EU's aid commitments threatened by economic crisis

European Union decision makers, heads of relief organizations and representatives from aid recipient countries are coming together for the fourth time for European Development Days, which kick off this Thursday in Stockholm. One of the main issues is how the EU can effectively help poorer nations with the costs associated with the global economic crisis still mounting.

Developing nations are depending on EU countries to fulfill their aid commitments

The EU supports the United Nations' Millennium Goals, which include cutting the number of people living in extreme poverty in half by 2015. Jan Kohout, the Czech Republic's foreign minister, is confident that EU countries can fulfil their development aid commitments, known as Official Development Assistance (ODA).

"The EU will maintain its role as the largest aid donor in the world. In total, the EU spent in 2008 around 49 billion euros ($74 billion) on official development aid. That represents 0.4 percent of the economic output."

Promises made are not the same as promises kept

The EU has agreed to up its ODA rate to 0.7 percent of the gross national product. But individually the EU countries' efforts vary. Denmark has already passed its ODA of 0.82 percent, while Italy only plans to give 0.18 percent of its economic output to the most impoverished nations. Germany is set to give 0.38 percent.

Wieczorek-Zeul says Germany will be able to meet its aid goals despite the economic crisis

Development Minister Heidemarie Wieczorek-Zeul insists that Germany will keep its development commitments. But aid organizations have serious concerns about whether the promised funds, which will need to double in the next six years, will actually materialize.

"What's important is in which direction Germany, France and Great Britain go," said Imme Scholz of the German Institute for Development Policy. "If you look at these figures and compare them with the difficulties that these budgets are having keeping below the limits on new debt then you can infer a rather negative result."

Concord, the European umbrella organization of aid organizations, alleges that many governments are falsely reporting their ODA quotas. Concord says they include all kinds of expenses that don't really count as development aid such as money spent on asylum seekers or even student exchange programs with developing countries.

"In those cases there isn't really a transfer of money to the developing country," says Concord's Javier Prereira. "The money then stays in the donor country and can't be used to fight poverty according to the Millennium Goals."

Concord also charges that the EU is maintaining subsidies and trade policies that put the developing world at a disadvantage.

EU countries to work together on development

Since 2007, the 27-member bloc has been working on better coordinating development aid and the new commissioner for development, Karel de Gucht says he's determined to foster this cooperation.

"We have to work with the international organizations," he says. "But we also have to work on the level of the individual countries, integrated with a national strategy. We have a lot of work ahead of us in the coming years."

The crisis has hit developing countries too and left more people with too little food

The global economic crisis has pushed the number of people with too little food even higher, which has led de Gucht to attempt to mobilize immediate, short-term aid. The poorest nations in the world, he says, must not be left to bear the consequences of the crisis on their own.

"The livelihood of one billion men and women are at risk," he says. "We have to prove that we keep our promises. We have to act quickly, but also achieve sustainability. The donor countries have to ensure that aid reaches its targets and is used effectively."

In addition to the EU countries themselves, the European Commission is also handing out aid – 12 billion euros ($18 billion). The Commission wants more and more to directly finance the budgets of developing countries rather than just individual projects. Brussels says that in this way aid can be delivered more quickly because there's less administrative effort involved.

But many experts in the field warn that depositing the money directly into the state coffers of developing countries would simply make corrupt leaders and their bureaucracy even more corrupt. These experts instead call for more micro-financing so people across the globe can take individual responsibility for fighting poverty.

Author: Bernd Riegert/hf
Editor: Chuck Penfold