DAC Peer Review: Praising Luxembourg’s aid commitment

According to the Development Assistance Committee (DAC) of the OECD, Luxembourg is a generous and committed donor. Its aid rose in real terms by almost 12% from 2006 (constant $291m) and 2007 (constant $325m) to 0.90% of its Gross National Income (GNI), making Luxembourg the third most generous donor in percentage terms. Every year since 2000 Luxembourg has achieved an aid to national income ratio of at least 0.7%. It has also promoted international efforts to strengthen the quality and increase the volume of aid. Luxembourg has improved the management of its aid programme, creating a strong foundation for more effective aid.

Luxembourg has opened regional offices in five priority countries and is translating its international commitments into practice. Its second generation of multi-year co¬operation programmes with ten priority countries makes aid more predictable. Luxembourg’s ambitious programme is coherent and well structured thanks to an efficient use of financial and human resources, the OECS says. Aid allocations are concentrated and aligned to the expressed needs of a few priority countries, which are the world’s least developed. It also works with a small number of multilateral organisations which share Luxembourg’s aid objectives. Its record in implementing humanitarian assistance is exemplary in many respects and follows the lines of internationally agreed principles. Luxembourg’s developing country partners appreciate the open and flexible manner in which it engages in policy dialogue and implements its aid programme.

At the same time, however, the Grand Duchy faces challenges in implementing the aid effectiveness agenda: it could do more to use partner country administrative systems and could co¬operate in new ways with other donors. Ensuring that its staff has the necessary competencies, and that it has access to other needed expertise is a constant challenge. In addition, the Development Co¬operation Directorate needs to enhance its capacities to become a learning organisation. Like other donors it will be a challenge for Luxembourg to shore up public and political support for meeting aid effectiveness commitments and taking risks such as engaging in difficult environments, including fragile situations.

The Development Assistance Committee, which groups major aid donors that are members of the OECD, issued its Main Findings and Recommendations on Luxembourg as part of a series of examinations of members' aid policies and programmes. The Peer Review, led by Finland and Spain took place on 3 June 2008. The Luxembourg Delegation attending the review meeting was headed by Mr Jean¬ Louis Schiltz, Minister for Co-operation and Humanitarian Action. The DAC Chair will present the findings from the review in Luxembourg in September 2008 during the annual Assises de la coopération (development co¬operation forum).