Aid giving by rich countries falls for a second year: OECD

BRUSSELS (REUTERS) - Development aid from rich countries to some of the world's poorest fell for a second year in a row last year, as big European donor countries hit by years of debt crisis cut their spending.

Data released by the Paris-based club of rich countries, the Organisation for Economic Cooperation and Development (OECD), on Wednesday showed a 4 per cent fall in aid last year by its Development Assistance Committee (DAC) members to US$125.7 billion (S$155.6 billion). DAC comprises 15 European Union countries, along with the United States, Australia, Japan, Korea, and others.

It is the first time since 1997 that aid spending has fallen for successive years, with a 2 per cent drop in 2011.

Stung by austerity cuts to manage budgets, most EU countries cut their aid spending, with large cuts by countries hard hit by the crisis, such as Italy, Spain, Greece, Portugal and Ireland.

"It is worrying that budgetary duress in our member counties has led to a second successive fall in total aid," said OECD Secretary-General Jose Angel Gurria.

Two years after the Arab Spring wave of uprisings in North African countries toppled governments and resulted in a surge in giving to the region, aid to Africa has trailed off.

Africa, as a whole, saw aid drop by almost 10 per cent since 2011, to roughly US$29 billion.

Some countries managed to maintain a UN goal of spending 0.7 per cent of their total economic activity on aid, in spite of the EU's ongoing debt crisis. Sweden, Denmark, the Netherlands and Luxembourg exceeded that target.

Britain is set to begin spending at the 0.7 per cent target in its 2013-14 budget, but British Prime Minister David Cameron has raised the possibility of diverting hundreds of millions of pounds from aid to defence spending.

European aid group Concord said the dramatic drop in foreign aid by Spain, of almost 50 per cent, meant that some Spanish NGOs had to pull out of projects in progress.

The EU, collectively the world's biggest aid donor, said budget cuts made this year will not allow it to meet the 0.7 per cent UN aid target.