Short-sighted savings at expense of the poorest

IZA-Budget 2017-2020
Résumé
Massive cuts were made to the Confederation's 2016 development assistance budget. The Federal Council also cut back the credit lines in its Dispatch on Switzerland's International Cooperation 2017-2020.

Even as the headlines are dominated by crises, disasters and the plight of refugees, the Federal Council and Parliament are keen to cut precisely those resources that could meaningfully contribute to combating the causes of these occurrences. Up to 2015, allocations to development cooperation increased annually in keeping with the target set by Parliament, whereby 0.5% of Gross National Income (GNI) should go towards Official Development Assistance (ODA). Sluggish economic growth meant that this target was already attained in 2014 and 2015.

Yet the cost of caring for asylum seekers in Switzerland contributes largely to attaining the target, accounting for over 13% of ODA. Absurd though it may seem, it is a fact that Switzerland is the biggest recipient of its own development aid funds. Alliance Sud is critical of this, as the cost of housing and covering the basic needs of asylum seekers serves no developmental purpose. Generally speaking, there is an ever greater risk of development cooperation work becoming a self-service facility for promoting interests alien to development. Hence, ever more funds are being channelled into climate change alleviation measures, and even export promotion is being financed from development aid funds. The development budget was also used to fund Switzerland's entry into the Asian Infrastructure Investment Bank (AIIB) – an economically desirable but developmentally highly questionable move.

Rapid-fire budget cuts

The development cooperation budget has recently come under constant fire. In its preliminary proposal regarding the 2016 Federal Budget, the Federal Council cut development cooperation funds by more than CHF 115 million. Those cuts affected mainly the long-term development cooperation work of the Swiss Agency for Development and Cooperation (SDC) and of the State Secretariat for the Economy (Seco). Humanitarian aid is being largely spared from cuts. Given the level of desperation, these resources are also urgently needed. But they must be provided additionally. Alliance Sud deems it short-sighted to set these funds off against long-term resources. In so doing, Switzerland is weakening a critical tool for fighting the causes of poverty and need. "On-the-spot-aid" does not only take the form of food aid or the supply of tents for refugee camps, but more specifically of education programmes, promotion of the local economy and good governance. Long-term projects of this kind help create future prospects for local people, thereby lessening migratory pressure.

Despite a surplus of billions in government finances for 2015, the Federal Council wants to make further massive savings in the years ahead. In its 2017-2019 Stabilization Programme, international cooperation is expected to account for some 25% of cuts. This means saving at the expense of the poorest, who cannot stand up for themselves. In its reply under the consultation procedure on the Stabilization Programme, Alliance Sud is specifically critical of the Confederation's wish to balance the federal budget by avoiding any revenue-side measures.

Credit lines for 2017-2020

In its Dispatch on Switzerland's International Cooperation 2017-2020, the Federal Council published concrete figures for the credit lines to be made available for development cooperation in the years ahead. Here the Federal Council is continuing its reallocation of long-term development aid to short-term humanitarian aid, a process already started in the 2016 budget. While humanitarian aid is receiving the requisite increase, SDC long-term bilateral programmes are again undergoing further massive cuts for 2017. By 2020, spending in this field will be less than in 2015. This indicates a shift by the Federal Council to a reactive strategy instead of investing in the prevention of future crises.

In terms of content, the new dispatch on international cooperation opts for continuity. Although appreciably less resources are to be allocated to poverty reduction, this remains the foremost goal. It makes sense to assign regional priority to Southern Africa, where 34 of the 48 poorest countries are located. Also commendable is the gearing of the dispatch towards the UN 2030 Sustainable Development Agenda approved in 2015. It should serve as a frame of reference for Switzerland's international cooperation. Poverty alleviation can only succeed if all aspects of sustainability are taken on board.

Call to support the fight against hunger and poverty

In the light of the impending cuts to development aid budgets, Alliance Sud in conjunction with 75 non-governmental organizations launched the "Call to support the fight against hunger and poverty" in February 2016. Over 36,000 people called on the National Council and Council of States to abide by the target affirmed internationally by Switzerland, of devoting 0.7% of GNI to official development assistance.

While the Finance Committee of the National Council wanted to make further substantial cuts to resources, the Foreign Policy Committee supported the Federal Council's proposal. On 2 June 2016 the National Council debated the Dispatch on Switzerland's International Cooperation. Proposals for referral stood no chance, as they would have meant requiring the Federal Council to formulate a fundamentally new Swiss development cooperation strategy in a very short space of time. In the end, and by a narrow margin, the National Council supported the Federal Council's Dispatch providing for ODA amounting to 0.48% of GNI. In so doing, the National Council went for a figure lower than the one it had called for during the preceding legislative period, which was a 0.5% GNI allocation to development assistance.