Programs set to combat global poverty

The development aid pie is shrinking, and as Dipankar de Sarkar of Inter Press Service writes, the least developed countries may end up getting the smallest slice.

LONDON (IPS): Development aid is shrinking, and the poorest of the poor are losing out yet again.

Official development assistance (ODA) -- as a percentage of the gross national product (GNP) of donor countries -- had fallen to its lowest recorded level, 0.27 percent, the Organization for Economic Cooperation and Development (OECD) says.

A report by the OECD, comprising the world's 29 most industrialized countries which account for 90 percent of the world's development assistance, revealed that in terms of volume, ODA in current dollars was about 59 billion dollars in 1995 -- about the same as in 1994.

That figure, however, was "deceptive because there was a weak dollar," said James Michel, chairman of the OECD's Development Assistance Committee (DAC). There was a decline of about nine percent in real terms when the figure was adjusted for exchange rate fluctuations and inflation.

The decline was widespread, with 14 of the 21 members of DAC reporting declines in real volumes of ODA, according to Michel. Japan was the largest donor with $14.49 billion. The United States ($7.37 billion) slipped to fourth place from second -- after France (US$8.44 billion) and Germany ($7.52 billion).

As a percentage of GNP, the traditional leaders -- Denmark, Norway, Netherlands and Sweden -- remained on top. They were the only countries to meet the U.N. target for ODA of 0.7 percent of GNP. The figure for Italy and the United States both fell below 0.2 percent and the aggregate figure of 0.27 percent was "the lowest its ever been, since statistics first were recorded," Michel said.

Geographically, 40 percent of the ODA went to Africa, 30 percent to Asia, 10 percent to Latin America and 20 percent to other and unallocated recipients.

"It is a concern that there is at least a stagnation and some decline in ODA levels," Michel said. "I have commented on what this means for the credibility of the (OECD) strategy when you get into a dialogue with developing countries and say 'OK, we are counting on more self-reliance'.

"What that means is we are cutting our aid. That's not a good beginning. I hope we will see a leveling off and I hope there will be an increasing realization that this is important."

Michel's comments assumed greater significance because the report also noted that external debt stocks of developing countries increased by eight percent to reach $1091 billion dollars at the end of 1995.

There was a "phenomenal growth" in private flows to developing countries, accounting for $160 billion or two-thirds of all resource flows, Michel said. But the report showed that hardly any of the private flows went to the least developed or low- income countries.

When, however, it came to investing in the upper middle-income countries - such as Botswana, Brazil, Malaysia and Mexico - private flows led the way.

The latest report drew heavily on the OECD's development strategy agreed in May 1995 by development cooperation ministers and heads of aid agencies, which outlines a seven-point "people- oriented vision." The 1995 document declared that:

- Development cooperation was an "investment" for industrialized countries;

- Combating poverty at its roots was a central challenge, with some 1.3 billion people living in extreme poverty;

- Strategies for success were available - integrating elements such as health, education, population, gender equity, human rights, good governance and sustainable environmental practices;

- Developing countries were themselves ultimately responsible for their own development and must be "owners" of their own policies and programs;

- It was critical that other policies, such as trade, investment and the growing role of the World Trade Organization, did not undercut development objectives;

- Bilateral and multilateral development assistance must be managed for maximum efficiency and effectiveness; and - The DAC will advance these priorities.

Now, the new report says, it is time to translate the vision into reality. To do that, the OECD has set itself some concrete targets drawn from various UN summits.

These include: halving the proportion of people living in extreme poverty by 2015 (the current figure is 30 per cent of the population in developing countries); universal primary education in all countries by 2015; elimination of gender disparity in primary and secondary education by 2005; reduction of infant mortality and child mortality rates by two-thirds of the 1990 level and reduction of maternal mortality by three fourths - all by 2015; and implementing national strategies for environmental sustainability and regeneration by 2005.

Development experts in London said the OECD's plans to put developing countries in the driver's seat were in immediate danger of being derailed because of a variety of reasons.

"I am deeply concerned that the least developed countries are starved of official and private flows," said Andrew Simms of the non-governmental organization (NGO), Christian Aid. "My fear is also that these optimistic targets will not be achieved unless the resources are made available."

Simms also said it was "too simplistic" to put the onus of development on developing countries, whose actions are constrained by "parameters such as structural adjustment programs set by the aid agencies and by the regulatory functions of the World Trade Organization."

"We have seen 20 years worth of structural adjustment programs in Africa, and it's not delivering the upturn in investment," he said. "The tone of the OECD's report is upbeat and full of nice words. But where is the money coming from for the poorest countries? All the trends included in the report point to the poorest losing out yet again."

Alex Wilkes of the Brettonwoods Project, another NGO, pointed out that much of the ODA included in the OECD figures was aid tied to the purchase of goods and services from the donor countries.

"These figures should come under the budgets of the departments of trade or industry," Wilkes said, adding, "I didn't think the report was very visionary. It was nothing but giving with one hand and taking away with the other."