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Foreign aid has been slashed so sharply and swiftly in the 1990s that millions of children will leave the 20th century without the most basic standards of health and education which were promised them by world leaders in 1990. The aid total from the world's seven richest nations (called the Group of Seven or G-7) has been slashed by about 30 percent since 1992 -- US$15 billion-a-year in real terms -- at a time when the International Monetary Fund (IMF) has been able to cobble together hundreds of billions of dollars to combat the Asian flu in South Korea, Thailand and Indonesia. Children are hardest hit, says Carol Bellamy, executive director of the United Nations Children's Fund (UNICEF). "It's increasingly a struggle despite the economic growth around the world. The rich are certainly getting richer, but their generosity is not getting more generous," she said recently commenting on a shocking new report by the Paris-based Organization for Economic Co-operation and Development (OECD). The aid cuts have hit hardest at countries with the most pressing human needs, including those with high child death rates, high birth rates and low access to safe drinking water. Among the report's findings, bilateral aid is:
The sharp drop in traditional assistance, combined with stagnant government budgets in many developing countries, mean that most of the major goals set at the 1990 World Summit for Children will not be met: basic education for all children; safe water and sanitation for all families; and a reduction in the incidence of low birth weights to less than 10 percent of all births. The most recent figures show a shortfall on all fronts: only 75 percent of girls in developing countries enrol in primary school and only half of these complete it; only 44 percent of the population of developing countries has access to sanitation and 71 percent to safe water; and 18 percent of children born in the developing world weigh less than 2.5 kg, the minimum weight considered healthy. Total overseas aid declined to US$49.3 billion in 1997 (the last year for which figures are available), far below the previous high of US$61 billion in 1992. The US led the way, slashing its overseas aid budget by 28.1 percent to US$6.8 billion at a time when America's economy was in an unprecedented -- and still continuing -- boom. Germany cut its aid by 11.8 percent. Overall aid levels will be lower when 1998 figures are in, given Japan's economic recession and turmoil in many developing countries. Only Canada among the G-7 has announced a small increase in overseas assistance, making about $120 million (Canadian) available for new initiatives next year, but still far below the budget levels of the early 1990s and far below its long-vaunted goal of 0.7 percent of gross domestic product. From a peak of $3.18 billion in 1991, aid to poor countries fell last year to $2.5 billion (Canadian) or 0.49 percent of GDP. Overseas aid "appears to be in a freefall, just at a time when we, in the development field, understand how interventions make a difference," Bellamy said. While there are many theories -- excuses some aid workers would say -- about the causes of aid reduction, including an increase in environmental emergencies and armed conflicts which consume more than 10 percent of aid budgets, other analysts blame it on marginalisation of developing countries and a lack of will by the wealthy countries of the North to assist. The Overseas Development Council, a research institute in Washington, suggests the Third World "has gone missing in the recent economic turmoil" over globalisation, the Asian collapse and currency speculation. "This highlights their extreme marginalisation from the global economy," the council laments. When inflation is factored into the equation, aid is far lower than even 1990 projections and while the IMF can find its billions for Asia, it cuts foreign aid to African nations. All this proves that the world can respond to the crisis if it has the will to deal equitably with countries weighed down by debt and poverty, analysts claim. According to a report by the World Bank, three of four people afflicted by absolute poverty (about 2 billion of the world's population) live in countries where foreign aid could make a difference. The Overseas Development Council says the approach to aid should be "mend it, not end it." For economic, political, financial, environmental -- let alone moral and ethical - reasons, the world cannot afford to cut aid. The Asian malaise proves this point. There, as in most of Africa, hard-won gains are disappearing. In the world's 80 lowest income countries, most live on US$1-a-day. The celebrated wave of private capital -- on which aid critics place so much faith -- has missed most of these countries. Private investment between 1990 and 1996 increased five-fold to about US$245 billion, but poor countries accounted for only US$7 billion of it. Given the current international economic situation, least- developed countries (LDCs) have little reason to be hopeful. Attracting new investment will be difficult. Revenues from commodities (oil, coffee, metals and minerals and agricultural products) are falling. While it is true that direct investment in LDCs is increasing faster than aid, it still amounts to less than one-third of aid. Half a century after the U.S. rescued Europe with the Marshall Plan, is no time to abandon the Third World. The challenge is to end marginalisation and find the will to change. Focus on the world's poorest countries, which many donors do not, is needed. Aid should be untied, allowing poor countries to develop and strengthen manufacturing sectors. Better training methods in almost all sectors will reinforce success, not failure. Above all, says Roy Culpepper of Canada's North-South Institute, "let us remember that aid is more than a balance sheet. It is an obligation, which ought to be in the self-interest of moral societies, even when its pecuniary return suggests otherwise." Bellamy agrees that UNICEF now relies on the private sector for one-third of its budget, mainly through greeting card sales and donation boxes on airlines. But, she warns that such efforts should not compromise UNICEF's basic role as a multilateral agency. Its budget has declined eight percent over two years. "While I think private sector funding is important, it is not sustainable," she says. (SARDC) |
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