EU Accused Of Artificially Inflating Its Aid Figures

You hear stories of millions of pounds given to foreign countries in terms of aid and you wonder what happens to all this money, why do these countries not improve themselves? Well here is the answer...

Taken from The Independent, UK, 11 May 2007
By Jerome Taylor

European countries are artificially inflating the amount of aid they claim to be donating to poor countries and nearly half of those surveyed have not even met their promised aid targets, according to a damning new report released today.

Charities across Europe have accused their governments of making "misleading claims" about their aid figures by including items which should not be counted as development aid, including debt relief and money spent on foreign students and refugees.

The problem is so widespread that the report calculates at least one third of all the aid Europe gives to the developing world is not genuine aid but "inflated aid".

"One way or another half of the donor countries are missing their genuine aid targets," said Jasmine Burnley of ActionAid, one of the charities that helped compile the report.

"The fact that items such as debt relief and refugee costs are allowed to be counted is a problem with aid accounting and needs to be addressed."

In 2002 the 15 member states that belonged to the EU at the time committed to substantial increases in the amount of aid they would give to poor countries and set a target of donating at least 0.39 per cent of their gross national income (GNI) by 2006. That pledge was then reiterated in 2005 during the run-up to the Gleneagles G8 summit which placed reducing poverty in the developing world at the top of its agenda.

The EU claims it has already met its 2006 target but today's report, which was compiled by more than 1,800 NGOs across Europe, argues that once inflated aid is taken away, genuine aid actually fell far short of the target, only reaching 0.31 per cent. If the current trend continues poor countries will have received €50bn (£34bn) less from Europe by 2010 than they have been promised.

Four countries, Spain, Portugal, Greece and Italy, failed to even reach their promised 2006 targets in the first place. Italy remained the smallest contributor of foreign aid in Europe despite being a G8 member.

Meanwhile Germany, France and Austria, three of Europe's largest economies, only managed to meet their 2006 targets with the help of inflated aid, the report revealed.

France and Austria were named as the two worst offenders for exaggerating their aid figures, with "inflated aid" accounting for at least half of the amount of money they give.

Official figures show the UK has met its promised targets but campaigners yesterday criticised the Government for continuing to include foreign debt, which includes debt relief to Iraq, in its annual aid figures. "If you go down that road then one day military assistance will end up being counted as aid," said Marco Serena from the development charity BondUK. "Aid should be aid that reduces poverty. Full stop."

But a spokesman for Britain's Department for International Development defended the inclusion of debt relief in its aid figures.

"Debt relief frees up reserves to improve health care and education. For example, the debt deal agreed at Gleneagles has helped Zambia provide free healthcare for thousands of people," he said.

A breakdown of the EU's debt relief also revealed that the vast majority of the debt written off by European countries last year was almost entirely in relief for just two countries, Iraq and Nigeria - €8bn out of €10.5bn in 2006.

The report's authors are particularly scathing about the way European countries use debt cancellation to top up their aid figures. "Aid is about providing new resources to solve current problems," the report states, "not about clearing European balance sheets to rectify mistakes of the past - mistakes that were often a shared responsibility of lender and borrower."

Last year European governments marked spending on foreign students and refugees inside their borders as an aid expense, adding at least €2.7bn to the total inflated aid quota.