Modest Development Assistance

Last year, Poland has allocated a little over 1,4 billion PLN to development assistance for poorer countries. Is it a little, or a lot? Depends on the point of view.

Leszek Baj

– Poland is not doing enough in terms of development assistance to poorer countries. Looking at your economic potential – you could do more – believes Xavier Devictor, World Bank Manager for Poland and Baltic States.

For years, Poland has been a beneficiary of various types of support. We get billions of euros from European funds, for purposes including construction of infrastructure. Over the past two decades, the World Bank has granted us cheap loans to a total value of 12,4 billion USD. However, according to OECD, Polish development assistance to poorer countries last year has reached only 0,09% of your national income.

In total, Poland’s assistance within the framework of “official development assistance” has exceeded 1,4 billion PLN last year (data of Ministry of Foreign Affairs). This is the money used to finance projects in other countries. Our priorities are “democratization, human rights and systemic transformation”, as these are the areas in which we can share our experience of the past 25 years.

However, the clear majority of our assistance – approximately one billion PLN – is payment to EU budget and to European Development Fund. The rest of the money is assistance within the framework of international organizations, e.g. the World Bank, and Poland’s bilateral assistance to specific countries.

Wealthy countries often direct their assistance towards countries in which they have major economic and political interests. For example, Germany allocate the largest portion of assistance to China, US – to Afghanistan, Australia – to Papua-New Guinea.

According to Foreign Ministry data, bilateral assistance last year included 110 million PLN going from Poland to countries of Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine). Our assistance to Central Asia countries (mostly Afghanistan) has reached 32,7 million PLN, to Palestinian Autonomous Areas - 2,2 billion PLN, and to countries of East Africa - 7,4 billion PLN.

However, Xavier Devictor says that Poland’s contribution to assistance for poor countries within the framework of International Development Association (IDA) is very low compared to our capabilities. Within the framework of IDA (a World Bank fund) projects are financed in poorest countries of the world. In 1945-2012, assistance provided within the framework of IDA has reached 252 billion USD, of which the largest amounts went to India, Bangladesh and Pakistan.

Wealthier countries within the framework of IDA every three years declare, how much money they are going to give to support the poorer countries. In the past three years, Poland has transferred 6,74 million SDR (international settlement currency), which makes approximately 10,4 million USD. This is barely 0,03% of total financing provided by IDA. An amount not much lower than Polish contribution was provided by Slovenia, whose economy is... over 10 times smaller than that of Poland. Hungary has provided to IDA twice the amount Poland has. UK has provided as much as 2,7 billion SDR.

The World Bank convinces, that assistance provided within the framework of its structures can be more effective than bilateral assistance. – In order to be able to invest in a given contract, you must first make sure that the state and its institutions function there. In case of bilateral assistance, it’s easy to implement local projects, but more difficult to effect true reforms – says Devictor. And he adds: - It begs a question, whether Poland’s position in a given country will be stronger because there are Polish flags on a newly built school, or because reforms are implemented in the country, resulting in improved business climate. I believe the second solution is more effective.

At the end of the year, countries will declare how much money they would provide to IDA in the next three years. Due to savings being made, it does not seem that Polish contribution would increase.

“As of now, Poland has not as yet submitted a declaration as to her participation in IDA17 Replenishment” Ministry of Finance said in a letter to us. “Proportions for distribution of funds, about whose purpose Poland can decide in a discretionary manner, must be – due to limited amounts of public finance – determined with utmost caution. It should be assumed, that increasing financing for any of the items would have to be combined with reduction of financing provided for other items” – adds the Ministry of Finance.