Local authorities face crisis

By Joshua Massarenti and Daniele Biella

Caught in the grip of the worst economic crisis since the last century, European Local and Regional Authorities (LRAs) are forced to do everything they can to balance the public budget. Among the sectors that are most exposed to this turn of the screw, there is decentralized cooperation whose funds risk a serious  decrease in some countries. Not even groundbreaking countries, such as Italy, Spain and France can consider themselves shielded from the “budget cuts” threat. Let’s take the Spanish case. After at least five years in which development aid funds increased significantly, the growth in Spain was abruptly stopped by a sudden turn-about in 2009. Compared to 2008, both local authorities’ contribution to international cooperation for development and the contribution of autonomous communities decreased, as shown in data collected in the annual report of the Federaciòn Espanola municipios y provincias (Femp). The local authorities’ contribution decreased by €1.6M, from €148,8M to €147.2M, 4.6 per cent of the total amount of Spanish bilateral aid, while the contribution of autonomous communities was €18.7M less, going from €464.7 to €446M.

The official figures for 2010 are not yet available but the trend is clear: “the reduction will be confirmed,” anticipates Mercedes Sanches, head of the Femp international cooperation for development, “but local authorities have already put in place their strategies to meet the commitments they made, while maintaining the quality of their interventions.”

Femp, a network including 7,100 Spanish municipalities (90 per cent of the total number), does not grant funds but performs important networking activities among relevant bodies, above all promoting projects for the improvement of local authorities in South American countries.

“The crisis is deeply felt by Spanish institutions which are now facing cash flow problems. We are helping them to coordinate with one another in order to avoid a waste of resources,” Sanches explains. A tool that is emerging as a winner is the website cooperacion.femp.es, an up to date online database where “everyone can see what the others are doing, from the neighboring municipality to those in foreign countries.” While at the moment the Femp authorities are able to maintain the 0.7 per cent of their budget for the decentralized cooperation, autonomous communities are not able to do the same: even Catalonia, the region with the highest investment (in spite of everything it reached €103M, 0.55 per cent in 2009) is unlikely to reach the target that is supposed to be achieved in 2012 (0.7 per cent). “The funds have been reduced but this is also an occasion to search for better quality and to introduce suitable financial mechanisms, such as the Tobin Tax (a tax on transactions, ed),” adds Miguel Angel Villena, head of communications for the International Development State Secretariat.

The aid to governmental development “decreased by €500M in 2010, €300M in 2011” and it will be about €4.2bn (0.43 per cent of the GDP) “remaining at about 80 per cent of the total”. The rest, and it is not a small amount, remains in the hands of the decentralized cooperation, “that is local authorities and autonomous communities, but also universities and unions: a well-established tradition guaranteed by  federal impetus from the Spanish nation,” underlines Villena, that similar to the one of the central government, operates mainly in Latin America (but is growing in Africa) and works in five directions: besides improving the local institutions, it promotes projects in defense of gender equality and of access to education, healthcare and water.

In France the situation is less negative but the overall scenario is not so bright. In the absence of updated data for the years 2010-2011, we have to rely on the statements made by Maryse Dusselier, counselor of the International Affairs and Decentralised Cooperation at Association des Régions de France: “In spite of the deep economic crisis public institutions are going through and the LRAs reform recently adopted by the government, the 2011 budgets endorsed by French Regions do not provide substantial reductions in funding for international cooperation.” A reassuring fact, considering that according to a report issued in September 2010 by the National Commission of Decentralized Cooperation (CNCD), of the €70M funding for development aid allocated in 2009 by French LRAs, 56 per cent came from the  Regions. But not all that glitters is gold. The growth of LRAs development aid (€62M in 2007, versus €50M in 2005) was stopped in 2009 with €2M funding less than 2008 (which had been a record year with €72M). To counterbalance this trend, the Foreign Ministry decided to raise the funds for decentralised cooperation from €12,5M in the three –year period 2007-2009, to €16M in 2010-2013. Will it be enough? According to Dusselier “starting from 2012, with the new LRAs multi-year plans, funds will be heavily reduced”.

And while future forecasts don’t augur well, also the present gives very little satisfaction. According to Yannick Lechevallier, president of the Agence COOP DEC Conseil, an independent agency that gives advice and sells expertise to territorial communities in the field of decentralized cooperation: “some departments such as the Deux-Sevres have closed their international services.” It is not a coincidence that a study over 165 territorial communities, carried out by COOP DEC, shows that, between 2007 and 2009, the funds allocated by the departments included in the study decreased on average by 34.5% (versus +38.8% for the regions and -1.8% for the cities).

“Apart from the figures, LRAs are confronted with at least two challenges”, claims Lechevallier. “The first involves French taxpayers who, in times of crisis, have a hard time accepting local social cuts while international cooperation funds remain untouched. In November 2010 a group of deputies from the majority party, following complaints from citizens of Aubagne against development aid, got up and asked the Home Office “what is the advantage that a French territorial community can have from international cooperation with countries outside  the OCSE area?”

The reply arrived from the Ministry of Foreign Affairs, according to whom “LRAs take part in a strategy of national interest.” And here comes the second challenge: “Today LRAs should question themselves on the position they want to take at international level. Sustainable development requires new concepts of cooperation to live together on the planet, not simply to help others. If LRAs just copy the State or reduce decentralized cooperation to a simple process of transferring skills and expertise” from North to South, “then their models are doomed to failure”.

For now LRAs follow in large part a strategy that has been marked by the State. Geographic wise Africa remains the area that has been more privileged by decentralized cooperation, collecting 70 per cent of the funds in 2009 but with an increasingly insisting opening towards emerging countries and a growth of interregional and border crossing partnerships (see the Rhone-Alpes Region engaged in development projects in Senegal together with the Region of Tuscany). Local governance, agriculture, food security, water and public services are the prevailing themes, a sign that revolution can wait.

Websites: Coop Dec Conseil,Federaciòn Espanola municipios y provincias (Femp), Association des Régions de France (Afr) and The National Commission for Decentralised Cooperation (CNCD).