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Swiss development aid under pressure

23.05.2016 – Marc Lettau

As a nation Switzerland plays an active role in development aid. But it now faces a radical change of direction. Parliament is set to cut development aid funding this summer. It is just a question of by how much.

The Swiss cross is a symbol internationally of the great solidarity of a small nation with a world characterised by tremendous divides. Whether in Benin or Bangladesh, Mozambique or Mekong, Niger or Nepal, Switzerland is currently directly involved in activities in 20 poverty-struck regions. It is improving healthcare systems there, helping to set up water supply and supporting the provision of education because it is often only education that enables an escape from the spiral of poverty. Its commitments also shape Switzerland’s self-identity.

Enormous cost-cutting pressure

Development aid is nevertheless under pressure. Foreign Minister Didier Burkhalter (FDP) gave a spirited assurance at the start of the year that Switzerland intended without fail to continue its “long-standing humanitarian tradition” and to combat poverty, hunger and inequality. Such a commitment was needed not least because development is a better alternative to migration, he said. However, the Federal Council currently feels obliged to give priority to the state of the federal government’s coffers over world poverty. The aim is to cut around a billion Swiss francs a year from the Swiss government’s budget for the period 2017–2019. International cooperation is one of the areas where the axe will fall particularly heavily.

A long way off the UN’s guidelines

Although words like “expansion” and “strengthening” currently predominate in the government’s position statements on international cooperation, the government recently proposed cutting Switzerland’s public development aid to around 0.48 % of gross national product (GNP). It will thus fall below its own target of 0.50 % and move further away from the UN guidelines under which wealthy industrial nations should provide aid of at least 0.70 % of their GNP as global development goals cannot be achieved otherwise.

National Council right-wingers want far greater cuts

Since the Federal Council’s announcement about reducing the cost of solidarity with the southern hemisphere in future, the saving drive has clearly been stepped up. The National Council’s Finance Committee called for costs to be slashed at the end of March, meaning that Switzerland’s public development aid would fall by around 20 %. Parliament is likely to set the course for the future during the forthcoming summer session.

A 20 % reduction is significantly more than what the Federal Council is proposing. However, it is much less than what those on the right in Parliament, whose position was strengthened at the last election, have in mind. The line of argument put forward by the Zug National Councillor Thomas Aeschi (SVP) is: “We simply can no longer afford to spend so much money on development aid. We would otherwise have to make more swingeing cutbacks in other areas, which we’re not willing to do.” Aeschi is a heavyweight in the debate. The Zug MP, who was put forward as a Federal Council candidate by the SVP in 2015, is one of his party’s leading financial experts. The SVP wants to cut aid money by 40 %. That would see Switzerland’s public development aid plummet to 0.3 % of GNP. This would be tantamount to the “complete dismantling” of Swiss development aid, remarks Thomas Greminger, Deputy Director of the Swiss Agency for Development and Cooperation.

However, the ongoing debate over development aid does not follow clear left-right party lines. Conservative foreign policy expert Doris Fiala (FDP) believes it would be unprincipled to save on development aid in the middle of a refugee crisis where everyone is calling for greater aid on the ground. Those who, like her, have seen the misery with their own eyes look at this sensitive issue from a “slightly different” perspective. Fiala’s position is that, despite pressure for cuts, Parliament should not measure future development aid by finance policy criteria alone.

Aid agencies launch “wake-up call”

Aid agencies are calling it an outright “attack on development aid”. Alliance Sud, the umbrella organisation of the major Swiss aid agencies, recently launched an urgent “wake-up call” in the form of a nationwide petition aiming to show just how much backing there is in civil society for Switzerland’s development aid. Broad sections of civil society are opposed to cutting aid in view of the global situation and instead favour increasing it to the level proposed by the UN, according to Alliance Sud’s CEO Mark Herkenrath. “The idea of one of the richest nations wanting to make savings at the expense of the poorest is unbearable for many people,” he says.

Herkenrath also points to what has long been a bone of contention for the aid agencies. Switzerland’s development aid is effectively already much lower than it appears to be on paper. The reason for the criticism is that Switzerland also includes the high costs incurred domestically for asylum in development aid expenditure. Herkenrath believes this is a “complete absurdity”, creating a disastrous situation: “This means that Switzerland is itself the greatest recipient of what it takes credit for internationally as public development aid.” As the costs for the asylum system are likely to remain high, the pressure on traditional development aid will continue to rise, he says.

In the event that Parliament adopts the proposal of the National Council’s Finance Committee, development aid expert Herkenrath forecasts that Switzerland will have to withdraw from around a third of its current, long-term development projects.

Marc Lettau is an editor with the “Swiss Review”

Traditional development aid is most under pressure

Switzerland’s international aid covers five areas. The largest is cooperation and financial aid for developing countries. From 2013 to 2016, CHF 6.9 billion was available for this area, of which CHF 4.1 billion was earmarked for Switzerland’s traditional, bilateral aid in developing countries. If Parliament reduces development aid, it is primarily this bilateral aid that will come under pressure. The second-largest pillar of Switzerland’s international aid is humanitarian aid. This emergency aid in humanitarian disasters is largely uncontentious. Switzerland has in the past often deployed its (short-term) emergency aid and its (long-term) development aid in the same crisis regions where they complement one another. Switzerland also counts spending on economic and trade policy measures, support initiatives in Eastern European states and peace-building measures as public development cooperation.

Picture Foreign Minister  Didier Burkhalter voiced passionatesupport for the fight against hunger and poverty at the start of the year.  Photo: Keystone