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Last Updated: Friday, 9 June 2006, 00:07 GMT 01:07 UK
G8 'failing to meet aid pledges'
By David Loyn
BBC Developing World correspondent

World leaders at the end of the G8 summit
G8 leaders pledged to boost development spending
UK charity Oxfam says increases in aid from the world's richest countries are not enough to meet promises they made at the Gleneagles G8 meeting last year.

The claim comes as G8 finance ministers meet in St Petersburg.

It was at the same pre-summit meeting last year that the decision to extend debt cancellation to more countries, including Nigeria, was made.

Oxfam criticises the G8 for adding debt write-off into the total development figure to make it look better.

The G8 countries made a commitment to increase development spending by $50bn (27bn) a year by 2010.

And the raw data showing a $21bn increase in development spending in 2005 over 2004 look as if they show some progress towards that target.

The G8 countries will hold a full summit in St Petersburg in July.

'Time bomb'

But Oxfam says 80% of that figure was in the one-off cancellation of debt to Nigeria, along with cancellation of debt to Iraq.

Oxfam says that if those figures are taken out then "the underlying trend in aid by some G8 countries actually gives cause for serious concern".

The danger is that this will mask a failure to increase the underlying volume of real aid... allowing the G8 to take their foot off the accelerator

Debt cancellation has to be accounted for somewhere, and has traditionally been counted as part of the development budget - although its beneficial effect to a country in cutting repayments and interest paid out in a single year is much less than the overall capital figure that is written off.

Oxfam concedes that the debt cancellation, and other measures, have made a real difference.

"Across Africa, lifting the burden of debt is allowing millions of dollars to be directed to fighting poverty instead of repaying rich countries," it says.

But in lumping it together with other development payments, the developed world is "double counting" the money.

Oxfam says that second tranches of debt cancellation to Nigeria and Iraq in 2006 will similarly obscure the real figure this year, and challenge the G8 countries to show how they will defuse a "time bomb" when the debt repayment figures are not there in 2007.

"The danger is that this will mask a failure to increase the underlying volume of real aid in line with their Gleneagles commitments, allowing the G8 to take their foot off the accelerator."

Freak of accountancy

The Oxfam analysis of the figures finds that once debt repayments are taken out of the equation, the total increase in development assistance by the G8 countries is 8%.

Italy and the US have the largest increases, but both come from a very low base, and remain at the bottom of the table in terms of their development assistance as a percentage of GNI (Gross National Income).

The government has set a clear timetable to meet the 0.7% target by 2013 and is fully on track with its plans to achieve this
Hilary Benn
UK International Development Secretary

The Director of Oxfam Barbara Stocking said: "At the current rate of progress real aid is not rising nearly fast enough across the G8 countries to meet their Gleneagles aid commitment to increase by $50bn by 2010.

"The G8 must make clear how and when they will deliver real aid increases, to pay for vital services such as health and education."

On these figures, British payments actually reduce by 2% over the year, but this is a freak of accountancy, explained by the way payments flowed in and out of the Commonwealth Development Corporation during the period.

When this is taken into account, and the debt repayments in that one year are excluded, then Oxfam calculates that the UK figure rose by 7% in 2005.

The UK government disputes this, saying that the average annual increase is 9.2%.

It points to projects like an agreement to finance African education over 10 years, moves towards universal access to Aids drugs, and a new Financing Facility for Immunisation as signs of real progress since the Gleneagles agreement.

More than 30 years ago the most developed countries committed themselves to paying 0.7% of GNI for development assistance.

Britain's budget [leaving out debt repayments] is at less than half of this figure.

But the International Development Secretary, Hilary Benn, said: "The government has set a clear timetable to meet the 0.7% target by 2013 and is fully on track with its plans to achieve this."

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