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There is no denying the fact that pure foreign aid – as opposed to the so-called foreign aid provided with some kind of vested interest by the rich countries – help the poorest countries accelerate the pace of their economic development.
Jeffrey D Sachs, in his treatise “The End of Poverty,” argues that only if all of the rich countries follow through on their promise to help the poorest countries by providing aid equal to at least 0.7% of their GNP, extreme poverty characterizing the poorest countries can be ended by 2025.
Although it may be logically impossible or at least difficult to say with a high degree of certainty that if all of them keep their promise, extreme poverty can be ended by 2025, it is true that it can certainly be at least alleviated to a certain measure after a certain period of time, which can only be specified arbitrarily. But, the poignant fact is that not all of them have followed through on their commitment yet.
The United States has been the laggard of them all. Now, official development assistance is roughly 0.25 of donor GNP.
In 1961, the United Nations General Assembly adopted the objective that the level of official development assistance should increase appreciably “so as to reach as soon as possible approximately 1% of the combined national incomes of the economically advanced countries.” At that time, foreign assistance was about 0.5 % of rich country income. Despite this, foreign aid continued to decline. At various summits, say, the Rio Earth Summit in 1992 and the Copenhagen Summit on Social Development in 1995, the rich countries promised to reach 0.7% of their GNP. World leaders, including the US president George Bush, adopted once again the target of 0.7% of GNP, with the US being a signatory as part of what was termed as “the Monterrey Consensus” when they met in Monterrey, Mexico.
It appears that the promises and actions of many rich countries contrast sharply. This is evidenced by the fact that by the early 1990s, official development assistance was still around 0.33% of donor GNP, and by the early 2000s, it had declined to around 0.2% of GNP. Now it is roughly 0.25% of GNP. It is also evidenced by the fact that the US government often declares these days that it is not bound by any arbitrary numerical target such as 0.7% of GNP.
What is more surprising than this is that top US officials even declare that the US never signed on to such a goal, despite the fact that it and other rich countries did sign the Monterrey Consensus. Alas, the US has shown absolutely no concrete efforts towards keeping this commitment. US official development assistance amounts to just 0.15% of America’s GNP, which is less than one forth the global target whereas it spends 4% of GNP on its military, which is roughly $500 billion this year. Thus, the US spends around 30 times more on the military than it does on peaceful development aid for the poorest countries.
But, unlike the US, some rich countries have followed through on their promise, and some other rich countries have determined the year by which they shall have reached the global target of 0.7% of GNP. The countries that have reached this target include Denmark, Luxembourg, Netherlands, Norway, and Sweden. Six European countries have, of late, set a time table to reach 0.7% of GNP by the year 2015. They include Belgium, Finland, France, Ireland, Spain, and the United Kingdom. Note that UN Secretary-General Kofi Annan, in his report in advance of the UN Summit of World leaders in September, has called on all donor countries to reach at least 0.5% of GNP by 2009, and 0.7% by 2015.
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Ajit Rai
I take a deep interest in development and underdevelopment as well as in politics, especially in its relation to economics. Currently, I am undertaking systematic research, and intend to theorize about Nepalese development and underdevelopment from a socio-philosophical approach.
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