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Thursday, July 31, 2014
- In an unprecedented move, all 27 EU development ministers championed budget support Monday as an effective way of reducing poverty in developing countries. At the same time they gave the green light to a new ground-breaking initiative to prevent new humanitarian crises in the Horn of Africa.
Ahead of the Rio+20 summit on sustainable development in June and this year’s new EU budget negotiations, the council of EU Development Ministers backed budget support, the aid modality in which money is given directly to the recipient country government, as an effective way to provide aid to developing countries.
All member states agreed on the official Council conclusion that they were committed to “use budget support effectively to support poverty reduction, make aid more predictable and strengthen the partner country’s ownership of development policies and reforms.”
Oxfam, together with several other NGOs who advocate budget support, applauded the Council’s decision. “This is the first time all member states are recognising the benefits of budget support,” Catherine Olier, development expert at Oxfam, told IPS.
The Council’s decision follows recent studies that have shown the effectiveness of budget support in reducing poverty. For example, last December the Organisation for Economic Cooperation and Development (OECD) published a report demonstrating the positive effects of budget support in Zambia, Tunisia and Mali.
In all three countries the OECD reported important achievements in education in terms of total enrolment, increased participation of girls, and access for students from poor areas. In Zambia the improved health service led to a decrease of tuberculosis, malaria and diarrhoea incidence. It also brought about a reduction of child and maternal mortality.
“With budget support you give ownership to the country to manage the funding according to their own needs. This way it helps countries to finance vital and recurrent costs,” Catherine Olier told IPS. “It allows them to pay teachers and doctors over the course of several years. It can cover the costs of the drugs to treat illnesses. Project-based aid is shorter in time and therefore less predictable, it cannot cover the costs of doctors and teachers in the long term. This is exactly what a developing country needs.”
The EU Ministers’ move to commit to budget support comes as a surprise since the aid modality has always been heavily criticised. According to many it leads to increased corruption in the recipient country.
“No method of aid is without risk,” said Olier, “but in this case there’s a lot of fear without any justification. In fact it’s the contrary: according to several studies, budget support is a good means to effectively fight corruption. Budget support is not just a blank cheque. It comes with policy dialogue. Donors start engaging with the recipient governments. It makes governments accountable towards their citizens, their parliament and civil society.”
Olier’s statements are confirmed by research. According to the conclusions of OECD’s 2011 assessment of Tunisia, Zambia and Mali, “budget support contributes to improved accountability and transparency of budgeting processes and is a valid support for the implementation of reforms, when governments and citizens are actively committed thereto.”
At the same meeting Monday afternoon, the EU’s development ministers approved a new plan to boost the prevention of hunger and famine in the Horn of Africa. Since July 2011, more than 13 million people have been facing the consequences of extreme drought. To prevent the outbreak of a new crisis, the EU is initiating the ‘Supporting Horn of Africa Resilience’ (SHARE) project. With SHARE, the EU wants to improve the transition from emergency assistance to long-term development aid.
“More than 400,000 members signed our petition urging leaders to break the cycle of famine and take action in the Horn of Africa – today shows Commissioners have listened. We now hope the EU will be able to provide additional funding for this important initiative, and member states should also step up”, Eloise Todd, director of international NGO ONE said in a press release.
“This new project is ground-breaking,” Natalia Alonso, head of Oxfam’s International EU office in Brussels, told IPS. “Until now, emergency response to humanitarian crises only went to the most urgent needs. With this new plan, the efforts will not only be spent on supplementary nutrition for malnutrioned children, but also on supplementary nutrition for a community’s lifestock. So when the crisis is over, the community will still have the means to continue its livelihood. That’s what building resilience means: adapting to the situation but looking at the future as well.”