Coherence of Development Policies

Abstract

This study provides a general analysis of economic relations between Spain, as a donor of official development assistance (ODA), and Ecuador, as a partner and recipient of development aid. It seeks to assess the potential (in)coherence between Spain’s foreign economic activities and the goals of development and poverty reduction that the Spanish government established for its relations with developing countries. Hence, the study's main aim is to determine whether the Spanish government as a whole (and not just Spanish co-operation) is coherent with Ecuador’s development and thus coherent with Spain’s policies on international development co-operation. We therefore analyse the links between the two countries through trade, international remittances, foreign direct investment (FDI) and external debt, from a development point of view. The secondary aim is to offer recommendations to help make Spain’s activities more coherent with development. One main challenge that arises is the lack of an institutional framework for a wider set of relations between the two countries. Although there is an institutional basis for international assistance acitivites, it does not cover other economic activities such as trade or investment projects. As a result, incoherences appear, such as the approval of ODA trade credit lines that are eliminated in debt cancellation agreements a few years later.

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