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AidWatch Report 2017 - EU aid uncovered: How to reach the target on time

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EXECUTIVE SUMMARY

Significant political events and upheaval took place in 2016, with many far-reaching impacts, including on the European Union’s aid spending and development cooperation. The rising number of terrorist attacks across Europe has created an atmosphere of fear and beleaguerment, while the UK’s intention to withdraw from the EU has challenged the European project as we know it. EU governments and international institutions alike are failing in their response to refugees seeking asylum, and to the humanitarian crises in the Mediterranean. Finally, the arrival of President Trump has ushered in a new era of US unilateralism. In this international context, the aid and development system is under even greater pressure than before; and global leadership is needed more than ever if we are to deliver the 2030 Agenda for Sustainable Development and achieve its goals. To succeed in this, the role of official development assistance (ODA) is central.

Promisingly, the EU and its 28 member states (EU28) have remained the biggest development donor, with a stable increase in total aid over the last five years. In 2016, EU member states disbursed €75.46 bn of ODA, with ten states increasing their total ODA by over 25%. This is welcome news, but it needs to be put into perspective: EU governments’ aid contributions still fall considerably below their collective ODA commitment to deliver 0.7% of EU’s gross national income (GNI). Also, more than half of the increases in aid from EU governments in the last two years are the result of spending on areas that do not in fact contribute to development outcomes in partner countries (mainly in-donor-country refugee costs, and debt relief). This “inflated aid”1 accounts for 20% of the total ODA reported by the EU28 in 2016. At this rate, once inflated aid is discounted, the EU28 will not be able to close the gap to 0.7% before 2052: twenty years later than the target for 2030, and long past their initial 2015 target for a promise made almost half a century ago.

Trends in development policies are equally troubling. In 2016 and 2017 the EU introduced various key policy frameworks that embraced recent international agreements on development and the environment, including the 2030 Agenda. And yet, EU leaders ´ words are speaking louder than their actions. The increased emphasis on domestic objectives – such as migration control, tackling security threats and promoting commercial expansion – dilutes the primacy of the EU’s international development goals and undermines the hard-fought aid effectiveness principles.

By orienting development policies towards serving Europe too, the EU is performing below its own standards and expectations, and failing to meet its international commitments. At a time of such geopolitical uncertainty, if the EU continues along this path it will not fulfil its potential as a global leader with a key role in tackling the challenges of the 21st century.

These trends need to be halted. The role of development professionals in EU institutions and member states is vital in upholding development effectiveness principles. Some countries are managing to reach the 0.7% target while keeping inflated aid levels low. The role of civil society is paramount for scrutinising donors’ actions and resisting any further shifts by EU governments that undermine the integrity of aid and development cooperation.