Luxembourg's development cooperation - Annual report 2017

Dear friends of Luxembourg’s development cooperation,

In the context of improved economic prospects, global growth consolidated in 2017. Although we can be pleased about this positive global situation, we must also acknowledge that many countries are lagging behind and that even in countries experiencing strong growth whole populations are in a state of poverty. Even though the Sustainable Development Goals (SDG) aim to “leave no one behind”, over 800 million people are still living in poverty and over 65 million people have been displaced – a figure not seen since the Second World War.

Our world has become more interconnected and more complex, against a background of recurrent crises, violent extremism, climate change and internal conflicts involving extreme poverty. Measurements such as gross national product (GNP) or economic growth alone thus no longer suffice to measure the well-being of populations and inclusive development. We should add to this the fact that, in the era of “fake news”, it is becoming increasingly difficult to access reliable information in order to enable us to make the right choices at the right times. This is even more important in the field of development cooperation, where one constantly has to set priorities and make strategic choices in line with the limited resources available.

Global official development assistance (ODA) remained largely unchanged at a total of 146,6 USD billion in 2017. Only six OECD (Organization for Economic Development) countries reached or exceeded the target for ODA of 0,7% of gross national income (GNI): Denmark, Luxembourg, Norway, Sweden, Turkey and the United Kingdom. As in previous years, Luxembourg fulfilled its commitment to dedicate 1% of its GNI to development cooperation and humanitarian aid. This voluntary policy reflects our belief that official development assistance is still the most effective and speedy method to encourage stability and inclusive growth and that it will remain vital for developing countries and for meeting the SDG.

However, it is also clear that ODA alone will never be enough to meet current challenges, which require trillions of dollars. The involvement of the private sector, investment funds, the mobilisation of national resources in developing countries and the transfer of technologies and knowledge are also vital in meeting the SDG. So new partnerships need to be created – it was not by chance that the main theme of the 2017 development cooperation conference was multi-actor partnerships – with the aim of creating development synergies with all actors, public and private, civil society, international organisations, universities and research centres.

In this respect, we are lucky to be able to rely on the specific expertise of a large number of Luxembourgish actors. In 2017, we were able to start and consolidate direct collaborations or public-private partnerships with enterprises and institutions in the telecommunications, health, education and research and transport sectors as well as with financial actors, especially in the microfinance sector. Luxembourg consolidated its role as a reliable, innovative and predictable partner in the field of development cooperation. This was confirmed to us by the peer review by the OECD’s Development Assistance Committee (DAC) published last October.

The DAC welcomed the effective, targeted implementation of our development cooperation, referring to its geographical and sectoral concentration – enabling its impact to be maximised – and its visibility and influence in our partner countries. I was able to gain personal experience of the appreciation and impact of our development cooperation on the ground, especially during my visits to Burkina Faso, Laos and Vietnam.

In addition to the measures taken to improve the effectiveness of Luxembourg’s development cooperation, the OECD was greatly impressed by the additional value provided by the funds used for climate action and for refugee support. This further enhances Luxembourg’s credibility on the international stage and makes us an important actor in the implementation of Agenda 2030.

Some 13 recommendations were also made by DAC, which will guide us as we draw up a new general strategy for Luxembourg’s development cooperation in concert with all the actors which have actively contributed to the OECD’s peer review. I am thinking in particular of my colleagues in the Ministry of Finance, the MDDI, LuxDev and the Cercle des ONG de développement, as well as the members of the Luxembourg Parliament’s Foreign Affairs Committee, who continually support us. At the beginning of 2017 we had already made a start on a large proportion of our strategic reorientation work with many of our partners at the bilateral, NGO and multilateral levels.

Throughout the year, my department has been working on the effectiveness and quality of the cooperation programmes and projects with the development NGOs. Together with the Cercle de Coopération, the co-financing conditions have been reviewed, their percentages harmonised and adjusted to the level of development of the countries concerned. As a result, the law on development cooperation has been modified and from now on there will be only two co-financing rates: 60% and 80%, regardless of whether an NGO is working under a framework agreement or on an individual project. I am also happy that, together with the Ville de Luxembourg, we have been able to support the Cercle by establishing the Maison des ONG de développement.

At the bilateral cooperation level, we have drawn up a new agreement between the government and LuxDev. The agency is now more decentralised and its new structure enables it to to respond better to the new international context. The reforms and reorientations undertaken have positioned our agency as a centre of competence capable of extending its reach to implementing projects on behalf of other mandataries such as the European Commission, Denmark and Switzerland.

Unfortunately, the security situation has deteriorated in some of our partner countries, especially in the Sahel, and we have had to adapt to this new context. We have reorganised our working methods, invested in more secure infrastructure and equipment, reviewed our security plans and trained our staff on site. This is long-term work that will continue to occupy us throughout the years to come.

Instability factors, such as conflicts and droughts, create humanitarian crises that make our partner countries more fragile and jeopardise our achievements in the development sector. For that reason, we have increased our humanitarian aid and linked our more long-term cooperation actions to it. This is what we mean when we talk about the nexus between humanitarian aid and development.

In this context, we have also reviewed some of our collaborations with UN agencies and international organisations. New strategic partnership agreements have been signed with the United Nations High Commission for Refugees (UNHCR), the International Committee of the Red Cross (ICRC) and the World Food Programme (WFP). In addition to our substantial contribution to these organisations, our response to humanitarian crises can also make use of the expertise of Luxembourg’s private sector and a team of volunteers from the civil protection service trained as part of our emergency.lu project. In 2017, emergency.lu was deployed effectively in Madagascar, Niger and the Caribbean.

As you will see in reading this annual report, 2017 has been full of successes, as well as challenges to which we have had to adapt constantly. In this context, we have carried out various evaluations – joint and thematic – in order to gain the maximum learning from our actions and further improve our development cooperation. The work done in 2017 was made possible by the commitment of all my staff, our partners and all development cooperation actors, both professionals and volunteers. I would like to thank them all, in recognition of and with respect for their unfailing devotion to a fairer world. My special thanks go to Ms Martine Schommer, Director of Development Cooperation and Humanitarian Affairs for the last five years.

Romain Schneider
Minister for Development Cooperation and Humanitarian Affairs