20/03/2003 - Luxembourg has significantly increased both its official development assistance - from USD 99 million (0.65% of GNI) in 1998 to USD 143 million (0.82% of GNI) in 2001-and the quality of the aid it gives, according to the Development Assistance Committee's (DAC) review of its development co-operation. Luxembourg is on track to reach the government's objective of 1% of GNI by 2005. It now ranks 4th out of the 22 Development Assistance Committee (DAC) member countries in terms of ODA/GNI and 21st in volume terms. The DAC pays tribute to Luxembourg's aid contribution.
During the review of Luxembourg's development co-operation policies and programmes, the DAC noted its orientation to poverty reduction in support of the Millennium Development Goals. More than half of Luxembourg's 'target' list of 10countries fall in the least-developed category and 82% of its ODA supports social infrastructure and social services: education, basic health, water supply and sanitation. Measures are being taken to improve the quality of this aid: long-term co-operation programmes with target countries, deploying Luxembourg officials in the field, improved collaboration with non-governmental organisations, and the introduction of a monitoring and evaluation system.
The DAC Chairman, Jean-Claude Faure, summarised the Committee's main findings and its key recommendations to Luxembourg:
- Continue to focus on a limited number of target countries and maintain efforts to integrate projects into wider strategic programs. The DAC noted the reduction in the number of target countries and encouraged Luxembourg to maintain efforts in this direction. Luxembourg is reinforcing its support for poverty reduction - and is re-configuring its co-operation with several middle-income partner countries, concentrating on the poorest regions and requiring an increased financial contribution from the partner governments.
- Enhance the coherence of national policies with aid policies. Luxembourg's commitment to ensure policy coherence for development needs to be backed by a more systematic approach for a better mobilisation of efforts at different levels of the government. Luxembourg supports developing countries' interests in numerous fora: the Doha trade negotiations, EU efforts to open markets to their exports, and access to affordable medicines. It is concerned about the trade-distorting effects of developed country agricultural subsidies which negatively affect the agriculture, livelihoods and food security of developing countries. It also draws attention to the problems of productivity and development of the agricultural sector in developing countries, as well as problems of access to credit by rural populations.The flight of capital from developing countries and its laundering constitute policy coherence problems of which Luxembourg is mindful. Efforts by Luxembourg to combat the risk of abuse of its financial sector are welcomed and the DAC encourages the Luxembourg authorities to continue the fight against money laundering.
- Co-ordinate intra-government responsibilities for development. Development co-operation falls within the purview of the Ministry of Foreign Affairs. Coordination among the Luxembourg ministries and agencies concerned with development co-operation could be improved through the Inter-Ministerial Committee for Developing Co-operation, taking into account the strategies of developing countries, so as to promote partnership and local ownership. Luxembourg is establishing a number of field offices. This closer collaboration with partner countries provides opportunities for improved management and co-ordination in the field.
The Luxembourg delegation was led by Charles Goerens, Minister for Co-operation and Humanitarian action. The examining countries were Austria and Greece.
The DAC's Main Findings and Recommendations for this review will be on the DAC web site within a week at www.oecd.org/dac/peerreviews . For further information, journalists are invited to contact Helen Fisher, OECD Media-Relations Division (tel.  1 45 24 80 97).
See table and charts .