Just 1% of rich countries’ spending on Covid went to overseas aid
- OECD preliminary figures for 2020 show donors still failing to reach commitment to spend 0.7% of GNI on ODA
- Loans are on the increase
New preliminary figures on overseas development assistance (ODA) show that while spending went up to US$ 161.2 billion in 2020, it constituted just 1% of the amount countries have mobilised in economic stimulus measures in response to the Covid crisis.
Nerea Craviotto, Senior Policy and Advocacy Officer at the European Network on Debt and Development (Eurodad) said: “ODA can and should play a crucial role in tackling the impacts of the coronavirus crisis and in supporting a recovery centred on human rights, gender equality and a just transition. Yet we see countries prioritising their national recovery pathways, pouring trillions into their own economies while still failing to meet their 0.7 commitment. These should be times of solidarity beyond borders”.
The figures, published today by the Organisation for Economic Cooperation and Development (OECD), show that donors spent an all-time high of US$ 161.2 billion in 2020. In real terms, this figure represents an increase of 3.5% from 2019. In relative terms, however, this amount represents a modest raise in aid spending from 0.30% of gross national income in 2019 to 0.32% of gross national income in 2020, totalling less than half of the long-standing spending target of 0.7% - a promise made more than half a century ago.
The rise in ODA spending in absolute terms is partly explained by an increase in the use of bilateral ODA loans by some donors, notably France (with an increase in real terms of 63%), Germany (69% increase) and Japan (11% increase). This was despite the fact that many of the poorest countries are already deeply indebted. In 2020, 22% of gross bilateral ODA was provided in the form of non-grants (as loans and equity investments), up from around 17% in previous years, confirming a rising trend.
In addition, since July 2020, new rules have also allowed donors to report debt relief as ODA under the grant equivalent methodology. While the preliminary figures released today do not show any major debt relief operations (0.33% of total ODA), these numbers are already increasing from the previous year (less than 0.1% of total ODA).
“Last year’s agreement on the reporting of debt relief allows donors to meet their commitments by inflating ODA figures. This strongly undermines the credibility, integrity and solid reputation of OECD DAC statistics.”
The ODA data comes at a crucial moment as the pace of recovery of the richest part of the world and the rest of the world continues to diverge. Global poverty is on the rise for the first time in 20 years. There are serious doubts that Covid-19 vaccines will reach poor countries in the near future. Jobs are being decimated everywhere and inequality is on the rise. ODA is a vital resource for supporting those most in need, notably women and girls.
In a joint statement published today, 76 Civil Society Organisations across the world, including Eurodad, called current ODA levels “economically unwise and morally flawed” given the current pandemic and interconnected crises, including climate change, conflict, fragility, and rising poverty and inequalities. They are calling for the donor community to fulfill and exceed the 0.7% target for ODA in 2021, as well as the 0.15% to 0.2% target for Least Developed Countries (LDCs), prioritising unconditional grants and technical support.
Craviotto said: “Before the pandemic, the world was off track to fulfill the Sustainable Development Goals (SDGs). While the virus has impacted everyone, its inter-related consequences are affecting the world’s poorest and most vulnerable people the most. It is now that donors should be stepping up and taking their commitment to the global recovery seriously, otherwise we risk pushing the poorest countries into another lost decade for development.”
Media contact: Julia Ravenscroft, Communications Manager: [email protected]/ +32 486356814
Notes to editor: A detailed summary of the preliminary ODA statistics for 2020 can be found here.