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07/12/2016

Member states deepen development aid diversion to refugees

Development Policy

Member states deepen development aid diversion to refugees

A refugee camp in the centre of Brussels.

[European Parliament]

The Global South is losing out, as EU members dig into their development aid budgets to meet the costs of their asylum policies. EurActiv France reports.

Faced with the scale of the challenge presented by the refugee crisis, a number of European countries have been asking themselves whether they should help the populations of developing countries or the tens of thousands of refugees that have been arriving in Europe in recent months.

In Sweden, where the government plans to take in 190,000 asylum seekers this year, the idea of siphoning off funds from the official development assistance budget is an attractive one.

Joint funds

Sweden’s Ministry of Finance are reported to have asked asked the country’s foreign affairs ministry to examine the possibility of slashing its development aid spending by 60%, in order to cover the cost of hosting the refugees that come to the country.

>>Read: Report: EU countries divert overseas aid to cover refugee bills

The Ministry of Foreign Affairs warned against this decision, but the 2016 budget is still under negotiation in the Swedish parliament.

“A few weeks ago, Denmark also announced plans to cut its contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria by 40%,” said Friederike Röder, the director of ONE France.

Ban Ki-moon has criticised this tendency to divert funds earmarked for development aid to assisting the refugees. “Resources for one area should not come at the expense of another,” the UN Secretary-General stated in a press release, without naming a specific country.

>>Read: NGOs fear that development funds are getting spent on barbed wire

“There are countries where the refugee crisis has a very visible impact on development assistance,” a source from France’s Ministry of Foreign Affairs told Euractiv. “But the question of refugees in France is completely separated from official development assistance in the budget.”

OECD rules

In France, where the 2016 budget is still under discussion in parliament, assurances have been given that the development budget has been ring-fenced, and that it will not be consumed by the country’s asylum policies. “And both budgets are growing,” a government source said.

But around 4% of the French aid budget, an estimated €300 million, has already been allocated to the refugees.

>>Read: UN official: More development doesn’t mean less immigration

“Today, there are three types of country in Europe: those that will not cut their aid, like Germany and Norway, those that will dig into their development aid budgets to cover the cost of receiving refugees, like Sweden, Denmark and the United Kingdom, and those where the line between the two budgets is unclear, like France,” said Röder.

The rules for evaluating a country’s official development assistance (ODA) are flexible enough to allow certain costs associated with hosting refugees to run into the ODA budget.

The rules concerning the recording of public development aid are set by the Development Assistance Committee (DAC) of the OECD. This international forum of the 29 largest providers of aid decides which countries are eligible for development aid and what kind of spending constitutes international aid.

Eligible expenses

“The rules of the OECD list the types of spending that are eligible. The first 12 months of hosting refugees is part of this, but that is a maximum,” the director of ONE said.

Each country is free to decide whether or not to declare these expenses as official development assistance. Some countries, like Luxembourg, Poland and Bulgaria have already announced their intention not to include their spending on the refugee crisis in their ODA budgets, according to a report published on 23 November by the NGO Concord.

But “the OECD rules encourage states to dig into their OAD budgets to fund the hosting of refugees”, Röder said.

Many European countries decided to do just this between 2006 and 2010, according to the OECD’s data. Sweden, France and the Netherlands have all traditionally allowed these budgets to overlap by a few percentage points, while others, like Ireland, the United Kingdom and Italy, have done so to a lesser extent.

European countries recorded €1.7 billion of expenditure linked to asylum in their ODA calculations for 2013, according to Concord’s Aidwatch Report.

>>Read: OECD to redefine Official Development Assistance

Concerns over the accounting of ODA have recently pushed the OECD’s Development Assistance Committee to establish a working group to re-examine the rules on aid spending.

Background

The rules concerning the recording of public development aid are set by the Development Assistance Committee (DAC) of the OECD. This international forum of the 29 largest providers of aid decides which countries are eligible for development aid and what kind of spending constitutes international aid.