Policy Documentation Center

Vera, Messing

Active Labor Market Policies with an Impact Potential on Roma Employment in Five Countries of the EU

PASOS

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Policy 
Documentation 
Center Feature Article
Official Development Assistance: 
The Case of Nine New EU Member States
From recipients to donors
This publication examines the overall Official Development Assistance (ODA) of nine countries of Central and 
Eastern Europe (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Poland, Romania, Slovakia, and Slovenia) 
which acceded to the EU in 2004 and 2007 respectively. The countries on which this report focuses are all 
post-Communist states which, in the past 20 years, have undertaken deep political, economic and social trans-
formations. In the transition period they were recipients rather than providers of ODA. 
However, the transition to the “new donors” group did not occur for all of them simultaneously. Some coun-
tries, such as the Czech Republic and Hungary, started ODA activities relatively early, i.e. in the mid-1990s, 
largely due to their accession to the Organisation for Economic Cooperation and Development (OECD). Others, 
such as Romania and Bulgaria, remained on the recipient side until the very moment of their EU accession in 
2007. Thus, the countries do not represent a homogeneous group and their track records of delivering ODA 
vary greatly, as will be illustrated further.
These countries’ experiences of delivering development co-operation also vary in another aspect. Some coun-
tries in the group, especially Poland, Hungary, and the Czech Republic and Slovakia (formerly Czechoslovakia), 
acted as development co-operation providers during the communist period.
This assistance was provided in a different context: it was aimed mainly at developing countries such as Cuba, 
Vietnam, Cambodia, Mongolia, Angola, and other communist regimes or regimes inclined thereto, and the Cold 
War context was the main determinant of such aid.
Although this development aid vanished after the fall of communism, these countries have nevertheless estab-
lished a certain reputation as aid providers, including a track record and a network of contacts. This makes it 
somewhat easier for them to engage once again in the poorest regions of the world, especially in Africa or Asia.
On the other hand, countries such as Estonia, Latvia, and Slovenia do not have extensive experience with aid 
provision, as this policy was centralised (either at the USSR or Yugoslavia level), and thus they have largely 
had to build up their development policy from scratch. 
Difficulties in meeting international commitments 
By joining the European Union, all the countries in this report undertook certain commitments with respect 
to the EU development co-operation framework, as enshrined in the European Consensus on Development, 
adopted in 2005. 
Because many of the countries had not yet completed the transition from aid recipients to donors and were still 
in the “catching up” phase in comparison with more established EU members, the commitments required of 
them were formulated more leniently, obliging them to strive for an ODA to GNI (gross national income) ratio 
of 0.17% by 2010 and 0.33% by 2015.
None of the countries examined have managed to meet this obligation, although some of them are faring bet-
ter than others, with Slovenia (0.13%) and the Czech Republic (0.125%) coming closest to the target ratio in 
2011. This failure to meet the commitments is usually explained by the economic downturn of 2008/2009. As 
a result, all the governments in the region decided to cut their development budgets, exploiting the fact that 
ODA represents the least sensitive area for their electorates.
This situation is now slowly ameliorating as economic performance improves. For instance, the Czech develop-
ment co-operation strategy adopted in 2010 pledges to raise the development budget by 0.01% of GNI on a 
yearly basis. Nevertheless, the Czech Republic is failing to fulfil this commitment. 
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The rising importance of multilaterally provided assistance 
Another important implication of the new donor countries’ accession to the EU is the fact that they had to start 
contributing to the EU and international (United Nations, World Bank) instruments of multilateral development 
co-operation, especially the European Development Fund, which is decoupled from the general EU budget. As 
the overall amount of funds for development co-operation is limited, this has largely resulted in a huge rise in 
the multilateral ODA proportion of development budgets and a respective drop in the proportion of bilateral 
ODA. 
For instance, while Hungarian bilateral ODA represented 51% in 2004, its proportion in the Hungarian devel-
opment budget in 2011 was a mere 24%, and in 2008 an even smaller 14%. In the case of some countries, 
contributions to multilateral ODA account for as much as 90% of development budgets, such as in Latvia. The 
Czech Republic channels around 30% of its development budget through bilateral aid, the highest proportion 
from the countries examined. Slovakia, Hungary, and Poland also maintain a relatively high proportion (Slova-
kia 25%, Hungary 24%, Poland 22%).
As much as multilateral assistance stems from international obligations, the countries have to keep in mind 
that bilateral ODA leaves them with greater room for manoeuvre in terms of where the aid is directed, thus 
maximising the added value of each donor country’s experience and know-how. 
Nevertheless, multilateral contributions are predominant in all the countries of the region. 
Institutional and programmatic framework still in the making
Central and Eastern European countries have also had to create a legal, institutional, and strategic framework 
which would facilitate their assumption of the new donors’ role and enable full participation in development 
co-operation policy. The general pattern is that the countries with a longer tradition of ODA provision usually 
have a better institutional and programmatic framework to deliver development co-operation and most of the 
necessary instruments, including strategic as well as individual programmatic documents, already in place.
In all the countries examined, the Ministries of Foreign Affairs (MFAs) assume the major coordinating, strategic 
and programmatic role when it comes to development co-operation. However, the execution of development 
policy is often fragmented, with different line ministries or other agencies exercising important roles in terms of 
setting priorities, approving projects, and disbursing funds. This certainly poses huge challenges to the overall 
coherence, coordination, strategy-setting, and evaluation and monitoring of development aid.
In some cases, however, steps have been taken to centralise policy-making and limit the role of line minis-
tries, which is a practice common in long-established donor countries. The Czech Republic has probably gone 
farthest in this respect, limiting the role of line ministries to only the provision of scholarships by the Ministry 
of Education and the administration of some 15% of bilateral international development cooperation by 2013.
Two of the countries examined – Czech Republic and Slovakia – have established a special development 
agency charged with the implementation, monitoring and evaluation of bilateral development programmes and 
projects – a practice also common in more established donor countries.1 In the case of Poland, the Polish Foun-
dation for International Development Co-operation can be charged with rather limited tasks in implementing 
certain projects and initiatives related to democracy promotion and sharing of the Polish transition experience. 
Another similar decentralised system was introduced in Slovenia, where the execution of some development 
projects can be devolved to four foundations, functioning at arm’s length from the MFA.
Central and Eastern European countries have largely introduced multi-annual strategies and programming, 
which is in line with OECD recommendations and international best practices and which should deliver greater 
effectiveness by clearly articulating geographical as well as thematic priorities of development co-operation.
In the case of Hungary, however, such a comprehensive development co-operation strategy is missing, which 
is quite surprising given Hungary’s rather long track record as a donor country compared to most of the other 
countries of the region.
1 Czech Development Agency (CRA) and Slovak Agency for International Development Co-operation (SAMRS).
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In the case of Bulgaria, the legal framework for programming is in place, but the documents are still in the 
drafting process. Similarly, in the case of Romania, the development strategy dating back to 2006 is considered 
obsolete by many stakeholders. Moreover, the Council for Development Co-operation, which should enhance 
the coherence of development policy at a national level, has not been put in place.
Geographical focus mainly on Eastern Europe and Western Balkans
The design of development policy strategy goes hand in hand with the challenge of defining which geographi-
cal areas and territories should be targeted.
For an absolute majority of the nine countries, the focus lies either on Eastern Europe (countries covered by 
the so-called Eastern Partnership: Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine) or on the 
Western Balkans.
This policy is explained by several factors: historical and existing political, economic and social ties, previous 
experience operating in the region, and cultural and linguistic proximity, all of which make delivery of develop-
ment assistance easier and more effective. This, however, poses at least two challenges. The first is a risk of 
duplication of development co-operation delivery. For instance, Moldova features as a priority country for all 
the CEE countries bar Hungary. Similar overlaps can be found in the case of Ukraine, Georgia, Serbia and other 
Western Balkans countries. The risk of duplication becomes even more apparent when taking into account the 
fact that the thematic priorities of the Central European countries’ ODA are also similar, as will be explained in 
the next section.
The question is thus whether it would make sense to somehow co-ordinate a better division of labour among 
the donor countries. Although the development co-operation policy framework is created at the national level, 
and it is naturally in the recipient countries’ interest to be targeted by as many donors as possible, the actual 
outcome can be counterproductive, and perhaps more could be achieved by better focused bilateral co-op-
eration from fewer donors. The second challenge stems from the fact that the recipient countries of the CEE 
group are usually upper or lower-middle income countries, not the least developed countries. The new donor 
countries’ activities thus seem to go against the spirit of the European Consensus on Development, whereby 
the EU should prioritise the least developed and lowest-income countries and redirect aid especially to Africa.
Currently, very few countries from the region provide development aid to the least developed (lowest-income) 
countries, except for Poland, Hungary, the Czech Republic, and Slovakia.2 Afghanistan is an exception.3
In the case of Hungary in 2011, as much as 37% of bilateral ODA went to Serbia, which is an upper-middle 
income country. By far the largest cumulative recipient of Polish bilateral ODA in the 2007-11 period was China, 
which also belongs among the upper-middle income economies.
Although it can be argued that this consideration is somewhat less important in light of the relatively small 
proportion of bilateral ODA in the overall development budget, it certainly represents further food for thought 
for the Central European countries as to possible reconsideration of their geographic priorities.
An overarching problem of these geographical priorities is that in most cases they are still too broadly con-
ceived, which leaves the rather limited development funds scattered across many different countries with 
arguably limited impact. For instance, Hungarian bilateral ODA was disbursed across 84 countries in 2010.
Some countries have already opted for a drastic reduction in the number of priority countries, which should 
lead to greater effectiveness of development aid. The Czech Republic, for example, has reduced the number 
of programme countries to five (with five other socalled project countries), and decided to phase out develop-
ment aid to some countries.
2 Ethiopia and Afghanistan are programme countries of Czech bilateral ODA, Kenya is a recipient of Hungarian ODA, Poland has as 
bilateral geographical priorities a bunch of low-income countries in East Africa (Ethiopia, Kenya, Somalia, Rwanda, Uganda, Tanza-
nia, Burundi), and Ethiopia, Kenya, and South Sudan are priority countries of SlovakAid.
3 Afghanistan features as an important recipient of ODA among many of the Central and Eastern European countries. However, this 
is largely linked to these countries‘ participation in international civilian missions in the country or their presence in provincial recon-
struction teams, which is also reported as ODA. This somewhat distorts its picture as a systematic recipient or priority of ODA.
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Thematic focus on transition experience and transfer of know-how
Apart from articulating geographic priorities, the countries of Central Europe have also had to define, in line 
with OECD recommendations, the thematic focus of their ODA, maximising their expertise and added value. All 
of the countries surveyed agree that special added value rests in their specific experience related to economic, 
political, and social transition. Thus, this “soft” know-how in areas such as education, capacity-building, train-
ing, and technical assistance constitutes the core priority of their development aid.
Different countries accentuate different aspects of development aid, e.g. in Estonia the creation of e-govern-
ance, in Slovenia women’s empowerment, and in Bulgaria post-conflict reconstruction. 
However, some countries have also identified so-called “hard” thematic priorities related to their expertise in 
areas including water management and sanitation (Czech Republic, Slovenia, Bulgaria), agriculture (Hungary, 
Czech Republic), or economic development and infrastructure (Czech Republic, Bulgaria). The “hard” thematic 
priorities often stem from previous engagement in such activities in developing countries, and are thus more 
visible and present in the cases of countries that have already been development aid providers for some time 
(particularly the Czech Republic).
Article referred to
PASOS Policy Association for an Open Society, ‘Official Development Assistance: The Case of Nine 
New EU Member States’
http://pdc.ceu.hu/archive/00006819/   
 


Official Development Assistance: The Case of Nine New EU Member States

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Real Economy No. 39

 
Better Research, Better Policy, Better Reform 
 
 
 
 
 
 
Azerbaijan Economy in 
2012 
 
 
 
 
© Center for Economic and Social Development (CESD) 
Shirin Mirzeyev 76 "a"/33, 
Baku, Az1002, 
AZERBAIJAN 
 
Phone; (99412) 5970691 
(99412) 4975684  
Fax (99412) 4975684 
Email; cesd.az@gmail.com  
info@cesd.az 
URL; www.cesd.az 
Baku, January, 18, 2013 
 
Azerbaijan Economy in 2012 
 
 
Azerbaijan oil production started to decline rapidly since 2010. In fact, dramatic fall in oil 
industry continues to hamper the country's total growth in 2012.  It was the main reason that 
Government of Azerbaijan (GoA) has adjusted its previous official forecast of 5.7 % GDP 
growth in 2012 to 2.5 % in the second half of 2012. Thanks to affected growth in non-oil sector, 
the country was able to keep growth track last year since State Statistics Committee announced 
GDP growth was 2.2 % in this period. Oil production, however, has still had a profound effect on 
Azerbaijan’s domestic sector. One way to characterize its impact is by looking at the rents 
produced by oil - that is, the returns in excess of production costs - in the Azerbaijan economy.   
 
GDP increased by 2.2 % in 2012 according to State Statistics Committee. The committee reports 
that industry production decreased by 7.8 % in non-oil sector and 4,2 % in oil sector. 
According to the primary calculations done by the state committee, AZN 54,0 billion ( $ 69,23 
billion US) GDP was produced in the reporting period. In this period with current prices in 
amount of AZN 77, 9 billion ($ 100,0 billion US) products and services were produced and it 
was AZN 4.5 billion ($ 5,8 billion US) more than 2011.  
Meanwhile, Azerbaijan's oil output made 43 million tons in 2012.  According to the State 
Statistics Committee, oil output has dropped by 2.4 million tons compare with previous year. 
Considering that oil production in Azerbaijan made 45.4 million tons in 2011 which is a drop of 
5,4 million tons over 2010. In the results, Azerbaijan’s oil production drops by 5.3% in 2012 
 
 
Main Economic Figures for 2012 in Azerbaijan 
 
Main Economic Figures 
 
Government Report CESD Report 
GDP Growth 2,2 %  1,65  % 
Non-oil GDP Growth 9,7 % 7,5  % 
Oil GDP Growth - 5,3 % - 6,0 % 
Inflation Rate 1,1  % 3,0  % 
Industrial Production  - 5,0 % - 7,0 % 
Unemployment Rate 5.2%, 14,0 % 
Currency Reserve $ 46,5 billion N/A 
Monthly Salary $ 516,0 $ 705,0 
Revenues of citizens Increase % 13,8 % 9,0 
Poverty Line 6,0  % 15,0 % 
Source; State Statistic Committee of Azerbaijan Republic and CESD, January, 2013 
Note; CESD used different methods to calculate macro-economic figures including GDP growth 
while an aggregation method and a weighting variable are chosen. Reasons how choices of the data 
source, the aggregation method and the weighting variable create are based on CESD estimation.  
CESD also used oil production forecast and non-oil import and export, the volume of household and 
public consumption, capital formation and private and public investment data, as well as the impact 
of changing inflation on output to forecast GDP. The Center organized focus group discussions 
including meetings with representatives of different state agencies where estimations of 
macroeconomic data are included among the subject issues. 
 
 
 
 
GDP Growth in 2012 
GDP increased by 2.2% in 2012 and reached to 54.0 billion manat- as State Statistics Committee 
reported.  In this period with current prices in amount of 77, 9 billion manat products and services were 
produced and it was 4.5 billion manat more than 2011. Value of goods and services spent to product 
output was formed 23.9 billion manat or 30.7% on output of product and services.  
 Last year non-oil GDP increased by 9.7%, its special weight in GDP increased from 48.8% to 52.7%. 
Correspondingly 47.3 percent of GDP was share of oil-gas production and processing fields and 
decreased by 5.0% compared to previous year.  
Azerbaijan’s oil production drops by 5.3% in 2012 
Crude oil production by all producers in Azerbaijan totaled 320.667 million barrels in 2012 against 
338.467 million barrels in 2011, 379.224 million barrels in 2010, 375.807 million barrels in 2009 and 
332.07 million barrels in 2008. The State Statistics Committee reports that for 2012 the country was 
produced 42.98 million tons that is by 5.3% less than in 2011. It was produced 3.6 million tons in 
December 2012, and the highest production for 2012 was recorded in January – 3.9 million tons. Oil 
stocking reserves by 1 January 2012 totaled 267,300 tons. 
In 2011 the country was produced 45.37 million tons of oil that is by 11.5% less than production for 
2010. In December 2011 the country was produced 3.165 million tons, and the highest production level 
was recorded last year in March – 4.104 million tons. In 2010 oil production amounted to 50.8 million 
tons of oil, including 4.5 million tons in August (the best index for 2010). 
CESD experts mentioned decline in oil production is mainly connected with potential end of oil boom 
in Azerbaijan: Oil production was peaked in 2010. Starting 2011 oil production in Azerbaijan will 
dramatically decrease. Azerbaijani oil production will be kept around 42-44 million tonnes in upcoming 
2 years based on Production Sharing Agreement (PSA).  Meanwhile, the latest predictions confirm that 
oil production will be decreased to about 36 million ton in 2015. Even with current prices of crude oil 
in the world market, SOFAZ’s assets will be totally spent within the budget lines if current 
unbelievable transfers’ level kept. Keeping such fantastic transfers can result in negative consequences 
because of theatrical cutting of budget expenditure lines due to potential lack of financial resources. 
 
 
 
 
Oil export decreased 6,9 %  in 2012 
Azerbaijan exported 34,9 million tons of oil in 2012 which was 6,9 % less than compare with previous 
year.  Of the overall volume of export, 1,99 million tons were exported by Baku-Novorossiysk pipeline, 
3,9 million tons by Baku-Supsa pipeline. BTC exported 27,99 million tons of oil. The railroad exported 
1,01 million tons.  
Over 2011 the country’s oil export reached 37.45 million tons of oil (data of controlling and measuring 
appliances) and cargo custom declarations recorded only 27.825 million tons for $22.911 bn, i.e. 74.3% 
of overall export. Average export price of Azeri oil, according to customs statistics, made up $823.39 
per ton in 2011. 
In 2011 it was carried 30.658 million tons via Baku-Tbilisi-Ceyhan (BTC) named after Heydar Aliyev, 
3.812 million tons via Baku-Supsa pipeline, 1.996 million tons via Baku-Novorossiysk pipeline and 
982.801 tons by rail via Baku-Batumi route. 
In 2010 the country exported 31.86 million tons of crude oil for $18.45 million versus 27.829 million 
tons for $11.989 million in 2009. 
By 1 January 2011 the pipelines pumped (data of controlling and measuring appliances) 4.414 million 
tons of oil (including 3.066 million tons in December) against 41.29 million tons in 2009 and carried 
1.24 million tons (70,626 tons) by rail against 1.399 million tons. 
It was pumped 2.247 million tons out of the total transportation via Baku-Novorossiysk oil pipeline in 
2010 (against 2.48 million tons in 2009), 35.18 million tons (34.57 million tons) via BTC, 3.985 
million tons (4.235 million tons) via Baku-Supsa oil pipeline. 
In 2008 the average export price of Azerbaijani oil reached $565.67 per ton (including $373.89 per ton 
in December of that year), in 2009 - $430.83 per ton ($547.66 per ton in December), in 2010 - $579.19 
per ton ($630.18 per ton). In 2011 the average export price was $683.65 per ton. 
Income of population increased by 13.8 % in 2012 
According to the results of 2012 income of population compared to the previous year increased by 
13.8% and reached to 34.7 billion manat. Volume of incomes on per capita was on average 3784.3 
manat or 315.4 manat in a month. Growth of per capita income increased by 12.2% and exceeded 
increase of consumer prices by 11.1%, i.e in fact per capita income increased by 11.0 %.  
The State Committee reported inflation was 1,1 % meanwhile the figure is 3.0 % in 
independent calculations 
According to the State Committee price and service tariffs of consumer goods increased by 1,1 
%  in 2012 compared to 2011. The CESD survey verifies that inflation was 3,0 % in indicated 
periods. Price increasing observed mainly in food products particularly meats.  
The official exchange rate is 0.7854 manat to $1 on January, 18,  2013 
© CESD, 2013 
 
 61.0 % of income was directed to the final consumption, 8.6 % - to the taxes, social insurance and 
membership dues, 1.1 % - to the payment of percents on credits, 29.3% - to the growth of deposits and 
capitals.  
 Income in the population disposal made up 31.7 milliard manat and increased by 13.8% compared to 
the previous year 
Foreign Trade: Oil Still Dominates 
During January-November, 2012 legal and natural entities registered in Azerbaijan made up trade 
operations with 154 partners of world countries. According to the statistical data turnover of foreign 
trade was formed 39, 473 billion US dollars, 8, 444 billion dollars of it size was share of import, 31, 
028 billion dollars – export and in amount of 22,583 billion dollars positive balance was created.  
 Export on non-oil products was in amount of 1, 477 billion dollars and exceeded the level of January-
November 2011 by 11.2%.  82.7 % of foreign trade operations were realized with Italy, United States 
of America, Russian Federation, Turkey, Israel, France, Indonesia, India, Germany, Greece, China, 
Taiwan (province of China), Great Britain, Republic of Georgia, Czech, Bulgaria, Ukraine and 
Malaysia, the rest (17.3%) were realized with other countries. 
 


Azerbaijan Economy in 2012