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Most Foreign Aid Does Not Go to Neediest Countries, Report Finds

May 27, 2015

Amazing strides have been made in reducing poverty worldwide over the last quarter century -- the rate has halved since 1990, from 36% of the world's population to 18% -- but rather than clapping themselves on the back, aid organizations are now calling for rich nations to go even further, and help eradicate "extreme poverty" altogether.

Extreme poverty is defined as living on no more than $1.25 a day, a figure that encapsulates not only an absence of cash, but often of clean water, education, and even a meal. The circumstance still applies to more than 1.2 billion people, a disproportionate number of whom live in Africa, where poverty has actually increased. Yet most foreign aid goes to countries that are better off.

"We all find it quite surprising how little—32%—of U.S. aid goes to the poorest countries," says Tom Hart, North America director of the advocacy group ONE, which on Tuesday released a 127-page report calling for donor nations to designate 50% of their aid budgets to "least-developed countries."

The 50% goal is at the heart of a new global strategy against poverty, aimed at picking up with the conclusion of the 15-year international campaign known as where the Millennium Development Goals. The new effort, dubbed Sustainable Development Goals, will be articulated at a conference in Ethiopia in July, and adopted in the months beyond by assorted convocations of the international bodies ranging from the G-20 to the Committee on World Food Security.

But the brow-beating has already begun, as advocates struggle both to correct misperceptions about foreign aid among the U.S. public, and lobby Washington and other major donors to direct the roughly $140-billion they give each year to where it is most needed.

The fact is that only about 1% of the U.S. federal budget goes to foreign aid. The average American thinks it's more like 28%, according to a Kaiser poll from earlier this year. And though that American is likely to shelve reflexive objections to the spending when informed of the reality, polls show that the misperception persists year after year.

Advocates for aid believe it can be more effective with the advent of technology that allows aid dollars to be tracked at every stage, including the stages where some of those dollars have in the past disappeared into the pockets of corrupt foreign officials.

The new global strategy expects more of receiving governments -- calling for each to provide a basic package of health and education services, with help from donors as needed. For example, Liberia, which was an epicenter of the Ebola outbreak last year, spends $6 per person on basic services each year; it needs to spend $300, and requires $317 million to make up the difference.

The new strategy also calls for specifically directing aid to women and girls. "Poverty is sexist," the ONE report states, noting that by almost every measure life is harder for women and girls in the poorest countries than it is for men. But at the same time, helping females serves to lift the whole of the societies in which they are so central.

"When we invest in girls and woman, that has more catalytic results that pulls everybody out of poverty," says Eloise Todd, global policy director for the ONE campaign. Over time, that investment should be made as directly as possible, not necessarily through governments, adds Gargee Ghosh, director of policy and finance for the Bill and Melinda Gates Foundation. "We need to focus more on poor people," Ghosh says.

But the first message to rich countries is that they need to focus on the poorest. Of 29 donors, only Iceland directed more than 50 percent of its aid to the least developed countries. "Something's going really wrong in the way a lot of donors are allocating their aid," says Todd. "Finding the end of extreme poverty is going to be a lot harder than the previous 15 years."

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