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Extra info for OECD Development Assistance Peer Reviews: Portugal 2010
Partners may or may not use all the money available in the line of credit. Once a firm commitment for a specific developmental loan within the line of credit is agreed, the value of that loan only can be recorded as an ODA commitment. The terms are fixed for the borrower; the Ministry of Finance provides a subsidy to meet the difference between this interest rate and the current market rates. Procurement under the lines of credit is carried out by the partner countries, but is tied to Portuguese goods and services (Chapter 5).
For example, Portugal’s decision to advocate on behalf of Cape Verde within the European Union was taken after feedback from the field on the potential difficulties arising from Cape Verde’s graduation to a middle income country (Annex D). Portugal could improve its capacity to monitor and analyse policy coherence for development by building on its existing assets and experience. Firstly, development cooperation and line ministries staff based at embassies could work together more regularly. They could collect evidence of the impact of Portugal’s policies and activities in the field and feed their impressions back to respective ministries, IPAD and the institution or DAC PEER REVIEW OF PORTUGAL © OECD 2011 40 – DAC PEER REVIEW OF PORTUGAL co-ordination mechanism in charge of resolving policy incoherencies.
To maximise its positive impact, Portugal should apply the new law; give the co-ordinating institutions the mandate, tools and authority to check for policies that could undermine partner countries’ development; and establish mechanisms for analysing and reporting on the impacts of Portugal’s policies on partner countries. Even before enacting the legislation, Portugal showed commitment to ensuring consistency of its policies with partners’ development objectives in some specific areas. The 2005 Strategic Vision recognised that achieving the MDGs depends not only on official development assistance, but also on “coherence in the different spheres of economic policy” (MNE/IPAD, 2005).