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  • on 11.07.2014
  • at 04:40 PM
  • by Kevin Hind

Lapo Pistelli: “Blending is the future: time is ripe for an Italian Development Bank” 0

Italian Development Cooperation is back. This is the message from Italy’s Deputy Minister of Foreign Affairs launched on Afronline.org. A new cooperation with new actors, including the private sector.

It is time for a clear political direction, with a Deputy Minister who can ensure political coherence and a new, leaner Agency devoted to Italian development cooperation actors.

Why not also a Development Bank which can bring new resources and track those already allocated to regional and international Banks and Funds, and provide professional support to all subjects involved in cooperation within the field of new opportunities offered by development finance?

This was the missing piece, and it is not a minor thing. Within the next few months the Italian Parliament will approve a new law on cooperation, marking the end of Law 49 adopted 27 years ago. On many previous occasions, parliamentarians, parties and ministers have unsuccessfully tried to adapt this law to the radical and evident changes brought by the mere passing of time.

Everything changes in 30 years, look at us: our body, our families, the cities we live in, the way we work. In the same way, the world around us has changed dimension, orientation and speed. The geography of rich and poor countries has mutated, a new global dialogue has emerged concerning the next development targets (a long way from the hunger strikes against world hunger in the 1980s). This will define a universal language for 2015: common objectives, instruments, responsibilities assigned to everyone and to each under the aegis of the United Nations and the international community.

It will certainly be a major challenge: defeat world poverty in 15 years – hitting the economic, social and environmental causes of underdevelopment and ensuring the universality of such objectives in the framework of good governance and respect of human rights. This will put those who subscribe to these challenges at risk of failure, of discrepancy between rhetoric and reality.

Thus we have the objective, the final goal. What about the instruments?

The OECD DAC and the EU have highlighted the continuous growth in public support for development despite the economic crisis. Yet they have also reaffirmed that public support, even if everyone was to reach the historical milestone of 0.7% of GDP, would not be sufficient to meet the objectives of such an ambitious agenda. Responding to emergencies, helping developing countries, promoting development amongst those emerging, helping many to bridge their internal inequalities and making these efforts sustainable requires an active involvement of all actors.

It is therefore not by chance – and even less an “ideological” step back – that institutions not only work with civil society and NGOs, but are also increasingly co-involved with the private sector.  In a framework of shared principles, the private sector can bring real and fresh resources, promote innovation and contribute to the inclusive development of emerging countries. This is not merely about highlighting isolated cases of “enlightened business”, but about changing the perception of development and its relations.

In this new law, under discussion by the Italian Parliament, the government intends to complete the structure of “cooperation 2.0”, granting it with what Emilio Ciarlo defined a “Development Bank” (in a debate promoted by Pistelli’s political advisor on vita.it, Afronline’s publisher). As happens with KfW in Germany and AFD in France, this would involve creating an ad hoc department within a public group such as ‘Cassa Depositi e Prestiti’  (the Italian Deposits and Loans Fund) that could be then accredited as an International Financial Institution (IFI) to the European Commission.

Following a subsequent agreement with the Italian Foreign Affairs Ministry and the Agency, the “Development Bank” would manage existing financial instruments efficiently. In particular, it should also guide Italian actors through the great deal of opportunities offered by IFIs and ultimately bring its own funds to Italian cooperation.

The so-called “matching” between public and private resources, the “blending” of grants and loans or between different funds are practices already consolidated by partner countries and call on Italy to catch up. These countries, which we usually consider reference points, not only dedicate more resources towards development assistance and trace their contributions down to banks and international funds, but also multiply these resources through efficient cooperation with the private sector. This is where we intend to elevate our system.

If the Italian Parliament examines the law this summer, the government will then take six months to establish the Agency, its Statute and the convention that will regulate its relations with the Ministry of Foreign Affairs. A similar period could be needed to create a development bank.

Therefore, we are working to make 2015 not only the year of Expo (the Universal Exposition taking place in Milan) and a new Development Agenda but also the birth of the new Italian Cooperation.

Lapo Pistelli, Italian Deputy Minister of Foreign Affairs – VITA/Afronline.org

Translated by Sofia Christensen

Photo credit: Google

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