THE DEVELOPING WORLD
The EU’s development aid shortcomings have given birth to a new “Brussels consensus”
Summer 2007
The EU is, we often hear, the world’s No 1 aid giver. But according to Swedish MEP Anders Wijkman it has also been the most chaotic donor. He examines the EU’s new Development Policy Statement, for which he is the European Parliament’s Rapporteur
EU development policy has suffered from many shortcomings, the most obvious one being the serious lack of cooperation in the whole development field between member states’ national programmes and including the Community aid effort. Recipient countries have had to face far too many different donor requirements, rules and conditions, and in many of them hundreds if not thousands of programmes have been run parallel to each other − financed either by Community aid or by individual member states − with no coordination whatsoever. The result has been high transaction costs, wastage, duplication of work and serious complications for the EU’s partner countries.
Another serious problem has been Europe’s embarrassingly obvious lack of policy coherence. Many donors give with one hand and take with the other. Criticisms of EU trade policy are well known, and it has even been estimated that if our import quotas and our border tariffs in key product areas were to be abolished, the resulting gains for developing countries would by far exceed official development assistance (ODA). Among the examples of EU wrong-headedness there is the charge that many of the fisheries agreements between the EU and developing countries seem to be geared towards favouring EU fishing fleets rather than those of developing countries.
And then there is the failure of industrialised countries to effectively address the problem of greenhouse gas emissions. True, the EU has tried to give leadership on climate change policy, but its efforts so far have been half-measures. Many developing countries already face serious consequences because of climate change, but have received very limited help in terms of adaptation.
Against this backdrop, the initiative in early 2005 by Commissioner Louis Michel to review the development cooperation policy of the EU was an important and long overdue decision. Although by far the largest aid donor in the world, the EU has long lacked a coherent development policy with regard both to substance and procedures.
After almost a year of intense discussion involving all major stakeholders, the review process was brought to a close 18 months ago, in December 2005. The resulting document – the European Consensus on Development (DPS) − represented a huge step forward. For the first time, the European Commission, the EU’s member states and the European Parliament agreed a set of objectives and principles for development cooperation activities and expressed them in the Paris declaration of March 2005. The new policy therefore represents a serious response by the EU to the ongoing efforts for greater harmonisation of how donors should plan and deliver their aid.
The DPS policy statement includes an important section where the role of the EU Commission in development cooperation is clearly defined. Until now, the Commission has very much acted as a 26th donor of the Union, but through the DPS, the Commission, while maintaining a high degree of flexibility, is given a more precise mandate that emphasises its complementary role to that of the member states. The Commission is expected to provide added value. The idea is that it should be able to do so thanks to its global presence and expertise as a delivery agent, its role in promoting policy coherence and best practice as well as in facilitating coordination and harmonisation. Its other assets are its neutral image, its role in supporting democracy, human rights, good governance and respect for international law, and in promoting the participation of civil society.
Although the EU together with its member states is the world's single largest aid donor, the lack of coherence and coordination has so far meant that the Union seldom speaks with a single voice. This means that the EU has much less influence on the international development agenda than it should have, so a primary objective of the DPS is to promote a “European Consensus” on development issues.
The primary, overarching objective for EU aid is the eradication of poverty within the sustainable development framework. Attainment of the Millennium Development Goals (MDGs) is of particular importance, and therefore guides the action agenda of Community aid, so the DPS strongly emphasises the need to allocate a greater share of development aid to low-income countries.
The MDGs focus attention on poverty-related targets; because people must always be at the centre of development, efforts, investing in their education, health systems, nutrition and social security is paramount. Yet there is also a risk that by paying attention primarily to the MDGs, which mainly address important social needs, other critical aspects of development will be neglected. That’s why the DPS also gives emphasis to investment in wealth generation and support for entrepreneurship, job creation, access to credits and technologies and also to property rights.
Another important area that is surprisingly absent from the MDG agenda but is to receive primary attention by the DPS, is support for natural resources management. The developing world’s rural poor are generally more dependent on the Gross Biomass Product than on the GDP, hence the protection and regeneration of forests, soils, fresh water and marine resources need to be crucial components of our poverty reduction strategy. High priority is also given to the promotion of democracy, respect for human rights, good governance and anti-corruption.
The DPS stresses that all development cooperation activities should be anchored in the principles of ownership and partnership, in-depth political dialogue, the participation of civil society, gender equality and a continuous engagement towards preventing state fragility. Developing countries bear the primary responsibility for their own development, of course, but that doesn’t mean the EU should not share that responsibility as well as a degree of accountability.
Where circumstances permit, the use of general or sectoral budget support should increase, as a means to strengthen ownership, to support partner’s national accountability and procedures, to finance national poverty reduction strategies and to promote sound and transparent management of public finance. It seems abundantly clear that aid transfers will increase significantly in the years to come, not least from the EU, and that’s a strong argument in favour of more sectoral and budget support.
But if a doubling of European aid in line with the EU’s Monterrey commitment in 2001 were to translate into a doubling of projects in the field, we would not be able to act responsibly. Already there are simply too many parallel aid programmes and projects in most recipient countries. In Tanzania, for example, there are presently more than 600 health projects of less than €1m each, most of them in combating HIV/Aids. The transaction costs are extremely high because of poor coordination and duplication. But budget support should only be used where the conditions are right. One suggestion made during the DPS process that deserves attention, is to actively involve national parliaments in recipient countries in the overall monitoring of both budget and sector support.
In a nutshell, the new European Consensus on Development offers hope that the focus within the Union will shift towards the effectiveness and quality of aid. Nobody doubts that the amount of aid is important – and recent decisions to increase aid volumes are more than welcome – but for too long the debate over aid has been preoccupied more by numbers and less by results and impact. If we are to meet the MDGs, this has to change.
The DPS is by no means perfect. I would have liked to see a more serious attempt to define EU aid’s top priorities. I don’t question the need for the Union as a whole to be engaged in all major areas of development, but issues that merit special attention are trade reform, HIV prevention, good governance, conflict prevention and adapting to climate change. If these are not effectively tackled, other aspects of our development effort risk being in vain.
The climate change issue is worth particular attention. The latest reports from the International Panel on climate change (IPCC) underline the importance of disaster prevention and risk reduction. With hundreds of millions of poor people already living in high-risk areas for earthquakes, heavy storms, floods, landslides and severe droughts, and with natural disasters more frequent and violent, many countries find themselves caught in a vicious cycle of loss and recovery that robs them of their ability to move forward. It is estimated that more than half of the populations of low-income countries will by 2020 be living in high-risk areas for heavy storms and floods. The only possible way to tackle their increased vulnerability will be to manage disaster risks as an integral part of development planning, rather than as a humanitarian issue. The EU should be taking the lead here by promoting a much more integrated approach to disaster management.
The DPS is a step in the right direction, but as ever the devil will be in its implementation. The Commission’s initiatives so far to bring about closer harmonisation in the field of donor requirements, rules and conditions have not been applauded by all the member states. The process adopting national aid policies to a common position on priority countries and topics is a politically sensitive issue in most member states. That’s why legislators all over Europe, including those in the European Parliament, now bear a heavy responsibility to monitor the new process now getting under way.
Anyone with experience of development cooperation knows that action is badly needed to make our aid more effective. We’ll just have to hope that the joint efforts of the Commission, member governments and legislators all over Europe will mean that the DPS is implemented, and implemented effectively. Of course we owe that to the world’s poor, but we also owe it to the European taxpayer.