Development: Aid to developing countries falls because of global recession

by Sabrina I. Pacifici on April 15, 2012

News release: “Major donors’ aid to developing countries fell by nearly 3% in 2011, breaking a long trend of annual increases. Disregarding years of exceptional debt relief, this was the first drop since 1997. Continuing tight budgets in OECD countries will put pressure on aid levels in coming years. OECD Secretary-General Angel Gurría encouraged donors to meet their commitments, “The fall of ODA is a source of great concern, coming at a time when developing countries have been hit by the knock-on effect of the crisis and need it most. Aid is only a fraction of total flows to low income countries, but these hard economic times also mean lower investment and lower exports. I commend the countries that are keeping their commitments in spite of tough fiscal consolidation plans. They show that the crisis should not be used as an excuse to reduce development cooperation contributions.” In 2011, members of the Development Assistance Committee (DAC) of the OECD provided USD 133.5 billion of net official development assistance (ODA), representing 0.31 per cent of their combined gross national income (GNI). This was a -2.7 % drop in real terms compared to 2010, the year it reached its peak. This decrease reflects fiscal constraints in several DAC countries which have affected their ODA budgets (see Tables and Charts).”

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