Aid - What is needed?
It is clear that the way the world's wealth is currently divided is terribly unequal. Richer countries have a moral obligation to provide financial assistance to enable poorer countries to achieve sustainable development. The UN set a target for development aid of 0.7% of each rich country's GDP, but currently only five countries achieve this (with Norway in the lead with 0.92%). There is too little aid being given, and the money that does reach poorer countries often carries endless conditions about how it must be spent. At the same time these countries are still trying to repay their debts. The result is that flows of money from rich to poor are actually far less than flows from poor to rich in debt repayments.
Governments have signed up to achieving the Millennium Development Goals by 2015, but they will not be achieved unless money is also set aside to helping reach them. Governments and international institutions must urgently provide the major increase in resources that is needed to eradicate poverty. They need to:
- Give aid that is not tied to contracts with donor countries, or linked to economic conditions that impact negatively on people in poverty.
- Meet the 0.7% target for aid and ensure that aid is directed towards achieving development objectives.
- Ensure that aid supports (instead of undermines) community- and country-defined development priorities.
Debt relief and increased aid need to go together. Giving aid, whilst at the same time enforcing debt repayments, is to give with one hand whilst taking with the other. In fact, debt cancellation is more reliable than aid, because it cannot be reduced or stopped when the donor's political priorities change. The reality is that poor countries need debt cancellation, increased aid and important improvements in how aid is delivered in order to meet the huge challenges they face.