Tuesday, 18 October 2011

Agenda for Change: In whose interest?

The European Commission is seeking to attach more conditions to development aid and restrict it to fewer recipients. This is the message that is set out in the Commission Communication entitled ‘Agenda for Change’ adopted on 13 October. The most prominent innovation is the concept of ‘differentiated partnerships’ by which different countries will be eligible for different forms of assistance mechanisms. The Agenda emphasizes good governance as a more important prerequisite for development assistance and also focuses on the concept of inclusive growth — with development effects reaching those most in need.

This however seems to be counter to the goal included in the Age for Change of reducing the recipient countries. Middle-income countries where a large segment of the population lives below the poverty line would no longer be recipients of development aid. “Unfortunately the most important change in Piebalgs’ new agenda is that aid to the world’s poorest is being cut, diverting funds towards energy and private sector investments which are in the interest of the EU only, not the developing world,” says Concord Director, Olivier Consolo. Concord also highlights that poverty has not disappeared from countries now classified as middle income and these poor should not face reductions because of these categorizations.

Head of Oxfam International’s EU Office, Natalia Alonso, similarly points towards the negative implications this will have on the poor living in middle-income countries. Moreover, she calls attention to the limits of the private sector in its role in development. “We cannot sit on our hands and assume that the benefits of the private sector will simply trickle down and reach those most in need”, says Alonso. Concord also mentions that although the private sector can be beneficial for development, Official Development Assistance (ODA) should not be used “to guarantee private sector risk or to substitute public services.”

The Agenda for Change is accompanied by a paper on budget support outlining some of the implications it has on this modality of aid delivery. Oxfam International’s EU Office welcomes the EU determination to continue to use this system for poverty reduction objectives, but also warns against a politicization of aid that can result from more requirements. “We are surprised that the Commission suggests attaching more political conditions to recipient countries. Budget support must remain a poverty-reduction tool – not a political one”, stresses Natalia Alonso.

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