by donors to partner countries and equates to roughly two-thirds of total ODA.
“I am encouraged to see that development aid remains at a historic high at a time when donor countries are still emerging from the toughest economic crisis of our lifetime,” said OECD Secretary-General Angel Gurría. “Our challenge as we finalise post-2015 development goals this year will be to find ways to get more of this aid to the countries that need it most and to ensure we are getting as much as we can out of every dollar spent.”
A survey of aid donor countries’ spending plans through 2018 points to a dip in country-programmable aid – aid that is planned in advance for country programmes - in 2014 but with programmed increases starting in 2015.
The survey indicates that country-level aid to the poorest countries should recover over the next few years after several years of declines, in line with a pledge by DAC members in December 2014 to reverse the fall in aid to countries most in need.
“ODA remains crucial for the poorest countries and we must reverse the trend of declining aid to the least-developed countries. OECD ministers recently committed to provide more development assistance to the countries most in need. Now we must make sure we deliver on that commitment,” said DAC Chair Erik Solheim.
Five of the DAC’s 28 member countries – Denmark, Luxembourg, Norway, Sweden and the UK – continued to exceed the United Nations target of keeping ODA at 0.7% of GNI.
Thirteen countries reported a rise in net ODA, with the biggest increases in Finland, Germany, Sweden and Switzerland. Fifteen DAC members reported lower ODA, with the biggest declines in Australia, Canada, France, Japan, Poland, Portugal and Spain.
Looking in addition at several non-DAC members who also reported their aid flows to the OECD body, the United Arab Emirates posted the highest ODA/GNI ratio in 2014 at 1.17%.
ODA makes up more than two thirds of external finance for least-developed countries. The OECD will call at the International Conference on Financing for Development in Addis Ababa in July for more of this money to be used as a lever to generate private investment and domestic tax revenues in poor countries. OECD work on combatting tax avoidance and illicit financial flows out of least-developed countries also aims to reduce dependence on aid.