More and more foreign aid seems to be doing less and less of what it’s supposed to.
Farida Bena is an aid effectiveness expert with the CSO Partnership for Development Effectiveness.
Every year the OECD, an inter-governmental organization made up of the world’s richest countries, releases figures on how much aid, or overseas development assistance, goes to developing countries. On the surface, the latest released data from 2015 suggests a reason to celebrate: once you take out inflation and exchange rate changes, the overall net amount of aid keeps rising, totaling $131.6 billion after an already record-high couple of years. That’s quite an achievement, particularly for those European donors who last year had to face major unexpected challenges, such as the arrival of migrants and refugees at their doorstep.
Look deeper into those figures and the picture changes quite a lot. Welcoming those refugees in donor countries was actually paid for by money that was meant to be used for other, equally important purposes, like fighting poverty and disease in the global South. These costs nearly doubled last year, meaning that a sizeable portion of ‘international’ aid – up to 34 percent of individual donors’ pots – never crossed Northern borders in reality.
Another controversial use of aid funds that donor countries can now make is for security reasons – fighting ‘violent extremism’ or training the military, for example. These objectives have little or nothing to do with “promoting the economic development and welfare of developing countries”, as purported by the official definition of aid. Not that donors shouldn’t fight violent extremism or other security threats. The point is that aid already represents such a tiny percentage of donor countries’ Gross National Income (0.30 percent on average) that these governments should really be looking for other sources of funding to pay for their non-aid interventions.
To me, however, the most troubling trend from analyzing figures from the last few years is how little aid is given where it is needed the most, to the so-called ‘Least Developed Countries’ or LDCs. These 48 nations, gathering almost a billion people across Africa, Asia, the Pacific and Latin America, all have in common the lowest levels of socio-economic development on earth. Yet, despite their dire condition, aid to LDCs represents just a minor part of the overall total and has actually declined until 2015, when it rose by only 4 percent. How is it possible when for some of these countries, like Malawi, aid represents as much as 40 percent of their national budgets?
As part of my personal mission to listen to people living in the least developed countries, I have been trying to find more information about how these challenges play out from sources in those affected countries. Easier said than done. Apart from declarations of good intentions prepared for conferences every so often – the last one, a mid-term review, dating a few weeks ago – it is pretty silent out there.
There is no concrete plan to systematically increase aid to LDCs, just generic calls for at least 0.15 percent of aid to go to these countries and an invitation to include them into global decision-making. If you want to get a better sense of what LDC governments actually think about the situation, you have to go through their individual reports. Afghanistan, for example, has given up on the possibility to graduate from LDC status by 2020, as originally planned, choosing the more realistic target of 2030. So does Zambia, despite the fact that it was promoted to lower middle-income country in 2011. Other countries, like Guinea Bissau, do not explicitly rule out the possibility but note how aid is still largely fragmented, unpredictable and uncoordinated.
On the civil society front, there seems to be a bit more information and discussion about the challenges of declining aid numbers. Last February, representatives from about a dozen African civil society organisations signed a statement to denounce the declining aid levels to sub-Saharan Africa, where 43 countries still rely on aid more than on any other external financial flow to provide their populations with essential services, like health care. The statement also defended the positive impact that aid can make when allocated properly. Yet, to find a Southern voice speaking specifically about aid to LDCs we need to go back at least five years, when LDC Watch, a civil society network based in Nepal, reported major disparities in the way aid to LDCs had been distributed in previous years – more than half of it had gone to just eight countries. In another recent statement LDC Watch calls the plan of having half the number of LDCs graduate from their status by 2020 just “a distant dream”.
Despite record-high aid figures, it is not only a question of ‘how much’ but also of how aid is allocated. Figures may well be on the rise, but if the funds do not target the populations most in need, then numbers risk becoming irrelevant.
EDITOR’S NOTE: This article has been adapted from the original version “When more aid is less” published on Kiliza – Listening to Southern Citizens.