By Luca De Fraia (ActionAid Italy)
Italy may well now sport a Ministry of Foreign Affairs and Development Cooperation; in fact, the good news is that the Italian Parliament gave its final clearance to the legislation to reform the Italian development cooperation on 1st August.
Domestically, the final go ahead was welcomed by many decision makers and interested observers even if the general political context was not helpful as the final vote took place amidst fierce divisions around other legislation the Houses were discussing in parallel, including a substantive institutional reform.
Despite divisions across the political spectrum, the aid bill got only two nays in the plenary voting sessions at the Senate and the Chamber of Deputies. This is the final chapter in a story of attempted reforms that has spanned about twenty years. There is also an ironic side to this story: not many seemed to care about Italian cooperation, but, when it came to fixing it, all different sorts of interests coalesced to stop the reformers. Kudos to the current political leadership, in the Government and in the Parliament, that has pushed this reform through at last.
A ‘comprehensive reform’
You may like it or not, but this is a comprehensive reform, which covers many aspects from governance to stakeholder’s participation, from transparency to the role of the private sector. It is hard to lump everything together in a few lines, but, nonetheless, it is worth noting down a few of the signature changes as well as the issues that the secondary legislation now in the making will have to settle.
But, before getting lost in the nitty-gritty, let me also praise my fellow CSO colleagues. For many years, CSOs have been through a struggle in the midst of on/off political interest, fundamentally reflecting the recurring crises typical of the Italian political system, dominated by a severe economic climate which provided the right context with which to kill the ODA budget, under the assumption that development cooperation means no votes. Despite this, CSOs have kept working and now some of their flagship demands are well planted in the reform. But their job is not over as more participation – including active CSO involvement is needed to ensure that the final combination of structures and norms are up to the challenges, namely those of creating a new Italian development cooperation system ready for the post 2015 agenda.
Ministry of Foreign Affairs and Development Cooperation
First things first. Development cooperation has become part and parcel of the Cabinet line up as there is now a Ministry of Foreign Affairs and Development Cooperation. And not only: there is also a deputy minister for development cooperation, who will take part in Cabinet meetings whenever issues of development concern are directly or indirectly on agenda. This wide latitude of action may bode well for an increased capacity to address policy coherence, which is explicitly mentioned in the legislation along with the effectiveness principles. In terms of planning and coordination, the Cabinet will endorse a rolling three year plan to provide clear indications as regards priorities.
The three year planning document will have to go through the scrutiny of the Parliament first as well as get assessed by stakeholders gathered in the national development cooperation council, which brings together all sorts of players public and private in a consultative forum. Other aid providing administrations will take part in the planning process through an ad hoc inter ministerial committee; the aid total will be captured yearly in a specific section of the budget law to offer a comprehensive picture of the resources available, which should be allocated to ministries after agreement in the inter-ministerial committee. Provisions also include reporting on an annual basis, which should mark a dramatic departure from the current practice, whereby MPs get accounts with a two year delay. This is not the only good news regards transparency, which should benefit from a radical change of perspective and, more specifically, from the creation of a public online database to provide timely updates on activities in the making.
Italian Agency for development cooperation
The right complement to renovated governance is a brand new Italian Agency for development cooperation.
The Agency will operate under the Ministry’s oversight in compliance with the Italian legislation; the actual space for the initiative of an Agency has been the subject of arm-twisting for many years, fuelled by those that, from inside and outside the diplomatic community, feared a diminished role for the Ministry itself. The Agency should provide a greater degree of permanent knowledge and responsibility compared to the current system, where all the apical roles pay tribute to the goods and the bads of a diplomatic career based on regular jobs rotation.
One notable change is in the broadening of the community of the development actors, eligible for public funding through selection procedures, which now is expanded beyond national/local government entities and development NGOs to embrace a wide range of CSO players, which are just required to have development cooperation in their missions. But the reform goes well past this as it acknowledges the for profit sector as a development actor eligible for ODA funding. At this point, so the story goes that, thanks to the vigilant work of CSOs, MPs amended the original draft to state clearly that interested companies must abide by the commonly agreed CSR standards; companies involved in arms trading are not included whatsoever.
New Italian development financial institution
One unexpected outcome is provision for the creation of the first ever Italian development financial institution; such a systemic change was brought about in the second reading, at the Chamber of Deputies, as the proposal was not included in the original draft tabled in the Senate. Technically speaking, it is not a new body, but rather, everything is about endowing new development goals and capacities into the “Cassa depositi e prestiti”, which is “a joint-stock company under public control, with the Italian government holding 80.1% and a broad group of bank foundations holding 18.4%, the remaining 1.5% in treasury shares…. manages a major share of the savings of Italians – postal savings – which represent its main source of funding”.
But the making of the new Italian development cooperation is just at the beginning as secondary legislation is needed to fix the working arrangements. In fact, within 180 days of publication, the statute of the new Agency will have to be agreed, which in turn will pave the way for the appointment of the first Director; within 90 days, the national conference will have to come to life; the framework to operationalise the Italian financial institution still needs to be discussed. CSOs have put on the table their concerns, which include the right balance between the political leadership (the Minister/Deputy Minster + the diplomats) and the operational arm (the Agency); the Agency’s capacity to seek funds from the public, which may erode CSOs’ space; fragmentation of resources – just partially addressed through the ad hoc budget annex that is a feeble interpretation of the single trust fund called for by CSOs; the actual rules that will apply to the for profit sector.
So, the clock has definitely started clicking, but it is easy to predict that all the pieces will have fallen into place not before at least 12-18 months. A lot of work still needs to be done and it is more important than ever that all stakeholders be given the opportunity to be part of the process. There is a major risk to avert – complexity: things need to be kept as easy as possible to bring on board public opinion or else the much needed popular support for development cooperation will hardly materia
lize. One legitimate question to pose: will the fate of the Italian development cooperation change?
Let’s be honest and remind ourselves that Italy is one of worst performers when it comes to implementing global commitments.
Unfortunately, poor ODA levels – 0,16% of GDP in 2013 – are an indisputably bad presentation card. So, will Italy’s performance improve? On the plus side, efficiency, effectiveness and coherence may be better, given the substantive changes in governance, transparency and planning. But the hopes for better quantitative performance may basically rely on the new financial twist of the Italian development cooperation as grants and concessional loans cannot be expected to grow. But the financialization of cooperation is not just an Italian peculiarity and may deserve its own ad-hoc commentary beyond the scope of this piece.