Aid and debt
The
world’s high-income countries
collectively spend 0.25% of their gross national income (GNI) on aid
– about $78 billion per year. The percentage has declined by
almost half since the 1960s, although in recent years it has begun to
increase. Only five countries – Norway, Luxembourg, Denmark,
Sweden and the Netherlands – currently meet or surpass the UN
target of 0.7%. The EU has pledged to reach this target by 2015.
Not all so-called aid benefits the poor. A substantial amount ends up in the coffers of Western businesses or is earmarked for dubious purposes such as police training in non-democratic countries. When aid projects aren’t carried out in close partnership with recipient communities, they can fail and even create new problems.
The global aid budget needs to increase and aid needs to be better directed. Western governments should also cancel the debts that have crippled low-income countries for decades. Many of these debts were incurred by corrupt regimes, and repayments exceed 20% of government revenue for some countries.
Most importantly, high-income countries should remove the protectionist trade barriers and abolish the agricultural subsidies that together cost developing countries six times the amount they receive as aid.
Not all so-called aid benefits the poor. A substantial amount ends up in the coffers of Western businesses or is earmarked for dubious purposes such as police training in non-democratic countries. When aid projects aren’t carried out in close partnership with recipient communities, they can fail and even create new problems.
The global aid budget needs to increase and aid needs to be better directed. Western governments should also cancel the debts that have crippled low-income countries for decades. Many of these debts were incurred by corrupt regimes, and repayments exceed 20% of government revenue for some countries.
Most importantly, high-income countries should remove the protectionist trade barriers and abolish the agricultural subsidies that together cost developing countries six times the amount they receive as aid.
See also Trade, Globalisation, Disaster relief.