EU Aid - Joint European NGO Report (April 2006)

About this report International), Iacopo Viciani (ActionAid

Italy), Dragan Nastic (BOND), Katia Herrgott This report has been produced by an (Coordination Sud), Florent Sebban unprecedented broad collaboration of (Eurostep), Michael Obrovsky ( FSE) and European NGOs. Contributions were received Luis Morago (Oxfam International).

from all the major European development

NGO networks and from NGOs and NGO

platforms in all 25 EU countries. A list of European aid-watching initiative organisations formally endorsing the report is This initiative contributes to the Global Call

available at the end.  to Action against Poverty mobilisation. It is

part of a broader process of monitoring and The report is available at: www.eurodad.org  advocating on European aid being undertaken For more information send your query to: by a range of organisations and networks aidwatch@eurodad.org  under the umbrella of CONCORD, the

European confederation of development and

relief NGOs. This includes a seminar in early Acknowledgements April 2006 during which European NGOs This report has been written by Hetty Kovach discussed further joint advocacy activities on and Alex Wilks at the European Network on European aid.

Debt and Development (Eurodad).

Eurodad has been assisted by a Steering More information: Group whose members are: Han Verleyen www.concordeurope.org

(11.11.11), Romilly Greenhill (ActionAid adavies@concordeurope.org

Contents

PART ONE

EU aid: genuine leadership or misleading figures? 3

Flattering official numbers 4

Where countries really stand: behind the official figures 6

Change the aid reporting rules 9

Conclusions and demands 11

PART TWO: COUNTRY PROFILES 12 Austria 13 Belgium 14 Denmark 15 Finland 16 France 17 Germany 18 Greece 19 Ireland 20 Italy 21 Luxembourg 22 The Netherlands 23 Portugal 24 Spain 25 Sweden 26 United Kingdom 27 NEW MEMBER STATES

Cyprus 28 Czech Republic 28 Estonia 29 Hungary 29 Latvia 30 Lithuania 30 Malta 31 Poland 31 Slovakia 32 Slovenia 32 European Commission 33 Report signatories 34 Endnotes 35

EU aid: genuine leadership or misleading figures?

European Governments provide over half of the world s development aid. In international development negotiations over the last five years they have provided crucial international leadership. In 2005 they pledged further increases to aid levels in order to help fight world poverty. 1 If these pledges are honoured, Europe will provide at least $38 billion more aid a year from 2010 onwards. 2

Increases in high quality aid are vital for the fight against poverty. Providing more aid would enable millions of people in desperate poverty to get access to health, education and productive opportunities.

In 2002 European Governments set themselves a collective target of providing 0.39% of their gross national income (GNI) for Official Development Assistance (ODA) by 2006 and individual minimum targets for each country of 0.33% of ODA/GNI by 2006. This commitment was renewed and expanded in 2005, following civil society campaigning, with European Governments agreeing to contribute 0.51% ODA/GNI by 2010.

New official figures released by the Organisation for Economic Cooperation and Development (OECD) in April 2006 and the European Commission in March 2006 show

that European Member States are fulfilling

their promises and are actually ahead of their collective target and doing better than expected.[3]

However, there is no room for complacency.

This briefing shows that, according to our calculations   13.5 billion or almost one third of reported European ODA in 2005 did not provide any new aid for developing countries. This vast amount of apparent aid spending was in fact money for debt cancellation and for foreign student costs and refugees in donor countries.

Official debt data reveals that more than   9 billion of EU aid in 2005 was spent on the cancellation of two countries debt: Iraq and Nigeria. Iraqi and Nigerian debt is largely export credit debt. It was issued primarily as a means of subsiding European companies operating in developing countries and never had any development purpose. While cancellation of this debt is vital, the resources released for

poverty reduction will be far smaller than the headline figures suggest. European Union Governments insistence on accounting for this cancellation in their official aid figures also contravenes the United Nations Monterrey agreement, which calls for debt cancellation to be funded additionally to Official Development Assistance. 4

In addition, assuming that in 2005 European countries continued to spend similar levels of their ODA on these items as in the previous five years, a further  840 million will have been spent on housing refugees within European countries, and

  910 million of EU aid on educating foreign

students within European countries.

While spending on foreign students and refugees in Europe is important, these are not expenses which the public rightfully expects to be described as development assistance. This is because they provide no new resources for developing countries and are not tied to development objectives of improving the welfare and human security of the poor.

If these items are removed from headline aid figures, as the NGOs from across Europe who have combined forces to produce this analysis believe they should be, then Europe has still a long way to go in its fight against world poverty.

This report calls for a clean up in aid reporting to ensure that the only aid that is counted is aid that saves lives and not simply that which saves face.

Current aid reporting rules are set by the Organisation for Economic Cooperation and Development. The OECD allows European Governments to regularly include spending on debt relief as aid and to count spending on refugees and foreign students in their own countries as ODA. This must be changed immediately in order to prevent Governments from misleadingly inflating aid figures. The credibility of Europe is at stake.

Box 1.

Why more aid?

More aid is badly needed. Between 1.4 and 1.9 billion people worldwide live in poverty. This poverty results in needless deaths and low quality of life. For example about 500,000 women worldwide die each year from complications arising from pregnancy and childbirth and in 2002 alone 3.1 million people died of HIV/AIDS. 5

More aid can make a real difference to people s lives. Since 1970, aid has contributed to the doubling of school enrolments and the halving of child mortality.  6  A further aid increase could make a massive difference in the level of investment in anti-poverty interventions. For example, US$ 800 million per year in aid would enable Vietnam to reach the Millennium Development Goals (MDGs) lifting millions of its citizens out of poverty and enabling them to have access to clean water and health. 7

A greater volume of aid is important, but not sufficient. Aid allocation and administration also need dramatic improvements so that more spending is predictable and poverty- focussed. Developing country Governments need to take steps to meet their international commitments and enable their citizens to be involved in determining policies and monitoring spending. Aid increases must also go hand in hand with more policy coherence in trade, agriculture and financial policies.

Flattering official numbers

The latest figures released by the Organisation The collective European aid average is pulled for Economic Cooperation and Development up by a minority of well-performing European and the European Commission show that Union Governments Sweden, Luxembourg, European Member States spent nearly   45 the Netherlands and Denmark who have all billion on Official Development Assistance in been spending at or above the United Nations 2005. This means that European Member aid target of 0.7% ODA/GNI for some years. States have already reached their collective EU

target of 0.39% of ODA/GNI a year earlier than Another seven EU countries have recorded the target date they had set themselves in 2002. that in 2005 they have already hit, or are just Most EU countries are also able to report that above, the minimum EU 2006 aid target.

they have reached the minimum target for These are France, Austria, Belgium, Ireland, individual member countries of 0.33%. Finland, Germany and the United Kingdom.

Figure 1  Figure 1

Source: OECD (2006) 8

THE OFFICIAL PICTURE: ODA as a Percentage of GNI

for the EU 15 Member States, 2005

1.00

0.92

0.90 0.87

2005  Official  headline  aid figures

0.82 0.81

0.80

0.70

0.60

0.53 0.52

0.50 0.48 0.47 0.47

0.41

0.40 0.35

0.30 0.29 0.29

0.24

0.21

0.20 0.10 0.00

en e ly

Swed xembourg erlands Denmark Belgium Austria Kingdom Finland Franc Ireland Germany Ita Spain Greece Portugal

Lu Neth

United

At the bottom of the official European aid rankings come Portugal, Spain, Greece and Italy. All are well below the EU 2006 minimum target and have a long way to go in order to reach it. Italy, one of the EU s largest economies, stood at only 0.29% in 2005, while Portugal the worst performer in the EU15 stood at only 0.21%

Figure 2

Figure 1 Source: European THE OFFICIAL PICTURE: ODA as Percentage of GNI Commission (2006) 9

for the EU New Member States, 2005

0.2

0.18

0.18 2005  Official  headline  aid figures 0.16

0.14

0.12

0.12 0.11

0.1 0.09 0.09

0.09

0.08

0.06 0.06 0.06

0.06

0.04 0.04

0.02

0

Malta Slovenia Czech Poland Slovak Hungary Estonia Latvia Lithuania Cyprus

Republic  Republic

New Member States

The ten countries which joined the European Union in 2004 (new Member States) are relative newcomers to aid spending but have rapidly increased their aid levels in recent years.

Malta posts by far the highest figure, already above the new Member State EU target for 2010 of 0.17 ODA/GNI. All the other countries are saying they intend to reach this target. However Estonia, Latvia, Lithuania and Cyprus are currently far below and it will remain a major challenge for them to increase spending rapidly enough to meet the target.

Where countries really A second group of countries: Ireland, Belgium,

and Finland, while not yet at the 0.7% target, have stand: behind the already surpassed the 2006 minimum EU aid

official figures target even without inflated aid. Belgium and

Finland still continue to count non-aid items as

part of their headline aid statistics, however. All On the surface, the official picture for most three countries also need to do more to move

countries appears positive. However, there is no towards the 0.7% target without aid inflation. room for complacency.

The UK and France were amongst the countries According to our calculations, based entirely on with the highest levels of aid inflation in 2005,

official figures,  13.5 billion, or nearly one third both inflating their aid by more than a third.

of reported European Official Development Once non-aid items are taken out, both countries Assistance in 2005 will not provide any new aid are still below the EU minimum target and will for developing countries. This is because all have to work hard to increase aid over the next European Governments routinely include year to reach the threshold. Both also need to spending on debt cancellation and on housing stop the practice of heavily inflating their

refugees and educating foreign students in their headline aid.

own countries in their ODA statistics. The

European NGOs which contributed to this Worryingly, there are six countries at the bottom report believe that these items should not be of the list which are highly unlikely to reach the included within ODA statistics. This spending is minimum EU target once inflated aid is

not in line with development policy objectives discounted: Austria, Germany, Italy, Spain,

and often provides minimal new resources for Greece and Portugal. Austria, which currently developing countries, resources which are badly chairs the EU presidency, is guilty of inflating its needed to help lift people out of poverty.  headline aid by more than 50%, while actual aid

is a woeful 0.20% of GNI. Germany, one of the Figure 3 below shows countries headline aid EU s largest donors and host to the 2007 G8

figures, and also what countries actually gave in summit, inflated its aid by more than 40% in

new aid in 2005 if debt cancellation, refugee 2005 and has an actual aid level of only 0.20% of spending and student costs are excluded.  GNI, while Italy s actual aid effort is a mere 0.19%

without aid inflation. Unless all these countries

At the top of the list are the 0.7% countries: sharply increase their aid over the next year, they Luxembourg, Sweden, Denmark and are likely to face serious embarrassment when it Netherlands. While all but one of these countries becomes clear that they can only meet their aid included non-aid items in their headline aid targets through aid inflation and double

statistics in 2005, all four of them reached the counting.

0.7% target even without inflating their aid.

Figure 3 Figure 1

Source: Eurodad

calculations based on EU 15 Official aid statistics showing inflated aid 2005

OECD statistics 1  0

1.00

0.75

0.50

0.25

0.00

2) (4) (5) (6) * * 1)* 2) (9) 4)* (8) (13) 5)*

n ( d  m  (10) (1 n (1 e  (1 al a  (1 urg (1) de nds (3) e ai ec y  ri y

e lan lgiu p re an rtug st Ital

Sw enmark  herla Ire Be Finland (7) Franc S G rm Po Au

Luxembo D Net Ge

United Kingdom

The official rules for determining what counts is likely to have been spent on these items.

as Official Development Assistance are set by New Member States aid inflation data is

the Organisation for Economic Cooperation incomplete and as a result new Member States Development. This international organisation are dealt with separately at the end of this represents aid-giving countries only and section.

allows them to count items which the public

would never imagine could be included in Aid inflation is not a small matter.

foreign aid calculations.

Debt: According to our calculations based For this report we have focused on three key entirely on OECD statistics  11.8 billion of items included to boost official headline aid EU official headline aid in 2005 was spent on figures. These are debt relief, imputed foreign debt cancellation alone.   9.2 billion of this student costs and immigration/domestic was spent on the cancellation of two

refugee costs. The NGOs from across Europe countries debt: Iraq and Nigeria.

which have combined forces to produce this

analysis believe that these items should not be Iraqi and Nigerian debt is largely export credit counted in official aid statistics, given that debt, resulting from credits issued primarily as they do not produce new aid for developing a means of subsiding European companies, countries, and often fail to transfer any rather than reducing poverty. Furthermore in resources at all for poverty reduction. the case of Iraq, the rationale for cancelling Moreover these areas are still only a part of these debts has more to do with geopolitics

the problem when it comes to ensuring that than poverty reduction. These transactions

aid goes to reduce poverty. Even aid that does should not be allowed to count towards

actually reach poor countries is often poorly countries headline aid figures.

allocated, of low quality, and badly reported

(see box 3 on page 10). Cancelling such debts while crucial is often

more a matter of cleaning up the balance

This report shows that many European sheets of European agencies and ministries, countries are massaging their aid figures in a rather than providing new resources to invest way that can mislead the public. What is in development. As one Danish NGO activist needed is a substantial increase in the amount points out: "the money is not moving 5000

of genuine aid they provide in order to kilometres from Denmark to Africa, but 500 translate their promises into real differences metres from the Ministry of Foreign Affairs to

in the lives of poor people.  the Treasury".

The following section provides an explanation of why European NGOs believe these items should not be counted as aid, and a more in- depth look at just how much EU aid in 2005

Table 1

Sources: OECD

Debt cancellation

with much of the Highly Indebted Poor

All European Governments formally agreed at

Countries debt relief funding for debt

the United Nations 2002 Monterrey Financing

cancellation should be additional to aid

for Development summit that debt

spending.

cancellation though vitally important for

development should be additional to

Finally, the way EU Governments account for Official Development Assistance. This was

debt relief ensures they maximise its value. supported by poverty and debt campaigners

They count the entire stock of debt in the year across Europe who argue that as a matter of

that it is cancelled, even though debt service justice it should be creditors, not poor people,

payments would have happened over many who pay for the cost of debt cancellation. If

years.

donors are allowed to score their debt

cancellation as ODA, then effectively other Refugees in Europe

poor countries (who would otherwise be

receiving aid) pay the price rather than the In addition, assuming that European

donors. The European Commission reminded countries continued to spend similar levels of Member States in March 2006 that "the their ODA on these items as in the previous Monterrey Consensus underlines the need to five years, we estimate that a further   840

Table 2

Aid inflation - best and worst performers

ensure that resources provided for debt relief million of EU aid in 2005 was spent on

do not detract from ODA resources intended housing refugees within Europe.  1  2 Several EU to be available for developing countries". 11 Governments, most notably Denmark,

Sweden and the Netherlands, include the first Yet this agreed principle, as our evidence year costs of refugees arriving from developing shows, is being contravened by all but one countries in the donor countries and all costs European country. Only Norway a non-EU associated with any repatriation back to the country fully upholds the principle that debt developing country. Spending on refugees is cancellation should be additional to aid.  of course necessary, but this spending should

not be counted as ODA as it never actually Secondly, the vast majority of the debts leaves the donor country.

currently being counted as ODA are export

credit debts which were not intended to serve Foreign students

development purposes. Export credits are

primarily a means of subsidising European Some European Governments also inflate companies operating in developing countries. their aid figures by including spending on

And, as in the cases of Iraq and Nigeria, many educating foreign students in their country. export credit loans have been provided during Assuming past spending trends, European periods of military rule, giving little Governments are likely to have accounted for opportunity for citizens to scrutinise the  910 million of the EU s ODA in 2005 on investment or their outcomes.  educating foreign students in donor countries.

Funding foreign students education in

As many Governments have not been able to Europe may be worthwhile, but it should not repay these debts for several years, in be counted as development assistance for numerous cases debt cancellation does not overseas countries.

free up resources to invest in development and

represents a belated recognition that the New Member States: lack of data money will not be repaid. Even when debt

For the 10 new Member States in the cancellation does deliver new resources as

European Union providing development

assistance is relatively new. In many of the countries there are serious problems of coordination and transparency. In the Czech Republic, for example, responsibility for official aid spending is spread across 11 ministries. For this reason, amongst others, access to information on the details of development spending is limited, making it difficult for citizens and NGOs to monitor. The Hungarian development NGO platform reports that different figures on overall aid volumes are provided by different ministries in Budapest.

Because of this, few NGOs in new Member States are aware of whether or how much official headline aid statistics are inflated with spending that does not provide new resources. In some cases, however, this practice is clearly occurring. Malta s aid is deceptively doubled by the inclusion of its spending on refugees in Malta, and Poland includes debt cancellation spending in its official development assistance totals.

What is the OECD DAC?

The Organisation for Economic Cooperation and Development is an inter-Governmental organisation. Established in 1961 and coined the rich man s club, the OECD currently has thirty of the richest countries in the world as its members. Membership to the OECD is by invitation only and is conditional on a country s commitment to a market economy and a pluralistic democracy.

The organisation develops policy recommendations and rules for its member Governments on matters as diverse as trade liberalisation, tax policies, health, education and Official Development Assistance. The OECD Development Assistance Committee (DAC) currently sets the rules for defining what Governments can count as Official Development Assistance. See: www.oecd.org/dac/

Box 2.

Change the aid reporting rules

Political will is required to increase aid budgets and to report transparently and accurately on progress. We are challenging European Governments to resist the temptation to make misleading claims. Official aid figures should continue to rise and should only show spending which delivers new resources for poverty reduction in developing countries.

There are dangers that the problem of misleading aid reporting could get worse, not better. One reason is that further major debt cancellations for Iraq and Nigeria are due in 2006, 2007 and 2008. Another is that a number of Governments including leading European aid-providers are currently arguing that Official Development Assistance reporting rules should be further loosened. They are arguing that spending on security issues and on climate change mitigation should be allowed to be counted as part of their ODA. Development NGOs consider that only interventions which have poverty alleviation as their main objective should be included in aid figures.

Since September 2001 there have been moves by a number of countries to use aid money to directly or indirectly contribute to the "war on terror", for example by boosting certain countries military capacities. Support for security should not be taken from the already limited resources allocated to development. Using ODA money to fund military-related activities will result in a diminishing of the funds allocated to achieve the Millennium Development Goals. This is a problem in itself and might deepen inequalities and contribute to further instability.

Climate change is another important issue, but not one which should divert development spending. A number of countries propose to classify their spending under the Clean Development Mechanism as part of their official aid statistics. This mechanism is part of the Kyoto Protocol which aims to assist industrialised countries to comply with their emission limits and create a new and additional incentive for these countries to invest in clean technologies in developing countries. Governments which choose to channel financing through this mechanism should do so additionally to their Official Development Assistance.

Development NGOs will work to ensure that their Governments take a firm stand on this issue in negotiations before and at the OECD meeting on aid accounting rules in 2007. The rules for accounting Official Development Assistance need strengthening, not weakening.

Box 3.

Aid quality and allocation: key additional issues

This report focuses on some vital issues that must be resolved to improve public confidence that Governments are meeting aid commitments. There are, however, many other problems which frequently stop aid resources reaching those who need it most. Among these important issues which civil society groups in the South and North are continuing to monitor and campaign on are: 13

Tied aid . Forcing recipient Governments to buy goods and services from the aid- providing country raises costs by between 15 and 40 per cent. Only the United Kingdom, Ireland and Norway abide by a 2001 OECD recommendation to fully untie all their aid to least-developed countries (LDCs). Greece, Austria and Spain have extremely high proportions of aid tied. Finland, Italy and Luxembourg fail to report their tied aid figures, presumably because the figures are so bad. In 2001, the last time Italy reported its tied aid, for example, 92% of its ODA to LDCs was tied.

Ineffective technical assistance . In 2004, European Governments spent   8 billion

almost one fifth of the total aid spend on training and research in developing countries.14 Yet as the OECD has recently acknowledged, technical assistance has been criticised for frequently being too costly, inappropriate to recipients needs, and for fostering dependency.

Politically-motivated aid allocation . Aid has often been targeted not to countries that need it most but to Governments which are geo-politically important. Countries that have seen their aid volumes nearly treble over the last decade include Afghanistan, Colombia, Iraq, Jordan and Pakistan, for example. Some 68% of total EU aid is currently spent in low-income countries. 1  5 However Greece only allocates 29% of its aid to low-income countries, Austria 57% 1 6and the European Commission 55% . 1 7

Conditionality . In exchange for aid finance bilateral and multilateral agencies impose a large number of policy conditions, up to 100 in some cases. This is administratively burdensome for developing countries to implement and distorts national policy-making processes. Progress on implementing official pledges to reduce conditions has been very slow. The UK Government is the only EU Government with a policy to limit economic policy conditions such as services privatisation and trade liberalisation.

Un-coordinated aid . Overstretched civil servants in aid dependent countries are required to meet a raft of disbursement, procurement, reporting, monitoring and auditing requirements from multiple agencies, diverting scarce time and resources. A typical African Government submits 10,000 quarterly donor reports each year and hosts more than 1,000 donor missions. In 2005, EU Governments signed up to targets aiming to reduce the administrative burden of their aid delivery, but progress remains well below what is possible. 18

Predictability: Only 70% of pledged ODA is actually delivered. ODA flows are highly volatile: four times more volatile on average, than recipient countries GDP. 1  9  Donors need

to work towards ensuring far greater stability of aid flows in the near future, improving disbursements and procedures so that recipient Governments can increase their budgets

and spending predictably.

Conclusions and D. Greater transparency

in aid reporting

demands European Governments must be more

transparent in the way they report their official European Governments have taken a vital aid. Countries routinely fail to provide their leadership role in international diplomacy on citizens or the OECD with data, making development assistance in recent years. They comparisons across countries hugely difficult. provide a very substantial amount of the Italy, for example, has failed since 2001 to world s development assistance, and the publish how much of its aid is tied to the amount is rising. However there is no room for purchase of Italian goods and services. All European Governments to rest on their laurels.  Governments must provide a complete

breakdown of their official aid each year and The harsh reality is that European countries as publish their data much more rapidly.

a whole are a long way off from meeting their Currently final statistics for each country s

aid pledges. The millions of people who official aid statistics are only made public after campaigned for an end to global poverty in a lag of two years, making it difficult for

2005 wanted action, not just announcements, citizens to track their Government s current and have made their own pledges to continue performance.

to watch and pressure their Governments until

they deliver on their promises.  E. Enhance the allocation

and quality of aid

All European Governments must take steps to This report calls for:  improve the allocation, predictability and

1. Genuine increases in European aid quality of their aid. All development assistance European Governments must increase their funding must help reduce poverty and meet ODA so that they reach their minimum and international commitments to the Millennium average commitments for 2006, 2010 and 2015 Development Goals.

without distorting the figures. This means they

should not inflate their headline aid figures by Table 3

including items such as debt relief, refugees Actual and Inflated Aid by EU country arriving in Europe or foreign students educated

in Europe.

2. Clear year-on-year timetables

to reach 2010 targets

All European Governments must develop their own clear timetable for reaching the 2010 European targets. Italy, Austria, Portugal, Spain, Greece and Germany still need to provide details on when they will meet their pledges. New Member States also need to produce clear timetables for reaching their own targets.

3. Tighten official aid reporting rules The rules which determine the criteria for Official Development Assistance must be changed to ensure that Governments cannot mislead their citizens by exaggerating the figures. The Organisation for Economic Cooperation Development s Development Assistance Committee (OECD DAC) is the official body responsible for setting the international rules for official aid statistics. The rich country Governments represented in the DAC should agree to change the rules for counting Official Development Assistance so that countries are no longer able to include items which do not provide new resources for poverty reduction in developing countries.

PART TWO:

COUNTRY PROFILES

This section provides a detailed breakdown of official aid and aid inflation for each European country. This data is accompanied by an assessment from national NGOs of their Government s likelihood of meeting the EU minimum aid target of 0.33% ODA/GNI by 2006 with genuine aid resources only. Also included within this section is a page on European Community aid, which addresses other aspects of poor quality aid other than aid inflation.

Due to a lack of detailed data on new member state aid, this report does not provide as detailed a breakdown of new Member States aid inflation, however, NGOs do provide an assessment of their Government s likelihood of meeting the EU aid target of 0.17% ODA/GNI by 2006.

The official aid statistics quoted for 2005 are drawn from the Organisation for Economic Cooperation and Development preliminary ODA statistics released in April 2006  2  0 except in the case of the new Member States, where we have drawn on data from the European Commission s recent survey on members aid levels. 21

Getting timely access to official aid statistics is incredibly difficult. Our calculations for how much official aid will not deliver new resources have been undertaken in two ways. For the debt figures we have used the OECD s official preliminary figures for 2005 released

in April 2006.22 However, in order to get figures for how much European ODA was spent on housing refugees and educating foreign student in European countries we have taken each EU country s spending trend on these for the last four years (as reported to the OECD) and then we have projected this forward for 2005. Therefore, the number is an estimated figure. Finally, it is important to note that all the figures may be subject to change, given that the final official ODA figures will only be released in December 2006.

AUSTRIA WEUil laiAdutsatrrgiae tmbeye t20it0s6mwinitihmouumt

inflating its aid?

According to the latest OECD statistics NGO Prediction : UNLIKELY

Austria has nearly doubled its ODA in 2005. It

would appear to have moved from a poor

performing European aid donor country to a Austria's inflated and actual ODA generous one, with aid rising from 0.23% of

GNI in 2004 to 0.52% in 2005. This far

exceeds the EU minimum aid target for 2006.

1400

However, our calculations indicate that over 1200

half of Austria s total ODA in 2005 (62%)

failed to deliver any new aid resources for 1000

developing countries. Once this inflated aid is

removed Austria is significantly below the EU 800

minimum target, registering only 0.20%

ODA/GNI.  600

400

Austrian NGOs are hugely disappointed at their Government s performance in 2005 and are deeply concerned that Austria will not meet the EU minimum target by 2006 in a genuine manner. They call upon their Government to make a real effort this year to ensure that they deliver genuine new aid resources to the world s poor and meet the EU target.

200

0

2004 2005  (preliminary)

Total inflated aid ODA net of inflated aid Source: OECD (2006); OECD (2005)

Austrian development

A58c%coordf iAnugs ttori aOnEOCDDA f iignu 2re0s0, 5 w72a5s smpielnlitoonnor NGOs demand:

debt cancellation, with the largest part of this

on cancellation of debt to Iraq. This is not a The Austrian Government to establish a one-off problem. OECD projections suggest specific timetable to increase Austrian that further cancellations of Iraqi debt in the ODA in a genuine manner to 0.7% by coming years are likely to distort Austria s 2010, ahead of the EU timetable.

headline aid figures in the future.

For all political parties to include a 0.7%

In addition, if we draw on Austria s official aid commitment for 2010 in their election trends over the last four years,   31 million programs and in the Government

was spent on housing refugees in Austria and programme.

a further   16 million on educating foreign

students in Austrian universities. That Austrian ODA becomes more

predictable and better targeted to poor Austrian NGOs are hugely disappointed that countries.

the increase in Austrian ODA in 2005 does

not correspond to an amount of money

available for genuine development

cooperation.

Organisations consulted : AGEZ, KOO and Austrian EU - Platform of Non-Governmental Development.

BELGIUM Wmiilnl i Bmeulgmiu EmU maiedettairtgset by

2006 without inflating its aid?

According to the latest OECD statistics NGO Prediction : YES

Belgium is significantly above the EU

minimum target for 2006, registering 0.53% Our calculations indicate that   379 million ODA/GNI as aid in 2005. A quarter of this, or (24%) of Belgian ODA in 2005 was spent on  400 million, delivered no new aid resources debt cancellation, with a significant part of for developing countries, according to our this going to Iraq and Nigeria. In addition, if calculations. Once this inflated aid is removed we draw on Belgium s official aid trends over however, Belgium still remains comfortably the last four years,  21 million of Belgian above the EU target, registering 0.40% ODA in 2005 was spent on housing refugees ODA/GNI.  within Belgium.

Belgian NGOs are pleased that their Belgian NGOs fear that their Government will Government has met the EU minimum target further inflate its ODA figures in the coming ahead of schedule with actual aid. However, years. The Belgian minister for Development they urge their Government to stop inflating Co-operation is arguing for a loosening of their ODA figures immediately. They are also ODA-eligibility criteria at the DAC-level. If concerned that in the next few years, their this move to include military expenses is Government will continue inflating its figures successful it will enable Belgium to boost its even more in order to make the 2010 targets. ODA figures even further.

This is despite the fact that Belgium is among

Belgian NGOs call for tithsee lffetwo caotuimntertieasb lteh taot hreaasclhe gtahlely 0 c.7o%m tmarigtteetd by their Government to:

2010.

Increase the share of actual aid in the Belgian ODA budget, and decrease the amount of aid that does not result in new

Belgium's inflated and actual ODA aid flows to developing countries.

Ensure 0.7% of GNI for development co- operation by 2010 and to uphold the aid budget afterwards.

1600 1400 1200 1000 800 600 400 200 0

To implement concrete measures aiming at debt cancellation of all LDCs and consider these efforts as additional to the 0.7%.

Pass spending on immigrants to the Ministry of Internal Affairs.

Untie all aid.

2004 2005 (preliminary)

Total inflated aid ODA net of inflated aid

Source: OECD (2006); OECD (2005)

Organisations consulted : CNCD-11.11.11, Coalition of the Flemish North South Movement ACODEV

DENMARK Wmiilnl i DmeunmmEaUrkamideteatrigtest by

2006 without inflating its aid?

Denmark is one of only five countries in the NGO Prediction : YES

world which has already met the UN aid

commitment of 0.7% ODA/GNI. According to

the latest OECD statistics Denmark is giving Denmark's inflated and actual ODA 0.8% ODA/GNI. Danish NGOs praise their

Government for meeting this important

commitment and being one of the most 1800

generous aid givers in Europe.  83 129

1600

However, Denmark has set its own national 1400

commitment to not go below 0.8% ODA/GNI

and NGOs are worried that Denmark may fail 1200

to meet this commitment, especially given the 1000

steep decline in ODA levels over the last 1581 1566

800

couple of years.

600

  129 million (8%) of Danish ODA in 2005

400

delivered no new aid resources for developing

countries, according to our calculations. Once 200

this is removed, Denmark is actually below its 0

own target, registering just 0.75% ODA/GNI.  2004 2005 (preliminary)

Danish NGOs urge their Government to Total inflated aid ODA net of inflated aid ensure that they reach 0.8% ODA/GNI in a

genuine manner with real resources and not Source: OECD (2006); OECD (2005)

through aid inflation.

Danish NGOs demand

ADcecnomrdairnkgs t oof OficEiCalDd efvigeulorpesm,  en1t 6 a mssiisllt iaonnc oe  fin that their Government:

2005 was spent on cancelling debt, with most

of this going to Iraq. Danish NGOs support Go back to allocating 1% of Denmark s

debt cancellation, but argue that cancellations GNI to development assistance.

must come from additional funds. They also

point out that a large majority of this debt Make assurances such that assistance is

originates in old export credits and is now not diluted and translates into new and

being channelled back into the state budget, additional resources for poverty

while also being counted as aid. As one eradication and for the MDGs.

Danish NGO commentator pointed out: "The

money is not moving 5000 kms from Finance debt relief through additional

Denmark to Africa, but 500 meters from the funds, probably from the Export Credit

Ministry of Foreign Affairs to the Treasury!"  Facility itself.

In addition, if we draw on Denmark s official aid trends over the last four years,   113 million or 7% of its ODA in 2005 was spent on housing refugees in Denmark, making it the worst European country in terms of

percentage of ODA used to house refugees.

Organisations consulted : Danish EU-NGO Platform and IBIS.

FINLAND Wmiilnl i Fminu lman EdUmaeide tt aitrsget by

2006 without inflating its aid?

According to the latest OECD statistics NGO Prediction : YES

Finland is significantly ahead of the EU 2006

minimum aid target, registering 0.47% OECD figures reveal that   121 million, or ODA/GNI in 2005. But   132 million (18%) of 17%, of Finnish ODA in 2005 was spent on this delivered no new aid resources for cancelling debt, mostly for Iraq and Nigeria. developing countries, according to our Debt cancellation is likely to make up a calculations. Once the inflated aid is removed, significant part of Finland s aid budget in however, Finland still remains comfortably future years and is not just a one off problem. above the EU target, registering 0.38%

ODA/GNI.  In addition, if we draw on Finland s official

aid trends over the last four years, 2% of Finnish NGOs are pleased that their Finnish ODA or   11million is likely to have Government has met the EU minimum target been spent on housing refugees in Finland in ahead of schedule with genuine aid. However, 2005.

they urge their Government to stop inflating

their ODA figures immediately and note their Though at present Finland does not register concern that in the next couple of years, their on its aid figures the cost of educating foreign Government will continue to inflate its figures students in Finnish universities, it is currently even more in order to make the 2010 targets.  considering whether to count this on this

ODA. Finnish NGOs appeal to their

The 115 Finnish NGOs who took part in the Government to abandon the idea of

0.7% campaign in Finland in 2005, note that subsidising Finnish universities from aid Finland can easily afford to fulfil its aid  money money for poverty reduction. Finnish

NGOs are also concerned that Finnish aid commitments and believe that Finland should includes mixed concessional credits used to genuinely increase its aid.  support Finnish exports to poor countries.

Finland's inflated and actual ODA Finnish NGOs demand that:

Finland follows the example set by its Nordic neighbours and fulfils its

800 commitment to raise its ODA to 0.7. This

should be through genuine transfers of 700 132

real resources.

600

[3] Stop paying for refugee related costs and 500 mixed concessional credits from aid funds. 400 Continues efforts in the field of debt relief

590 and makes them additional.

300 535

On top of this Finnish NGOs demand that: 200 the Finnish Government raises its support to

the least developed countries, especially to 100 Ethiopia, Mozambique, Zambia and

Tanzania, which are among Finland s eight

FRANCE WEUil laiFdr atnacreg emt ebeyt 2it0s06mwiniitmhouumt

inflating its aid?

France was the first G7 country to adopt a NGO Prediction : LIKELY

timetable for its ODA to reach 0.7% of GNI. In

March 2002, the French president announced France's inflated and actual ODA the adoption of an official timetable for

French ODA to reach 0.7% of GNI by 2012,

with an intermediary target of 0.5% in 2007.  9000

8000

According to the latest OECD statistics France

is already ahead of the EU 2006 minimum aid 7000

target and near its commitment to reach 0.5%

by 2007, registering 0.47% GNI/ODA in 2005. 6000

However, 3.6 billion (40%) of French ODA in 5000

2005 delivered no new aid resources for

developing countries, according to our 4000

calculations. Once this inflated aid is 3000

removed, France is below the EU minimum

target, registering only 0.28% ODA/GNI. 2000

1000

French NGOs hope that France will not only

reach the minimum EU aid target next year 0

with aid that delivers new resources, but come 2004 2005 (preliminary)

close to its 0.5% commitment. They urge their Total inflated aid ODA net of inflated aid Government to ensure a genuine increase in

aid in the coming year and to stop inflating Source: OECD (2006); OECD (2005)

their ODA figures.

French NGOs demand

OECD figures show that   2.6 billion, or 32%, that their Government:

of French ODA in 2005 was spent on

cancelling debt and the large majority of this

was to Iraq and Nigeria. Debt cancellation is Calculate debt relief figures on the basis of

likely to make up a significant part of France s their market value, so that it does not

ODA in future years and is not just a one off overestimate their impact on recipients

problem.  budget, and improve the transparency of debt

cancellations.

In addition, if we draw on France s official aid

trends over the last four years,   305 million Exclude export credit debt cancellation

of its ODA in 2005 was spent on housing from ODA.

refugees in France and a further   373 million

was spent on educating foreign students in Exclude artificial aid from ODA (mainly French universities. France is one of the worst students costs, housing refugees, expenditures European countries for inflating their ODA to French Territories).

with foreign student costs.

Adopt a programming law in order to

Despite France s poor record, French NGOs make real ODA reach 0.7% of GNI by 2010 do note that some expenditures of genuine and to improve both predictability and quality French aid to regional initiatives as the of aid.

European Development Fund and global

initiatives like the Global Fund to Fight Aids, Coordination Sud members detailed

the UN and the multilateral development demands can be seen in their 2005 report on banks, are increasing in 2006. French ODA available at:

www.coordinationsud.org

GERMANY Wmiilnl i Gmeurmm aEnUyamideteatrigtest by

2006 without inflating its aid?

According to the latest OECD figures German NGO Prediction : UNLIKELY

is currently on track to reach its EU 2006 aid

target, registering 0.35% ODA/GNI in 2005. According to OECD figures, over one third - However,  3.4 billion (43%) of German ODA  2.9 billion - of German ODA in 2005 was in 2005 delivered no new aid resources for spent on cancelling debt, with the large developing countries, according to our majority of this to Iraq and Nigeria. Debt calculations. Once this inflated aid is cancellation is likely to make up significant removed, not only is Germany significantly part of Germany s ODA in future years and is below the EU minimum target, registering just not just a one off problem.

0.20% ODA/GNI, but the amount of genuine

aid it gave has actually decreased since 2004. In addition, if we draw on Germany s official

aid trends over the last four years   487 German NGOs are hugely disappointed at million, 6%, of its ODA was spent on

their Government s dismal performance in educating foreign students in German

2005 and are deeply concerned that their universities, making it the worst EU country Government has actually decreased the for inflation on this item. A further   49 amount of genuine aid it gave in 2005. They million of German ODA in 2005 was spent on call upon their Government to make a real housing refugees in Germany.

effort this year to ensure that they deliver

substantial genuine new resources to the German NGOs calls on the

world s poor in order to meet the EU target.

They also demand that Germany immediately German Federal Government to: stops inflating its ODA figures.

Increase German development assistance so that it provides genuine new resources to developing countries.

Germany's inflated and actual ODA Exclude cancellation of non-concessional

debt from official aid figures.

Introduce innovative financing instruments.

8000 7000 6000 5000 4000 3000

Raise the effectiveness of German development cooperation and co-ordinate it more efficiently on an international level.

2000 1000

0

2004 2005 (preliminary)

Total inflated aid ODA net of inflated aid

Source: OECD (2006); OECD (2005)

For detailed information: www.weltweite-aktion-gegen-armut.de/docs/DSGA-VENRO-positionpaper.pdf

GREECE WEUil laiGdretaercgeemt beeyt 2i0ts0 6mwiniitmhouumt

inflating its aid?

According to the latest OECD figures Greece NGO Prediction : UNLIKELY

is currently far below the EU 2006 aid target

of 0.33%, registering only 0.24% ODA/GNI in Greece's inflated and actual ODA 2005. Only  2 million of Greek ODA in 2005

did not deliver new aid resources, according to

our calculations. This makes Greece one of the 450 2

best European countries when it comes to not

misleading the public with aid inflation, but 400 2

still a very weak performer when it comes to

350

delivering on its aid increases.

300

Greek NGOs are disappointed and concerned

that their Government is off-track to meet the 250 429

EU minimum aid target by 2006 in a genuine 200 378

manner. They call upon their Government to

make a real effort this year to ensure that they 150

deliver substantially more genuine resources

100

to the world s poor in order to meet the EU

target. They also demand that Greece 50

immediately stops inflating its ODA figures.

0

If we draw on Greece s official aid trends over 2004 2005 (preliminary)

the last four years,  2 million of Greek ODA Total inflated aid ODA net of inflated aid in 2005 was spent on housing refugees in

Greece. Greek NGOs call for the Greek Source: OECD (2006); OECD (2005)

Government to totally remove this

expenditure from the ODA budget and Greek NGOs demand

redirect the funds towards poverty reduction that their Government:

and finance support for refugees in Greece

from the domestic budget.

Commits to a public timetable to increase

Greece does not currently account for any its genuine aid in order to meet the EU costs for foreign students in Greek universities target of 0.51% by 2010 and the UN target and Greek NGOs praise their Government for of 0.7% by 2015.

not counting this as ODA.

Introduce clear commitments to target the

Greek NGOs also point out that the majority of Greek aid to low income Government needs to do more to ensure countries.

sustainable increases and call for a public

timetable to meet the UN 0.7% target. They Fully untie all Greek aid.

also note that there are many other problems

with Greek aid. In particular, they point to the On top of this Greek NGOs call for the tying of official aid and the very large Government to:

percentage which goes to middle income Develop a clear policy rejecting harmful countries, which in their opinion seriously economic policy conditions to aid, reduces Greece s effectiveness.  including aid through multilateral

organisations, so that recipient countries have the policy space to decide on their own development path.

Introduce a more transparent and accountable planning and budget process.

IRELAND Wmiilnl i ImreulmandEUmaeiedt t iatrsget

by 2006 without inflating its aid?

NGO Prediction : YES

Ireland s inflated and actual ODA

According to the latest OECD figures Ireland exceeds the EU 2006 minimum aid target,

600 1 registering 0.41% ODA/GNI in 2005. Only

1.5 million of Irish ODA in 2005 was

500 3 inflated aid, according to our calculations,

making it one of the best European countries when it comes to not inflating its ODA

400 figures. Once the inflated aid is removed,

Ireland still remains comfortably above the

300 556 EU target.

493

Irish NGOs are pleased that their Government 200 has met the EU minimum target ahead of

schedule with genuine aid. However, they urge 100 their Government to continue to increase

their genuine aid levels in line with their own

0 national timetable: 0.5% by 2007, 0.6% by 2010

2004 2005 (preliminary) and 0.7% by 2012.

Total inflated aid ODA net of inflated aid

If we draw on Irish official aid trends over the Source: OECD (2006); OECD (2005) last four years, 700 thousand euros of Irish

ODA in 2005 went towards expenditure

related to accommodating refugees in Ireland

and a further 700 thousand was spent on

educating foreign students in Ireland.

Irish NGOs are asking their Government to:

Keep its promise to spend 0.7% of national income annually on overseas aid by the year 2012, at the latest.

Introduce legislation to ensure that future Governments abide by this timetable.

All debt cancellation must be additional to Ireland s contribution toward meeting their obligation of spending 0.7% of national income on overseas aid.

Further information: www.budget.gov.ie/2006/downloads/StabilityPr

ogramme.pdf www.irishaid.gov.ie/latest_news.asp?article=678 www.dci.gov.ie/latest_news.asp?article=618

ITALY Waidil lt Iatraglye t m b ey e 2t 0it0s6 mwiint ihmo uu mt EU

inflating its aid?

According to the latest OECD figures Italy NGO Prediction : UNLIKELY

spent only 0.29% ODA/GNI in 2005. This is

far below the EU minimum target for 2006. Itlay s inflated and actual ODA

On top of this,   1.4 billion (34%) of Italian

ODA in 2005 delivered no new aid resources

to developing countries, according to our 4500

calculations. Once this is removed, Italy is

even further away from the EU minimum 4000

target, registering a pitiful 0.19% ODA/GNI.

This puts Italy as the least generous European 3500 1365

aid giver of the EU 15 Member States. 3000

Italian NGOs are hugely disappointed at their 2500

Government s terrible performance in 2005 2000 95

and are deeply concerned that Italy will not

meet the EU minimum target next year. They 1500 2702

urge their Government to make a real effort 1000 1916

this year to ensure that they deliver

substantial genuine new resources to the 500

world s poor in order to meet the EU target.

They also demand that Italy stops inflating its 0

2004 2005 (preliminary)

ODA figures.

Total inflated aid ODA net of inflated aid According to OECD figures just under   1.4 Source: OECD (2006); OECD (2005)

billion or 33% of Italian ODA in 2005 was

spent on debt cancellation with the majority Italian NGOs demand that

of this going to Iraq and Nigeria. In addition, the Government elected in

if we draw on Italy s official aid trends over

the last four years,  13 million of ODA in April 2006:

2005 was spent on housing refugees in Italy.

Significantly increases "fresh money" for

Italian NGOs also note that a high percentage transfer to developing countries so as to of Italian aid is tied to Italian goods and meet Italy s agreed international aid services. Unfortunately the Italian targets for 2006 and 2010.

Government does not tell its taxpayers how

much aid money is diverted to subsidise

Italian businesses; it has refused to publish TcohheeIrteanlitaannGd otrvaenrnspmaer nent tp rreopdourcte o an

such figures since 2001. Scrutiny of Italian official aid spending to enable public development spending is also hampered by scrutiny of aid allocations.

the fact that Italian aid spending is carried out

by different ministries which do not release

combined figures.

Organisations consulted : ActionAid International, Italy.

LUXEMBOURG Will Luxembourg meet its minimum EU aid target by

2006 without inflating its aid?

NGO Prediction : YES

Luxembourg s inflated and actual ODA Luxembourg comes out as the best

performing EU country in terms of aid quantity and limited aid inflation, according

250 to our calculations. It is one of only five

countries in the world which has already met

[4] the UN aid commitment of 0.7% ODA/GNI. 200 0 According to the OECD s official figures in

2005 Luxembourg registered 0.87% ODA/GNI. And not one bit of this is inflated aid.

150

Luxembourg NGOs are delighted by their

192 212 Government s good performance and call

100 upon their Government to continue their

excellent record by reaching their own

national target of 1% GNI/ODA by 2009 in a 50 genuine manner.

THE Will The Netherlands meet its NETHERLANDS m20i0n6imwuimth oEuUt ai indf l taat ri gn eg t i tbsy aid?

NGO Prediction : YES

The Dutch Government has been spending

high amounts on aid for a number of years Netherland s inflated and actual ODA and is one of only five countries in the world

that has already achieved the UN target of

0.7% ODA/GNI. According to the latest

4500

OECD figures the Netherlands spent 0.82% of

ODA/GNI in 2005. Of this   477 million 4000 477

(12%) of Dutch ODA in 2005 delivered no new

aid resources to developing countries, 3500 268

according to our calculations. However, once 3000

removed, the Netherlands is still one of the

top aid performers in Europe.  2500

2000 3653

Dutch NGOs praise their Government for 3166

being one of the most generous aid givers in 1500

Europe. But they urge their Government to

1000

stop inflating its ODA figures immediately.

500

According to OECD figures   330 million or

(8%) of Dutch ODA in 2005 was spent on debt 0

2004 2005 (preliminary) cancellation, with the majority of this going to

Iraq and Nigeria. Dutch NGOs argue that Total inflated aid ODA net of inflated aid export credit debt write-downs should be paid

from the Export Credit Facility s income and Source: OECD (2006); OECD (2005)

not counted as ODA. In addition, if we draw

on the Netherlands official aid trends over Dutch NGOs demand that the

the last four years, 4% or  147 million was Dutch Government remove

spent on housing refugees in the Netherlands

in 2005, making it one of the worst European from its official aid figures:

Union countries for inflating its aid on this

item. Export-credit debt cancellations.

Dutch NGOs are also concerned that other Spending on climate change mitigation non-aid items are increasingly being counted through the Clean Development

as official development assistance. These Mechanism.

include expenses to prepare projects under the

Clean Development Mechanism (CDM) of the Police and military spending.

Kyoto Protocol on climate change. Such

expenses should not be considered aid since

they are expenses of industrialized countries

that choose to use the CDM facility. Another

area of concern is expenses for certain

activities classified as peace & security .

PORTUGAL Wmiilnl i Pmourmtu gEaUl amide etta ritgset by

2006 without inflating its aid?

According to the latest OECD figures, NGO Prediction : UNLIKELY

Portugal is currently far below the EU 2006

aid target of 0.33%, registering 0.21% Portugal s apparent aid spending was inflated ODA/GNI in 2005. In addition,   16 million by an amazing 70%. This was the result of (5%) of its ODA in 2005 delivered no new aid including debt cancellation (  570 million), resources to developing countries, according student costs (  25 million) and a small

to our calculations. Once this is removed, amount on housing refugees within Portugal Portugal is significantly below the EU target, (  1 million), according to OECD statistics. registering only 0.20% ODA/GNI.

According to OECD figures   2 million or 1% Portuguese NGOs are hugely disappointed at of Portuguese ODA was spent on debt

their Government s poor performance in 2005 cancellations in 2005. In addition, Portugal, and are deeply concerned that Portugal will according to provisional figures, spent   13 not meet the EU minimum aid target. They million on educating foreign students in

urge their Government to make a real effort Portugal.

this year to ensure that they deliver

substantial genuine new resources to the Portuguese NGOs are concerned about the world s poor in order to meet the EU target. quantity, quality and effectiveness of

They also demand that Portugal stops Portuguese development assistance. They inflating its ODA figures.  argue that the current Portuguese

Government s approach to public spending

In fact, in 2004, Portugal was one of the main makes it unlikely that aid will rise rapidly.

EU culprits for inflating its ODA with items They also argue that "the level of public which failed to deliver new aid resources to information and awareness on aid levels and developing countries. If we look at 2004  policies is very limited" and that there is

inefficient and ineffective coordination between Government departments.

Portugal s inflated and actual ODA Portuguese NGO s demand

that their Government:

900 Raise aid spending in line with

800 international commitments.

700 Focus spending on a coherent basis with 600 592 sustainable development objectives.

500 Introduce clearer rules on allocation and 400 evaluation of aid funds.

16

300

200 250 279

100

0

2004 2005 (preliminary)

Total inflated aid ODA net of inflated aid

Source: OECD (2006); OECD (2005)

Organisations consulted : National development NGO platform

SPAIN WEUil laiSdpatainrgmeteebty i2ts0 0m6i nwimithuomut

inflating its aid?

According to the latest OECD figures, Spain NGO Prediction : LIKELY

only registered 0.29% ODA/GNI in 2005. This

is below the EU target and makes Spain the Spain s inflated and actual ODA third last donor out of the 15 old members,

only better than Greece and Portugal. In

addition   435 million (17%) of this can be

considered as inflated aid according to our 3000

calculations. Once this is removed, Spain is

significantly below the EU target, registering 2500

only 0.24% ODA/GNI.

2000

Spanish NGOs are aware that their new

Government is struggling to increase both the

quantity and quality of its aid, but the 1500 departure level is extremely low and Spain is

still by 2005 one of the worst performers. The 1000 Government has committed to make a real

effort this year through the new 2006 budget 500 to ensure that they deliver substantial genuine

new resources to the world s poor in order to

0

meet the target. They also demand that Spain

2004 2005 (preliminary)

stops inflating its ODA figures

Total inflated aid ODA net of inflated aid According to OECD figures   401 million or

Source: OECD (2006); OECD (2005)

16% of Spanish ODA in 2005 was spent on

debt cancellation. In addition, if we draw on Spanish NGO s demand that

Spain s official aid trends over the last four

years,  15 million of Spanish ODA in 2005 their Government:

was spent on housing refugees in Spain and a

further   20 million on educating foreign All political parties commit to a timetable

students within Spanish universities.  to reach 0.7% of aid as a proportion of

gross national income.

Spanish NGOs are calling for the Spanish

Government to ensure that debt relief funds 20% of aid is allocated to essential services.

are additional to existing aid, including this

commitment in the new law that is being At least 0.15% of gross national income is

discussed in parliament on debt relief. They

allocated to the least developed countries,

welcome the Spanish Government s own

especially Sub-Saharan African ones.

pledge to reach 0.5% by 2008 but urge it to do

so by increasing real resources available for

development spending.

Spanish NGOs also note that there are still many other challenges regarding the quality of Spanish aid. About 30% of bilateral aid at present is tied to the purchase of Spanish goods and services. This distorts spending for commercial gain rather than poverty reduction.

SWEDEN Wmiilnl i Smwu emd eEnU maiede tta irtgset by

2006 without inflating its aid?

The Government of Sweden has been providing NGO Prediction : YES

a high level of development assistance for many

years. It is one of only five countries in the According to the latest OECD figures,   43 world which has already reached the UN target million of Swedish ODA in 2005 was spent on of 0.7%. Swedish NGOs praise their debt cancellations. In addition, if we draw on Government for meeting this important official aid trends for the last four years, a commitment and being one of the most further   132 million was spent on housing generous aid givers in Europe.  refugees in Sweden.

Sweden has set its own national aid target of Swedish civil society 1% ODA/GNI by 2006 and Swedish NGOs are

concerned that Sweden should reach this organisations call for: target, but through genuine aid resources.

The removal from official aid statistics of

According to the latest OECD statistics Sweden amounts that do not result in increased

is giving 0.92% ODA/GNI in 2005.  174 resources available for combating poverty million (7%) of this did not deliver any new aid in developing countries.

resources for developing countries, according

to our calculations. Once this is removed, Sweden should not use its aid budget to Sweden is far away from its own target, finance debt relief.

registering 0.86% ODA/GNI.

Untying of all Swedish aid to developing

Swedish NGOs urge their Government to countries.

ensure that they reach 1% ODA/GNI by 2006 in

a genuine manner with real resources and not An end to the use of economic policy through aid inflation. They also call for the conditions on aid so that recipient Swedish Government to stop inflating its aid. countries have policy space to decide on

their own development models.

Sweden s inflated and actual ODA

The delivery of real development aid that focuses on poor peoples needs, has a clear

3000 rights-perspective and takes long-term sustainable development as its starting

174 point.

2500

163

2000

1500

2466

2061

1000

500

0

2004 2005 (preliminary)

Total inflated aid ODA net of inflated aid

Source: OECD (2006); OECD (2005)

Organisations consulted : Forum Syd, Diakonia, Church of Sweden

UNITED

KINGDOM WEinUifl llaa itt dhin etg aU ri Kgtse  mtai ebd ey? t 2 i0ts0 6mwiniitmhouumt

According to OECD figures the United NGO Prediction : LIKELY

Kingdom has already exceeded the EU

minimum aid target, registering 0.48% UK s inflated and actual ODA GNI/ODA in 2005. However, a third (  3

billion) of this did not deliver any new aid

resources for developing countries, according 9000

to our calculations. Once this is removed, not 8000

only is the United Kingdom below the EU 2977

target, spending only 0.31% ODA/GNI, but 7000

the amount of genuine aid it gave has actually 634

6000

decreased since 2004.

5000

British NGOs hope that the United Kingdom

will reach the minimum EU aid target next 4000

year with aid that delivers new resources, but 3000 5805 5679

remain concerned, especially with the

reduction this year in actual aid levels. They 2000

urge their Government to ensure a genuine 1000

increase in aid in the coming year in order to

ensure they meet the EU minimum aid target. 0

They also demand that the UK Government 2004 2005 (preliminary)

stop inflating their ODA figures.  Total inflated aid ODA net of inflated aid According to OECD figures   2.97 billion, or Source: OECD (2006); OECD (2005)

34%, of UK ODA in 2005 was spent on debt

cancellation and most of this went to Iraq and UK development

Nigeria. This is not a one-off problem as, NGOs demand that

according to our projections,   2 billion of

British aid will go on debt cancellations in their Government:

2006. The UK gives a positive example to

other EU countries, however, by not including Set itself a more ambitious target of

any spending on refugees or on foreign reaching 0.7% in 2010.

students in its aid statistics.

Stop counting debt relief as part of its

UK NGOs congratulate the UK Government progress towards reaching 0.7%. Debt

on setting its own target of 0.7% by 2013, with relief financing should be additional to aid an interim target of 0.47% in 2007/08. UK financing.

NGOs hope that once the huge debt spikes in

2005-6 have past, the UK Government will get Improve the quality of its aid, by fully back on track to meet these targets in a implementing its position on economic genuine manner.  conditionality, by reviewing its use of

technical assistance and encouraging more local procurement.

It should also do more to promote mutual accountability, including through implementation of the Paris Declaration on Aid Effectiveness, ensure meaningful and effective mechanisms for reaching agreed targets to improve aid quality, and the promotion of human rights and the country level.

Organisations consulted : British Overseas NGOs for Development (BOND), UK Aid Network (UKAN).

New EU Member States

CZECH REPUBLIC

Will the Czech Republic meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures, the Czech Government is spending 0.11% ODA/GNI in 2005. However, 12 million of Czech ODA in 2005 will deliver no new aid resources for developing countries, according to our calculations.

Czech NGOs are seriously concerned that the Czech Republic will not meet its 2010 commitment. This is because the Czech Government has announced that its spending will remain at 0.11% of GNI for 2004, 2005 and 2006. Czech NGOs urge their Government to provide a substantial increase in genuine aid.

According to OECD figures 10 million of Czech ODA was spent on debt cancellation in 2005. In addition, if we draw on official aid trends for the last four years, 4 million was spent on housing refugees within the Czech Republic.

Czech NGOs note additional problems with Czech ODA, highlighting that the complicated administrative system of Czech ODA has led to a fragmentation of responsibilities, with no central development agency. There are also problems linked to the one-year financing system that complicates all stages of the development project cycle.

State aid administration is currently divided among 11 different ministries and it is extremely important to establish a Czech Development Agency as a necessary precondition for effective planning and implementation of ODA projects and programmes.

However, on a more positive note, Czech NGOs praise the Government for the enormous progress it has made in terms of transparency in its aid delivery. A new ODA

28

administration system to be introduced in 2006 should enhance transparency of project identification and formulation and results of project monitoring and evaluation.

Czech NGOs note that their greatest overall demand, however, remains the need for a steady increase in Czech ODA in line with its EU aid commitments.

Organisations consulted:

FoRS - Czech Forum for Development Cooperation, Development Centre of the Institute of International Relations, People in Need.

CYPRUS

Will Cyprus meet its EU 2010 minimum aid target of 0.17%?

Prediction : UNLIKELY

According to the European Commission s March 2006 figures Cyprus spent 0.04% ODA/ GNI in 2005, making Cyprus the least generous aid giver of all new Member States. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Cypriot NGOs are extremely concerned that Cyprus will not meet its EU aid target in 2010 and consider these numbers very low, given the economic context of Cyprus. They urge their Government to increase the amount of genuine aid they give in the next couple of years. They also demand that there is greater transparency in ODA reporting in Cyprus.

In addition, Cypriot NGOs point out that the targets set by the Cyprus Government include a focus on the Millennium Development Goals and especially the poverty reduction goal, the untying of ODA and a strong interest in ensuring aid effectiveness.

The demands of Cypriot NGOs include a better allocation of aid funds, and Cypriot NGOs hope a climate of trust can be established between development NGOs and the Government.

Organisations consulted:

CARDET, Doctors of the World Cyprus, Cyprus Neuroscience and Technology Institute.

EU aid: genuine leadership or misleading figures?

ESTONIA

Will Estonia meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures, the Government of Estonia spent 0.06% ODA/GNI in 2005. Due to a lack of data it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Estonian NGOs are concerned that Estonia will not reach 0.17% ODA/GNI by 2010. They note that development cooperation gets very low priority in the Government and consider their aid spending rather low in comparison

to that of some of the other new Member States. Estonian NGOs urge their Government to substantially increase the genuine new aid resources in the coming years; in order for Estonia to meet its EU aid target. Though

they note that their Government its taking some steps to make development assistance more transparent, they call for still greater transparency in aid reporting by their Government.

Estonian NGOs are also happy that the debt cancellation finance Estonia contributed to the Highly Indebted Poor Countries Trust Fund was not counted as official development assistance in 2005.

Estonian NGOs ask their Government to:

Keep Estonia's commitment to reach the 0.17% by 2010.

Introduce clear commitments to target aid to Least Developed Countries, basic social services and the MDGs.

Provide clear figures.

Make more efforts to raise awareness on global poverty and inequality.

Organisations consulted:

Estonian Roundtable for Development Cooperation (AK ).

HUNGARY

Will Hungary meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures, the Hungarian Government spent 0.9% ODA/GNI in 2005. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Hungarian NGOs are very worried that Hungry will not meet its EU aid target in 2010, despite substaintial increases in aid over the last couple of years. This is because their Government recently announced that the Hungarian Ministry of Affairs budget will be reduced by two thirds in 2006.

Hungarian NGOs also demand greater transparency and standardised data from their Government on aid spending. All too often the different Government departments responsible for ODA spending publish different figures.

Hungarian NGOs urge their Government to reach its EU aid commitments.

Organisations consulted:

National development NGO platform.

LATVIA

Will Latvia meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures the Latvian Government spent 0.61% ODA/GNI in 2005. Due to a lack of data it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Latvian NGOs are extremely concerned that Latvia will not meet EU minimum aid targets in 2010 due the very slow pace that official aid is increasing within Latvia. This is confirmed by the current Government s development cooperation financing policy which foresees reaching only 0.10% GNI by 2010, below the target of 0.17%.

Latvian NGOs also demand greater transparency in Latvian aid spending, highlighting that there is no public information on how much Latvian official aid figures are inflated by including debt write- downs and spending on education and refugees.

Latvian NGOs demand that their Government:

Reach at least 0.17% GNI by 2010.

Introduce transparency for the selection of aid-funded projects.

Organisations consulted:

Latvian NGDO Platform.

LITHUANIA

Will Lithuania meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures Lithuania spent 0.06% ODA/GNI in 2005. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Lithuanian NGOs are extremely concerned that their Government will not met the EU

aid target, noting that the Government lacks political will. Official aid policy is limited to a narrow circle of specialists. Lithuania s national parliament has no plans to discuss ODA issues.

Lithuanian NGOs urge their Government to increase aid spending in the next couple of years to ensure that Lithuania reaches its target. They also call for greater transparency in ODA implementation, evaluation and accountability.

Organisations consulted:

Lithuanian NGDO Platform, Institute for Social Ethics.

MALTA

Will Malta meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures the Maltese Government spent 0.18% ODA/GNI in 2005, exceeding the EU target for 2010. However, almost half of this did not deliver any new aid resources for developing countries, according to Maltase NGOs. The majority of this was spent on housing refugees within Malta, though debt cancellation is also counted as ODA. Once this is removed, Malta is significantly below the EU target.

Maltese NGOs are optimistic that Malta will meet its EU aid targets in a genuine manner, but demand that Malta stops inflating its aid figures. Maltese NGOs also call for greater transparency and access to information on Maltase ODA.

Organisations consulted:

Koperazzjoni Internazzjonali Malta.

POLAND

Will Poland meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures Poland spent 0.09% ODA/GNI in 2005. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries. However, Polish NGOs highlight that according to their data, a significant part of official aid figures announced by the Ministry of Finance figures was spent on debt relief; an example is 8.7 million of Ethiopian debt.

Polish NGOs are seriously concerned that the Polish Government will not reach the EU ODA target, despite sharp increases in their aid over the last couple of years. They urge their Government to prove them wrong and to provide more genuine aid resources in line with the EU target. They also call for greater transparency in Polish ODA reporting.

Polish NGOs also highlight that there is little consistency in development spending among various ministries in terms of priority countries and other approaches. The list of main 10 recipients of bilateral aid in 2004 includes only half of 6 countries considered priority countries by the Ministry of Foreign Affairs. Some projects raise many questions, for example investment credits for China in 2004.

Organisations consulted:

National Platform

More information: ODA report for 2004 (in Polish only): www.msz.gov.pl/files/docs/pomocpr2.pdf

SLOVAKIA SLOVENIA

Will Slovakia meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNLIKELY

According to the European Commission s March 2006 figures the Slovakian Government spent 0.09% ODA/GNI in 2005. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Slovak NGOs are concerned that the Slovak Government will not meet the EU aid target for 2010. They note that they are not satisfied with the official aid figures and point out that bilateral aid levels have remained at the same level for 3 years. They also point out that there is need for greater transparency in Slovakian ODA reporting.

Slovak NGOs call on their Government to:

Increase total Slovak aid.

Increase bilateral aid.

Publish a "road map" to reach 0.17% GDP of ODA in 2010.

Organisations consulted:

Slovak NGDO Platform.

Will Slovenia meet its EU 2010 minimum aid target of 0.17%?

NGO Prediction : UNSURE, INSUFFICIENT INFORMATION

According to the European Commission s March 2006 figures Slovenia spent 0.12% ODA/GNI in 2005. Due to a lack of data, it is not possible to reveal how much of this delivered no new aid resources for developing countries.

Slovenian NGOs are not happy about the lack of detailed official information on aid spending. They point out that there is no overview of the projects financed by different ministries. It is not known how much Slovenian official aid figures are inflated by including debt write-downs and spending on education and refugees.

Slovenian NGOs are pressing for more transparency of official aid spending, for example by allocating funds through open calls for proposals, and more influential position of Ministry of Foreign Affairs within the Government when allocating aid funds through different ministries. Thus NGOs would be able to advocate for and monitor a more efficient allocation of funds.

European Commission

European Governments have committed to increase their aid flows dramatically. However the amount channelled through the European Commission will rise more slowly than bilateral spending. Around 90% of the new aid will be provided bilaterally and the EC s share in the overall European Union budget is set to drop from 20% to 15% between 2005 and 2010.

However European Commission (EC) external spending will remain very significant. It is set to increase by 4.5% per year between 2007 and 2013 and an additional 22.6 billion will be spent during that period through the

European Development Fund (EDF). 23

Campaigners are questioning how European aid will be focussed and managed. Will EC aid be used to serve the interests of Europe s trade and foreign policies rather than those of the poorest people in the developing world? Calls to make EC development money conditional upon adherence to Europe s migration policy will likely become more frequent. Will European Governments continue to divert development funding to other purposes?

It is clear that the "war on terror" impacts directly on the EC s relations with developing countries. In 2004 the EU funded a 250 million grant to the African Peace Facility by reducing by 1.5% the development allocation of each African country in the European Development Fund. The proposed Stability Instrument now provides the opportunity to replicate this type of non-poverty-focused spending from the EC budget at the expense of development priorities. This instrument is designed to finance, among other things, the fight against terrorism in developing countries. Funded by monies originally allocated to long-term development, most assistance will continue to be claimed as ODA even though it has been redirected to the security agenda.

The European Commission has drafted a series of thematic guidelines for the programming of the 10th European Development Fund; for example on the war on terror , migration and fragile states. Security issues are thus likely to be an explicit focus of the next generation of Country Strategy Papers.

In 2005, the EU's Asia & Latin America Member State Management Committee voted

through a project in the Philippines that includes intelligence capacity-building, border control and counter-terrorism initiatives, financed by development funds. The European Parliament has recently initiated legal proceedings against the European Commission at the European Court of Justice on the basis that the funding does not meet

its supposed aim to aid development by means of financial, technical and economic cooperation. The decision of the Court is still pending. 24

Moreover the European Commission is pushing for other activities that are clearly outside the limits of development cooperation e.g. the Erasmus Mundus educational programme to be covered by a regulation governing EC aid to developing countries between 2007 and 2013 (Development Cooperation and Economic Cooperation Instrument).  2  5

The fungibility of development funds is equally evident in the area of trade. On the one hand, institutions are realising that imposing Economic Partnership Agreements (EPAs) on ACP countries might not be the best means for promoting development. On the other, the real alternatives are not being considered. Rather development funds are being diverted as a way of making EPAs more acceptable. In the discussions on the programming of the 10th EDF, the Commission continues to press for trade- related assistance to be classified as development assistance.

Campaigners and parliamentarians will continue to monitor closely how the European Commission allocates and reports on aid.

Organisations consulted:

Eurostep, Aprodev, Bond, Eurodad, Cidse/Caritas Europa.

Endnotes

1. EU aid pledges:

2. OECD Development Cooperation Official Development Assistance [18] European Commission (2005), Directorate (2005) Scaling up for Results: Preliminary Data for 2005. Available at:  Speeding up Progress towards the Issues Paper, OECD.  www.oecd.org/dataoecd/34/24/36418634.pdf  Millennium Development Goals .
3. OECD (2006) Aid flows top USD 100 To calculate European Member States ODA [19] International Working Group on

billion in 2005 . Available at spending on refugees and foreign students Innovative Financing Instruments Report www.oecd.org/document/40/0,2340,en_264 in 2005, Eurodad took the average ODA December 2004. 9_201185_36418344_1_1_1_1,00.html. And spent on domestic refugees and imputed

European Commission (2006), Financing student costs reported to the OECD DAC [20] OECD (2006), Aid flows top USD 100 for Development and Aid Effectiveness - for 2000- 2004 and added an extra 2% per billion in 2005 . See especially Table 1: Net The Challenges of scaling up EU Aid 2006- annum in line with OECD DAC data on Official Development Assistance In 2005 2010 . ODA projections which assume a GNI Preliminary Data. Available at:

growth rate of 2% p.a. These past trends for www.oecd.org/dataoecd/34/27/36418598.pdf

4. United Nations (2002), Final Outcome of European countries can be found in the

the International Conference on Financing OECD (2006) Statistical Annex of the 2005 [21] European Commission (2006),

for Development, United Nations, 1 March Development Co-operation Report. Financing for Development and Aid

2002, United Nations. Available at: Available at: Effectiveness The challenges of scaling up www.un.org/esa/ffd/aconf198-11.pdf.  www.oecd.org/document/9/0,2340,en_2825 EU aid 2006 2010 .

_495602_1893129_1_1_1_1,00.html

5. UNDP (2003), Human Development [22] OECD (2006), Aid flows top USD 100 Report 2003: MDGs: a compact among [11] European Commission (2006), billion in 2005 . See especially Table 2: Share nations to end poverty , New York, Oxford Financing for Development and Aid Of Debt Relief Grants In Net Official University Press. Effectiveness The challenges of scaling up Development Assistance, Preliminary Data. EU aid 2006 2010 . Available at:
6. Foster, Mick, and Andrew Keith (2003), www.oecd.org/dataoecd/34/24/36418634.pdf The Case for Increased Aid: Final Report to [12] This spending is labelled domestic

the Department for International refugees by the OECD DAC. [23] European Commission, Communication Development. Volume 1: Main Report. from the Commission to the Council and Essex, United Kingdom.  [13] OECD Development Cooperation the European Parliament On Financing for

Directorate (2005), Progress Report - Development and Aid Effectiveness, the

7. OECD (2004), The DAC Journal Implementing the 2001 DAC Challenges of Scaling Up EU Aid 2006- Development Co-operation 2003 Report, Recommendations on ODA in LDCs , June 2010, 2nd March 2006, p.33.

Volume 5, n¡ 1, 2004. 2005, OECD cited in the European

Commission / OECD (2006) EU Donor [24] Official Journal of the European Union

8. OECD (2006) Aid flows top USD 100 Atlas 2006: Volume One.  C 10/15, 14 January 2006:

billion in 2005 available at http://europa.eu.int/eur- www.oecd.org/document/40/0,2340,en_264 [14] OECD Development Cooperation lex/lex/LexUriServ/site/en/oj/2006/c_010/c 9_201185_36418344_1_1_1_1,00.html  Directorate (2004) Statistical Annex of the _01020060114en00140015.pdf

2005 Development Co-operation Report,

9. European Commission (2006), OECD, Table 10. Available at: [25] Eurostep Briefing N¡31, Response to

 Financing for Development and Aid www.oecd.org/document/9/0,2340,en_2825 the Commission Non Paper of 3rd July, Effectiveness - The Challenges of scaling up _495602_1893129_1_1_1_1,00.html Legal basis for a regulation on a

EU Aid 2006-2010 . Available at: Development Cooperation (and Economic http://europa.eu.int/comm/development/b [15] European Commission / OECD (2006), Cooperation) Instrument. ody/communications/aid_effectiveness_en. EU Donor Atlas 2006 Please note that this

htm. excludes bilateral ODA unallocated by

income group.

10. The figures in this table calculate the

amount of each European Government s [16] OECD Development Cooperation Official Development Assistance in 2005 Directorate (2005) Statistical Annex of the that was spent on debt relief and assistance 2005 Development Co-operation Report, to refugees and foreign students in the OECD, Table 26.

donor country. All the figures have been

drawn from official sources. Debt relief [17] European Commission / OECD (2006), statistics are taken from OECD (2005), EU Donor Atlas 2006: Volume One . Table 2: Share Of Debt Relief Grants In Net

Report signatories

COUNTRY ORGANISATION REPRESENTING

AUSTRIA Austrian EU-Platform 38 NGOs AGEZ - Arbeitsgemeinschaft Entwicklungszusammenarbeit 32 NGOs

KOO 24 NGOs

BELGIUM

CYPRUS CZECH REPUBLIC DENMARK

ESTONIA FINLAND

FRANCE GERMANY

GREECE HUNGARY

IRELAND

ITALY LATVIA LITHUANIA LUXEMBOURG MALTA

THE NETHERLANDS

SPAIN

POLAND PORTUGAL SLOVENIA SLOVAKIA

SWEDEN

UNITED KINGDOM