Development Aid Falls Short, While Other Financial Flows Show Rising Volatility

As the world approaches its 2015 deadline for achieving the Millennium Development Goals outlined in 2000, development aid by the 26 members of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development declined in 2012 for the second year.1 Preliminary data indicate that official development assistance (ODA) totaled $128.4 billion (in 2011 dollars) that year, down 4 percent from 2011’s $133.7 billion.2 (See Figure 1.) The 2012 figure marks a 6 percent decline from 2010, when global ODA peaked at $136.7 billion.3

The United States provided the largest amount of ODA, with a total of $29.9 billion in 2012, which was 23.3 percent of the DAC total.4 Trailing the United States are the United Kingdom, Germany, France, and Japan.5 When tracking ODA as a percentage of gross national income (GNI), however, a different picture emerges.6 Since 1970 the United Nations has set 0.7 percent of GNI as the target for ODA: in 2012, only Luxembourg, Sweden, Norway, and Denmark exceeded this target.7 (See Table 1.) In comparison, the U.S. figure was only 0.19 percent.8 Not surprisingly, given the severity of the Eurozone crisis, the 15 European Union members of DAC decreased their assistance by a total of 7.4 percent, with the most severe cuts coming from Spain, Italy, Greece, and Portugal.9

It should be noted that DAC governments are not the only ones that provide development assistance: according to a 2012 U.N. report, non-DAC countries donated a total of $7.2 billion in development aid in 2010, with Saudi Arabia providing almost half of the total.10 Furthermore, assistance from private sources was estimated at $56 billion that same year, but reporting on such flows is much weaker than for government funds.11

Aid & Cash Flows - Figure 1

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