Aid watchdog insists Malta inflating its Millennium development aid contribution

Malta has demonstrated a growing interest in achieving its Millennium Development Goals (MDGs), by increasing its overseas development aid in 2011 by some 44% over its contribution last yea

But an international development aid watchdog has insisted that Malta may have inflated its development aid to poorer countries by 28%, by factoring in money it spends on asylum seekers at home when this cash does not actually leave the country.

Malta has signed up to commit a total of 0.17% of its gross national income in overseas development aid (ODA) by 2015, which it does in grants by the foreign ministry to development NGOs which carry out projects in developing countries.

But Aidwatch calculates that in 2011, at least €7.35 billion (or 14%) of EU ODA was not invested in developing countries but on developing country refugees and students in donor countries as well as debt relief.

Overall, the largest inflators of aid in proportional terms are Greece (36%), Italy (31%), Malta (28%), France (27%) and Austria (22%). The Member States that inflate their aids budgets the least are the UK, Luxembourg and Ireland.

The Maltese Aidwatch working group SKOP said there was a need for further transparency from the foreign ministry by publishing complete and detailed reports on Malta's ODA. It also called for more genuine aid, not including expenditure related to the detention of irregular migrants in Malta.

In 2011, ODA from European member states fell for the first time since 2007 in GNI terms, with collective EU aid decreasing by €490 million in 2011, from almost €53.5 billion to €53 billion. Most aid budgets were cut in countries facing a financial crisis, namely Greece (-39%), Spain (-33%), Cyprus (-28%), but also Austria (-14%) and Belgium (-13%). The budget cuts by France (- €544 million) and the Netherlands (-€307 million) were significant in absolute terms.

Only six member states delivered at least 0.55& of their GNI as overseas aid, a level that would demonstrate they were steadily increasing their aid to meet their targets in 2015. These countries were Luxembourg, Sweden, Denmark, the Netherlands, United Kingdom and Malta.

Member states that increased their aid included Germany, Italy and Sweden, as well as Malta ( 44%), Lithuania ( 37%), Romania ( 37%) and Estonia ( 26%).

The eurozone crisis has dealt overseas development aid a blow for many countries that need billions in aid to respond to the needs of the poorest population groups. Regional differences remain noticeable, with progress being significantly slower in Sub-Saharan Africa and South Asia.

"European development civil society organisations are concerned about the policy changes at EU level," the development aid watchdog Aidwatch said.

"The main concerns relate to the plan to phase out grant aid to Middle Income Countries where a large proportion of poor people lives. The focus needs to be on poor people and not on poor countries.

"A further concern is the increased focus on private finance, noticed at the European level and in several European Member States. It poses challenges to transparency, accountability and risks diverting resources to other objectives than development of the poorest groups. It needs to be ensured that development finance effectively contributes to the goal of poverty eradication.