EU aid spending fell for the first time in five years in 2017, according to the CONCORD AidWatch Report 2018 published on Wednesday (17 October).
EU member states disbursed €72.65 billion in aid in 2017, a 3% fall. In fact, the report reveals that the decrease in EU aid is largely the result of a fall of in-donor refugee costs and debt relief which were reported as aid, by 10% and 82% respectively compared to 2016. Despite the fall, the EU remains the world’s largest aid donor.
Aid donors in the Organisation for Economic Co-operation and Development (OECD) agreed to revise the rules for classifying ‘in-country’ donor costs at their meeting in Paris last October. Temporary sustenance costs, such as food and shelter, will be counted as aid, while costs on refugees arriving including security screening, border control, detention centres will no longer be permitted.
“On the one hand, we deplore the disengagement of the EU and its Member States into ensuring sufficient aid and respecting their commitments,” said De Fraia.
“On the other hand, we regret that the EU aid level relies on inflated aid and 2017 confirmed this worrisome direction. For several years, migration control, securitisation and private sector investments in donor countries have taken over development objectives, progressively inflating the reported aid level. This means less and less resources from the EU are dedicated to poverty eradication and global sustainable development.” said Luca De Fraia, a CONCORD expert from ActionAid Italy.
The message from the EU is that direct aid will not be significantly increased in its next seven- year budget but that private sector investment will be ramped up.
On Thursday, Bill Gates is set to be unveiled as the latest high-profile investor in the European Commission’s External Investment Plan, which seeks to generate €40 billion in private investment across the African continent by leveraging money from the EU budget.
“The narrative is very clear that aid is not enough. But how are we going to make sure that these private investment programmes are linked to development goal?” questioned Luca De Fraia to EURACTIV.
Such instruments also worry sections of the NGO community who say that the world’s least developed countries (LDCs) are far less likely to obtain private sector investment than their wealthier neighbours.
“We know that blending very rarely goes to LDCs – it is about 8%,” De Frais told EURACTIV. He added that a “plan to help LDCs is still in the making.”
In 2017, only four EU member states exceeded the 0.7% commitment: Denmark, Luxembourg, Sweden and the UK, while Germany fell short because of a drop in its reporting of refugee costs.
The biggest aid cuts were in Spain, the EU institutions, Austria and Hungary, while Croatia, France, Malta, Portugal and Romania each increased aid spending by between 15% and 20%.
Meanwhile, aid to Least Developed Countries increased by 4% compared to 2016, but stands at 0.11% of EU GNI, short of the bloc’s target to allocate 0.15%/EU GNI to the world’s poorest by 2020.