AIDWATCH 2021

A GEOPOLITICAL COMMISSION: BUILDING PARTNERSHIPS OR PLAYING POLITICS?

Introduction

Official Development Assistance (ODA) is one of the most powerful tools for enabling both governments and civil society to support those left furthest behind. But since 2005, when CONCORD began its annual AidWatch report, the European Union (EU) has failed to meet internationally agreed-upon aid targets.

Each year, the AidWatch report monitors the quantity and quality of EU ODA through the ‘four Es’: Is it enough? Is it employed correctly? Is it effective? And is it equality-focused? AidWatch, and its ongoing activities, holds EU institutions and Member States accountable to meet their own target of allocating at least 0.7% of Gross National Income (GNI) to ODA by 2030. It also provides recommendations for those funds to be used in a genuine and effective way.

The urgency of scaling up more and better funding for EU ODA is only underscored by the global pandemic, which continues to compound inequalities that existed way before. If we are to overcome the obstacles ahead, international cooperation will be paramount. The EU, as the world’s largest donor of ODA, has a crucial role to play.

What’s new about AidWatch 2021?

AidWatch is constantly evolving. And the 17th edition of the report is no different with this new digital format. The sections below present the main findings on the 4 Es in a more user-friendly way. From click-to-tweet functions and an interactive map of trends in EU ODA, this enhanced version also offers tools for civil society to call on decision-makers to uphold the commitment to Leave No One Behind.

This year’s report takes a detailed look at the commitment to effectiveness in the Team Europe approach – the EU’s response to COVID-19 in partner countries. There are worrying signs that Team Europe is falling short when measured against all four of the Development Effectiveness Principles. The entire approach lacks transparency, civil society has so far been largely shut out of the process and partner country ownership seems scant. Read more in the “Effective ODA?” section or download the full report.

2020 also marked a step change in the EU’s budget for international cooperation. As the EU’s previous budgetary cycle (from 2014 to 2020) came to a close, Global Europe – the EU’s new fund for global development – was introduced. While Global Europe introduces several welcome changes, it also gives way to a number of concerns. A complete analysis of the most relevant trends in the EU ODA landscape from 2014 to 2020 as well as Global Europe is available in the full report.

In 2020, the EU’s ODA represented 0.50% of its GNI, up from 0.42% in 2019. However, this increase must be seen in the context of an economy which was shrinking owing to the COVID-19 pandemic, which automatically increased ODA as a percentage of GNI – despite a significant decrease in real terms as a result of the loss of one of the biggest Member State donors, following the withdrawal of the United Kingdom (UK) from the EU on 1 February 2020. EU GNI shrank by 4.7% in 2020, causing an increase in the ODA/GNI ratio, while in real terms ODA fell from €75.4bn in 2019 (€58.1bn without the UK) to €63.9bn in 2020 – representing 46% of the total ODA provided by the DAC community. However, it is important to note that if the UK’s contribution to 2019 ODA figures is discounted, in 2020 the EU-27 actually increased their ODA spending by €5.8bn in real terms, which is encouraging. But as the economy recovers from the effects of the pandemic, GNI will increase once more, threatening the gains seen in 2020 in relation to the 0.7% commitment, unless there are greater increases in ODA spending by EU Member States in 2021 and beyond.

 

Graph 1: ODA and genuine ODA as % of GNI, EU Member States

CONCORD’s methodology for analysing aid reveals that ‘inflated aid’ as a proportion of total EU ODA has fallen for the fourth consecutive year and now represents 13% of all reported ODA. Levels of inflated aid for most Member States are very low, with 14 reporting inflated aid at levels of 5% or less of their total ODA. While inflated aid across the EU is decreasing, it is not doing so quickly enough. At current levels, if only genuine ODA is counted, the EU will not meet the 0.7% GNI target until 2038. CONCORD urges all Member State governments to put in place concrete plans to achieve spending targets by the 2030 deadline.

Six EU Member States (Slovenia, Slovakia, Malta, France, Portugal and Germany) have inflated aid levels representing over 15% of their total ODA. Malta is the largest statistical outlier, with inflated aid at 74% of total ODA. This is due to significant spending (€36.66m) on sustaining refugees inside Malta, compared with a low level of spending on ODA generally. More significant are the cases of France and Germany, two of the EU’s leading donors, whose inflated aid levels are at 19% and 17% respectively of their total ODA. Germany reported reaching the 0.7% GNI spending target in 2020, and France has committed to trying to reach this target by 2025 – but if their aid spending continues to be inflated at current levels, their contribution to sustainable development goals in partner countries will be severely limited. Both countries report high levels of inflated aid across refugee costs, high imputed student costs, interest received and tied aid, while France is alone in the EU in reporting a significant amount of debt relief (€247m) in its overall ODA figures.

Graph 2: Estimated timescale for keeping the 0.7% promise: genuine vs inflated EU ODA

Alongside the launch of Global Europe (the EU’s new budget instrument for international cooperation), the adoption of the Team Europe approach represents the most high-profile shift of 2020 in how the EU plans, delivers and, crucially, brands its ODA. Created to provide a united EU response to the COVID-19 pandemic in partner countries, Team Europe has evolved over the past year into a more comprehensive programme, encompassing a wider range of EU ODA initiatives.

The European Commission has described Team Europe as an effort to “further improve the coherence
and coordination of efforts, notably at partner country level”.Coordination mechanisms to prevent the fragmentation and duplication of effort between donors are welcome, but it is hard, from an external perspective, to grasp how Team Europe represents an improvement on pre-existing arrangements for joint programming. Instead, the heavy promotion of the Team Europe brand appears more consistent with the ‘geopolitical’ Commission’s efforts to raise the EU’s profile and increase its global influence. Indeed, Laurent Sarazin, DG INTPA’s Head of Unit for Effective Development Policy and Team Europe, confirmed that Team Europe does play an important role in showcasing the EU’s unique contribution as a development partner, saying: “One of the objectives of Team Europe is to show partner countries that the way the EU does development cooperation is more effective and brings more lasting impact than other models.”It will, however, be crucial for the EU’s future credibility as a sustainable development partner to demonstrate how Team Europe actually delivers results for marginalised people in partner countries. This section will provide an initial analysis of what is known about the Team Europe approach so far.

Our analysis is structured around the Development Effectiveness Principles. It is important to note that Team Europe is very new, and the first Team Europe Initiatives (TEIs) remain in the early stages of design and agreement rather than delivery. Consequently, most of this analysis is based on a review of Team Europe’s governing documents and interviews with EU officials, civil society representatives, and other relevant stakeholders, together with questionnaire responses provided by CONCORD’s National Platforms across Member States. The Commission itself recognises that Team Europe is still a fledgling initiative and there is much yet to do in terms of agreeing objectives, devising ways of working and improving effectiveness. As Laurent Sarazin, DG INTPA, put it, “We are still building the ship while we are sailing it!”

Reducing inequalities is one of the most critical challenges facing the world today and is a key objective of the EU’s ODA. It is crucial to achieving the SDGs, as well as being an SDG in its own right. However, there is very little comprehensive data available to analyse how successful EU ODA has been in reducing inequalities between richer and poorer countries or within a given partner country. To make a meaningful assessment, CONCORD takes into consideration the following four of the OECD DAC’s equality-related measures:

  • EU ODA to least developed countries (LDCs);
  • EU ODA aimed at supporting gender equality;
  • EU ODA financing to support CSOs;
  • EU ODA to help partner countries mobilise domestic resources.

There have been only small shifts across these criteria in 2019 (the latest data available), and any gains have been strictly limited – nowhere near sufficient to curb the rising inequalities that have since been further aggravated by the global pandemic. We will explore these issues below.

Recommendations to the EU

The EU (including its Member States) must improve the quantity and quality of ODA to reaffirm its role as an important stakeholder in global sustainable development and to ensure progress is made towards achieving the SDGs by 2030.

TO ENSURE EFFECTIVE ODA…

TO ENSURE EQUALITY FOCUSED ODA...

Trends in EU ODA by Country

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Riccardo Roba

Riccardo Roba

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