World

50 years of broken promises: The $5.7 trillion debt owed to the poorest people

Format
Analysis
Source
Posted
Originally published
Origin
View original

Attachments

Introduction

This year marks an historic chapter in the story of international aid. On 24 October 2020, it will be 50 years since rich countries committed to spending 0.7% of their gross national income (GNI) on aid to low- and middle-income countries.

International aid is a crucial tool in the fight against poverty and inequality, and it is the only rich-country policy that puts the people living in poverty around the world first. Aid is also a form of redistribution between countries; this redistribution is a moral imperative in a world where global inequality has reached extreme levels, due in large part to past and ongoing exploitation of many countries by a handful of wealthy nations. Furthermore, aid is one of the only ways to channel additional financing to the budgets of low- and middle-income countries, where it is essential to boosting investment in public goods and social spending. Seven countries in sub-Saharan Africa, for example, fund their social protection programmes entirely through international aid.

As the decades have passed, however, high-income countries have time and again missed deadlines and broken their aid promises. Oxfam has calculated that in the 50 years since the 0.7% promise was made, donor countries have failed to deliver a total of $5.7 trillion in aid. Essentially, this shortfall means that the world’s richest countries owe a $5.7 trillion debt to the world’s poorest people. This figure is nine times larger than Sub-Saharan Africa’s stock of external debt at the end of 2019 ($625 billion). For the human development that has been lost as a result of donor countries’ inaction, there is also an immeasurable moral debt to pay.

These trillions in unpaid aid could have helped eradicate hunger and extreme poverty. It would cost, for instance, an estimated $4.8 trillion over planned expenditures during 2019–2030 to meet all 17 UN Sustainable Development Goals (SDGs) in the world’s 59 lowest-income countries. The financing gap for achieving the health SDG worldwide is estimated at $3.9 trillion between 2016 and 2030.

Instead, today, there remains a very long way to go. Before the coronavirus pandemic, nearly 3.3 billion people lived below the $5.50 per day poverty line. The number of people suffering from chronic food insecurity has risen since 2015; an estimated 2 billion people do not have regular access to safe, nutritious and sufficient food. The dramatic impact of COVID-19 is making a dire situation worse; the pandemic could push 121 million more people into an acute hunger crisis this year, and in worst-case scenarios could undo decades of progress by forcing an additional 226 million to half a billion people into poverty.