Rich Countries' Overseas Aid Behind Pledges

“Overseas aid crawled higher last year but left most rich countries well behind successive pledges they have made to increase assistance to the developing world.  

Figures to be released on Friday by the Organisation for Economic Co-operation and Development (OECD), obtained by the FT, show that excluding one-off effects of debt relief, which can cause large year-on-year movements in the data, aid increased by 2.4 percent.  

OECD member countries gave on average 0.28 percent of their national income in aid in 2007, well below the 0.7 percent target set by the UN. In real terms, overall net aid from the world's rich countries fell 8.4 percent last year to $103.7 billion. … The US gave the least as a share of national income, 0.16 percent, with the UK at 0.36 percent, Germany at 0.37 percent and France at 0.39 percent. …” [The Financial Times (UK)]

Reuters reports that “Development aid from the EU's 27 countries fell last year, the bloc's top aid official said on Friday, urging governments to live up to their commitments to give more to poor nations. EU aid amounted to EUR 46.1 billion euros ($72 billion) in 2007, down about EUR 1.7 billion euros from 2006, officials said, adding that other major donors had also failed to fulfill their pledges.  

‘2007 was a serious failure for financial aid to development,’ EU aid and development Commissioner Louis Michel wrote together with Luxembourg's aid minister Jean-Louis Schiltz, in a letter obtained by Reuters. … Aid relief from major donors had grown in previous years thanks to debt relief packages for countries such as Iraq and Nigeria. One EU official said last year's reduction was largely explained by the end of the rise in debt relief. …  

‘The EU is still the biggest donor in the world, with Official Development Assistance amounting to EUR 93,’ the official said, adding aid was equivalent to EUR 53 per person in the United States and EUR 44 in Japan. …” [Reuters/Factiva]

The Independent notes that “The UK seems to be sticking to its commitment to international development. Open House can exclusively reveal that the Department for International Development (DfID) will announce tomorrow figures confirming that the UK will reach an EU commitment to spend 0.7 per cent of gross national income on aid in 2013, two years ahead of schedule. …

The UK’s aid giving has been boosted by a cash injection by the Treasury last year, with DfID’s budget increasing by 11 per cent each year until 2011. It will push the UK’s total spending on aid to over GBP 9.1 billion by the end of the decade, the highest level in the country’s history.

Increased aid spending has also seen the UK become the biggest donor to the World Bank, overtaking the US. It will give the bank $4.3 billion over three years, topping the $3.7 billion pledge by the US. …” [The Independent (UK)/Factiva]

  AFP reports that “British charity Oxfam released Friday figures on aid spending showing that rich countries had broken promises made to substantially increase assistance to developing countries. … ‘These figures don't lie,’ said Jeremy Hobbs of Oxfam International. ‘They show a clear lack of leadership on bringing much needed funding to poor countries.’ … ‘We must see emergency plans announced to rapidly increase aid at the G8 this summer.’ Oxfam used figures from the OECD for its development spending data.” [Agence France Presse/Factiva]

IMF Weighs In On Global Warming - Study Says Dealing With Climate Change Could Be Affordable

“The International Monetary Fund (IMF) forecast that sharply reducing greenhouse-gas emissions would slow global growth, but only minimally if economic policies were designed to encourage companies to adopt low-emission strategies.  

The policies needed to reduce emissions by 60 percent from 2002 would leave the global economy about 2.6 percent smaller than it otherwise would be in 2040, the IMF projected. Even so, the global economy would grow to about 2.3 times its current size between 2007 and 2040, the IMF said. …

The IMF study helps give the imprimatur of the global financial establishment on the idea that dealing with climate change is affordable. …The IMF study said that all countries need to agree to climate-change mitigation policies because a large percentage of emissions will come from big developing countries. …”   [The Wall Street Journal/Factiva]

AFP notes that “… ‘Climate change is a potentially catastrophic global externality and one of the world's greatest collective action problems,’ the IMF said in releasing analytical chapters of its twice-yearly World Economic Outlook.  

To curb global warming, the IMF suggests a worldwide long-term scheme of gradual increases in carbon prices. …Such a framework would ‘induce the needed shifts in investment and consumption away from emission-intensive products and technologies.’ For example, the IMF said, staff estimates showed that mitigation policies introduced in 2013 and aiming to stabilize carbon-dioxide-equivalent concentrations at 550 parts per million by 2100 would entail only a 0.6 percent reduction in the net present value of world consumption by 2040. …” [Agence France Presse/Factiva]

Reuters adds that “…The IMF's research, the first ever that looks at the effects of climate change on economies, cautioned that climate policies could also have wide-ranging economic consequences. …The IMF said mitigation policies should encourage all countries, from rich to poor, to start pricing their emissions. Any framework that does not include large and fast-growing economies would be costly and politically difficult, the IMF said. …  

IMF researcher Natalia Tamirisa said incentives to cut emissions would depend on the design of policies to cut emissions. … The IMF also said that carbon pricing should have enough flexibility to accommodate the ups and downs of the business cycle. In periods of high demand, it would be more costly for firms to reduce emissions, for example, it said. It recommended a gradual increase in carbon prices, starting early and from a low level, which would minimize adjustment costs by spreading them over a longer period. …’ [Reuters/Factiva]

G-8 Ministers To Discuss Aid Focused On Climate Change

“G8 Ministers in charge of development will meet in Tokyo for two days from Saturday to discuss aid to developing nations at a time when the impact of global warming on such countries has been becoming more visible.  

At the meeting, to be chaired by Japanese Foreign Minister Masahiko Komura, participants will discuss whether donor countries need to review their aid programs to better help recipient countries cope with the effects of global warming, such as drought and rises in sea levels.  

Japan will explain its $10 billion ‘Cool Earth Partnership’ aid program, proposed by Prime Minister Yasuo Fukuda with the aim of supporting the efforts of developing countries to tackle the climate change impact. …” [Jiji Press (Japan)/Factiva]

Kyodo News reports that “…Coming at a critical midpoint year, the gathering will be one key litmus test in assessing the international community's commitment to achieving the Millennium Development Goals. …  

According to Foreign Ministry officials, Japan plans to propose a new framework of partnership with emerging donors at a time so-called traditional donors are wrestling with both tight budgetary constraints and growing development needs of impoverished regions like Sub-Saharan Africa.  

Eight countries outside the G8 grouping - China, India, Brazil, Indonesia, Malaysia, Mexico, South Korea and South Africa - are invited to the three outreach sessions in addition to various regional and international organizations such as the African Union, the Organization for Economic Cooperation and Development, the World Bank and the UN Development Program. …” [Kyodo News (Japan)/Factiva]

AFP adds that “…Japan sees the two-day meeting as an opportunity ‘to share Asia's remarkable growth experience with Africa,’ a foreign ministry official said. ‘The key of Asia's experience, in which Japan is deeply involved, is private-sector investment, technological transfer and education, among others,’ he said. …  

G8 nations will this weekend urge ‘more transparency of aid policies by new donors,’ a senior government official said on condition of anonymity. Emerging nations will also be pressed ‘to act in a more responsible manner in terms of good governance, sustainability of aid and consideration for democratization,’ the official said. …  

Climate change is also expected to be discussed at this weekend's meeting of development experts, along with ways to achieve the UN's poverty-reduction Millennium Development Goals (MDGs), officials said. …” [Agence France Presse/Factiva]

Micronutrients, Education Keys To End Hunger-Study

“Governments could take a big step towards ending world hunger by spending just $1.2 billion a year in developing nations on dietary supplements and education about the food needs of babies, a study showed on Friday.  

Such targeted spending to help a billion of the poorest people in Africa and Asia could save millions of lives and bring annual economic benefits of more than $15 billion in lower health bills and longer and more productive lives, it said. … The total cost of adding micronutrients, such as iron to flour to curb anemia, of providing vitamin A capsules to help children's eyesight and immune systems and of adding iodine to salt to avert thyroid damage was estimated at $347 million.  

The study, written by Susan Horton with specialists from the World Bank and Mexico's National Institute of Public Health, estimated such micronutrient measures would mean annual benefits of $5 billion from improved health. And it said that education about nutrition, largely to promote breast-feeding of babies, would cost about $798 million and bring annual benefits of $10 billion. …” [Reuters/Factiva]

A Costly Thirst: Proper Pricing of Water Could Ease Shortages

“Slum-dwellers in Dar es Salaam pay the equivalent of Pounds 4 (Dollars 8, Euros 5) for 1,000 litres of water, bought over time and by the canister. In the same Tanzanian city, wealthier households connected to the municipal supply receive that amount for just 17p. In the UK, the same volume of tap water costs 81p and in the US it is as low as 34p.

Figures from other countries confirm the evidence: it is generally the poorest who pay most for what is one of the most essential of all natural resources. Water is in short supply for a large proportion of the world's people: about 1bn lack access to clean water and 2.6bn have no sanitation. An estimated 5,000 children die every day from water-related disease, according to WaterAid, the London-based charity.

If the number of people lacking safe drinking water were halved, at a cost of about Dollars 10bn, the world would benefit by Dollars 38bn in annual economic growth, according to the United Nations Development Programme. Disputes over water rights can, the UNDP argues, lead to conflicts - such as in Darfur.” [Financial Times]

In other news in relation to access to water, This Day Lagos reports that “Democratic Peoples Alliance (DPA), has implored Lagos State government and National Agency for Food and Drug Administration and Control (NAFDAC), to intervene in recent hike in the price of satchet water, popularly called pure water.

Lagos State government's policy to rid streets of water sachets last month, inadvertently led to increase of the price of…water pack…Urging NAFDAC and the state government to help reduce the price, the DPA, in a press statement by its Director of Publicity, Felix Oboagwina, said if the increment subsisted, Governor Raji Fashola's administration would go down in history as increasing the people's hardship through facilitating an unwelcome raise in the price of packaged water.” [This Day (Lagos)/All Africa]

Briefly Noted

World Bank Country Director Madani Tall in an interview with Wal Fadjri noted with satisfaction the progress made by Senegal on matters relating to poverty reduction. Still, social issues remain a concern for the development partners who are asking the Prime Minister's team efforts in this regard. [Wal Fadjri (Senegal) and All Africa/Factiva]

The World Bank has granted the Ivory Coast $308 million to help the west African country purge debt arrears and regain international financial aid, the funding institution announced Thursday. [Agence France Presse/Factiva]

The sale of Nigeria's biggest steel plant to an Indian company has been cancelled. Umaru Yar'Adua, the president, has reversed sales of several state assets perceived to favor business allies of Olusegun Obasanjo, the previous president, since he took over a year ago. [The Financial Times (UK)]

Large mining investments will push Guinea's economic growth to 4.5 percent in 2008 from 1.8 percent the previous year, a visiting International Monetary Fund team said. [Reuters/Factiva]

Africa must make higher health spending a priority if it is to stop rich nations poaching medical staff and cut deaths from the continent's five biggest killers, the African Public Health Rights Alliance said. Tuberculosis, HIV/AIDS, malaria, child and maternal mortality kill 8 million Africans every year - more than the combined populations of Sierra Leone and Botswana - [Reuters/Factiva]

Latin America is better prepared than ever to deal with the crisis in the US and the global financial markets, but should closely monitor inflation, said Institute of International Finance Managing Director Charles Dallara. [EFE/Factiva]

The World Bank expects the investment grade granted to Peru by the risk rating agency Fitch will contribute decisively in the creation of more jobs for Peruvians and a reduction of poverty. World Bank Country Director, Felipe Jaramillo, congratulated the Government of Peru for having achieved the level of investment, which was awarded to the country by Fitch Ratings, according to a press release of the organization. [EFE/Factiva]

Argentine farmers rebelling over soaring export taxes on their crops on Wednesday suspended a three-week-long strike but warned they will resume highway blockades in 30 days if the center-left government doesn't negotiate concessions. [The Associated Press/Factiva]

Honduran lawmakers signed off on a $3.23 billion spending budget on Wednesday with macroeconomic goals that put it on track for a credit accord with the International Monetary Fund, the government said. The budget foresees a spending deficit of 1.9 percent of gross domestic product, with the country's economy growing as much as 5.5 percent this year, legislators said. [Reuters/Factiva]

China's State Administration of Foreign Exchange or Safe that manages the bulk of China's $1,650 billion in foreign exchange reserves has bought a 1.6 percent stake in France's Total, the fourth-largest oil group, in a sign of its more aggressive approach to investing the funds under its control. [The Financial Times (UK)]

The International Monetary Fund on Wednesday approved $217.7 million in emergency loans to Bangladesh to help the government deal with severe damage caused by flooding and a cyclone last year. [Reuters/Factiva]

The first case of human-to-human transmission of avian flu in Pakistan has been confirmed. Tests carried out by the World Health Organisation (WHO) show that bird flu killed some members of a family in north-west Pakistan late last year. The WHO says steps were taken to prevent future fatalities in the area. [BBC News (UK)]

European finance ministries, central banks and financial supervisory authorities are set to co-operate more closely to avert cross-border financial crises under an agreement to be adopted on Friday. The accord, which will take effect on July 1, marks the EU’s most important effort to address the implications of market turmoil for financial institutions with extensive cross-border operations. [The Financial Times (UK)]

A long-awaited meeting of ministers to agree on the outlines of a new global trade deal is likely to take place by the end of May, World Trade Organisation Director-General Pascal Lamy said on Thursday. [Reuters/Factiva]

Delegates working in Bangkok on the negotiating agenda for a sweeping global warming pact clashed Friday over Japan's push for early discussions of industry-specific limits on carbon dioxide emissions, delegates and environmentalists said. Representatives from 163 countries were hammering out the working plan for talks meant to lead to a climate change agreement by the end of next year aimed at preventing rising temperatures from triggering environmental disaster. [The Associated Press/Factiva]

International agreements on how to avert climate change will hinge on the support of developing countries, World Bank President Robert Zoellick said on Thursday. That will require a solution that still allows economic growth in industrializing India, China and parts of Africa, he said in a speech at Harvard University in Cambridge, outside Boston. [The Guardian (UK) and Reuters/Factiva]

A UN convention aimed at ensuring equal rights for the world's 650 million disabled people in work, education and social life will go into force on May 3, the UN said on Thursday. [Reuters/Factiva]