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Research: Future of EU aid in middle-income countries

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Friday, 24 May 2013

Research: Future of EU aid in middle-income countries

EU’s proposed approach of ‘differentiation’ will lead to cuts in grant-based bilateral aid to 17 upper-middle-income countries (UMICs) and two lower-middle-income countries (LMICs) from 2014. These countries will only still be eligible for funds from thematic and regional programmes.
This policy is expected to fundamentally change the nature of the international development and cooperation dynamics by altering the volume of funds, modalities, and sectors.
South Africa is a key country in this change. The European Commission initially proposed that the country should be exempted from the policy of differentiation. However, a majority of member states, through the Council of Ministers, are pushing for South Africa to be included in the policy and thereby to lose its grant-based bilateral aid budget. Meanwhile, the European Parliament has kept South Africa on the list of eligible countries.
The Overseas Development Institute (ODI) - an UK think tank on international development and humanitarian issues – has recently published a paper that aims to focus the discussion on these points at the case study level through a specific analysis of South Africa. The methodology includes 37 interviews and two private roundtable discussions with key stakeholders in the Government of South Africa, the EU, other Development Assistance Committee (DAC) donors in the country, non-state actors and academics conducted in South Africa and Brussels between November 2012 and March 2013.

Source: ODI