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DEVELOPMENT: EU Countries ‘Massaging’ Aid Figures

Stefania Bianchi

BRUSSELS, Apr 3 2006 (IPS) - In the run-up to crucial European Union aid talks next week, leading development groups say most EU member states are boosting projections of commitments to poor countries by “massaging” their aid figures.

Non-governmental organisations (NGOs) including Eurodad, ActionAid, Oxfam and Eurostep say a total of 12.5 billion euros (15 billion dollars) – nearly a third of European Union (EU) aid in 2005 – was spent on debt cancellation, housing refugees in Europe and educating foreign students in European universities, instead of giving new aid to fight poverty.

“Some European countries are artificially inflating their aid figures including with items that are not representing new money for poor countries,” Hetty Kovach of the European Network on Debt and Development (Eurodad) told IPS Monday (Apr. 3) on behalf of the broader NGO coalition.

“We are challenging those governments to clean up their aid reporting and meet their targets with genuine new money. What developing countries need is more aid money to save lives and not for donors to save face,” she added.

In a briefing paper released Monday (Apr.. 3), the coalition of European organisations and national platforms representing hundreds of NGOs across Europe said that key EU member states including Britain, France and Germany have inflated their aid figures. Other governments such as Austria are failing to deliver any new aid increases, while some countries such as Italy will simply fail to meet targets, they said.

The charge comes on the eve of the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) special meeting in Paris, where official aid figures for 2005 will be discussed.

The OECD is a group of 30 rich countries. The DAC is the main body through which the OECD deals with issues related to cooperation with developing countries. Environment and development ministers are meeting in Paris Apr. 3-5 to discuss ways of helping developing countries strengthen their economies without harming the environment.

EU foreign and development ministers are then due to review the bloc’s aid targets when they meet in Brussels Apr. 10.

Last year European governments made a historic commitment to reach the United Nations target of allocating 0.7 percent of their gross national income (GNI) to fight extreme poverty by 2015. If these pledges are honoured, Europe will provide at least 31.5 billion euros (38 billion dollars) more aid a year from 2010 onwards.

New official figures released by the European Commission, the EU executive, in March show that European member states are ahead of their collective target. But the development groups are warning that “there is no room for complacency.”

They say France, Germany and Britain appear to have the most inflated aid figures in 2005 with respectively 3.5 billion euros (4..2 billion dollars), 2.96 billion euros (3.56 billion dollars), and 2.26 billion euros (2.72 billion dollars) spent on debt cancellation, housing refugees in Europe and educating foreign students in European universities.

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

The groups say Britain, France, Germany and Italy together counted 8.47 billion euros (10..2 billion dollars) of debt relief for Iraq and Nigeria as part of their official development assistance (ODA).

“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. Its cancellation will do little to fight world poverty,” the paper says.

Austria, which currently holds the rotating presidency of the EU, is also charged with inflating its aid figures by as much as 50 percent in 2005.

The groups add that Italy is unlikely to meet agreed aid targets and that it spends even less on aid than some of the much poorer new EU member states. Italy’s official ODA level is close to new member states like Malta, Slovenia and the Czech Republic.

Although the NGOs praise a few countries like Sweden and Luxembourg for their high aid levels and minimal aid inflation, they are calling for new rules to ensure that debt cancellation does not come at the expense of new aid for developing countries.

Although technically permitted under OECD rules, the NGOs say EU governments’ insistence on accounting for debt cancellation in their ODA figures contravenes the United Nations agreement in Monterrey in 2002. The agreement calls for debt cancellation to be funded additionally to ODA.

“The credibility of the EU as a world leader in giving aid to poor countries is at stake. NGOs are watching closely in all countries to hold their governments to their pledges,” Han Verlayen told IPS on behalf of 11.11.11 and the Belgian platform of CONCORD.