Published On: Mon, Jun 1st, 2015

EU draws fire for failing to set date for 0.7% aid target

EU draws fire for failing to set date for 0.7% aid targetThe EU has come under fire for failing to set a deadline for its own financial commitments to aid, a move that activists say could threaten wider talks on funding an ambitious development agenda.

A critical funding summit in Addis Ababa in July is meant to agree how to finance development priorities for the next 15 years.

The sustainable development goals (SDGs), which will replace the millennium development goals when they expire this year, will be ratified in September. But campaigners say that, without concrete progress in Addis Ababa, the entire process is in jeopardy.

“The EU is absolutely central for any global agreement, and unless the ministers become more ambitious, there is a very real risk that the international negotiations will collapse,” said Tove Maria Ryding, head of tax justice and financing for development at the European Network on Debt and Development (Eurodad).

“This would not only be a missed opportunity to repair the broken financial system and mobilise the funding we need to end poverty. It could also cost us the new sustainable development goals as well as the climate treaty, which is supposed to be adopted at the end of the year,” she added in a statement released after a meeting last week of the EU’s Foreign Affairs Council on Development.

The council set out the EU’s vision of a new global partnership for sustainable development, including a renewal of member states’ pledges to commit 0.7% of gross national income to aid. But it gave no concrete deadline, saying the target would be achieved “within the timeframe of the post-2015 agenda”.

Concord, the European confederation for relief and development, described the pledge as “vague and non-binding” and said 2020 should be the new deadline.

“[EU member states] clearly couldn’t reach an agreement and this was a diplomatic fudge, which says nothing really,” said Jean Saldanha, the chair of Concord’s financing for development taskforce. She said the draft outcome document for the Addis meeting set 2020 as a deadline for the 0.7% target.

“The question now is whether the EU is going to kill that 2020 deadline at the international level. It would really be a scandal if they did,” said Saldanha, who also works at Cidse, an alliance of Catholic development agencies.

Donor nations have generally failed to fulfil the promise made at the Gleneagles G8 summit of 2005 to meet the UN target. Only five countries – Sweden, Luxembourg, Norway, Denmark and Britain – achieved the 0.7% level in 2014.

The council’s new global partnership also emphasised the role of the private sector in ending poverty and the use of public funds to subsidise or “leverage” private investment in a process known as blending. This reliance on the private sector was also a concern for campaigners, with Eurodad decrying a “controversial and problematic reliance on private finance”.

The European parliament has said that “blended finance must not replace state responsibility for delivering on social needs and should be aligned with national development objectives and with development effectiveness principles”.

It also called for the adoption of international standards and debt risk analysis for blending projects and public-private partnerships that attract private finance and support local businesses.

“The EU’s continued and uncritical focus on private finance is extremely worrying,” said María José Romero, policy and advocacy manager at Eurodad. “There is a serious lack of evidence that the existing investments are reducing poverty in any significant way … Companies are mainly attracted to middle-income countries where they can make profits.”

For Saldanha, the EU placed too much faith in the private sector as an “engine for transformation”.

“We have heard from private sector actors that they do not see this role for themselves, so our question is: who is going to drive this transformative agenda?” she said, adding that EU officials at the Addis preparatory talks in New York were pushing blending hard, describing it as innovative finance.

“That’s making the whole discussion on innovative finance really toxic. As civil society, we are really furious that lumping innovative finance and blending together has made it really difficult to push the boundaries on the intentional consensus on progressive taxes like financial transaction taxes,” she said.

The UK’s aid watchdog recently said that Britain’s Department for International Development was failing to capitalise on partnerships with the private sector because of a lack of concrete targets and detailed operational plans.

Eurodad also criticised the EU policy document for failing to back a push for an intergovernmental body under UN auspices to set global standards on tax.

“It will look strange if the European Union, which prides itself on being democratic, defends the right of an exclusive club of countries to decide the global tax standards behind closed doors,” said Ryding.

In a report last December, Eurodad said that the world’s poorest countries had lost more than $2 for every $1 gained since 2008, with illicit financial flows, profits taken out by foreign companies, debt repayments and lending to rich countries responsible for most of the outflow.

Saldanha said she feared the Addis meeting would deliver a weak agreement with low-level political support, noting that few European states were planning to send high-level delegations.

“The EU is just going to play the negotiations with whatever tactics they can to weaken the agreement to the lowest common denominator, so that whatever we get out of Addis will be so weak that we might as well have not had an agreement at all.”

1,348 total views, 6 views today