2/23/2010

EU aid ambitions derailed by Italy

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%.

2/08/2010

Italian aid in 2009

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%).