An often quoted criticism of the rich countries by globalization critics is that they permanently seem unable to meet the goal of spending 0,7 per cent of their GNP on Official Development Assistance – something they committed to in 1970 for the first time. 40 years have gone since, and there are only 5 OECD countries whose ODA lies above the target: Luxemburg, Sweden, Norway, Netherlands and Denmark. Others are far from reaching it.
It is very important that developed countries finally meet their commitment. The first reason for this is an “egoistic” one: by not reaching the target they undercut their own credibility in the area of development (and others as well). Since the developed world claims a leading role for itself in the political as well as economic areas, this disability to hold what they have promised is somewhat counter-productive. (By the way: according to Wikipedia, some Arab countries are spending some 5 % of their GDP as ODA.)
Secondly: there is a need for this money. The problems the Global Fund to Fight AIDS, Malaria and Tuberculosis has had this year to raise the funds it is urgently needing to continue its so far successful work has shown this. As I already more than once emphasized, many countries in the world cannot break out of the poverty trap without help from outside.
But there is another problem beside whether there will be enough money spent or not. Indeed, it also matters how it will be spent. And that is currently a big problem. Most of the ODA is reaching only a few countries, for the time being (Iraq is the main recipient – see e.g. here). Much of this “money” is only virtually spent – writing off outstanding debt counts as development assistance. Than there is the problem that ODA is mostly given in projects following the one-size-fits-all logic: they are mostly big ones and trying to copy patterns that were successful elsewhere (i.e., in the developed world). What in the most cases fails.
One could set the list forth for a long time. But the main message is: while it is important that developed countries meet their commitment, it is also (perhaps even more) important that they change the way in which they are spending their money. They should, among others, start allocating their grants and lending more evenly all over the world; abandon the one-size-fits-all ideology; stop counting debt relief as ODA etc. etc. For the aim of the whole thing is not that the rich part of the world feel satisfied with itself. The aim is to help the people starving all over the developing world to break out of the poverty trap their caught in.
The Sceptical Economist 