Foreign Aid Failing to Help End Global Poverty According to Reality of Aid Report

September 11, 2008

Foreign aid, in both its quality and quantity, is failing to help end global poverty according to a report released today (September 11). Reality of Aid 2008, the only North/South non-governmental initiative looking at aid priorities and policies, says that aid has become a source of power, wielded by donors over recipient developing countries.

Donors are imposing policy conditions, tying aid to benefit donor-country suppliers, linking aid with trade and using aid to further geo-political interests. Country ownership, or the ability of developing countries to set their own development priorities, is being undermined as an inordinate number of conditions are placed on aid.

"Current aid policies and practices reflect donors' political and economic interests and have little impact on poverty reduction," says Gerry Barr, President and CEO of the Canadian Council for International Co-operation (CCIC). "What gets lost in this power grab is a focus on ending poverty."

Ending poverty, not donor foreign policy concerns (in particular the "war on terror"), should be at the heart of foreign aid spending. Unfortunately, although more than two-thirds of Sub-Saharan African countries rank among the poorest in the world, there was no evident priority for aid spending to Africa in this decade. Asia actually received the highest proportion of aid as donors concentrated their aid spending on Afghanistan and Iraq.

The Reality of Aid concludes that foreign aid can no longer be assessed as "effective" without showing an impact on poverty reduction. "The only way to ensure effectiveness in aid policies and spending is to make sure that those affected by poverty can promote and claim their human rights," says Brian Tomlinson, CCIC's senior aid policy analyst and member of the Reality of Aid management committee.

In terms of quantity, aid spending has stagnated, despite high-profile commitments made by donors at international meetings, such as the Gleneagles G7 Summit. Globally, Official Development Assistance (ODA) fell from 0.33% of Gross National Income (GNI) in 2005 to 0.28% in 2007. As a whole, donors are nowhere near the internationally-agreed-to target for aid spending of 0.7% of GNI.

Canada, sadly, is following these global trends. Canadian foreign aid spending has also stagnated with no plans to increase spending after 2010, and Canadian foreign policy interests seem to be determining where our aid dollars go, with Afghanistan receiving significant new funds.

The Reality of Aid report is written by Northern and Southern aid experts. A copy of the Reality of Aid book is available upon request.

For more information contact:

Katia Gianneschi
Media Relations
Canadian Council for International Co-operation
613-241-7007 ext. 311