Portugal

Total aid in 2011: €481m

About Portugal's aid commitments:

Changes in 2011

In June 2011 a new government was elected. Several measures were taken (e.g. end of IPAD, the national development agency and development cooperation budget cuts) which proved that the Portuguese development cooperation has a new agenda: promoting the Portuguese language, more export led economy and attract foreign investment, all jeopardizing the accomplishment of the Portuguese aid quantity and quality commitments (particularly regarding tied aid and predictability). In fact, very serious setbacks can be expected. The consequences of these measures will only come into full effect in 2012 but they have already a very deep and negative impact on the activities of many stakeholders. ODA levels in 2011 decreased by 3% compared to 2010. A deeper fall did not occur mainly because tied aid represents more than half of Portuguese ODA The overall Development Cooperation Budget was cut by 40%, while public funding for NGDO’s was cut by 60%. The aid quality principles were reaffirmed as a priority but no new plan has been designed to reinforce their incorporation into Development programs.

Aid Quantity

Preliminary data for 2011 indicates that Portuguese ODA decreased to 475 million euros, from 490 million euros in 2010 (3,0% decrease). ODA/GNI remained at 0,29% since the overall Portuguese Gross National Income decreased in 2011. However tied aid has been one of the major problems of Portuguese ODA. A big part of this ODA is used for Concessional Loans and Technical Assistance Programs implemented by Portuguese teams and experts.

System

The Ministry of Foreign Affairs is responsible for defining and executing Portuguese Development Cooperation Policies, mainly through a specific Government Agency called IPAD. However the Ministry of Finance has a much higher budget (and the lowest implementation rate) and most of the other Ministries also have departments that deal with development cooperation issues. Coordination between them is very weak and some of them have their own Technical Assistance Programs, often created outside IPAD’s control. At the end of 2011, the government took the decision to merge the Development Cooperation Agency and the Public institute in charge of the international promotion of the Portuguese Language. This measure goes against all international best practices and the European Commission and OECD recommendations regarding the separation of Development Cooperation and other foreign affairs objectives. This has been causing great apprehension and confusion among many stakeholders, regarding the future of Portugal’s Development policies and strategies. Poverty eradication has always been one of the priorities of Portuguese Development Cooperation but problems related to lack of coherence and coordination have undermined the effectiveness of the implemented projects.

Countries and sectors

The main recipients of Portuguese bilateral aid are Angola, Cape Verde, Guinea-Bissau, S. Tomé and Principe, Mozambique and East Timor ,countries where Portuguese is the official language. The main sectors of Portuguese bilateral Aid are (1) Sustainable Development and the Fight against Poverty, with Education as a main sector; and (2) Governance, Democracy and Participation, where support to the Security sector and to Public Finance are important elements.

Challenges in 2012 and beyond

The Portuguese Government, due to the economic crisis, will probably have public support to prioritize other areas than development cooperation and fight against poverty in developing countries. It will also have enough political leverage to use development cooperation for other purposes, such as revitalizing the Portuguese economy by promoting exports and trying to attract foreign investments. Therefore, the biggest challenge will be to hold the Portuguese government accountable for not complying with its European and international commitments regarding aid quantity and quality.

Recommendations

 Maintain Portuguese international commitments regarding ODA, especially regarding its quality approach, in order to safeguard Portugal’s international credibility.

 Find new sources and means to finance Development Cooperation initiatives, namely through financial transaction tax, promoting the carbon market, taxation on international flights, creating “diaspora bonds”, etc.

 Adhere to IATI in order to ensure aid transparency and predictability along with the CRS system of DAC/OECD.

 Promote a multi-stakeholder forum (including Government members, public departments, CSO representatives, researchers and other stakeholders) to define and discuss the Portuguese development cooperation.

 Maintain a constructive institutional dialogue with NGDOs and with the Portuguese Platform.