Select Committee on International Development Second Report


SECOND REPORT


The International Development Committee has agreed to the following Report:

THE EFFECTIVENESS OF THE REFORMS OF EUROPEAN DEVELOPMENT ASSISTANCE


SUMMARY

The primary objective of the Department for International Development (DFID) is to reduce the proportion of people living in extreme poverty by half between 1990 and 2015. The international community has also adopted this objective as a Millennium Development Goal. This objective drives DFID's policies, programmes, and spending decisions.

Some 25 percent of DFID's budget is absorbed by its contribution to European development assistance. If DFID is to maximise its impact on poverty, this money—£709 million in 2000-2001—must be allocated effectively and managed efficiently.

We have examined the organisation of European development assistance in previous inquiries and have been dismayed at the inefficiencies we have found. A comprehensive programme of reforms was announced in 2000, beginning with a new statement on development policy which made poverty reduction the primary objective of European development assistance.

This report examines the range of these reforms, from policy statements, through resource allocations, to management procedures. Key themes include:

  • The coherence of development policy with the European Union's policies in other areas;
  • The geographical allocation and poverty focus of European development assistance;
  • The relationships between the various Directorates General with an interest in development;
  • The management of European development assistance, including Country Strategy Papers and the devolution of project management to Delegations.

Our findings suggest that the reforms have been reasonably successful at the level of policy and institutional change. The EuropeAid Cooperation Office has produced significant improvements in the management of European development assistance, Country Strategy Papers promise an improvement in programming, and the much-needed ability to report clearly on spending by sector as required by the OECD's Development Assistance Committee is being developed. We trust that the real-world impact of these reforms on poverty reduction—the central objective of European development assistance—will be apparent soon.

We remain concerned by the lack of transparency as to which funds are intended for poverty reduction, the continuing division of responsibilities between DG Development and DG External Relations, and the questionable ability of the Commission to staff its Delegations adequately and appropriately.

More worryingly still, a shrinking share of European development assistance is spent on low income countries. If the target of a 50 percent reduction in poverty by 2015 is to be met, resources must be spent effectively and targeted appropriately.


Background and Acknowledgements

On 19 September 2001 we announced an inquiry into the effectiveness of the reforms of European development assistance. We received written evidence from a number of organisations, held four evidence sessions at Westminster, and visited the European Commission and the European Parliament in Brussels on 21 and 22 January where we also took formal evidence.

We are grateful to the people and organisations who gave evidence to the inquiry and have included a list of all those who gave oral evidence at the end of this report. We would like to thank particularly the Rt Hon Chris Patten, Commissioner, External Relations; Mr Poul Nielson, Commissioner, Development and Humanitarian Aid; Mr Giorgio Bonacci, Director-General of EuropeAid; and, Ms Costanza Adinolfi, Director of the European Community Humanitarian Aid Office (ECHO). We appreciated their openness, and their willingness to assist us with our inquiry.

Explanatory Notes

EUROPEAN COMMUNITY OR EUROPEAN UNION?

The European Community (EC) was established by the Treaty of Rome in 1957, and is now one of the three pillars of the European Union (EU). The European Community's central feature is the Single Market, but it also encompasses a range of other policies, including development cooperation. In contrast to the EU's inter-governmental pillars of Foreign and Security Policy, and Justice and Home Affairs, in European Community affairs the European Commission is responsible for policy implementation.[1]

COUNTRY CLASSIFICATIONS AND TYPES OF ASSISTANCE

Development assistance refers to aid given to both transitional and developing countries. Transitional countries are those which appear in part II of the Development Assistance Committee (DAC) list of aid recipients;[2] assistance to such countries is termed Official Aid. Developing countries are those which appear in part I of the DAC list; assistance to such countries is termed Official Development Assistance. Low income countries are the poorest of the developing countries, and include the Least Developed Countries and the Other Low Income Countries as shown on part I of the DAC list.


1   Adapted from DFID's European Community Institutional Strategy Paper; see also Ev 16 and Ev 17. Back

2   The DAC list is the categorisation made and used by the members of the Organisation for Economic Cooperation and Development's, Development Assistance Committee. http://www.oecd.org/htm/M00024000/M00024669.htm (accessed on 16-4-02). Back


 
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