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EU needs to keep ODA promise and implement other development commitments

08-04-2011

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On 6 April, the OECD and the EU released figures for official development assistance flows in 2010. While the highest ODA levels ever where reached, donors are failing to reach their promises made in 2005 and the EU did not meet its collective target of 0.56% of GNI. Some countries, such as Germany, fell significantly short with reaching an ODA level of 0,38% only, despite strong economic growth. And prospects for increasing ODA in the future are not bright unless new financing for development can be mobilised. Besides the quantity, the quality of EU aid and its overall approach to development also deserves extra attention. Europe wants to play a greater role on the world stage in order to contribute to poverty reduction worldwide and tackling global challengesBut there are challenges to live up to the EU’s ambition. Not only on meeting ODA commitments, but also in accelerating progress in implementing the international aid effectiveness agenda set out in the Paris Declaration and Accra Agenda for Action and in the emerging debate on broader “development effectiveness. ECDPM sets out in a Talking Points blog posted this week where efforts are needed to ensure that all EU policies contribute to the Union’s development goals. This is particularly urgent in view of the upcoming modernisation of EU development policy and negotiations on the EU’s post-2013 multi-annual financial framework.

In 2010, net official development assistance (ODA) flows from the 24 members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC) reached USD 128.7 billion the OECD announced on 6 April. This is the highest real ODA level ever.  Net ODA as a share of gross national income (GNI) was 0.32%. But when comparing the 2010 ODA outcome with the promises made in 2005 at the G8 Summit and other fora, this still represented a shortfall of about USD 19 billion.  Only a little over USD 1 billion of the shortfall can be attributed to the economic crisis the OECD says. The remaining gap of USD 18 billion was due to donors that that did not meet their ODA commitments. The OECD has also just completed a comprehensive survey of donors’ future spending plans, preliminary findings suggest slower aid growth ahead.

The European Development Commissioner, Andris Piebalgs, also presented the 2010 preliminary figures on ODA spent by the EU (not all of the 27 Member States are covered by the OECD report) on 6 April. EU aid reached a total of €53.8 billion (0.43% of GNI) – the highest amount of ODA ever spent by Europe – confirming the EU’s position as the largest donor providing more than half of global aid funding. But this falls short of EU commitments of spending 0.56% of GNI in 2010. Only nine Member States reached these targets and a substantial collective effort is still needed in order to achieve the goal of 0.7% of GNI by 2015.

Financial innovations needed

Development cooperation has not been an easy ‘sell’ during the global recession. Aid budgets have been difficult to sustain when public expenditure cuts have been the order of the day. There is also public scepticism over the positive impact of aid. Development news hardly ever presents success stories, usually, we read about misery, need and the lack of progress. That is why initiatives like “Living Proof”, a new campaign website launched by the organization ONE, which focuses on showing “real stories of the incredible progress being achieved by some of the world’s poorest people” are so important, especially at a time when preparations are also ongoing for the launch later this year of negotiations for the next 5-10 year Financial Perspectives for the EU’s Budget. Given that the current economic climate does not bode well for a strong increase in overall ODA levels, it will also be important for EU governments to explore all possibilities to mobilise new financing for development. The introduction of a financial transaction tax, for instance, could provide substantial amounts of financing. The G8 and G20 Summits this year offer an opportunity to take this forward.

More is not enough

Besides the quantity, the quality of EU aid and Europe’s overall approach to development also deserve extra attention. Global challenges have already led to new thinking and new approaches to international development cooperation which moves beyond the traditional aid debates (focused on poverty eradication, aid delivery, the Paris and Accra aid effectiveness agenda) and fully embraces the global agenda for international cooperation (focused on issues such as climate change, security, trade and migration). And this debate on moving from aid effectiveness to “development effectiveness” is continuing in force now in the run up to the High-level Forum on Aid Effectiveness in Busan in November.

Europe wants to play a greater role on the world stage in order to contribute to poverty reduction worldwide and tackling global challenges. But there are challenges to live up to the EU’s ambition.Greater efforts are needed to ensure that all EU policies contribute to the Union’s development goals. The application of ‘policy coherence for development’ (PCD), which is enshrined in the Lisbon Treaty, has remained more of an aspiration than a reality. For example, while the collective contribution of the Union towards development cooperation amounted to €53.8 billion in 2010, the Union is also known for its agricultural subsidies and for policies in sectors like fisheries which overwhelm the impact of aid. This is why PCD is so important. The EU has an ambitious results-oriented PCD Work Programme, but the main challenge will be that all actors play their part in the complex choreography of promoting PCD. ECDPM’s recent paper “EU Policy Coherence for Development: from moving the goalposts to result-based management?” argues that the only way for Europe to move forward with PCD and consolidate its international credibility and legitimacy under the present multitude of global challenges is through further strengthening its technical competencies and showing ample ‘global public guts’ through its interventions and decisions. This will hold true for the many challenges coming up in reforms of key EU policies such as the Common Agricultural Policy and the negotiations on the future EU multi-annual budget framework.

Finally, the EU needs to improve cooperation between Member States so that the EU works as one. This effort could save between EUR 3 to 6 million. The European Consensus on Development and the EU Code of Conduct on Complementarity and Division of Labour provide valuable frameworks for EU donors to work together in developing countries, but progress on the ground has proven to be slow. To speed up progress, there is a need for a more systematic assessment of comparative advantages of EU donors, encouraging EU representatives at the country level to take the issue forward. There should also be better information sharing among EU donors, and an effort to unlock the potential of the new EU delegations in partner countries to facilitate a more effective European contribution to development on the ground.

This post draws from a previous Talking Points blog post on the February 2010, European think-thanks joint Memorandum titled ‘New Challenges, New Beginnings: Next Steps in European Development Cooperation’ and on ECDPM’s annual Challenges Paper.

 

Thanks also to ECDPM Policy Officer Niels Keijzer for his advice on this blog post.

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