General information on Belgian development cooperation
The Directorate-General for Development Cooperation and Humanitarian Aid (DGD) is responsible for managing almost two third of Belgium’s ODA. It is responsible for planning, guiding, supporting and following up on governmental development cooperation programmes. Some ODA budgets are managed by other directorates within this federal public service and other federal public services are also key players.
As per the May 1999 Law, Belgian development cooperation has been focused on sustainable human development with a particular emphasis on the reduction of poverty. Since 2003, its governmental bilateral cooperation has been concentrated on 18 countries,13 in Africa and 10 in the group of Least Developed Countries (LDCs).
The focus of Belgian development cooperation is to assist partner countries with the implementation of their individual poverty reduction strategies. It is monitored by the Belgian embassies’ development cooperation attachés. All government development programmes are implemented by Belgian Development Agency (BTC) Governemental cooperation activities are limited to: healthcare, education, agriculture and food security, basic infrastructure and social development. Gender equality, social economics, respect for the environment and the rights of the child were cross-cutting topics which must be taken into account by all aid programmes.
A fully new Law on Belgian Development Co-operation has been presented to by the Belgian Parliament in 2012. It should come into force in 2013.
This new law will form the legal foundation for the principles and methods of Belgian cooperation, reflects the need for a thorough revision of the previous law after 12 years in order to be more in alignment with the changing international context and the new challenges with which development cooperation is confronted: the arrival of new players in development funding, the larger role of civil society and the challenges associated with global public goods (access to healthcare, combatting AIDS and other pandemics, maintaining natural resources, etc.).
Today, development cooperation represents a dual challenge. On the one hand, it is critically important that aid is allowed to work more effectively. On the other hand, in a context within which the effect of other policy measures on this aid is growing ever larger, it is fundamental that policy consistency be guaranteed in order to benefit development cooperation. For example, the situation in which efforts made with regard to development cooperation are undermined by other policy measures, which are sometimes taken within the same countries or institutions, must be avoided.
The new law is therefore also intended to:
- Make Belgian official development aid more effective through better alignment with policy in the receiving countries, which are responsible for their own development, through improved coordination among (among others, the European) donors; and through a more results-oriented approach and the further development of a democratic development policy in the countries, together with the local civil society;
- Make the aid more sustainable, with an integrated approach concerning climate change and with attention paid to the three pillars of sustainable development (economic, social and environmental);
- Strengthen policy consistency thereby benefiting development cooperation;
- Base Belgian Development Cooperation on an approach that is founded on rights, in which the social-economic and cultural rights (health, education, decent work, housing, food, etc.), civil and political rights (discrimination, freedom of expression, etc.), and the right to development are key points.
Economic development is an essential element for developing countries to rise up out of poverty and free themselves from dependency upon aid, but of course, not under just any circumstances. Based on the ILO’s Decent Work Agenda, the Law puts the social economy, the strengthening of local production capacity, local entrepreneurship, fair trade, etc. on equal footing. This approach then considers development cooperation to be more a question of justice than of charity.
Three others important documents concerning Belgian Co-operation will signed or prepared in 2013:
- New Royal Decrete concerning actors of the non governemental cooperation;
- New Convention between DG D and CTB;
- New convention between DG D and BIO (Belgian bank for investments in development countries).
Early 2013, DG D will provide the Ministry of Development Co-operation with a project of new strategy for PSD (private sector development).
That means that the Belgian development cooperation landscape will be radically modified in 2013.
Aid for Trade (AfT) Strategy
The Belgian Aid for Trade Strategy was approved by the Belgian Minister for Development Cooperation in June 2008 and is in line with the EU Aid for Trade Strategy approved by the Council of the European Union in 2008. It defines the framework for Belgium’s contribution to the EU’s trade-related assistance (a subcategory of AfT). Belgium aims, through its AfT strategy, to add value to its ongoing development cooperation activities and to maximize aid effectiveness in line with the Paris Declaration and the European Union’s Code of Conduct on Complementarities and Division of Labor.
The principal areas of intervention are:
- Institutional support;
- Support for local, sustainable agricultural enterprises and for small and medium companies.
Linked to its AfT strategy, Belgium recognizes the role of the private sector as a key player for poverty alleviation.
The Belgian Investment Company for Developing Countries (BIO) plays a key role in furthering the Belgian Government’s support for trade finance projects as well as its supply capacity programmes, particularly in the agricultural and agro-processing sector. A major part of Belgian AfT goes through BIO (55%) and is intended for small and medium enterprises. BIO aims at promoting a strong private sector in developing and/or emerging countries.
Geographically, Belgium directs its AfT funding mainly to African LDCs . Belgian AfT is channeled through a number of mechanisms at multilateral, regional and bilateral levels. At the multilateral level, it has been an active member of the Enhanced Integrated Framework since 2008, and an important part of its AfT has been channelled through multilateral partners such as the World Bank, regional development banks, UN agencies, CGIAR and the European Commission.
Some Belgian NGOs are also deeply involved in AFT programmes.
To support its AfT strategy, the Government of Belgium has revamped some of its previous trade entities. The growth of fair trade and sustainable trade and the rise of the concept “aid for trade” have led to the broadening of the Fair Trade Centre’s mandate; in 2009, it has consequently been renamed the Trade for Development Centre and, in addition to promoting fair trade and supporting promotion activities, is also responsible for ensuring that trade issues are integrated into Belgium’s bilateral programmes and for providing support to the bilateral trade offices of Belgian development cooperation, with technical support in the area of trade.
As already mentioned, the AFT component of the Belgian Cooperation policy, will probably be deeply modified during and after 2013.
Principal official agency responsible for TCB assistance to developing countries
Directorate-General for Development and Humanitarian Aid (DGD)
Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation
Rue des Petits Carmes, 15
Tel: +32 2 501 8111
Directorate-General for Development Cooperation and Humanitarian Aid (DGD) is the Belgian federal administrative body for development aid with overall responsibility for the implementation and strategic oversight of development policy, including AfT and trade capacity building. It is a Directorate-General of the Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation, and reports directly under the Minister of Development Cooperation. The DGD is directly and indirectly responsible for managing almost two thirds of Belgian ODA. It is responsible for the preparation and budgetary and statistical co-ordination of cooperation programmes, and for ensuring the coherence of development policies. It only directly manages (with implementation by the BTC) about one-third of the volume of aid entrusted to it. The DGD’s organization was modified in 2012. It has four operational directorates (Geographical direction, Thematic Direction, Civil Society, Management of the organization).
For more information: http://www.dgcd.be/en/
Other government and official agencies with responsibilities directly relevant to TCB
Belgian Investment Company for Developing Countries (BIO)
Avenue de Tervueren 188A b4
Tel: +32 2 778 9999
Fax: +32 2 778 9990
Belgian Investment Company for Developing Countries (BIO): BIO is the main instrument for Belgium’s private sector support in developing and emerging countries. Established by the Law of 3 November 2001 as a public limited company whose shareholders are the Belgian state and the Belgian Corporation for International Investment (BMI-SBI) , BIO’s mission is to support the development of a strong private sector in developing countries, and in particular to contribute to the growth of local Small and Medium Enterprises (SMEs). BIO achieves its mission by providing tailored long-term financing (equity, quasi-equity, debt and guarantees) at market conditions to financial institutions, investment funds, enterprises and private infrastructure projects. Through its Capacity Building Fund, BIO is also able to fund technical assistance programmes for client companies, and to co-finance feasibility studies. BIO works as a catalyst by operating in regions that are generally overlooked by commercial banks because of the high risk factor. BIO supports projects with a balance between return on investment and development impact, hence taking into account indicators that contribute to sustainable development and bring a viable socio-economic added value.
BIO operates as an additional partner to the traditional financial institutions and BIO requires its business partners to implement environmental, social and governance standards. BIO is a member of EDFI (European Development Finance Institutions).
Belgian Development Agency
Rue Haute 147 Hoogstraat
Tel: +32 2 505 3700
Fax: +32 2 502 9862
Belgian Development Agency (former Belgian Technical Cooperation (BTC) was established in 1998 as a public-law company with social purposes. Under the mandate of the Directorate-General for Development (DGD), it works in cooperation with the partner country and is responsible for implementing projects and programmes of developing countries in their fight against poverty. In addition to its activities on behalf of the Belgian State, BTC also performs tasks for third parties. These tend to be more specific assignments for any public body in Belgium (e.g. municipalities, regions, provinces and communities), abroad (e.g. DFID) or at international level (e.g. the European Commission or the World Bank). It manages more than 200 projects in 30 countries in Africa, Asia and Latin America. Additionally, it manages study grants and traineeships awarded by the DGD (on average 1,000 per year) as well as the Junior Programme for Development Cooperation.
BTC is represented in the partner countries by “resident representatives” who are responsible for overseeing the implementation of programmes and projects, and from whose ranks BTC recruits project experts and participants.
Trade for Development Centre (TDC)
Rue Haute 147 Hoogstraat
Tel: +32 2 505 3700
Fax: +32 2 502 9862
Trade for Development Centre (TDC) is a Belgian Development Agency (BTC) programme to promote fair and sustainable trade. It gives smallholders in the South the opportunity to develop in a sustainable way.
It works around three main themes:
Other official or government trade-related organizations
Federal foreign trade institutions
Belgium counts on three federal players to support exports: the Agency for Foreign Trade, the FINEXPO committee and the National Delcredere Office.
The Agency for Foreign Trade
FPS Foreign Affairs, Foreign Trade and Development Cooperation
rue des Petits Carmes 15
1000 Brussels, Belgium
Telephone number: +32 (0)2 501 81 11
The Agency for Foreign Trade, which supersedes the Belgian Foreign Trade Office(OBCE/BDBH), has been running since March 2003. The Agency is defined as a “service centre” for regional institutions promoting foreign trade, and it serves these institutions directly.
The Agency is responsible for:
- Deciding on and organising joint trade missions on the initiative of one or more Regions or at the request of the federal authorities;
- Organising, compiling and disseminating information, studies and documentation on foreign markets for regional services responsible for foreign trade;
- Tasks of common interest decided unanimously by the Board of Directors.
FPS Foreign Affairs, Foreign Trade and Development Cooperation rue des Petits Carmes 15 1000 Brussels, Belgium Telephone number: +32 (0)2 501 81 11
FINEXPO is an interministerial advisory committee which is managed by the Administration of the Ministry of Foreign Affairs. It is chaired by the Director-General of Bilateral Relations at the Ministry of Foreign Affairs, while the vice-chairman is provided by the Ministry of Finance. It comprises representatives of the Ministries of Foreign Affairs, Foreign Trade, Development Cooperation, Finance, Economy and the Budget, and also includes representatives of the National Delcredere Office and the Regions.As mentioned previously, Finexpo studies the dossiers submitted by companies and/or banks seeking public aid for export credit.
The main objectives are:
- To allow Belgian companies which are negotiating a contract and competing with companies from other countries to offer appealing and competitive financing.
- To allow Belgian companies to conduct projects in developing countries, and thereby contributing to their development.
- There are two types of State involvement: one enabling financing to be offered at competitive market conditions, and the other making it possible to grant public aid for projects carried out in developing countries.
There are five instruments: the first – interest stabilisation – relates to loans financed at market conditions, whilst the four others – interest subsidies, interest subsidies with a grant, grants, and State-to-State loans – enable aid to be provided.
Finexpo was set up by the Royal Decree enhancing the effectiveness of instruments for financial assistance for exports and the Royal Decree of 15 July 1997 laying down the composition and the terms of reference of the Finexpo Committee. The text of these decrees is included in the Finexpo documentation and can be found on the Finexpo website. The decrees determine which ministries are competent to grant public support and assistance and also lay down the methods of State involvement.
The National Delcredere Office
The National Delcredere Office (ONDD) is the Belgian public credit insurance company with a mission to promote international economic relations. The ONDD performs this task as an autonomous government institution enjoying state guarantee. The ONDD insures companies and banks against risks related to international commercial transactions, mainly with respect to capital goods, industrial projects, and contracted works and services. To cover these risks, the ONDD also works alongside with banks under risk-sharing schemes. Two major types of risks exist: the political risk (upheaval, revolution, war, but also natural disasters), and commercial risks (the inability or unwillingness of the buyer to comply with its obligations). The ONDD also covers foreign exchange risks and participates in export financing arrangements. To a large extent, activities focus on non-OECD countries since these markets bear a higher risk to Belgian exporters and traders (the ONDD does not insure against export risks in all countries in the world).
The commitments assumed by the ONDD are guaranteed by the State, while part of the political and the commercial risks assumed around the globe is reinsured internationally. For that reason, the ONDD is active in credit insurance working groups within the European Union, the OECD, as well as the Berne Union (International Union of Credit and Investment Insurers). In addition, the ONDD forms part of the Belgian representation in the Paris Club, where it considers the export related private sector credit component of the debt portfolio. The ONDD has set up an array of insurance instruments that can be used according to specific needs. As far as FINEXPO transactions are concerned, it should be noted that:
- State-to-State loans do not count with a financing insurance to the Bank. It is in fact the State itself that provides the insurance. The exporter insures the export transaction (goods or services, and with or without State guarantee) of which the premium payment forms part of the value of the transaction; and
- Interest subsidies: the ONDD insures the financing risk to the commercial bank in Belgium. The ONDD sets the premium based on the political risk and the company underwriting. The premium is part of the total transaction cost.
Regional foreign trade institutions
The law of 13 July 2001 enables the Regions to pursue their own policy on commercial outlets and exports. Such a regional approach to trade has made export funding more readily available to individual companies.
AWEX - Wallonia Foreign trade and Investment Agency
Place Sainctellete 2
1080 Brussels, Belgium
AWEX - Wallonia Foreign Trade and Investment Agency
The AWEX is in charge of promoting Walloon foreign trade and it deals with foreign investors in the Region. The board of Directors of this public interest organisation represent equally the Walloon government, employer organisations, and unions.
The main mission of AWEX is to:
- Increase international visibility and improve the attractiveness of Wallonia;
- Strengthen the professionalism of exporting companies;
- Contribute to the annual increase of Walloon exportations, outperforming European rival regions;
- Broaden the geographic and sectoral ranges of the markets;
- Ensure an after-sales service.
Avenue Louise 500
Tel : +32 (0)2 800 40 63
Fax : +32 (0)2 800 40 01
Brussels Export is a partnership between the Foreign Trade Department of the Ministry of the Brussels Capital Region and BECI, Brussels Enterprises Commerce and Industry. BECI was established in 2007 and encompasses the services of the Brussels Chamber of Commerce (KHNB) and of the Union of Brussels enterprises (VOB), as well as over 150 professional associations and inter-professional organisations.
Unlike FINEXPO at the federal level, Brussels Export does not provide financial facilities for the transactions themselves, but supports the facilitation of an enabling environment.
The government of the Brussels Capital Region supports export promotion through an array of services.
Flanders Investment Trade – FIT
Rue Gaucheretstraat 90
BE-1030 Brussels – Belgium
Tel:+32 2 504 87 11
Fax:+32 2 504 88 99
Flanders Investment Trade – FIT
Flanders Investment & Trade aims at promoting sustainable international business both in the interest of companies in Flanders and to foreign companies through synergies and the expansion of networks and expertise achieved by the merger.
Flemish policy supports sustainable and ethically responsible entrepreneurship. Three quarters of Flemish exports are directed to European partners.
The development component of FIT’s activities has become more important as the agency is now involved in emerging markets and markets in developing countries.
Selected TCB programmes and initiatives in this guide
LEGAL AND REGULATORY FRAMEWORK
- EAC Partnership Fund
- Trademark East Africa (TMEA) Burundi Programme
- Beekeeping Improvement Project − Tanzania
- CenfroCafe − Peru
- Development of dairy farming − Vietnam
- Development of traditional fishing and aquaculture − Democratic Republic of Congo
- Producer Support Programme
- Supply Chain and Logistics Development Programme (SCLP) – SADC
COMPLIANCE SUPPORT INFRASTRUCTURE AND SERVICES
- Trade for Development Centre
TRADE PROMOTION CAPACITY BUILDING
- Ex-Change programme for improving entrepreneurship
- Income generating activities in Coastal Regions – Kigoma, Tanzania
MARKET AND TRADE INFORMATION
- Go North Help Desk
- Restructuring the central and provincial departments of the Ministry of Agriculture, Fisheries and
- Animal husbandry − Congo
- Strengthening the Textile Research Institute (TRI) − Vietnam
- Cooperation agreement with the East African Community (EAC)
- Port friendship through port knowledge
TRADE RELATED FINANCIAL SERVICES
- Access to Coordinated Credit and Enterprise Support Services in Vietnam
- BIO loan support to AGB Technoprint − DRC
- BIO loan support to SOADF Industry SA − Mali
- BIO Loan to Banco Comercial e de Investimentos (BCI) :
- Micro-Finance Support Project − Senegal (PAMIF 1)
OTHER TRADE-RELATED SERVICES
- Trade Development Centre