Europe questions ‘official development aid’

Europe may be making it easier for member states to fulfill their promises with regard to development aid. Today the European Commission will publish a Communication, that questions the traditional criteria used to define ODA (Offical Development Assistance). Those criteria are being closely watched by the Organisation for Economic Co-operation and Development (OECD).
In the document “Policy Coherence for Development - Establishing the policy framework for a whole–of–the-Union approach”, Europe stresses the importance of other financial flows to developing countries and at the same time tends to widen the definition of ODA, according to development ngo’s.
This would open the possibility for member states to take into account other financial efforts, which before weren’t recognised as ODA, and thus make it easier for them to comply with the 0,7 pct-norm for spending on development aid.
What do ngo’s think about the European document “Policy Coherence for Development - Establishing the policy framework for a whole–of–the-Union approach?
Interview (complete version) with Romain Philippe, Policy Coherence for Development (PCD) Officer at Concord, the confederation representing European NGOs for relief and development at European level. Concord represents over 1600 NGO’s.

1. Why does the Commission bring out this kind of communication right now?


There are two contexts to be known. The first is that there is a real danger that EU members will fail on ODA promises. This means ODA budgets will be reduced, and aid will continue to be inflated with “non-aid items”. The effects of the financial crisis are being used by governments as an excuse to reduce aid budgets, but this is not the answer to the woes of the global economy, and given how much has been spent on rescue packages for the financial industry, it is shocking that we have seen aid cuts from European governments this year.
However, this communication opens the door to including other actions and policies by the EU as “development” when there is no evidence that this is what they will achieve. It comes now because they are looking for a way out of their promises. The second is that the Commission will now publish the second report on PCD. This concept is highly political. It is policy coherence FOR DEVELOPMENT.
We know that number of EU policies are not PCD compliant, in fact the opposite. The Communication on Raw materials for example was very clear about that: « 5 Favoriser l’accès durable aux matières premières dans le domaine de la politique de développement en ayant recours à l’aide budgétaire, aux stratégies de coopération et à d’autres instruments ». So also in this respect, EU an Member States will not stay on track.
This communication with the Whole of the Union approach combines ideas to overcome both problems. It widens the concept of development cooperation without establishing any criteria to do so, taking the debate away from its hard won focus on poverty reduction, and narrows the concept of PCD, reducing it to little more than an exercise in accountancy.

2. Which essential statements would you retain of this document?


There is positive language recognizing the importance of a more systematic approach to PCD and proposing to involve developing countries more in dialogue on coherence. The communication is forward looking in recognizing that the challenge to take forward PCD has been big, and that there has not been sufficient political will to do so, whilst stating that it remains key to development. This is however, immediately contracdicted by the proposal to move away from PCD towards a “political priority” focus area, which completely fails to tackle the underlying need to ensure coherence of EU policies for development.

3. Is it a prelude to a shift in development policies of member states? So yes, in which way?


I would say: Yes, this does act as a prelude to a shift in development policies, by widening what can be considered as development cooperation (and in the future ODA) away from poverty reduction, and by abandoning the focus on policy coherence for development. We may not see the change immediately, but the EU’s willingness to focus on the contribution to development of its policies which are first and foremost “high on the EU agenda” signals a shift to a more EU self-interested development agenda. What is also immediately clear, is that it means a shift in the importance by which development cooperation is considered. For sure there will be less money, and clearly less regard to PCD for other policy areas.

4. The text is quite vague and not really ambitious?


Although there is not a lot of detail on the specifics of the proposed policies, it is quite clear about the direction, in which the commission and some member states want to orient the ODA and the PCD debate. It must also be viewed against the context of the April Package which although along the same lines as this communication, gives much clearer guidance on which direction EU is trying to take development cooperation towards a more political agenda.
In addition, this communication is very clear that the EU will begin measuring these other types of financing that ODA is helping to leverage – but which we feel are not necessarily aimed at development objectives – and even states that the new “PCD work programme” will influence discussions around future financial perspectives.

5. Which important steps are taken, in your opinion?


The ODA+ concept is very vague, and this will dilute the work done by DAC on criteria for what can be considered ODA. For PCD the big change is, that now, the Commission is proposing that some selected policies should try to find synergies with development cooperation, meanwhile, the idea that all policies should be monitored if they respect the need of development is now abandoned!

6. Do you think that Europe is setting out the ground to expand ODA and so, loosen existing criteria on Official Development Aid? Ngo’s are afraid that this will allow member states to take into account other ‘aid-money’, such as relief for the effects of climate change in Africa.


As above, this is something a number of MS are keen on, and there have been ongoing discussions around this for some time. We already see a number of MS counting climate change financing. Our analysis (AidWatch reports) shows that MS have long been inflating aid with spending on refugees, students and debt, and there is much willingness from some MS to officially widen the definitions to include many other items. The communication is clear that these other flows it will leverage are distinct from ODA, but nevertheless, it also clearly opens up the door for discussions on the definitions of ODA and what can be considered to be development cooperation to take place.
Discussions on the DAC criteria should be done in that forum and they should be transparent. NGOs are not necessarily against widening these criteria, it would be a matter of arguments. Adaptation and Mitigation costs are sometimes linked to development and so really “daccable”, but this is not the case for all of them. And of course, not all development programs can fit to climate change.
Crucially, we have to recognize, that the concept of ODA+ has not come at a time where there is plenty of money and from actors who respect their commitments. It comes from countries like Italy, a poor aid performer and consistent aid inflater, which has long been keen to reverse its aid commitments. This sends a clear signal about the political origins of this approach.
The reason for this is clear: the challenge of climate change – which requires mass global mobilisation of resources, is already being used as an excuse for European governments not to meet hard won aid commitments for spending on direct development resources. This means that not only will European governments fail to effectively meet their climate change commitments, but that they will also take the opportunity to of using critical climate change financing to fill out their meagre aid budgets. For this reason it is vital that any spending on climate change financing is additional to European aid commitments.

7. The document puts some priorities, which seem closely linked to European interests. Why else would ‘intellectual property rights’ be mentioned? Strangely, trade is not mentioned.


The communication clearly states that one of the criteria for selecting the “priority issues” (the move away from PCD) is that they should be “high on the EU’s agenda”. This is a clear indication that the EU is interested in pushing development direction in its own interests rather than those of the poor.
The IPR proposal is a clear example of this: IPR has historically put corporate rights not human rights at the centre of development. Access to lifesaving medicines and seeds for the world’s poor must be a core principle guiding actions within this area and reference to this in the communication is weak. The strong emphasis on the protection and enforcement of property rights represents little more than the interests of the bottom line of private business and therefore is not putting poverty reduction at the heart of PCD.
Moreover, in climate change specifically, we need a complete change in the way Trips are seen. Technology transfer in that context must be massive and for free!
In addition we see that any direct reference to trade has been completely dropped from the communication and the EU’s “new” PCD approach. And reform of unfair trade rules is the key demand called for by developing countries – it is therefore shocking that this is now completely absent.

8. Will this “communication” have an effect whatsoever or shouldn’t governments, ngo’s, aid organisations bother to much about this text?


Although the language in this communication can appear to be vague and flexible, it essentially opens up the way for fundamental change in the way that the EU deals with development cooperation – next year, we will be five years off the target to meet the MDGs, governments across Europe will have international commitments to demonstrate they have improved the quality of their ODA, and simultaneously, poverty is rising constantly as a result of the financial crisis. At a time like this it is crucial that NGOs and Civil Society Organisations challenge this threatening proposal to the hard won gains on development and poverty reduction.
CONCORD will publish a report on PCD, Spotlight on Coherence, mid-October, which put forward a different perspective and investigate the extent of the coherence of EU decisions in several policy areas. 

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