UNITED NATIONS // As western countries renege on promises to boost development aid, the UN is turning to the oil-rich Gulf to plug the funding gap and meet global poverty-reduction targets. A progress report on the so-called Millennium Development Goals made public last week said such traditional donors as the United States, Japan and European countries are not meeting aid commitments.
Ban Ki-moon, the UN secretary general, described the report as a "wake-up call" and warned that world leaders were "running out of time" to achieve poverty-reduction goals by 2015. With recession likely to further dent western economies, Rob Vos, the report's author and a director from the UN's Department of Economic and Social Affairs, urged Gulf rulers to help shoulder the burden with petrodollar windfalls.
"Oil-exporter countries have accumulated additional wealth as a result of high oil prices," Mr Vos said. "A lot of that money is piled up in sovereign wealth funds, which sit there as a reserve with no clear purpose, except for being used as a buffer for possible shocks if oil prices go down later on. "Some countries have accumulated so much wealth that it could also be used for ? creating regional or national development funds, which could have a rate of return, but the return [would] come out of development projects in developing countries."
Burgeoning Gulf coffers have hitherto funded national development projects and takeovers of western firms. But Mr Vos said the money could be better spent, claiming the estimated US$4.5 trillion (Dh16.6 trillion) stored in sovereign wealth funds (SWFs) globally could couple with similar sums in foreign cash reserves to double the lending power of the World Bank.
While he was speaking, UAE envoys were among delegates of 26 top global SWFs meeting in Chile to agree on a voluntary code of practice that promises greater transparency and accountability. Last week's progress report on poverty reduction comes more than halfway through an ambitious UN project launched in 2000 by Kofi Annan when he was secretary general. Members agreed to reduce poverty and improve trade conditions, focusing on reducing child deaths, fighting such diseases as Aids, malaria and tuberculosis, and other problems that plague the developing world.
The 52-page document confirms what many experts have been saying for months - that the world is in danger of failing to meet its millennium goal targets. Improvements in providing debt relief to the world's poorest countries have not been met with commitments on trade and development, the report said. Donors would need to increase their development assistance by $18 billion a year between now and 2010 if aid were to reach the level of $50bn per year as agreed at the 2005 Group of Eight summit in Gleneagles, Scotland, the report said.
But even this would only bring development aid up to half the level the United Nations targeted in its plan to halve the number of people in the world living on less than $1 a day. Overall, donor countries have increased development aid since 2000, but in both 2006 and 2007 assistance levels declined by 4.7 per cent and 8.4 per cent respectively, the report said. It also described the collapse of the Doha round of global trade negotiations as a "major setback for developing countries seeking to benefit from expanding global trade opportunities in order to reduce poverty".
The Doha round was launched in 2001 to meet the UN goal of establishing an "open, equitable, rule-based, predictable and non-discriminatory multilateral trading and financial system". UAE delegates will discuss global trade and development goals with other world leaders on the sidelines of the UN General Assembly in New York this month. jreinl@thenational.ae