Targeting recipient needs

As discussed in section 5.3.2, poverty is a concept that is not easily defined. It may entail many aspects of a person’s, community’s or country’s life. Poverty may be defined both as absolute, which refers to people in lack of basic necessities for survival, or relative, which refers to people who live below the general standards of living in the society (European Anti-Poverty Network 2010). The EU definition of poverty stated in the European Consensus on Development includes a wide aspect of what may be perceived as deprived people, and a wide range of policy areas that are considered to influence the level of poverty. This definition facilitates a wide understanding of what kind of poverty areas the EC intends to focus on.

However, the overall goals of the EU, presented in chapter five, clearly state a focus on the most disadvantaged and least developed countries. These goals tend towards the definition of absolute poverty, while at the same time making sure that the countries with relative poverty are also included. The most precise way of measuring the EC poverty focus, is to analyse the amounts of aid that is allocated to the poorest countries and regions. Moreover, the definition in the European Consensus on Development emphasises access to health, food and education, focus areas which are also stated in the MDGs. Analysing whether these areas are also the focus of the EC aid allocation is done by evaluating which sectors are prioritised in the aid allocation. Combined, this will give insight as to whether the EC focuses on poverty when allocating aid.

Table 6.1: EC allocation to income-groupings total amounts are presented in current US dollars.

* The part II list of recipients was abolished in 2005.

** “Unallocated by income” means that the funds cannot be placed into the DAC categories of Income Groups, because the recipient of the funds is unknown or undetermined at the time the aid agency is reporting aid flows.

Table 6.1 shows the EC’s aid allocations according to income groupings. First of all, the focus on the least developed countries (LDCs) in the aid allocation of the EC until the 1980s is apparent. One observes that until 1985, the EC distributed the better part of its ODA, more than fifty percent, to the LDCs. Considering the fact that the focus areas of the Community’s development policy at this stage primarily were former colonies, this suggests that many of the associated countries were also among the poorest. From 1985, aid allocations to the LDCs declined, and reached is lowest point in 2000, with only approximately 23 percent of the total amount of ODA going to the LDCs. Simultaneously, the upper middle income countries (UMICs) experienced a sudden growth of ODA, from almost nine percent in 1995, to approximately 23 percent in 2000. Flows to the other low income countries (Other LICs) have remained relatively low throughout the time period. However, this is not too disturbing, since

there are fewer countries in this group²⁹. The low middle income countries (LMCs) have experienced stable aid allocations from the 1970s until today, amounting to more than 20 percent each year throughout this period. Van Reisen (2002) argues that this shift in aid allocations is due to the changes in nature of the thematic budget lines. Also, Table 6.1 shows that aid allocations to the more advanced countries and territories (MADCTs) have remained very low throughout the entire time period from 1960 to 2008. This corresponds with the fact that, at least from the 1990s, most MADCTs received OA and not ODA.

This suggests that the EC has allocated substantial aid flows to the poorest countries, at least when counting LDCs, OLICs and LMCs. This weakens Berthélemy’s (2006: 107) argument that the EC is insensitive to recipient needs. Certainly, the focus on absolute poverty has been weakened, but still the relatively high allocations to LDCs until the 1990s show a considerable focus on poverty until the fall of the Berlin Wall. What is more, this shows that while the development policy was primarily focused on colonial ties, the poorest countries were also the main beneficiaries of development assistance. But, while the development policy increased its focus on poverty eradication, the aid allocations to the poorest countries decreased. This finding is interesting considering that the EU to a great extent has been labelled a strategic actor based on its association with the former colonies.

As seen in Table 5.1 in the previous chapter, the EU development policy through the European Consensus on Development states a focus on all developing countries including LMCs and UMICs, while the Treaty on European Union states a focus on all developing countries, but particularly the most disadvantaged ones. In this regard, the actual allocation of the EU is in accordance with the aims of the development policy.

However, it seems like the declining aid allocations to the LDCs are not solely a trend within the EC. Norberg (2000) argues that overall aid from the OECD countries to the LDCs has decreased from 38 per cent in the mid-1980s to 31 per cent in 1997. Thus, a variety of donors might have changed their priorities in the aftermath of the Cold War. Riddell (1999: 324) presents another explanation to this change; He argues that the increase of aid to the middle-income countries could be due to the donors’ increased focus on allocating aid to the countries

29 According to the OECD.Stat listing of 2010, there are 12 countries and territories in the Other LIC grouping, whereas 49 countries and territories in the LDC group, 48 countries and territories in the LMIC group, 43 countries and territories in the UMIC group and 27 countries and territories in the MADCT group.

with the greatest market potential. Hence, disbursements have shifted from the poorest countries to the middle income countries, as the trade and investment potential is more likely to be greater in these countries.