The European Union was the largest single donor of official development aid (ODA) in 2020, providing US$80 billion which represents practically half of the total global ODA which stood at US$161 billion. Nevertheless, EU countries are still far from reaching 0.7% of Gross National Income (GNI) which is the OECD target for annual spending on development assistance.
What is ODA?
Official Development Assistance is a category used by DAC (Development Assistance Committee) to measure foreign aid, i.e., to indicate the level of international assistance given by developed states to developing countries. The countries that are eligible to receive ODA are low- and middle-income countries with the estimates of their revenue being based on GNI.
In 2015, when wealthy nations signed up to the UN’s Sustainable Development Goals which are supposed to be reached by 2030, they pledged to allocate 0.7% of their GNI for development aid.
How much ODA has the EU raised?
EU aid increased by 7.8% in real terms to US$72.7 billion thus the assistance grew from 0.41% of GNI in 2019 to 0.50% GNI in 2020. However, only four EU countries and two European countries were able to meet the target of 0.7% GNI, i.e.; Sweden, Norway, Luxembourg, Denmark, Germany, and Great Britain. The graph below shows which countries donated the most and the least, bearing in mind both the donation in relation to GNI and the nominal donation.
Fig.1. ODA 2020 preliminary data
Pandemic caused growth in EU ODA
The resources that were channeled by the EU last year were higher partly due to the pandemic outbreak as EU member states decided to deliver more than US$9 billion to poor countries in pandemic-related aid and Norway, which is not an EU member, allocated US$300 million.
The Commissioner for International Partnerships, Jutta Urpilainen, stated:
“Team Europe (the EU states including their implementing agencies and public development banks) has significantly increased its contribution of Official Development Assistance compared to last year. This is crucial at a time when so many people in our partner countries face significant health, economic and social challenges linked to the COVID-19 crisis. The latest figures show that 10 years ahead of the due date to deliver on our commitment to provide 0.7% of our collective GNI as ODA, we are more determined than ever to achieve this target.”
How do the EU countries calculate ODA?
Although the EU managed to increase development aid, it cannot be ignored that some countries included the money they spend on those refugees staying in their territories as development assistance. In fact, the money spent on refugees does not significantly help to improve the situation in their countries of origin. For instance, during the refugee crisis that occurred between 2015 and 2016, it may seem that ODA increased but when the refugee influx slowed down, ODA also dropped.
It is also worth noting that not all projects that are conducted in developing countries, thanks to development assistance, prevent migration.
ODA is a reflection of policy
“Sadly, ODA is always more a reflection of the politics and society in donor countries rather than the issues of need in developing countries,” said Andrew Sherriff from the independent think-tank, the European Centre for Development Policy Management.
As he added:
“Even if ODA is on rise, it omits some of Sustainable Development Goals such as universal education or healthcare which was highlighted even more by the pandemic when not all students were able to join the remote classes that happened due to lockdowns as they did not have proper resources to take part in these. Delivering COVID-19 vaccines to poor countries within the COVAX scheme also turned out to be challenging as the funds channeled towards this target are not sufficient.”
