The European Union (EU) is world’s largest economic block (with 501 million inhabitants and a total GDP of more than $17 trillion). In addition it is also the world’s largest provider of Official Development Assistance (ODA), also known as “Overseas Aid”. In 2010, EU countries provided over $72 billion of overseas aid, which is more than double that of the United States. It is a huge total.
However the proportion of European overseas aid that is channeled through the EU Commission has been criticized for not being focused enough on trying to alleviate poverty. The Commission is seeking to address this by looking at how it can increase the impacts of its development policy and early this year ran a consultation process. Groups were invited to submit comments on the EU approach and what they thought the Commission should do to promote inclusive and sustainable growth.
ONE — along with more than 200 other groups including governments, think tanks and other non-governmental organizations (NGOs) -– made submissions which the EU has now consolidated into a single report released last week. The report will inform the debate on the European Union’s development policy and how the Commission focuses its overseas aid. So the report could have a huge impact on poverty reduction… being aware of this potential impact, here is a summary of the major opinions put forward by respondents:
Economic growth is necessary for development but that growth alone may not lead to poverty reduction
Support exists for the EU using overseas aid to catalyze inclusive economic growth, development and employment creation. Though many NGOs were keen to point out that redistribution policies and social protection systems are important to make sure the poorest people benefit from economic growth.
Overseas aid should be primarily provided to the least developed countries
There needs to be greater coherence between development and other EU policies such as trade, foreign investments and better coordination with recipient countries’ domestic resources and individual countries’ aid contributions.
Increase support for small- and medium-size enterprises (particularly in the agricultural sector) to provide increased jobs and economic growth is needed.
Climate change adaptation should be a priority focus of EU’s overseas aid spending and it should be incorporated into all parts of its work to ensure growth and poverty reduction is sustainable.
Plans to have sustainable agriculture and food security as a priority for EU development assistance was endorsed. Other potential EU priority issues identified include education and health, energy infrastructure and aid for trade.
EU development plans must align with recipient countries priorities as part of a partnership to be most effective.
More focused, long term, predictable and reliable ODA commitments in order to increase aid effectiveness.
These conclusions from the consultation generally echo the points ONE made and we hope that later in the year when the European Parliament and Commission discus the future of EU development policy it will take these points on board. We here at ONE will of course be watching the discussion and will keep you informed.
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