SUNS  4314 Monday 2 November 1998


DEVELOPMENT: AID FALLS TO ITS LOWEST LEVEL - ONCE AGAIN

London, Oct 29 (IPS/Dipankar De Sarkar) -- World aid fell to its lowest-ever recorded level to reach 47.58 billion dollars in 1997 -- a decline of 7.1 percent in real terms over the amount in 1996, according to a report published Thursday.

And at the same time, donor countries are failing to focus on the 'quality' of aid and gear up to eradicate world poverty, according to the latest Reality of Aid report -- an annual world aid assessment by a group of non-governmental organisations.

"If policies were programmes and promises were dollars, the Reality of Aid could report great progress on the road to eradicating global poverty this year," it says.

"But at a time when donors acknowledge that ending poverty is possible, it seems that commitments are being offered instead of resources and real challenge," it adds.

The report shows that aid in 1997 fell by 7.85 billion dollars to its lowest-ever recorded level -- a mere 0.22 percent of the gross national product of the 21 donor nations of the Organisation for Economic Cooperation and Development (OECD).

The amount represented only 1.4 percent of the combined government expenditure of the OECD countries.

But this is not a new phenomenon. According to OECD figures, aid as percentage of GNP has fallen almost consistently since 1985, when it accounted for 0.35 percent of the total earnings of the 21 wealthy industrialised countries.

Since then, it has risen only once, up briefly from 0.32 percent of GNP in 1989 to 0.33 percent in 1990-92. Otherwise, it has been a case of steady decline.

It is not just the falling volume of aid that is worrying the coalition of NGOs that prepared the report: EUROSTEP, the international Council of Voluntary Agencies (ICVA) and the Norwegian People's Aid.

They are equally concerned that OECD countries are doing nothing to meet their own commitments made two years ago in an OECD document called 'Shaping the 21st Century', which were drawn from a broader set of international agreed goals.

These goals were recognised in the Reality of Aid report last year as "worthy goals which are helping to reinforce the increased policy level focus on poverty."

"But the question this year is: where is the evidence of real commitment to poverty eradication? A yawning gap has appeared between commitments, policies and realities," it adds.

These targets, drawn up by the OECD's Development Assistance Committee (DAC), include halving the number of people living in absolute poverty by 2015; achieving universal primary education by 2015; eliminating bias against girls in primary and secondary education by 2005; and
significantly reducing the death rates of infants and mothers by 2015.

There also are targets on making available reproductive health services to women at the primary health care level and on reversing environmental damages suffered in the course of development.

But, the report says, efforts to meet these targets are being constantly undermined by the donors' "other interests," such as commercial or political priorities.

"Often donor policies on trade are directly contradictory on their policy on aid," says Jeff Chinnock, a policy expert at the London-based development group ActionAid.
For instance, the European Union, which supporting cattle farmers in the Sahel region of Africa through aid programmes, dumped frozen beef in the region during the crisis over so-called 'mad cow disease' in Europe some years ago. "Increasingly, development is not so much about aid alone, although we will continue to argue for more aid," Chinnock adds.

"There are a range of policies that developed countries need to take on how globalisation or unfettered liberalisation of trade affects poor countries. They need to think up of new forms of growth that are conducive to poverty reduction."

According to Chinnock, while aid should continue to play a vital role in catalysing the process of development, "the answer to development comes from the economic and trading environment that poor countries find themselves in.

"Aid is a tiny drop in the ocean compared to trade flows."

The report argues donors' concern about 'good governance' in poor countries needs to be matched by concern for removing the "structural obstacles" in the global economy to reducing poverty.

These obstacles include the debt burden, unfavourable terms of trade and increasing loss of control on the movement of capital flows.

The report's authors also want increasing attention to be paid to gender as a mainstream issue in poverty eradication. They also want increased engagement with civil society in both developed and
developing countries as part of a "partnership for poverty eradication."

"Not only must attention be given to the impact of development interventions on women, but increased priority must also be given to interventions whose goal is poverty reduction through the enhancement of women's position within society," the report says. At the same time some donors are tending to use aid, and its allocation, as a means of pursuing wider economic free market agendas. Aid is being directed away from the public sector and sent to support private sector initiatives. But many desperately poor nations, such as Mozambique and Malawi, rely upon aid to fund their basic social services.

"There are donor institutions such as the World Bank who tend to see aid as a safety net support in international liberalisation," says Chinnock. "That's not the way we would like to see aid. We don't want aid picking up the pieces of Structural Adjustment Programmes."

Donors are also using aid to smoothen the path to private sector investments by using aid as a leverage to 'improve' governance and train civil servants -- steps aimed at creating a so-called
business-friendly environment.

"The whole aid agenda is built up in the North," argues Marioano Valderrama of the Latin American NGO CEPES-ALOP, in the report. "Aid is a political instrument and whoever pays the orchestra calls the tune and hosts the party," Valderrama says.

"Experience in the rural sector in Latin America shows that initiatives for projects come from the North, statements about developing country ownership and civil society participation seem to be rhetorical."