Rich countries are breaking the promises they made to increase aid to the world’s poorest countries warns international agency, Oxfam today. The warning follows the publication of the 2006 overseas aid figures by the OECD which shows that aid from the richest 22 countries fell by 5.1 per cent compared with 2005, the first time aid has fallen since 1996.
Like last year, today's figures are also massively inflated by one-off debt cancellations to Iraq and Nigeria. While cancelling the debts of poor countries is vital in the fight against poverty, the Iraq and Nigeria debt deals are counted in a way that hugely overstates their impact on poverty and masks the true picture of aid levels. Oxfam estimates that this inflation amounted to $13 billion in 2006.
 
“The fall in aid is a terrible indictment of the world's richest countries and the real figures show that the picture is even worse. These promises are a matter of life and death for the world’s poorest - millions of people will continue to die every year from preventable diseases, 80 million children will not go to school and millions will be condemned to a life of poverty,” said Max Lawson of Oxfam.
 
The figures released today by the Development Assistance Committee (DAC) of the OECD show that the total aid provided in 2006 was $103.9 billion down from $106.8 billion in 2005. This equates to just one tenth of world military spending. While a number of countries including Germany and France have recorded a slight increase in aid, it is not nearly enough to reach the targets they promised. However the UK and Spain have bucked the trend with 13 per cent and 20 per cent increases respectively. Japanese aid fell by almost 10 per cent and the country has now been eclipsed by the UK as the second largest donor of aid after the US.
 
Aid works.  Increased aid has enabled the Tanzanian government to more than double its education budget over the last four years and substantially increase its health spending. The result is an extra 3.1 million children in primary school, infant mortality rates have been reduced by a third and mortality rates of under-fives have fallen by almost a quarter.
 
In 2005 the G8 promised to increased aid by $50 billion annually by 2010. Although far from what is needed to end poverty, this money could pay for every child to go to school, save the lives of 500,000 women who die each year in pregnancy and childbirth, and help train the six million teachers and health workers urgently needed around the world.
 
“This is deeply embarrassing for the G8, and particularly for the Germans who are chairing this year’s summit in two months time. The G8 must prove its promises were more than empty rhetoric and set binding timetables which clearly show when and how it will deliver real aid increases. This should be long term, predictable aid to build strong public services particularly in health and education,” said Lawson.
 
Oxfam warns that unless immediate action is taken by the G8, next year, with no further debt cancellation for Nigeria and Iraq left to be counted, aid figures will plummet.
Notes to Editors
1. Included in the OECD’s $103.9 billion aid figure is $19.2 billion in debt relief, mainly to Iraq and Nigeria. When debt relief is excluded, aid fell by 1.8 per cent.

2. Debt relief for Iraq and Nigeria accounted for $14 billion of the aid figures. However Iraq was not paying its debt so does not benefit. The benefit to Nigeria is approximately $1 billion each year so this means the figures are inflated by $13 billion.