The European Commission’s multiannual financial framework 2014-2020, have decided to reduce bilateral development aid funds for 19 countries starting in 2014. Nine countries of the South American region are included: Argentina, Brazil, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. Although this response has been interpreted within the context of the most severe budget crisis of member countries of the European Commission (EC), the decision is based in two technical criteria. First, the European Commission is reducing aid to upper-middle income countries (GDP per capita between US$3,000 and US$9,400). Second, no aid will be directed to countries above one percent of global GDP.
Nevertheless, non-financial aid will be still be important for South American countries. In fact, the EC is proposing a new type of cooperation, where it encourages developing countries to mobilize their own domestic resources to alleviate poverty and inequality. This opens an opportunity to strengthen South- South cooperation in the region, as well as other emerging mechanisms where developing countries are not merely aid recipients. Nevertheless, this is a trend that may be followed by other donors. By using aggregate macro indicators as criteria to allocate aid, donors may miss some opportunities. Inequality, poverty, and economic and environmental vulnerabilities are austere in vast regions of South America, where development conditions are comparable to those countries where EC’s aid will be allocated in the future. Helping these areas to develop is where EC and South American interest may converge in a post- aid relationship: exchange development approaches, implement interventions and compare outcomes. ( www.fni.pe)
In a sense we could conclude that the current financial crisis gives a great opportunity for the development of south-south cooperation, forcing this countries to search for new challenges and opportunities, diverting the historical and current strategy focused on developed countries aid for a new allocation of human and financial resources that will make the countries build from an “empowerment perspective”.
This step represents a big revolution in developing policies that could contribute to open new routes that leads them to a real boost of Latin-American development´s capacities.