Responsibilities for development cooperation

The main responsibility for development assistance is primarily divided between the Ministry of Foreign Affairs (MFA) and the Ministry of Finance (MEF). The areas of cooperation managed by the Ministry of Foreign Affairs is regulated by the a law dating back to 1987. Numerous attempts to reform this law have been made, but none have passed yet.

There is an ongoing dialogue in parliament regarding development, yet public debate on issues of policy and strategy remains limited.

Recently, a specific Parliamentary Committee focusing exclusively on the MDG’s was set up and is commencing its work on advocating the importance of the goals and the need for resources.

The OECD-DAC recommends that Italy define a national vision for development cooperation which is derived from a more inclusive and broad-reaching dialogue with Italian peers in development.

Italy’s contribution to the Millennium Development Goals (MDG’s)

During the last G8, the Italian Presidency framed all the development objectives and policies of the Summit within the MDG framework.

A-in-house monitoring mechanism - i.e. the MDG committee recently established within the Parliament - has the main mandate to carry out a fact/finding inquiry on activities currently being performed by the international community and Italian institutions in their achievement towards the MDGs.

Italian Civil Society has a strong voice in monitoring the government’s commitments towards the MDGs. In strong partnership witht eh Un Millennium Campaign, Italian civil society partners mobilized over 800, 000 people during the recent Stand Up mobilization.

Italy’s record on aid
Aid quantity

The most recent DAC figure (March 2009) estimates Italian ODA/GNI (the ratio of Official Development Assistance to Gross National Income) at 0.20%. This is far from the agreed upon target of 0.51% by 2010 and 0.7% by 2015. This places Italy last out of all the EU-DAC countries, together with Greece.

The latest DAC Peer Review recommends that Italy lay out an explicit aid growth path, already strongly suggested in past peer reviews.

Italy provided about 4 billion USD in ODA in 2008, this figure places Italy at a level which is half of the EU average. In 2008, Italy announced a timetable for the cuts to be made on aid quantity.

Debt relief grants (form of debt reorganisation which relieves the overall burden of debt) comprised approximately 20% of total ODA (821 million USD) in 2008.

Over the last few years, growth in ODA has been restrained due to government-wide budget austerity which culminated in a pre-crisis drastic budget cut of 56% of ODA for international cooperation policies in the first economic programmatic law approved by the Government in June 2008.

Aid quality
Currently, Italy’s share of multilateral aid exceeds bilateral. In 2007, bilateral aid represented 32%, a significant decrease from 52% in 2006. There is evidence from the MFA that this trend is becoming inverted.

In 2007, Italy allocated only about 8% of total ODA to LDC’s (least developed countries). The top three recipients of aid in 2007 were Iraq, Nigeria, and Ethiopia. The DAC recommends that Italy increase the resources dedicated to the LDC’s.

At the level of sector priorities, the Italian programme tends to disperse funding and stretches its already limited staff capacity and resources. In its last Peer Review in 2004, the OECD-DAC recommended Italy to limit dispersion of aid by decreasing the number of partner countries; the aim is to reach 35-40 partner countries during the period 2009-2011.

Country programmable aid (CPA) is the proportion of aid that developing countries can allocate according to their needs. In 2007 it represented only 21% of Italy’s gross ODA. This figure is below the combined figure across all OECD countries (47%).

The DAC reports that the share of tied aid (tied aid is assistance given to developing countries which must be used to purchase goods and services from the donor country) was about 69% in 2007, this places Italy last of all the EU-DAC countries. Therefore, the DAC recommends a revision of policy in favor of further untying, as this would contribute to the greater effectiveness of its aid.

Italy has not included a defined time frame in the budget for reaching its ODA targets; it therefore seems implicit that there is a lack of political will to reach the levels of commitment.

In 2006 and 2008, The OECD/DAC conducted a Survey on Monitoring the Paris Declaration to gauge the progress of donor nations toward improving aid effectiveness. Italy has only recently laid out a national plan on how to improve on the various measures of aid effectiveness (transparency and accountability of funding mechanisms, coordinated technical
assistance, predictability of aid- precise time tables on aid delivery, harmonisation of donor procedures, number and extent of joint missions) and the measures are only partially recognised. Italy’s performance is below average on most of the indicators of aid effectiveness.

According to Italian Non-Governmental Organisations (NGO’s), two years after the Accra Conference, Italy has only recently laid out a national plan on how to improve on the various measures of aid effectiveness and only partially considered the issues, in particular transparency. In fact, Italy is one of the least transparent donors.

Policy coherence

Italy still lacks a formal policy for Policy Coherence for Development (PCD).

Its institutional arrangements on this topic are limited primarily to very broad policy debates in the Council of Ministers or in the Interministerial Committee on Economic Planning (CIPE – Comitato Interministeriale per la Programmazione Economica). Furthermore, Parliament does not have a specific commission on development cooperation, whilst it does has an MDG Committee at the embryonic stage. The NGO community, normally an active advocate of policy coherence in other DAC member states, so far has refrained from playing a major policy role.

In its last Peer Review, the DAC recommends that Italy take into account a range of challenges including the need to enhance Italy’s position vis-à-vis EU policy coherence efforts, to bolster the role played by parliament and civil society in raising the visibility of the policy coherence agenda among the general public, and to shape appropriate institutional mechanisms at government level to deal with PCD matters.

Furthermore, the DAC recommends that policy coherence be made an explicit goal of the Italian government. This should include a specific public statement on coherence for development, with particular reference to themes of special interest such as FDI or untying.

Italy’s record on trade

Policy coherence for Development does not refer just to aid policies: coherence of trade policies with development is key to help create livelihoods in poor countries.

As an EU Member State, Italy implements the Common Agricultural Policy (CAP), providing subsidies and price controls on agricultural commodities. Despite gradual reforms, the CAP continues to cover a wide range of products of critical importance to developing countries, such as cotton, dairy products, rice, fruits and vegetables, etc.

In this regard, the DAC recommends that Italy mobilise expertise and analytical capacities both within and outside government to identify policy areas incoherent with its development cooperation objectives.

Consultation with civil society and the research community would strengthen these actions.

Public Opinion

The Directorate General for Development Cooperation (DGCS) has begun to take stronger action in this area, however, it has yet to develop a transparent and effective information policy for development cooperation, including strategic alliances with the media, coordinated outreach at the level of Parliament, expanded public education and enlargement of public dialogue. Current Italian public opinion strongly supports development cooperation but shows skepticism towards the public aid system.

Italian NGOs have so far refrained from taking on the advocacy role played by their counterparts in other OECD countries. Their development education programmes and their fundraising schemes could constitute an important tool to raise awareness among the Italian public opinion on these issues.

A 2009 Eurobarometer survey shows the number of people responsive to the MDGs in Italy has increased from 18% to 32%. When asked “Have you ever heard or read about the Millennium Development Goals, the vast majority of respondents (68%) remains uninformed about the Millennium Development Goals.

Commitment to Development Index

The Centre for Global Development (CGD) ranks 22 of the world’s richest countries based on their dedication to policies that benefit poor nations. CGD’s Commitment to Development Index (CDI) looks at seven policy areas important to developing countries: aid, trade, investment, migration, environment, security and technology.

Italy ranks 18th overall in 2009. The Italian government scores below average on every component except for trade.

Italy’s overall score is brought down by a very small foreign aid programme, poor donor practices (including the highest share of “tied” aid in the CDI), and the lack of support to research and development. Its low score can be attributed to low greenhouse gas emissions and protection of sea lanes important to international trade.

On the positive side, it performs relatively well on trade as it has low barriers against textiles. However, Italy continues to apply high tariffs on agricultural products and high agricultural subsidies.

Updated: November 2009
For a more in-depth analysis and list of sources, please refer to the long version of the What About.