Genuine Aid: EU pushes commitment up to 2052

Posted on 19/10/17 by CONCORD

The EU could take a generation to meet the 0.7%ODA/GNI target at the current rate of growth, reveals the CONCORD AidWatch Report 2017.

While 2016 saw a substantial increase of 27% in development spending, there has also been a relatively dramatic increase in reporting of inflated aid, such as in-donor costs or debt relief. [1] 

Over the last 5 years, Official Development Assistance from EU has increased by 27%. What’s more, 5 EU Member States now compose the 0.7% Club – those that reach the target: Denmark, Luxembourg, Sweden, the UK and for the first time, Germany.

Amy Dodd, CONCORD expert and Director of the UK Aid Network commented that “aid from the EU has risen in 2016: 23 from 28 EU member states increased their aid budget – and that’s something to be proud of. Not just because it is progress toward meeting the promise they made but most importantly because it means more aid to help with the transformative changes and sustainable development needed to deliver on the ambition of Agenda 2030.”

Yet the nature of the spendings tell another story. In 2016, the spending costs for migrants, refugees and securitisation, all reported as aid, increased by 43 % compared to 2015. But this type of spending, also known as inflated aid, either never leaves the EU and is spent in-house or illustrates the conditions imposed by the EU on third countries. 

 

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Figure 1: Genuine vs Total Official Development Assistance Aid

At the same time, the amount of aid that reaches Least Developed Countries continues to decrease (in 2015, it represented just 14.6% of total European aid). 

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Figure 2: Official Development Assistance for European Union 28 countries to Least Developed Countries 2012-2015

The real aid gap between today’s spendings and the 0.7% target actually amounts to EUR 29.25 billions.

Dodd comments that “Reporting of in-donor refugees costs, tied aid, debt relief or interest repayments as development aid has also gone up and quite dramatically in some countries. That’s a worrying trend that looks set to continue. Arguably this is all emblematic of a continued shift in EU aid and development which is seeing progressive instrumentalisation of EU aid away from genuine, sustainable development in favour of migration control, securitisation and the private sector in donor countries – all of which have slightly more dubious development impact. 

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Figure 3: Estimated timescale for keeping the 0.7% promise: genuine vs inflated EU aid. 

With only genuine aid being accounted, CONCORD calculates that it would take the EU and its Member States another 30 years to reach their commitment to 0.7% GNI. We should expect the target to be reached in 2052. The target having been adopted in a 1970 UN Resolution, this means the EU will live up to its commitments 82 years after the target was first set.

 

CONCORD is the European confederation of Relief and Development NGOs, made up for 28 national associations, 21 international networks and 3 associate members that represent over 2600 NGOs. They tweet as @CONCORD_Europe This blog was originally published on CONCORD's website and the original post can be found here.

 
[1] (Inflated Aid: In essence, “inflated aid” refers to all financial flows that – although formally reported as aid by donors under DAC rules – do not genuinely contribute to development. In CONCORD’s view, there is a distinction between instruments and budget lines that contribute new funds to meet development needs and those that do not. CONCORD believes that, assessed against aid effectiveness principles, some aid reported to the DAC should not be regarded as a “genuine” transfer of resources to developing countries. Using this logic, the following items should be discounted from reported ODA in order to obtain “genuine aid” figures: spending on refugees in the donor country, tied aid, spending on students in the donor country, interest repayments on concessional loans and future interest on cancelled debts and debt relief.)