Austerity in rich countries hits international aid: OECD

Rich countries applying budget austerity cut their aid to developing countries by 4.0 percent last year, the OECD said on Wednesday, with the poorest countries taking the brunt of the cutbacks. Development aid from the OECD's 34 member countries has dropped 6.0 percent in real terms since reaching a peak in 2010 and it is the first time since 1996-97 that aid has contracted for two consecutive years.
In 2012, OECD members provided $125.7 billion in net official development assistance, representing 0.29 percent of their combined gross national income. The largest donors by volume were the United States, the United Kingdom, Germany, France and Japan. Smaller countries Denmark, Luxembourg, the Netherlands, Norway and Sweden however continued to exceed the United Nations target 0.7 percent of gross national income.
"It is worrying that budgetary duress (in) our member countries have led to a second successive fall in total aid, but I take heart from the fact that, in spite of the crisis, nine countries still managed to increase their aid," said OECD Secretary-General Angel Gurria. Turkey showed a 98.7-percent increase in outside aid, through help to Syrian refugees and aid to North African countries following the Arab Spring. The United Arab Emirates boosted aid by 30 percent and South Korea by 17.6 percent.
The biggest drops were seen in crisis-hit Europe, with direct assistance from Spain halved and Italy down by 34.7 percent. The organisation said bilateral trade to impoverished sub-Saharan Africa fell 7.9 percent last year to $26.2 billion and by 12.8 percent to least developed countries as a whole. The OECD said aid for core bilateral projects and programmes, that exclude debt relief and humanitarian aid and often benefit middle income countries, actually rose by 2.0 percent last year.
"The survey suggests a shift in aid towards middle-income countries in the Far East and South and Central Asia, primarily China, India, Indonesia, Pakistan, Sri Lanka, Uzbekistan and Vietnam, and it is most likely that the increase will be in the form of soft loans," the OECD said. The Paris-based Organisation for Economic Co-operation and Development is a research body for advanced nations which it advises on policy in a wide range of activities.