EU remains the largest aid contributor to Latin America and Caribbean and pledges further investment

Analysis published by India’s Research and Information System for Developing Countries (RIS), reveals that the European Union and its Member States are the largest donors of Official Development Assistance (ODA) to the LAC region with 46 percent of total aid.

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The RIS, a policy research institute based out of New Delhi, produces the Development Cooperation Review (DCR), a policy and academic review focused on South-South Cooperation.

This week’s edition of the DCR includes an analysis of the flow of Official Development Assistance (ODA) from the EU to Latin America and the Caribbean. Dr. Sushil Kumar’s statistics demonstrate that the EU remained the largest donor in the world, doubling their total aid from USD 26.3 billion in 2000 to USD 52.5 billion in 2021, and also remained LAC countries’ largest donor. However, in the same period, the EU’s ODA to Latin America only increased from USD 2.6 billion to USD 3.4 billion, suggesting a relative downward trend.

In 2023, the European Union is placing a strong emphasis on Latin America, making it a key priority. The EU-CELAC Summit at Heads of State and Government level took place last week.

The European Commission, in its 2023 work programme, revealed its intention to propose a fresh strategy aimed at revitalizing relations with Latin America and the Caribbean (LAC).

Additionally, efforts are being made to achieve complete ratification of the updated Association Agreements with Chile and Mexico. Notably, the European Parliament may initiate the consent procedure for the agreement with Chile within this year.

The European Union is closely monitoring significant developments in LAC, such as China’s increasing influence in the region, Brazil’s re-emergence on the international stage, political instability in Peru, and three presidential elections.

Expectations were high for the 8-year long wait for the third EU-CELAC Summit of Heads of State and Government that was held Brussels this month under the Spanish Presidency of the Council of the EU.

During the summit, crucial subjects were addressed, encompassing increased collaboration in international organizations, global peace and security, trade and investment, ensuring justice and security for citizens, as well as initiatives to counter climate change, and enhancing research and innovation.

At the event, the EU introduced its Global Gateway Investment Agenda for Latin America and the Caribbean, committing to invest €45 billion by 2027. The investment will be channelled into four primary areas in the LAC region, namely a just transition to a sustainable and environmentally friendly economy, an all-encompassing digital transformation, human development and health resilience, and initiatives related to vaccines.

CELAC countries were firm in their demand to reduce or eliminate any mentions of the war in Ukraine from the joint declaration expected to be signed by both parties, and they also pressed for reparations regarding colonial occupation. Eventually, all leaders, except Nicaragua, reached a consensus on a declaration that expressed profound concern regarding the ongoing war in Ukraine, but without specifically mentioning Russia.

Brazilian President Lula announced the EU would soon receive a counterproposal to theirs to include further instruments to address environmental concerns. Another meeting was held on the sidelines to discuss how the Venezuelan government and opposition leaders can find a path towards holding free and fair elections. Finally, more follow up meetings are expected to resolve key international agreements, namely on Mercosur – expected before the end of 2023, as well as agreements with Mexico and Chile.

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