Two international relief organizations have criticized industrialized nations for cutting aid to the world's poorer nations by $740 million in 2007. They fear the global financial crisis will exacerbate the situation.
Many Western government are spending less on aid then they set as a target three years ago
Levels of aid dropped from $104.4 billion in 2006 to $103.7 billion in 2007 (81.3 billion euros to 80.8 billion euros), according to a report presented by relief organizations terre des hommes und Agro Action in Berlin on Thursday, Oct. 30.
Germany is the second biggest international aid donor in absolute terms after the United States, but it is still far from reaching the 2015 target of 0.7 percent of gross domestic product, agreed by the European Commission in 2005. At the moment it stands at around 0.37 percent of GDP.
"Measured according to its economic strength, Germany is in position 12 and thereby has a middle ranking among the OECD donor countries," said Peter Mucke, the managing director of terre des hommes.
What counts as aid?
Organizations are afraid nations will cut back aid more due to the financial crisis
Only a fifth of German development aid actually reaches the countries that need help. A large part is spent on administration, the aid groups said. German Chancellor Angela Merkel, according to a report by Spiegel Online, would also like to declare money spent on military missions abroad as aid.
The organizations also attacked the uneven distribution of aid. Last year, Afghanistan, China and India were the biggest recipients of German aid. The world's poorest countries received considerably less.
The NGOs fear that these countries will suffer even more in the light of the world economic slowdown.
"We notice that there is a certain reluctance to invest money and to buy goods," said Agro Action Secretary General Hans-Joachim Preuss.
He said that could led to a drop in international demand for production from developing countries. In addition, financial institutes in industrialized countries are already pulling their investments out of developing countries to cover their liquidity needs, according to Preuss.