Cutbacks to push foreign development aid allocation back to 2004 levels

The new secretary of state for foreign aid and Iberoamerican affairs, Jesús Gracia, was scheduled to be sworn in on Monday in a double role that makes sense, since Latin America is the greatest recipient of Spanish development funds.

The only problem is, there are practically no funds to speak of any more. On December 30, the Cabinet approved a spending cut of 8.9 billion euros on the 2011 budget, extendable to this year. One of the departments hardest hit was the Foreign Affairs Ministry, which lost two-thirds of its annual 1.5-billion-euro allocation.

For now, the government has not specified which ministry areas will be losing money, but all sources consulted by this newspaper took it for granted that foreign aid will take the biggest hit.

The Spanish International Cooperation and Development Agency (AECID), which now runs on a 900 million-euro budget, could lose up to 400 million euros; another 600 million euros might be saved by reducing the amount earmarked for the Fund for the Promotion of Development, which grants repayable loans and donations.

One of the most sensitive areas that could feel the pinch is the Water Fund, which tries to bring drinking water to the poorest communities in Latin America.

The new cutbacks come on top of the 800-million-euro reduction already made by the previous Socialist government over the course of two years, effectively postponing to 2015 the goal of spending 0.7 percent of Spain's GDP on foreign aid. The new cuts mean that, rather than postponing the goal even further, development aid spending will actually revert to 2004 levels.

In 2011, experts estimate that foreign aid represented 0.4 percent of GDP, or around 4.2 billion euros; this year, it is expected to be no more than 0.25 percent of the gross domestic product, the same as in 2004.

And it is not just the central government, but regional and local authorities as well that are drastically reducing their aid allotments (up to 80 percent in the case of the Valencian region), as though it were some form of superfluous spending.

Coordinadora de ONG para el Desarrollo, an umbrella group for development aid associations, expressed its "deep concern" over the cuts and said it was "unfair" that the most vulnerable countries and sectors should pay for the effects of the crisis.

The issue could go beyond moral concerns. Spain's goal of becoming a non-permanent member of the United Nations Security Council in 2015 could be in danger if the country stops being a major contributor to UN agencies, as it had been in recent years.