Foreign Aid Budgets: Who Spends What?

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ESSEX, England — Research has shown that most people greatly overestimate the amount governments spend on foreign aid budgets. If you had to guess how much of your country’s gross national income is spent of foreign aid as a percentage, what would your answer be? 20 percent? 10? Less? And which countries do you believe contribute the most to the world’s poor?

The truth about foreign aid budgets may surprise you.

Big Spenders:

United Kingdom — Earlier this year the UK government reached an international target to spend 0.7 percent of Gross National Income (GNI) as aid for the world’s poorest nations. Exact figures will be known in October, but provisional figures released by the government show that the UK spent £11.4 billion on foreign aid for 2013 or around £180 per UK citizen – that’s nearly 20 billion U.S. dollars.

The 0.7 percent target was part of the Millennium Development Goals, a set of international measures agreed to in the year 2000 with the aim of reducing global poverty by 2015 – an ambitious target which is now unlikely to be met.

The G07 Club — By reaching the 0.7 percent target the UK has become one of the biggest contributors of foreign aid in terms of a percentage of GNI. The UK now belongs to the little-known G07 club which includes Norway, Sweden, the Netherlands, Denmark and Luxembourg — only these countries have managed to spend 0.7 percent of its GNI on Foreign Aid.

Recent Developments:

China — On July 11, 2014, China released the China Foreign Aid white paper, which revealed that China had spent $14 billion on foreign aid between 2010 and 2012. Aid came in the form of grants, interest-free loans and concessional loans with over half of the 14 billion dollars going to Africa, where China has been developing its economic interests in recent years.

Australia — Australia spent 0.34 percent of its GNI in 2013, and this is set to be reduced.

Governments often scrutinize foreign aid budgets at times of austerity and public support for foreign aid usually declines. The Australian Government has recently announced an overhaul to the Australian Aid budget, which will be cut by 7.6 billion Australian Dollars over the next five years. Foreign aid will be capped at $5 billion until the 2015-16 financial year.

Who Could Do More?

The United States — As a percentage of gross national income, the U.S. spent just 0.19 percent on foreign Aid in 2013. In real terms this equals $31.55 billion.

The U.S. public hugely overestimates how much the government spends on foreign aid; a recent poll by the Kaiser Family Foundation shows that a majority of Americans believe 28 percent of the U.S. annual budget gets spent on foreign aid.

The truth is that the most powerful and influential nation on earth spends less the one percent of its annual budget helping the world’s poor. The U.S. has the ability to do a lot more and is failing to meet its obligation to spend 0.7 percent of GNI on foreign aid set by the Millennium Development Goals.

In times of austerity, foreign aid budgets often come under fire and are perceived as a luxury spend and not as a necessity. Reductions in the amount of foreign aid Australia will be spending in the coming years may well reflect this trend. The UK government’s muted celebrations of having met the 0.7 percent target on foreign aid show an awareness of the potential unpopularity of this great achievement.

Only a handful of countries have met the 0.7 percent target as set by the Millennium Development Goals and the U.S. not is not one of them. Oxfam America points out the sad truth, that Americans spend more on candy, lawn care and soft drinks a year than on foreign aid.

Charles Bell

Sources: The Guardian 1, The Guardian 2, Global Post, Publish What You Found
Photo: FutureForeignPolicy

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