Aid amid austerity

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EU Commissioner for Development, Andris Piebalgs, tells us why development spending remains crucial — even at a time of austerity.

“Development aid is increasingly about calculated risks.” — Andris Piebalgs, EU Commissioner for Development

As the world's largest official development assistance donor, the EU plays a critical role in improving the lives of millions worldwide. Greater precision and a willingness to take calculated risks is what’s driving the approach, says Piebalgs.
“There are three arguments to justify development spending,” he says. “First, our human nature is about solidarity with the poorest people. The second is about the potential threat an unstable world has to offer. The final argument is that investment could result in direct or indirect profit.”

Defining development

EuropeAid, the European Commission’s Directorate-General for Development and Cooperation, was established in January 2011. It is responsible for setting the EU’s development policy for all developing countries and ensuring the effective programming and implementation of aid.

EuropeAid’s work is aimed at:

  • Reducing poverty
  • Ensuring sustainable development
  • Promoting democracy, peace and security

Planning its operations under the EU’s new financial framework and budget, Piebalgs identifies two key development mechanisms: the European Development Fund (EDF) and the Development Cooperation Instrument (DCI).

“We have €50 billion for classic development work. The main change is that we have to focus our resources more than we used to.”

Changes have been made on three dimensions:

  • Focus on least developed countries (LDCs) and low income countries (LICs), moving from 29% allocation of resources to 56%
  • Focus on Africa, with 75% of the resources aimed at projects across Sub-Saharan Africa
  • Increased sectoral focus on agriculture, food security and nutrition

Money talks

To maximize the impact of funding, the EU is making it a priority to work in collaboration with bilateral agencies, the private sector and international finance institutions.

“We also need to resolve bottlenecks. One way of stimulating the development of a financing infrastructure is to promote regional integration; creating a market in its own right and enabling investment in more than only extractive industries,” continues Pielbags.

He also emphasizes a strong focus on making each penny count. “Financial risk is not acceptable and this is where companies such as EY can help to track our work.”

Ushering in a new chapter

Since July 2012, Piebalgs is also serving as a member of the United Nations High Level Panel on the post-Millennium Development Goals agenda beyond 2015. The UN Development Group has organized a set of 11 thematic consultations on issues such as education, environmental sustainability and inequalities.

Piebalgs believes development professionals need to move out of their comfort zone to deliver lasting change. “Development aid is increasingly about calculated risks,” he says.

Taking these decisions now will lead to sustainable improvements in developing countries in the near, medium and long term future. Piebalgs is optimistic that an era shaped by increased collaboration between government, multi-lateral agencies and the private sector is within reach.

“I would hope that by 2030 we wouldn’t need a Commissioner for Development anymore,” he says.

Read our article: Aid amid austerity