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.
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