The Development Report-2006 on 'Equity and Development' says though these rich countries committed more, but in 2003, the ODA was only 0.25 percent of donor countries' GNI that is much below the UN target of 0.7 percent.
For European Union (EU) members ODA as a share of GNI was 0.35 percent during 2003 and 0.36 percent in 2004. While for Development Assistance Committee (DAC) member countries like Australia, Canada, Japan, New Zealand, Norway, Switzerland and United States, the combine ODA share was the same: 0.25 percent for 2003 and 2004.
It reveals these countries are far behind the commitment they made earlier and it would be difficult for them to achieve the target.
At the international conference on financing for development in Monterrey, rich countries committed to increasing their aid flows significantly. Besides, it was also resonated to help more countries achieve Millennium Development Goals.
Net aid flows indeed increased significantly in 2002-04 in nominal and real terms, reaching $78 billion. These include ODA provided by countries that are members of the Development Assistance Committee (DAC).
Non-DAC countries also provide ODA. The largest non-DAC donors are Saudi Arabia ($2.4 billion in 2003 out of total $3.4 billion), Republic of Korea ($366 million), UAE ($188 million) and Kuwait ($133 million).
According to the report, three major factors were behind these increases: continuing growth in bilateral grants (but with a large share going to technical cooperation, debt forgiveness, emergency and disaster relief and administrative costs).
The second factor was the provision of reconstruction aid to Afghanistan and Iraq by the US government (in 2004, $0.9 billion to Afghanistan and $2.9 billion to Iraq). The last factor was the depreciation of US dollar.
The report adds the High Indebted Poor Countries (HIPC) received less in real terms in 2004 than a year before. On the positive side, the International Development Association (IDA), the soft lending arm of the World Bank, received replenishment for 2006-08, which is at least 25 percent higher than the previous one.
These recent increases notwithstanding, aid flow remains low not just in relation to need but also in comparison to domestic human development and safety net programmes that aim to equalise opportunities and ensure against deprivation.
According to the report, if rich countries deliver on their monetary commitments, this alone would add around $18 billion to development assistance by 2006. It further simulates 0.44 percent ODA for EU members and 0.30 percent for Development Assistance Committee members for 2006.
In comparison with other uses of public resources, aid was low, as agriculture subsidies for instance were almost five times larger than aid in 2002, the report adds.
Japan, the European Union and United States had subsidies equal to 1.4, 1.3 and 0.9 percent of their respective GDPs and gave aid to the tune of 0.23, 0.35 and 0.13 percent, respectively, the report says.