WHAT IS THE DEVELOPMENT ASSISTANCE COMMITMENT?

At the Gleneagles Summit, Italy committed to reach at least 0.51% of its GNI as ODA by 2010 and 0.7% by 2015. This promise was made as part of the 2005 EU commitment on development assistance, which also stipulated that 50% of the increases would be directed to sub-Saharan Africa.

In order to meet its Gleneagles commitment, Italy would need to increase ODA to sub-Saharan Africa from €1.010 billion ($1.457 billion) in 2004 to €3.528 billion ($5.089 billion) in 2010. As a percentage of projected GNI, Italy made the third highest commitment among the G7 (0.24%), and the fifth largest in absolute volume.

OVERALL ASSESSMENT

Italy, the President of the G8 in 2009, only slightly increased its ODA to sub-Saharan Africa and globally between 2007 and 2008. It has failed to make any consistent or significant increases in its ODA to Africa since Prime Minister Berlusconi signed the Gleneagles Communiqué in 2005 and is far off track to meet its commitments. Further, Italy is planning devastating cuts to its bilateral development assistance programme in 2009.

If Italy wants to have any pretence to a leadership role through the G8, it must reverse this disastrous path by dramatically increasing ODA, in particular to sub-Saharan Africa.

LOOKING AHEAD

Not only is Italy this year's G8 Chair, but Prime Minister Berlusconi is the only leader among those who signed the Gleneagles commitments to still be in power. Given this status, it is all the more unacceptable that, amongst this group of countries, Italy is furthest off track to meet the commitments. Rather than reassure the world that Italy will revise its course, its most recently passed budget for 2009 only sounds an alarm that future ODA levels will continue to disappoint. Forecasts show that Italy's ODA/GNI may shrink to as little as 0.13% in 2009, thus pushing the country even further away from the goals it helped to set back in 2005.

If Italy wants to play a leading role within the international community, it should immediately reverse its declining ODA trend and take steps to put itself on a plausible track towards meeting its ODA commitments, both globally and to sub-Saharan Africa. It must set up annual, realistic and accountable timetables for delivery, providing the transparency needed to monitor its commitments to the developing world. Otherwise, Italy will not deserve to be considered a trustworthy international player in future discussions or negotiations.

SEE THE ODA CHART

ITALY ODA to sub-Saharan Africa and 2010 target

Click to enlarge
 

IS ITALY DOING ITS PART TO MEET THE G8's SECTORAL COMMITMENTS?
 

ON TRACK
DEBT
  • Along with other G8 countries, Italy agreed to cancel 100% of qualified debts for the poorest countries, first through the HIPC and then through the MDRI process.
  • An important measure of progress on debt is the extent to which donors fulfil their commitments to compensate the IFIs for lost reflows due to lost revenue from debt servicing. Italy is on track with this commitment. In total, Italy has made pledges to cover the cost of multilateral debt cancellation worth $1.584 billion. through 2044, which exceeds its share, $1.485 billion.
  • As part of these pledges, Italy has committed to contribute $416.05 million between 2006 and 2019 to compensate IDA for reflows lost due to MDRI. As of 30 June 2008, Italy had made an unqualified pledge of $29.38 million - 7% of the compensation needed. Italy is off track, as over 20% of the time period has already passed. However, the 2009 Italian budget authorises a comprehensive expenditure of $2.99 billion for the country's participation in the Advanced Market Commitment initiative and MDRI. This is a promising improvement that might allow it to deliver on its promises.
  • Italy has cancelled 100% of bilateral debt owed by HIPC countries. This includes 100% of its post-cut-off-date commercial debt.
AGRICULTURE
  • Even prior to the Hokkaido commitment to reverse its funding decline, Italy had fulfilled the agriculture commitment with small increases in funding for agriculture in sub-Saharan Africa from 2004 to 2007. However, the commitment remains weak. The funding Italy is providing is minimal, and accounts for only 5% of the G8's total ODA for agriculture in sub-Saharan Africa.
  • Italy provided $82.87 million to agriculture (excluding food aid) in sub-Saharan Africa in 2007, a 4.5% increase from 2006.
  • In 2007, Italy spent $52.18 million on food aid for sub-Saharan Africa.
  • As part of the EU, Italy contributed a share of the €1 billion ($1.44 billion) for agriculture in the developing world (ONE calculates $1.096 billion (€760 million) to be additional to ODA already budgeted at the EC level). This was approved by the EU in December 2008. At least €800 million ($1.154 billion) will be disbursed in 2009.
WATER AND SANITATION
  • This report interprets the G8 commitment on water and sanitation to mean that a donor should direct 5.5% of its ODA to sub-Saharan Africa to the sector. In 2007, Italy directed $139 million to the region's water and sanitation sector and exceeded the 5.5% target, channelling 9.04% of its total ODA to the region (the second highest percentage among G8 countries).
  • The 9.04% of Italy's ODA to sub-Saharan Africa that was spent on water and sanitation was more than double the 4.16% the country dedicated to the sector in 2006. However, this high percentage is deceptive. Italy's weak ODA levels artificially inflate its performance in this sector, as the percentage is based on total ODA given to sub- Saharan Africa (Italy's total ODA to the region actually decreased by 2% from 2007 to 2008). In order to make real progress in this sector, Italy must increase overall ODA levels and increase spending on water and sanitation in proportion to those overall increases. It must also work with partners to create a more meaningful collective commitment on water and sanitation.

OFF TRACK
EDUCATION
  • Italy committed $33 million to primary education in sub-Saharan Africa in 2007. This is far below its proportionate share of the $4.9 billion needed annually to achieve UPE in the region (which required Italy to commit $173 million in 2007). 31% of Italy's total ODA to education in sub-Saharan Africa was spent on primary education in 2007.
  • To get on track to meet its Gleneagles commitment on education, Italy would need to commit $160 million to primary education in sub-Saharan Africa in 2009, scaling up to $310 million in 2010.
TRADE
  • As an EU member, Italy is represented in the WTO negotiations and bilateral trade negotiations such as the Economic Partnership Agreement negotiations through the EU. Sensitivities in the agricultural sector, combined with market-opening interests in the manufactured goods and services sectors, continue to impede the progress of negotiations in the pro-development agenda.
  • The EU is currently negotiating EPAs with African regions. EPAs are two-way deals that require African countries to open up their markets in return for better access to EU markets. They were introduced after the original programme that provided special market access to African, Caribbean and Pacific countries expired at the end of 2007 due to WTO compliance issues. Many civil society voices have been critical of the EU's approach to EPAs, voicing concerns about the adequacy of policy space. The fragmentation of regional blocs has also been attributed to the EU forcing countries to negotiate as part of groupings that do not reflect existing regions in Africa. This has seriously undermined the objective of enhancing regional trade and integration - one of the prime goals of EPAs. While negotiations continue, the interim agreements that have been initialled with certain countries such as Cameroon and Ghana, or certain smaller regions such as the East African Community, allow preferential access to EU markets to continue until full agreements have been concluded. With the mandate of the present European Commission winding down before June's European elections, and with the next Commission unlikely to take office until after the Lisbon Treaty referendum in October, agreement on full EPAs still looks a long way off.
  • LDCs are granted nearly 100% duty-free/quota-free market access to products through EU's Everything But Arms programme. However, this programme does not cover all African countries, and has been criticised for maintaining complicated rules of origin that make it difficult for poor countries to utilise.
  • In 2005, at the WTO Ministerial meeting in Hong Kong, the EU pledged to increase aid for trade to all developing countries by €2 billion ($2.5 billion) per year by 2010. According to the OECD figures, Italy's aid for trade contribution to Africa was $443 million - low compared with a peak of $728 million in 2005, but higher than the average annual contribution of $303 million between 2000 and 2004. Meanwhile, the aid for trade needs of Africa alone are estimated to be $12-$14 billion per annum.
  • The European Commission is the world's largest subsidiser of the agricultural sector, collectively spending approximately €53.6 billion ($73.3 billion) in subsidies to support its farmers in 2007 through its Common Agricultural Policy (CAP). Italy was a net contributor to the CAP in 2007, and Italian farmers received €6.0 billion ($8.3 billion) from the CAP.

PROGRESS REPORT
HEALTH
  • Total 2007 health sector spending for sub-Saharan Africa was $254.57 million, a 23.6% increase over 2006 and a $60.45 million (31.1%) increase over 2004.
  • Of total 2007 health spending, Italy spent $160.52 million (63.1%) on infectious diseases; $62.25 million (24.5%) on health systems; $29.84 million (11.7%) on basic health; and $1.95 million (0.8%) on reproductive health. Italy did not contribute to the Global Polio Eradication Initiative in 2007, but it provided $11.95 million in 2008.
  • Italy pledged and contributed $186.9 million to the Global Fund in 2008. It has pledged $172 million in 2009, but its 2009 budget does not make any provisions for the payment to be made.
  • Italy committed a total of $682.9 million over 20 years to the GAVI Alliance in 2005, an equivalent of $34.1 million per year. Italy contributed $635 million to launch the first Advance Market Commitment in 2007.