IPS News [OPINION]: IT'S HIGH TIME THE EU FULFILLED ITS PROMISES (19 March 2007)

By Mirjam van Reisen

Brussels, 19/03/07, (IPS): Brochures published by European Union bodies handling development aid tend to convey the impression that they regularly take up the cudgels on behalf of the world’s poorest citizens.

The 30-country Organisation for Economic Cooperation and Development (OECD) in Paris has, however, recently issued a study which strips away the public relations spiel to give an unvarnished view of the EU’s activities in the wider world.

The OECD’s 2006 development cooperation report reminds us that only five industrialised countries have honoured the United Nations target of allocating at least 0.7 percent of gross national income to development aid. Four of these – Denmark, Luxembourg, the Netherlands and Sweden – are in the EU; the fifth is Norway.

Yet EU governments would be wrong to think there is any room for complacency on the grounds that they generally perform better in terms of what percentage of their wealth they give to the poor than, say, the U.S. or Japan.

The idea of a 0.7 percent target has been on the global policy agenda since the 1970s. Indeed, the Independent Commission on International Development Issues chaired by the former West German Chancellor Willy Brandt recommended that industrialised nations should attain it by 1985.

That the goal remains elusive for most wealthy nations 22 years later can only be described as scandalous. Nothing can be more reprehensible than breaking a promise to the poor.

That is not to deny that some progress is being made. Aid levels from several EU countries rose considerably in 2005 compared to the previous year – Austria by 127 percent, Belgium by 31 percent, Britain by 35 percent and Finland by 30 percent.

While these increases are welcome, it is important to step back and analyse what they involve.

The two largest recipients of aid from OECD members in 2004-05 were Iraq at 13 billion dollars and Nigeria at 3 billion dollars. However, the bulk of the aid to those countries was in the form of debt relief.

Naturally, debt relief is vital to help countries escape from poverty. And in the case of Iraq and Nigeria, today’s populations should not be saddled with debts incurred by their former dictators Saddam Hussein and Sani Abacha.

Many anti-poverty campaigners nonetheless argue that debt relief must be additional to aid if the United Nations’ Millennium Development Goals (MDGs) of dramatically reducing extreme poverty by 2015 are to be met.

Sadly, the shoddy performance of some EU donors indicates that without a major improvement the MDGs will be out of reach in sub-Saharan Africa until the next century.

In 2002 western European countries committed themselves to allocating a minimum of 0.33 percent by 2006. Italy, Greece, Spain and Portugal remain below this level.

Italy’s aid/national income ratio rose from 0.15 percent in 2004 to 0.29 percent in 2005. But there is no excuse for it not going beyond the modest target to which the Rome government, then led by Silvio Berlusconi, had committed itself. Italy belongs to that most elite of clubs, the Group of Eight (G8). And despite widespread opposition domestically, it supported the U.S. invasion of Iraq by sending troops.

If Italy is able to stump up the cash to assist a legally dubious war, then there can be no excuse for it failing to play its full role in the fight against poverty.

The OECD report also delivers a timely message to EU institutions about the growing tendency to channel money directly to the national budgets of recipients. It shows that there are discrepancies between the funds released by donors and the information recorded in the recipients’ account books.

Although direct budget support accounts for just 5 percent of all official development assistance, the European Commission is increasing its use of this mechanism. Within the next few years, it hopes that 50 percent of its aid to African, Caribbean and Pacific (ACP) countries will be delivered in this way.

The Commission’s rationale has some merits: it argues that recipients must be allowed to set their own priorities for development to work. But there are good reasons why it should proceed with caution, at least until there are cast-iron guarantees that an adequate proportion of this money is supporting elemental human needs, particularly health and education.

Officials from The Netherlands, one country making a greater use of budget support, recently admitted that they have no way of checking if such aid actually reaches the poor. The non-governmental organisation Social Watch in the West African country Benin has also described budget support as a “black box” for its economy, complaining that the end-use of this aid is extremely difficult to monitor.

Lately, the Commission has been dangling a promise of 2.6 billion dollars in aid to the ACP if they sign free trade deals known as Economic Partnership Agreements (EPA) with the EU.

Research by the United Nations and other distinguished organisations suggests that the ACP is not ready for these deals and that they could prove detrimental for the poor.

Just as crucially, the OECD report queries how the concept of ‘aid for trade’ is being applied.

In 2005, the international community signed up to the Paris declaration on aid effectiveness. Its provisions on aid for trade said it should be based on the national strategies of recipients.

Yet the OECD finds that “too often” aid for trade is assessed on its levels, rather than the results and that tools for diagnosing a need for such assistance are “relatively weak”, tending to rely on work carried out by hired consultants, with little involvement from those actually living in the countries concerned.

Next weekend (Mar. 25), EU leaders will be marking the fiftieth anniversary of the Treaty of Rome, which led to the Union’s establishment.

Meeting in Berlin, they will issue a declaration on the EU’s history, values and policies. As development aid was listed as a key activity for the EU in the 1957 Treaty, it is imperative that the declaration reflects an ongoing commitment to this activity and commits the Union to ensure that it makes a tangible difference to the lives of the poor.

Rather than issuing self-congratulatory plaudits, I would urge the EU leaders to acknowledge that they can do better. Paying attention to the OECD report would be a good way to start.

*Mirjam van Reisen is director of Europe External Policy Advisors, a Brussels-based office which conducts research on the fight against poverty.