Swiss link development aid to economic reform

Bolivia, where almost 80 per cent live in poverty, has been earmarked to receive more money Keystone Archive

The economics ministry is to cut development aid to 24 countries, in favour of recipients that are implementing economic reforms.

The new strategy will see the recipients of development aid cut from the current 50 countries to just 26.

Martin Roth, head of development and transition in the economics ministry (Seco), said cutting the number of recipient countries was designed to “improve the management, the coherency, efficiency and impact” of Swiss development aid.

Seco’s contribution to Swiss development aid accounts for about SFr270 million, an eighth of the country’s total aid budget. Switzerland spends around 0.4 percent of its Gross Domestic Product on aid.

The new criteria involve identifying countries that are undergoing far-reaching economic and structural reforms, countries that Seco finds “economically interesting”, and countries singled out by the cabinet for special projects.

Roth acknowledged that political factors would play a role in whittling down the list. “At the end of the day, it will be political decisions that count,” he said.

Countries that have enjoyed a “mid- to long-term relationship” with Switzerland are to continue receiving funding.

According to the economics ministry, each country will receive development aid worth at least SFr5 million ($3.45 million) per year.

Likely beneficiaries

Roth declined to say which countries look set to lose Swiss aid. Those African countries which look set to receive future money include Ghana, Mozambique, Tanzania and Egypt.

Roth said engagement would be increased in southeast Europe and central Asia. “Definitely Albania, Bulgaria, Macedonia and then Kyrgyzstan and Tajikistan,” he said.

In South America, further economic assistance would flow to Peru and Bolivia, while in Asia, Vietnam, China, probably India and eventually Indonesia, would also benefit.

Seco says the changes are aimed at improving Switzerland’s international cooperation on aid projects – particularly with organisations such as the World Bank and regional financial institutions.

It also argues that the Swiss parliament has repeatedly called for better targetted aid.

Seco focuses on economic and business development, whereas the Swiss foreign ministry’s Agency for Development and Cooperation handles a broader range of issues, including so-called “first-step” humanitarian measures.

swissinfo with agencies