This is another bad news for Italian ODA quantity.
The Budget session has officially started, and the 2011 budget proposal from the Governemnt is a further cut to the ODA that is can be still cut ( that is not linked to EC and EDF disbursements). This is mainly the ODA managed by the MFA. In one year, it is to l face a 45% reduction (-140 million euro) to reach the minimal level of 179 million euro. This follows the 56% reduction in 2009. ODA appropriations managed by the MFA is at an historical minimal level. It was not so low even when Italy had to face heavy expenditures reduction to enter the Euro zone in 1996. Italian NGOs are able to channel by far more funds for international development via their private fundraising than the Italian Ministry of Foreign Affairs
At the end of June, both the Ministry of Foreign Affairs and the Ministry of Finance invited all Italian stakeholders in international development cooperation ( NGOs, foundations and all ministries) to a round table to discuss the creation of a regular coordination mechanism. The convenors sketched out the two main objects for such coordinating structure: drafting an overarching vision for the Italian development cooperation, as recommended by the DAC, and piloting some multistakeholders development cooperation interventions, involving private and public players, in partners countries. The idea was very welcomed by all participant and the group is going to meet again in September. In early July during the biannual general meeting the Director General for development cooperation hold with the Italian NGOs, NGOs arrears were updated to reach 30 million euro. These are delayed public financial contributions due to NGOs but these have not been disbursed due to red tape and lack of capacity. In order to complete their interventions, NGOs had to frontload resources to fill this financial gap; they have been waiting for a reimbursement over the last 15 years.
The Italian Government has approved a emergency decree to fund the Italian participation in the International peace keeping/enforcement operations in the second half of 2010 - July to December. It is usual for the Italian Government to approve two or more decrees a year to fund international military operations. They generally include additional financial allocations to support development cooperation interventions (ODA eligible). In 2010, these two decrees provided additional financial resources to the Ministry of Foreign Affairs development cooperation budget up to 72 million euro – a 22% increase. However, the 2010 International military decrees approved less resources for international development cooperation interventions than last year - 22 million euro, a 20% reduction. The total financial resources provided by this second military decree are 12% less than those appropriated in the first semester with a 36% reduction for development cooperation activities. Financial resources for Afghanistan faced a 15% reduction while in other areas – Lebanon, Iraq, Sudan, Pakistan. Somalia - funds were cut by 56% in comparison to the first semester appropriations.
What happened to the Italian G8 commitments on International development? The 2010 G8 accountability report is a good step forward, as it lists all actions delivered by the G8 members, as these are reported by the Governments themselves. This mechanism lacks any independent validation but, at least, it provides a single registry to compare G8 performances.
According to the document, Italy ranks at the bottom in almost each G8 commitments. As for official development assistance and GDP ratio, the Italian 0.16% is the lowest level, among the G8. In the document, Italy explains that such minimal level is also due to the economic crisis but it reaffirms its commitment to reach 0.7% by 2015 and to increase ODA levels when the general budget increases. Unfortunately, between 2008 and 2009, the Italian budget increased by 3,4% but ODA levels shrank by more than 30%.
As for each thematic commitments, Italy is the only G8 member not disbursing to the Global Fund in 2009, to halve its contribution to STOP TB initiative, and to rank last in contributing to the Polio eradication initiative. Last year, the L’Aquila Summit launched an emergency initiative to respond to the global food crisis. Out of 6 billion dollar extraordinary funds, Italy just pledged 180 million dollar, half the contribution of Australia and almost as much as the Netherlands.
On July 7th, South African Government will also host the Global Summit on Education. The international meeting also aims to have the OECD States pleadge their financial contribution to the Education for All fast track Initiative (FTI). I taly lists education among its thematic focuses in its international development cooperation initiatives but the Italian financial commitment to the FTI is very limited. It amounted at just 3 million euros per year in 2006-2007, to peak in 2008 with a 10 million euro disboursement. Th 2008 trippling aimed at meeting the Italian pledges for two years (2008-2009), averaging 5 million euros per year. In 2010, Italy has again allocated only 3 million euro to the "Education for All initiative".
In 2008, 45% in the Italian bilateral aid was channelled towards Iraq, thanks to the last debt relief instalment. Afghanistan was the second partner country – receiving 6.3% in bilateral aid – Palestine followed with 3.8% and Ethiopia and Lebanon closed the top 5 list – 3.5%. This top 5 partner countrylist is consistent with the 21 country long list for aid recipients, included in the 3 year planning guidelines for the Italian development cooperation. Despite the Italian aid effort, the influence of Italy- as a donor - in the country – ranking among the top 10 - depends on the financial commitment by the aid community. Among the top five partners countries, in Iraq and Lebanon only, Italy is among the top 10 donors, and in 4 only of the 21 priority countries list. In financial terms , Italy is the most important donor in the small islands of Saint Vincent and Kitts, thanks to 16 million dollars and 21 million dollar worth debt cancellations. Again, debt relief operation allows Italy ranking forth in Sierra Leone and Iraq. Yet, beyond debt relief is in middle income not aid-dependent countries where Italy is among the most important donors (4th) - Libya, Angola and Argentina -tough investing less than 1 million euro per country. Consistency between investment, political priority and influence in the aid framework is found again in Lebanon (66 million dollars), Albania (32 million dollars), and Tunisia (18 million dollars), whereby Italy is the 6th most important donor.
On February 17th, DAC released the 2010 official development aid (ODA) projections for 2010. These data are far from official, as the 2010 data will be available in 2011, but they are the first official estimates assessing whether the 2010 aid targets are likely to be met. Unfortunately, the EU 0.56% ODA/GDP collective target agreed in 2005 is not going to be just a 0.48%, with more than 10 billion US dollar gap from its pledged levels. Italy is the main EU culprit for the de-railing of the EU ambitions - accounting for more than 40% of the financial gap. The financial shortfall could have been bigger if some EU member states, such as Finland, Belgium, Denmark, Sweden, United Kingdom or Ireland had not gone further than the EU agreed targets DAC.
The Italian ODA/GDP is estimated at 0.20% rather than the 2005 promised 0.51%. According to ActionAid own estimates, the DAC projections on Italy are overoptimistic, as a 0.18% is the most likely Italian performance on aid in 2010. These data also include debt relief operations, forecast to be a third in total ODA in 2010. When debt is discounted, Italian aid is estimated to decrease by 19% between 2009 to 2010 ( from 0.16% to 0.13%).
International aid analysts are expecting a contraction in aid levels due to the current economic crisis. Following DAC estimates, the 2010 aid levels are already shrinking from their 2008 peaks. World Banks studies forecast a 20%-25% reduction in aid levels in the next decade following a financial/bank crisis. Yet these estimates are based on previous donors actions. For the time being, the USA administration has increased its 2010 foreign aid allocations by 15%. Moreover, the Italian aid levels are not the results of the economic crisis. Italian ODA has always been around 0.20%, even during moderate economic growth periods. If the Italian performances on aid are assessed against other DAC donors facing the same economic constraints, Italy has always underperformed and in 2010 its ODA/GDP ratio should be still around at 0.27%.
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%).
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 OECDDevelopmentCenter 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.
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.
ActionAid è un'organizzazione internazionale indipendente impegnata nella lotta contro la povertà e le cause dell'esclusione sociale. Nata nel 1972 opera in oltre 40 paesi del mondo raggiungendo oltre 13 milioni di persone che vivono in condizioni di povertà ed emarginazione.
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