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Development Aid on the Decline, Warns New Study

UNITED NATIONS, Dec 10 2015 (IPS) - UN Secretary-General Ban Ki-moon expressed fears last month that increases in humanitarian aid to thousands of refugees invading Europe could result in sharp cuts on development aid by Western donors.

Confirming those fears, a new report by CONCORD, the European confederation of non-governmental organisations (NGOs) representing all 28 European Union (EU) members, points out aid budgets are increasingly being used to cover refugee and asylum seekers costs: the Netherlands at 145%; Italy 107%; Cyprus 65%; and Portugal 38%.

And despite repeated promises, the EU, as a whole, did not deliver on its commitment to spend 0.7% of Gross National Income (GNI) as official development assistance (ODA) by 2015.

More worryingly, says the report, there is an emerging trend in EU countries to divert aid budgets from sustainable development to domestic costs associated with hosting refugees and asylum seekers.

Luxembourg, Poland and Bulgaria have already decided not to report refugee costs as ODA, contrary to Spain, Malta and Hungary.

The report, the tenth CONCORD AidWatch and titled “Looking to the future, don’t forget the past – aid beyond 2015,” finds that EU as a group remains well short of the target having spent 0.42% of its GNI on aid, with only four of 28 Member States meeting the 0.7% target;

The only four EU countries meeting aid targets are: Luxembourg, Sweden, Denmark and the UK.

According to CONCORD, the largest increases in EU aid were in the EU13 countries, namely Romania (65% increase), Croatia (41%), Estonia, (21%), Hungary (13%) and Malta (13%).

Significant increases were also recorded in Germany (14%), Finland (14%), the UK (9%) and Sweden (7%), although aid is expected to contract significantly in Finland in 2015.

Major cuts were recorded in other countries, including Lithuania (21% cut), Spain (20%), Portugal (14%), France (8%) and Poland (7%).

Of these countries, Spain, Portugal and France are a source of serious concern, because they have continued on a downward trend for the last few years.

Asked about declining aid, the UN Secretary-General told reporters at a press briefing in Finland Wednesday he appreciates the difficulties and challenges facing many European countries.

“At the same time, I commend such compassionate leadership and generous support for many refugees who are seeking better opportunities and safety. “

“While I appreciate such difficulties, I ask the rich countries, the European countries, to increase their financial support and generous support for all these migrants and refugees, rather than diverting their already earmarked development aid.“

Ban said he realizes there is a limit to resources.

“So inevitably, they may have to temporarily divert and use this development money for humanitarian purposes but in the longer term, if this kind of trend continues, it will only perpetuate this bad balancing between humanitarian and development.”

If development doesn’t move on, it will create more jobless people, it will create more frustration and then, they may have to flee their homes again for better opportunity, he warned.

“So I think you have to address this in a balanced and comprehensive way – that is my earnest appeal to many European countries.”

Asked specifically about Finland, he said it was one of the biggest donors in the world, and one of the leaders of the world for the development agenda and empowerment, and for peace and human rights.
“It is a model Member State and I asked many other Member States to emulate from that shining example,” he added.

Meanwhile, the CONCORD report says EU aid is still seen by many as a tool to drive policy change or liberalization in partner countries – much aid remains directly tied or comes with a ‘suggested’ policy agenda.

The study also said development aid commitments by EU countries are also at risk of being “greenwashed” to meet climate finance promises to poorer nations and that these existing aid commitments could be relabeled to qualify as climate finance. Also the growing costs of climate change should not replace existing development priorities.

The UN’s post-2015 development agenda 2030, which was adopted by world leaders last September, will require ambitious financing from all actors.

“What’s been lacking to date is real action from most – though certainly not all – of the donor community to meet their own commitments and promises on aid which we’ve seen again this year as the EU misses its own 2015 target to deliver on the 0.7% promise.

Aid will remain a vital development source for years to come – it is focused on reaching the hardest to reach which is vital for the leave no one behind agenda and is more flexible, predictable and accountable, the report says.

To ensure the new development framework delivers as expected, EU should reach the 0.7% target by 2020 in line with the commitment made (at the Financing for Development Conference in July) in Addis (Ababa, Ethiopia)”, said Amy Dodd CONCORD AidWatch Chair and Director UK Aid Network.

Jessica Poh-Janrell from CONCORD Sweden, said: “We recognize the urgent nature of the current refugee crisis, but remain convinced that aid should be used to support development in third countries.”

The world’s poorest should not foot the bill for the refugee costs in Europe. Aid is essential to prevent more people having to flee their homes. Continuing investing in fighting poverty and inequality in developing countries is ultimately the most sustainable way of dealing with the crisis in the long term, she added.

Last month Ban appealed to the international community not to forsake its longstanding commitment for development assistance to the world’s poorer nations.

Ban’s appeal followed a UN pledging conference on Nov 10 which reported a “dramatic decline” in donor commitments: from 560 million dollars in 2014 to 77 million dollars in the most recent pledges, largely covering 2015.

Asked if the Secretary-General’s appeal was the result of the decline in commitments, UN Deputy Spokesman Farhan Haq told IPS: “It’s in response to many factors, including concerns expressed by some states about maintaining aid levels.”

The secretary-general said resources for one area should not come at the expense of another.

Redirecting critical funding away from development aid at this pivotal time could perpetuate challenges that the global community has committed to address, he warned.

“Reducing development assistance to finance the cost of refugee flows is counter-productive and will cause a vicious circle detrimental to health, education and opportunities for a better life at home for millions of vulnerable people in every corner of the world,” Ban declared.

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