French development aid decreased by almost 10% in 2013, according to the OECD, a surprising drop which runs contrary to governmental declarations, EURACTIV France reports.
The French Treasury expected only a small cut to the development aid budget, reducing it to 0.46% of GDP in 2013 compared to 0.47% in 2012. OECD figures put it now at 0.41% of GDP in 2013.
The OECD calculated French aid to be €8.44 billion in 2013. This represents a €1.45 billion drop compared to the €9.89 billion announced earlier.
Why the drop? The former French minister in charge of development aid, Pascal Canfin, said that it can be explained by many factors. “Some debt relief, notably to South Sudan, was cancelled for obvious political reasons,” explains the member of the Green party.
France contributes greatly to the debt relief of poor or developing countries. On 30 June 2009, France cancelled €15.4 billion of debt under the Heavily Indebted Poor Countries (HIPC) initiative. Granting debt relief is considered equivalent to providing development aid and relatively cheap. Debt relief does not necessitate any spending.
Another important aspect is the delays in granting loans by the French development aid agency (AFD). “Certain loans by the AFD were pushed back, in North Africa or in the Sahel for example,” explained an advisor in the French ministry of foreign affairs.
The late loans meant that many AFD projects were not funded as planned in 2013. “These delays can be explained by the AFD’s strict selection process, which was put in place in 2013, and which takes into account the social responsibilities of companies and sustainable development,”Canfin argued. More complicated and stricter projects have decreased the amount of AFD funded projects.
In its strategic orientation plan for 2012-2016, the AFD introduced an array of demands under “social and environmental responsibility, professional ethics, accountability, transparency and the efficiency of its work.”
7% of budget put into reserve
NGOs argue that a budget freeze is to blame for the drop in French development aid. The practice of putting some resources that are dedicated to French development aid into reserve was set at 6% of the budget in 2013 and 7% in 2014.
The memorandum that set these rates emphasises that “the ‘unfreezing’ of the finances put into reserve is exceptional in nature and must be justified”. The permanent freeze “automatically leads to a cut in budgetary credit mechanisms from one year to the next”, said Christian Reboul, head for development financing at Oxfam France. Freezing part of the budget is not well viewed as France tries to introduce more transparency to the AFD through a planning law, which should be voted on in the summer.
There is substantial pressure on the European budget dedicated to public development aid. If the budget is maintained in the financial framework of 2014-2020, “in seven years 15-20% will be missing,” said Eva Joly, President of the European Parliament’s committee on development.
The committee accepted transferring funds meant for development to humanitarian aid in order to meet the urgent needs of the Syrian crisis,” the Green MEP said. The emergency loan was made under the condition that EU member states would provide greater financing. “This only solves the problem until the end of the summer,” she continued. In spring time, humanitarian aid will once more need greater funding, and it will have to come from somewhere.
Aid to developing countries grew steadily from 1997 to a first peak in 2010, according to OECD figures.
It fell in 2011 and 2012 as many governments took austerity measures and trimmed aid budgets.
French development aid dropped significantly in 2013.