New data at the end of the global recession in 2010 show strong gains in philanthropy and remittances from developed to developing countries, according to the 2012 Index of Global Philanthropy and Remittances, released today by Hudson Institute’s Center for Global Prosperity.
“Our latest research shows that private philanthropy and remittances to the developing world now dwarf official government aid,” says Dr. Carol Adelman, the Center’s Director.
In 2010, the most recent year for which data are available, philanthropy and remittances from the developed to developing world were nearly twice as much as government aid ($246 vs. $128 billion). The third flow, private capital investment, made the most dramatic recovery from $228 billion in 2009 to $329 billion in 2010. These three private financial flows together totaled $575 billion, accounting for 82% of the developed world’s economic dealings with developing countries. While total government aid grew to one of its highest levels of $128 billion, it accounts for only 18% of total financial flows and continues to be a minority shareholder in international development assistance.
The 2012 Index shows that private flows from the United States to the developing world increased to $39 billion in philanthropy,$95.8 billion in remittances, and $161 billion in private investment capital in 2010. Marking a major recovery for U.S. private investment capital, this important long-term development resource accounts for nearly 50% of U.S. total economic engagement with the developing world. While U.S. official aid increased to a high of $30.4 billion, it remains only 9% of U.S. total economic engagement with the developing world.
The Center for Global Prosperity (CGP) launches the 2012 Index at a joint event with the Georgetown University School of Foreign Service today, Monday, April 2. Director of the CGP, Dr. Carol Adelman; Dean of Georgetown University’s School of Foreign Service, Dr. Carol Lancaster; and Managing Director of the World Bank, Dr. Caroline Anstey; will participate on a panel entitled Beyond Aid: How Philanthropy and Partnerships Can Drive Global Prosperity, discussing how foreign aid has been transformed by increased private monies, new financing mechanisms, and a generation of hands-on problem solvers delivering assistance faster and more efficiently than traditional government aid. Panelists will discuss what this means for prosperity in the developing world and for governments, given the declining role of official aid.
“Our new data suggest that the ever-growing foreign aid architecture of private actors, transparency, and empowered local citizenry may well be making inroads against poverty in ways that surprise even the experts,” says Adelman. “The recently-released World Bank report found a broad reduction in poverty around the world over the last 30 years and confirmed that, contrary to predictions by the World Bank itself, the global recession did not increase poverty in developing countries.”
To view the 2012 Index of Global Philanthropy and Remittances, click here.
To view the executive summary of the Index, click here.