DGDC Annual report 2008 - Buitenlandse Zaken - Belgium

3. Remittances decrease. Migrants are the most
important bridge between developing countries and
the rest of the world. Between them, they send more
money back to their countries of origin (in remittances)
than the entire development cooperation budget
across all donors. But the crisis means that these
figures have fallen. Migrants are losing their jobs, or
the cost of living is rising steeply. So that knocks on
to their families back at home.
4. Development aid is threatening to fall. After
investments and remittances, development aid is the
third biggest monetary flow to the poor countries.
But the aid budget is being squeezed. It is one of the
most striking effects of this crisis. In recent years,
many donor countries promised to spend more on
development aid. This might prove to have been no
more than words, now that there is a greater tendency
to tighten the purse-strings. The consequences
would be particularly dramatic for sub-Saharan Africa:
almost two thirds of net capital inflow consists of
development aid. In many donor countries, development
aid is pegged to national income. When the
economy shrinks, it would mean an automatic drop in
the aid budget.
Belgium is continuing to aim for
the 0.7% standard
Belgium decided to meet the United Nations standard
by 2010. This standard lays down that the
industrialised countries must dedicate 0.7% of their
gross national income (GNI) to development cooperation.
This decision was enshrined in a law in
2002, making Belgium more ambitious than the EU,
which has set 2015 as the target date for achieving
the 0.7% standard.
This growth curve was sustained until 2005. In
2006 and 2007, federal spending on development
cooperation stalled, and in addition the period of
exceptionally high debt relief operations came to
an end. This meant a drop in total official assistance
for development cooperation, both in Belgium
and in the other member countries of the OECD
Development Committee.
despite the difficult budgetary situation, the DGDC
budget rose by 252 million euro (almost 23%) to
1.362 billion euro.
The total Belgian official development assistance
(ODA) includes
■■ spending on the DGDC budget,
■■ the development spending of Foreign Affairs,
Finances and some other federal public services
(FPSs),
■■ the debt relief operations by the National
Delcredere Office (which is a public institution that
insures export businesses against all manner of
risks such as non-payment, coups d’état, etc),
■■ some spending by the communities, regions,
provinces and municipalities.
To counter this negative trend, the government
decided to raise the DGDC budget for 2008 to
1.11 billion euro, an increase of 244 million euro (or
28% compared to 2007 expenditures). The amount
budgeted was entirely spent. When drawing up the
2009 budget, the growth dynamic was confirmed:
For 2008, total ODA was estimated at 0.47% of GNI
(a provisional figure), compared to 0.43% in 2007.
The surge in DGDC spending was to some extent
offset by a further drop in debt relief operations.
10