Aid and new money

What Tony Blair said in Parliament after Gleneagles is not true:

On aid and debt relief, in respect of the new money aspect, I am somewhat puzzled by some of the people who have been claiming that it is all recycled money. It is absolutely clear to me that the EU commitment is additional, the Japanese commitment is definitely additional, and as far as I am aware, Canada and the US are agreeing to double their aid from their present position. Although people keep saying that there is an issue about whether it is new money, it seems to me certainly true that it is, at least the vast bulk of it.

If we deliver on what has been promised, yes, we can say that the millennium development goals will be met; but, obviously, we have got to deliver on it.

Here are the numbers of the additional pledges made during 2005. The UN Millennium Project estimated that in 2010, ODA would need to be $152 bn (in 2003 prices)  That’s about $160 in 2004 prices. 

My estimate based on DAC projections is that $114 bn had been pledged by September 2004 for 2010; which has been increased during 2005 to pledges totallying about $128bn.  That is an increase in pledges during 2005 of just $14 billion. Of that, the bulk ($9 billion) is due to promises from Germany and Italy, both of whom have cautioned that their increases are subject to fiscal priorities at the time.   There would need to be an additional $33 billion pledged by 2010 to reach the UN Millennium Project estimate of what is needed.

It is true that if $128 billion were achieved, this would be an increase of around $50 billion compared to 2004 levels. But at most $14 billion of that increase is additional money pledged during 2005, and it is not safe to count on about half of that.

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