Spain has a new aid law and aid minister. Can they fix a flawed system?

After two years of negotiations, a new law called the Cooperation for Sustainable Development and Global Solidarity was approved by the Spanish Congress on Feb. 9. It aims to modernize and reform the country’s aid system and was supported by all political parties apart from the far-right Vox. But shortly after the law was introduced, Spain fell into a period of political upheaval, which left the country without a strong government for months and stalled progress on implementing the law. On Nov. 9 a new government was formed, and this week a new minister, Eva Granados, was named the new secretary of state for cooperation, giving her primary responsibility for aid. Those within the development sector hope that the pieces are now in place to begin to address some of the issues hampering the effectiveness of Spanish aid. So what are the goals of the new law, the new government, and the new minister? And can they do enough to address the calls for change? The need for reform The new law is meant to ensure that Spanish aid priorities are more aligned with the 2030 Agenda and its Sustainable Development Goals. It also introduces a feminist lens and puts climate change at the center. The changes will help the aid sector “adapt and modernize itself to the times and continuous change we live in,” Irene Bello Quintana, the president of La Coordinadora, a network of Spanish nongovernmental and regional organizations, told Devex in Spanish. Nonprofit organizations also hope the law can reform the inefficient structures of the Spanish aid system. Right now they say Spanish aid is fragmented among many agencies and government departments, with little coordination between them. Development experts say some of those agencies lack specialist staff or aid expertise. A big issue looming over Spanish cooperation for almost two decades has been its lack of autonomy and independence from foreign affairs. “The new law only is justified if it really contributes to refounding the Spanish cooperation system,” said José Antonio Alonso Rodríguez, professor of applied economics at the Complutense University of Madrid. Finally, the law is seen as an opportunity to increase the amount of Spanish aid. In 2022, Spain had a budget of €4 billion a year, ranking it 20th among the Organisation for Economic Co-operation and Development's Development Assistance Committee member countries for official development assistance as a percentage of gross national income. The law sets an aspirational target of raising ODA from 0.3% to 0.7% of gross national income by 2030, although there is a clause that reads “only if economic circumstances allow,” explained Pablo Martínez Osés, a global justice specialist at Oxfam Spain who was involved in creating the original law dating back to 1998. Another reform is to the Cooperation Council — a wide-ranging group of development experts that helps the government to develop aid policy, and an important entity in Spanish aid of which Alonso and Martinez are both members. It was renamed under the new law, becoming the Superior Council for Cooperation. The expectation is the council will have an enhanced remit to go with its new name, although there is very little detail on what that might look like. Political shifts Under normal political circumstances, the government would have six months to jointly develop the regulations needed to guide the implementation of the new law after consultation with the development sector. However, the process was delayed following snap summer elections called by Prime Minister Pedro Sánchez, which failed to yield a majority for any political bloc and left the country with a caretaker government from July until Nov. 9 when Sánchez managed to score a deal with the Catalan separatist party Junts, allowing him to form a coalition government. The limbo also delayed the creation of the 6th Strategic Plan for Spanish Cooperation 2024-2027 which should establish the strategic priorities for sustainable development and help guide planning. The document is normally drafted by the Ministry of Foreign Affairs via the secretary of state for cooperation, with input from the Cooperation Council and public consultation. While it should have come out last year, it was deliberately delayed to ensure it was in line with the new law, Bello said. When it comes to ensuring the new law improves the effectiveness of Spanish aid, Alonso believes a lot hinges on who ends up being named the secretary of state for cooperation. “To lead the reform you need to name a person that has political weight, but who also has knowledge of the sector,” he said. On Dec. 5, Granados was named the new secretary of state for cooperation in Sánchez's new government, a political appointment from the socialist party’s branch in Catalonia. Reaction to Granados has been mixed. “She doesn’t have experience in the sector, and she’s not known in the sector either,” a source told Devex. However, the same source also said she was a comparative political heavyweight, with some ability to get things done. It remains to be seen if her political weight will be enough to push through the reforms needed to make Spanish cooperation more effective and to convince the government to ramp up investments in the sector. Development partners are also waiting to see if the government will change any of the other key appointments affecting the sector, including any potential changes to the leadership of the Spanish development agency AECID. However, the Minister of Foreign Affairs José Manuel Albares is set to hold off on any changes until Spain’s EU presidency ends on Dec. 31. “The [new] law is important to us, but it doesn’t mark an end, only the beginning of the changes to the cooperation system that we need. There’s a lot left to do,” Bello said. Improving financial cooperation A key issue is the need to reform the Spanish financial cooperation system to ensure it can manage enough money to eventually reach the 0.7% target, Martínez explained. One of Spain’s main instruments for concessional loans is the Fund for the Promotion of Development, or FONDPRODE, which was set up in 2011 and is managed by the Ministry of Foreign Affairs, but it has long been burdened by inefficiencies and bureaucratic processes. Under the new law, it will be replaced by a new instrument for financial cooperation called the Spanish Fund for Sustainable Development, or FEDES. Martínez said that because FONDPRODE had never been its own legal entity, “The deals didn’t flow and therefore the impact of this economic cooperation was very small. Rarely did it manage to execute the budget it had been assigned.” He said it was not clear exactly how the new FEDES fund would change things, as the new law only stipulates that a new commission will be set up within six months to study the institutional design of the new fund. However, the structure of the fund will remain the same. Those who were hoping that FONDPRODE’s lack of operational and financial autonomy would be resolved by the new law were hoping that it would have structured FEDES differently, he added. Another key financing body is COFIDES, a state-owned trading company financing investment projects in low- and middle-income countries and a founding member of the European Development Finance Institutions network. It was initially set up in 1988 to promote exports and foreign investment from Spanish companies, and while it functions similarly to a DFI, it has a lot of operations in high-income countries too, explained Alonso. The Spanish development finance landscape “is an institutionally very fragmented and confusing landscape,” he said. “When it comes to competencies, for example, [AECID] was tasked with managing FONPRODE but it doesn’t have experts in financial operations. COFIDES has experts in financial operations, but until a few years ago lacked development experts.” He said the new law will hopefully help unify the fragmented landscape, and that development institutions are discussing the possibilities of creating a development bank — even if there’s still an institutional fight over where it would be situated. The lost decade for AECID Like much of southern Europe, Spain was badly hit by the financial crisis of 2008, leading to what Bello calls “the lost decade” for Spanish cooperation. During this time, she explained, AECID lost a lot of strength due to austerity measures. The rest of Spanish cooperation also suffered, and some departments were forced to restructure or shut down. Martínez said that during this time, a law to reform the system and make the development agency more independent — including limiting its dependency on the Ministry of Foreign Affairs — was also put on ice. “AECID has always been like a small department of the Foreign Ministry and that’s how it will continue to be,” he said. Out of the €4.4 billion aid budget for 2023, AECID only manages €588 million, or 13.3%. Most ODA goes through the Foreign Ministry and Ministry of Finance. The latter also manages most contributions to multilateral organizations such as the World Bank and the European Union. There are a lot of different partners involved in Spanish cooperation, and that’s a good thing, stressed Alonso. However, “for that to function well there needs to be a conception of a system and something to coordinate and integrate all those actors … instead, it has been a kind of no-system until now,” he said. Lack of capacity One of the other issues development organizations hope will be addressed as the new law is implemented is the lack of capacity and qualified staff, especially within AECID. “The biggest issue that the agency has today is human resource, the lack of staff,” said Bello. Today, most AECID staff are civil servants who lack specific training and education around development, explained Alonso, who believes the Spanish development system needs to invest more in educating experts and staff that are committed to and knowledgeable about cooperation. He hopes the reform will help ensure more technical staff enter the agency. The structure of the agency is also “inadequate when it comes to its technical capacity and the human resources needed to manage cooperation in the way it is done today,” he said. Instead of being the coordination mechanism needed in such a diverse landscape, the agency “started to close itself off” to other partners — especially the private sector and academia — and became less and less open, he added. On the upside, the agency’s lack of technical capabilities has made it more open to dialogue with local partners and more receptive to their perspectives, he explained. However, Martínez is disappointed that the new law doesn’t put forward concrete efforts to decolonize aid. Oxfam’s strong decolonization agenda depends on its ability to channel money directly to local partners, but the old law lacked the necessary regulatory framework for organizations to easily channel money to organizations outside of the EU. “We hope that the new regulations will allow the creation of grant funds that local partners can apply for directly,” Martínez said. What happens next? Now that a government has been formed, all eyes are on its leaders to see what happens next. Alonso said that a lot of development organizations hoped the new law would force the government to start discussing issues such as restructuring, Alonso explained. However, nothing was done to advance the issue during the first two years of Sánchez's last term, he said, and once work on the new law started, little attention and reflection was given to its content. “It’s very revealing of the fact that the political parties give very little attention to cooperation,” he added. Alonso said that Sánchez is sensitive to the importance of development but has a lot on his plate. “He wants to improve the international projection of Spain and he knows that cooperation is part of that projection. But I’m not sure it’s his priority,” he said.