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For Immediate Release
May 27, 2005
Sandy Krawitz, Media Officer, ActionAid USA
202-835-1240 or 202-492-7207 (cell)
sandy.krawitz@actionaid.org
US Foreign Aid Greatly Exaggerated, Says New Study
The world's richest nations greatly exaggerate their aid to poor
countries - with the US, the worst offender, giving only 0.02% of its
income in real assistance, says a study released today by ActionAid
International.
The report, which can be downloaded at
http://www.actionaidusa.org/Action%20Aid%20Real%20Aid.pdf says that
some two-thirds of the money donated by the world's wealthiest
countries is in actuality "phantom aid" that is not genuinely
available for poverty reduction in developing countries.
Phantom Aid is aid that is diverted from poor nations for other
purposes within bureaucratic aid systems. This includes aid that is,
among all G7 donations:
not targeted for poverty reduction, estimated to be worth US$4.9
billion
double counted as debt relief, totaling US$9.4 billion
overpriced and ineffective- Technical Assistance, estimated at US$13.8
billion
tied to goods and services from the donor country, estimated at US$2.7
billion
poorly coordinated and with high transaction costs, estimated at US$9
billion
too unpredictable to be useful to the recipient - lack of data
prevents an estimate
spent on immigration-related costs in the donor country; totaling
US$1.5 billion
spent on excess administration costs; totaling US$0.4 billion.
In total, says the study, at least 61% of all donor assistance from G7
nations is phantom aid, with real aid in 2003 accounting for just US$27
billion, or only 0.1% of combined donor income. Nearly 90% of all
contributions coming from the United States and France are considered
phantom aid.
Says ActionAid International USA Policy Analyst, Rick Rowden, "what
this comes down to is that the US government is spending the tax
dollars of well meaning Americans on bloated, inefficient, and
manipulative programs that do little to help the poor. This is
inexcusable when you consider that a child dies every two seconds from
hunger somewhere in the world."
The report argues that the share of real aid is unlikely to increase
unless a system of genuine accountability, which balances the interests
of donors, recipients, and the poor, can be put in place.
In addition, the report calls for a new International Aid Agreement
that will hold donor countries accountable. This Agreement should
include clear policies from developing countries on the criteria for
accepting aid; mutual commitments from donor and recipient countries;
national and international review forums; and new mechanisms for
increasing the amount and predictability of aid to the world's
poorest countries.
Every day, 800 million people go to bed hungry, 30,000 children die of
preventable disease, 100 million children are denied education. Three
children a minute die due to unsafe water and sanitation. Approximately
30 children die a minute of hunger.
NOTES TO EDITORS
ActionAid International is a nonprofit organization bringing relief to
some 13 million people in Africa, Asia, Latin America, and the
Caribbean every year. Working hand-in-hand with 2,000 civil society
partners, 90% of ActionAid's employees herald from developing
countries.
http://www.actionaidusa.org/realaid.php
For Immediate Release
May 27, 2005
Sandy Krawitz, Media Officer, ActionAid USA
202-835-1240 or 202-492-7207 (cell)
sandy.krawitz@actionaid.org
US Foreign Aid Greatly Exaggerated, Says New Study
The world's richest nations greatly exaggerate their aid to poor
countries - with the US, the worst offender, giving only 0.02% of its
income in real assistance, says a study released today by ActionAid
International.
The report, which can be downloaded at
http://www.actionaidusa.org/Action%20Aid%20Real%20Aid.pdf says that
some two-thirds of the money donated by the world's wealthiest
countries is in actuality "phantom aid" that is not genuinely
available for poverty reduction in developing countries.
Phantom Aid is aid that is diverted from poor nations for other
purposes within bureaucratic aid systems. This includes aid that is,
among all G7 donations:
not targeted for poverty reduction, estimated to be worth US$4.9
billion
double counted as debt relief, totaling US$9.4 billion
overpriced and ineffective- Technical Assistance, estimated at US$13.8
billion
tied to goods and services from the donor country, estimated at US$2.7
billion
poorly coordinated and with high transaction costs, estimated at US$9
billion
too unpredictable to be useful to the recipient - lack of data
prevents an estimate
spent on immigration-related costs in the donor country; totaling
US$1.5 billion
spent on excess administration costs; totaling US$0.4 billion.
In total, says the study, at least 61% of all donor assistance from G7
nations is phantom aid, with real aid in 2003 accounting for just US$27
billion, or only 0.1% of combined donor income. Nearly 90% of all
contributions coming from the United States and France are considered
phantom aid.
Says ActionAid International USA Policy Analyst, Rick Rowden, "what
this comes down to is that the US government is spending the tax
dollars of well meaning Americans on bloated, inefficient, and
manipulative programs that do little to help the poor. This is
inexcusable when you consider that a child dies every two seconds from
hunger somewhere in the world."
The report argues that the share of real aid is unlikely to increase
unless a system of genuine accountability, which balances the interests
of donors, recipients, and the poor, can be put in place.
In addition, the report calls for a new International Aid Agreement
that will hold donor countries accountable. This Agreement should
include clear policies from developing countries on the criteria for
accepting aid; mutual commitments from donor and recipient countries;
national and international review forums; and new mechanisms for
increasing the amount and predictability of aid to the world's
poorest countries.
Every day, 800 million people go to bed hungry, 30,000 children die of
preventable disease, 100 million children are denied education. Three
children a minute die due to unsafe water and sanitation. Approximately
30 children die a minute of hunger.
NOTES TO EDITORS
ActionAid International is a nonprofit organization bringing relief to
some 13 million people in Africa, Asia, Latin America, and the
Caribbean every year. Working hand-in-hand with 2,000 civil society
partners, 90% of ActionAid's employees herald from developing
countries.
http://www.actionaidusa.org/realaid.php
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