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Globally Foreign Aid Hits Record Levels in 2013

Worldwide foreign aid hits record levels
The Organization for Economic Cooperation and Development (OECD) has recently released figures showing a large increase in foreign aid among its members to foreign countries for development assistance. Official development assistance has grown 6.1% in 2013 to a total of $134.8 billion after two years in a row of shrinking development assistance.

This new figure comes as seventeen countries increased their aid spending this past year, some with rather sizable increases. For instance, the UK finally hit the target of spending .7% of its Gross National Income (GNI) as its foreign aid by increasing its budget for foreign aid by 27.8%. Other countries with large increases include Japan (36.6%) and Iceland (27%).

The country with the largest increase in foreign aid over the past year was the United Arab Emirates, with a whopping 375.5% increase in its aid spending, although most of the aid was used to support Egypt. In 2013 the UAE spent a total of 1.25% of its GNI, the most out of the seventeen-country OECD group.

While 17 of the 28 countries in the Development Assistance Committee spent more money than last year on foreign aid, its eleven other members actually spent less on development aid. Countries such as France (-9.8%), Canada (-11.4%) and Portugal (-20.4%) all spent less on foreign aid in 2013 than in 2012.

The largest gross donors were the US with $31.5 billion, the UK, Germany, France and Japan. Countries that exceeded the .7% of GNI target set by the UN were Denmark, Luxembourg, Norway and Sweden, with the Netherlands falling short of the .7% mark for the first time in 40 years.

Despite this positive trend, the proportion of aid going to the poorest countries in Sub-Saharan Africa is falling. Bilateral aid to Sub-Saharan Africa decreased by 4% to $26.2 billion in 2013, and aid to the African continent decreased by 5.6% to $28.9 billion. Aid to developing countries grew from 1997 to 2010 and then declined in 2011 and 2012 when the financial crisis and economic austerity measures forced countries to cut budgets down.

It is anticipated that donors will begin to focus more of its aid spending on the economic development of middle-income countries such as Brazil, China, Chile, Mexico, India and Pakistan in the form of loans.

– Jeff Meyer

Sources: OECD, The Guardian
Photo: The Perspectivist 

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Julia Roberts Backs Clean Cookstoves Initiative

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When people think of the needs of the hungry in the developing world, their supply of proper cookware is not always the first thing that comes to mind. More common are thoughts of the need for immediate food supplies and ways to promote agriculture. However, there is a definite need in the developing world for proper cookware. Estimates say three billion people around the world rely on open-air stoves, an inefficient and sometimes dangerous way of cooking food.

The Global Alliance for Clean Cookstoves was organized in 2010 by then-Secretary of State Hilary Clinton and the United Nations Foundation to raise awareness about the challenges that so many face in cooking their food from open-air flames. In 2011, Julia Roberts joined the Alliance as a global ambassador and became a key spokesperson for the group. In a statement soon after her decision, she said, “I was inspired to join the Global Alliance for Clean Cookstoves because its core mission is saving lives – especially children’s lives.”

It is believed that two million people a year are killed due to the smoke coming from the cooking done on unclean cookstoves. Up to a million of those killed are children. In the necessity for parents to provide for their children they inadvertently put them at risk. This shows the necessity for governments in the developed world to step in, and shows the necessity of groups like the Borgen Project to encourage this type of support.

Fires cooked over open-air flames take the terrible human toll that have resulted in the millions of deaths around the world. They also take a toll on the environment, raising concerns about the future of humans on this planet. In order to supply these open-air flames, the people using them are contributing to the global deforestation problem. The flames from the stoves, just as they release carcinogens that can harm the cooks, can also release dangerous greenhouse gases that harm the environment. Studies have shown that fires contribute to emissions of methane, carbon monoxide and black carbon.

The goal of the Global Alliance for Clean Cookstoves is to change the landscape of cooking in the developing world by 2020. Goals have been set to establish 100 million clean stoves by that year. Julia Roberts describes the “effective solutions, which can save lives, improve livelihoods… and combat climate change.”

This is a fight worth taking up, one that could have large impacts on the global stage. With more efficient stoves, the health costs spent combating smoke-related diseases could be used towards the upkeep of a productive family. As more families have these funds freed up, a significant impact on the global economy could follow.

Human lives being lost in the search for a good meal should not be the case anywhere in the world. The meals people cook everyday at home are an unheralded luxury we enjoy. If citizens take the time at every meal to think of how they can make it easier for those abroad to healthily enjoy their meals, it may contribute to a global effort to save lives.

– Eric Gustafsson

Sources: Kiva, Clean Cookstoves, Guardian, PBS
Photo: TV Guide

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USAID, Paragon of Higher Edu. for Developing Nations

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For decades, it was believed that funding should be siphoned into lower levels of education rather than university education, and throughout the 1980’s studies argued in favor of this mode of international aid. However, more recent studies show conclusive evidence that higher education has manifold benefits for developing nations. The United States Agency for International Development (USAID) is perhaps the paragon of the potential that universities and development agencies have when they work together. USAID has chosen to forego any future partnership with Higher Education for Development, an intermediary that works with universities at home and abroad, opting to instead work directly with universities themselves.This signals a more hands-on approach that shows the growing importance of higher education in the eyes of USAID.One very important case of this approach is the Higher Education Solutions Network, which attempts to find solutions to global issues such as food security through development labs at seven different universities.Another example of the commitment of USAID to higher education is its appointment of a senior higher education coordinator that will serve to improve the agency’s transparency and accountability.In every way, USAID shows the desire to forge strong relationships with universities in the belief universities are integral to addressing global problems.One real world example of these burgeoning relationships involves Burma and USAID’s attempt to help the country in its transition to democracy through its universities.In addition to supporting the future leaders of Burma, USAID hopes to create a culture of democracy within the universities that will proliferate outward, focusing on expanding courses in business and politics.The fact that Burma is near the bottom of the United Nations Human Development Index shows the ambitious and optimistic nature of the endeavor, as well as the belief in the importance of higher education.The relationships formed through these partnerships have also gone a long way in mending what has been a problematic one between the U.S. and the countries of Pakistan and Afghanistan since the killing of Osama bin Laden. USAID has sponsored and trained Afghan professors and hopes that this might curb the rampant Islamic extremism within the country.The U.S. also expanded the Fulbright program to Pakistan in 2011, providing 200 scholarships to bright Pakistani students to pursue an advanced degree. This makes it possible for intelligent but poor Pakistanis to transition to a higher economic strata.

USAID’s commitment to addressing global problems through its engagement with higher education is already being noticed and utilized by other agencies. As Peter McPherson, director of the Association of Public and Land-grant Universities, states, “There’s no question that USAID’s engagement with universities has increased…There’s more money and more relationships.” A good combination for helping those in need.

– Jordan Schunk

Sources: Inside Higher Ed, Insider Higher Ed Global, University World News, USAID
Photo: Flickr

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Global Poverty Threat to U.S. National Security

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The volatile national security climate resonating throughout the United States is fickle, and at times hostile. Political partisanship clamors and clashes against the tide of uncertainty – an uncertainty that resides deep within the veins of the American people.

In the midst of this madness, where should efforts of national security be focused? Global poverty remains rampant and begs the question: does the cure for our own security begin with aiding in the security of others? According to the Pentagon’s “3Ds” highlighted by the Borgen Project – Defense, Development and Diplomacy – it is in the best interests of U.S. national security to focus energy on combating global poverty.

Vincent Ferraro, professor of international politics at Mount Holyoke College, spoke candidly on this issue in his publication, “Globalizing Weakness: Is Global Poverty a Threat to the Interests of States?”

“While there is no necessary trade-off between economic growth and environmental protection in the long run, a poor state needs significant outside resources to realize both objectives simultaneously,” Ferraro stated. “This situation will only worsen over time, as poorer and more populated states become more integrated into the global economy and adopt the industrial techniques of the richer states.”

The United States is an essential part to a whole interconnected entity. This is referred to simply as the international economic system. The dichotomy between poor and rich nations is linked to, but not directly responsible for, national security issues such as global terrorism.

Combating poverty may be the first step to begin building a more unified global network of national security, beginning with a more powerful nation such as the United States.

The Global Poverty Project quotes the National Security Strategy to describe the cost of this dichotomy: “America is now threatened less by conquering states than failing ones.”

Military personnel and international intelligence cooperation agrees that although combating global poverty may not be the outright solution to violent conflict, it can be a method by which to better utilize global diplomatic unity.

According to the Borgen Project, “84% of military officers said that strengthening non-military tools, such as diplomacy and development efforts, should be at least equal to strengthening military efforts.”

Global poverty is the antithesis to worldwide security and peace, specifically when rich and poorer nation-states are unfairly divided economically without a reasonable process of growth.

The Global Poverty Project encapsulated this idea in stating, “Violent conflict is development in reverse. It destroys societies and is a shortcut to extreme poverty.”

The ongoing concern of national security is not only a diplomatic issue but also a vulnerable look into the realm of the human condition. Perhaps it is in the providing basic necessities to those less fortunate where feeling safe can once again become a social truth.

– Lance Moore

Sources: ECSP, Borgen Project, State Department, Global Poverty Project
Photo: The Daily Mail

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IFC Invests in Fluidic Energy Climate-Smart Batteries

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Energy is tantamount to the development of poor nations. Several sectors rely on energy — from lighting schools and hospitals, powering farms, manufacturing facilities, maintaining water sanitation plants to keeping emerging businesses afloat. Mobile telecommunications has become a fundamental part of successful business — especially, the business of global development.

IFC, the private sector arm of the World Bank Group, plans to invest $7 million to the clean energy company, Fluidic Energy, which is a company for the research and development of new climate-smart batteries that power cellular phone networks in developing countries. The rechargeable energy sources are promised to be a solution that is both cost-effective and power-efficient. As the technology will reduce costs of powering mobile networks in rural areas, the battery is also a cleaner alternative to diesel generators and lead-acid batteries. In result, it is less damaging to the environment for it leaves a smaller carbon footprint.

The technology is currently used in Indonesia and other South East Asian countries. The hope is that the technology will branch out into the rest of Asia and South America. Fluidic Energy, the Arizona-based company, is a fine example of private businesses working in tandem with The World Bank Group for the common goal of global development.

Providing sustainable energy to telecommunications is a development that is promised to open new frontiers in other sectors where sustainable energy can be a progressive alternative.

– Malika Gumpangkum

Sources: IFCPressRoom, thegef
Photo: Panos

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Norway’s Debt Audit

Debt Audit
Norway recently completed an audit of its debts to developing nations that was conducted by Deloitte, an international financial services company. The audit was initiated with the intention to discover if Norway’s aid to developing nations since 1970 complies with international and national guidelines. This is the first audit of its kind and is welcomed by anti-poverty advocates across the globe.

Developing countries burdened with debt is a significant contributor to global poverty and hinders the countries’ ability to introduce progressive reforms. Many of these loans impose burdensome payment plans and high interest payments. As a result, anti-poverty measures must be forsaken or cannot be effective with such a burden on public finances.

In April 2012, the United Nations Conference on Trade and Development (UNCTAD) introduced the Principles on Promoting Responsible Sovereign Lending and Borrowing. The principles are intended to protect developing nations that are borrowing money by decreasing the costs of borrowing and the number of debt crises.

So far, twelve countries have endorsed the principles. The principles include provisions that agents who work with a country’s debt are required to act in a transparent and accountable way that is consistent with their public office. In addition, the principles place responsibility on both the borrowers and lenders in debt agreements.

This is a significant change from most international debt principles, which place the burden almost solely on the borrowers.

Norway’s audit included 34 debt contracts that are held with seven countries: Pakistan, Indonesia, Egypt, Zimbabwe, Myanmar, Sudan and Somalia, which total almost $1.6 billion. Norway’s International Development Minister pointed out that while international aid may total $141 billion annually, developing countries must pay $464 billion annually to creditor nations.

While Norway has not released its intended actions in response to the audit’s findings, some of the debts did not meet standards of responsible lending. Norway is considered a responsible lender, and implementing a similar debt audit in other lending countries may produce similar findings.

The U.S. has endorsed the principles, but only as voluntary guidance. Advocacy firms for responsible lending are lobbying the U.S. to introduce legislation that would incorporate the principles in U.S. policy, providing a more consistent application of the principles.

– Callie D. Coleman

Sources: Inter Press Service, European Network on Debt and Development, UNCTAD
Photo: Empresate

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Vulture Capitalism Circles Argentina and Developing World

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Long before the global recession, Argentina defaulted on a staggering $81 billion of national debt in 2001. The government was able to renegotiate with its bondholders in subsequent years—93 percent of them agreed to make do without the monetary sum previously owed by accepting exchange bonds with lower returns. The remaining holdouts, however, refused the offer—demanding that they be repaid in full despite the country’s continued economic plight.

Moreover, many of the indignant creditors swept in immediately after the default to buy the bonds under-priced. These vulture funds systematically buy up cheap credit from nations in crisis only to sue them later in order to profit. One of the major vulture funds behind Argentina’s ensuing litigation headache is NML Capital. Its owner, Paul Singer, is an American CEO with a net worth of $1.3 billion and is oft-credited as the father of vulture capitalism.

Historically, Singer’s cunning entrepreneurship has spared no mercy. In 1996, he purchased a bond from Peru for $11 million, sued, and received a return of $58 million. In subsequent years, he would go on to sue the Republic of Congo for a sum 40 times the original $10 million he paid and take nearly $40 million of the nation’s oil sales. Argentina, Singer’s latest victim, has likewise been struggling against his tactics.

As a prominent businessman, Singer not only has the financial support but also the political backing he needs to win these big cases. Not only has he made a name for himself as one of the leading contributors to Republican election campaigns, but he has also worked with Democrats to lobby against Argentina through the American Task Force Argentina—which claims to represent hardworking American taxpayers. This allegation, however, could not be any further from the truth. After all, NML Capital is strategically headquartered in the Cayman Islands for tax evasion purposes.

Argentina, on the other hand, has equally eminent supporters. The International Monetary Fund was amicus curiae to Argentina. As Eric LeCompte, Executive Director of Jubilee USA, states, “The IMF understands the ruling will go well beyond Argentina – it will have serious repercussions on poverty around the globe. If these hedge funds win it will harm legitimate investors and poor people.” The Obama administration has expressed similar sentiments and lent vocal support on behalf of Argentina’s national sovereignty.

Although the United States Court of Appeals for the Second Circuit recently upheld a lower court ruling in favor of NML Capital and its fellow hedge funds—ordering Argentina to pay $1.3 billion to the plaintiffs, no measures to enforce the ruling were established.

In the meantime, it remains to be seen whether the case will be granted certiorari by the United States Supreme Court, Argentina’s final platform of hope before President Cristina Fernandez de Kircher is forced to default on even the exchange bonds—which would only serve to further exacerbate the country’s financial quagmire.

If the Supreme Court justices choose to pick up the case and rule in favor of Argentina, they could establish precedent that benefits impoverished nations and legitimate creditors everywhere. Conversely, if the Court of Appeals ruling is upheld, vulture fund activity would go largely unchecked—creating conditions for a bleak world in which developing nations find themselves constantly indebted to unethical lenders and unable to escape from the cycle of poverty.

– Melrose Huang

Sources: Common Dreams, New York Times, IPS, The Guardian, FRANCE 24, Huffington Post

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Obesity Spreading To Developing Nations

Obesity Spreading To Developing Nations
While it seemed as if obesity was normally a problem only high-income countries suffered from, the World Health Organization stated that that is no longer the case. With obesity spreading to developing nations in Africa and Latin America, hunger and starvation are not the only food issues poorer countries are facing.

Obesity is often overlooked disease. Between 1980 and 2008, the number of people who were considered obese had almost doubled with 2.8 million people each year dying from the disease. Obesity is also correlated with other diseases such as diabetes, heart disease, and cancer.

Obesity is developing in poorer countries because oftentimes unhealthy, fatty, and sugar-laden foods are much less expensive than healthier options. People with less money have fewer choices to eat healthily. In order to combat this “obesity epidemic,” the WHO created a plan that will attempt to halt the spread of obesity by 2020 by urging food companies to start making healthier options with fewer harmful fats, salts, and sugars, and to reduce portion sizes. The plan also calls for a reduction in marketing foods to children, because they are more impressionable and vulnerable, therefore more likely to become hooked on unhealthy food that could cause them significant or even deadly health problems in the future.

The food and beverage industry has reacted surprisingly well to most of the plans and proposals. Jane Reid of the International Food and Beverage Alliance noted that companies represented by the Alliance such as Coca-Cola, McDonald’s, and Nestle have been voluntarily working on a solution for almost 10 years. These companies readily support the actions proposed by the World Health Organization.

The proposals that the International Food and Beverage Alliance didn’t agree with were ideas that countries with the most pressing obesity problems should place higher taxes on unhealthy foods. Reid claimed that there is no proof that increased taxes and other forms of monetary pressure would improve eating habits and that the families with the lowest income would be hit the hardest.

– Katie Brockman
Source: Yahoo! News

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BRICS Plans For Development Bank

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Leaders of BRICS (Brazil, Russia, India, China, and South Africa) announced at the end of their summit in March in Durban their intention to start a new Development Bank.  This Development Bank will be used to mobilize resources within developing countries to build infrastructure and promote sustainable development projects.

Over the last four decades, the nations of BRICS have seen enormous success in economic development and are coming together to see that their futures are bright and full of opportunities.  As developed nations struggle through their own economic difficulties, the Development Bank will serve to bridge a gap in funding.  Infrastructure requirements in emerging-market economies point to the need for the availability of credit and sources of financing. With 1.4 billion people lacking reliable electricity, 900 million lacking access to clean water, and 2.6 billion without adequate sanitation, the Development Bank will be a key player in addressing the long-term sustainable solutions to those problems.  In addition, the forecasted large migration to cities calls for policymakers to fund environmentally sustainable investments.

Predictions for infrastructure spending within the developing world top $2 trillion annually in the coming decades.  This spending will allow nations to achieve long-term poverty reduction and economic growth. The private market will still be relied upon, but their dollars can only go so far. The Development Bank will fill the gap and become a catalyst for change in developing countries.

As the world economy is changing, the Development Bank provides BRICS a chance to reflect on those changes within an institution that utilizes modern financial instruments, strong governance, and broad-based mandates.  The bank can capitalize on new development partnerships and collective action as well as innovative and cost-effective approaches.  While developed countries still have a strong role to play in global development, the shortfall in assistance and need for quick decisions make the Development Bank a welcome institution in the marketplace of emerging countries.

– Amanda Kloeppel

Source: The Korea Herald
Photo: BRICS

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Vaccination Fears & the Developing World

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A leading proponent of vaccines warned there is a real danger that mistrust of vaccines in wealthy nations, created by “irrational fears” of the lifesaving preventive medicine, could endanger citizens who are already vulnerable if it trickled down into the developing world.

In an article written for the BBC, Dr. Seth Berkley, chief executive officer of the GAVI Alliance, an organization which provides vaccines to children in developing countries, said that while vaccination fears have been around as long as vaccines, it is worrying “when such fears begin to trickle into countries like India, where lives are more vulnerable and the stakes are far higher.”

Measles, a disease that has been largely eradicated in wealthy countries, continues to be a killer in many parts of the world. Berkley said measles kills 164,000 children under five every year, or approximately 450 children every day. Most global health organizations, including the World Health Organization, recommend the MMR vaccine as the best way to protect children against measles.

Berkley wrote in response to recent news reports from the United Kingdom about a measles outbreak that prompted a “catch-up program” to target children ages 10 to 18 whose parents had chosen not to immunize them with the measles, mumps and rubella (MMR) vaccination because of fears about links to autism. A large outbreak in Wales and smaller outbreaks in other parts of the UK recently brought international attention back to vaccines. Fears of links between immunizations for young children and autism created a scare in some wealthy nations like the US and UK about 20 years ago following research that has since been completely discredited.

-Liza Casabona

Source: BBC,   Guardian
Photo:Guardian

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