Austrian development assistance supports global public goods

The Austrian flag. The country’s development assistance has contributed to global progress, but more could be done. Photo by: Mikekilo74 / CC BY-SA

Austrian aid has contributed to enormous global progress over the past decades. Extreme poverty has been halved. So has child mortality — saving more than 17,000 children every single day. Most of this progress has been achieved by good leaders implementing good policies and more and better private investments. Austrian development assistance can make a big difference by supporting peace and state building, and mobilizing more private finances.

Austrian aid is provided out of solidarity with poor countries or victims of natural disasters. But what is good for the world is also good for Austria. A more peaceful world makes everyone safer. Terrorists mobilize by pointing out global inequalities and recruit poor youngsters with few options in life. A world without climate change and destruction or reefs, rainforests and animals matters to us all. A more prosperous world and thriving trade is good for companies and the economy at home. Austrian developing assistance is supporting such global public goods.

But Austria could provide much more money and leadership.

Austria is making important contributions to global peace and regional security. Development is not possible without peace. A conflict in Africa is estimated to reverse development by as much as 30 years. Liberian national income fell from more than $1,200 per person to less than $200 after a string of conflicts. All conflicts are different, but every peace involves some combination of political settlements, security and development.

Austria has a long and proud history as mediators of peace and political settlements. Austrian peacekeeping forces are contributing to regional security in U.N. operations. But more can be done to support development in fragile states and very poor nations.

Austrian aid has been decreasing and is far from the commitment to 0.7 percent of national income for development assistance and the U.N. target of at least 0.15 percent for the least developed countries. In a year of record high global aid where countries in more difficult economic circumstances reached the 0.7 percent target, Austria fell behind average commitments of Organization for Economic Cooperation and Development member countries.

Just as important as quantity of aid is the quality of aid. The focus should be on country ownership and results that make a difference in poor people’s lives. Development assistance to fragile states should be used more strategically to support state and peace-building goals, align behind the priorities of governments and use existing country systems. Austria could achieve more by focusing aid to a few prioritized countries and use both money and human resources to lead. Minister for Foreign Affairs and Integration Sebastian Kurz can potentially undertake a lead role in one fragile state to rally all international donors behind a common strategy.

Climate change and the environment is one of the Austrian government’s foreign policy and development assistance priorities. What is good for the environment is generally good for development. Climate change adaptation projects providing access to drought-resistant seeds also improve poor farmer’s yields. Solar power in Nigeria is good for the climate and better electricity provision would increase economic growth in Nigeria from 5 percent to more than 8 percent.

Much can be achieved by Austrian ministers leading coalitions for action to tackle specific challenges. Brazil, Indonesia and other rainforest countries are working together with a few donors to reduce deforestation in the U.N. Collaborative Program on Reducing Emissions from Deforestation and Forest Degradation in developing countries. Deforestation in Brazil has been reduced by 80 percent and Wilmar, Asia’s largest palm oil producer, has promised not to cut down another tree.

There are plenty of coalitions that are just waiting for leadership: reducing fossil fuel subsidies in developing countries; protecting the glaciers and rivers of the world; green climate financing in the least developed countries.

Eradicating poverty and greening our energy and agricultural systems will require billions of euros in investments. Most of it will have to come from private investors. But development assistance can help reduce risks associated with investments in developing countries and mobilize more private and public finances.

More than 15 trillion euros ($17.6 trillion) will be invested every year in the coming decades. Development assistance can help direct more of these financial flows to green our planet and reduce poverty. Austria is supporting innovative financing and aid is increasingly used to mobilize more private finances. The Development Bank of Austria is funding microlending in Azerbaijan and its investments have created more than 13,000 jobs in developing countries.

Austrian development assistance is supporting international development and global public goods. But much more can be achieved with more leadership and more and better financing.

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About the author

  • Erik Solheim

    Erik Solheim is chair of Organization for Economic Cooperation and Development’s Development Assistance Committee since January 2013, and incoming executive director of the U.N. Environment Program. With a solid background in climate, the environment and peace building, Solheim was also Norway’s minister for international development from 2005 to 2012.