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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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Economy Strong, Poverty in Israel

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Over the last several years, Israel has enjoyed economic growth and low unemployment. Unfortunately, that is not all good news. A report recently released by Israel’s National Insurance Institute and the Central Bureau of Statistics indicate that over 1.7 million people, or 23.5 percent of the population, live below the poverty line. Of the 1.7 million people living in poverty, 817,000 of them are children and 180,000 of them are elderly. In addition, one in five households is living at or below the poverty line.

In recent years, Israel has been seen as up and coming in the high-tech sector, drawing international attention. Even though Israel is seeing significant progress, The Organization for Economic Cooperation and Development (OECD) released a statement saying, “Israel’s output growth remains relatively strong, unemployment is at historically low levels…However, average living standards remain well below those of top-ranking OECD countries, the rate of relative poverty is the highest in the OECD area.” The report also adds that the poverty problem is affecting some groups more than others, “Among Arabs and in the rapidly growing ultra-Orthodox Jewish community poverty is over one in two, mainly due to low employment rates among Arab women and ultra-Orthodox men”

The OECD indicated that Israel surpassed some of the average measures of other OCED members; it ranked far below average in similar social themed categories. These categories included housing, education and skills, social connections, work life balance, environment quality, personal security, and civic engagement. Fixing some of these social problems could help alleviate poverty in Israel. Action that should be taken should target groups that are endemic with poverty and other related problems such as Arabs and the ultra-Orthodox Jewish community.

The OECD did offer several options for different solutions that could help alleviate poverty in Israel. One major suggestion was to improve education, especially in areas with severe levels of poverty. Another suggestion was to begin the process of pension and welfare reform to ensure that it is capable of coping with an aging population. Finally, the OECD favored sales tax increases over income tax increases so the tax does not become more of a burden on already cash-strapped families.

– Colleen Eckvahl

Sources: Your Middle East, JTA
Photo: Ivarfjeld

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What is the OECD?

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What is the OECD?

In short: OECD stands for Organization for Economic Co-operation and Development. It is an international economic organization whose mission is to “promote policies that will improve the economic and social well-being of people around the world.”

A little more detail: In the beginning, the OECD was actually named the OEEC – the Organization for European Economic Co-operation. It was founded in April of 1948, with 18 original European participants. The first and original principles of the OEEC were as follows: “Promote cooperation between participating countries and their national production programs for the reconstruction of Europe; Develop intra-European trade by reducing tariffs and other barriers to the expansion of trade; Study the feasibility of creating a customs union or free trade area; Study multi-lateralization of payments; and Achieve conditions for better utilization of labor.”

In 1961, the OEEC became the OECD, and membership was extended to non-European countries. Most OECD members are regarded as “developed countries” with a high human development index. To this day, according to Pierre Tristam at about.com, the OECD remains one of the most cited sources for “economic data and information” because the organization keeps vast databases and “conducts some of the world’s most authoritative analyses and studies on the world economy.”

The OECD said that it provides a forum in which countries can work together to “seek solutions to common problems.” The organization aims to identify good practices and to coordinate “domestic and international policies.” It is committed to democracy and a sustainable market economy. Some of these good practices include taxes and social security, leisure time, school systems and “pension systems” that look after country’s elderly citizens, since the OECD tries to look at issues “that directly affect the lives of ordinary people.”

Its reach extends to the environment, the economy and social issues. The OECD is committed to helping the lives of ordinary people, thus making life harder for those “whose actions undermine a fair and open society,” such as terrorists, unethical businessmen and tax evaders.

The OECD promotes policies designed:

“To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in Member as well as nonmember countries in the process of economic development; and to contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations.”

As of 2013, the OECD has 34 active member countries, including the United States, and “is in accession talks with the Russian Federation.”

– Alycia Rock

Sources: OECD: About, OECD: Report 2013, Middle East About, OECD
Photo: CIB

Most Generous Donor Countries

Most Generous Donor Countries
The Organization of Economic Cooperation and Development has released their list of the world’s most generous countries in terms of granting foreign aid. The list is topped by European countries, even though the amount of international giving among European Union member countries has continued to fall for the past three years.

The countries are listed by the highest percentage of aid given compared to each country’s Gross National Income (GNI). The most generous countries on the list are Luxembourg, Sweden, Norway, Denmark, and The Netherlands. Luxembourg was easily the most generous, giving 1% of the country’s GNI. Switzerland and France tied for tenth place, each giving 0.45% of their GNIs.

The United States did not even come close to being placed in the list of the top ten. The United States gave only 0.2% of our GNI in the past year. One of the common misconceptions about U.S. foreign aid is that we give a massive amount of foreign aid. This list of top donor countries shows how untrue that is. With less than 1% of the U.S. federal budget set aside for international aid and development we, as a country, could certainly do better and make a bigger, more positive, difference in the world.

– Kevin Sullivan

Source: 24/7 Wall St.
Source: CRW Flags

Global Aid Decreased in 2012

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Global aid, formally known as Official Development Assistance (ODA), continued to decline in 2012 as wealthy countries struggled with the global financial crisis. Global aid decreased by four percent in 2012, following a two percent decline in 2011.

Global aid totaled about $125 billion USD in 2012. Most of that came from members of the Organization for Economic Cooperation and Development’s (OECD) Development Assistance Committee (DAC), which includes most of the world’s wealthiest countries: the United States, Japan, and much of Europe. However, contributions of the BRICS countries (Brazil, Russia, India, China, and South Africa) are becoming increasingly important to poverty reduction and assistance efforts.

In 2012, Australia, Austria, Iceland, Korea, and Luxembourg increased their donations to global aid. Countries hit the hardest by the financial crisis, including Italy, Spain, Greece, and Portugal, decreased their contributions.

Donations can be measured both by total quantity of donation and percentage of gross national income (GNI). The US was among the largest donors in total monetary value, but did not reach the minimum threshold of 0.7% of GNI. Smaller countries such as the Netherlands and Denmark surpassed 0.7%. In some cases, donations from non-traditional donor countries such as Saudi Arabia and Turkey surpassed individual donations from DAC-member countries.

The percentage of OECD global aid dedicated to humanitarian causes has increased from 3.3 percent to 8.6 percent over the last two decades. Global aid is distributed to many different sectors, including economic development, social and administrative infrastructure, food aid, transportation, and agriculture.

Global aid distribution has also shifted in recent years. The share of aid going to sub-Saharan Africa, traditionally the largest beneficiary, decreased from 47.8% to 41.8%. Meanwhile, aid to South and Central Asia increased from 11.5% to 19.8%.

The OECD’s official report on global aid trends can be found here. Call your senator or representative and let them know that you’d like to see the US contribute more, not less, to global aid.

– Kat Henrichs

Source: IRIN
Photo: The Fact File