Development aid and budget support face criticism

Published: 12 January 2011

Broadcast Language: Slovenian (Audio follows the English transcript.)

English Transcript: Effectiveness and budget support

Oldemiro Marques Baloi:  “It’s a bridge that we built. Until recently the country couldn’t communicate by on-land transport without that bridge on Zambezi river. And the EU has supported it financially. It’s a big bridge and has helped Mozambique a lot.”

Reporter:  Oldemiro Marques Baloi, the Foreign Minister of Mozambique, is enthusiastic about the new road link. This was one of the topics discussed at the European Development Days, organized by the European Commission, which has spent almost three million euros on it. Representatives of different countries as well as many non-governmental organisations participated, and the main topic discussed was development aid offered by the European Union to the third countries, especially to Africa. As the financial crisis is significantly reducing the European countries’ budgets, the effective use of development aid was among the most discussed issues. Opinions on the topic are divided. The Foreign Minister of Mozambique is certainly supportive of development aid…

Oldemiro Marques Baloi:  “Well, for us budget support is a key device for the empowerment of our countries, because you get the money, you have your own planning and you have your own mechanisms. What you have to do at the end is to show the donors that you used the money properly.”

Reporter:  Budget support and other forms of aid are provided and managed by EuropeAid, a European Commission Directorate-General with a budget of 10 billion euros. In times of crisis they are striving for a greater effectiveness. The use of every single euro has to be proved by an invoice. EuropeAid is directed by Koos Richelle.

Koos Richelle:  “Well, we don’t give money and then wait and see if they do something. In the design of the projects the country is involved, we are involved. It goes through quality measurements in Brussels for all the countries with which we are working together and then we follow during the lifetime of a project what’s happening with it and we only pay when we see that indeed some activities have been deployed.”

Reporter:  In case of abuse, claims Richelle, a refund is demanded. Even though they are in search of the greatest effectiveness, there are many people blaming them for the exact opposite - ineffectiveness. Among the critics there is Raphael Mwai, a development agent from Kenya, who says that keeping accounts for the use of development aid is so complex that it slows down cash flow.

Raphael Mwai:  “How do you measure results? Because if you support government trade negotiations etc., you must show through negotiation increased market access; it doesn’t, because trade within Africa is going down. So how do you measure effectiveness? Is it that the money is accounted for? Is that effectiveness? It is not! That’s accounting! Effectiveness is development on the ground, the lives of people. Sometimes you develop more when you don’t have aid; that’s the problem.

Reporter:  Many non-governmental organisations that issued a report on development aid in 2010 for the occasion of the conference share the same opinion. The report establishes that the instruments of aid have not been created in Africa and are therefore not oriented towards local ownership. This is considered to even increase the indebtedness of African countries as well as poverty, destitution and hunger.