EU plans change to rules for aid

The European Union wants to end its practice of targeting development aid at 30 top-performing “donor darlings” by sending more to neglected countries as part of a new code of conduct.

The code, presented to EU development ministers in Bonn, would improve co-ordination and cut waste in spending the region's €50bn ($66bn, £34bn) annual aid budget. European donors compete to give to economically vibrant countries such as Tanzania, Ghana and Vietnam, while giving little to “orphans” such as Malawi, Niger and weaker economies with poorer governance records.

The code would encourage EU states to cut the number of countries to which they donate, and in the chosen countries focus on only two sectors where the donor has expertise. It would also require member states to publish an annual “development aid atlas” highlighting areas where money is concentrated or spread too thin.

Louis Michel, development commissioner, said there were “too many overlaps and too much fragmentation” between donors. Co-ordination would become increasingly important as the EU increased its aid to 0.56 per cent of gross national product by 2010 from about 0.39 per cent today, half the world’s total. He said cases such as in Tanzania, where donors run about 600 health projects, should no longer occur.

Member states such as Denmark, Britain and Germany have long argued for improved co-ordination, with particular countries taking a lead role in specific developing countries, but national sensitivities and colonial ties have hindered progress.

Ulla Tornaes, the Danish development minister, welcomed the change but said recipients should determine the sectors on which to concentrate. Copenhagen has for years focused aid on 16 countries while other member states help several dozen. She said the code should be open to non-EU donors such as the US.

Developing countries represented in Bonn said better co-ordination could improve efficiency but some ministers, speaking privately, were worried donors could gain extra influence if they acted in a more unified way.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.