Aid charities slams EU for inflating aid figures to world's poor

Apr 3, 2007, 13:39 GMT

Brussels - A coalition of independent European aid agencies Tuesday slammed the European Union for inflating development assistance to poor nations by including one-off debt relief measures to Nigeria and Iraq in its annual aid figures.

The statement by Concord, which represents over 1,600 European aid organizations, came after new aid figures by the Organization for Economic Cooperation and Development (OECD) in Paris showed that close to one-third of EU development assistance in 2006 did not deliver any fresh resources for poor countries.

'European governments are relying on large one-off debt cancellations to Iraq and Nigeria to fatten up their figures,' said Concord.

The aid agency said such an approach was short-sighted and gave the impression EU countries were making more money available for poverty reduction than was really the case.

'Although some European countries are moving in the right direction, most will not reach the targets they set themselves unless major improvements are made,' said Lucy Hayes from Eurodad, the European Network on Debt and Development which is part of Concord.

The aid agencies said that in 2006, nearly 30 per cent of European aid or 13.6 billion euros of reported official development assistance was inflated.

Of this amount, nearly 11 billion euros reported as official aid was in fact debt cancellation - primarily for Iraq and Nigeria.

Another 1.6 billion euros went on educating foreign students in Europe and 1 billion euros was spent on housing refugees in Europe.

As a result, the EU had only spent 0.30 per cent of (GNI) Gross National Income on genuine aid in 2006, missing its collective target for 2006 of 0.39 per cent, the aid agencies said.

Austria and France were identified as the 'worst culprits,' with agencies saying more than half of their claimed development assistance did not deliver genuine new resources for poor people.

Debt cancellation is necessary but should not be counted as aid, said Concord.

The OECD figures are an embarrassment to the EU which has promised to substantially increase aid for the poorest nations and said it intends to reach the United Nations target of allocating 0.7 per cent of national income to fight extreme poverty by 2015.

The OECD report said that the only EU countries to reach the UN target were Sweden, Luxembourg, Norway, the Netherlands and Denmark.

The EU, however, remains the largest aid donor, providing contributions representing 57 per cent of world development aid valued at 103.9 billion dollars last year. The EU is followed by the United States and Japan.