Reinventing international solidarity
Stéphane Madaule, a consultant to the private and public sectors, an academic and a former executive at the French Development Agency, has published an essay with an unequivocal title: A Plea for a Transparent, Generous and Selfless Policy of International Solidarity, published by L’Harmattan.
In it, he advocates a demanding vision of international solidarity, which he believes is currently undermined by financial considerations, geopolitical interests and the gradual shift from grants towards loans.
Why did you choose such a provocative title for your essay?
The title is deliberately strong, because international solidarity is currently going through a difficult period. Since the United States halted USAID’s activities, and with the decline in European budgets allocated to Official Development Assistance (ODA), the policy of solidarity has been undermined.
Through this book, I hope to reignite the debate on international solidarity. For it to regain its meaning and legitimacy, it must be transparent, generous and selfless. Yet this is not exactly how it currently operates…
However, international relations are also based on power dynamics and state interests. How can we change this mindset?
Firstly, we must distinguish between international solidarity and international cooperation. International solidarity should primarily be directed towards poor countries, the least developed countries and low-income countries.
Furthermore, genuine international solidarity is funded primarily through grants, not loans. Finally, it must be selfless. If the economic or commercial interests of donor countries take precedence, it becomes unclear whether the aim is to help people or to conquer markets.
You place great emphasis on the issue of transparency; in practical terms, what is the problem today?
Take the case of France. Around 40 per cent of the announced ODA is, in reality, never actually transferred to the field. These are expenditure items incurred in France but counted as development aid. Recipient countries therefore hear about this aid without necessarily seeing its effects.
Another key point is long-term impact. When we fund schools, health centres or programmes to tackle poverty, recipient countries must subsequently have the means to run this infrastructure. Building a school is not enough: we need to fund teachers, equipment and day-to-day running costs. Otherwise, the impact remains limited over time. Stéphane Madaule
You mention the French Development Agency (AFD) a great deal. What would you say about how this institution operates?
Many people confuse the AFD with French official development assistance. In reality, only part of the Agency’s activity takes the form of international solidarity.
Every year, the French government provides it with around 1.5 billion euros in budgetary allocations. However, the AFD Group undertakes activities totalling nearly 14 billion euros. This means that it carries out a wide range of activities beyond just Official Development Assistance.
What exactly are these other activities?
In particular, the AFD funds the fight against climate change and the protection of biodiversity. This funding is directed primarily towards emerging economies rather than the poorest countries.
The problem is that essential sectors such as health, education and the fight against poverty mainly require grants. However, the AFD currently lacks grant funding. It is therefore turning increasingly towards profitable projects or infrastructure financed by loans. Yet a loan remains a loan: it must be repaid. This is not international solidarity in the strict sense.
Do other countries operate differently?
Yes. USAID, before it ceased operations, operated primarily through grants. In France, we combine grants and loans. However, as soon as we provide funding through loans, the countries must be able to repay them. This severely limits the scope for intervention in the poorest countries.
Today, France’s official development assistance (ODA) stands at around 13 billion euros in pledged funds. Yet the projects actually funded as grants by the AFD amount to around one billion euros. There is therefore a considerable gap between the figures reported and the reality of international solidarity.
You have spent a large part of your career at the AFD. Why are you taking such a critical view today?
I am in no way questioning the quality of the work carried out on the ground. The AFD has competent and committed staff.
But the institution currently has two distinct mandates: on the one hand, international solidarity; on the other, the financing of sustainable development and global public goods, such as climate action and biodiversity.
What I regret is that the historic mandate of international solidarity is gradually being sidelined due to a lack of sufficient budgetary resources.
You also criticise the concept of ‘solidarity-based and sustainable investment’ developed by the AFD. Why?
Because the term is misleading. A loan is not an investment: it is a resource that must be repaid. When we talk about investment, we imagine capital being injected on a long-term basis without any obligation to repay it. However, the AFD works mainly with loans. Calling this ‘solidarity investment’ confuses the public.
How do you view Rémy Rioux’s track record after ten years at the helm of the AFD?
Rémy Rioux has significantly expanded the AFD Group’s activities. But today, the main issue remains the resources allocated to international solidarity.
NGOs, decentralised cooperation and the AFD now lack the resources to assist poor countries. The main challenge for the AFD’s new director will therefore be to advocate for larger grant budgets.
Does the European Union now play a central role in this system?
The European Union and the AFD are working together more and more, which is a positive development. Co-financing makes it possible to support more projects.
But one thing must be borne in mind: public development banks, such as the AFD or the World Bank, operate mainly through loans. Yet international solidarity requires, above all, grants. Without substantial grants, these institutions mainly finance profitable projects in emerging economies capable of repayment.
You cite Indonesia as a particular example…
Yes. Following the G20 summit, a group of donors mobilised around 20 billion dollars to help Indonesia in the fight against climate change.
But Indonesia is a member of the G20. It is not a poor country. And despite this massive funding, the country’s greenhouse gas emissions continue to rise.
These large-scale projects also largely benefit companies from donor countries, which win the contracts linked to the funding.
Ultimately, is the impact of official development assistance actually measured?
It is extremely difficult. The impact also depends heavily on local governments.
We can fund schools or health centres, but if the governments do not then fund the teachers, nurses or day-to-day running costs, the infrastructure quickly becomes ineffective.
International solidarity can only function sustainably within a partnership framework. Local investment is needed to sustain the work funded by international donors.
Has the shock caused by the suspension of USAID been absorbed by now?
No, clearly not. Global development aid has fallen from around $230 billion to less than $200 billion in a very short space of time.
The shock is significant. To turn things round, we must put international solidarity back at the heart of public policy and emphasise that it must prioritise poor countries, primarily in the form of grants.
What message do you wish to convey through this book?
The first message is that rich countries are not as generous as they claim to be. The figures announced often give a misleading impression.
The second is that international solidarity cannot produce lasting results without strong involvement from the recipient countries themselves.
It takes two to build an effective policy: donors on the one hand, and local governments on the other. Without this, even the best projects eventually lose their impact over time.
