Presented by Climate Action
A leaked draft spells out how the European Commission’s development policy is tied to its strategic interests. It elicited shock in some quarters, but did it warrant all that much surprise?
Also in today’s edition: Spain goes against the grain on aid, and Africa forms a united front to push for greater World Bank financing.
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A leak of their own
A leaked “Briefing Book” outlining the European Commission's development vision puts the continent’s strategic interests front and center — which, not surprisingly, has raised the hackles of NGOs that want traditional metrics such as poverty eradication to be at the heart of the EU’s development agenda.
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But anyone surprised by the revelations in the draft hasn’t been paying attention, Devex Senior Reporter Vince Chadwick writes. That’s because the commission has been telegraphing its desire to align foreign aid with strategic interests for quite a while. And, spoiler alert, governments already do this. Generosity and geopolitics often go hand in hand.
Still, the document is pretty explicit about this realpolitik. It speaks of the need to “[engage] our strategic partners with a policy mix driven by economic interest, and less so by more traditional and narrow development and foreign policy approaches.”
It also mentions the need to no longer serve as aid-receiving countries’ “partner of convenience on many niceties.” As Vince points out, it would be nice — and perhaps shocking — to know what the commission considers nice but dispensable.
On the flip side, the document could be seen as a practical admission that the commission cannot do “everything, everywhere, all at once,” as it clearly states. This is especially true if spending remains flat in the next budget cycle, forcing donors to pick and choose their priorities.
Asked by Devex about the leaked document, EU development commissioner Jutta Urpilainen was circumspect.
“We have to have a very balanced and comprehensive approach,” she said. “And it has to be also very much aligned with the SDGs.”
Read: How to read Europe's future development vision (Pro)
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Juttalkin’ to me?
I spoke to Urpilainen shortly after the World Bank-International Monetary Fund Spring Meetings, when she touted the merits of the commission’s “Global Gateway” investment strategy, designed as a counterweight to China’s Belt and Road Initiative.
She praised its holistic, “360-degree approach” to focus not only on physical infrastructure, but also soft infrastructure such as education and health care. She also alluded to the need to compete with China and Russia to woo the global south.
“There is a battle of narratives, but we also face a battle of offers,” she said, calling the Global Gateway “our offer” and pointing out that it encompasses values such as democracy, the rule of law, human rights, environmental standards, and “more equal mutually beneficial partnerships.”
Conversely, Europe has its own interests in benefiting from these partnerships, especially in a world where issues such as climate change, pandemics, security, and migration know no borders.
Yet despite these cross-cutting threats, aid budgets across Europe are being slashed. Asked about the cuts, Urpilainen said she is “very worried.”
“And also very sad. … As a former finance minister myself, I know we have certain budgetary constraints,” she said. “On the other hand, I personally see that one lesson learned from COVID was that actually we are living in a world which is very interlinked and intertwined in a way so that what is happening in other parts of the world actually has an impact on all of us.”
+ Join Devex and a panel of experts on May 15 for a discussion on why European donors are cutting their aid budgets and what aid groups can expect from EU donors in the foreseeable future. Register now.
Contracorriente
While EU member states such as Germany and France are cutting aid budgets, one country is swimming against the current and trying to raise theirs.
Spain has set a target to spend 0.7% of gross national income on aid — a laudable though longshot goal given that the country’s current level of spending is 0.24%.
Still, Antón Leis García, director of Spanish development agency AECID, says his country is moving in the right direction.
“In 2021, we had a budget when I took over of €360 million and last year, it was €708 million,” Leis told me on the sidelines of the Spring Meetings, noting that with its development financing arm, AECID manages a portfolio of about €1 billion. “It’s still small. … We need to continue growing, but that's a good testimony of the commitment to growth.”
Read: Spain bucks Europe's aid trend, but journey is just beginning
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IDA lifeline
Both Leis and Urpilainen expressed hope that World Bank President Ajay Banga gets his wish and this year’s replenishment of the International Development Association, or IDA, the bank’s fund for the lowest-income countries, is the largest ever. Banga is eyeing $30 billion in contributions, which he says the bank could leverage to lend or grant about $100 billion.
My colleague Adva Saldinger reflects on how critical IDA is for large swaths of the world — there are 1.9 billion people living in 75 IDA countries — in her special series of World Bank-themed podcasts.
“Without IDA Malawi will perish,” Justice Chombo, Malawi’s ambassador to the U.S., bluntly tells her. “So I cannot overemphasize the help, or let me say the transformation that IDA has been doing in Malawi.”
Listen: What's at stake in the World Bank's IDA replenishment?
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Africa’s ask
Africa has a huge stake in the replenishment — more than 70% of IDA funds went to the continent in the last fiscal year, reports Anthony Langat for Devex. Yesterday, African heads of state met in Nairobi for a summit seen as a key milestone on the road to the replenishment at the end of the year.
So what do they want from the IDA? A focus on job creation, energy and digital access, and building resilience. Also, for it to be less complex, easier to access, and more flexible.
The IDA 21 Coalition, which brings together partners to work toward a successful IDA21 replenishment, was also launched at the summit.
Read: African leaders set out IDA funding priorities at World Bank summit
Don’t be DAF
Not all generosity is built the same. The business of philanthropy seems pretty straightforward: It gives money away. But what if it’s also self-serving?
That question has prompted a “donor revolt” campaign signed by more than 200 philanthropists and seven national funding and policy organizations to stop what they view as abuses of donor-advised funds, or DAFs, in the United States.
DAFs are private accounts where individuals can deposit charitable contributions over time. That time bit is important. U.S. law allows DAF holders to receive an immediate tax break when they set up the account, but there are no deadlines for them to pay out the money — meaning the funds may never actually reach charities.
The campaign wants to encourage a quicker pace of charitable giving by DAF account holders, in part because it has global implications.
“I would argue that it’s slowing the flow [of philanthropic giving],” Chuck Collins, lead organizer for the campaign, tells Devex contributor Stéphanie Fillion. “There’s a warehousing of charity dollars.”
Read: Philanthropic campaign calls for reform of donor-advised funds
In other news
Women in Iran are facing increased violence and arrests as authorities step up patrols to enforce mandatory headscarf use. [DW]
The IMF disbursed $1.1 billion to Pakistan, concluding a crucial $3 billion loan program to avert a potential sovereign debt default. [Nikkei Asia]
U.N. chief António Guterres reaffirmed the agency's steadfast support for Kenya amid devastating floods triggered by persistent heavy rainfall, which continues to affect the region. [UN News]
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About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
