Select Committee on International Development Minutes of Evidence

Memorandum submitted by Mrs Glenys Kinnock MEP


  1.  In May 2000, the European Commission adopted a wide-ranging reform package to improve the management of EU external assistance. This implementation of these reforms must be seen in the context of the comprehensive administrative and financial overhaul of the Commission. The reform agenda is complex, long term and will need the commitment of, not only the Commission, but also the European Parliament, Member States and partner countries in the South.

  2.  It will take at least three years to implement the reform package in full, but it is broadly on track. It is, however, questionable whether—after only 18 months—it is possible to provide a comprehensive analysis of the progress which is being made. At this stage, we can only really make a judgement about the structural changes which have taken place. Ultimately, we will only be able to measure the success of the reforms on the ground.

  3.  Over the last decade, many questions have been asked about the impact of international development co-operation. Issues of concern have included the high cost, and questionable effectiveness, of expatriate technical assistance, the proliferation of uncoordinated projects, high administrative costs, the lack of country ownership, cost and time overruns, and a disappointing record on sustainability. The reform of EC external assistance is taking place in the context of a number of other international reform initiatives, which have attempted to address these criticisms. The OECD's Development Assistance Committee, the World Bank and the UNDP are leading this process, and new mechanisms, such as the Comprehensive Development Frameworks (CDFs), Poverty Reduction Strategy Papers (PRSPs) and sector-wide approaches (SWAPs), are currently being tested. It is critical that the EC continues to liase closely with other donor agencies in order that lessons can be learnt, and best practice can be shared.

  4.  The EU now has a clear policy framework which makes poverty reduction the central objective of all EC development cooperation. This priority is reiterated in a number of recent agreements governing relations between the EU and third countries. For example, the EU/ACP Cotonou Agreement, which was signed in June 2000, and which puts poverty reduction, and the achievement of the OECD International Development Targets, as the overriding objective of EU-ACP partnership. In May 2001, the Commission adopted a rolling Programme of Action which outlines how it will implement the Development Policy Statement, and sets out a timetable for action.

  5.  In an effort to improve its programming the Commission is currently preparing Country and Regional Strategy Papers (CSP's), which will set out a "strategic framework" for the EC's relations with third countries. This is an important step forward and has the potential to improve the focus and clarity of the EC's work. It also places the partner country firmly in the driving seat in the preparation of a national development strategy.

  6.  The creation of an inter-service Quality Support Group to monitor the quality of CSP's, and to improve internal coherence, is another welcome development. It should be noted that, to date, no draft—or adopted—country strategies have been made available to the Parliament, or to NGO's, which makes it difficult to assess the new programming process. The Parliament is, however, looking forward to an early opportunity to comment, and expects all final texts to be published in full, and submitted to the Parliament, as soon as they are adopted by the Commission.

  7.  In January 2001, the EuropeAid Office was set up, with responsibility for managing all external assistance, from the identification of programmes and projects to their evaluation. The Office will play a pivotal role in the reform process since it is responsible for the introduction of new, harmonised and transparent management methods. The responsibility for these new methods will be progressively devolved closer to the "field" as the autonomy of Commission delegations increases. DG Development (DG DEV) retains responsibility for development cooperation policies with all partner countries, and DG External Relations (DG RELEX) will be responsible for the political dimension of all cooperation policy. It is critical that dialogue between DG Development, DG RELEX and EuropeAid takes place at every stage of the project cycle—from policy formulation to programme implementation.

  8.  An Evaluation Unit has been established which reports directly to all five External Relations Commissioners on the Board of EuropeAid. The Unit is responsible for monitoring the efficiency, relevance, impact and sustainability of all projects, and all finished reports will be available on the Commission's website. In order to develop effective dialogue with both NGO's and Parliamentarians, it is critical that over the next few years EuropeAid is transparent, accountable and open about its work.

  9.  The reform of the EC's external assistance is taking place at the same time as the definition, and development, of the EU's Common Foreign and Security Policy. Concerns about the marginalisation of development in this process continue to be voiced. A key challenge will be to ensure that in the process of strengthening the EU's foreign policy—we do not lose a specific development perspective. To this end, the EC must continue to mainstream its poverty focus throughout the RELEX family and beyond.

  10.  On transparency, on quality project management and on indicators of achievement the Commission still has a long way to go. There needs to be a comprehensive, open and inclusive debate about how to monitor and assess the effectiveness the reform process.


  11.  A key factor in the reform agenda is the fact that the Commission's administrative capacity has simply failed to keep up with the quantity, and variety, of aid which it is being asked to manage. The Commission has repeatedly stressed the severity of its staff shortfall.

  12.  During 2001, the majority of new positions in EuropeAid were filled, taking the number of officials in the new Office to nearly 1,000. The progressive devolution of responsibilities to delegations is set to start at the end of 2001. Initially, this will involve building administrative, financial and technical capacity in 22 delegations.

  13.  By their presence in country, delegations should be better able to contribute to the relevance, efficiency and sustainability of Community assistance. In addition, devolution offers new opportunities for designing programmes and projects which are based on the demands of partner countries.

  14.  The Commission has identified its additional staffing requirements for 2002 and beyond, and it is critical that these needs are met. It is essential that EuropeAid has a sufficient number of appropriately qualified personnel, and that delegations are fully equipped to take on their new responsibilities. Staff expertise should include, for example, financial and audit experts, gender specialists and officials with experience of the latest in participatory techniques and development thinking on human development and social sector support, and staff with the necessary skills to manage relations with donors, NGOs and civil society organisations, national governments and bodies and the International Financial Institutions.

  15.  For the process to be sustainable, it is critical that there is an urgent clarification of how the costs of deconcentration will be met.

  16.  Worrying staff shortages are still evident in a number of delegations, especially in ACP countries. For example, the delegation in Sudan has just two Commission staff—the Head of Delegation and an Administrative Attaché—an ECHO Technical Assistant, a Food Security Technical Assistant, and a Young Expert. The EC's contribution to Sudan since 1992 has been approximately 40 million Euros per annum. In 2001, as a result of a new emphasis on sustainability, this total increased significantly to 63.6 million Euros. In comparison, in 2001 France had eight operational staff out of 24 officials, to manage a 1 million Euro programme. And, the UK had nine operational staff out of 15 officials managing a 10.7 million Euros programme.

  17.  The success of the EC's programme in the Balkans—where there are enough people on the ground—shows that with the right number of staff, with the appropriate expertise, the Commission can deliver impressive results.

  18.  One of the first priorities of the new EuropeAid Office was to improve financial management and reduce the backlog in budgetary commitments, and on this front some progress has already been made. For example, from November 1999 to September 2001, the number of old and dormant commitments dating from pre-1995 were cut by 52 per cent. There does, however, remain a significant way to go before the backlog in old commitments is cleared. A range of indicators on deconcentration, efficiency, the rationalisation of budget lines, visibility and transparency have been set, and will be used to monitor progress.

  19.  The onus now lies on the Budgetary Authority—the Member States and the European Parliament—to ensure that sufficient resources are made available in order to build on these first steps. There is worrying evidence that the initial commitment from Member States for the process has waned, and there is now less political interest in supporting these ambitious reforms.

  20.  Work is also underway to overhaul the Financial Regulation in order to speed up payments. The Commission has proposed a number of welcome amendments, including critically a "sunset clause", or a cut off date, for the validity of budgetary commitments, and is also trying to make it easier for the EC to work with other international donors. It will be critical that the Parliament and the Council work together to facilitate the progress of these proposals, in order that a revised regulation can be adopted by the end of 2002.

  21.  The number of contracting procedures has been reduced from 46 to eight, and at a recent briefing for the British Consultancy Bureau the Commission was told that its tendering procedures and new standard contracts now compare favourably with other donors.


  22.  The EC has been repeated criticised for its inability to effectively target development assistance at the poorest people, in the poorest countries. One of the key objectives of the EC's new development policy is to focus resources where they will have the greatest impact on poverty reduction. According to the Commission's Programme of Action, "financial resources must be allocated so as to maximise their effect on poverty reduction. Consequently, the least developed and other low income countries should be given particular attention."

  23.  According to data from the OECD in 1998-99 there were no LDC's, and no countries from Sub-Saharan Africa or Asia, in the top 10 recipients of EC Overseas Development Assistance. In the 2002 budget negotiations, the Commission proposed a number of worrying cuts to development budget lines, including those for Asia and Latin America, human rights and democracy and food security. The Parliament's Development Committee has rigorously opposed these cuts, and has stressed that the overall level of development aid should at least be equivalent to the 2001 total, and should be focused on poverty related budget lines.

  24.  We do, however, need to acknowledge that EC aid does not only respond to levels of poverty, but is also influenced by the EU's other political priorities. These political priorities are, of course, set by Member States and by the Parliament. And the EU's development policy must be seen in the context of an increasing prioritisation of relations with Eastern and Central Europe, the former Soviet Union and the Mediterranean countries.

  25.  As a result, the Commission does not have the same level of control over its development assistance budget as Member States. It is, for example, far easier for Member States to focus resources specifically on Least Developed Countries (LDC's), and two or three priority sectors.

  26.  In addition, the EC works in a number of countries where Member States do very little, or do not have a presence at all, including, for example, the enlargement countries in Eastern and Southern Europe. In calculations about the poverty focus of the EC's external relations budget these countries are, however, included.

  27.  The structure of the EC budget is also such that budget lines dealing with issues as diverse as fisheries, relations with Cyprus and Malta, the accession countries, migration and trade have traditionally been included in the external relation's budget.

  28.  In addition, the European Development Fund (EDF)—which accounts for approximately half of all EU development assistance—remains outside the EC general budget, and as a result is governed by separate procedures and cannot be effectively monitored by the European Parliament. During the 2002 Budget negotiations, the Parliament reiterated its view that the EDF should be incorporated into the general budget.

  29.  Work is currently underway to update the Commission's information systems in order to allow a classification of its external assistance according to the internationally agreed system established by the OCED's Development Assistance Committee. By mid 2002, the Commission has stated that "CRIS" (Common RELEX Information System)—a single harmonised system for programmes and projects covering all external assistance—will be in place, and that classification by sector will be available by 2003. The Parliament has called on the Commission to provide clear evidence that funding for health and education is progressively increased, and that the Commission moves to DAC-compliant reporting at the earliest opportunity. The Parliament expects a comprehensive progress report by mid-2002.

  30.  The EC Development Policy Statement clearly states that the Commission should only work in those areas where it can bring added-value. The following six priority areas have now been identified by the Commission: the link between trade and development; support for regional integration and cooperation; support for macro-economic policies; transport; food security and sustainable rural development; and institutional capacity-building, particularly in the area of good governance and the rule of law.

  31.  The Commission clearly should focus on those areas where it has a comparative advantage, and there needs to be an urgent analysis of the EC's weaknesses and strengths.

  32.  We should also acknowledge that it is the developing country which identifies its development priorities, and this naturally has an impact on any assessment of the EC's poverty focus. For example, even though the Commission has identified education as a priority area in 2002, many ACP countries do not see the EC as the donor of choice in this sector. To date, 40 per cent of ACP countries have opted for transport as their priority sector, 25 per cent for rural development and 35 per cent for budgetary support—with no area of the budget specified. Recipient country governments should be encouraged to look to the EC for support in those areas where the Commission has not traditionally worked.

  33.  It will clearly be essential for the Commission to work closely with developing country governments, Member States and civil society, to improve the EC's poverty focus.


  34.  There are several dimensions to the perceived lack of coordination in the EU's external assistance, including:

    —  Insufficient communication (i) within the Commission—between DG RELEX, DG Development and EuropeAid, (ii) within the Member States' administrations—between Embassies, capitals and Permanent Representations, and (iii) between the field and headquarters.

    —  The complexity of the decision-making process—for example, the involvement of Member States at different levels of "project cycle".

    —  A mismatch between the EU's political priorities and EC technical programming.

    —  A lack of analytical capacity in delegations to integrate these political priorities into technical programming.

    —  The different priorities of different European institutions.

  35.  Significant efforts are being made to improve collaboration between the European Commission, Member States and other donors in the field, but progress—to date—has been extremely slow. At the first annual orientation debate on the effectiveness on EC external assistance, which took place at the General Affairs Council on 22-23 January 2001, the Council adopted a series of proposals to improve coordination between Member States and the EC. These new guidelines require both the Commission and Member States to continue, and considerably step up, coordination on the ground.

  36.  The EU's decision-making structure means that Member States, through a number of technical management committees, including the EDF Committee, the Asia and Latin America Committee and the MEDA Committee, decide at a technical level, and often in the field, on the content of EC country strategies. At the same time, in Council working groups in Brussels, Member States set out their political priorities to the Commission. There seems to be very few links between these two processes, resulting in the apparent incoherence in the EU's approach to particular countries, or regions.

  37.  As a matter of course, Member States are informed about all EC programmes—either by email, or through the Committee work in the Council. In comparison, the exchange of information from Member States to the Commission seems to be done on a rather ad hoc basis, often only when the General Affairs Council wants to discuss what the EU is doing in a particular country, or sector.

  38.  Community development cooperation is now focused on six priority sectors in each partner country. In other sectors, the Commission will contribute co-financing for the programmes of Member States and other donors. However, very few projects managed by EuropeAid are currently either co-financed, or have parallel financing with Member States. To ensure that this works effectively there will need to be a major harmonisation of financing procedures.

  39.  The new programming system, and country strategy papers, should ensure better coherence between the political priorities and technical instruments—as well as improving complementarity between the Commission and Member States. However, the initial feedback from the programming process of the 9th EDF indicates that, for a number of reasons, this coherence has not yet been fully achieved.

  40.  By building the capacity of EC delegations in the field, the Commission should be better equipped to consult other donors and civil society in the field. The new Country Strategy Papers should put EU external assistance clearly in the context of the activities of other donors—and will hopefully take account of the priorities of the developing country itself.

  41.  A comprehensive review of coordination between the Commission and Member States would be a useful contribution to this debate.


  42.  EC policies on trade, the environment, conflict prevention and humanitarian assistance must all take account of the needs of developing countries, and should work towards creating a more equitable international order. There have been a number of recent examples where progress has been made on this front, including, for example, the Commission's Everything But Arms Initiative and efforts to link rehabilitation with development.

  43.  We should also note that a significant amount of the inconsistency in EC policies originates in the Council. For example, the Common Agricultural Policy versus local production capacities, European wine production versus the purported threat stemming from the Grappa and Ouzo industry in South Africa, the requirements of European fishing fleets' versus sustainable local food supply.

  44.  There is clearly always a hierarchy of priorities for the EU—and development aid is not always at the top, sometimes justifiably. For example, it is difficult to defend the continued export of asbestos into the EU—even though this will deliver a significant blow to the asbestos industries in certain ACP countries. Neither should the EU lower our food safety, and other health related standards, to facilitate the import of products from developing countries.


  45.  The European Community now spends over

9 billion (£5.5 billion) per annum in official development cooperation—which makes it the second largest mulitlateral donor. To those who doubt the usefulness of working with the EU, I would say that it is unthinkable to suggest that Europeans should not share a common approach to international cooperation, including development cooperation. There is, however, still a long way to go before we have an EC programme which lives up to its full potential.

  46.  There are a number of recent, and forthcoming, reports which will provide a better insight into the progress which is being made. These initiatives include the Commission's Annual Report, analysis from the inter-service Quality Support Group on Country Strategy Papers, a series of evaluations on poverty reduction, several Court of Auditors reports on EC spending and programmes and input from the new Evaluation Unit.

  47.  It is increasingly apparent that we should expect further reforms of the EC's external programmes in the future. Much progress has been made, in particular in areas that concern the whole Commission—such as internal financial control and audit—but also in terms of RELEX-specific concerns—such as the backlog in payment. The EC should continue to review the progress which is being made and, if necessary, further adapt organisational structures according to the functional requirements of the rapid and efficient planning, delivery and evaluation of development cooperation.

  48.  The Commission should, by September 2002, provide the European Parliament—and Member States—with a progress report on the RELEX reform process.

Mrs Glenys Kinnock MEP

21 November 2001

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