Mathias Cormann calls for more foreign aid despite role in Australian Cups | OECD
Mathias Cormann called on developed countries like Australia to increase foreign aid funding, despite his previous role in a government that shaved off billions of dollars in aid.
Cormann, the former Australian finance minister who now heads the Paris-based OECD, said he wanted to send a ‘very strong message’ to donor countries to increase official development assistance ‘and certainly not reduce it’ .
The aid sector welcomed the comments on Wednesday and called on Australia’s major political parties to pledge during the federal election campaign to increase the aid budget.
Australia ranks 21st out of 29 developed countries when foreign aid spending is measured as a percentage of gross national income, according to OECD figures released on Tuesday evening.
Australia’s official development assistance (ODA) increased by 4.5% between 2020 and 2021 due to an increase in bilateral grants as part of renewed Covid-related support, but this still did not account for than 0.22% of Australia’s gross national income.
The most generous countries analyzed by the OECD were Luxembourg (0.99%), Norway and Sweden, while Australia was a few places behind New Zealand (0.28%) but slightly ahead of the States (0.18%).
The figures were released by Cormann, who successfully campaigned for the job of OECD secretary-general with the strong backing of the Australian government.
In the Abbott government’s first budget, introduced in 2014 when Cormann was finance minister, the Coalition announced it would save $7.9 billion from the aid budget over five years.
This was achieved by maintaining ODA at $5 billion per year, with plans to resume indexation from 2016-17.
But the mid-year update released by Joe Hockey and Cormann in December 2014 additional savings announced aid budget of $3.7 billion over four years.
In then-treasurer Scott Morrison’s 2018 budget, the government announced it would freeze ODA spending at $4 billion a year, before resuming indexation in 2022-23.
Cormann was asked Tuesday night if he saw a danger of donor countries cutting development funds for poor countries in light of the war in Ukraine.
“I hope not,” he said. “And so far, the evidence is to the contrary. I mean, so far, the evidence is that ODA funding has been very resilient, has continued to grow, despite very serious budgetary constraints faced by donor country governments.
Cormann said that Russia’s “unprovoked war of aggression against the Ukrainian people” could have “wider negative consequences in terms of food security, nutrition, affordability and general impacts in terms of poverty in other parts of the world”.
“So the need is going to be higher, not lower,” Cormann said.
Cormann said the latest OECD figures “give us a lot of hope that the trend is going in the right direction, despite some of the challenges of late, and we’d like to think that will continue in the future.”
The Australian Council for International Development said New Zealand, Iceland, Spain and Hungary all ranked higher than Australia in their contributions as a percentage of gross national income.
The council’s chief executive, Marc Purcell, said Australia needed to make ODA increases long-term.
“We need to start investing 0.5% of our income in development cooperation and humanitarian aid again. It used to be a bipartisan engagement,” Purcell said.
“The Greens have committed to 0.7%, while Labor have committed to 0.5%. While we welcomed the coalition government’s additional $1.5 billion investment in recent years, it did not specify where it wanted to direct the international development budget. We need all parties to agree on 0.5 and a timeline to get there.
Purcell said developing countries were “bearing the brunt of Covid-19 and the ripple effects of crises like Ukraine”. He said that this year around 274 million people would need humanitarian assistance and protection, with needs increasing in the Sahel, Yemen, Afghanistan and Myanmar.
More broadly, OECD data released by Cormann showed that foreign aid from official donors reached a record high of $179 billion in 2021, up 4.4% in real terms from 2020.
Cormann defended the aid cuts in December 2014, saying the government was doing it “reluctantly” and “rather if we didn’t have to”, but he blamed the Labor opposition for standing up to it. other savings. “Essentially, we didn’t have a lot of choice,” said the finance minister at the time.
In March 2015, Cormann said he believed the government had “done everything we could” to save money on foreign aid. However, the government continued to make further savings on this part of the budget.
In May 2018, Cormann defended the budget decision to freeze spending at $4 billion a year, saying that level was “appropriate” until “we return to a strong and sustainable surplus position.”
This is not the first pivot since Cormann took the OECD position.
Last year, Cormann said carbon pricing and equivalent measures “must become significantly stricter and better globally coordinated, to properly reflect the cost of emissions to the planet and put us on a path to truly achieve the climate goals of the Paris Agreement”.
The Abbott government has repealed Australia’s carbon pricing system.