Aid from rich nations is likely to fall by at least $9.5 billion by the end of 2012 – the biggest drop in aid for 15 years, according to new calculations by international agency Oxfam on the eve of the Nov. 3-4 G20 Summit.
Oxfam says the figures show that poor people are being asked to pay for rich country austerity cuts. It calls on G20 leaders to reverse the cuts and agree to pursue new ways of raising money for poor countries being hit by the economic crisis and climate change.
Mark Fried, Oxfam Canada policy coordinator, called on Prime Minister Stephen Harper to unfreeze Canada’s aid budget. "Canada froze the aid budget despite having the strongest economy and smallest deficit in the G7. Why must the world’s poorest people pay to put our fiscal house in order?"
Fried also said: "Freezing Canada's assistance to the poorest people in the world does practically nothing to balance the government's books. But it means fewer children in school and more women dying in childbirth. Canada must do better."
$9 billion would be enough to educate more than half the 67 million children who cannot afford to attend school today. Aid cuts are already hitting poor countries now, like Bangladesh, Benin and Mozambique which are losing around half their basic education budgets.
Oxfam’s figures are based on existing and predicted OECD government aid budgets for 2010-12. More than $11 billion in cuts in official development assistance by the United States, Italy, Spain, the Netherlands and Japan are only partly off-set by a big increase in Australian aid and smaller rises in the UK and Germany, which keep their aid spending constant as a proportion of national income. Meanwhile, aid levels are flat-lining in other countries, including France and Canada.
Oxfam joins Bill Gates who will press G20 leaders later this week to support “Robin Hood” taxes on transactions by banks, hedge funds and other financial institutions and to agree to a fair international carbon charge on shipping. Oxfam also says that developing countries are key to helping to drive global growth – so these aid cuts will only undermine that potential.
"The best part of the proposed tax on financial transactions is that the revenues are earmarked to fight poverty and climate change. Surely the Prime Minister will not block this effort by Canada’s G20 allies to keep their promises to the world’s poor."
Oxfam spokesperson Max Lawson said "this represents the gravest threat to aid levels in 15 years. Rather than cutting aid, rich countries need to deliver on the promises they have made to the poorest people who are suffering additional hardships caused by the economic crisis and climate change."
An FTT has attracted heavyweight support from France and Germany, financier George Soros, and 1,000 economists including Nobel Prize winners, among others. Oxfam is looking for a coalition of countries to take advantage of the G20 Summit to signal their willingness to press ahead with their own FTTs.
Oxfam is also pressing for a fair carbon charge on rising greenhouse gas emissions from international shipping. This could cut emissions while raising $25 billion a year to help boost the Green Climate Fund.