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.
10/22/2008
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
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
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.
10/14/2008
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.
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.
10/03/2008
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.
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.
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