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Why foreign aid isn’t as generous as the latest figures might suggest

A closer look at the OECD estimates reveals that assistance to least developed countries actually fell in 2022.

A graphic illustration showing coins falling into a single hand that is cupped. Sofía Kuan/TNH

Foreign aid spent at home now surpasses what big donors give to respond to the world’s humanitarian crises, the latest aid figures show, in what critics say is another sign money is shifting away from where it’s needed most.

 

Aid from some of the world’s largest donor governments rose to $204 billion in 2022, according to estimates from the intergovernmental Organisation for Economic Co-operation and Development, or OECD.

 

The figures are a measure of official development assistance, or ODA, from the wealthy members of the OECD’s Development Assistance Committee, which includes governments in Europe, North America, Asia, and the Pacific.

 

The OECD says its figures are a sign of how aid is reaching record levels and rising alongside spiralling global crises. But a closer look at the numbers paints a different picture:

 

  • The estimates also show that donor governments spent $7 billion more to help refugees at home (while still calling it overseas aid) than they did on humanitarian aid for the world’s most dire crises.
  • Ukraine accounts for a huge chunk of foreign aid: 7.8% of all ODA in 2022.
  • At the same time, aid to least-developed countries and countries in sub-Saharan Africa actually fell.
  • Donors continue to miss the mark on targets to contribute at least 0.7% of gross national income, or GNI. When zooming out to a decades-long view, aid may still be on a downward trend compared to what countries can afford.

 

Critics say countries’ self-reported aid figures are inflated by mislabelling refugee costs and COVID-19 support, as well as crafty accounting on how development aid loans are tallied. They say the numbers amount to a “redirection” of aid toward the fallout from Ukraine – and away from countries facing long-standing emergencies out of the public spotlight.

 

Here are five takeaways from the latest numbers, and five charts that illustrate the trends:

 

Foreign aid on home soil outstrips emergency aid 

The money DAC countries spent on refugee costs at home outpaced humanitarian aid budgets by about a third – $29.3 billion for so-called in-country refugee costs compared to $22.3 billion on global humanitarian aid.

 

It’s driven by the large numbers of Ukrainians forced to flee their homes after Russia’s February 2022 invasion. But the practice of counting in-country assistance as development aid has always been divisive. 

 

It’s the first time in-country refugee costs have topped humanitarian budgets since 2016, when a rise in refugees and migrants from Syria and elsewhere led to early support (and later, border crackdowns). 

 

Ukraine has entrenched this “aid diversion” as donor policy, critics like Oxfam charge.

 

 

In-country refugee costs among DAC countries amounted to roughly 14.4% of all official development aid in 2022.

 

Yet humanitarian funding – a small slice of the overall aid pie, and largely supplied by many of the same OECD donors – isn’t keeping pace with global needs supercharged by climate change, conflict, and economic turmoil.

 

“Donors have turned their aid pledges into a farce,” Marc Cohen, a researcher at Oxfam, said in a statement. “We can’t allow rich countries to argue their pockets are empty.”

 

 

A massive slice of aid went to Ukraine

Substantial amounts of aid went to Ukraine and to addressing the fallout from Russia’s invasion in 2022. 

 

DAC countries sent at least $16.1 billion in bilateral aid to Ukraine in 2022, which adds up to about 7.8% of ODA. This is on top of the 14.4% counted as in-country refugee costs.

 

 

European leaders often say it’s natural to offer outsized support for Ukraine and its citizens, given the crisis is unfolding so close to home. But it’s the United States and Canada that are also fuelling the spending, supplying the largest amounts of aid for Ukraine.

 

Aid to some of the least wealthy countries fell

A big question for aid watchers in 2022 was whether the focus on Ukraine was pulling attention and resources away from other crises.

 

Donor governments insisted otherwise, though frontline aid workers often reported difficulties in finding cash for existing programmes in severe emergencies, while funding for Ukraine came in spades (albeit unevenly so).

 

The new OECD numbers will add ammo to the argument. While Ukraine funding was high in 2022, ODA to some of the world’s least wealthy countries dropped.

 

The data show that bilateral flows to so-called least developed countries, an economic categorisation for some 46 nations from Afghanistan to Zambia, dropped by about 0.7%, to $32 billion. 

 

In other words: Development aid to many developing countries actually shrunk.

 

The overall figures show a “significant redirection” of aid money “away from developing countries around the world”, warned the CSO Partnership for Development Effectiveness, a civil society network headquartered in the Philippines.

 

Aid for Ukraine, or for the next big emergency that demands global attention, must be in addition to existing humanitarian and development budgets, and “not sacrifice one for the other”, said Biljana Spasovska, the network’s co-chair.

 

Countries sent leftover COVID-19 vaccines as aid

Counting COVID-19 support and vaccines as aid has always been controversial. The 2022 figures underscore why.

 

DAC countries counted $1.54 billion worth of vaccine donations in 2022 – about 0.8% of total aid (overall COVID-19 support came in at about 5% of ODA). But the overwhelming majority of vaccine aid came in the form of extra doses that were first bought for domestic supplies then later donated.

 

Wealthy countries were accused of hoarding COVID-19 vaccines early on, only sharing them in significant numbers when they were no longer needed at home. Often, these doses were donated so close to expiry they were unuseable.

 

Only two countries, Ireland and New Zealand, reported buying doses specifically for developing countries as part of their 2022 aid, at a cost of about $16 million. Nearly the entirety of the remaining amount were doses that countries no longer needed for their own populations.

 

Aid as a share of wealth is still in a decades-long trough

While ODA may be rising in real terms, recent gains are modest compared to what countries can afford.

 

The share of a country’s gross national income spent on aid is one way of measuring aid generosity. Governments have a target of 0.7%, but rarely hit it. In 2022, only five countries met this goal: Luxembourg, Sweden, Norway, Germany, and Denmark.

 

 

And countries are still struggling to climb out from a decades-long downward trend since aid as a share of GNI was first floated as a target more than 50 years ago:

 

 

Edited by Andrew Gully.

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