Dwindling EU aid spurs UN ‘global governance’ calls

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SPECIAL REPORT/ The imminent breach of a promise by EU states to spend 0.7% of their gross income on overseas aid by 2015 is sparking calls for the UN to be given ‘coercive’ powers to force rich nations to honour future aid pledges.

The secretary-general of the Africa-Caribbean and Pacific (ACP) group of states, Alhaji Mumuni, and the chairwoman of the European Parliament’s development committee, Eva Joly, both told EurActiv that they favoured giving the UN stronger policy-setting powers.

“A commitment is a commitment and the commitment that 0.7% of GNP should be contributed is a Millennium Development Goal (MDG) that ought to be met,” Mumuni said.

The 0.7% figure was cited by the UN’s Millennium Project as the sum needed from developed countries to reach the MDG targets.  

“If it is not met it obstructs progress for developing countries,” Mumuni added. “The only way [forward] is to find ways and means of coercing these countries to live up to their obligations.”

Eva Joly, a French MEP for the Greens political party, blamed the situation on a global economic crisis that had  badly hit developing countries which were least responsible for it.

“We need to have new rules that make contributions to development mandatory,” Joly told EurActiv. “Today we need global governance of the world, so that if you commit yourself to dedicate 0.7% of your GNI [to aid] and don’t do it, there is a possibility [of sanction].”

She continued: “As long as we don’t have this system we will suffer from selfishness and egoism and people will say ‘Me First, My Country First’ and we risk that the progress [we have made] could be rolled back.”

Calls for strengthening the UN’s aid enforcement regime will be given a shot in the arm by new figures from Concord Aidwatch, a pan-European development NGO monitor of EU states’ aid spending, which EurActiv has seen.

Genuine aid

These show that when ‘genuine aid’ rather than declared figures is considered, member states’ contributions are an average 0.06% lower than declared, at 0.37%, a sum worth more than €5 billion.

The shotrfall is caused by ‘inflated aid’ counted as overseas development aid (ODA) which may cover non-ODA related expenditure such as costs for students from developing countries, refugee costs, and cuts to interest on loan payments.

“Aid is not genuine when it is being spent domestically and not overseas, as in the case of students and refugees,” said Luca de Fraia, a co-chair of Concord Aidwatch.

Equally bogus, he said, was ‘tied aid’ in which donor assistance was used to procure contracts or products from the donor country, and debt relief that did not involve any donor funds at all actually being transferred overseas.

“On the basis of the facts, we have to conclude that the 0.7% target is not within reach at the moment,” de Fraia said. “Because of the budget cycles, by definition we know that the chances of doing so are very limited.”

Not the right way to do development

But there is a strongly-held view within Brussels that mandatory targets are "not the right way to do" development.

"Aid is voluntary and supported by Europe's citizens and you don't want to start proscribing policy to their governments," one EU official told EurActiv.

"It would also be impossible to have international agreement on such proposals," another EU source said.

Instead, he flagged the removal of transaction costs on remittance payments which he said would raise more money than the 0.7% spending goal.   

The 0.7% target began as a commitment at the UN General Assembly in 1970 for “each economically advanced country” to reach by 1975. It has since been reaffirmed at UN development summits in Monterrey and Johannesburg. 

In 2005, the Council of the EU committed its member states to meeting the 0.7% target within the Millennium Development Goal timeline, by 2015.

This year’s OECD figures show that the EU is still the world’s largest donor – handing out aid worth €55.2 billion in 2012. But with contributions averaging 0.43% of their Gross National Income (GNI) at most, EU states have made no progress towards the 2015 goal since missing an interim 0.56% target in 2010.

MDG methodology

UN member state progress towards the MDGs themselves is measured by more than 30 chief statisticians from all the various UN agencies, as well as the World Bank and International Monetary Fund, who meet at the end of each financial year, between March and April.

Jan Vandemoortele, a co-architect of the MDGs told EurActiv that this way of proceeding was “one of the big achievements” of the process.

But while several ambitious MDGs such as halving the proportion of people in hunger, and those whose income is less than $1.25 a day look likely to be met, others have proved tougher nuts to crack.

Some 1.2 billion still live in extreme poverty, despite a pledge to eradicate it and 57 million primary school-age children were not in classrooms in 2011, despite an MDG pledging universal education by 2015.

EU Development Commissioner, Andris Piebalgs, told EurActiv that an estimated 100 million people had been “thrown back into poverty” by the global economic crisis. But despite such failures, “progress has been remarkable in the last two decades,” he said.  

'Remarkable progress'

Piebalgs noted that developing countries' growth rates had been twice as high as those of the developed world and were “a major factor” in lifting 700 billion people out of extreme poverty.

The fact that meeting MDGs has been easiest in fast-growing regions such as South East Asia and most difficult in sub-Saharan Africa might suggest that achieving the goals owes more to economic growth than political will. 

Piebalgs said it was “right” to point to the regional differences in levels and progress of development in the past decades.

“Countries in South East Asia moved towards higher-productivity activities, with proactive governments focusing on industrialisation and promoting exports,” he said. “In Sub-Saharan Africa, on the other hand, high rates of growth were driven mainly by exports of primary commodities and did not lead to the structural transformation required to reduce poverty in a sustained manner.”

Nonetheless he praised sub-Saharan African countries for making “very significant progress as they started from a very low base”.

Timeline: 
  • 23 Sept 2013: UN Millennium Development Goal review summit opens in New York
  • 2015: Deadline for 0.7% aid target to be met
  • 2015: Deadline for Millennium Development Goals to be reached
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