E. Austria and the Developing World

The primary policy objectives of Austria's current three-year programme on development cooperation are combating poverty, peace building and protecting the environment. These, together with the principles of ownership, adapted technologies and equality of men and women, are integral components of the revised development policy put forward by the Ministry for Foreign Affairs and enacted by Parliament in 2002. The new Act aims to establish a consolidated Austrian development policy with central coordination by the Ministry for Foreign Affairs.

The core problems of many developing countries have increased to such an extent that they now affect the future of the whole international community: war, migration and environmental destruction as reasons and results of poverty and inequitable distribution of resources, lack of access to education and health care all constitute a vicious circle that the people affected cannot escape. Against the background of ongoing globalisation, these problems have attained a new political dimension, because they now have a direct influence on the richer countries, too. Finding common solutions to these problems is not only a matter of moral obligation, but also of well-understood self-interest.

Austria's development cooperation sets out to reduce the gap between rich and poor with all due respect for the partner countries and their full involvement in the planning and implementation of development projects. Combating poverty is just as decisive as promoting democracy, human rights, equal participation by men and women in the development process and the responsible use of natural resources.

Globalisation makes it imperative to integrate developing countries into the global economy by strengthening their productive capacities and lowering market barriers. Examples in 2001 were the "Everything but Arms" initiative by which the European Union opened its markets to the products of the world's poorest countries, and the third UN Conference on the Least Developed Countries. In this field, Austria was able to make a contribution as co-leader of the working group on energy supply.

In 2000, Austria's total Official Development Assistance (ODA) amounted to €459.29m or 0.23 per cent of GDP. This amounted to a decrease of around €36.34m over the previous year. The Austrian ODA was thereby slightly above the OECD average of 0.22% of GDP, but below the EU average of 0.32%. The main reason for this was the receipt of the repayment of previous loans, which exceeded the payment of new credits. On the other hand, there was an increase in debt remission, whereby Austria granted reductions of interest rates to a value of €59.37m.

Poverty reduction is the main precondition for a better and more promising future for a large part of the world's population. It is also a prerequisite for the prevention of instability in developing countries and the maintenance of the global ecological balance. In 1996, the OECD set itself the goal of halving the number of people living in extreme poverty by the year 2015. Combating poverty therefore plays a central role in international development cooperation and also in Austria's, with an approach along the following lines:

· Selection of the poorest countries as priority and cooperation countries.
· Selection of particularly needy regions, provinces and districts within the partner countries, and promoting decentralisation.
· Orientation of sectoral priorities towards activities that directly benefit the impoverished population groups.
· Selection of particularly disadvantaged target groups.

In 2001, the practical application of Austria's development policy in respect of poverty was largely determined by cooperation with other OECD states on the compilation of the Guidelines on Poverty Reduction, and by the start of cooperation with the World Bank on drafting poverty-oriented country and sector strategies.

Bilateral Development Cooperation

All Austrian development cooperation projects are scrutinised from the planning stage onwards according to a list of criteria related to gender equality and environmental compatibility. The examination starts with an analysis of the prevailing situation, in the light of which a list of remedial measures is compiled. These can, for example, be structured as training courses for women in local politics, and in 2001 gender mainstreaming was permanently anchored as a basic component of Austrian ODA. All projects are subjected to standardised environmental compatibility tests, and special environmental projects are supported. In order to obtain the most effective use of limited means, more than 70 per cent of Austria's bilateral ODA is concentrated on a number of specific regions, countries and sectors as well as a special programme for Palestine:

Central America: priority country Nicaragua; cooperation countries Costa Rica, El Salvador, Guatemala.
The Sahel Zone of West Africa: priority countries Burkina Faso, Cape Verde; cooperation country Senegal.
East Africa: priority countries Ethiopia, Rwanda, Uganda; cooperation countries Burundi, Kenya, Tanzania.
Southern Africa: priority country Mozambique; cooperation countries Namibia, Zimbabwe, South Africa.
Himalaya/Hindu-Kush: priority country Bhutan; cooperation countries Nepal, Pakistan.

More than 500 projects in those countries were financed by Austrian bilateral development assistance in 2001. Typical examples were the South Western Towns Water and Sanitation Programme in Uganda; the Nicaflor project for the ecological production and eventual export marketing of ornamental plants in Nicaragua designed to reduce over-dependence on traditional crops; and the recycling of household waste in St. Louis, Senegal.

The special programme for Palestine ran into difficulties caused by the increase of violence in 2001, but the ongoing projects continued, including health care, seawater desalination, revitalisation of the old city of Bethlehem and the conservation of Nablus. In South East Asia, Austria continued to support technical and scientific institutions in order to strengthen local and regional expertise and to support North-South as well as South- South cooperation. In 2001 Austria provided support for about 90 researchers and candidates for doctorates from the region.

Sectoral Priorities

Austria offers her partners cooperation in those sectors where she possesses special know how and expertise. In the micro, small and medium-sized business sector an experience-based new strategy of strengthening market positions as well as opening up access to finance and know-how has been elaborated. In agricultural and rural development the aim is to increase production while conserving natural resources, promoting markets and increasing the incomes of the rural population. Other main target areas for cooperation are education, water, energy, decentralisation and conflict prevention. In 2001 measures were taken on national as well as EU level to promote fairtrading, a field in which Austria has taken the initiative in a number of respects.

Co-financing

Since 1992 there has been a structured programme of co-financing development projects with both official and private funds on a basis of framework agreements covering several projects each. Austria uses this instrument primarily to support social projects as well as private sector partnerships between Austrian firms and partners in the developing countries. The European Commission made €2.47m available for the activities of NGOs in this sector. Austrian contributions on this basis enabled €5.16m to be raised to finance projects. The European Centre for Development of Enterprise, in cooperation with the Austrian Foreign Ministry, financed "twinning" arrangements between private business partners up to a total of €150,000.

Evaluation

Evaluation and control have an important function in the administration of Austria's development assistance, as a means of learning from experience and also of justifying the expenditure of public money. A number of external evaluations were carried out in 2001, with an increased emphasis on thematic sectors and instruments rather than on individual projects. Amongst others, positive reports were filed on Austria's small power station projects in Nepal and Bhutan, which had given a positive impetus to regional development there. The instruments for granting small loans to micro, small and mediumsized businesses proved effective when strict criteria were adhered to.