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Premature donors? Development aid from Central and Eastern Europe ten years on

This article arose from the UACES supported event ’The Future Direction of Central and Eastern European Development Policy’ which took place in Vienna on 26 April 2013. The article was first published on the SSEES Research Blog and is re-published here with permission.

When they joined the EU Central and East European states committed themselves to meet EU norms on international development aid. Small budgets, weak social support and limited political commitment have so far limited the impact of aid from CEE. However, it is too early to dismiss them as ‘premature donors’ argue Simon Lightfoot and Balazs Szent-Ivanyi.

Eastern Europe (CEE) states becoming donors of international development aid. It is also the year that three CEE states – the Czech Republic, Slovakia and Poland – joined the OECD’s Development Assistance Committee (DAC).  DAC membership is symbolically important of joining the ‘donor’s club’, but it also commits members to certain norms and practices in aid spending.  Both events make this an opportune time to review the progress CEE states have made towards meeting global aid norms.

Before we do that it is worth asking whether these countries are ready to become donors.  They classify as high income countries and are number are OECD members, so economically the answer must be yes, despite the impact of the financial crisis on some CEE states. But socially, the self perception of these societies is that they see themselves are poor and awareness of development issues is low, so the answer here is more complicated. And politically, aid is not seen as a salient issue, so there is little political capital gained by ‘selling aid’ to the public.

All of these factors affect the quantity, quality and allocation of the bilateral aid given by the CEE states. On becoming EU members, the CEE states were set quantitative targets for aid as a percentage of GDP. They committed to providing 0.15% by 2010 with the ultimate goal of 0.33% by 2015. No country met the 0.15% target and most are unlikely to meet the 0.33% target. However, given the economic problems of the Eurozone, a number of the other DAC members are similarly unlikely to meet their own targets for aid, with aid levels in Greece and Italy particularly badly hit.

But quantitative targets, while important, do not tell the whole story.

A neighbourhood focus

We also need to consider where the aid is spent. The majority of aid spending in CEE states is taken up by their contributions to multilateral institutions, most notably the EU budget. Their small bilateral aid budgets tend to be focused on the ‘neighbourhood’: the Western Balkans and the former Soviet states, especially the Caucuses. Countries in Africa or other Less Developed Countries (LDCs) are only marginal recipients.

To some this lack of an African focus is problematic; especially as most of the recipients of CEE aid are middle income countries. Yet, CEE states argue that their comparative advantage lies in the EU’s Eastern neighbourhood and, given the relatively small amounts of money involved, it makes little sense to operate in areas where they have little extra to offer. Among the CEE DAC members we are witnessing a focusing of aid, with decisions being taken – in line with global norms –  to focus bilateral aid on a maximum of three priority countries.

Within the aid community there is now an increasing focus on the quality of aid. The CEE countries are working towards meeting the quality requirements of the global aid norms, which have also been incorporated into the EU acquis. But major problems remain with tied aid – aid given on condition that it is used to buy goods or services from the donor country – and much of the money is given only on a single year commitment, making it hard to plan. Many within the CEE aid community argue that meeting quality requirements is too costly with such low levels of aid, especially as many longer serving members of the DAC are long way from meeting them.

Development lessons of transition?

The new member states (re)started their international development policies more as a result of external pressure than internal conviction. Therefore to a large extent the label ‘premature donors’ is appropriate at present . But we must return to the time span we are focusing on. Ten years is a relatively short time to shift from a being a recipient of aid to a donor. Taking previous enlargements as a rough guide, only Spain managed to become a DAC member in less time than the CEE states, joining the DAC in 1991, while Ireland, an EU member since 1973, joined the DAC in 1985, and Greece, an EU member since 1981 only joined  in 1999.

However, given the nature of the accession process and EU action in the field, it is clear that more was expected of the CEE donors: it was hoped they can ‘practice good practice’. The trajectories the CEE states take from here is going to be interesting. Up until now, it has been relatively easy to compare the CEE states as a group on aid both in  academic research and among practitioners.

Joining the DAC has the potential to change this, with the three current CEE members plus Slovenia (expected to join the DAC before the end of 2013) forging a different path from the other donors in the region.  However, DAC membership does raise the question of whether the CEE countries have anything special to contribute to the global aid system?

At present the focus is on both the regional expertise and the ‘transition experience’ these donors bring to the table. The regional expertise and focus can be seen in the way the CEE states have been working in the EU to promote the Eastern partnership. Transition experience is more complicated. Is the transition the CEE states went through in the 1990s relevant for developing countries, and is it transferable? What is clear is that the new donors from the CEE have already come a long way in the past 10 years and how they respond to the post-2015 global aid agenda will clearly interest both practitioners and academics in the coming years.

 


 

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