The Stamp Out Poverty Assessment
The G8 communiqué announcement is an extra $50 billion in annual aid to be reached by 2010. This means incrementally increasing aid to $130 billion by 2010 (the current level is $80 billion). $130 billion is equivalent to 0.36% of Gross National Income (GNI) – the same level as in 1987 (18 years ago).
On current trends and with current commitments OECD-DAC estimate that aid volume would have reached $110- $115 billion per year by 2010. So what is on the table is basically $15- $20 billion more than we would otherwise have had in 2010.
If aid volume had been increased to the international target of 0.7% GNI by 2010 (the demand of Make Poverty History) we would have achieved a level of $250 billion of annual aid revenue (by 2010). This difference of an extra $50 billion by 2010 (G8 communiqué) and an extra $170 billion by 2010 (MPH demand ie $250 billion minus current aid level of $80 billion) is a shortfall of $120 billion.
Given the $15- $20 billion extra that is on the table, Stamp Out Poverty rates the G8 achievement on aid volume as scoring between 1 & 2 out of 10 (ie $120b $10-15b).
The Gleneagles result is, therefore, a modest increase, certainly not a historic breakthrough. Although far from spectacular, compared to previous G8s, it is an improvement and adds to a continuing upward trend in aid volume.
However, the UN is clear that by 2010 we need to have reached a minimum aid volume level of $180 billion per annum - 0.51% of GNI across richest countries – to be capable of paying for the Millennium Development Goals. The G8 aid volume announcement is $50 billion short of that figure. (To put all these figures in perspective, military spending was $1,000 billion in 2004).
Specific victories at the G8 include an unexpected 0.7% GNI commitment from the Germans and a $10 billion pledge from Japan (though both of these may be connected to UN Security Council aspirations).
Specific failures include Canada not signing up to the 0.7% GNI target, and the UK agreeing only to reach 0.7% GNI by 2013, and not 2010 as demanded by MPH. It is also important to note that approximately $40 billion of the promised money will come from Europe and was agreed in an earlier ECOFIN meeting in May, showing that the new commitments are a broadly European phenomenon.
There is little likelihood of new aid announcements from traditional sources this year, given that for the time-being virtually all moves to increase ODA (to 0.7%) have been exhausted (since G7 and European countries announced the limit of what they were prepared to commit to re ODA at Gleneagles).
This leaves an enormous financing gap in respect of paying for the MDGs and a significant political space now exists in which new taxes to finance development have a clear opportunity to gain ground.
For more information:
Click here to read the G8 communiqué
Click here to read the Make Poverty History response
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