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Historic change to aid rules allows use of funding when lives are at stake

Historic change to aid rules allows use of funding when lives are at stake

November 8, 2017 @ 2:05 PM
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Aid money can now be used to deal with humanitarian crises in wealthy countries after changes to the existing international rules were agreed at a meeting in Paris on Tuesday.

In a historic move, donor countries will be able to use money earmarked for development to respond to emergencies regardless of the recipient country’s wealth. Under the existing rules, crisis-hit countries are unable to receive official development assistance (ODA) if they are deemed too wealthy on the basis of their gross national income.

ritain called for a change to the rules following the devastation caused by Hurricane Irma, which hit the Caribbean in September. Under existing rules, some small Caribbean islands, formerly aid recipients, are judged too rich to qualify for aid, which is supposed to focus on poverty reduction.

The British overseas territories of Turks and Caicos, Anguilla and the British Virgin Islands all have gross national incomes exceeding $12,235 per capita. This meant they were ineligible for aid when the hurricane struck.

Under the new system, ratified by the development assistance committee of the Organisation for Economic Cooperation and Development (OECD), middle-income countries may now be reinstated as eligible if they suffer a long-term economic decline, providing that no aid is diverted from existing recipients.

The UK international development secretary, Priti Patel, said:“We’ve made huge progress on ensuring official development assistance can be used when vulnerable nations are struck by crises or natural disasters. Today’s agreement is a real step forward. Progress on this, and the other reforms we have confirmed today – including boosting aid for UN peacekeeping missions – show that by working patiently and constructively with our partners we are able to drive through change and modernise the rules.”

While the current system has been criticised, it was designed to prevent donors from bending the rules and ensure that funding reported as aid was genuinely supporting poverty alleviation in poorer countries.

Appetite for reform meant many more organisations participated in this year’s OECD talks, from civil society representatives to UN bodies and foundations, although developing countries are yet to join the table.

The rare change to aid rules aside, the committee also clarified how money can be used to support refugees. Under the new system, donors will have to separate out funds supporting refugees once they arrive in host countries. Temporary sustenance costs, such as food and shelter, will count as aid; integration expenses, like training or job-seeking support, will not.

While concerned that aid is still being spent in donors’ own territories rather than in developing countries, civil society groups welcomed the explicit exclusion of costs like security screening, border control and detention centres, saying that the clarifications will promote greater transparency.

Other reforms include doubling the percentage of contributions to UN peacekeeping missions – such as UK troops sent to South Sudan – that count as aid, from 7% to 15%. This follows agreements last year that made more security and counter-extremism spending eligible.

Reaction to the changes from civil society has been mixed. Amy Dodd, director of the UK Aid Network, said: “Some matters were agreed and some areas will need more work, but on one thing the consensus seemed clear – we have to keep the focus on being effective. That is critical to making sure all our aid is high-impact, value for money and delivers real change for people living in poverty.”

Oxfam International’s executive director, Winnie Byanyima, said: “This week at the Paris aid meetings we needed government donors to agree strict rules that, when they partner up with the private sector, it is done in the interests of the poorest people. That did not happen. Instead, we leave worried that governments are diluting the fight against poverty.”

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