Development aid funds rise to a record high

Global funds for development aid reached a new high in the past year. The Organization for Economic Cooperation and Development (OECD) announced in Paris on Tuesday, that public funds from donor countries rose to more than 161 billion US dollars (around 136 billion euros).

This corresponded to around one percent of the amount that the recipient countries had made available for economic stimulus measures in 2020. OECD Secretary General Angel Gurría criticized this as too little. “This crisis is a great test of multilateralism and of the concept of foreign aid itself. We must make much greater efforts to help developing countries distribute vaccines, care for hospitals, and support the incomes and livelihoods of the most vulnerable helping the world to achieve a truly global recovery.”

German Development Minister Gerd Müller (CSU) announced that, with 25 billion euros, Germany was the second largest donor country after the USA and that it was meeting its international obligations. At the same time, he warned against a reduction in funds in the coming years. “The financial plan submitted by the Ministry of Finance foresees a reduction in development funds of around a quarter in the coming years.”

Chancellor Angela Merkel (CDU) had promised the developing countries 220 million euros for the fight against climate change at the end of January. “Germany shares responsibility to strengthen the resilience of poorer and the poorest countries.” The aim is to provide 500 million euros annually by 2025 to protect particularly poor people from the consequences of climate risks such as crop failures or floods.

Last year, in view of the Corona crisis, the AfD called for funds for development aid to be frozen for a year . “For a strong Germany in and after the crisis, an end to the rampant redistribution of German wealth halfway around the world”, argued the development policy spokesman for the AfD parliamentary group, Markus Frohnmaier.

According to trade and development body UNCTAD, the global economy posted its sharpest annual drop in output since records began to be aggregated in the 1940s, “with no region spared”. But especially Europe, South Africa and India did very poorly according to the latest data.

“Multilateralism has essentially lost its mojo”, said Richard Kozul-Wright, head of the Division on Globalization and Development Strategies at UNCTAD, in a year that saw an almost 4 percent drop in global output. Speaking to journalists in Geneva recently, the UN economist maintained that debt-relief initiatives for poorer countries expected by the G20 group of advanced economies had been “extremely weak”.

The crisis triggered an effective loss of 255 million full-time jobs worldwide, according to the International Labour Organization.

Many countries, even rich ones, are struggling with the cost of the Coronavirus pandemic and subsequent lockdowns. In Germany it is expected to reach €1,3 trillion according to government figures. The calculation, published by the Redaktionsnetzwerk Deutschland (RND) at the end of last year, was in a Finance Ministry response to a request by the parliamentary leader of the socialist Left Party.

The total sum includes “all aid packages, launched by the federal and state governments to date,” the loss of revenue due to the crisis and guarantees at the federal and state level for more than €826 billion, according to the report.

In France, the crisis caused by Covid-19 will cost the state 424 billion euros over three years. The sums mentioned are staggering. The Covid-19 epidemic will cost a total of 424 billion euros in 2020, 2021 and 2022 to public finances in France, said the Minister of Action and Public Accounts, Olivier Dussopt in Le Figaro, Tuesday, April 13.

The figure, confirmed by the ministry to AFP, breaks down into 158 billion euros for the year 2020, 171 billion for this year (including 56 billion dedicated to emergency measures) and 96 billion euros in 2022.

These 424 billion euros represent “the gap between the public deficits forecast before the crisis” and what the minister “finally included in the stability program which will be sent to Brussels in a few days,” according to Le Figaro. These sums take into account both reductions in tax revenue and exceptional expenditure such as the solidarity fund and partial unemployment.

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