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.
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).
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).
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