- Phantom aid: According to ActionAid, 47% of the €62 billion worth of global development aid is redundant because it is poorly allocated, tied to donor’s own goods and services, highly conditional, badly coordinated and exaggerated through double counting of debt relief measures. The EU-15 doesn’t score too badly compared to other donors, with 8 countries (Luxembourg, Denmark, Sweden, the Netherlands, Ireland, the UK, Finland and Belgium) among the top 10 real aid donors. Nevertheless, because only around 57% of aid from EU countries is targeted effectively, ActionAid argues that real EU development aid amounted to only 0,2% of GNI in 2004, a long way off from the 0,7% target. Furthermore, 4 EU Member States (Greece, Italy, Spain and Austria) are at the bottom of the donor league along with the US and Japan.
- Lack of Donor Coordination: According to ActionAid, €3 billion of EU aid was lost through poor donor coordination in 2004. In December 2005, the EU adopted its first common Development Strategy Policy in view of increasing coordination and harmonisation between Member States.
- Technical Assistance: Donor spending on consultants, research and training accounts for one quarter of all development aid. However, ActionAid points out that technical assistance (TA) has but a limited impact on poverty reduction, because it is donor-driven rather than based on the real needs of poor countries, and because it is grossly over-priced. EU countries spent €6,3 billion on TA in 2004, of which ActionAid estimates that 62% was wasted.
- Trade Related Technical Assistance: Trade related technical assistance and capacity building has increased by 50% since the Doha Ministerial Declaration in November 2001. At the WTO Ministerial meeting in Hong Kong, in December 2005, the EU pledged a further €2 billion for aid for trade for developing countries. ActionAid warns that aid aimed at reducing barriers to poor countries markets may often be more in the interest of the donor country than the recipient. The report cites aid provided by the EU for building the capacity of African, Caribbean and Pacific countries to negotiate trade liberalisation agreements (the Economic Partnership Agreements) as an example.
