16th July 2000

The rich are still tight-fisted towards the poor

In absolute terms, Japan has remained the number one donor, providing an average of about $11 billion in overseas aid annually, followed by the US with over $8 billion (declining from a high of $19 billion in the mid-1980s) and France with nearly $6 billion.

Viewed in the context of their overall wealth and total population, however, the quantum of aid is relatively small.

The most appropriate yardstick to measure their generosities leaves them at the bottom of the totem pole.

On a per capita basis — the amount of aid doled out in relation to a country's population — the top performers are three Nordic countries: Denmark, Norway and Sweden Of the top five donors in this category, Denmark provides about $323 in aid per person, Norway $299, Luxembourg $265, the Netherlands $194 and Sweden $177.

At the bottom of the table are the US, whose ratio of aid to population, is about $32 per person, Italy $40, Austria $56, Spain $35 and Portugal $26. France stands at $98 and Japan at $84.

It is shameful that the US, the most prosperous and successful country in the history of the world, should be one of the least generous in terms of the share of its gross national product (GNP) it devotes to helping the world's poor," complains Secretary-General Kofi Annan.

US President Bill Clinton admits that foreign aid, which amounts to less than one percent of the US federal budget, has been declining since 1985.

But Clinton's plans for more aid to the world's poorest nations have been thwarted by a right-wing, Republican-dominated Congress which has wielded its axe heavily on the US foreign aid budget.

The costliest peace is far cheaper than the cheapest war," says Clinton who remains helpless in the face of a stubborn Congress which is moving toward a policy of splendid isolation in US foreign policy.

With the exception of outright grants— which are very rare these days— all foreign aid is conditional because the money has to be used to buy goods and services only from the country providing the funds.

Japanese aid money, for example, cannot be used to buy French utility vehicles or French aid money to buy Japanese farm equipment. The London-based NGO, Action Aid, says that donor countries are placing commercial interests over their commitment to help the world's poor by providing aid only on the condition that they buy goods and services from companies in donor nations.

Japan and France, it said, were the worst culprits resisting attempts to remove these conditions.

In 1970, the UN General Assembly set a target of 0.7 percent of gross national product (GNP) as the quantum of official development assistance (ODA) that each of the rich countries was expected to provide developing nations.

But so far, only four countries - Denmark, the Netherlands, Norway and Sweden - have met or exceeded the ODA target. The Netherlands is the only non-Nordic country in the group.

Meanwhile, in a report released last week, the UN Children's Fund (UNICEF), says the world's richest nation, has one of the highest ratios of children living in poverty amidst plenty. According to the report, more than one in five children in the US (about 22.4 percent) are poor compared with one in 38 in Sweden (2.6 percent) and one in 20 in Denmark (5.1 percent).

Not surprisingly, children were best cared for in the Nordic countries. The low levels of poverty in the five Nordic countries— namely Denmark, Norway, Sweden, Finland and Iceland— reflect the high levels of investment in family policies.

The study also says that one child out of six - amounting to about 47 million children - lives in poverty in the world's 23 rich nations.

The 23 countries are all members of the Paris-based Organisation for Economic Cooperation and Development (OECD) which includes both industrialised as well as industrialising countries that meet certain criteria: open market economy, democratic pluralism and respect for human rights.

Of the OECD members, Mexico has the largest number of children - more than one in four, or 26.2 percent - living in poverty. With US taking second place, the other three worst child poverty rates are in Italy (20.5 percent), Britain (19.8 percent) and Turkey (19.7 percent).

The two donor countries with the highest levels of child poverty, namely Italy and the US, contribute the least aid when considered as a percentage of gross national product (GNP).

Brian Atwood, the former head of the US Agency for International Development (USAID), has lambasted the Clinton Administration for allowing itself to be pushed around by Congress.

Right now, we are fat and happy," he says, "And we are growing very complacent, because we think we hear a lot about the democratic revolutions around the world. But what we don't hear about is this growing gap between rich and poor, and that is a poisonous mix that is going to create crises in the future."