Italy is a key actor in international development co-operation. It is a member of the Group of Eight (G8) leading industrialised countries, a founding member of the European Union (EU) and the seventh largest OECD Development Assistance Committee (DAC) donor in terms of aid volume. Italy fully understands that its national interests are closely intertwined with a number of neighbouring developing nations and elsewhere in the world, a fact consistently reiterated in its foreign policy statements.

Italy’s development co-operation system is carried out under the authority of law 49 of 1987. Since then, the measures to reduce public expenditure passed in the 1990s, with a resultant decrease in the general volume of intervention led Italy to reassess its bilateral and multilateral priorities. The emergence of new needs that arose in areas that were not previously priorities, for example in the Balkans, Afghanistan and Iraq, have assigned development co-operation a new role that has become an absolute priority of Italian foreign policy.

Indeed, Italian Official Development Assistance (ODA) slowly declined through the late 1990s, but has risen slightly since 2000, as Italy reasserts its role as an international political force. Despite Italy’s best political intentions, growth of the nation’s ODA has been irregular, generally restrained due to government-wide budget austerity policies, but periodically accelerated following major political initiatives (e.g. debt relief, Global Fund, Iraq). ODA levels will undoubtedly continue to fluctuate unless Italy is able to generate a clear consensual vision and ambition for its development co-operation. Its 2005, ODA was € 4.466 billion, representing 0.29% of gross national income (GNI).In May 2005, Italy approved the European Commission’s plan for increasing European ODA, whereby each ‘old’ Member State’s ODA should reach an average of 0.51% of GNI by 2010 and 0.7% by 2015.

The two key players in Italy’s development co-operation policy are the Ministry of Foreign Affairs and the Ministry of Economy and Finance. Actual implementation for Italian bilateral assistance is the responsibility of the Unità Tecnica Centrale (UTC), a specialised development unit housed in the Direzione General per la Cooperazione allo Sviluppo (DGCS). The Ministry of Foreign Affairs, and particularly the DGCS, is responsible for overseeing all development co-operation, in collaboration with other key development institutions, primarily the Ministry of Economy and Finance. The Treasury Department in the Ministry of Economy and Finance is responsible for managing and monitoring some 18% of overall Italian ODA, to which can be added approximately 50% of ODA which is jointly managed with the Ministry of Foreign Affairs. Many other ministries and institutions of government play a small role in terms of their management of ODA, such as the ministries of Agriculture, the Interior, Environment, Productive Activities and Justice. In addition, Italian development co-operation projects are increasingly funded by local government in the regions and municipalities. Decentralised projects are frequently of a multilateral nature (implemented by an international organisation) or carried out by NGOs. An important element of decentralised co-operation relates to immigrants and development activities within their countries of origin.

The main goals of Italian development co-operation are laid down in bilateral and multilateral (United Nations, World Bank, OECD and EU) regulations. The Millennium Declaration, approved by the United Nations General Assembly in September 2000, is a fundamental point of reference.

Italian development co-operation policy focuses on the following areas:

• poverty reduction (supporting the action plan for Africa);
• humanitarian action;
• sustainable development;
• the fight against HIV/AIDS;
• education;
• food security and combating rural poverty;
• information technology and e-government for development;
• private-sector development; and
• gender, minors and handicapped people.

Bilateral channels represented 44% of Italy’s gross ODA in 2005, compared to 35% in 1999. In this area, Italy’s development co-operation is based on integrated plans for intervention that have been drafted in agreement with recipient countries. These agreements are generally signed by a joint commission every three years. Bilateral programmes include technical assistance and aid for projects but also debt relief and general budget support.

An overview of country allocations over the last decade, with a few notable, longer-term exceptions, shows a trend of rapidly shifting country targeting for Italian aid. In 2003, 72% of available Italian bilateral aid was disbursed in Africa. This included 63% in sub-Saharan Africa and 9% in North Africa. Asia (10%), America (7%), Europe (5%) and the Middle East (6%) make up the remaining bilateral aid. This geographic emphasis has meant that 66% of bilateral disbursements in 2003 took place in the Least Developed Countries, down from 71% in 2002.

The choices of recipient countries and their budget levels are not undertaken based on a specific set of criteria or a performance-driven process. The main recipients of Italian ODA are, in decreasing order: Mozambique, DR of Congo, Tanzania, Ethiopia, Tunisia, Guinea-Bissau, Afghanistan, China, the Occupied Palestinian Territories, Albania, Nicaragua, Cameroon, Morocco, Uganda, Angola, Algeria, Sierra Leone, Zambia, Eritrea, and Egypt.

Italy’s bilateral aid priorities over 2002–2003 were primarily related to debt (54%, against a DAC average of only 13%). Other notable priority sectors included social infrastructure and services (15%), emergency assistance (8%), and commodity and programme aid (6%). One noticeable trend is the reduction in economic infrastructure investment, down to 1% from a high of 24% a decade earlier.

Italy is the DAC member that makes most extensive use of the multilateral channel for its development co-operation, representing 56% of its total gross ODA in 2005. Reasons for this particular dependence on multilateral channels vary, but include:

• the low transaction costs of using the multilateral channel;
• political desire to maintain Italy’s international standing;
• Italy’s interest in fulfilling broader international obligations;
• lingering Italian domestic distrust of bilateral management systems; and
• a lack of bilateral capacity to utilise additional funds.

For whatever the reasons, Italian officials consider the multilateral channel to function reasonably well, while it offers Italy the opportunity to simultaneously harmonise and align its aid in response to the 2003 Rome Declaration. The European Commission absorbs the bulk of Italian multilateral ODA, receiving 35% of total gross ODA, followed by much smaller allocations to United Nations (UN) agencies (8%), the World Bank Group (1%), regional development banks (1%) and ‘other’ multilaterals (6%). Italy has had a strong tradition of close co-operation with the multilaterals, but the criteria used to guide allocations of ODA funds among these institutions do not appear to be part of a longer-term strategic process.

The network of partnership agreements that Italy has with UNICEF, FAO and the World Health Organization (WHO), as well as the accord negotiated with UNDP, allows Italy to better focus its approach and monitor the results of targeted interventions it has funded. Italy continues to pursue its objective to be one of the top ten donor countries to the multilateral UN system. Intense collaboration with the three large agricultural organisations based in Rome – FAO, WFP and IFAD – provides financial resources and the strategic backing that established the role of Rome as the headquarters for multilateral bodies.

According to projections of the Resource Flows Project, Italy contributed US$ 27.068 million to population and HIV/AIDS activities in 2003. While this represents an increase compared to previous years, Italy still ranks 10^th out of 16 western European countries. In 2004, Italy contributed US$ 2.818 million to the UNFPA budget. UNAIDS received US$ 2.513 million in 2004 and US$ 1.254 million in 2005, and UNIFEM received US$ 2.451 million in 2004 and US$ 3.115 million in 2005.

The DAC peer review of 2004 highlights Italy’s key role in fighting HIV/AIDS, which dates back to the late 1990s. The geographical focus of Italy’s development co-operation has always been sub-Saharan Africa, where it spends more than 80% of Italian ODA to fight HIV, tuberculosis and malaria, mainly through NGOs, Italy’s National Health Institute, and multilaterals. Italy is also active in the WHO ‘Roll Back Malaria’ initiative, which is partly funded by Italy, as well as the WHO ‘Stop TB’ and ‘Initiative Against AIDS’ programmes. The creation of the Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) at the Genoa G8 summit in 2001 constituted a step change in Italy’s commitment to fight the pandemic. Italy, which at the time presided over the G8, sent a strong signal to the donor community by immediately pledging US$ 100 million to set up the fund. Between 2000 and 2005 Italy disbursed € 433 million and committed a further € 190 million over 2005–2006. This level of commitment made Italy the third largest donor and gave it a seat on the GFATM board. This, together with Italy’s participation in the various working groups and committees, permits it both to co-ordinate with other bilateral interventions and to have a strong role in the management and of the fund itself.

In its fight against HIV/AIDS and other pandemics, Italy has relied on a variety of channels, mostly NGOs and multilaterals. At the same time, its limited bilateral management capacity has not prevented a continued effort to cover an extensive range of countries. This broad spectrum of target countries, delivery mechanisms and channels of allocation certainly allows Italy to reach out to many stakeholders and geographical areas but also creates a risk of dispersion and low impact. This could be aggravated by a persistent lack of clear strategy and prioritisation and attention to gathering and analysing results on the ground.

The Ministry of Foreign Affairs sees an increasingly important role for NGOs in Italian development co-operation. Nevertheless, the size of the Italian NGO sector working with official ODA funding is still quite small in comparison to other DAC members, with only 2.9% of Italian total gross ODA channelled through NGOs. This limited use of the NGO channel may relate to the procedural difficulties confronted by NGOs in using Italian government funds, some of which are now being examined by the DGCS. Indeed, although the number of NGOs accredited by the DGCS has steadily grown in recent years – 146 in 2000 to 171 in 2003 – the number of NGO projects approved by DGCS has declined from 127 in 2000 to 66 in 2004. The NGO community has long complained of the unnecessary complexity of DGCS internal procedures, long project approval delays (36 months minimum) and of unnecessary financial controls and accounting requirements. The current administrative reform in the DGCS should help in this respect.

pdf download

Italian Ministry of Foreign Affairs, Italy and the fight against HIV/AIDS, Tuberculosis and Malaria 2000–2003, January 2004

Italian Ministry of Foreign Affairs

OECD, DAC Peer Review Italy, 2004

OECD Development Assistance Committee