Italian aid in 2009

By analysing the commitments of the development aid activities approved by the Italian development cooperation in 2009, it is possible to estimate sectoral and regional priorities for the Italian development cooperation implemented via the Foreign Affairs budget during the Italian Presidency of the G8. Italy committed more than 500 million euro from the Ministry of Foreign Affairs budget - 25% in loans. Despite the Italian commitment to allocate 50% of the development cooperation budget to the sub-Saharan Africa, 21% was allocated to the Middle east while the Sub-Saharan region received only 8.3%. According to the 2008 DAC statistics, 38% of the bilateral Italian aid, net of debt relief, was tied, while the 2009 value is estimated still on decrease - at 28%. The MFA systems also allows to track the MDG commitments, as well. In 2009 the best funded MDG was MDG 1 (25%), followed by MDG 7 (3.5%) and MDG 4 (2.8%).

Italian aid fragmentation

According to a December DAC study on country aid fragmentation, between 2004 and 2008 donors fragmented initiatives increased. The main purpose of the study is to agree on a measure to label an aid relation as being a “concentrated action”. The criteria used is twofold: 1) being among the top 10 donors in the partner country or 2) allocating a share of aid to the partner country that is more than the average that those to average partner country. These top down and arbitrary criteria are a compromise between small and big donors, while not including partner country perspective to assess when an aid relation can be labelled as “significant”. Following the DAC methodology, fragmentation of Italian aid has slightly increased, and the Italian development cooperation should phase out and re-allocate aid activities in 12 out of 33 priority countries.

Another study by the OECD Development Center assesses the sectoral fragmentation, pointing out to likely sectoral specialization, as measured by the financial investment made. The Italian investment in the production sector are the least fragmented among all aid sector. This result is shared by other small donors such as Portugal as aid initiatives in favour of the economic sector can be big project, being financially oversized for the aid budget of those agencies. When Italian sectoral fragmentation is analyzed for the social sector investment in the detail, the results are especially poor in health, population and water. In these sub-sectors, Italy is supporting the most fragmented initiatives among DAC donors.

The European Commission has released a study trying to assess the financial advantages for the EU donors by fully applying the aid effectiveness criteria. The study sums up different estimates for volatility, uncoordinated donors mission and analysis and eventually it states that the EU could save between 3-6 billion euro a year with a Paris Declaration compliant management. By applying the same methodology to Italy, the annual spending reduction is more limited that at the EU level, at around 160 million euro.

Reviw of Italian development cooperation by the DAC

Yesterday, the Development Assistance Committee (DAC) of the OECD presented in Rome the results of the Italian Peer review . The DAC document noted that Italian Co-operation is facing major challenges. The first is an urgent need to reform official development co-operation, but no political consensus on how to proceed. The second is that Italy will fail to meet its international commitment to increase official development assistance (ODA) to 0.51% of its gross national income (GNI) by 2010 and is unlikely to meet 0.7% by 2015. In 2008 Italy’s ODA/GNI ratio was 0.22%, only 19th amongst the 23 DAC members and 8th in terms of aid volume.

The DAC called upon Italy to demonstrate the strong political leadership needed to reform and fund a reliable and results oriented aid programme.

Despite the challenges remaining, the DAC notes some improvement in Italian aid management since 2008. It welcomes Italy’s intention to focus on 35 priority countries, the greater authority given to Italy’s embassies and technical offices to deliver and to contribute to formulating programmes and deliver aid, and the Steering Committee on Development Co-operation’s high level policy direction.

Italy still needs a strategy for its development co-operation shared by all stakeholders and to ensure that development assistance committee; italian co-operation; DAC; official development assistanceall relevant government departments and regional and local authorities work to common objectives; build systems to promote coherence between development co-operation and other policies; reform human resource management for the core cadre of development experts; and regularly undertake monitoring and independent evaluation. In addition, the limited political debate and public awareness about Italian Co-operation show there is an urgent need for the Italian authorities, together with civil society, to build popular support for development and public pressure for reforming Italian Co-operation.

Out of the 19 reccomandation the DAC Chair pointed out to 4 major priorities for Italian aid : approval of a new legislation for development cooperation; a strategic vision; swif progresses on Policy coherence for developemnt and develop apublic opinion communication strategy.

Official data on Italian aid in 2008

According to the 2008 DAC data, released on December 8th, the Italian ODA/GNI ratio was at 0.22%, with a 15% increase from its 2007 level, still second last among EU donors. By discounting debt relief, ODA/GNI decreases to 0.18% with Italy ranking last in Europe. However Italy increased it total aid disbursement by 468 million dollars ( 234 million, net of debt).

The top 5 countries are Iraq, Afghanistan, Palestine, Ethiopia and Lebanon. Iraq accounts for 45% in the total bilateral share, thanks to debt cancellations.

Italian aid - as share of bilateral aid - to sub-Saharan Africa decreases to the minimal share of 18,7%. The region received only 30% in the absolute bilateral aid increase ( 70 milion dollars, including debt), against 50% EU target. However, Italy has slightly sharpened its aid poverty focus, accounting for 25% of total bilateral aid from 24%, with an increase by 120 million dollars in one year.

As for sectoral investment, Italian support to Basic Social Services increases by 100 million dollars, accounting 7% of the total bilateral ( it was 5.4% in 2007).

Italia tied aid has decreased to 20% of total bilateral from 40% last year. By discounting debt relief, as being untied aid by default, Italian united aid share decreases from 78% to 38%, improving Italian ranking from the last position to the fourth last.

ODA from Italian Regions

According to a recent survey, the 22 Italian regions fund development cooperation interventions worth 45 million euro per year, to be counted within the Italian ODA. The first 4 most generous regions accounts to 74% of the total. Although decentralized cooperation is often featured as one of the postive development in the Italian development cooperation, financially speaking, it is still a limited actor. All regional resources account at 14% of the financial resources available the Italian Ministry for Foreign Affairs and as much as two big NGOs ,such as MSF and Save the Children, annualy raise from private contributions.

Italian debt relief activities since 2001 to 2009

The annual progress report on the implementation of the Italian law on international debt relief (Law n° 209/01) has been published. Since it has been implemented, from 2001 until June 2009, Italian bilateral debt relief activities amounted at 6,47 billion euro, with 61% in Africa and 68% included in the top five countries (Iraq, Nigeria, Congo, Mozambique and Ethiopia). Italian debt relief financially skyrocketed in 2005 (56% of the total amount). Later, each annual share is around 1%, showing the quick and successful implementation of Law 209/01. Moreover, Italian shaky aid quantity performance was yearly boosted by 22%, thanks to the reporting of debt relief operations. In the near future, Italian aid heavy reliance on debt relief operations and the exhaustion of the Italian debt stocks towards developing country is to bring about a significant and stable reduction in Italian aid levels. Eventually, 86% of the whole debt stemmed from the Italian export credit agency initiatives to support Italian firms abroad and not from concessional lending developing countries could not afford to pay back.

Ranking Italian response to Humanitarian emergencies

Last week, the DARA research center published the third edition of the Humanitarian response index, ranking 23 donors countries as for quantity and quality of their responses to Humanitarian crises. In 2009, Italy ranks third last, only followed by Greece and Portugal. In every index dimension, Italy performs consistently far below its peer donors average.

It ranks: 20th as for its response to humanitarian needs and for its generosity, second last in prevention, ability to work with humanitarian partners and evaluation of humanitarian interventions.
Italy’s recorded best scores concern timeliness of funding for onset disasters (ranking 4th best donor) and Italy is among the best 10 performers as for the investments in forgotten crisis.

Looking at the details in the Index dimensions, Italian flaws in responding to emergencies get clearer and clearer. Italy ranks: 4th last as for need assessment capacity; 3rd last at contributing to human rights protection, transparency in funding, ability to save human lives and protect human dignity and it is the worst donor as for funding timeliness to complex emergencies.

In order to increase its index performance Italy should reform her strategic and management response to humanitarian emergency following Norway, Sweden and Ireland examples; all scoring among the top three donors for all index dimensions.

Italian commitment to IFAD and conflict scenarios

During the 7^th IFAD replenishment Conference, Italy pledged 41 million euro to be disbursed by the end of 2009. So far, Italy has disbursed just 36%, ranking last among donors in terms of commitments/disbursement ratio, followed by Belgium (50%) France (67%) and the UK (74%). All IFAD donors, including developing countries, have already fully met their pledges. Last year, at the end of the 8^th replenishment, Italy further increased its financial commitment to IFAD by 56%, ranking as the second “virtual” contributor after the USA. Due to its relevant financial share, the low level in the Italian financial disbursement could financially harm the IFAD planned activities.

At the end of October, the Government issued the third Decree extending Italian military missions abroad till the end of 2009. Although it provides financial resourses for the army, the Decree generally includes a financial envelope to fund development cooperation activities in countries in crisis. This last decree appropriates 6.8 million euro to development cooperation activities with the total level for 2009 up to 82 million euro. In comparison to last year, 2009 ended with a 12 million euro gap for development cooperation initiatives.

Italian scores in the Commitment to Development Index, 2009

The Centre for Global Development has recently published the 2009 Index for Commitment to Global Development - CDI. The Index is supposed to assess the overall policy framework of each OECD country under the global/economic development lenses. The aim is to understand which donors policies should be reviewed or replicated in order to foster global development. The index is built on 7 policy areas - such as development, trade, investment, migration, environment, security and technology - and it allows cross country comparison.

In 2009 Italy ranks fourth last, improving one position from last year. Thanks to the 2008 increase in aid financial quantity and the numbers of unskilled migrants, Italy could raise its overall score in 2009. Since the index inception, the Italian performance has been very low due its technology, development and migration policies. As for the latter, Italy hosts a limited percentage of unskilled migrant workers and refugees fleeing from humanitarian crises. The Italian aid initiatives are financially inadequate, too fragmented and tied to the purchase of national goods and services. Eventually, Italy neither publicly invests nor encourages private investment in R&D, via tax incentives. As for regions, Italy is deemed to achieve the best results in terms of external policies fostering development in North Africa and Middle East while the Far East seems to be harmed the most.

Goverment commits to increase aid allocation before end of December

On October 27, the Government agreed on two bi-partisan parliamentary motion on increasing financial resources to development cooperation before the end of 2010. The minority motion was also accepted when mention to financial increase up to 500 million euro for the Ministry of Foreign Affairs was removed. Now it just engages the government to significantly increase resources for development cooperation

The minority motion also commits the Government to start the Parliamentary debate on aid reform again, taking into account discussions during the last legislature, and eventually to clearly state which aid financial commitments will be met in 2010 due to dearth of financial resources.

The majority requests are more vague than the previous ones, asking the Government to fulfil its commitments towards the Global Fund and international food aid agreements, while also increasing development cooperation staff.

Both texts commits the Government to increase aid allocation from current levels by the end of December. However, it is worth noting that the about to be issued decree on peace keeping missions in 2010 would have provided for an aid in fragile states contexts, in any case, in continuity with the past, with no need of any a Parliamentary activity. The actual fulfilment of this engagement by the government should be measured net of the Peace-keeping Decree.

The Italian and Development Aid

According to the recently released Eurobarometer poll on the EU citizens perception on “commitments towards development cooperation”, despite the financial crisis, 90% of the Italian public support development cooperation as important, with 47% asking to keep the aid financial promises versus 13% supporting a freeze or cut in current aid levels. Italian public is ranks 7^th as for awareness on the MDG, (32%) ,and 9^th for importance give to development cooperation. However, only for a small percentage (20%) consider public development aid as aimed to solidarity only without any self interest. 27% consider aid as an investment to ensure greater stability, 24% to prevent migration flows and 24% to counter terrorist spreading in developing countries

Italy and policy coherence for development in 2009

According to the recently EC report on Policy Coherence for Development (PCD), all 12 priority policy areas listed in 2005 have moved in the right direction, at national and the UE level. The report structure is not transparent and it does not allow to list which Member States are more progressive or at the bottom of the Policy Coherence reforms. According to the report, all PCD areas showed some progress with Italy being indirectly praised for its reform on migration policy ( multy-entry VISA), energy ( support to the Carbon fund) and medical research policies to support developing countries academic institutions. These remarks are quite contradictory with what Italy reported to the Commission when submitting its questionnaire. In its submission, Italy considered “very weak” the whole EU progress on the PCD agenda over the last 2 years. On average, it self-assessed its PCD performance positively, yet acknowledging the lack of any progress in terms of implementing the link between poverty reduction and migration, the support to e-government and lack of implementation for the EC strategy for Energetic needs in developing countries.

Italian Budget law: no increase to the 2009 minimal aid level

Today, the Parliamentary budget session has officially started in the Senate. The executive budget proposal restate the same financial level of the aid budget for the Ministry of Foreign Affairs as in 2009, despite the G8 pledges. The MFA proposed budget for development cooperation is set at 326 million euro, in real terms the same level as in 2009. However, only 173 million euro could be committed to new development initiatives, as the remaining is needed to fund on going multiannual activities and cover administrative costs. This financial amount is even more limited when compared with how much Italian NGOs are able to collectively fund raise from the private sector- up to 300 million euro per year. More broadly, the whole budget does not seem to allocate financial resources to actually pay the first Italian instalment to the IDA 15 - 284 million euro. Needless to say that the Italian contribution to the Global Find against AIDS, tubercolosis and malaria, together with the IFAD and the Asian development Funds contributions would need an extra budgetary appropriation to be met. The Government has to present a special law to cover almost 1 billion euros to fund peace-keeping and enforcement missions in 2010, that will provide the last opportunity for Italy to star honouring its aid pledges, to support countries facing the economic effects of the crisis.

Italian tied aid to the LDCs

According to the last DAC report on implementing the 2001 recommendations, in 2007 only 53% of Italian aid bilateral commitments to LDCs were untied, pushing Italy to the bottom of the DAC donors list. The main sectoral share of the LDCs tied aid is due to Power plant initiatives (19 million dollars) and emergency distress (16 millions dollars) interventions ( 36% in total). It is important to note that according to the 2001 DAC recommendations, emergency relief has no obligation to be untied. In 2008 the value of emergency tied aid might further increase as Italy shipped 25 miilion euros worth of food aid ( chicken meet, mailnly) being purchased from 4 Italian companies.

The 2007 tied aid result in LDCs is quite surprising as Italy amended its International development Law's section dealing with tied soft loans, in order to comply with the 2001 and 2008 OECD/DAC recommendations on aid untying. This figure might point out to the need to better communicate internally changes of the Italian aid regulatory framework in order to chance long-established aid management practices

Italian ODA in 2009 after the G8 Summit

At the G8 summit, Prime Minister Berlusconi reaffirmed his commitment to meeting the aid pledges which Italy endorsed over the past few years. At the press conference of July 9^th, he confirmed the disbursement of the Italian contribution to the Global Fund to fight AIDS Tuberculosis and Malaria ‑ 130 million euro + additional 30 million euro to fill the Fund 2009 financial gap ‑ by the end of August; the Prime Minister’s statements were not entirely clear as dollars were mentioned instead of euro. Moreover, Italy is reported to have committed a total of USD 450 million over three year as its share of the 20 billion dollar G8 pledge to mobilize funds for a global response to the food crisis.

The Italian Government’s announcements on aid can be seen as a response to the media campaign which culminated in the last few weeks to the Summit. The international media message was simple: Italy lacked the legitimacy to chair a Summit African session due to the grave cuts in aid. Italian aid is estimated to shrink from 0.22% ODA/GNI in 2008 to 0,15% - 0,17% in 2009 in the light of the current GDP forecasts, where the upper level might possible if IDA instalments were paid in time.

In reality, the Summit did not add substance to these promises; on the contrary, a press release by Minister of Foreign Affairs (MFA) Franco Frattini included references only to the 2015 EU ODA target (0.7% ODA/GNI) with no mention of the 0.51% ODA/GNI by 2010. More worryingly, the Government asked MPs to drop a 15 month deadline for a modest 60 million increase in the MFA aid envelope - equalling the 2006-2008 appropriation - off a Parliamentary motion on the G8 conclusion if they wanted to get the Government’s support.

In the wake of Summit, the Italian Government approved the Financial Perspective 2010-2013 paper: there is no tangible reference to aid increases. The Ministry for Foreign Affairs’ annex to the Financial Perspective mentions the need for a re-alignment plan of the Italian aid, yet this suggestion did not pass into the final document.

To sum up, the budget appropriation session just started is not making provision for an increase in ODA levels, which currently reflect the 56% cut in the Ministry of Foreign Affairs (MFA) managed aid (about 23% of on-budget ODA). If no change in the current financial legislation is passed, the MFA aid will face a further 33% reduction in 2011, after a minimal increase in 2010.

Italy not meeting DAC recommendations on aid untying to LDC

Over time, by adopting the OECD/DAC untying recommendations, the waiver got permanent for the HIPC and the Least Developed Countries (LDCs). Unfortunately, according to the last DAC report on implementing the 2001 recommendations on aid untying towards the LDCs, in 2007 only 53% of Italian aid bilateral commitments to LDCs was untied, ranking Italy at the bottom of the DAC donors list.

Threats to aid effectiveness implementation

There are warning signals that could weaken the implementation of the recently approved aid-effectiveness . The new evaluation unit – re-established after 2 year all posts were vacant - has no budget to commission independent external evaluations. Lack of political will and budget resulted in a complete stop of any independent evaluation activity by the Italian development cooperation since 2002. Recently, Director of the local Italian Cooperation offices were prohibited hiring staff in a decentralized way. This is another worrying signal, slowing down further decentralization, that should be aimed at enabling strategic decision-making at country level.

Italian Plan on Aid effectiveness approved

On July 14th, the Steering Committee of the Italian development cooperation, chaired by the Ministry for Foreign Affairs, Hon. Franco Frattini officially approved the Italian Plan on Aid effectiveness. It is a 11 page document, including 26 specific reforms to be implemented by the Ministry of Foreign Affairs in order to have the Italian development cooperation compliant to the Paris Declaration principles. This is the first comprehensive politically binding document attempting to translate international aid effectiveness commitments into internal action, as unlike other donors no Italian aid-effectiveness plan had followed the 2005 Paris Declaration. The adoption of the 2009 plan is not unexpected. In December 2008, the new three year strategy of the Italian development cooperation, had already pointed out aid effectiveness as one of the priority for the Italian development cooperation. The actually drafting started in January 2009, fully including Italian civil society in the aid effectiveness task team. The 6 month long exercise was speeded up by the international pressures arsing from the G8 Presidency and the still on-going DAC peer review. Although it was a participatory processes, the Plan is the result of an Head Quarter led effort with no actual involvement of the field offices. While this HQ approach is against the Paris Declaration principles, the Italian aid system is still too centralized and the aid effectiveness agenda too marginal in the field work that any serious attempt to reform had to stem from the Head Quarter. After its approval, the Plan implementation is the most critical phase as the approved reforms are to change the business-as-usual aid management attitudes. Plan implementation is likely to face resistance at Head Quarter and at field level, requiring a continuous engagement of the political leadership. Despite the fact that the Ministry chaired the Steering Committee, the Plan was strongly and continuously pushed by parts of the middle level management, succeeding at channelling the issue at high political level. On the positive side, the recommendation of the Italian Peer review and the approaching of the fourth International High Level Forum on aid effectiveness could provide some hook to keep the political interest in on aid effectiveness. As for the plan contents, the steering committee debated the extent of further untying. Civil society had asked the Plan to be ambitious on concessional loans and food aid untying, as Italy is generally among the worse EU donors in terms of aid untying. This bad record is mainly due to a legislative obstacle in the Italian law on international cooperation compelling all concessional loans to be tied unless special waiver is issued. Over time, by adopting the OECD/DAC untying recommendations, the waiver got permanent for the HIPC and the Least Developed Countries. Currently the main share of the Italian tied commitments is due to loans. Civil society had called on amending the tying paragraph in the International development cooperation Law. The plan only limited its further untying ambitions to scoping or exploring ideas for further untying, excluding any change or amendment of the Italian Law on international cooperation.

In 2009 only 11% of the Italian aid commitments to Sub-saharan Africa

Since 2005, the share of bilateral aid to Subsaharan Africa has been constantly descreasing from 39% to the minimum of 18% in 2008, according to the DAC data. According to the ActionAid real time estimates of 2009 allocations, despite the renewed official commitment to allocate half of funding for new aid initiatives in Sub-saharan Africa, only 11% of the Italian bilateral commitments were due to the region - only 23% towards the LDCSs.

71% of the Italian public support meeting aid pledges

According to a recently released Oxfam opinion poll on the Italian general public, 71% support meeting the 0.7 aid target, event in the current economic turmoil, with 41% agreeing on an immediate financial increase in the current aid levels. The result is consistent with those from previous surveys, showing the interest of the Italian general public on aid issues. Eventually, when asked about aid spending priority, 60% said aid should support access to public health facilities of the poorest people in developing countries.

The Italian 200 million euro food aid debt

Following the signing of the 1999 Food aid Conventions, Governments agreed to make available 2,5 tons of grains per year. Italy pledged an annual contribution of 36,2 million euro, but the Italian last disbursement dates back to 2004. So far Italy has accumulated a 200 million euro debt towards the Food aid convention commitments.

Italy announcing its proposal on innovative finance for health

On May 29th , Italy officially presented its innovative fiance proposal to leaverage resources for health financing beyond ODA. to the official document, the De-Tax aims to earmark a share of VAT taxes generated by participating businesses in participating countries for health systems development, combined with a voluntary contribution from businesses. The participating government would divert 1% or more of VAT on any good or service sold by businesses associated with the initiative to a designated fund for health systems development, while businesses, on a voluntary basis, would commit a share of their profits on related transactions to the same fund. De-Tax is aimed at fostering private solidarity. Its success depends on the number of participating businesses and the level of consumers’ support. Revenues would depend, in part, on the level and quality of publicity, and the administrative and transaction costs imposed on businesses.

In Italy the de-tax was launched on an experimental basis in 2003 in a triennial measure (2003-2005) and an overall coverage of 11 million Euros, the initiative never got off the ground. It has now been re-proposed with a focus on developing countries, but its philosophy is completely contrary to the international principles of aid efficiency and risks increasing the cost of transactions and fragmentation, making the entire aid system even more complex.

Actionaid report on Italian ODA launched

ITALY AND THE FIGHT AGAINST WORLD POVERTY is the fourth annual ActionAid report on Italian development cooperation,. In this series of reports, we assess the progress made by Italy in maintaining the commitments undertaken since 2000 in the fight against world poverty, drawing on the contribution of experts from the world of politics.

Last year’s report highlighted the re-launch of Italian cooperation in satisfactory terms, although acknowledging the inadequacy of the results achieved. This year, ActionAid once again reports signs of improvement and gives credit to the possibility of change. While there are still signs of recovery, the most recent financial political choices made are a cause for concern: unless there is a rethink, the planned reduction of financial resources will lead to a further marginalisation of ODA, making it an insignificant policy element for which the effort undertaken for its re-launch, or parliamentary efforts to ensure reform, will be of limited value.

The Italian Prime Minister’s inauguration speech to the Chamber of Deputies presented development cooperation as a means of ensuring the contractual capacity of the Italian system in the commodity market. During his first appearance before the Joint Foreign Affairs Commissions, the Foreign Minister Mr Frattini explained the necessity for a renewal in the debate on the legislative reform of development cooperation, by parliamentary initiative. However, since then there has been no progress on this.

This year, the areas of improvement concern the ability of Italian cooperation to stick to the timeframes for disbursing aid commitments on time (Italy is third best among European countries), the increased focus on least developed countries and an overall improvement of aid effectiveness criteria. Furthermore, the quota of bilateral aid allocated to basic essential services has doubled, and the concessionality of loans increased, while the level of volatility has decreased. Lastly, Italian aid has been concentrated in fewer countries, although the tendency to support the proliferation of micro-initiatives remains prevalent.

In terms of the total 2009 Italian state budget, which has increased by 3% in total, the resources allocated to international cooperation have been reduced by 24% overall and funds under the Ministry of Foreign Affairs have been reduced by 56%.

Since the approval of the law ruling on development cooperation (Law 49/1987), Italian cooperation has always been below the European average in financial terms. At the end of April 2008, it was 0.20% of Italian GDP (according to DAC figures) or 0.22% (according to Italian cooperation estimates). This compares to the European average of 0.42% of GDP, and is the second lowest rate out of 15 in Europe and less than the 0.25% G8 average. However, the difficult domestic and international situations do not justify such low levels of aid. If Italy had acted as the other donor countries did under similar circumstances, it would have been able to maintain a minimum level of aid of 0.29% of the GDP (net of debt cancellation), whereas the Official Development Assistance (ODA)/GDP ratio was 0.18% in 2008, net of debt.

Two consecutive state budgets led to an increase of 86% in the cooperation resources available to the Ministry of Foreign Affairs in 2007 and 2008, in addition to 1 billion Euros outside the budget in 2007. However, the 56% cut in resources managed by the Ministry of Foreign Affairs in the 2009 state budget – approximately 410 million Euros – has dragged Italy back to the minimum levels registered in 1997. For the first time, the Ministry will have less funds available for cooperation than those privately raised by non-government organisations (NGOs).

This cut is a severe blow to the current process of improving cooperation management, and will not solve the national economic problems: the development cooperation resources managed by the Foreign Ministry amount to 0.09% of state expenditure. For 2009, Ministry of Foreign Affairs figures and the estimates of the European Commission show that Italian aid will be 0.13-0.16% of GDP.

The most worrying facts, in addition to those regarding aid quantity, concern the decreased importance of sub-Saharan Africa in terms of the allocation of resources and the difficulty that the overall national institutional system has in promoting cooperation efforts and implementing coherent mechanisms. Lastly, specific attention must be given to the areas in which Italian cooperation is not only already below the European average, but where the results are actually deteriorating (sectoral concentration, aid towards least developed countries, coherence of policies and the untying of aid).

Aid transparency: Italy among the least transparent in the UE

The CONCORD 4th edition of the Aidwatch report includes the first transparency ranking of the EU 27 official development cooperation. Increased transparency is considered a vital item for aid effectiveness and it is an international commitment signed in 2008. The European NGOs respectively ranked its official development policies according to a fixed set of transparency criteria. In this first ranking, Italy resulted 6th last EU donors, scoring just a little better than Greece, Latvia, Bulgaria, Slovak and Slovenia. This poor performance is due to the dearth of information publicly available and linguistic barrier preventing from access citizens in partner countries.

2008 Italian ODA at 0.22%

OECD/DAC data on ODA released at the end of Mach will need to be corrected on the rise for Italy.
As a matter of fact, following one moth later re-calculation, Italy notified the DAC to have reached 0.22% of GDP from the previusly stated 0.20%. The previously missing 300 million euros came from the lack of conversion from euro to dollar of some multilateral contributions. Though the last Governemnt can be praised for this, this positive result is well below the politically set quantitative target of 0.33%, set by the Prodi's government for 2008.

DAC Reviewers start their field visit in Italy.

On May 11th , the 10 people DAC peer reviewers team, consisting of France, Greece and the DAC secretariat, has started their first field visit. This is part of the DAC Peer review process, expected to produce an official report by the end of November. In April Italy had presented to the DAC a 100 page long report listing the Italian development cooperation progresses since the last peer review in 2004. During this week long visit the DAC reviewers will be on a fact finding mission to gather firsthand information on the Italian development cooperation. They will meet many stakeholders, including members of Parliament and NGOs. The Reviewers are to visit Lebanon in their second filed visit as one of the priority country of the Italian development cooperation to assess it at field level. NGOs will present their own assessment on the lack of progresses and missed opportunities of the past five years. Moving from the official report of the Italian development cooperation, the NGOs counter memorandum acknowledges that while the overall legislative reform of Italian development cooperation framework has not yet produced any results, the Directorate-General for development cooperation (DGCS) has attempted to implement some of the recommendations of the DAC peer review conducted five years ago, especially during last year.

Driven by the pressure of the DAC approaching deadline, the DGCS has quickened the pace and attempted to conclude and finalise processes that started in past years. In September 2008, an internal Task force was set up to overcome Italian cooperation management inertia and implement international policies on aid effectiveness, even without a legislative reform. Despite these efforts, this late undertaking will not enable results to be available in time for the OECD examination, postponing the implementation of the expected changes to a future date. The Italian Memorandum to the DAC in many section often refers to these processes as “on-going” or “underway”. This “underway-ism “ tone indirectly makes clear that no major Peer-review oriented reform was fully implemented over the last 5 years. In the same line, despite the current analysis on aid effectiveness, and on aid quality, in the past there had been no strategic reflection on how to comply with the Paris Declaration commitment till the Accra conference. Three years were wasted while other OCED countries were attempting to implement their aid effectiveness national Plans.

Current policy and planning processes will start being implemented and face institutional resistance in the second half of 2009. Yet, the lack of financial resources and the reduced international screening on Italy after the G8 Summit will mean that two of the main incentives will be lost in the implementation phase, increasing the risk of a renewed stalemate.

The 2004 DAC review acknowledged that its 2000 recommendations were still not implemented. Now, the almost 10 year old recommendations are still valid as there was no protracted effort to implement them.

Italian development cooperation following migration flows

The Italian Parliament is about to approve a bill enabling the government to streamline and speed up bilateral cooperation agreements with countries signing migration repatriation agreements.

This controversial article is part of a broader bill, aiming at boasting Italian economic productivity; particularly it specifically entrusts the government to review its development cooperation administrative procedures in order to speed up development cooperation interventions, including management, in emergencies contexts and with partner countries that signed up to migration control and repatriation agreements. The article clearly details that additional priority is to be given to countries agreeing to jail their citizen that were initially jailed in Italy. This article is an infringement of international human rights and of the main aims of the Italian development cooperation, as stated in the Law. Eventually the article approves a 2 million euro cut of the Italian development cooperation to fund the expenditure stemming form the implementation of the Italian-Israel Treaty.

Italy to push DAC on Tied aid definition

Ahead of the next DAC WG on statistics, Italy is asking the DAC to classify local procurement of good and services as either “untied” or “partially tied”. Italy is putting forwarded its requests following Accra commitment to favour local procurement responding to demands. The overall results of the this change will be mixed. On the one hand, it will encourage donors policy reforms to favour local procurement. On the negative side, its insertion within the untying heading will allow all donors to immediately improve their scores on aid untying, with no policy change needed, possibly disliking national business.

Italian strategy for multilateral organizations

In 2009 the Italian development cooperation has issued its first strategy on multilateral organizations (3 page document). The strategy is only an annual document and does not include all the multilateral organizations. It does not refer to Regional Banks, as the document was published by the Ministry of Foreign Affairs with no clear engagement by the Ministry of Economic and Finance ( responsible for dealing with Banks).

However, contradictory, the documents breaks down the sectoral multiannual investment for multilateral organization with emergency 27% and food-agriculture 22% as the main sectors. The selection criteria followed the priority issue of the G8 presidency and evaluations by the Italian embassy. In line with the 2009-2011 strategy, the Italian development cooperation deems an asset for the multilateral organization having an headquarter in Italy, worth investing. There is no reference to any coordinated evaluation of multilateral effectiveness among partners, including donors and partners countries.

According to the document, Italy is to reduce its financial contribution to fewer multilateral organization due to financial constraints and will to further concentrate. 40 multilateral organizations are mentioned throughout the text, with FAO, WHO and UNPFA, being the most frequently referred to. This strategy commits the Italian development cooperation to develop multilateral organizations specific guidelines in case the Italian contribution be above 10 million euro.

2009 Italian ODA

According to the Italian Financial Perspective 2008/2011, the Italian ODA / GDP should have been 0.33% but it is 0.20%. Although there is an increase of 1% increase compared to 2007, if you take into account data in real terms, the level of ODA has remained broadly stable. European objectives remain far apart. The shares of Official Development Aid to be distorted by the accounting of the cancellation of the debt of developing countries, for 2008, net of cancellations, it has gone from 0.16% in 2007 0.15% ODA / GDP. In real terms, there was a reduction of 100 million dollars on the values for ODA in the period 2007-2008. Taking into account the commitments made in the past, this is a gap estimated at 3 billion dollars for 2008.

Italy working towards aid effectiveness

Last December the Italian development cooperation approved the 2009-20011 strategic plan that was meant to also provide some political direction to the work of the newly established task-force on aid effectiveness. The strategic plan states that aid effectiveness is deemed as a key priority as a response to Italian ODA quantitative limits. The dearth of financial resources could threaten any major reform as the management structure has no incentives and future perspectives. The Task-force is supposed to steer the internal debate and produce the national plan on aid effectiveness in close collaboration with the national civil society.

The 2009-2011 strategic guidelines for the Italian development cooperation officially endorses the principle of democratic ownership and commits to align future Italian country strategy paper to Partners countries national development strategies. In terms of processes the Italian commitment to ownership aims at engaging local civil society in strategic talks and a more-structured consultation with Italian-based civil society. However, there is no mention to increase transparency and accessibility of aid information to allow a better quality and timely reporting of aid. Italian reporting to the DAC is poor with non systematic reporting of DAC sectoral markers, such as gender, governance or environment. Moreover, with a view to enhance mutual accountability, the language barrier – all aid documents mainly available in Italian- should be tackled to allow citizens in Partners countries to be aware of the Italian interventions.

Despite this important effort to set clear and accountable policy criteria, the strategic guidelines does not help the effort to increase Italian aid predictability. The taskforce on aid effectiveness should explore some change to ensure a stable amount of financial resources, and at least establish a commitment to promptly communicate to partners countries financial changes. Eventually, so far the multi annual country planning is not transparent and its final documents are not publicly available to the Italian and partner country citizen.

The strategic plan shortly refers to the issue of common donors arrangements by mentioning the possible use of general budget support but no reference neither to any plan for increase nor to preliminary conditions to use the modality is made. Moreover, last September an amendment to the current legislation on development cooperation was approved to allow the Italian cooperation offices on the field to receive financial transfers from the European Commission and EU member States in order to be able to fully take part in the future EU work on division of labour. Italy is taking part into the EU exercise into 4 countries (Albania, Lebanon, Mozambique and Ethiopia).

However any improvement on the Paris Declaration indicators is linked to the possibility for Italy to participate into pooled funds or multi-donors funds, obliging to review internal administrative procedures. The strategic guidelines do not refer to any work on procedural reform to ensure greater flexibility, being specifically targeted to the aid effectiveness commitment. Yet, over the last two years, the Directorate General for Development Cooperation has being working on procedural reforms, that should be accomplished and also steered to comply with Paris Declaration targets.

Eventually the multi-year strategy is apparently silent on the problematic areas for the Italian development cooperation to meet the 2010 targets on aid effectiveness.

As for the use of country systems, the guidelines still refer to article 15 as the sufficient condition to meet the Paris declaration objective, not referring to the poor results score in 2008. The Italian development cooperation used art.15 as legal basis to take part into the General Budget Support in Mozambique, but there is scope to reduce the administrative burden. The internal on-going work on procedural reform could provide an opportunity to move forward towards the use of country systems. It has to be borne in mind that by using country systems, donors countries accept Partner countries, budget, reporting and auditing procedures. As for local procurement target, a recent DAC study assumes that Italy’s procurement for the development programme by the Ministry of Foreign Affairs Directorate General for Development Co-operation and other public organisations follows competitive procedures in line with the EU Procurement Directive, but was unable to establish to what extent bids from local or regional firms are allowed. In both cases, if the on-going procedural reform is on opportunity, policy guidelines need to be developed to clearly state the level of fiduciary risk.

The three-year plan acknowledges the recent efforts on decentralisation of decision making, increasing the number of Local Technical Units in the field, with both a national or local staff. However they do not announce for any further delegation for decision making at local level, including in financial management. A general finding from the Paris Declaration Survey is that those donors whose operations are more decentralised to their country offices or embassies tend to be more supportive of partner ownership and the use of country systems. In the Italian context the increase in delegate authority at filed level is also linked to the increase in number of the implementation units. The positive effort to move decentralization forwards should be coupled with a time table plan of parallel implementation unit reduction or restructuring. Italian PIU increased by 33% between 2005 and 2007, mainly thanks to those in Morocco, Ethiopia and Egypt.

As for joint missions and analytic work, despite the most improvement Italy recorded in 2008 survey, Italian performances are still respectively second last and third last within the EU. In the first aid effectiveness survey Italy was the second last EU donors concerning its joint work, two years later, it is still the second furthest donors from joint missions and analytic work targets. Joint work in Albania and Mozambique was particularly critical, while in Ethiopia had already met the Paris Declaration Target. Improvements on the two targets do not require any complex administrative reform to take place, it only needs a clear directives to encourage and monitor joint work. In the Italian context, it is important to note that missions by the Italian local authorities contribute to the overall result on joint work, hinting to the need of better coordination of the whole Italian cooperation system.

In the Plan, despite the specific section on concessional loans – representing the greater share of the Italian tied aid - there is no reference to further untying or support to local procurements of good and services throughout the document. As for local procurement, last December the Italian development cooperation increased the percentage of locally purchased services for some sectors for concessional loans. This move is in line with Accra commitments and further progress could be built on this. More importantly, despite the fact that article 6 of the current development cooperation legislation ties all loans, a non-legal reform was approved in 2002 to comply with the DAC recommendation on aid untying for Least Developed Countries. More specifically the Inter-ministerial Committee for Economic Planning approved the reform to allow the LDC untying. The same process is envisaged to extend the untying to the Heavily Indebted Poor Countries, proving that further untying can be quickly achieved.

http://www.cininet.org/download/CINI_Document_Planning.pdf

2008 Italian geographical aid commitments

According to ActionAid estimates on Italian aid commitments on different regions, sub-saharn Africa is ( 30%) followed by Asia (24%), Middle East (22%), America (11%), Eastern Europe (9%) and North Africa (4%). Only 50% of total committed aid has a geographical allocation. It is important to note that North Africa, Middle East and Easter Europe count as one single Region (Mediterranean ) for the Italian development cooperation . Therefore accounted for 35% of the Italian commitments. From 2009, according to the new multi-year strategy, Sub-saharan Africa should receive 50% of commitments while the Mediterranean region only 25%. A signficant re-shift within just one year.

Italian Cooperation in Water and Sanitation

As President of the G8, Italy to play a steering role on Water and Sanitation intervention in Sub-Saharan Africa (SSA) as it is tasked to revise the 2003 Evian Action Plan on Water and Sanitation. However, Italy is the least active in the Water and Sanitation (WSS) sector both globally and in Africa compared to the G7+EC, ranking last in the average annual disbursement to WSS in SSA with US$1.64 million. According to the OECD DAC Credit Reporting System, in 2006, the relatively higher commitment of US$3.9 million to WSS in SSA was not matched by any significant disbursements. Regarding the disbursements, this could be due to no investments made or because results were not reported. The reliability of Italy’s reporting system is questionable so these figures are at best indicative.

Only 14% of Italy’s bilateral ODA to the WSS sector went to Sub-Saharan Africa (SSA). However, according to the Italian Ministry of Foreign Affairs, SSA has been the main geographic focus of Italian bilateral ODA over the last few years. According to the OECD DAC donor profile (2008) on Italy, particular attention of Italian ODA is given to the Mediterranean and Middle East Region in the framework of the Barcelona Process (whereby Italy, France and Spain founded the Euro-Mediterranean Information System on the know-how in the water sector – EMWIS).

The priority sectors of Italian bilateral ODA are broadly those that concern the MDGs but more explicitly are reported as health and gender equality, and since 2008, rural and agricultural development and environmental protection. In a governmental report that forecasts investments and programmes for 2008, no mention is made of water and sanitation as a priority area. Moreover the Ministry of Foreign Affairs’ annual reports (2003 – 2006) to Parliament on Italian ODA refer to 4 initiatives and action plans of the G8 as part of their description of the international framework for development cooperation, namely, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, the Africa Action Plan, the Geneva Plan for e-government, and Education For All. However, in the latest (2006) report to Parliament on Italian ODA, the water sector is mentioned as one of the main recipients of Italian ODA in SSA, although this could be due to the significant level of ODA directed to emergency relief activities, which often include water and sanitation activities. The OECD DAC donor profile (2008) on Italy reports that WSS activities are deeply intertwined in most operations and that water supply is often found as a subcomponent in food security initiatives. Nevertheless, without a distinctive cooperation policy on water, data from the Italian Ministry of Foreign Affairs are generally insufficient and inconsistent to determine whether the WSS sector is/was a main recipient of aid.

According to the OECD DAC Credit Reporting System and in terms of the average annual ODA disbursed to all sectors and on a global scale, the proportion going to the WSS sector is very small at 1%. Within the geographical area of SSA the proportion going to WSS is even less at 0.2%. In both instances, Italy ranks last out of the G7+EC.

Italian ODA disbursements to WSS in SSA have varied in their focus. In 2004, 67% was invested in large WSS systems, and 16% in both basic WSS and Water resources policy/administration and management. In 2005 a more pro-poor approach was adopted with 55% of disbursements to WSS in SSA going to basic WSS. Development projects promoting access to water as well as environmental sustainability also include the principles of partnership, at local and global levels, and the equitable sharing of water resources among stakeholders and across geographical and administrative boundaries. Furthermore, the Italy promotes the mainstreaming of women’s empowerment into its water projects (OECD DAC Secretariat and the World Water Council, 2008).

The majority of ODA goes through bilateral channels followed by multilateral, and multibilateral channels. In 2008, forecasts show ODA going to multilateral agencies that focus on gender issues, climate change and environmental protection, agricultural development and food security, and emergency relief. NGOs are also typically used for implementation in the WSS sector. Moreover, within the WSS sector, Italy is increasing its involvement in joint programmes and programme-orientated joint financing with other donors, in line with its adoption of the 2005 Paris Declaration, to enhance aid effectiveness and increase recipient government ownership of development projects (OECD DAC Secretariat and the World Water Council, 2008).

2009-2011 concentration is to produce a major shift in Italian geographical priorities

The 2009-2011 strategy attempts to identify priority sectors and countries to ensure the greatest concentration of the Italian interventions due to limited financial resources.

The regional aid distribution commits to international consensus with Sub.-Saharan Africa receiving 50% of bilateral aid, including loans . However, in terms of aid effectiveness, the predictability of absolute country flows on three-year period is not mention, though more significant than the share of total resources. For example, between 2008 and 2009, while maintaining 50% of available resources, Sub-Saharan Africa’s absolute aid might halve due to the 56% cut to the total aid appropriations. The strategy could have clarified its commitment to maintain constant trends in a 3 year period in the priority partner countries at least. It is important to note that predictability is different from volatility. It only refers to timely reporting of aid to Partners countries rather than constant financial flows. However, ensuring a constant flow in aid resources in the main priority countries reduces aid volatility improving its quality.

It is important to stress that the planned aid geographical shares do not reflect the current proportions of regional Italian aid allocations between 2006-2007. Balkans -the Mediterranean and the Middle East Region as a whole had received 45% net-of-debt aid, while it is supposed to receive only 25% over the next three years. Compliance with the new geographical concentration will oblige the Italian cooperation to reduce its aid share in the Mediterranean to the advantage of the American region and Sub-Saharan Africa. This change together with a reduction in total financial resources is likely to result in a significant reduction in absolute aid to the Balkans, the Mediterranean and Middle East Region.

However, this regional planned share seems unlikely to be implemented due to the financial commitments to Libya, stemming from the Italy-Libya Treaty. In fact, the agreement allocates around 200 million euros a year for the next 20 years - equivalent to the resources currently available for all DGCS aid activities in 2009- to development cooperation activities.

Furthermore, the document highlights 23 priority countries, 15 countries with medium priority and 20 countries, whereby over the next three years the Italian cooperation is to phase out. In total, there are 58 partner countries for development aid over the next three years. It is a major improvement, significantly reducing Italian aid fragmentation. In 2007 94 countries received Italian aid, 86 partner countries in 2006. The 2009 concentration is in line with other European countries. In 2007, Spain pointed out 52 partner countries, Sweden set a list of 33 partner countries and Finland only 8 countries. The list of 23 priority countries will force a partial shift in the strategic allocation of Italian aid. In fact out of the first 23 Partners in 2006-2007 only 15 were among the first 23.

The Strategy does not make clear the difference in aid activities between high and medium priority countries. Only in sub-Saharan Africa, the strategy states that in high priority country Italy will directly implement, while in medium priority country Italy will deliver- almost delegating – via international organizations.

The listed priority sectors are eight, but rise up to ten, with other areas listed throughout the document of intervention. The sectoral concentration is still poor as total DAC sectors are only 12 , far away from the EC Code of Conduct on Division of Labour.

2009-2011 strategy: no resources, focus on aid effectiveness, but forgetting coherence

The 2009-2011 Strategy for development cooperation is more transparent in terms of the financial resources available for development in 2009 - 0.11% ODA/GDP - and clarifies the policy directions on the reform of the cooperation management system. The more innovative and important aspect is the attempt to identify a limited number of geographical and sectoral priorities for the bilateral and multilateral channel. However, except for the geographical concentration, the sectoral result is mixed.

The document takes into account the 2004 DAC recommendations and the conclusions of the 2008 aid related conferences - Accra on aid effectiveness and the Doha Financing for Development for the public-private partnership . Unfortunately, the document provides little detail on the strategic policy beyond the issues part of the Directorate General for Development Cooperation mandate. This lack is possibly due to the limited contribution t provided by the Ministry of Finance, raising the question about boundaries of the strategic directions: Guidelines for the whole Italian cooperation or solely for the Directorate General for Development Cooperation?

While referring to the need to monitor the effectiveness of interventions for development effectiveness beyond aid, the document makes no reference to the need to monitor and ensure policy coherence for development. The document aims to enhance an Italian system for development cooperation, including private actors, but it has to policy guidelines for all the actors whose actions have an impact in developing countries. The pursuit of policy coherence requires a high political commitment and an institutional coordination effort. The absence of any reference to policy coherence for development limits the future compliance to the DAC recommendations.

Blog survey on Italian G8 priorities for Africa

The blog Survey on the most important issues for Africa to be addressed in the Italian G8 ended after 6 moths. With 122 votes cast by international aid-watchers - Health, Agriculture and Education - resulted as the 3 main areas.

Table showing detailed results

	Italy	Intertional	Total	%
Agriculture	9	13	22	18,03
Education	15	5	20	16,39
Health	19	17	36	29,51
Energy	1	3	4	3,28
Infrastructures	4	1	5	4,10
Debt	3	3	6	4,92
Water	9	5	14	11,48
Remittances	0	1	1	0,82
Governance	6	3	9	7,38
Private sector	2	3	5	4,10
Total	68	54	122

The Libya connection: more and worse aid

Despite the heavy cuts for the development cooperation in 2009 Budget bill and the expected low levels of debt cancellations, Italy aid could have an unexpected quantitative boost by the Italian foreign policy. The Parliament has just started discussing the ratification of the Treaty between Italy and Libya. The agreement binds Italy to financially support various aid-reportable activities in Libya (roads construction, and students grants) for 20 years. Thanks to this Treaty, Italian ODA will increase by around 200 million euro each year ( around 0.012% of the Italian GDP) with predictable and additional money to the current ODA budget. In fact, the Parliament is also supposed to increase a profit-tax on oil-firms, in order to meet the Treaty financial requirements.

On the negative side, this additional money is going to worsen the quality of Italian aid, particularly its tied share- still 40% of the Italian bilateral ODA in 2007. As a matter of fact, all ODA–reportable interventions are 100% tied to the implementation by Italian firms. The possible injection of 200 million euro in tied aid will have an impact, as it represents 60% of the average 2006-07 Italian tied commitments. Finally due to the low levels of the Italian bilateral aid, this 200 million euro will also worsen the poverty focus of the whole Italian development cooperation. As the Italian annual country-allocated aid between 2006-2007 was around 400 million euros, the future Italian aid shares of Sub-Saharan Africa and the Least Developed Countries are going sharply to decrease.

Decree to extend Italian international peace operation does not provide extra-money for ODA: unlike last year

At the very end of 2008, the Government issued a Decree extending the Italian participation to international peace missions for 6 months, and allocated 763 million euro to meet foreseen expenditure. Required financial resources had already been appropriated by the 2007 financial bill. Last law approving the Italian participation to international military missions over the whole 2008 provided for 1 billion euros.

As for development cooperation, last year 94 million had been specifically earmarked for development cooperation activities in Afghanistan, Iraq, Lebanon and Somalia. 94 million added up to the development cooperation resources already appropriated by the 2008 Financial bill -732 million euros. Unfortunately, the last decree does not earmark any additional resources for development cooperation to lift up its minimal level -321 million- approved by the 2009 financial bill. If additional money is not appropriated during the Parliamentary debated, available financial resources are too scarce to allow Italy delivering on its commitment in fragile countries. For instance, in Afghanistan, the recently approved development cooperation 3-year plan had clearly stated the need to appropriate additional resources to be drawn from the international peace operation bill to meet its annual financial commitments for the country – around 50 million.

2009 Financial Bill finally approved: ODA cuts are confirmed

Last Friday, the Lower House of Parliament approved the 2009 Financial Bill, actually confirming the heavy and initial cuts to development cooperation. Despite proposal by minority groups and pressure from Civil society, no change was introduced within the Bill as for development cooperation section. According to unconfirmed sources, in the view of the Italian G8 Presidency, the Ministry for Foreign Affairs has asked 500 million dollar to be allocated to development cooperation over 2009. Extra-budget cycle financial allocations to development cooperation via a special decree is not new in recent years, both with centre-right ( the 2005 Tsunami Decree) and centre-left governments (the 2006 revenue-windfall decrees).

New evalutaion Unit members appointed: first evaluations planned after 7 years?

The last Steering Committee for development cooperation has appointed the new 5 experts for the Evaluation Unit. According to the current legislation, the Evaluation Unit is tasked with:1) ex-ante initiatives approval before they are submitted to the Steering Committe and 2) commissioning ex-post independent impact evaluations. Due to zero financial resources allocated to the last evaluation unit activities, the Italian development cooperation did not actually carry out any independent evaluation over the last 7 years. The 2009 workplan of the newly appointed Evaluation Unit provides for 500,000 euro worth evaluations. Unfortunately, an approved plan of activity is no guarantee that these are going to be adequately resourced. In 2006, the last evaluation unit approved a 3 year plan, but no financial resources have ever be allocated to implement that.

Multi-year development guidelines approved

Foreign Minister Franco Frattini, presided the December 9th meeting of the Steering Committee for Development Cooperation. The Minister reported almost the full use of the fiancial resources of the cooperation for 2008 - ( 811 million euros as grants and 270 million euros as soft loans) .

The December 9th, Steering Committee has also approved multi-years guidelines for development cooperation for the years 2009-2011.

New DAC data on development cooperation

The 27th November released DAC data on development cooperation in 2007 feature a mixed picture of the Italian development cooperation, highlighting some improvements in aid quality and allocation from the 2006 ones, tough still insufficient to attain the EU average. 2007 data show that last year the Italian aid benefited from a strategic reorientation. Yet, limited financial allocations remain the main obstacle for any credible re-alignment to the EU average.

Positive elements are:

- “Genuine aid” increased by 48% ;
- “Genuine aid” to Sub-Saharan Africa increased by 40%;
- “Genuine aid” to Least developed countries increased by 10%;
- Tied aid net debt decreased by 10%;
- Administrative costs were reduced by 25%;
- Bilateral aid to basic and social services doubled.

Unfortunately there are negative features, mainly related to quality:
- Italian aid stands at 0.19% GNI while the EU average is at 0.39%;
- Italian aid is decreasing by 2.6% from 2006;
- Share of aid to Sub-Saharan Africa is at 19% from 52% to the advantage of north Africa;
- Italia tied aid share is the third highest among OECD donors, after Greece and Portugal;
- Share of Italian bilateral aid to basic and social services is 1% while EU average stands at around 11%.

Financial Bill 2009: Lower House approves ODA budget cuts

Yesterday, the Lower House of Parliament approved the financial bill for 2009 that is now to be reviewed by the upper house - Senate. During the debate, the Parliament majority rejected three amendments aiming to partially restore the ODA cut for the Ministry of Foreign Affairs. No amendment was proposed to restore development funding to allow the Ministry of Finance to disburse its annual instalments to development banks. For the time being the ODA forecast for 2009 ranges between 0.09-0.14% GDP.

6.3 billion euros debts cancelled by Italy since 2002: 61% to sub-Saharan Africa

According to the 2008 Report on debt relief activities by the Ministry of Finance, since 2001 Italy has cancelled 6.3 billion euros in international debts - 61% benefiting Sub-Saharan Africa. 86% stems from export credit cancellations. In 2005 Italy cancelled 57% of its debt relief, thanks to the Iraqi cancellation - 31% of total debts operations. After 2005, the annual share for aid cancellations quickly decreased: 7% in 2006 and below 1% of the total in 2007. It is clear that the Italian credits are almost over with a relevant impact on the overal ODA - as debt relief accounted for about 22% on average.

2009 ODA cut: Budget Committee rejects amendments to avoid it

Over the last three weeks, ruling coalition members of Parliament and Undersecretary of State Scotti have bee ensuring that ODA cut in 2009 budget appropriation could have been avoided, thanks to some amendments proposing to raise excise on tobacco and alcohol to collect resources for ODA. Unfortunately, last Tuesday, the parliamentary Budget Committee rejected all amendments on excises increase, as additional financial resources they could raise were difficult to forecast. While discussions on the financial bill continue in the Budget Committee, there currently is only one amendment left that is attempting to limit the ODA reduction. However, this is a minority amendment and it is not clear yet whether, MPs from ruling coalition, proposing an ODA increase, will actually support this survived amendment.

Undersecretary supports Parliament proposal to raise additional funds for development cooperation

Undersecretary for Foreign Affairs, Vincenzo Scotti, hinted to the possibility that the drastic reduction to development cooperation appropriations could be partially avoided by using the early debt reimbursement by Argentina and increase State excises on alcohol and tobacco, as proposed by the parliamentary amendments.

The bipartisan amendment is to raise 250 million euro to increase the ODA appropriation in the Ministry of Foreign Affairs with an increase in alcohol and tobacco excise by 0,015 euros.

Additional 200 million euro could derive from the early reimbursement of the Argentina debt. The amount stemming from concessional loans is not clear yet - 200 or 250 million euros. However its reimbursement will negatively affect the Italian ODA - as it is counted as a negative flow. Hence its immediate disbursement is not an actual increase but a one-off measure to get a zero-sum result. It is also important to highlight that the financial resources from Argentina reimbursement - not available yet - are already ODA resources, namely concessional loans that are turned into grants to ease its disbursement. However, if this proposal turns into reality, this means that National Accounting Office changed its advice, as in the past it was always opposed to this kind of actions.

However, the current ODA cut under the Ministry of Foreign Affairs amounts at -411 million euros, and the two proposals could avoid the cut in 2009, while a 200 million cut will affect future years. For the time being the are proposals awaiting to be approved.

Financial Bill 2009: ODA levels between 0.09-0.14%

At the beginning of the Parliamentary budget session, it is difficult to draw a comprehensive quantitative picture of the ODA level for the next financial year. Neither all ODA is included in the budget nor it is completely appropriated during the budget session. For instance debt relief operations – accounting fro 22% of the Italian ODA between 2000-2007 – is out of the budget together with concessional loans disbursements. Moreover over the financial year, one-off ODA allocations can be approved. Eventually, ODA is actually related to disbursements while the budget session discusses appropriations. In fact, even 2008 ODA disbursements are not clear, with preliminary ODA data at 0.22%. As for the budget bill, ODA contributing budget lines are scattered among four main ministries – Min of Foreign Affairs, Min. of Finance, Min. of Environment and Min. of Interior - with no official table attempting any synthetic evaluation.

ODA under the Ministry of Foreign Affairs (MFA) was cut by 56% ( 312 million euros in total) ; down 411 million euro and to its minimum level since 2000, halving 2001 appropriations in real terms. Last year MFA ODA had peaked at 732 million euros. A June Law – cutting budget expenditures – had disproportionately reduced the MFA appropriations in comparison with other Ministries appropriations. Following this Law, the MFA re-allocated the bulk of the cut to the ODA heading, while other MFA programmes witness some financial increase – multilateral affairs programme with a 170 million increase. The MFA ODA is not enough to carry out any meaningful development interventions during 2009, as 168 million are allocated to fund already approved multi-year interventions. Multilateral aid budget envelope accounts for more than 60% of this ODA financial reduction. The Under Secretary of State. Hon Scotti, officially reported to the Parliament that this low appropriation endangers the 2009 Italian contribution to the Global Fund. For the first time since its creation, the fund for de-mining intervention has no appropriation. The 321 million euro ODA proposed appropriation is less than the amount NGO annually raise from private sources.

In the budget of the Ministry of Finance, the main ODA budge-lines include appropriations for the European Development Fund and direct transfers to the EC budget that total 1,100 million euro. Financial appropriations to meet the Italian pledges to regional development banks are part of a broad special envelope, including different expenditures. As for 2009 budget, this special envelope has no financial appropriation, excluding any contribution to multilateral banks by Italy during 2009, despite 2007 replenishment pledges and arrears. Less than 100 million euros are appropriated to enable Italian participation to the IFF-im, AMC and the MDRI.

Eventually, no more than 50 million euro are included within the Min. of Environment and Min. of Interior budget. Min. of Environment appropriations to fund sustainable development interventions in developing countries are undergoing a 20% reduction, while those for refugees expenditures are constant.

Beyond budget allocations, debt relief operations, loans disbursements and one-off allocation could contribute to increase the 2009 ODA level. On average, debt relief operations accounted for 22% of ODA between 2000 and 2007. Yet, they are difficult to be correctly estimated as they depend on multilateral negotiations that can slow down or speed up over the year. If all debt relief foreseen agreements are signed off, additional 700 million euros could contribute to the 2009 Italian ODA. As for loans, despite the agreement of a 100 million credit to Iraq, loans’ contributions to Italian aid could equal 100 million contribution at most, with loan reimbursements by Argentina negatively affecting ODA level. Eventually, ODA additional resources could be approved during the financial year, as it was the case in 2007 with the 1 billion euros extra allocation for ODA. On balance, between 2000 and 2007, the MFA development aid reported a 100 million increase and additional ODA resources are generally appropriated with the approval of the Bill on International Military Missions. Yet, a recent Decree aimed at shielding the Italian banks from the current crisis, allows to also cut ODA appropriations to find resources to fund Banks in troubles.

Despite budget fragmentation and in-year extra budget disbursements, estimate for 2009 ODA levels can be based on 3 scenarios. The minimum scenario just takes into account financial resources that are already included in the budget bill. Following this assumption, 2009 ODA is estimated at 0.09% GNI, its minimal level since ever. The intermediate scenario – 0.14% GNI - assumes that all on-going debt relief negotiations are concluded. Adding up required pledges to multilateral contributions to be disbursed, ODA could at most reach 0.18% GNI. In comparison with 2008 current estimates, 2009 ODA will face a between a 20-60% reduction. Last year, the same scenario exercise ranged 2008 ODA level between 0.15-0.28% GNI.

Financial Bill 2009: further cut for ODA

On October 2nd, the Italian Parliament officially started the 2009 Budget session, where ODA is facing a further cut, beyond the one approved last June. Although the total ODA is neither fully included into the budget – i.e. debt relief or concessional loans - nor in the budget bill – extra budgetary allocations, it is difficult to assess the ODA quantity in the budget bill.
Aid resources are scattered among different and sometime generic budget headings. Ministry of Finance and Ministry of Foreign Affairs (MFA) are by far the main ODA shareholders, in terms of genuine aid – excluding debt cancellations. In the proposed 2009 Budget, the MFA ODA appropriation is at just 321 million euro, the minimum level since 2000, half of the budget available in 2001, in real terms. It represents a 56% reduction from last year appropriation. The proposed amount is much less than what Italian NGOs are annually raising as private contributions – 400 million euro. The main culprits for this reduction are the last June budget expenditures bill and the MFA itself that had decided to allocate its whole budget cut (421 million euro) to the disadvantage of its own ODA budget. The result is paradoxical and clearly unfair for ODA: MFA aid appropriation are just 0,01% to the total budget expenditure but represents 4,7% of the whole State budget cut. In order to estimate 2009 Italian aid levels, Ministry of Finance ODA appropriation and planned debt relief are not clear, yet. ActionAid is forecasting the range of 2009 aid levels. The results will be posted on October the 8th.

A Government amendment to allow EU delegated-cooperation

A Government amendment allowing the Italian cooperation offices on the field to receive financial transfers from the European Commission and EU member States was tabled for discussion in the lower house of Parliament. If approved, the Italian cooperation would be able to fully take part into various EU pilot experiences on delegated cooperation, otherwise forbidden by law. this amendment, Italy could propose itself as EU leading donor in different countries and sectors, as part of the full implementation of the EU Division of Labour proposal. The government-sponsored amendment is a clear evidence that after Accra the implementation of the EU aid effectiveness agenda is fully supported by the Government.

Commission of Inquiry into NGOs conduct proposed

A significant number of ruling coalition Senators presented a Bill to set up a Commission of enquiry into NGOs conduct. According to the text, the main objectives of the Commission will be to monitor the management, allocation and strategic planning of Italian NGOs. As stated within the bill introduction, the Senators are concerned by the excessive level of administrative expenditures, actually diverting relevant financial resources from Developing Countries.

MPs agree on setting up a bi-partisan Committee on MDGs

On September 17th, during a UN sponsored event, attending Members of Parliaments – less than 10 - agreed to set up a bi-partisan Committee to specifically deal with MDG and development issues. Membership to the Committee is open to any MPs , even if they are not sitting in the Foreign Affairs Committee. The main purpose of this new official body is to measure political interest in development related issues among MPs and to highlight development as a standing alone issue beyond foreign affairs. A similar Committee was set up following the signing of the Millennium Declaration in 2001, but had no real influence in the Parliamentary debate of the time.

Italian aid effectiveness: 2008 results

According to the 2008 Paris Declaration progress report survey, Italian development cooperation is performing below the EU average on every Paris declaration indicator, despite significant improvements since 2005 . Yet, on proliferation of parallel structures, use of country systems and percentage of programme based aid Italian records are poorer than three years ago. In Europe, Italy ranks last as for aid predictability, second last on joint analytical work, and third last for relevant number of parallel implementing structures. However it is second best EU country on coordinated technical cooperation. Within this generally poor performance scenario - the tied aid data was not reported - the predictability and joint work targets are the furthest to reach. Unlikely others EU donors, Italian poor results are partly due to the fact that Italy has not approved any "aid effectiveness" national plan.

Updates on Italian ODA

In August, the 2008 ActionAid report on Italian ODA was updated by a 10 pages briefing taking stocks of the main developments the political arena, including the perspective, results and commitments, and new ODA figures available. It can be downloaded at:
http://www.actionaid.it/fileViewAction.do?xclass=Multimediafile&field=file&width=0&height=0&mime=application/pdf&id=23857

Here below, you find some abstracts:

Financial Perspective update
Unlike last year, the new financial perspective 2009-2013 does not include any reference to ODA targets and, more worryingly, at the end of July a Government decree reduces ODA allocation under Ministry for Foreign Affairs by 25% ( -170 million euro) from 2009-2011.

G8 updates
At the G8 Summit in Toyako, Mr. Berlusconi pledged 500 million dollar over the next five year to fund the global response against pandemics. In 2007, at Heiligendamm, Mr. Prodi committed 400 million dollar a year over ten years to fund the same global response.The Italian Sherpa office is already shaping the 2009 G8 thematic agenda, with an expected focus on education in conflict, health, agriculture and water and sanitation.

ODA facts updates
Due to limited and fragmented bilateral country allocations, in 2005-2006, Italy is the first donors only in Argentina and Montenegro, while ranks as second in Suriname and Rep. of Congo and then shifts at the fifth place in Albania, Eritrea, Iraq, Lebanon, Iraq, Nigeria and Tunisia. Italy ranks among the first 10 donors only in 22 partners countries.

Italy has 3.1 billions euro out standing debt, 1.6 billion covered by the HIPC initiative, while 1.5 billions with other counties, including China, Morocco and Argentina.

In 2007, 95% in NGO budget appropriation – 100 million- was committed, showing a significant scale up in administrative absorption capacity. In fact, in 2004, only 72% was committed out of a 73 million allocation. 60% of the arrears due to NGOs was paid off in 2007. NGO proposed initiatives mainly focuses on agriculture (38%) and health (19%). According to the DAC tied-aid definition, 100% of Italian NGOs committed-funds, are tied, due to administrative procedure for aid allocations.

Annual Report on Italian ODA: now available in English

Italy and the fight against world poverty - launched in May 2008 - is the third ActionAid report on Italian development cooperation. It assesses the progress made by Italy in maintaining the commitments undertaken since 2000 in the fight against global poverty. A few months before 2009 Italian G8 Presidency, the report attempts to answer the question whether Italy is ready to lead the G8. Contrary to last year’s report, our findings this year indicate that there are more obvious trends towards improvement, despite the fact that the overall results are still inadequate. T current results are still inadequate and it is very important that more efforts should be made in this direction. The most obvious example is the failure to meet the financial commitments the amount of aid: delays in allocating funds have meant that Italy has deprived the international aid community of 5.2 billion Euros since 2003.

This report assesses the trends and performance of Italian cooperation with respect to shared European objectives and strategies- summarized in the table below.

Sector	Trend	Judgement for 2009
Quantity of aid	Stable – improving in 2008	Inadequate
Phantom aid	Improving	Inadequate
Predictability	Improving	Adequate
Debt	Stable	Adequate
Aid to Africa	Improving	Adequate as regards the bilateral quota Inadequate as regards financial resources
Aid to least developed countries	Worsening	Inadequate
Emergencies	Improving as regards forecasts	Inadequate
Aid to basic social services	Worsening	Inadequate
Trade aid	Stable	Adequate
Coherence	Stable	Inadequate
Tied aid	Worsening	Inadequate
Volatility	Worsening	Inadequate
Fragmentation	Improving	Inadequate

Eventually, ActionAid recommends quick priority actions that could realign Italian cooperation to the European average within a year. Its English version is now available at:
http://www.actionaid.it/fileViewAction.do?xclass=Multimediafile&field=file&width=0&height=0&mime=application/pdf&id=23855

Aid cuts confirmed

Rome, Aug 5th.

The House of Deputies passed a vote of confidence on the omnibus legislation which makes provision also for a reduction in the grant budget of the Ministry of Foreign Affairs. The bill has yet to be published, but, according to the minutes available from the House, AID budget will be shirking by € 170ml in 2009, which accounts for 23% of the resources that were secured at the end of budget cycle last year; the same will happen in 2010.

Long term implications will have to be properly assessed; some experts are implying that the grant budget within the MFA will decline form €732 ml in 2008 to €383ml in 2011. The areas at risk include the GFTAM and voluntary contributions to international organizations (FAO for instance); also, NGOs are very likely to suffer.

Within the space of a few weeks, resources for development cooperation have been subject to legislation tabled by the government and reduced substantially. These measures are in contrast to role that Italy is expected to play as the champion of the fight against poverty in the run up the G8 Summit in 2009.

The budget cycle will be finalised between October and December, when the proper financial and budget bills will be discussed by the Houses. There is still space to right what has been done wrong, by, for instance, commit enough resources to increase the current aid level from a modest 0,19%. Berlusconi has to show whether or not has the profile of an international leader and has the capacity to push the G8 and associates to react consistently to the development crises

2007 GAO report on Italian ODA

This week, the General Accounting Office released the 2007 report for Italian ODA, the first official qualitative and quantitative assessment of Ministry of Foreign Affairs managed cooperation for last year. In 2007, the MFA cooperation budget disbursed 1.3 million euros, thanks to extra-budget allocation, to fund its 13 sectoral priorities. Bilateral debt cancellations amounted to 510 million while debt conversions peaked at 140 million euros, including Perù (38 million Euro), Egypt (100 million), and Macedonia (1,8 million). The MFA allocated 53 million euros to humanitarian interventions and channelled 365 million to multilateral organizations - doubling the highest level (165 million) reached in 2003. As for geographical allocations, sub-Saharan, Africa received 39% of total allocations from 25% in 2006 - 135 million from 106 million in 2006. The GAO report concludes by listing two concerning trends: un-committed resources to 291 million euros from 234 million in 2006, with a 11% loss in administrative staff for monitoring. Ironically speaking with the GAO report wished an ODA budget increase to enable Italian to meet its EU ODA targets, the Government cut development cooperation 2009 budget, with accepting to assess Parliamentary the recommendation for an ODA increase from September 2008.

Government confirms cut to ODA, despite NGO protests

The government asked a confidence vote on a text confirming the 170 million cut to ODA in MFA budget starting from 2009 , despite different calls from national and international CSOs.

http://www.repubblica.it/2008/07/sezioni/economia/conti-pubblici-76/bono-accusa/bono-accusa.html

Next Fall, the Government could still avoid the 2009 cut by presenting the Budget bill and different motions are already table in the Parliament asking the Government to commit for this ODA increase. Next week Government will whether to accept or reject those motions.

ODA cut: Parliamentary amendments to prevent reductions in ODA allocations

At the beginning of the Parliamentary debate on Decree 112, providing for a three year ODA reduction by 170 million euros (-25% of Ministry of Foreign Affairs ODA envelope), in the Committee for Foreign Affairs, the bill speaker from the ruling coalition expressed his concerns to the Government. Undersecretary Scotti, on behalf of the Government, replied that the government is still working to clearly detail which development cooperation expenditures to cut. Despite some concerns within the ruling coalition, at the moment only member of the opposition presented 3 amendments to avoid the ODA, with no support by any member of the ruling coalition. The in the Foreign Affairs Committee could still provide some space to foster bipartisan agreement to prevent the cut.

Minister of Foreign Affairs wishes a bipartisan ODA reform

On July the 2nd, during his first hearing at the Parliament, the Minister of Foreign Affairs supported a wide approval of a new ODA bill, beyond political parties lines. In his statement, the new ODA law is to make international cooperation, especially the bilateral one, a suitable tool for foreign policy. Eventually, he confirmed Sub-saharan Africa as a key priority of the Italian cooperation.

Italian ODA cut by 510 million euro between 2009-2011

The Government decree n° 112 from June 25th is cutting ODA resources managed by the Ministry of Foreign Affairs (MFA) by 170 million euro a year till 2011. After two years of ODA consecutive increases, currently the MFA budget amounts at 738 million euro with the view to be reduced at just 393 millions in 2011 - the same level of the MFA ODA budget after last Berlusconi's 2005 financial bill. In September, the government will still be able to avoid this financial cut when presenting the multiyear State budget.

Italian aid effectiveness strategy: first ever official statements

On June 26th, at a UN sponsored Parliamentary event, the deputy general director for the Italian development cooperation partially unveiled the Italian priorities for EU Accra agenda. Italy is supporting a greater role for civil society within the Paris Declaration. As for the EC sponsored division of labour, Italy is willing to increase its engagement in fragile States, while volunteering to play a role in health, education, rural development, with keep focus on other cross-country sectors (women empowerment and environment). The official data on sector of engagement will be published at the end of July. Unfortunately there was no reference to further aid untying. The EC division of labour is pushing the Italia development cooperation to understand whether its added value is. While discussion on aid quality is slowly moving on, the government is cutting the 738 million worth development cooperation budget within the Ministry of Foreign Affairs by 510 million euro over the next 3 years.

Waiting for the Economic Financial Perspective, Italian ODA/GDP at 0,22% in 2008

On June 18th the Government approved the Financial and Economic Perspective for 2009-2011. According to official declarations on the eve of the meeting, the Perspective is expected to be a short document (20p). Yet, this document is neither publicly available nor clear whether any ODA increase is mentioned. Previous 2002 and 2007 Financial Perspectives had included annual timetables for aid increase to allow Italy to meet the EU aid targets. Those commitments were not actually met. Over the last months, civil society has called on the new government to include a updated version of the aid timetable, in order to show its commitment to achieve the EU ODA target on the even of the Italian G8 Presidency

The June EU Head of States Council reaffirmed their commitment to reach 0.51% ODA/GDP in 2010, meaning that Italy will have to more than double its current aid level. Recent estimates from the Ministry of Finance forecast 2008 Italian aid at 0.22% - up from 0.19% and equal to 3,5 billion euros, including 600 million from debt relief.

New director for development cooperation appointed

Elisabetta Belloni was appointed as the new Director General for development cooperation, taking over from Alain Economides appointed as Head of Cabinet. Director Belloni was managing the Emergency Unit of the Minister of foreign affairs.

ActionAid 2008 report on Italian development cooperation: Ready for the G8?

ActionAid Italy launched the third Italian edition of the shadow report on the Italian development cooperation - “Italy and the fight against poverty: Are we ready for the G8?”. The report attempts to assess the Italian legitimacy to lead the G8 in 2009 on the development and Africa related issues. The Italian performance on development cooperation is benchmarked against internationally or EU agreed targets on aid quantity, quality and allocations. The main call is that Italy will be able to meaningfully steer the G8 African agenda only if the Italian development cooperation is in line with the EU average. The report acknowledges that some improvements occurred over the last two years, with a significant increase in genuine aid, a new focus on Africa, and an increase in aid predictability. Conversely, other aid features such as tied aid, aid allocations to LDCs and BBS further deteriorated. The report argues that the G8 is a crucial opportunity to quickly speed up the alignment of the Italian development cooperation. Although the Italian development cooperation crisis worsened over the last 15 years, many quality and allocations issues can be quickly fixed by 15 points action-plan with no addition cost for the Italian State budget. In the following debate discussants and speakers agreed that the 2009 G8 Presidency provided the very opportunity to embed development cooperation at the core of the Italian foreign policy.

Progresses on Division of Labour but concerns on aid scale_up

Following evident delay, Italy finally decided to take part into the European Commission Division of Labour Fast Track exercise in the following countries: Bolivia, Ethiopia, Kenya, Mozambique, Senegal, Sierra Leone and Uganda. In Albania, Italy will be one of the EU MS to chair the division of labour exercise. Before Accra, and possibly on the eve of the next EU technical seminar on aid effectiveness mid-June, Italy is also going to select its sectors of engagement in each country.

It is important to note that each decision on division of labour is going to happen between Rome and Brussels not at field level. Italy requested this specific centralized communication arrangement, as the Italian cooperation field offices do not have enough power to independently decide where actually to get engaged. The current centralized structure is also preventing Italy from taking part into “delegated cooperation” experiments.

As for the binding timetables on aid increase, Italy opposed and continues opposing any binding timetable. More worryingly, in 2005 together with Germay, Italy signed the 0.51% ODA target subject to financial national economic situation. Later, the new German government accepted the 0.51% without condition, while Italy apparently never officially changed its initial condition. As for tied aid, Italy had no problem in accepting the recent DAC expansion to all HIPC, while wishing to bring on board aid new donors such as China, on this issue.

ODA bill reform as a priority bipartisan matter

During the May 28th presentation of the ActionAid annual report on Italian development cooperation, the current Undersecretary of State for Foreign Affairs, Sen. Mantica, and former Foreign Affairs Minister, Hon. D'Alema in a bipartisan move both agreed to deal with the legislative reform of the ODA bill, as a matter of priority. They also agreed to restart discussions from the text that was tabled for discussion in the Foreign Affairs Committee of the Senate during the last legislative term. Undersecretary commended Minister Frattini’s decision to directly deal with development cooperation and Sub-saharan Africa, as a first sign of political commitment by the new Government on development cooperation related issues. Meanwhile rumours warn against a sudden and significant financial reduction in the current development cooperation budget, in mid-June.

Italian aid in Afghanistan: predictable but tied

According to the Afghan NGOs coordination report, the Italian development cooperation disbursed all committed aid in 2007, becoming one of the best performers in disbursement together with Australia and UN Agencies. However, the report questions whether those funds were efficiently spent or got wasted in expensive subcontractors and poor quality work. The report quote the example of the Italian sponsored reconstruction of a Kabul hospital. According to Kabul Press, who investigated the project, UNFPA were given $2.2m for the work, which was sub-contracted to the UN Office for Project Services (UNOPS), again sub-contracted to an Italian organisation- INTERSOS -, who in turn sub-contracted to an Afghan construction company. On the basis of a government investigation and sources involved with the project, Kabul Press report that less than half of the total budget was spent on the project, and the quality of the work was so poor that it required further reconstruction.

http://www.kabulpress.org/my/spip.php?article830

NGO resources contributing to Italian tied aid

According to the latest OECD data, the percentage of tied aid in italian ODA - discounting debt - is highest in Europe - above 70%. Tied concessional loans account for up to 73% of tied aid, thanks to an article in the ODA law, compelling to issue special waivers to un-tie concessional loans.

However, NGO funds allocation mightbe responsible for main share in the tied aid grants. Accurate estimates are impossible as 2006 data have not been fully reviewed, yet. However, according to the DAC tied-aid definition 100% of Italian NGOs committed-funds, following the national procedure, are tied.

The main responsibility lays within the administrative procedure for allocation: the Italian system is not based on call for proposals open to national and non-national NGOs.Actually, the only used procedure for funds allocations to NGOs consists of NGOs submitting spontaneous projects to the development cooperation to be screened following geographical or sectorial official cooperation priorities.

If the proposal fits with the main official priorities, it gest the whole budget funded by the Italian development cooperation. No-Italy based NGOs are excluded from all official funds.

Italian ODA 2007: slight decrease and big increase in REAL aid

According to figures by the DAC, Italian aid in 2007 decreased by 3.6% but its "real aid" - discounting debt releif - increased by 46.7% from 2006 to 2007 - the secondo donors biggest increase - while aid to Africa almost trippling from 2006. Prospects for 2008 are still positive thanks to late 2007 financial appropriations to be disbursed in early 2008. If this positive trend continues, Italy could get its cooperation on track in time for its G8 presidency.

ONG pressures on standing PMs

With a view to the next general elections due on April, 13^th-14^th , the Italian Coordination of International Networks (CINI) - ActionAid, AMREF, Save the Children Terres des hommes, WWF, and VIS - tested the Premiership candidates and the outgoing members of the Foreign Affairs Commission commitments on international cooperation. This move is supporting a general commitment by all Italian CSOs to draw candidates attention on development cooperation.

A 10 question survey on quantity, quality of aid and management structure was sent to 70 people. Intermediate results were presented on March with the final to be published on April 7^th. At that time only 10 individuals had replied, with no response by the centre-right political parties – one replied the following day. Answers showed consensus on the following issues: increase in financial resources for ODA; pursuing policy coherence for development cooperation; recognition of the importance of civil society’s role in strategic issues; single management for all ODA resources. Building on this consensus, CINI wished the new legislature will soon tackle long terms problems of the Italian cooperation.

EU donors reflecting on GBS in international workshop in Rome

On February 26th, ActionAid organized a European Seminar on General Budget Support: Lessons fearnt and way forward.
During the one day long workshop 10 different panelists - including think tanks, donors countries and partners countries - shared experiences and pioneered new ideas for future GBS initiatives. Speakers agreed that GBS is not panacea for all aid, but it is a promising political package to foster State and administrative capacities, together with the improvement accountability relations Governments-Citizens. GBS is not immediately suitable for all states but consensus arised to work to foster a GBS-enabling environment, even in post-conflict context. GBS is not more prone to corruption than project based aid but it is the best aid modality to immediately warn against governance related weakness in partners countries. One panelist strongly pointed out that DBS support in favour of local authories is worth further consideration, as a means to support decentralization.GBS compels a behavoural-change among all aid stakeholders. As for civil society, ActionAid shared its in Tanziania and Uganda. Despite lack of evidence of any reduction in financial support , donors-CSO engament changes based not only on service delivery but on policy-contents. EU member states shared their expeiences and future plans. UK, the EC and the Netherlands acknoledged past mistakes while Italy and Spain pointed at the managment challenges posed by GBS to their aid systems.

All presentations can be found in the download section, right-below.

Italy in the Development Cooperation Report 2008

Commitment to the MDGs. Since the adoption of its official guidelines in 1999, poverty reduction has been a principal objective of Italian development co-operation. However, Italy has yet to establish a coherent approach to mainstreaming this goal. A proposal to reform the structure of development co-operation and focus commitments on the MDGs was examined by the Italian parliament but the governemnt crisis blocked the process.

Aid effectiveness agenda. Italy supports the principle of recipient ownership and attempts to align its programmes with local strategies when possible. Its ability to carry out its commitments, however, is hampered by a lack of staff, organisational support and operational flexibility. The 2004 peer review encouraged Italy to build upon its efforts to streamline administration in order to address the parallel need for a clear strategy on harmonisation. Italy aims to reinforce the quality of evaluation feedback, including improved evaluation planning and operational guidance.

Advancing gender equality and women’s empowerment. The 2007 guidelines for Italian development co-operation maintain gender equality and women’s empowerment as a priority. The Directorate General for Development Co-operation intends to increase its commitment to the MDGs on gender. Specific action in favour of gender equality in 2007 included: i) a major seminar on the empowerment of women in West Africa and a new Italian programme on this topic; ii) a workshop on implementing the UN resolution concerning the participation of women in peace building and post-conflict reconstruction in Somalia; iii) specific programmes for the empowerment of women in Afghanistan, Lebanon and Palestine.

ODA 2008 forecast: still at 0.29%

Estimates for 2008 ODA are difficult to forecast during the budget cycle, as ODA budgeted resources are scattered and hidden within many financial headings in different Ministries. Moreover important components such as debt relief and concessional loans are not highlighted in the budget. Finally, during last year, significant financial resources for development cooperation – 1.1 billions euros –were allocated extra-budget cycle, via special decrees, with a share of these funds is to be disbursed in 2008. The 2008 disbursement of 2007 out-of-budget allocations, together with expected extra-budget allocation in 2008 are the main responsible for the ODA peak to 0.28-0.29% in 2008, after its stalling in 2007 – 0.21-0.23%. The forecast peak is neither enough to meet the EU Barcelona 0.33% target with a two year delay nor it is sustainable - likely to decrease in 2009. Since the approval of the 2002 road map for aid increase, included in the 2003-2006 Financial perspective, Italy summed up 4.5 billions euros in aid arrears - the gap between commitments and actual disbursements.

2008 Italian ODA could further increase thanks to extra budget cycle allocations, as it occurred in 2007. Last year ODA appropriations increased between January and June (from 1.1 billion to 1.5 billion euro). According to the current projections on 2008 level, the additional disbursement of 650 million euro will be enough to meet the 0.33% target.

ActionAid evaluation of the ODA reform Bill, under discussion

The ODA bill, under discussion in the Senate, sketches some positive elements, to be enhanced:

· there is a clear reference to partnership, as starting principle for development interventions, but not mention to ownership;

· aid activities are not necessarily tied;

· Deputy Minister for development cooperation, sitting in the Cabinet, is mentioned;

· multi-year strategy for development cooperation is to be approved by the Cabinet;

· the Minister for Foreign Affairs is responsible for development policy by also setting the Italian strategy towards the Financial institutions and the European development fund and by ensuring coordination;

· an implementing Agency is sketched following special financial regulation;

· there is an initial reference to policy coherence for development.

Unfortunately, the new aid architecture designed by the bill has some limitation and contradiction.

General remarks

The new bill does not reform all aspects included in the current law for development cooperation (Law 49) that is likely to be maintained to regulate issues, such as concessional loans or business partnerships in developing countries. There is no clear cut separation between planning institutions and implementing ones, entailing multiple responsibilities and lengths procedures. For instance, the Interministerial Committee for Development Cooperation (ICDC) not only deals with policy coherence but it mainly approves all development initiatives. Similarly, the Minister for foreign affairs issues very detailed and binding instructions to the implementing Agency.

ICDC – Interministerial Committee for Development Cooperation

• The ICDC’s mandate is too similar to the Minister for foreign Affairs’one, especially on planning, control and coordination. This sets potentials for duplication and conflict.

• Despite an high-level political membership, the ICDC does not fully take part into the strategic phase. It mainly focuses on micro-management, wasting its potential as ministerial forum for policy coherence. Despite its limited technical capacities, the ICDC is tasked to approve all development initiatives. While making no reference to project submission procedure, the bill sketches out a burdensome approval procedure for development activities starting from the ICDC, passing by the Minister and finally to the implementing Agency;

Development cooperation strategy

• The Minister of Finance does not submit any input during the planning phase.

• There is no mention to reduce the disbursement procedure to the development banks.

• The Cabinet does not meaningfully take part into the planning phase.

• The drafted contents of the 3-year strategic document do not mention important political issues such as, country strategies and allocations, debt cancellations, concessional loans and actions for policy coherence.

Pool Fund

• The pool fund does not include all-budget resources for development cooperation but at most 20%.

• The Fund managing authority is not clear, though the implementing agency can use those financial resources.

Development cooperation implementation

• The bill does not make clear who is responsible to implement the development cooperation strategy, as the Minister for foreign affairs is responsible for the whole development policy while the implementing agency is only tasked to carry out limited initiatives.

• The Agency is simply one among the implementing actors within the development system. Even if it is to be defined by specific Government decrees its tasks are too limited, as the Agency is not the main body responsible to implement the approved strategy.

• The bill indirectly forbids any decentralized cooperation, axed on field offices, as it explicitly excludes Agency field offices.

• There is no reference on how the Minister for foreign affairs coordinates development initiatives by the Regions that have only to inform the Agency of their initiatives.

• Responsibility to deal and sign agreement with multilateral organizations is unclear.

• Independent impact evaluation of development policies is completely missed.

Actors in development cooperation

• Civil society is only partially engaged during the planning phase.

• Civil society from partner countries is not mentioned as an actor, with access to the financial resources.

• Private sector is just referred to as partner with, apparently, no role as implementing actor.

In order to ensure the whole reform of development cooperation setting the basis for a coordinated, coherent and efficient system, the bill must deal with all the elements of the current Law; clearly divide between strategic and implementing phase with specific responsibility. Therefore, ActionAid recommends to:

• clearly state that all Italian aid is untied, tough country-local purchases can be preferred (Art 1,2);

• clearly state that development cooperation has to pursue ownership (Art 1,2);

Development cooperation strategy

• have the strategic plan approved by the ICDC, not by the Cabinet (Art 3,2);

• maximize ICDC potential, by focussing its mandate only on assessing policy coherence for development (Art 6-bis);

• allow the Agency to provide support during the planning phase (Art 14,1),

• specifically include debt cancellations, concessional loans, country strategies and allocations, development banks disbursements, and Ministerial actions for policy coherence in the multi-year strategic document (Art 3,2);

• state that the Minister for foreign affairs is responsible for concessional loans (Art 3,3) and for the relations with multilateral institutions (Art 9,1);

• actively engage the Minister of Finance in the planning phase (Art 3,5);

Pool Fund

• clearly set the Agency as the Fund only managing authority (Art 14,3,d);

• include all-budget resources for development cooperation in the Pool Fund, including those for financial institutions and regional development banks (Art 6,2),

• set the Agency to manage the Fund dealing with concessional loans (Art 9,1)

Development cooperation implementation

• enhance the link between the strategic document and the Minister for Foreign Affairs that must control its implementation (Art 3,3);

• state that the Minister for foreign affairs act to coordinate development cooperation initiatives by Regions (Art 12,3–bis);

• set the Agency as being the only body responsible for implementing the multi-year strategic plan ( Art 3,2);

• exclude that the Minister for foreign affairs issue binding instructions about implementation to the Agency (Art 14,3, a),

• simplify the disbursement procedure to development funds and banks, by allowing the Agency to directly disburse following the Minister of finance request and the strategic document instructions (Art 3,5);

• allow the Agency to sign agreement with multilateral agency, whether in line with the planning document (Art 11);

• have the Agency to link with multilateral organizations during the implementing phase;

• have all aid specific initiatives approved by the Agency, in line with the strategic document (Art 14,4 f);

• allow the establishment of Agency field offices to be responsible in implementing the country chapters of the strategic document (Art 14,8);

• establish an independent evaluation office, to assess the impact of bilateral and multilateral initiatives (Art 14,4 e);

Actors in development cooperation

• acknowledge civil society organizations from partner countries among the actors for development cooperation (Art 15);

• make compulsory the opinion by civil society during the planning phase (Art 16,3);

• allow the ICDC to hear civil society to assess policy coherence (Art 6-bis);

• compel the Agency to consult with civil society in sketching the implementing initiatives;

acknowledge private sector as implementing actor, if abiding to ILO standards (Art 15).

Italian ODA 2006: few money, better targeted to Africa, but too much technical assistance

According to the last DAC data for 2006, the Italian ODA is at 0.20% of GNI - 3.6 billions dollars - 30% down from 2005 level, when ODA/GNI was at 0.29%. In 2006, Italy ranks at the bottom of European donors list, only Greece ranks worse. The latest release of these official data mark the Italian failure to reach the EU Barcelona target - 0.33% ODA/GNI by 2006. The Italian aid is boosted by debt relief (37.8%) and compulsory contributions to the EC budget (36.1%). For the first time since 1994, Italian bilateral share (55%) is larger then the multilateral one (45%).

In 2007, the Italian ODA is expected to increase up to 0.29%-0.31%, thanks to specially approved decrees paying for arrears to IDA and Global Funds, and allocating resources to development cooperation. According to the latest financial perspective, the Italian Government is committed to reach 0.33% in 2008, yet the target is again unlikely to be met, with ODA levels forecast to decrease from 2007.

In 2006, 77% of Italian bilateral aid is untied, yet by discounting debt relief, only 27% aid is untied - a significant increase from last year when untied aid - debt relief net - was at 62%.

As for 2006 sectoral allocations, technical assistance is still the most important sector ( 8.5% in sectoral aid), while support to education is at just 3.75. Administrative costs increased by 25 million dollars, almost doubling its share in bilateral aid (2.65%). Italian support to Basic Social Services decreased from last year, from 5.03% to 3.36%.

As for geographical allocations, Nigeria is the first recipient (754 million dollars) - 72% debt relief - followed by Iraq and Serbia, where debt relieves are on average above 90%. By discounting debt relief, Nigeria is still the first recipient followed by Lebanon and Afghanistan. Angola, Indonesia and Ghana had negative transfers.

Italian aid to Sub-Saharan Africa increased by 200 million dollar, despite overall ODA level decreased.The share of bilateral ODA to the region significantly increased reaching out 52% from 38%, while the share to Middle East decreased. The aid reorientation advantaged non-LDC countries, as the received the same amount of aid.

Government likely to drop emendament on Aid reform

Following, negative Parliamentary reactions, the Government is willing to drop the emendament on aid reform from the Financial Bill, while the Senate has promised to break the stalemate on aid reform by opening discussions up to civil society. The Government emendament faced strong criticism by the opposition while it was supported by the majority of the civil society organizations. Public hearings are scheduled to start next week.

Government tries to reform ODA Law by using the Financial Bill

After a 3 month long fruitless discussion within an ad-hoc Committee in the Senate to find wide consensus on the institutional setting for the new Italian aid architecture, the Government broke the stalemate during the debate on the Financial bill in the Lower House of Parliament.

The ad-committee was not able to find any bi-partisan agreement on the establishment of the implementing Agency for Development Cooperation and the creation of a pooled-fund for half of ODA financial resources within the budget. Both were opposed by the opposition.

The Government included both bodies and provision for further untying within an amendment to the Financial Bill. If the Governments keeps this provision, by early next year the Italian instutions for development cooperation will be completely different. It is important to note that by this amendment, the Ministry for Foreign Affairs will enhance its planning role, while the Minister of Finance will keep its share in the financial institutions. The Minister of Finance will provide contribution to, for instance, regional development banks, while agreeing its policy position with the Minister for Foreign Affairs. Moreover the pooled fund, to be exclusively managed by the Agency, will not include loans or multilateral transfers.

However the current ODA Law will be maintained to discipline over other non-management related issues, such as the aims of ODA and the actors for development cooperation. The Parliament will still be called on innovating the ODA architecture on other institutional features, such as the appointment of a Deputy minister for development cooperation, institutional arrangements for policy coherence, provisions for Parliament and civil society meaningful engagement, possibility for Southern CSOs to get access to Italian resources.

Italy unlikely to fill its obligations towards African and Asian Development Funds

Italy is likely not to fullfill its financial commitments towards the African and Asian development Funds, as the Chamber cut 40 million euros to the financial resources appropriated for these Regional banks. Italy has already a 2 year delay towards the African a Asian development funds, but the cut 40 million will be committed to the Italian brand new participation to the Corporaciòn Andina del Fomento.

Officers within the Ministry for Economy and Finance (MEF) - responsible to manage the Italian contributions to multilateral financial funds - think that the approved amount will be enough to comply with the commitments. They think that Italy will get a discount by disbursing all its financial commitments in one installment. If this is not the case, in 2008 the Government will have to present another bill to fill the deficit. Procedures for resources appropriation to the regional development Banks are more complex than those for bilateral and UN related commitments that are managed by the Ministry for Foreign Affairs.
Yet, there is no law -not even in law n°49 - making any reference to any procedure to multilateral development Bank. In the late '90 the MEF proposed to simplify the procedures, but this proposal was ruled out.

Aid reform bill likely to be presented during December

While the upper House of Parliament - the Senate - is discussing the fFinancial bill, the informal Committee within the Committee of Foreign Affairs is attempting to draft the "Aid reform bill". The informal Committee has been working on the reform draft since last June, with initial hope to have a public text for discussion by Septmber.

However the drafting is taking loger, as the speaker for the Aid reform bill, Senator Tonini, is attempting to present a bi-partisan text. If he is successful, the presented text could be quickly discussed by the Senate whereby the ruling coalition has a thin majority. After fears of a stale mate in the informal committee could never finish its work, Sen. Tonini, is optimistic and the text could be publicly available over December.

The main roblematic issue still to tackle is the creation of an independent implementing Agency that the center-right opposition fears as a de-facto limit to the Ministry of foreign Affairs strategic leadership in development cooperation. In order to build a consensual environment, the speaker is accepting proposals by the centre-right coalition, for instance, introducing the Interministerial Committee for Development Cooperation.

Italian tied aid: some examples

According to the current 20 yers old legislation on Italian ODA, all concessional loans must be tied. Yet, following 2001 DAC recommendations on aid-untying in LDCs countries, the Law was informally modified by a decision from the Interministerial Committee on development and planning by accepting the DAC recommendations. The ODA law was not re-drafted and its tying provision is still partially responsible for the tying of Italian aid. The last official report on Italian development cooperation (2005 - 2006 report is to be made available early 2008) list some tied aid cases. In the Kwanza Sul province of Angola, the telecommunication network is being updated by the Alcatel Italy company thanks to a 18 million euro loans. In Vietnam, a 2.3 million a tied loan funds the building of the water system in the city of Quang Ngai and an Italian company is setting up the Vietnamese floods monitoring system – 2.5 million euro.

Surveies on Italian citizens support to AID

The findings of a poll survey commissioned by Catholic NGO platform were published at the end of October. According to the poll, the main development priority for the Italian public is the fight against hunger (47%). 40% make any aid increase conditional to its improved quality and allocation, but 24% favours an increase with attached conditions. Decrasing military expenditures to appropriate additional money for aid is the best option for 64% of the respondent. The UN systems is the one actor, scoring the highest for aid managing (73%). According to the EU barometer, 32% of the Italian public supports the idea that should encourage good governance and to be directed to Sub-saharan Africa (54%).

Deputy minister confirms a 100 million euro increase for NGOs

In the initial draft Financial bill's annexes, the 100 million euros increase for development cooperation was to be allocated to multilateral organizations ( 80 million) and emergency aid ( 20 million).
Yet, according to the recent declaration by Deputy Minister Sentinelli, the increase is to be made available to NGOs, bringing up the budget for civil society initiative to the record figure of 200 million. NGOs financial allocation has increased four times since 2006.

Senate cuts 20 million euro to Italian ODA

On friday 25th, the Senate approved Decree 159, with some emendaments to the government text.

As for development cooperation, the new text cuts 20 million euros previously allocated to the Italian participation to multilateral development funds, such as IDA, GEF or IFAD. The total amount currently availble is 389 million euros, and it is not clear where the 21 million euro were channelled to. The cut got all the government services dealing with the bank, by surprise.

Now the Decree is to be approved by the Lower House of Parliament, but time and political constraints will not allow re-allocatin g21 million back to ODA...

2008 Financial Bill and ODA: Target 0.33% still unlikely

Notes on the 2008 Budget

2008 Budget Cycle and the Fight against Poverty: target 0.33%, action still unclear and uncertain

29 October

By Iacopo Viciani, Luca De Fraia[1]

Reaching 0.33% in 2008, to save Europe in 2010

According to the forecast of the Ministry of Foreign Affairs, the ratio Official Development Assistance / GDP for 2007 is about 0.21-23%, the same level as in 2006, but there are two encouraging signs from the future in Financial Perspectives Document 2008-2010:

1) the planned schedule for the stable re-entry of Italian cooperation policy in Europe, by achieving the objective of 0.33% ODA/GDP, till then reaching 0.51% in 2010. The Financial Perspectives underlines the need to find additional resources for ODA, which, net of previous commitments, should tend towards 0.33% of the GDP (5.2 billion Euros on the basis of the new GDP estimates);

2) The Financial Perspective also groups together ODA expenses with costs due to the renewal of public sector contracts and welfare reforms. This hint that the cooperation allocations – 750 million in 2008 and 150 for subsequent years – has partly become a “compulsory cost”.

Despite these positive elements, the 2008 ODA in budget is difficult to assess due to the unclear nature of the budget and the difficult assessment of the time for disbursement. Therefore it is difficult to say whether the 2008 financial bill allocate enough resources to meet the 0.33% target.

Meeting the EU target with a 2 years delay means to subtract resources from the international aid system. By not meeting the official schedule for aid increase, as included into the 2003-2006 financial perspective, Italy kept 4.5 billion euros away from the international aid system. In terms of financial resources, it is almost equal to the Netherlands ODA[2].

The total ODA expected for 2008 appears to be more difficult to gauge because the allocations for 2008 are affected by the addition financial resources coming from the Decree 159 dated 3 October 2007 (771 million Euros for ODA). However to be in line with the Financial Perspectives 0.33% target net of previous commitments, only 355 million Euros should be counted as possible 2008 ODA. As for the DAC reporting directives all Decree resources to be disbursed in 2008 will count as 2008 ODA.

Despite these difficulties for any precise forecast, the attainment of the 0.33% target already seems to be very unlikely.

If 0.33% is not achieved in 2008, it will be even more difficult to reach 0.51% in 2010. This will delay the re-entry of Italian cooperation into Europe, but the will have negative impact on the overall European performance. If the 2010 Italian ODA had not reached at least 0.44% (approximately 7 billion Euros) in 2010, Europe will miss its 0.56% collective target.

Limited transparency

The reform of the State budget groups together all the Ministries budget heading under 34 missions. The reform was supposed to enhance transparency and had the potential to gather all headings dealing with development cooperation are under the mission title “Italy in Europe and the world”.

Over the last years, different ministerial departments had proposed to include to the budget a table indicating the forecast ODA level. This year this effort for transparency was in line with budget programme 2 of the “Italy in Europe and the world” mission, that is entitled “development cooperation and global challenges”. Instead both the “mission” is too broad and still does not only report ODA financial resources. In fact, the 662 million euro reported under the Mission/programme “development cooperation and global challenges” only indicates the financial resources available from the Ministry of Foreign Affairs (MFA).

There are still unclear and too broad budget headings scattered among Ministries, that “hide” a significant percentage ODA. This is the case, for instance of:

• the Special Fund of Ministry of Finance, financing, among other things, Italian contribution to development banks and funds;
• the Ministry of the Environment budget heading for sustainable development includes resources to support intervention in Italy and worldwide;
• budget heading n° 7493 of the Ministry of Finance - even more important for the Italian ODA. This contains allocations for the EC budget – 3.89 billion Euros – which will subsequently and partly be counted as ODA, - approximately 750 million Euros per year.

• ActionAid asks that the budget include a comprehensive table indicating the forecast ODA, detailing, among others, ODA channelled to the EU budget, ODA allocations in the Special Fund of the Ministry of Finance and the planned debt relief operations.