December 5, 2004
Developed world seen morally obliged to boost aid
Reuters

Rich countries have let foreign aid budgets fall by half since the 1960s despite their own increasing prosperity, and are morally obliged to boost their help for poor nations, a development advocacy group said on Sunday.

By Laura MacInnis

WASHINGTON (Reuters) - Rich countries have let foreign aid budgets fall by half since the 1960s despite their own increasing prosperity, and are morally obliged to boost their help for poor nations, a development advocacy group said on Sunday.

"Making this finance available is not simply an act of charity. It is a both a moral obligation and a matter of justice, born of a collective duty to guarantee the rights of all citizens," Oxfam said in a report called "Paying the Price: Why Rich Countries Must Invest Now in a War on Poverty."

It said rich countries' international-assistance budgets as a share of national income have fallen since the 1960s, with average aid budgets amounting to 0.24 percent of income in 1993, compared to 0.48 percent in 1960-1965.

The group called on donor countries to drum up at least $50 billion in new overseas aid "immediately" and raise aid budgets to 0.7 percent of income. It said the Millennium Development Goals on poverty reduction, agreed upon by 189 countries in 2000, were at risk without fast action.

"At only 0.14 percent of national income, the U.S. spending on foreign aid in 2003 was one-tenth of what it spent on Iraq," the report said. "The U.S. won't reach the aid target needed to halve world poverty until 2040. Germany won't reach the target until 2087 while Japan is decreasing its aid commitments."

Jeremy Hobbs, executive director of Oxfam, said: "The world has never been wealthier, yet rich nations are giving less and less. People are dying while leaders delay debt relief and aid ... The scandal must end."

RECENT IMPROVEMENT

Still, a U.S. official said the United States' development record had in fact improved in recent years.

"The Bush administration has dramatically increased development assistance levels over the past four years," said Tony Fratto, spokesman for the U.S. Treasury Department.

"These increases came after years of significant declines in development assistance," Fratto said, noting increased funds for HIV/AIDS and education, as well as U.S. initiatives for poor country debt reduction.

The International Monetary Fund's top policy-making group failed at their October meeting to agree on a debt relief plan, despite calls from the United States and Britain for sweeping debt forgiveness for some countries.

In its report, Oxfam asked donor countries as well as the World Bank and IMF to revisit the debt relief issue to ease strain on the world's poor. It also asked the international lenders to minimize conditions attached to loans, such as spending caps and fiscal targets.

"This practice undermines countries' ability to choose their own reform paths, meaning that aid money is less likely to support sustainable reforms, adapted to suit local circumstances," Oxfam said in the report.

On its Web site, the IMF says its programs are designed to reduce hardship on countries who would otherwise pay more for loans in the private market, and include social safety net provisions. The fund also said its loan criteria are revised frequently in light of local circumstances.

World Bank spokesman Damian Milverton said the bank was in the process of streamlining conditions on its loans.

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