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OECD development aid hits record high in 2013, Europe lags

Source: Reuters - Tue, 8 Apr 2014 14:09 GMT
Author: Reuters
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* OECD countries' foreign aid rose 6 percent

* Biggest increases from Britain, UAE

* Only five EU states have met 2015 target of 0.7 pct of GDP

By Anna Nicolaou

April 8 (Reuters) - Development aid from rich countries to some of the world's poorest rose to a record high last year, data showed on Tuesday, but contributions from mainland Europe lagged as the region clawed its way out of recession.

The Organisation for Economic Cooperation and Development (OECD), which is considering changing its definition of what constitutes aid, said states in the Paris-based club doled out $134.8 billion last year.

After two years of cuts to foreign aid budgets, that was 6 percent more than in 2012 and the highest ever level, an outcome the OECD described as "heartening".

But the gain was skewed by Britain, which increased aid by nearly a third, and the United Arab Emirates, whose contributions rose more than threefold as it offered financial support to Egypt's army-backed government during political unrest.

Of the 28 members of the OECD's Development Assistance Committee (DAC), 17 increased their overseas aid last year while 11 cut it back.

Several countries in the euro zone, which exited recession in the second quarter of 2013, paid less, including France, Greece and Portugal. The Netherlands' contribution as a percentage of gross national income was the lowest in almost four decades.

"Aid austerity is continuing across Europe as a whole, despite some positive signals from the UK," said Seamus Jeffreson, director of Concord, a European aid group.

The European Union is the world's largest collective aid donor but has made little progress towards a target of 0.7 percent of income set under the 2015 U.N. Millennium Development Goals.

Only five EU states have met the target so far: Denmark, Luxembourg, Norway, Sweden and, for the first time last year, Britain.

Britain's development aid surged 28 percent to $19 billion at a time of austerity at home, and Prime Minister David Cameron has faced pressure to divert such funds elsewhere.

The UAE increased its aid rate to 1.5 percent of GDP, the highest in the 34-member OECD, with the organisation citing "exceptional measures to address needs in Egypt".

The OECD has been debating since last year whether to alter its definition of aid, which would be the first such change since the 1970s.

It is as yet unclear what form this would take, but Concord said it was concerned the definition might be broadened, which could boost the statistics without changing the underlying value of contributions. (Reporting By Anna Nicolaou; Editing by John Stonestreet)

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