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.