Rich Nations Fail Aid Pledge to Poor

Rich Nations Fail Aid Pledge to Poor

Thalif Deen
November 07, 2003

http://www.ipsnews.net/interna.asp?idnews=20996

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UNITED NATIONS, Nov 7 (IPS) - When more than 50 world political
leaders and finance ministers from rich nations gathered in Mexico
in March last year, they solemnly pledged to substantially increase
their official development assistance (ODA) to the world's poorer
nations.

But 19 months later, the promises of increased aid held out at the
International Conference on Financing for Development (FfD) in
Monterrey, Mexico, have failed to materialise.

"There is a clear indication that counter-terrorism measures have
subsumed the spirit of Monterrey and dashed hopes for international
cooperation on financing for development," Saradha Iyer of the
Malaysia-based Third World Network, told IPS.

"And the prospects for the equitable and sustainable development of
the South are bleak," she added.

Last year, a glimmer of hope appeared when ODA from rich nations to
the poor rose to 57 billion dollars, up from 52 billion dollars in
2001.

But the news of a five-billion-dollar increase brought little
rejoicing to delegates, senior U.N. officials and representatives of
non-governmental organisations (NGOs) at a high-level ministerial
meeting on FfD in New York last week.

"This increase was totally overshadowed by two other haunting
statistics," Iyer said -- the 800 billion dollars spent on military
budgets worldwide in 2002, and the 200-billion-dollar net transfer
of financial resources from the South to the North.

According to a study by the U.N. Conference on Trade and Development
(UNCTAD, the flow of net resources was the largest ever from the
world's poorer nations to the rich.

According to Iyer, the money, which could have been used to promote
investment in health, education and infrastructure in the developing
world, has instead "perversely been channelled to the North, either
because of debt servicing arrangements, asymmetries and imbalances
in the trade system or because of inappropriate liberalisation and
privatisation measures imposed upon them by the international
financial and trading system".

"The implications of these global trends are grave," she warned,
pointing out that the FfD meeting in New York "raised the spectre
of gloom and doom for the realisation of the U.N.'s Millennium
Development Goals (MDGs)".

The goals, endorsed by a special session of the U.N. General
Assembly in September 2000, call for the world's nations to slash
global poverty and hunger in half by 2015. They also call for a
global partnership for development.

"The fact that the poor subsidise the rich, to the tune of nearly
200 billion dollars per year, tells us just how seriously the G-8
(the world's industrial nations and Russia) is taking its
commitments to the poor," says Raj Patel of the U.S.-based Food
First/Institute for Food and Development Policy.

"Instead of redistributing wealth -- wealth often appropriated from
poor countries through colonialism -- the international financial
system legitimises and encourages the expropriation of the poor,"
Patel told IPS.

Worse yet, he said, is that it has been going on for years.

"The hypocrisy of the rhetoric of 'financing for development'
cannot, ultimately, stand up to the facts." One can only hope, he
said, that with the publication of the UNCTAD study, citizens of
conscience in rich countries will turn to their governments to
demand justice for the peoples of the Third World.

But Mark Malloch Brown, chair of the U.N. Development Group and head
of the U.N. Development Programme (UNDP), remains sceptical despite
new commitments made by rich nations for an additional 16 billion
dollars by 2006.

This includes new aid arrangements, including some five billion
dollars proposed by the United States as part of its Millennium
Challenge Account.

Malloch Brown estimates that if the MDGs are taken into account, the
shortfall in ODA would be as high as 100 billion dollars a year --
"even assuming developing countries raise domestic resources,
pursue good macroeconomic policies and tackle corruption."

"Today, the world is more unequal, and more insecure, than ever: we
live in a world of six billion people, one billion of whom own 80
percent of global wealth, while another billion struggle to survive
on less than a dollar a day," he said.

U.N. Secretary-General Kofi Annan was equally pessimistic about the
deteriorating state of the Third World economy -- rising external
debts, declining foreign direct investments and distortions in
international trade characterised by subsidies and tariff barriers
protecting farmers and exporters in rich nations.

Annan also pointed out that funds that could be promoting investment
and growth in developing countries, or building schools and
hospitals, or supporting other steps towards achieving the MDGs, are
instead being transferred abroad.

"If what we say about financing for development is not to ring
hollow, if financing for development means anything, we must reverse
this negative balance sheet and fix the system so that all
countries, and all people, especially the poorest, can benefit."

Although the world's 22 rich countries were mandated by the General
Assembly to provide 0.7 percent of their gross national product
(GNP) as ODA to developing nations, only five countries have met
this target, according to a new U.N. report on FfD.

Three of them, Luxemburg, Norway and Sweden, have also pledged to
reach the 1.0 percent target by 2005-2006. The other two, Denmark
and the Netherlands, have not.

Of the countries that have not reached the U.N. target, Belgium and
Finland have pledged to reach 0.7 percent by 2010, Ireland by 2007
and France by 2012. Britain, on the other hand, has pledged to meet
only 0.4 percent, and that too by 2005-2006.

The other European Union (EU) countries -- Austria, Germany, Greece,
Italy, Portugal and Spain - have not made any promises on the 0.7
percent target.

The remaining six rich nations outside the EU -- Australia, Canada,
Switzerland, the United States, New Zealand and Japan -- have
provided no time-frames to reach the 0.7 percent target, and no
goals for interim targets either.