The European Union – a global leader in development aid

The European Union is collectively the world’s largest contributor of international aid, providing half of all Official Development Assistance given yearly in the world. With recipients varying from countries like India and Turkey to Syria and Afghanistan, EU’s leading position shows how it has the potential and capacity to be a global player and influencer beyond just being a trade block for Member States.

The European Union provides over 50 billion euros per year of international aid in the world, making it, as a collective, the largest donor in the world. EU’s strategy in handing out international aid is tackling poverty and advancing global development, while at the same time it also aims to implement international agreements related to aid effectiveness and being accountable to EU citizens, who make it possible for the European Union to aid countries around the world. It is currently committed to donating at least 0.7% of its Gross National Income (GNI) every year, and the target is to achieve that level by 2030 at the latest. Besides just providing development aid, the EU is also world’s leader in providing climate finance. In 2014, the European Union helped developing countries to mitigate climate change and supported their climate adaptation projects and programs by providing over 14 billion euros. Climate finance handed out from the EU budget is estimated to double between 2014 and 2020.

Where does the aid go?

According to figures given out by the OECD, the EU provided over 75 billion euros in Official Development Assistance (ODA) in 2017. For comparison, the second largest provider of ODA is the United States, with the contribution of 34 billion dollars. The EU figures consist of the sum of all EU Member States as well as the additional funding provided by different EU institutions. Biggest recipients in 2017 for Official Development Assistance given by the European Union were Turkey, with 3.9 billion euros received, India with 1.8 billion, Syria with 1.7 billion, Morocco with 1.6 billion, and Iraq and Afghanistan with 1.4 billion euros received. The total amount of money given as ODA represented 0.5% of EU’s Gross National Income, falling short from the ideal level of 0.7%. There was a 2.4% decrease in EU’s collective ODA from 2016 and a drop to 0.5% GNI from 0.53%. Even with decrease in Official Development Assistance, the European Union was still the clear leader in global development aid.
Only four EU Member States reached the target of 0.7% or more of their GNI provided as official Development Assistance in 2017: Denmark, Luxembourg, Sweden and the United Kingdom. Only 5 Member States increased their ODA in terms of GNI, 9 held it at the same level, and in 14 countries it decreased. This shows that the problem is not so much as what the European Union would like to provide, and what it is aiming to provide, but it comes to the lack of commitment and contribution of some of the Member States. Recently the EU has used ODA as a tool for the promotion of its own interest in the world, like in Turkey and Libya where it has aimed to prevent the flow of refugees to the European Union. This is an issue in which the Member States should be ready to commit their resources to providing ODA. An important and topical thing to note is also the level of UK’s Official Development Aid, which is as one of the largest economies in the Union meeting the set level of 0.7% of GNI. The possible exit of the United Kingdom from the European Union is going to seriously cut back the collective amount of ODA the Union is providing, harming EU’s impact in the sector of global development. Losing one of the only four countries to reach the GNI spending target, which also happens to be one of the biggest economies, is a large setback to the aims of the European Union.

What is done with the aid?

Official Development Assistance is a crucial source of financing for several developing countries. According to the Commissioner for International Cooperation and Development, Neven Mimica, the purpose of the aid is to invest in people, as well as in stronger institutions and societies. The official development policy of the European Union seeks to nurture the sustainable development of developing countries, with the main aim being eradicating poverty. Development policy is also the cornerstone of EU’s relations with other countries and is contributing towards the objectives of EU external action, alongside foreign, security, and trade policy. The biggest sectors the EU provided aid during 2017 were refugees in donor countries, government and civil society, emergency response, education, and energy generation and distribution, with the amount ranging from 10 billion to 4 billion euros respectively.

Why EU’s development aid matters

The global ODA provided decreased as a whole from 2016 to 2017, just like the amount spent by the EU. The European Union’s collective Official Development Aid constituted 57% of global ODA in 2017, highlighting the importance of the EU as a global actor in development policy. With the global ODA in decline, and with the overall decline of multilateralism in the world, it is more important than ever for EU to show leadership in this area and promote its own values in a concrete way. Development aid is crucially important global sector where the EU has a clearly dominant position, enabling the EU to show that it is much more than just a trade bloc and providing a key source of soft power for the Union. When the EU starts to develop its foreign policy capabilities, it is areas like these where it can successfully start building it on. Development aid is, even though very important just for its own sake, also a political tool that can be used to further the aims of the EU beyond just promoting its values and image. It can act as a leverage in negotiations about issues ranging from tackling climate change to suppressing the flow of refugees to Europe and enables the EU to influence global affairs more effectively.
Therefore, development aid, even though often neglected, is of immense importance and should not be overlooked. The EU has to seriously assess the impact of potential Brexit to the goals and aims of the Unions development policy, as well as to consider how to take this into account in the next EU budget and strategy. It would be important not only for the concrete help it provides to countries around the world, but also because it would further increase the foreign policy capacity of the European Union.
TEXT Anttoni Saarinen
PHOTO European Commission
The author studies international relations at Tallinn University. Interests include the EaP initiative as well as environmental issues.