Last month, Andrea Riccardi became Italy’s first minister for international cooperation and integration. It was a positive sign which raises the profile of foreign aid after three years of neglect under former Prime Minister Silvio Berlusconi.
The OECD’s Development Assistance Committee has been asking for such a move since 2004. Civil society leaders urged the government to make the Cabinet-level position permanent.
The Monti administration’s first austerity law already passed, and it included plans to reduce Italy’s debt towards the African Development Fund and other multilateral development banks. The country’s multilateral aid arrears will be met by 66 percent as a result, although unmet commitments of 1.1 billion euros remain.
A minister without a ministry
This is all for the good news. Unfortunately, at this point, it is not clear if the first ever minister for international cooperation will actually be able to carry out his mandate. It appears that he has no budgeting authority; his staff and offices are based within the prime minister’s offices.
So far, we have a minister without his own ministry. This sounds odd, since the administrative machinery for development cooperation – with its own budget! – is already in place within the Ministry of Foreign Affairs, in the Directorate General for Development Cooperation. Yet Riccardi has no authority over DGCS.
There are legislative constraints. The current legislative framework for Italian development cooperation dates back to 1987 and clearly states that DGCS falls under the foreign minister or an appointed undersecretary. They are in charge of development priorities.
Riccardi may not be able to handle official development assistance unless the law is changed. This could be a welcome opportunity to aid reform plans that have been under discussion since 1996. The country’s last serious reform attempt failed at the beginning of 2008 with the end of the second Prodi government. Since then, there have been legislative proposals but no significant change.
The Monti government should hammer out a broad bipartisan consensus on the future of Italian aid that can lead to swift reforms after the 2013 general elections, with the cooperation ministry at the center. Riccardi can restart discussions with lawmakers and civil society now, even if he cannot officially coordinate with DGCS and he has no funds. He should act quickly to avoid losing leverage with the foreign affairs ministry on ODA.
The foreign minister steps in
Unfortunately, there is no guarantee future administrations will retain a Ministry for International Cooperation and Integration. If Riccardi does not establish effective relations with DGCS, any incremental reforms will be deemed useless. Earlier this month, Riccardi received additional ministerial tasks beyond development cooperation, including youth and family affairs. The ministry’s broader focus may mean less of a focus on ODA.
Parliament has yet to discuss the new Ministry for International Cooperation and Integration’s priorities. But the first parliamentary speech delivered by the new Minister of Foreign Affairs Giulio Terzi did not encourage aid advocates. Terzi described Riccardi’s role as similar to an ambassador or to a sherpa: to provide visibility to Italian development cooperation. Terzi did not mention plans to reform the law to allow for better coordination between Riccardi and DGCS.
Terzi has also appointed two undersecretaries. One of them chaired the first meeting of the steering committee on international development cooperation, which approved several aid initiatives and the multi-annual 2012-2014 strategic guidelines for Italian development cooperation. The guidelines list the sectoral and country priorities of Italian ODA. The same undersecretary later addressed parliamentary questions on development cooperation.
The rubber hits the road
While his space for maneuver seems shrinking, the Riccardi is already attending Cabinet-level meetings where he can raise the issue of streamlining the country’s international cooperation.
The first big test for Riccardi: In the coming days, Italy will have to approve a decree to extent international military missions in conflict areas such as Afghanistan or Lebanon. The decree includes total costs – up to 1.5 million euros over 12 months – and limited resources allocated to development cooperation initiatives in the same regions.
Since 2008, the share of military spending has increased while foreign aid has been cut. Can Riccardi reverse this trend and start a reform debate even without MFA? To do so, he must win over other ministers and stakeholders.
Empty coffers in 2012
In 2012, after a series of bilateral ODA cuts – a 88 percent reduction since 2008 – DGCS will not be able to approve any new aid initiatives. Its 86 million euro budget allows just only little spending on emergencies and initiatives funded by concessional loans. The irony: A majority of the Italian people – 64 percent, according to a November poll – support an increase in development aid. This is the second highest support rate in Europe.
In the last three years, attempts to get the private sector to pitch in on foreign aid failed, and ODA now stands at the lowest level since DGCS was established. If this trend continues, Italy will have to further decrease the number of priority countries from 26 to 21 between 2012-2014, following an already approved 20 percent reduction in local offices and 25 percent reduction in personnel.
The dearth in financial resources is so serious that all NGOs approved for 3-year projects in September will now only be funded for one year by DGCS. True, most Italian NGOs are not going to be seriously affected: Due to long-declining national resources, many Italian NGOs have developed alternative funding channels, managing to raise around 450 million euros per year from the public. (Some 280 million euros are raised by just 10 NGOs.)
Italy is already responsible for derailing ambitious EU plans to lead in international cooperation. The country’s new international cooperation minister should act swiftly to reverse what could set a dangerous precedent for other cash-strapped donors.