Kudos and Critique for France's Aid Policy

By Richard Johnson | IDN-InDepth NewsReport

PARIS (IDN) – While commending France for its commitment to aid, its overall development strategy and its engagement at the global level to promote it, including innovative financing, an OECD review has urged the government “not to compromise its ability to help reduce poverty in poor and fragile countries.”

It also calls upon France “to do more to support civil society organisations and gender equality and to build stronger capacity for developing countries to manage their own futures.” The country could also do more to monitor the results of its development efforts, says the Review of the Development Co-operation Policies and Programmes of France, which is available only in French.

According to an OECD press release, the review, known as the Peer Review, has been done by Luxembourg and the United States on behalf of the OECD’s Development Assistance Committee (DAC). Peer reviews are purported to provide in-depth examinations of development systems and policies, including lessons learned, in all DAC member countries.

The DAC currently has 26 members: Australia, Austria, Belgium, Canada, Denmark, European Union, Finland, France, Germany, Greece, Ireland, Italy, Japan, Korea, Luxembourg, The Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States.

The review takes notes that France’s Official Development Assistance (ODA) was USD 12.1 billion in 2012, making it the fourth largest member of the OECD’s DAC in terms of the volume of aid. However, this represents 0.46% of French Gross National Income (GNI) – below France’s international commitment. The review recommends that France plan to reach the 0.7% ODA/GNI ratio as soon as possible.

“In line with international standards,” says the review, “France’s aid is largely untied and most of the projects it funds in developing countries are carried out by local partners.” In particular, it has improved both the predictability of its co-operation and the relationship between the three bodies largely responsible for development: the ministry of Foreign affairs, the ministry of Economy and Finance and the French Development Agency (AFD).

However, as many other actors and numerous budget lines are involved in the aid programme, the DAC review committee recommends that France reduce its transaction costs by rationalising the institutional system. The Committee also recommends that France make a special effort to maintain its technical expertise and strengthen its team in the field.

The committee notes that, since 2008, France has shifted towards providing fewer grants, and more loans, in its ODA portfolio. Loans predominantly support the productive sectors and action to counter climate change in middle income countries.

The committee points out that “the continuous decrease in the level of grants limits support to social sectors and governance in poor and fragile countries.” But extending loans to new partners also means France is active in an increased number of countries. The review recommends that “France not allow these trends to compromise its ability to help reduce poverty in poor and fragile countries and notes too that it should ensure an appropriate balance between grants and loans.”

While France is committed to co-ordinating its humanitarian actions with other donors and with the humanitarian community, the review notes that only 0,9% of French ODA is devoted to humanitarian aid. “This is much lower than most other donors and the Committee warns that such a limited budget will prevent France from implementing its new humanitarian aid strategy and compromises France’s commitment to global burden sharing.”

Combating climate change

The OECD DAC peer review stresses that France is actively engaged in fighting climate change. On the international front, it was co-chair, with South Africa, of the G20 Study Group on Climate Finance. It has used this position (which it held until October 2012) to insist on the need to mobilise innovative financing and promote a streamlined international financial architecture with the creation of the ‘Green climate fund’. France has also declared its willingness to host the United Nations conference on climate change in 2015.

On the domestic front, adds the review, the ‘Grenelle de l’environnement’ has since 2007 strengthened the environment and climate change component of public policies. Although this process seemed to be losing momentum, in September 2012 France adopted a roadmap on energy transition, and is now seeking to mobilise private investment to this end. France has also increased substantially the portion of its ODA allocated to combating climate change, and AFD has become a key player in this field. Today it is looking at ways to improve the reporting of its projects and financing related to climate change.

Commenting the review, Robin Davies, Associate Director of the Australian Development Policy Centre (Devpolicy) since December 2012, says in the Centre’s blog: “Overall, the review tends to suggest that French aid is at the very least being rebalanced, with a stronger emphasis on transaction-based loan financing for economic infrastructure, and a correspondingly weaker emphasis on country-based grant financing for social development and capacity-building.”

He adds: “It might be that we are simply witnessing the first phase of a transition, in which new emphases overshadow old, and that eventually a genuine and possibly beneficial balance will be achieved. Or it might be that we are witnessing a decisive shift in French aid policy toward a more mercantilist outlook and operating model, with perhaps a stronger emphasis on middle-income countries. Time will tell.”

For ten years before joining Devpolicy he held various positions within the senior executive service of AusAID, both in Australia and overseas, among others, as Australia’s representative on the G20 Development Working Group from its establishment in 2010. He played an active role in shaping the Seoul Development Consensus for Shared Growth and subsequent work on ‘growth with resilience’. He has represented Australia on the OECD Development Assistance Committee, and managed Australia’s aid program in Indonesia from 2003 to 2006.

Against this backdrop, Davies’ comment is significant: The review committee’s statement that France not allow latest trends in its aid policy to compromise its ability to help reduce poverty in poor and fragile countries “gels with something we recently learned from a visiting OECD official (. . .) namely that in each of the last two years France has failed to meet a long-standing DAC norm according to which the overall share of grants in a donor’s aid program must be at least 86 per cent. [IDN-InDepthNews – July 10, 2013]

Image: French aid for Ghana wetland | Credit: africasti.com

2013 IDN-InDepthNews | Analysis That Matters

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