Reaching 0.7% of GNI on aid? Aid Effectiveness must not be ignored

On the opposition benches, the Labour Shadow Team led by Harriet Harman was not convinced. They launched a website titled, "Keep the Promise", pushing for the 0.7% target to be passed through Parliament. The question is: What exactly is this demanding figure of 0.7% of GNI that the Coalition government has set and the Labour Party is so eager about? Will that help development if a country spends 0.7% of its income on aid?

This abstract figure of 0.7% of a nation’s GNI was suggested in the late 1960s with the Dutch economist Jan Tin Bergen proposing a 0.75% target for donor countries. This was reworked to the figure of 0.7% by the World Bank appointed Pearson Commission. In 1970, the United Nations General Assembly tabled Resolution 2626, where paragraph 43 stated that “Each economically advanced country will progressively increase its official development assistance...to reach a minimum net amount of 0.7 percent of its gross national product at market prices by the middle of the decade.” This set the ball rolling for the 0.7% target.

Despite this target being more than 40 years old, only a couple of countries, notably some Nordic Countries, have surpassed the level of 0.7%. Todd Moss and Michael Clemens stated that “no rich country (prior to 2005) had actually promised to give that target."

With the formation of the DFID in 1997, UK aid has grown at a dramatic pace. In the 2010 UK General Election all three major parties pledged to spend 0.7% of GNI on foreign aid, or Official Development Assistance (ODA). However, Moss and Clemens have argued that it is an outdated and irrelevant target that no nation should be concerned about. They draw upon econometric data to show that the 0.7% figure was based on growth rates of the past. They further argue that is a too abstract a figure and that it is at best a “rallying cry” for pro-aid proponents.

However, there’s nothing wrong with following a “rallying cry” target, even if it is outdated. After all, the UK is committed to the Millennium Development Goals (MDGs) which themselves are abstract targets. Aiming to hit a historic aid target, in fact, affirms the UK’s interests in helping those in dire need.

Labour’s actions in pushing for the 0.7% target to be approved in Parliament has given this issue more weight than it perhaps deserves. In fact, that seems to be the main issue that the shadow team is working on, besides their commitment to helping females in the developing world. However, this emphasis disguises the need to say what ODA really is. ODA is not simply charity but is always given with strict conditions which favour certain economic and political ideologies.

In the last few decades, the dominant ideology has been that of Neoliberalism, whereby the free market knows best and that the state should stand aside. While it has caused poverty and global inequality, Neolibealism remains the hallmark of most donors' ODA today including that of the DFID. Therefore, aid is not simply charity and there is no easy correlation between giving more aid and saving more lives. Aid can be increased up to 0.7% of GNI, but if the political ideologies accompanying it are still anti-developmental in practice, then it is of no use to provide such a figure.

Donors in recent years have noted that aid figures are not just the issue and in fact have reached certain agreements such as the Paris Declaration on Aid Effectiveness. However, the Labour team seems to paint the 0.7% figure as the crucial goal to be met. The constant emphasis on the figure of 0.7% constructs the idea that a successful aid policy is only about achieving a random and possibly outdated figure. Aid should also be about changing the old ideas and creating progressive development, not simply saving lives in the short term.

Posted on July 2, 2011

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