Aid hits record in 2008, targets need effort-OECD
*OECD donors need extra $10-15 billion to meet commitment
*Financial crisis, drop in trade "serious effect" on poor
*Oxfam says G29 must rescue "babies not just bankers"
(Repeats with bullet points, adds OECD, Oxfam, Shetty quotes)
LONDON, March 30 (Reuters) - Development aid from the world's biggest donors rose to a record level in 2008 but they will need to make substantial efforts to meet targets for 2010 because of the economic crisis, the OECD said on Monday.
The 22 members of the Organisation for Economic Cooperation and Development gave a net $119.8 billion in development aid, which includes funding for education, healthcare and economic growth programmes, in 2008.
That was a rise of 10.2 percent from 2007 in real terms -- but the OECD donors' aid had fallen in 2006 and 2007, partly because of the end of large debt relief packages.
The Paris-based OECD said a survey of donors' spending plans suggested aid would rise 11 percent between 2008 and 2010, but donors would need to add a further $10-15 billion to meet their 2010 commitments.
"Only a special crisis-related effort can ensure that the 2010 targets for aid are met, which is even more important now that the economic crisis is reducing developing countries' growth prospects and their ability to make progress towards the Millennium Development Goals," it said in a statement.
In 2000, world leaders agreed on U.N.-backed targets to reduce extreme poverty by 2015. At the 2005 Gleneagles G8 summit, major donors pledged to double aid by 2010, amounting to an extra $50 billion globally, including $25 billion for Africa.
Excluding volatile debt relief grants, bilateral aid to Africa from OECD donors rose 10.6 percent in real terms in 2008. Net assistance was $26 billion, of which $22.5 billion went to sub-Saharan Africa, the OECD said.
HEAVY BURDEN
The OECD said the financial crisis was having a "serious impact" on poor nations as world trade suffers its biggest drop in 80 years and commodity prices and remittances fall. Aid will be crucial in balancing the sharp decline of financial flows to developing countries, it said.
Eckhard Deutscher, chair of the OECD Development Assistance Committee, said the 2008 aid increase was no cause for complacency amid the global economic downturn.
"There is a very distinct possibility that the (developing countries) end up as the worst-hit victims while already being the most vulnerable," he told reporters in London. "The need for aid has increased dramatically."
Deutscher called on leaders at Thursday's G20 meeting to redouble efforts to meet aid commitments and coordinate a response to the challenges facing poor nations.
The aid agency Oxfam said global aid levels were minimal compared with the trillions of dollars mobilised to prop up ailing financial systems in rich countries.
"(Insurer) American International Group's executive bonuses alone could have paid for enough teachers for seven million children in Africa," Max Lawson, Oxfam's head of development finance, said in a statement. "We need to see the G20 move fast in London this week to rescue babies, not just bankers."
U.N. Secretary-General Ban Ki-moon has urged G20 leaders to support a $1 trillion stimulus plan for developing countries.
Salil Shetty, global director of the U.N. Millennium Campaign, called on rich nations to provide a $300 billion one-off fund for 2009/2010, and to maintain their aid pledges in absolute dollar terms rather than as a percentage of gross national income (GNI) because of the economic contraction.
Major donors have repeatedly pledged to raise their aid spending to 0.7 of GNI, but some -- including the United States and Japan -- still give far less. OECD donors gave 0.3 percent of their combined national income in aid in 2008, projected to rise to 0.39 percent by 2010. (Reporting by Megan Rowling, editing by Tim Pearce)
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