State aid shy of EU mark

SLOVAKIA gave almost Sk1 billion (€25.5 million) in aid to developing countries in 2004. According to the European Union, however, Slovakia is still way behind its targets.

SLOVAKIA gave almost Sk1 billion (€25.5 million) in aid to developing countries in 2004. According to the European Union, however, Slovakia is still way behind its targets.

The EU requires that Slovakia, along with the nine other new member states, spend the equivalent of 0.17 percent of its annual gross domestic product on official development aid (ODA). In 2004, Slovakia spent only 0.07 percent of its GDP on ODA.

All new member states are supposed to maintain this 0.17 percent target level through 2010. Afterward, they are expected to match the level of ODA given by the EU15 countries, a rate that is significantly higher: 0.56 percent of annual GDP.

A spokesperson for the Slovak Foreign Ministry, Juraj Tomaga, told The Slovak Spectator that Slovakia is only under a "moral obligation to the EU" to reach its ODA target of 0.17 percent of annual GDP.

In other words, Slovakia will not face sanctions for falling shy of the mark. Nevertheless, the situation could change once the EU General Affairs and External Relations Council officially approves ODA targets.

Slovakia is finding it increasingly difficult to find the necessary funds to direct to developing countries. Finance Minister Ivan Mikloš told the BBC that he supports development aid that achieves real results. One way to do that, he suggested, is writing off loans owed to Slovakia by developing countries.

According to Mikloš, it is unlikely that debtor nations would repay their loans to begin with. By removing itself as a creditor, Slovakia could indirectly simplify their task of planning a state budget while at the same time, meeting its ODA targets.

József Berényi, the Foreign Minister's state secretary, confirmed that writing off loans to developing nations is considered a valid form of ODA. He admitted, however, that writing off loans does not help developing countries build new schools or hospitals.

In addition to development aid, Slovakia offers what the Foreign Ministry's spokesperson calls "bilateral aid in cooperation with not-for-profit NGOs". European countries such as Serbia, Bosnia, Montenegro and Albania are beneficiaries. Non-European beneficiaries include Kenya, Mozambique and Sudan.

Bilateral aid allows Slovakia and various aid organizations to better control the use of their funds. Specific projects are targeted - the construction of a new school for girls in Afghanistan, for example, or medical assistance for Cambodian children with AIDS.

Nora Beňáková is the executive director of People in Peril, a locally based non-government organization. She recently told the Hospodárske noviny daily that the system of distributing direct ODA funds is bad.

"Most of the money goes to international organizations in the form of a compulsory contribution," said Beňáková.

The director of the Finance Ministry's ODA department, Peter Hulényi, wants to see bilateral help play a larger role in development aid than it does today. He says the reason is simple: Slovak organizations can target the exact territory where help is needed and the whole process is transparent.

The Finance Ministry recently finished evaluating applicants for the Trust Fund, a programme in which Slovak NGOs submit aid requests for up to $200,000 per project. Applicants must focus their projects on one of the 13 priority countries identified by the Slovak Foreign Ministry. Among those considered for funding were plans to build democratic institutions and ideas for developing a market environment and improving infrastructure.

The Foreign Ministry expects that projects that receive money from the Slovak government will be co-financed by several other donors.

Projects that receive a Trust Fund grant can repeatedly apply for additional money in subsequent evaluation rounds. But the Finance Ministry encourages Slovak NGOs with good ideas to cooperate with agencies in the receiving country.

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