Swiss ODA: New priorities and more funding

The increase in development aid may well be at the centre of the forthcoming debates. The newly elected parliament must decide whether it wishes to follow the decision taken by its predecessor, which in February 2011 adopted the 0.5 per cent target and approved the first two tranches of the increase for 2011 and 2012. With the new lines of credit, the last three tranches will be up for decision (in 2011 the share was 0.45%.)

Poverty reduction remains central

The new message stresses that development cooperation will continue to benefit the poor in poor developing and transition countries and therefore remains committed to poverty reduction. This is in line with the provisions of the law and the Constitution as well as the UN Millennium Declaration. In that Declaration, the international community promised to halve the proportion of people living below the absolute poverty line by 2015.

But the focus on poverty reduction is also in line with domestic political thinking in that if all Swiss tax payers, including the least well-off, must contribute towards development aid, then the beneficiaries should be amongst the four billion people who are significantly worse off than the poorest among us. Development aid can only be legitimised as a transfer from rich to poor.

New priorities in fragile states...

The Message does set some new priorities, however. For instance, the Swiss Agency for Development and Cooperation (SDC) is keen to become more involved in «fragile contexts». This refers to countries with weak state institutions and unresolved problems regarding the exercise and distribution of power. Typical examples are Somalia, a country whose southern part has no state machinery, the Democratic Republic of the Congo, and Afghanistan. The 2011 Arab spring has increased the number of fragile states, although until just a few years ago, Libya, Tunisia and Syria had been deemed to be very stable or fairly stable States. According to World Bank figures, 1.5 billion people live in fragile contexts – where poverty, lawlessness and despair are most widespread.

Stepping up the engagement in fragile contexts strengthens the poverty focus of Swiss development cooperation. The SDC places in this category its already existing programmes in the Great Lakes region (DRC, Burundi, Rwanda), in southern Africa (Zimbabwe), in the Sahel countries of Niger and Chad, and in Nepal and Haiti. The new or only recently added programmes are of those in the Horn of Africa, in the Hindu Kush (Pakistan/Afghanistan) and in Myanmar. Working in fragile contexts is risky, successes take more time, and failures are more frequent.

...and in North Africa

The SDC and the State Secretariat for Economic Affairs (Seco) are also making a fresh approach in the post-revolutionary countries of North Africa. Before the Arab spring of 2011, Egypt had been the only Seco priority country in North Africa. This was so because Egypt had been prepared to sign the free trade agreement with Switzerland only on condition that it was granted development aid. The Egyptian government saw this as offsetting Switzerland’s huge trade surpluses with Egypt (547 million francs in 2010). In the wake of the overthrow, Tunisia too has become a Seco priority country. The SDC contributes humanitarian aid. For the time being, the North Africa programme is conceived for a five-year period.

New global programmes

Four years ago the SDC launched a series of global programmes in the fields of climate change, water, food security and migration. Through its global programmes, SDC is striving to build up expertise that will represent Switzerland internationally in these fields, promote pilot projects that offer pioneering solutions in problem areas, and support concrete work in priority countries. They are being continued and augmented with the new «health» global programme. The Seco development division's current programmes are now being brought together under the sixth global programme «Finance and trade», where the main emphasis is on supporting developing countries in international trade negotiations and on «taxes and development».

The contentious aspect of funding

The funds required to increase the development budget to 0.5 per cent of GNP are foreseen in the Federal Council’s finance plan. The same goes for the other global credit lines that are up for decision (education, traffic, agriculture). Yet, uncertainty is being created by the parliament's decision – against the proposal of the government – to increase the military budget and to opt for the purchase of new fighter jets. That decision was taken before last autumn's elections.

The Finance plan does not provide for higher military spending and in the view of the Government would necessitate a savings programme of some 750 million francs annually. That would affect, inter alia, the areas that are to be funded under the current line of credit – including development cooperation. Military and defence spending and any savings programme will be dealt with by parliament in 2012 in parallel with the lines of credit, most likely starting in the autumn session.

The radical right-wing Swiss people’s party (SPP) had voted unanimously against increasing development cooperation. Voting in favour of an increase alongside the Red/Green parties were the Green Liberal Party and huge sections of the Christian Democrats as well as a minority of the Liberals. This March, the SPP opposed the Federal Council's savings programme and called for the increase in military spending to be set off against development aid. Accordingly, the SPP would have to table a motion for a reduction in the credit line for international cooperation by 2.4 billion or 600 million francs annually – the amount corresponding to the desired increase in military spending. Besides, the SPP threatened to consider a referendum «against the bloating of foreign aid and in favour of assuring national defence». At the same time, the Federal Council was discussing the submission of only a modest increase in military expenditure to the parliament. At the time of going to press in mid-April it was not clear where the different political manoeuvrings would lead.

Peter Niggli, Alliance Sud

Article published in: Alliance Sud News No. 71, Spring 2012

Box

New procedure

For the first time the Government will be submitting all development lines of credit together for parliamentary decision, and setting out their rationale in a single message. The usual practice to date has been to submit to parliament the lines of credit for humanitarian aid and aid to Eastern Europe and the South throughout the entire legislative period. The new approach stems from an amendment to the budgetary planning ordinance, whereby all the essential lines of credit are to be submitted simultaneously to parliament, and this at the beginning of the legislative period when the next elections and hence the taking into account of voters' opinions are still far away. Alongside international cooperation (11.3 billion francs) the lines of credit for education and research (26 billion) as well as traffic (10 billion) and funding for agriculture (about 14 billion) will come up for decision in 2012. To give an idea of scale, for the years 2013-2016, the Confederation projects income and expenditure of 270 billion francs.