worlds-richest-countries-owe-57-trillion-debt-to-poor-oxfam-summary

Context: Fifty years after rich countries agreed to give 0.7 per cent of their gross national income (GNI) in aid, they have failed to deliver $5.7 trillion to the globe’s poorest, according to a study by Oxfam.The 0.7% commitment was established by the UN in 1970.

Key findings of the study: Fifty Years of Broken Promises

  • According to the study, the figure is nine times larger than sub-Saharan Africa’s stock of external debt at the end of 2019 of $625 billion.
  • Poor countries lost out around $114 billion a year since rich countries reneged on their ‘solemn promise’ to deliver the aid, Oxfam said.
    • The aid that poor countries lost as a result of donor countries’ inaction is an immeasurable debt that could have brought great changes to humanity, according to the report.
  • Prevailing disparities: The wealth of the world’s richest man $185.6 billion in October 2020 is greater than the sum of all international aid budgets $152.8 billion in 2019.
  • Government expenditures on aid: Governments spend more than twice as much subsidising fossil fuels $320 billion in 2019 than they do on aid. 
  • If wealthy nations had delivered on their aid commitments 
    • It would go a long way towards providing the additional $4.8 trillion needed between 2019-2030 to meet all 17 United Nations-mandated Sustainable Development Goals in the world’s 59 lowest-income countries.  
    • Donors would have contributed to the financial gap of $3.9 trillion gaps required to achieve the health SDG worldwide between 2016 and 2030.

How aid helped?

  • The aid played an important role in tackling development and health challenges, poverty and inequality between 1970 and 2020.
  • Helping children: 
    • Thirty-four million children finally got the chance to go to school as a result of the aid package agreed at the 2000 Dakar World Education Forum.
    • The Civil Society Education Fund has supported national coalitions in 60 countries to advocate for better policies and more resources for education.
  • Health Programs:
    • The health programmes supported by the the Global Fund to Fight AIDS, tuberculosis and malaria saved more than 27 million lives since 2000
    • The Global Polio Eradication Initiative galvanised funding to vaccinate children, saving an estimated 18 million of them from paralysis and eradicating polio in many parts of the globe.
  • Aid during COVID-19:
    • The high income countries spent just 0.3 per cent of their GNI on international aid in 2019. 
      • Only five countries — Luxembourg, Norway, Sweden, Denmark and the UK — met or exceeded the 0.7 per cent target, report added.
    • The donor countries have also violated international standards by diverting grants to support their national or commercial interests.

The non-profit group, Oxfam, have called for a renewed political commitment to international aid and a move from a charity-based system to one based on justice.

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