Decades of politicization largely influenced and inarguably shaped how Official Development Assistance (ODA), or more popularly known as “aid”, is delivered to and received by the Global South. This briefer lifts and synthesizes accounts from the recently published Reality of Aid Report 2023 that dissects patterns and trends in development cooperation over the last 30 years, in the hopes of coming up with alternatives for a future where people’s rights are championed.
This briefer also serves as a supporting piece to already-existing debates on the future of aid and development cooperation—of what it should become to live up to its core purpose of alleviating communities from poverty and eradicating divisive inequalities. This document lists some points on how the Report reimagines aid and development cooperation as truly inclusive and people-centered, opposite of narratives that speak of inflation, securitization, and privatization.
The Past: Peeking through history
The Report touched on the 30-year history of development cooperation in its “Across Changes, Conflicts and Crises” chapter. Historically, neoliberalism and globalization shaped the politics and economics of ODA. It was mentioned that ODA is the most “stable” source of financial inflows for developing countries, at least looking at the historical resource flows coming from member countries of the Organization for Economic Cooperation and Development-Development Assistance Committee or OECD-DAC, which remained consistently fluctuating over the past four decades, despite major financial crises such as the 1990 Recession and the 2008 Financial Crisis.
The unprecedented rise of neoliberalism during the Thatcher (United Kingdom) and Raegan (United States) regimes led to rampant privatization and trade liberalization across different regions of the world. It redefined agriculture and land use, exacerbated resource extraction, and overall intensified imperialism in the Global South. Over the next decades, the Global South will incur an insurmountable debt from the imposition of loans over grants as ODA, and will suffer from resource drain due to outward value transfer at the cost of at most USD 3 trillion per year, the highest ever recorded from 1990 to 2017.
Changing behaviors of DAC member countries in response to their 0.7% Gross National Income (GNI) commitment have also contributed to the overarching trends that influenced ODA. One example is the vital role of Japan and the US during the 1990s in leading DAC countries’ aid allotment. Sweeping most of the 90s as one of the largest DAC donors, Japan cut its aid budget in the beginning of the third millennium after being saddled by increasing budget deficits. The post-9/11 catastrophe and succeeding development policy shifts of the United States will later on explain their fallout as one of the largest donors as well, reallocating their budgets to the growing and intensifying conflicts and militarism in fragile contexts.
The Present: Breaking through protracted crises
The constant failure of donor countries to allot 0.7% of their Gross National Income as ODA, among others, has caused insufficiency and inadequacy for the Global South to chart genuine development for their constituencies. Although the Report only mentioned 2022 figures, the latest 2023 numbers from OECD-DAC revealed the usual narratives: only five donors reached their targets and two of these countries would not even qualify with the 0.7% threshold had they not accounted in-donor refugee costs (IDRC) which are actually driven by emerging conflicts and existing wars. Year after year, donor countries still manage to find loopholes in reporting their contributions, and civil society has long called them out on inflating their aid reports.
The Report recurrently highlights the presence of unmet ODA, the expanding role of the private sector, heightened geopolitics, lacking climate finance, dominant aid regimes, and growing humanitarian assistance as the prevailing trends in development cooperation that affect today’s disbursement of global aid. Instead of grants, donors provide their ODA as loans which lead to the worsening public indebtedness of developing countries and derail these nations from improving the quality of life of its constituents.
Rising militarism has steered how ODA is delivered too. Intensifying geopolitical tensions among the US, China, and Russia have caused these countries to deflect their budgets to defense. From 2013 to 2022, global military spending grew by 19%, reaching a record-high amount of USD 2.2 billion as of 2022. Moreover, the climate crisis has also opened new doors on how aid is being allocated. The planet will get warmer over the next decades, and the pledge of providing USD 100 billion climate financing by 2025 is still far from achievement. To make matters worse, climate financing is now slowly seizing a huge part of ODA. International financial institutions (IFIs), such as the International Monetary Fund and World Bank, on the other hand, are mobilizing the private sector to finance and dominate development cooperation that will eventually languish the public sector investment, promote profit maximization, and undermine ODA concessionality.
These above-mentioned issues are not just trends alone; these are part of the whole gamut of multiple, intersecting, and protracted crises of climate, hunger, poverty, and conflicts that have long crippled the possibility of developing societies and advancing people’s rights in which aid could pragmatically champion and add value into.
The Future: Shifting the narratives
Ultimately, a future that is not reliant on aid, or any financial assistance from “more developed” nations, but centered on sovereignty and global solidarity in terms of economic cooperation, is not only what civil society clamors for those that are painstakingly bearing the brunt of protracted crises, but more so the relief, liberty, and development that those left behind rightfully deserve.
The Report underlines creating a future that is truly people-centered and rights-based; reassessing the current international financial architecture; and repackaging and scaling up ODA as imperatives. We need to hold donor countries more accountable to their pledge, and it will only transpire if policies will be revisited and realigned according to people’s needs over donor countries’ geopolitical and financial interests. The Report imagines a future where:
- Aid is decolonized – Decolonizing aid requires shifting the power from dominant Northern donors to Southern local actors that are severely impaired by centuries of colonialism and plunder of natural resources. In treating aid with a renewed narrative as reparations, all actors involved recognize the historical relationship and responsibility of colonizers with developing countries, and the present neo-colonial policies and structures that are perpetuated in development cooperation today. A reparative lens ensures that accountability is centered on the Global North and would not pass on the burden to the maldeveloped Global South countries.
- ODA is delivered – Donor countries should ramp up and exceed their ODA commitments, and the conversation must shift towards treating undelivered aid as “aid debt”. To date, donor countries owe developing countries around USD 4 trillion worth of undelivered aid. In treating unmet ODA as “aid debt”, developing countries would have more leverage in a political and economic context to drive their own development and reclaim centuries-worth of resources stolen from them. To ensure that the Global North will be obligated to pay what they owe to the Global South, civil society has been proposing that the UN advance a UN Convention on International Development Cooperation. Development co-operation understood as reparations is fair and just in the face of centuries of colonialism and exploitation.
- Grants are prioritized and loans are canceled – The Report reaffirms its call to push back against the trend of increasing loans in ODA. Reforming the debt architecture should go beyond debt cancellations to avoid insolvency and debt distress—it further means reforming the political paradigm by veering away from and moving beyond short-term, “charitable” responses of loans and technical assistance that are only aligned with donors’ interests.
- Development cooperation is centered on the needs of the Global South – Over the years, development has been mainly catered to the geopolitical and economic interests of the Global North, especially of US foreign policies sprawling globally through militarization and seizure and extraction of developing countries’ resources. Geopolitical tensions such as the war in Ukraine and genocide in Gaza have influenced how aid is being delivered, which is substantiated by increasing military budgets in the guise of humanitarian action; limiting funding to humanitarian responses (not integrating development and peace aspects to actions); and/or by inflating ODA through IDRC.
- USD 100 billion climate finance is achieved by 2025 – Climate change has been impeding the achievement of the Agenda 2030 Sustainable Development Goals (SDGs). The worsening climate catastrophe each year ravages the Global South, specifically Africa which needs USD 50 billion by 2050 to cover the cost of climate adaptation, and in the Asia Pacific region where climate-related disasters are causing food insecurity and instability. Upholding the USD 100 billion climate finance means treating it as “new and additional” ODA, and should not be another way to inflate aid from donor countries.
- Public finance is mobilized against privatization of development financing – Efforts were made throughout decades since the rise of neoliberalism and trade liberalization to mobilize the private sector in leading, funding, and maneuvering development goals. Such efforts, often led by IFIs such as the International Monetary Fund, are usually burying developing countries into mounting debt. Priority towards public sector financing should be reinstated and narratives around private investment as a catalyst to fill development financing gaps should be shifted. IFIs must also be held accountable for their rights violations among communities that resulted from austerity policies and other conditionalities. There must be a truly independent body, not attached to these IFIs, monitoring their transparency and accountability as well as addressing people’s complaints filed against them.
- Development is sustainable, people-centered, climate-resilient – Maintaining at its core the humanitarian-development-peace (HDP or triple nexus) approach, actors involved in eradicating poverty, ending hunger and food insecurity, building a climate-resilient future, forwarding gender equality, and other aspects of societal, economic, and political development should continuously safeguard the fundamental rights of people.
Download the Reality of Aid Report 2023 here. Also available in Spanish.
Photos by: Peter Casier, UN Geneva, and EU Civil Protection and Humanitarian Aid via Flickr