Development aid threatened by financial crisis | Globalization | DW | 30.07.2012
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Development aid threatened by financial crisis

Development aid workers are warning that the financial crisis has the potential to harm the world's poor. A recent study by an aid organization indicates that the EU is already lagging in its fight against poverty.

Small business training in Uganda, agricultural help in Afghanistan, pumps in desert areas - these are all projects supported by the European Union.

The EU is the largest provider of development aid in the world. More than half of all money for poor countries comes from the EU and its 27 member nations. The EU also supports trade by opening its markets to exports from developing countries, which account for almost 70 percent of the EU's agricultural imports. But development workers see the euro crisis as a threat to this success.

Johanna Stratmann - works for the aid organization One in Brussels.

Stratmann fears the poor will pay for Europe's crisis

The lobby organization "One," which was co-founded by U2 singer Bono, fears that the financial crisis will lead to cuts in financial support to poor countries.

Johanna Stratmann from One's Brussels office told DW that her organization has been looking at this issue closely.

"We released a new report that shows the risk that the poorest people in the world will pay the price for the crisis in Europe," she said.

The EU is lagging behind

In a new report, One took a closer look at the European Union's promise to increase its financial support for the fight against poverty.

The EU and its member countries had committed themselves to invest 0.7 percent of Gross Domestic Product in development aid every year until 2015. Stratmann said that the EU is lagging behind this goal.

Last year, the average was 0.43 percent, which would mean that, "EU countries would have to raise an additional 43 billion euros by 2015 in order to fulfill this promise," she said.

The current amount of aid is a little over 51 billion euros.

A patient undergoes a bucco-dental consultation at a community health centre in a suburb of Dakar .

EU aid helps finance health facilities, like this one in Dakar.

According to One's estimations, the total aid payments in 2015 would have to reach 94 billion euros to match each EU country's economic performance. Moreover, the EU promised that half of the aid increase would directly benefit sub-Saharan Africa. Some donor countries have moved away from that goal, said Stratmann.

"We're 20 billion euros away from the goal in this case. That means there's still a lot to do even if the EU is doing well globally," said Stratmann.

Commitment declining

The EU has a difficult task keeping up its development aid targets in light of the amount of money it must use to battle the economic crisis. Rescuing the Spanish banks alone cost it 100 billion euros, which is why the German Development Institute (DIE) in Bonn has a pessimistic view of the situation. Mario Negre from DIE has little hope that the EU can increase its aid to the amount promised, saying that the EU member states are showing less ambition in this area.

"We probably won't be able to do that. It's more likely that the average level of commitment will decline this year," Negre told DW.

It's hardly surprising that the European countries hardest hit by the financial crisis, like Spain and Greece, have made the largest cuts to their development aid. On the other hand, other nations have increased their funding, such as Germany, Sweden, and Belgium. This shows that people can continue to help others even in times of economic hardship, said Stratmann.

Proud of its contributions

Andris Piebalgs is the EU Commissioner for Development

Piebalgs says EU aid has made an impact around the globe.

Despite their criticisms, the experts agree that the EU is doing a good job. It is still the only group of nations which has the announced goal of increasing its development aid.

EU Commissioner for Development, Andris Piebalgs, is proud of what the EU has contributed up until now. During a speech in Brussels, he said that the aid provided over the last decade has made a difference.

"Whether it's in a hospital in Djibouti or South Sudan, at a wind park in Vanuatu in the South Pacific or in a medical laboratory in Afghanistan," said Piebalgs, "I have seen with my own eyes what our help has accomplished."

What does the future hold?

The European Union will soon reveal its future development aid strategy. The member nations are currently negotiating the EU budget for 2014 through 2020. During these talks, the members will determine how much money will be poured into the financial crisis, as well as how important the EU believes help for developing nations really is in tough times.

Autor: Ralf Bosen / kms
Editor: Michael Lawton

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