Does the experience in transition matter?View of a traditional donor on its development assistance in transition countries

Stefan Weidinger, Department for Development Cooperation, Federal Ministry for European and International Affairs, Austria

Austrian Development Cooperation

Ministry for European and International Affairs

(BMeiA)

Department for Development Cooperation

Austrian Development Agency (ADA)

The Operational Unit of Austrian Development

Cooperation

Austrian Development Cooperation

BMeiA

Overall-coordination of the

Austrian public development

cooperation

Formulation of development

cooperation strategies and

policies

Policy-dialogue in Austria and

at international level

ADA

Implementing Austrian

development cooperation

strategies and programmes

Management of bilateral

development cooperation budget

Policy dialogue in Austria and

partner countries

Advising BMeiA

References & legal basis

International commitments

Development Cooperation Act 2002

Three-year-Programme on Austrian Development Policy

International commitments

Millenium Summit, Millennium Development Goals (MDG) 2000

Monterrey Consensus 2002 (EU Council Conclusions 2005)

World Summit on Sustainable Development (2002)

Declaration of Paris on Aid Effectiveness (2005)

European Consensus on Development (2005)

Code of Conduct on Complementarity and Division of Labour in Development (2007)

Accra Agenda for Action (2008)

Geographical priorities

Programmes and projects in 7 key regions

Central America

West Africa / Sahel

Southern Africa

Eastern Africa

Himalayas/Hindu Kush

South Eastern Europe/Western Balkans

Southern Caucasus

Priority Countries

Nicaragua

Cape Verde, Burkina Faso

Ethiopia, Uganda

Mozambique

Bhutan

Palestinian Territories

Albania, Bosnia and Herzegovina, Macedonia, Serbia, Kosovo, Montenegro, Moldova

History of ADC in SEE DC in Southeastern and Eastern Europe was part of the Federal Chancellery from 1989 until 2000 when it was moved to the Ministry for Foreign Affairs.

Early 90ies - First humanitarian cooperation activities

1993 - creation of a department for DC in Southeastern and Eastern Europe in the Federal Chancellery

1995 – first DC cooperation office opened in Tirana, followed by offices in Sarajewo (1996), Skopje (1998), Belgrade (2002), Pristina (2005), Podgorica and Chisinau (2007)

2003 – SEE becomes ADC priority region

ADC in SEE - Goals and PrioritiesStrategic goals in SEE (DC Act 2002)

- Poverty reduction- Peace and security- environmentally sustainable development

Sector priorities in SEE (Three-Years-Programme 2008-10) - economic development- education (vocational training and higher education)- environment (water and sanitation; renewable energy)- governance (EU-oriented capacity building)

EU integration

DC Coordination with new Member States

DC Coordination with former transition countries makes sense and is of mutual benefit.

Regional Partnership Programme (RPP) pilot project fund: 58 projects with 53 organizations

MoU 2009-2011with SlovakAid; 2 projects in SerbiaMoU with Czech Development Agency; water/waste water project in Moldova

Increasing contacts with other new MS/development agencies (SLO, HON, RO, BG, LIT, PL)

Transition Countries and DCNew MS assumed DC commitments as part of a package of MS obligations DC still low priority, as reflected in funds and institutional capacityNatural geographical focus of new MS on neighbouring countries in Western Balkans/EE and former Third World aid recipients (cf. History of EU enlargement and DC) Thematic focus on poverty reduction, regional security, Democracy/human rights and public sector reform/GGNew MS to contribute own valuable experience to EU development policy with candidate countries

Challenges of DC in transition countries (1)Democratic challenges in transition countries:

political participation and political culture, despite political freedom and civil libertiesdemocratic fragility, underlined by democratic decline in recent years (in both new MS and candidate countries)

Economic/social challenges in transition countries:

Unemployment, social exclusion, poverty; financial crisisPoor health/educational/environmental standardsOverconsumption and unproductive investment fuelled by foreign capital and high growthLack of economic diversificationLack of counter-cyclical policy instruments due to Euro peg

Challenges of DC in transition countries (2)

Transition is one form of development as a comprehensive process of economic, social and political improvement.

Goals of this process correspond broadly to Copenhague criteria (indicators of successful transition/development):

political (democracy, RoL, human/minority rights; Democracy-Index, TI-Index) economic (open competitive market economy; GDP/cap, HDI, Gini-Coefficient) aquis communautaire (legal adaptation) absorption capacity

Challenges of DC in transition countries (3)

Overarching goals of DC: Poverty reduction; EU-oriented capacity building

4 Levels of intervention to promote development: Micro (education, health, employment) Meso (governance) Macro (fiscal and monetary policy) Global (globalization, global crisis management)

DC operational on micro and meso level only.

Challenges of DC in transition countries (4)Democratic dialogue as a means to solve social problems

Social problems are basically problems of access to and distribution of economic goods and political/social power Alternatives to dialogue (voice, vote): social violence and migration (or fatalism, resignation)

Triangle democratization/social violence/migration

Governance: Intertwinement of political and economic interests (income and power differentials)

Challenges of DC in transition countries (5)

Limits of what DC can do:

Volume of global DC is modest compared to FDI, trade flows

Social change takes time, cannot be cut short at will (tradition)

„Old mentality“ – change of value systems (black sheep problem)

Transfer of money/expertise is a necessary but not sufficient condition for transition/development (Marshall plan limitations)

Inappropriate environment; „wrong“ incentives

Importance of trial and error („good“ vs. „bad“ projects)

Concluding remarksCorrelation between political and economic indicators:The higher democracy and economic indicators, the closer a transition country is to EU integration.

DC cannot achieve sweeping political and economic changes, but can be effective in areas such as poverty reduction, employment, education and environment (micro and meso levels).

Transition and development cooperation in transition countries is work in progress.

Experience in DC in former transition countries certainly matters, in taking remaining transition countries closer to EU standards.

Thank you for your attention.