Brussels, 13/10/2011 (Agence Europe) - There must be a positive outcome for every penny spent - this is the leitmotif of the European Union's development policy for post-2013, as set out by the European Commission in two reports published on 13 October on increasing the effectiveness of EU development aid, which makes up no less than 56% of total development aid around the world (€53.8bn in 2010). The first report is on increasing the impact of the EU's development policy - a programme for change. It lays the foundations of a development policy governed by an overarching approach rather than country-by-country, and that focuses expenditure on areas key for inclusive, sustainable development of developing countries. It will focus on countries with the greatest need for foreign aid (not emerging economies therefore) and situations where aid can truly make a difference. The second report is on the future approach to budget aid for non-EU countries and sets out how such aid to governments in developing countries should take the same effectiveness approach.
Providing more than 50% of world aid, the EU is the leading donor around the world and EU Development Commissioner Andris Piebalgs said he wanted to ensure the EU also provided the most effective aid because the world had changed and this needs to be reflected in how the EU tackles poverty. Piebalgs said he wanted to ensure every euro of EU aid reaches the people who need it the most because EU aid is a catalyst for change, not a panacea. In key areas, the EU aid can make a real difference, he added.
Increasing the impact of the EU's development policy. The new programme will also focus aid on good governance, including respect for human rights, gender equality, democracy, gender equality, the role of civil society, tackling corruption, food safety, social welfare, health and education (which should receive at least 20% of EU aid), developing an entrepreneurship-friendly environment, expanding regional integration, sustainable development and access to clean energy. At the same time, safeguards are needed to protect against external shocks and convert food safety problems into genuine
prospects for growth.
In order to deploy more resources in these hard times, the EU will be examining innovative ways at its disposal to finance development, for example by combining subsidies and loans. The joint aid programme (Commission and member states) will also help to achieve the aim of aid effectiveness.
Commissioner Andris Piebalgs told reporters that the essential part of the approach consists in linking results to human rights and eradication of poverty. There have been many positive developments in the developing countries, he said, going on to explain that, for the Busan Forum (on aid effectiveness), most developing countries have credible programmes but donors have not delivered the aid according to the Paris Declaration. “We are not calling for a new international framework”, the commissioner said, adding: “We are sticking to the Millennium Development Goals. By 2015, the level of EU aid should have reached O.7% of the EU's GNI”. Speaking to a journalist who asked whether respect of human rights was a new conditionality of aid, Piebalgs replied: “It is the essential criterion that we shall use to ensure our policies are credible. It is the completely honest commitment of two parties to make sure they know what is expected. It is intelligent conditionality. The Arab Spring has taught us a great deal. One must not sacrifice fundamental considerations for the sake of security. If there are doubts about a country, then other ways must be found to help the people (through charities, civil society)”.
A new contractual approach for budgetary support. The Commission considers that budgetary support should contribute to combating corruption and fraud, helping countries to reinforce their own financial resources and reduce their dependency on long term aid. As a supporter of keeping the channel for aid open, the Commission suggests that, in order to increase aid effectiveness, contractual partnerships with developing countries should be strengthened. The setting in place of contracts for good governance and development will make it possible to provide general budgetary aid when the partner country can demonstrate its commitment in favour of fundamental values. The EU will place greater emphasis on human rights, democracy and rule of law, by giving priority to dialogue with partner countries, by creating incentives to reform and by calling on countries concerned to pledge to abide by fundamental values. Improvement of services rendered at sectoral level will require “sector reform contracts”. Sectoral budgetary support remains a useful tool even when conditions have not been met for concluding a contract of good governance and development.
Budget support will be used in fragile countries on a case by case basis to ensure vital state functions and support the transition via “state-building contracts”.
In spring 2012, the Commission will invite EU foreign affairs ministers to approve this new budgetary support approach.
NGOs give mixed response. Development NGOs gave a mixed reaction to the new agenda. Oxfam “applauds” the Commission decisions to make priorities of health, education and agriculture as “these sectors have the greatest impact on improving the lives of those most in need”. It finds it shocking, however, that no real lines have been drawn to define the role of the private sector in development and that aid has been cut to some middle-income countries, “where 72% of the world's poorest people live”.
CONCORD, the confederation of European development NGOs, welcomes the stress laid on good governance and human rights, and the recognition of civil society organisations. It regrets, however, that “the most important change in Piebalg's new agenda is that aid to the world's poorest is being cut, diverting funds towards energy, and private sector investments which are in the interest of the EU only, not the developing world”.
Asked to respond to these criticisms, Piebalgs pointed out, with regard to the removal of emerging countries, that too much dispersal would not help the most fragile. He added: “We welcome the fight against poverty in China, India and Brazil. These countries are now able to meet and deal with the challenges. Some have even offered to help the EU stabilise the euro. There can be no valid justification for giving aid to the BRICS countries. From 2014, there will have to be a differentiation made between countries with low incomes and those with intermediate incomes. Development criteria will be the decisive factor”. It will be the end of the year before an exhaustive list is available, he said. As for the private sector, he added: “I can assure you that our aid is to help the people. By working through the private sector, we help create jobs. The private sector must be constantly under the scrutiny of the authorities”. (AN/transl.fl/jl)