Official: EU committed to increasing aid despite financial crisis

Business Materials 24 November 2008 16:15 (UTC +04:00)

The European Union is committed to increasing aid to developing countries despite the negative effects of the global financial crisis, an official from the European Commission's development department said Monday.

"The financial crisis can't be used as a pretext for cutting development support," Maciej Popowski, director for EU development policy horizontal issues, told journalists in a video conference. "We can't force anyone to meet their targets... but the EU is serious about its commitments."

Developing nations have avoided much of the immediate effects of the financial crisis due to their limited exposure to global markets, reported dpa.

However, economists are warning there will be knock-on effect in terms of a reduction in aid inflows as well as remittances, foreign direct investment and economic growth.

The EU promised to increase development aid to 0.56 per cent of its Gross National Income by 2010 and 0.7 per cent by 2015 in order to meet the Millennium Development Goals (MDGs), a series of ambitious UN targets aimed at improving the plight of the world's poorest by 2015.

However, campaigners believe that the EU promises, and those made by other developed nations, are unlikely to be met because of the financial crisis.

Even prior to the crisis, former UN secretary general Kofi Annan warned that at the current rate of progress G8 nations would fall 40 billion dollars short of their promises to double aid to Africa by 2010.

Donor nations are meeting in Doha from November 29-December 2 to discuss aid targets, the first serious opportunity to address the effects the financial crisis will have on aid commitments.

Popowski said the EU, which currently accounts for around 60 per cent of global Official Development Assistance (ODA), would be putting pressure on other nations, such as the US and Japan, to increase development aid at the meeting.

He warned that a failure to meet the MDGs would result in problems for richer nations through issues such as increased migration.

"We are living in a global world and the cost of not meeting the MDGs will be borne by everyone," he said. "We need to tackle the root causes. ... We are all interconnected."