Memorandum submitted by Development Initiatives
Development Initiatives is pleased to have the
opportunity to present evidence to the International Development
Committee on the Financing for Development process. This memorandum
aims to present some statistics on aid from the UK and other DAC
Development Initiatives is an independent research
organisation that monitors aid, development and poverty reduction
policy and works on NGOgovernment relations.
For the last 10 years Development Initiatives
has edited the annual Reality of Aid report. In 2000 Development
Initiatives produced the Global Humanitarian Assistance Report.
Judith Randel was part of the team that produced the December
2000 Africa Partnership Report for Downing Street.
Development Initiatives is a partner in the
Chronic Poverty Research Centre.
The paragraph numbers below relate to the graphs
1. Between 1960 and 2000, UK GNP per capita
rose from $11,246 to $24,882from about £7,500 per
person to about £16,600. Aid per capita rose from $67 to
$78 between 1960 and 2000from about £45 each per year
to about £52. So while personal wealth has more than doubled,
aid per person is only 60 pence a month more than it was 40 years
2. In 2000 the UK was the world's 4th largest
donor providing aid worth $4501.
3. Against the UN 0.7 per cent target, the
UK gave 0.32 per cent GNP in 2000, compared to a weighted DAC
average of 0.22 per cent and an unweighted average of 0.39 per
4. Most of the fall in global aid that has
taken place since 1992 is the result of cuts by G7 donors. The
UK and Japan are the only G7 donors to have increased aid over
the period 1992 to 2000.
5. In real terms, UK aid in 2000 almost
equalled the level reached in 1979.
6. As a percentage of GNP, UK aid will grow
on current (pre budget 2002) expenditure plans. But UK commitments
made at FfD to match the EU 0.39 per cent figure for 2006, would
leave UK aid well below the headline figure for 1979, and somewhat
below the real level achieved in 1979 if distortions caused by
disbursement timing are taken into account.
7. Whilst DFID currently plans substantial
spending increases, the experience of other DAC donors is that
sustaining commitment to increase aid over several years is very
difficult in the context of both economic and political pressure.
Donors such as the Netherlands set a fixed GNP percentage for
aid, which somewhat protects their aid budgets from cyclical pressures
and ensures that spending keeps pace with growth. The establishment
of a mechanism such as a UK Council for International Cooperation
could also help to promote both a cross party consensus on aid
spending and public commitment to the UK playing an increasingly
positive role on both poverty reduction and international relations.
8. The UK spends less on aid as a percentage
of public expenditure than the donors who meet the UN 0.7 per
cent targetbut more than any other G7 donor.
9. Aid spending as a share of total UK government
expenditure has risen over the last four years.
10. If the increased aid pledged at FfD
is projected to the year 2006, total ODA would be around $66 billion.
Based on DAC estimates of GNI growth, this would be around 0.24
per cent of DAC GNI. In 1992, aid was $63 billion and 0.33 per
cent of DAC GNI. So the increases promised at FfD will restore
the aid cuts of the 1990sbut will fall very far short of
the additional $50 billion a year required to finance the Millennium
11. Even if the Millennium Development Goals
are achieved, around one billion people will remain in poverty
in 2015. Current global development policies do not really address
the issue of Chronic Poverty or how the needs of this billion
people can be addressedthough at the 1995 Social Summit
governments pledged themselves to eradicate absolute poverty.
The 0.7 per cent target must be seen therefore not as an end in
itself, but as the minimum requirement which would do half the
job of eradicating poverty. The doubling of planned UK aid spending,
in line with the Zedillo recommendations, would effectively reach
0.7% within the likely lifetime of the present parliament and
would send a powerful signal to both other G7 donors and the UK's
developing country partners.
Tony German and Judith Randel
11 Assuming the figure of $50 billion a year in extra
aid-the amount that the Chancellor said was needed, in his speech
to the Federal Reserve on 16 November 2001. Please note that these
projections are approximate and assume planned increases spread