Jessica from our UK office brings us this great bit of news!

In a packed House of Commons today, the Chancellor delivered the annual budget. We had been waiting eagerly to see what the results would be for development aid. With the current economic downturn affecting everyone, some worried that the development pot would be raided.

At lunchtime, we found out that Gordon Brown and Alastair Darling have kept their promise to the world’s poorest- they did not roll back their spending commitments even in these tough times. Chancellor Alistair Darling said Britain’s Overseas Development Assistance (ODA) budget would be £7.48bn for 2009/10 and £9.14bn for 2010/11, as proposed in last year’s Comprehensive Spending Review.

What does that mean? It means that the UK is still on track to keep its promise to devote 0.56% of national income to effective overseas aid by 2010. This is great news!

In reaction to the news, ONE Executive Director Jamie Drummond said the following:

“The Prime Minister and the Chancellor have shown true global leadership in keeping Britain’s promises to the world’s poorest. Britain is setting the standard for other G8 countries at a time of global crisis when effective overseas assistance has an even more vital role to play.

“This pledge reflects the British public’s firm belief that effective international aid is a smart investment in a fairer, more prosperous world.”

-Jessica Gomez-Duran

On Wednesday April 9th, the European Commission launched its yearly update on how EU donor countries are helping to meet the MDGs. This year President Barroso and Commissioner for Development Louis Michel used the opportunity to make some key announcements on advancing crucial development assistance for African countries. It’s fantastic that the leadership of the Commission is putting development matters so high on his political agenda. Less than a week after the London Summit, the Commission outlined three main ways it would act to help developing countries combat the effects of this economic crash:

1. Pushing EU governments to meet their aid promises and ensuring the highest degree of aid effectiveness possible. Development Commissioner Louis Michel’s message was: “We know what we must do: meet our aid targets, advance our money to have an impact when it is most needed, refocus our existing programmes to tackle the crisis and then make every Euro count”.
2. The EU is proposing spending more cash for the poorest countries to help fill some of the financing gaps created by the economic downturn. The €1billion Food Facility was intended to be spent over 3 years- now the Commission have promised to spend €800m of it by the end of the year to inject much-needed cash into the agricultural sectors of countries most in need of support for farmers. A whopping €3billion will be brought forward for African, Caribbean and Pacific country governments and another €500m for spending on health, education and other vital social spending.
3. Thirdly aid effectiveness is the Commission’s priority. When Louis Michel spoke of ‘making every euro count’ he was alluding to some research he had commissioned which showed that just by working together more effectively, the European Commission and the 27 governments could save a huge €7billion a year which could be freed up to save lives in this downturn. The Commission wants more coordination between donors- it’s common sense that not every donor should work on every sector in one country, and we should be seeing more of donor countries playing to their strengths and taking the lead amongst donors in their specialist areas.

All in all the announcement yesterday was a very positive step- it shows the EU has not just read the G20 communique and agreed- it is doing that rare thing of acting quickly upon agreements. We hope it will convince other G20 countries to do the same, and fast- we’re particularly looking toward the Spring Meetings of the World Bank and IMF to raise more funding for Africa in grant form. Any loans that are given we will argue should be extremely concessional so they don’t spark another debt crisis. There are of course some concerns about the announcements yesterday– Will governments replenish those funds when there’s not enough in the pot next year? Ironically, if the EU alone kept to its 2010 promises, that would mean another €20 billion on overall assistance over the next two years. So the message is simple- we welcome these announcements, on the condition that EU governments stick to their ODA promises.

-Eloise Todd

As you know, the World Economic Forum was held in Davos last week, and much of it has been widely reported. On Friday, German Chancellor Angela Merkel spoke. As a German I was excited to hear her announcement that Germany will again increase ODA “significantly” in 2010! But let’s have a more systematic look at what she said. In her speech she described the German reaction on the financial and economic crisis. After describing the national approach (mobilization of € 81 billion as economic stimulus) she added that the German reaction includes a strong international prong. As part of this, 5 elements are important to Germany (but also for the international community):

1. Continued support for a market economy: She suggested internationalizing the German model of “social market economy”, which recognizes that the forces of the market are necessary for prosperity, but that these forces need an order, which the government has to guarantee.
2. Reform of international organizations: She added that the G8 will not be able to do the job on their own. The new format of the G20, meeting at the Heads of government/state level, is therefore a “formidable development as we move forward”. This includes the lesson that nation states need to transfer sovereignty in some cases – a lesson that EU member states have learned and even other big nations will have to learn.
3. Open world economy: This includes a successful end to the Doha-round.
4. Sustainable use of natural resources: Especially strong commitments from developed countries in the run up to the Copenhague climate deal.
5. Fight against poverty: just as in 2009 Germany will increase ODA “significantly” in 2010. She sketched three consequences if aid were to lose its importance: political instability, a widening development gap in the world, and diminished hopes in those countries that have received our promises in the forms of the MDGs.

As a way forward, Merkel suggested that a G20 “Charta for sustainable economic activity” could be the departing point to establish the “UN Economic Council”. She will meet with Worldbank, IMF, OECD, WTO and ILO in the week of 2 February to discuss the role of international organizations and their division of labour.

She also mentioned that the German “social market economy” can serve as a role model for a globalized world. The following argumentation shows that this would bring Africa into the picture: the basic idea of the social market economy is that the state enables its citizens to be economically productive. This creates wealth. However, a large percentage of Africans currently lack the preconditions to be productive, as they suffer from malnourishments or diseases or lack access to basic education. African enterprises are held back by a lack of energy and infrastructure. An internationalized “social market economy” must therefore encompass a mechanism to create preconditions for productivity. The three elements of such a mechanism are more and better aid, a trade deal for Africa and maintaining sustainable debt levels.

-Andreas Huebers

Due to the EU’s reaffirmation earlier this month to reduce CO2-emissions by 20% by 2020, on January 1, 2013, 10,000 E.U. power plants and energy-intensive factories will have to buy certificates for emissions of carbon dioxide.

It’s relevant to African countries in several ways, but particularly because it is likely that implementing this policy will generate extra resources for Africa to adapt to a changed climate and make progress towards the MDGs.

The policy creates a whole new stream of revenues for EU-governments and the tug-of war over how to use these revenues has already started. Usually, Africa is not on the top of the agenda for European politicians when they talk about spending. However in this case, several particularly good arguments support the idea that a significant part of these resources should be spent in Africa.

Most compelling is that African countries have contributed the least to the current climate change, yet they will be hardest hit and are the least prepared. (more…)

Last Friday, the German parliament (the Bundestag) approved its 2009 budget with a $1.1 billion (800 million Euro) increase in development assistance spending for next year.

This is great news and marks the third year in a row that Germany has made impressive increases in development spending. This is an increase of more than 12% since 2008, the largest for any ministry in Germany. We know that this money will make a difference- it can be used, for example, to buy and distribute 180 million insecticide treated bed nets or to supply 5.5 million AIDS-patients with antiretroviral treatment for a whole year.

A substantial portion of the increase (225 million Euro) will be generated through an innovative financing scheme launched by the German government last year. Through this scheme, Co2-certificates are auctioned off to German industry to help pay for development projects. Development funding from this source has almost doubled since 2008- from 120 million to 225 million Euro. Steep increases can be expected in the years ahead. And for the first time, in 2009 these funds can be partly used for development assistance in any sector (as opposed to being fully earmarked for funding climate-related activities like adaptation and mitigation).

This decision pushes Germany a step closer towards fulfilling its aid commitments to the world’s poorest countries. However, increases from Germany and the rest of the G8 will need to accelerate much faster to meet the promises made in 2005 at the Gleneagles summit. Here in Europe, we’re hopeful that President-elect Obama’s commitment to meeting the Millennium Development Goals and doubling foreign assistance will play an exemplary role for Germany and the rest of the EU and inject new momentum into meeting these commitments.

-Andreas Huebers, ONE Germany

Late Friday night, the EU finally agreed to provide 1 billion Euros of funding to struggling farmers in the developing world. Best of all, after crunching the numbers it looks like 76% of this funding will be new development assistance above and beyond what these countries currently give.

Congratulations to the 15,000 European ONE members who took part in the massive effort and great achievement. We’ll update you later today with more details on the final deal.

While this was a challenging campaign, the EU has shown, for now, that it will not forget people living in extreme poverty during these difficult times. But there are still two tests that remain. Firstly, when these countries write the check they must not simply reallocate other development assistance to fulfill their commitment. Secondly, we’ll be following the process to make sure the Commission spends these funds wisely.

- Roxane Philson, ONE’s EU Deputy Director

In his annual foreign policy speech to the Lord Mayor’s Banquet in London, Prime Minister Gordon Brown set out the five great challenges the world faces today. One of these challenges is meeting the Millennium Development Goals.

In the speech he said:

For now more than ever it is both our duty and in our interest to help meet the Millennium Development Goals. For we cannot solve climate change without Africa; nor can we solve the food crisis without Africa. We need a fully financed ‘energy for the poor’ initiative; where commercial sources of capital dry up support from the international institutions; and we need to support agricultural development in Africa, in the past feed the world meant that we helped to feed Africa. In future, if we do things right, we will do best by enabling Africa to feed the world.

He goes on to make some interesting statements in relation to sustainability and bringing the environment and development together:

This is why as we prepare for an ambitious post 2012 climate change agreement at Copenhagen, for which I pledge our Government’s unbending commitment, the European Union must, and I believe will, agree in December its ‘2020′ programme for energy and climate and show European leadership at its best. And I want the World Bank to become a bank for environment as well as on development, helping developing countries move towards sustainable energy paths of their own.

It’s great news that the British Prime Minister has explicitly made the Millennium Development Goals one of his top foreign policy priorities. Let’s keep him to his word.

Full speech can be read here.

-Jessica Gomez-Duran

It’s been almost 5 months coming, but hopefully on Friday we’ll finally know if the European Union will dedicate an additional 1 billion Euros to help struggling farmers in the developing world. For the last month we’ve turned on the heat to make sure these farmers get as much help as possible.

It feels like Eloise Todd – our Government Relations Manager – doesn’t live in London any more as she has been constantly in Brussels and Strasbourg. Yesterday, she just delivered our petition with over 13,000 signatures to Alain Joyandet, Secrétaire d’Etat chargé de la Coopération et de la Francophonie (Minister of State responsible for Cooperation and Francophony) at the European Development Days in Strasbourg.

ONE members across the EU have also sent nearly 5,000 emails and letters to their national finance ministers and chancellors, urging them commit to giving as much additional aid as possible. On Friday, 21 November, these finance ministers will be signing off on the European Budget and we’ll know how well all our hard work as paid off.

The key thing to watch out for this Friday is how much will be additional within the EU budget. After that, we can’t afford to take our eye off the ball in case countries try to finance this from their bilateral aid budgets. If they take this money from within their aid budgets, we’re looking at this additional billion not being additional at all. The money must be additional and spent on the most urgent needs of farmers in the developing world. We want a political commitment on additionality at the budget negotiations on Friday. We’ll keep you posted on how things look.

-Weldon Kennedy

Our Government Relations Manager Eloise Todd checks in with an update on the EU Billion:

With just a week to go until the EU institutions negotiate the budget, we’re working hard to make sure that the EU’s governments and European Parliamentarians deliver on the billion for poor farmers. The main concern is whether the money will really be additional. There are rumours that some negotiators want to simply raid other pots of development money to fund this Food Facility which would be disastrous. This funding was intended to fill the huge funding gap that has been caused by the food crisis and to deliver swift aid to farmers in developing countries – the seeds, tools and fertilizer they need to get back on their feet again.

Despite these rumours, we know that there are lots of good people working on the inside and outside of this process to deliver this money and we’re working very closely with them. Just a few leaders and Finance ministers who keep putting new obstacles in the way of this Food Facility and we need to keep the pressure on to make sure they know we’re watching and we’ll name and shame those countries who are trying to deliver this money without stumping up fresh funding.

On Sunday I’ll be travelling to Strasbourg to the EU’s Development Days to keep passing the message on to the Ministers that will be there. After that I’ll be lobbying decision-makers in the European Parliament. We’ll keep you posted

-Eloise Todd

Bono has been blogging today from the United Nations’s Summit on the MDG’s in NYC. The below post he wrote after meeting with the President of France, Nicolas Sarkozy. You can read his complete posts at FT.com.

Tough meeting with the Président de la République of France. He’s a tough guy. We like tough guys because they get straight down to business. They don’t waste their time or yours. The French budget is out this Friday and in it we will see if France intends continuing its leadership role on the continent of Africa. In the last few years, French aid has been falling.

My point was that as much as Africa needs French aid and the energy that Sarkozy himself provides, he/we need Africa. Why? Africa has never been so strategically important as it is now, economically and politically. Just ask…

Read the full post here.

-Virginia Simmons