Poor countries, already hard hit by the global economic downturn, are now facing cutbacks in foreign assistance from traditional donors saddled with rapidly expanding deficits.
The worldwide recession has driven 50 million people into extreme poverty, said the World Bank and the IMF, which have exhorted rich countries to live up to promises to boost development aid.
“There’s a risk that these promises will not be kept if the crisis deepens,” warned Jose Gijon, head of the Africa-Middle East department at the Organisation for Economic Cooperation and Development.
Shanta Devarajan, chief economist for Africa at the World Bank, said: “The fiscal pressure that developed countries are facing, especially to address the problems of their citizens, is so high that it will be hard to get political support to maintain the level of foreign aid.”
He said a 2005 pledge from the G8 industrialized powers to double aid to Africa, made when the world economy was flourishing, had already fallen about US$20 million short of the target before the latest crisis erupted late last year.
“If during the boom period they were unable to meet these commitments, I’m wondering what is going to happen now that we’re in a deep recession,” he said.
Emmanuel Frot of the Institute of Transition Economics in Stockholm described development aid as an “easy target” for governments anxious to trim spending.
He said his research had shown that six countries that had suffered an economic slowdown in the 1990s, including Japan and the US, had in one year cut their overseas assistance by 13 percent.
Aid volumes came to a record last year but have now begun to slide. Italy has reduced its overseas development budget by 56 percent and Ireland by 10 percent, while Latvia has abandoned such initiatives altogther, the European Network on Debt and Development said.
Oliver Buston of the non-governmental organization ONE has noted that in addition to a fall in aid amounts, there has been a worrisome shift “toward more loans and less and less grants,” which could trigger a “debt crisis.”
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