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The International Commitment for Foreign Aid SpendingCurrently, there is an international commitment among developed countries to spend 0.7 percent of their Gross National Income (GNI) on foreign aid. The goal for this aid is to assist the world’s poorest countries in developing sustainably. However, the majority of the richest countries in the world have not met this commitment. In fact, the United States ranked last in 2018 (27th) on the Commitment to Development Index (CDI) after only spending 0.18 percent on foreign aid. While the U.S. is reducing foreign aid spending, four countries are choosing to invest even more into developing countries than international commitment. They are doing so not only for humanitarian reasons but for strategic reasons as well.

Here are the four countries exceeding the international commitment for foreign aid spending.

4 Countries Exceeding the Commitment for Foreign Aid Spending

  1. Denmark – In 2018, Denmark allocated 0.72 percent of its GNI to foreign aid. The majority of this amount took the form of bilateral aid, which means Denmark provided aid directly to foreign governments rather than international organizations. With its commitment to foreign aid spending, the country seeks to enhance its soft power and to reduce immigration to Denmark. Development Minister of Denmark Ulla Tørnæs stated, “Through our development work, we create better living conditions, growth and jobs in some of the world’s poorest countries and thereby help prevent migration.”
  2. Norway – Norway spent 1 percent of its GNI on foreign aid in 2018. Although the country directed a higher percentage of its GNI to foreign aid than Denmark, Norway’s quality of foreign aid is not as strong. According to the Center for Global Development, the country’s aid score has declined due to struggles in the transparency and learning categories. According to Børge Brende, the Former Minister of Foreign Affairs of Norway, foreign aid spending enhances Norway’s soft power and national security interests. Additionally, the promotion of business development in foreign countries “is a good example of how aid can be used as a catalyst to mobilize other, larger flows of capital.”
  3. Luxemburg – Luxemburg spent 1 percent of its GNI on foreign aid in 2018. Luxemburg’s aid score is quite high, ranking fifth out of 27 among CDI countries. As explained by the Organization for Economic Co-operation and Development (OECD), efficient bilateral foreign aid spending “enables Luxembourg to maximize its visibility, impact and international influence.” Currently, Luxemburg focuses its foreign aid spending in sub-Saharan Africa due to its particularly high rates of poverty.
  4. Sweden – At 1.01 percent, Sweden ranks first amongst developed nations for the highest percent of GNI directed towards foreign aid. Foreign aid has become a primary focus for Sweden due to the high influx of immigrants Sweden has taken in within the past few years. Like Denmark, Sweden sees foreign aid as an opportunity to reduce the inflow of immigrants by improving the economic conditions and overall wellbeing of developing countries. This high level of foreign aid spending is one of the main reasons why Sweden ranked eighth in the world in terms of soft power in 2018. In that sense, foreign aid spending is a long-term investment for Sweden because it helps Sweden manage immigration flow, build up the global economy and increase its influence on foreign countries. Since Sweden views foreign aid as an investment, the country heavily focuses on learning about the effectiveness of its foreign aid spending in order to maximize results.

Denmark, Norway, Luxemburg and Sweden all demonstrate that foreign aid spending is in the national interest of developed nations. Since these countries do not perceive foreign aid spending as a mere charity, they have become more incentivized than most other developed countries to provide high-quality aid.

– Ariana Howard
Photo: Flickr

Top 10 Countries Contributing to Foreign AidIn February, the U.N. declared that 109 million people were in critical circumstances. In other words, international assistance is more important than ever. Countries around the world are fighting to alleviate global poverty, but some are doing a better job than others. Read further to find out which nations make the list for the top 10 countries contributing to foreign aid.

Top 10 Countries Contributing to Foreign Aid

  1. Luxembourg – Even though it is one of the smallest countries in the world, Luxembourg is a world leader in foreign aid. In 1970, the U.N. urged wealthy nations to contribute 0.7 percent of their Gross National Income (GNI) to foreign aid. Luxembourg was the second country to achieve this goal. Today, the government invests 1.07 percent of its GNI to foreign aid.
  2. Sweden – Contributing 1.04 percent of its GNI to international development, Sweden landed itself at the top of this list in 1974. In 2018, it was still considered the largest donor when taking into account the size of its economy. The Swedish government expects to spend nearly $6 billion on foreign aid by the end of 2019. Primary concerns regarding foreign aid include agriculture, education, global health and nutrition.
  3. United Kingdom – In 2017, the U.K. spent more than 14 billion pounds on international assistance. The largest recipient of this aid was Pakistan followed by Ethiopia and Nigeria. The majority of funding is donated to humanitarian projects. Approximately 64 percent of aid is sent directly via bilateral organizations. The remaining percentage is distributed indirectly via organizations like the U.N.
  4. Norway – In 2018, Norway revised its foreign aid policies. In the new outline, the government mandates that at least 1 percent of its GNI is spent on international assistance. The proposal also focuses on health and education as its chief concerns.
  5. Ireland – In July 2018, Ireland relaunched a new foreign aid policy aptly named A Better World. One of the primary goals of this policy is to ensure that 0.7 percent of the GNI is spent on international development. It is estimated that this target will be met by 2030. Furthermore, the policy emphasizes climate action, gender equality and strengthened governance. For female education alone, the country has committed to spending 250 euros within the next five years.
  6. Japan – Japan is the largest contributor to foreign aid in Asia. In 2018, the country donated $14.2 billion. Japan has publicly committed to using the official development assistance (ODA) for guidance in future development.
  7. Canada – Unlike other countries, Canada has taken a unique feminist approach. Its foreign aid policy uses feminism as its core value. By promoting the success of women around the world, Canada hopes to create a more equal balance in power. The country believes that an increase in women’s rights would lead to other areas of progression, such as a more inclusive government and representation for minorities.
  8. France – Within the past year, France has committed to enhancing its foreign aid policy. Currently, the country donates 0.43 percent of its GNI to foreign aid. However, by the year 2022, the French government aims to increase this level to 0.55 percent. The primary objective of this increase is to aid in international stability.
  9. Finland – In just the first part of 2019, Finland has already administered 68.35 million euros in foreign assistance. The government distributes its finances through a process that includes evaluating the extent of a crisis, assessing how many deaths and illnesses have occurred and recording the percentage of the population affected by the issue. Finland also prioritizes its aid to countries that have formally submitted a request to the U.N.
  10. United States of America – Last but not least on the list for the top 10 countries contributing to foreign aid is the U.S. The current American aid system was created in 1961. However, disputes surrounding U.S. investment have increased in recent years. President Trump has repeatedly fought for cuts in the budget while others advocate for the amount to be raised. In 2016, the U.S. contributed approximately $49 billion in foreign assistance.

Ultimately, there is still a lot of work to be done. With millions of people in crisis, it is important that the wealthiest nations help combat the issues that plague the poorest. If not for humanitarian reasons, foreign aid can help elite nations by increasing the global economy and infrastructure. When looking at success stories like China (which once was a U.S. aid recipient but now a financial leader), one can understand the impact of international assistance.

– Anna Melnik
Photo: Flickr

Which Countries Give Out the Most Foreign Aid?
Many surveys show that Americans believe 20 percent of the government’s budget goes to foreign aid. In reality, this figure is less than one percent. The common misconception that the U.S. spends too much on foreign aid shows that many people do not know which are the largest donors of foreign aid. On average, the U.S. gives $30 billion to the world’s poor each year.

Foreign aid is defined as any resources that are given by one entity to another across national borders for the latter’s benefit. This may include money, food, water, medical supplies, materials for infrastructure, defense supplies, volunteers and other resources.

This is not to be mistaken with military aid, which is aid given by more stable countries to help people that live in countries with lower standards of wealth and less developed infrastructure. The average amount the U.S. spends per year on the military is $663 billion.

While the $32 billion the U.S. gave out in foreign aid in 2014 represents the largest dollar amount given by any country that year, this amount is low compared with U.S. gross national income (GNI). This number represents only 0.19 percent of the U.S. GNI.

Based on 2014 data, this list shows the largest donors of foreign aid based on GNI:

  1. Sweden: 1.41 percent GNI
  2. United Arab Emirates: 1.09 percent GNI
  3. Norway: 1.05 percent GNI
  4. Luxembourg: 0.93 percent GNI
  5. Denmark: 0.85 percent GNI
  6. Netherlands: 0.76 GNI
  7. United Kingdom: 0.71 percent GNI
  8. Finland: 0.56 percent GNI
  9. Turkey: 0.54 percent GNI
  10. Switzerland: 0.52 percent GNI
  11. Germany: 0.52 percent GNI

Analysis of the U.N. Millennium Project shows that enough resources to meet the Millennium Development Goals could be provided if developed nations give 0.7 percent of their GNI to foreign aid. Only seven countries on the list meet the 0.7 percent goal for donors of foreign aid.

This goal was first introduced by the U.N. in 1970 and has been reaffirmed in several international agreements since then, but many developed nations still fail to meet this goal each year, including the U.S. at only 0.19 percent GNI.

– Cassie Lipp

Photo: Flickr

Tim  Costello
Tim Costello, who serves as Chair of the Community Council of Australia and as the Chief Executive of World Vision Australia, recently spoke about Australia’s successful foreign aid. Costello is a prominent figure in Australia, recognized for his unrelenting efforts to raise global poverty awareness and place poverty issues on the Australian national agenda. On Boxing Day of 2004 when the tsunami hit Asia, Costello was able to raise more than $100 million from the Australian public for tsunami relief. Recently, Costello asserted that when it comes to children’s lives and education, Australia’s foreign aid has been “spectacularly successful.”

Overseas development assistance has led to the inhibition of many HIV infections and has treated millions with AIDS. Australian development assistance has also dispensed “insecticide-treated bed nets against malaria,” which globally decreased death rates by half. Thus, Australian foreign aid is deemed quite necessary yielding many successes. The good news is that, for the past two elections, the Gillard government has wanted to lift aid directed overseas by 0.5% of Gross National Income. The U.N. had set up a goal of 0.7% of G.N.I. and so this lift is a step closer to that goal. It also presents the greatest potential of changing many people’s lives and saving people.

Leen Abdallah
Sources: World Vision, The Australian
Photo:The Sydney Morning Herald