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Contributions from
the Column
Monitor
How UN missions impact
on local economies
Trade liberalisation has
born little fruit
Conference: “E-Learning
Africa 2006”
Wieczorek-Zeul and
Morales meet
Solidarity and productivity
Debate on debt relief
AIDS medication:
progress with provision
Bird flu: EU increases
export subsidies
A new role for the IMF
05/2006
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[ Official development assistance ]
Debate on debt relief
The 22 largest donor countries increased their official development assistance (ODA) to a record $106.5 billion last year – an increase of more than 30% compared with 2004. According to the OECD’s Development Assistance Committee (DAC), the ratio of aid to the gross national income of all donors rose from 0.26% to 0.33%. The DAC points out that the greatest portion of the increase can be attributed to debt relief for Iraq and Nigeria, amounting to $19 billion. Excluding debt relief, the ODA rise is of only 8.7%.
Germany increased its ODA by 30% in real terms, from $7.53 billion to $9.92 billion. The German ODA quota accordingly rose from 0.28% to 0.35%. According to DAC figures, this rise is fully attributable to debt relief. Excluding this factor, Germany’s real ODA shrunk by 9.8% in the past year. The Association of German development non-governmental organisations (VENRO) expressed its concern that last year’s figure might remain an “interim high”. On the other hand, Heidemarie Wieczorek-Zeul, German Development Minister, said that she was confident the Federal Government would meet its targets of increasing official development assistance step-by-step. As evidence, she pointed to the 7.8 % increase in her Ministry’s budget for 2006, which has been granted by the Federal Cabinet.
The Joint Conference Church and Development (GKKE) argues for debt relief only to be posted as ODA if the original loans served development purposes. In its 2006 report on the German government’s contribution to poverty reduction, the GKKE states that this was not the case for most German credits for Nigeria and Iraq, which the German government is now forgiving.
According to GKKE, it is therefore highly disputable to label relief of such debts as development assistance, even if DAC rules permit doing so. Wieczorek-Zeul rejects such criticism, saying that debt relief is a key element of poverty reduction. “Churches and non-governmental organisations have always quite rightly insisted on the cancellation of debts in the past,” the minister said.
(ell)
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