Portugal needs to increase its development aid and improve oversight | WPN World People News

Portugal has endeavoured to maintain its foreign aid programme since the economic crisis, but its aid budget has been hit hard and a plan is needed to avoid a further decline and get back on a path towards internationally agreed targets, according to an OECD Review.

The latest DAC Peer Review of Portugal notes that Portugal’s official development assistance (ODA) has dropped for three consecutive years to stand at USD 419 million in 2014, according to preliminary data. That equates to 0.19% of its gross national income (GNI), below an average of 0.3% for OECD Development Assistance Committee members and far off a UN and EU donors’ target of 0.7%.

Aid volumes are likely to fall further, the Review warns, unless Portugal opens up new credit lines or expands the grant element of its aid. The share of Portugal’s aid provided as loans – which are concessional and often provided below market rates – soared to 41% in 2013 from 5% in 2006. Portugal has extended EUR 1.6 billion in credit since 2001, but as of 2015 partner countries had drawn down only EUR 958 million as loans, leaving 40% unspent. Five of the 10 credit lines have expired and the remainder will expire by 2017.

“Portugal brings many positive elements to international development. This includes a forward-looking vision, a tight geographic focus and a commitment to partner countries, which have a strong voice in aid projects. These assets could be more effectively deployed if Portugal commits to increase its aid volume, untie its aid and improve the co-ordination and oversight of its aid programme,” said DAC Chair Erik Solheim.

The share of Portugal’s aid that is tied to the purchase of Portuguese goods and services rose to 70% in 2013, well above the DAC average of 14% and going against the country’s aid effectiveness commitments. Portugal should ensure it does not enter into further tied aid agreements in future programming or credit lines.

The Review also says Portugal should improve co-ordination and oversight to ensure a high quality aid programme in line with the UN Sustainable Development Goals. Its development model, involving 57 public entities with their own budgets and implementation strategies, enables a diverse range of expertise to be drawn upon but also makes it difficult to deliver coherent aid programmes. Portugal’s development agency has been strengthened, but still does not have sufficient input into or oversight over half of Portugal’s bilateral ODA budget.

Portugal provided 0.07% of its GNI to least-developed countries in 2013, falling short of a UN commitment to send 0.15-0.20% to the poorest countries. The top recipients of Portuguese aid are Cabo Verde, Mozambique, Morocco, Angola, Sao Tome and Principe, Timor-Leste, China, Guinea-Bissau, Brazil and Afghanistan.

Each DAC member is reviewed every 5 years in order to monitor its performance, hold it accountable for past commitments and recommend improvements. Reviews use input from officials in the country concerned and a partner country – Sao Tome and Principe for this Review – as well as civil society and the private sector. Read more on DAC Peer Reviews.

Portugal has fully implemented five and partially implemented eight of 20 recommendations made in its last Peer Review in 2010. Six recommendations were not implemented, including one on establishing interim targets for increases in ODA, and one was not examined.

Source: Organization for Economic Co-operation and Development