The EU presented its first report on financing for development in years at the UN FFD Summit in New York, on April 23rd. CONCORD welcomes this opportunity for greater transparency on the EU’s efforts to support the realisation of the 2030 Agenda.
The report, meaningfully entitled “Investing in Sustainable Development”, addresses and monitors EU’s implementation of the Addis Ababa Action Agenda (the framework agreed globally in 2015 on Financing for Development). This is the first edition of the report since 2015, and it encompasses data gathered from all EU Member States as well as the EU institutions, across the seven action areas of the AAAA.
Several CONCORD Hub 2 members are currently in New York to participate in the Financing for Development Forum and yesterday attended the high-level event organised by the European Commission to present EU’s contribution to implementing the ambitious Financing for Development Agenda. Below are some initial reactions to the report, by CONCORD members on-site in New York.
While presenting the main outcomes of the report, the EU Commissioner, Neven Mimica, highlighted 2 important elements: The recent EU Consensus on Development, guiding framework for the EU engagement on development cooperation and the role of the EU as the major donor block.
CONCORD acknowledges the breadth of the commitments covered by the EU Consensus on Development. In particular, we notice that the Consensus emphasizes the political dialogue between the EU and the partner countries as a fundamental component of the partnerships agreements. Nevertheless the report remains still pretty vague on how to promote a better regional trade policy especially regarding the concerns of African countries about the negative impact of Economic Partnership Agreements (EPA) and their compatibility with their own regional trade and industrialisation strategies.
At yesterday’s event, Dr. Vera Songwe, executive secretary of the United Nations Economic Commission for Africa, emphasized in her statement that while mobilizing local resources is important, most African countries alone are unable to mobilize additional resources on a large scale. Equally important, therefore, is to see that strategic resources remain in the country. This refers to e.g. the many valuable raw materials that would also have to be added to value in their own country through appropriate industrialization strategies. Currently, many commodity-rich countries are degraded by the existing trade regimes to pure exporters of these commodities.
This sums up the dilemma of EU development policy which also affects many areas of development finance. Also within development cooperation, increasing attention is put on investments for the private sector or trade policies that continues to focus on the interests of the EU. The newly released report doubtfully claims in several places that new EU instruments, like. the use of ODA to mobilise private investment, actually contribute to the trade and industrialisation strategies defined by African governments themselves.
Furthermore, the report underlines the importance of the EU as the largest donor of development finance: EU Member States contribute with more than 75 billion euro to the half of global ODA. However, this is still well below what is on the table as a promise: the rich countries’ target of dedicating 0.7% of Gross National Income to ODA is currently achieved only by four countries within the EU.
On volumes, we feel compelled to remember that the EU postponed by 15 years the realisation international agreed commitments such as the 0,7% target. Stagnation of ODA volumes across the region in 2017 is a call for donors to realise that some EU countries are the first beneficiary of their ODA such as Italy and Germany which inflated their ODA quote including refugee costs.
The report describes EU’s ambitious plans with regard to blended finance. CONCORD would like to see a more comprehensive assessment of both the potential benefits as well as of the risks, such as crowding out of countries and sectors and potential new debt crisis.
We call for greater policy coherence to make sure that efforts by partner countries to mobilise their own resources are not undermined by unfair tax regulation; the EU should support initiatives to establish a transparent and more effective tax system that profit where it is created. Last but not least, we would like to recall that lasting development results can be only be achieved through the participation of all key stakeholder including CSOs, private sector and MPs. We trust that future consultation will involve them actively.
CONCORD HUB 2 FFD working group is preparing a more comprehensive response to the report which will be presented to the Commission in mid-May. If you want to join the work, please contact HUB 2 coordinator email@example.com