12 Increasing
the impact of EU development policy
| (33244)
15560/11
+ ADDs 1-2
COM(11) 637
| Commission Communication: Increasing the impact of EU development policy: An Agenda for Change
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| Legal base | —
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| Department | International Development
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| Basis of consideration | Minister's letter of 6 June 2012
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| Previous Committee Report | HC 428-xli (2010-12), chapter 6 (9 November 2011); also see (32174) 16146/10: HC 428-xi (2010-11), chapter 18 (15 December 2010)
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| Discussion in Council | 14 May Development Foreign Affairs Council
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
12.1 The 2005 European Consensus on Development (signed jointly
by the Council, the Commission and the European Parliament under
the UK's EU Presidency) sets out a clear framework for EU development
policy focused on poverty reduction and achieving the Millennium
Development Goals (MDGs) and is based on best practice principles
for delivering aid.
12.2 The Consensus identifies shared values,
goals, principles and commitments which the European Commission
and EU Member States will implement in their development policies,
in particular:
— reducing
poverty, particularly focussing on the MDGs;
— development based on Europe's democratic
values (respect for human rights, democracy, fundamental freedoms
and the rule of law, good governance, gender equality, solidarity,
social justice and effective multilateral action, particularly
through the UN); and
— developing countries to be mainly responsible
for their own development (national strategies developed in collaboration
with non-government bodies, and mobilising domestic resources;
EU aid aligned with these national strategies and procedures).[107]
The earlier Green Paper
12.3 In November 2011, the European Commission
Development Commissioner, Andris Piebalgs, announced his intention
to update the EU's development policy and, depending on the outcome
of a Green Paper consultation (which was to run until 17 January
2011), that he might choose to launch a full review of the Consensus
in late 2011, aiming to conclude in 2012.
12.4 The Green Paper considered how to update
the EU's development policy so as to improve its impact and increase
its focus on economic growth as a driver of sustainable development.
12.5 In his Explanatory Memorandum of 24 November
2010, the Minister of State at the Department for International
Development (Mr Alan Duncan) noted that the Green Paper posed
questions covering a range of EU development policies, focusing
on the following areas:
— Putting
'High Impact' cooperation into practice:
Should the EU and Member States develop guidance setting out
conditions to be met (for example, on coordination and results)
before any programmes can be implemented? How should different
aid flows (for example, from public and private sources or different
EU budget instruments) be managed together?
— Growth for human development:
How can the EU and Member States ensure that aid for health
and education contributes to human development and growth? How
should the EU support skills development, for example through
its approach to migration?
— Promoting Governance: How should
the EU adapt its development policy to support governance reforms
in partner countries, with greater incentives for reform? How
should the EU promote more robust results monitoring?
— Security and Fragility: How should
the EU intervene in fragile and conflict-affected States, coordinating
short term conflict or crisis response with longer term development?
— Making coordination of aid a reality:
How can the EU promote aid effectiveness and make European
Country Strategy documents a reality?
— Policy Coherence for Development:
How can policy coherence be improved and measured?[108]
— Partnerships for inclusive growth:
How should the EU support industrial investments in partner
countries, e.g. in the extractive or post-extractive sectors?
How can the EU better protect social and economic rights, such
as labour standards? How can the EU help partner countries to
promote a business-friendly environment, especially for small
and medium sized enterprises? How can the EU support low cost
finance and financial guarantees? How can EU funding promote innovation
and technology transfer in partner countries?
— Fostering regional integration:
How can the EU's experience inform regions seeking to strengthen
their integration?
— Continuing to ensure trade for
development: How can the EU improve aid for trade provisions
and ensure consistency between its trade and development policies?
— Climate change, biodiversity and development:
How can climate adaptation and disaster risk reduction be
mainstreamed into the EU's development policy?
— Energy and development: How
can the EU help partner countries to secure sustainable energy
for their citizens, combining climate change funding and leveraged
loans from Development Finance Institutions?
— Agriculture and food security:
How can EU development policy better support food security and
stimulate sustainable intensification of agriculture, fishing
and aquaculture? How can the EU support the fight against malnutrition?
12.6 The Minister went on to say that it was
not currently clear whether the Green Paper consultation was intended
to focus only on growth, or cover the entire remit of EU development
policy. He saw the broad remit of questions as suggesting a wholesale
review, although also noted that the title of the Green Paper
and discussions with Commission officials put the emphasis on
growth.
12.7 The Minister also noted that similar consultations
were presently being run on the EU's approach to Budget Support,[109]
while those on the future of the EU's external financial instruments
had yet to be officially launched. The Commission had, he said,
indicated that all these consultations would feed into a Communication
in autumn 2011, at which point a decision would be taken on whether
to open up the European Consensus on Development for a full review.
12.8 The Minister saw this consultation process
as an important opportunity to influence emerging EU priorities
on development. He welcomed the focus on sustainable growth and
wealth creation in the Green Paper and reference to the private
sector as a key driver of growth, which he said was an area in
which the Department for International Development was stepping
up its efforts. He also welcomed the increased focus on demonstrating
the impact and results achieved by EU development aid. However,
he was concerned that a major review of the Consensus in the current
climate could downgrade its poverty reduction focus and undo the
achievements of 2005. In addition to focusing on growth and the
private sector, he would want any potential review of the Consensus
to ensure that EU development policy continued to prioritise poverty
reduction and the MDGs, certainly the most off track ones like
maternal mortality, as well as press for a stronger focus on ensuring
value for money from the EU's aid budget; and it should also embrace
the EU's future role in combating climate change and preventing
conflicts across the globe.
12.9 In the short term, the Minister noted that
general discussion on the Green Paper was scheduled for the 9
December 2010 "Development" Council, and that the Government
would provide written comments on the Green Paper (consulting
other Government Departments, including the Foreign and Commonwealth
Office and Department for Business, Innovation and Skills) and
work closely with the Commission and other EU Member States through
experts' groups and officials' meetings to steer the emerging
Communication.
Our assessment
12.10 We reported this development to the House
because of the importance of the subject matter and also drew
it to the attention of the International Development Committee.
12.11 We asked the Minister to write to the Committee
in due course about the outcome of his Department's consultations
and the Government's response.
12.12 In the meantime, we cleared the Green Paper
from scrutiny.[110]
The Minister's letter of 2 March 2011
12.13 On 2 March 2011, the Parliamentary Under-Secretary
of State at the Department for International Development (Mr Stephen
O'Brien) wrote to update the Committee on his Department's responses
to the Commission's recent consultations on development policy
and budget support, and to set out the then Hungarian EU Presidency's
development priorities.
12.14 With regard to EU development policy, the
Minister said that the Government's response emphasised that it
should:
- stay focused on poverty reduction;
- promote economic growth and the role of the private
sector;
- demonstrate clear results;
- improve aid transparency;
- ensure coherence between development and wider
EU policies;
- meet commitments on aid volumes;
- review the EU approach to aid effectiveness and
strategic partnerships.
12.15 The Minister also attached a copy of the
Government's full response, as set out in a 3 February 2011 letter
to the EU Development Commissioner, Andris Piebalgs.
12.16 As the Minister's lengthy letter and attachments
were also copied to the chair of the International Development
Committee, we decided that a further Report to the House at that
point would be otiose.
The Commission Communication
12.17 In his Explanatory Memorandum of 28 October
2011, the Minister recalled that the aim of the consultation,
to which he says the UK provided significant input, was to launch
a public debate on how the EU could best support developing countries
in mobilising their economic, natural and human resources in support
of poverty reduction strategies. The Minister noted that, as well
as providing written comments on the Green Paper, the UK worked
closely with the Commission and EU Member States through expert
groups and officials' meetings to steer the direction of the Communication;
and in so doing, pushed for a strong focus on demonstrating impact
and results achieved by EU development aid as well as ensuring
strong engagement with the private sector as a driver of growth.
12.18 The Minister went on to say that the consultation
confirmed the relevance of the existing policy framework, but
agreed on the need to increase impact, with a convergence of views
on ensuring:
- a strong poverty focus;
- the EU achieves its commitments on ODA;
- greater transparency of EU aid;
- the importance of inclusive growth for human
development;
- the adoption of a differentiation approach, with
resource allocation based on partner countries needs and capacities;
- the achievement of clear development results;
- good governance;
- the importance of country ownership; and
- private sector engagement.
12.19 The Communication set out a more strategic
EU approach to reducing poverty, including through a more targeted
allocation of funding. It noted that the EU is "not simply
the 28th European donor", implementing 20% of the EU effort,
but "also acts as coordinator, convener and policy-maker."[111]
To be fully effective, the Commission said, "the EU and its
Member States must speak and act as one to achieve better results
and to improve EU's visibility."[112]
12.20 Against this background, the Commission
contended that the EU must seek to focus its efforts where it
can have the greatest impact and concentrate development cooperation
in support of:
— human
rights, democracy and good governance; and
— inclusive and sustainable growth.
12.21 With this in mind, the Commission laid
out an Agenda for Change (see Annex to this chapter of our Report).
To ensure best value for money, this should be accompanied by
differentiated development partnerships; coordinated EU action
and improved coherence among EU policies. The main proposals are:
— Differentiation
of partnerships and aid allocations and mechanisms:
target aid based on where it is needed for poverty reduction and
where it will have the greatest impact. In particular, focus on
the EU neighbourhood and sub-Saharan Africa. The Communication
details criteria for differentiation which includes: a) Country
needs; b) Capacity (the ability of the country to generate financial
resources and their aid absorption capacity); c) Commitments and
Performance; and d) Potential EU impact;
— Fragile situations: specific forms
of support for fragile States from the EU should be defined to
enable recovery and resilience; country-based decision-making
will give the EU the flexibility to respond to unexpected events
and shocks;
— Human Rights, Democracy and Good Governance:
EU support to governance should feature more prominently in all
partnerships and further focus on partners' commitments to human
rights, democracy and the rule of law; the mix and level of aid
should therefore depend on the country's situation, including
its ability to conduct reforms;
— Inclusive and Sustainable Growth for
Human Development: the EU should encourage more inclusive
growth through sectors such as social protection, health and education
and through doing so promote a "green economy"; there
should be continued support for social inclusion and human development,
including implementing the Gender action plan;
— Business Environment, Regional Integration
and World Markets: the EU should support the development of
competitive local private sectors with a greater focus on investing
in drivers for growth and job creation; also further develop blending
mechanisms to boost financial resources for development with a
greater focus on innovative financial tools;
— Coordinated EU action: the EU
should give further consideration to Joint Programming as a way
to reduce fragmentation and increase its impact proportionally
to commitment levels; programming should be synchronised with
the strategy cycles of partner countries where possible; and also
work towards a common EU results reporting framework; and
— Policy Coherence for Development (PCD):
intensify the EU's joined-up approach with more PCD through new
thematic programmes especially in regards to security and poverty.
12.22 The Commission concluded with a section
on Embracing The Agenda For Change, in which it called
on the Council to endorse the proposed Agenda for Change that
it says seeks to:
— equip
the EU with high-impact development policy and practice for the
coming decade and give it a leading role in setting a comprehensive
international development agenda up to and beyond 2015; and
— support the change needed in partner
countries to bring about faster progress towards poverty reduction
and the MDGs.
12.23 The Commission said its services and the
European External Action Service will ensure that the guiding
principles set out in this Communication are progressively reflected
during the remainder of the current programming cycle and in future
programming documents, as well as in the proposals regarding the
architecture, legislation and programming of future financial
instruments for external action; and urged Member States also
implement the Agenda.
The Government's view on the Communication
12.24 The Minister began by noting that the Communication
did not represent further decision-making powers granted to the
EU — "rather its intention is to improve the effectiveness
of existing EU aid", and "to improve the impact of EU
development cooperation in support of a) human rights, democracy
and other key elements of good governance, and, b) inclusive and
sustainable growth for human development."
12.25 The Minister said that he supported the
emphasis that the Commission put on improved value for money through
a differentiated development partnership based on the needs, capacities
and commitment of the partner country and the potential impact
of EU's support, and its call for improved coordinated EU action
and coherence among EU policies; and that he would work closely
with Commission, European External Action Service (EEAS) and Member
States to implement these policy changes.
12.26 Overall, the Minister said, the Communication
was broadly in line with UK priorities and he professed himself
pleased with the focus on poverty reduction and targeting aid
to where it will have most impact. The Communication is, he said,
in line with the UK priority for aid to be based on individual
country needs and priorities.
12.27 The Minister then commented on the notion
of greater EU coordination at country level as follows:
"there is a clear value for money rationale
in doing so. However, we are not satisfied with the EC's suggested
Joint Programming approach in its current form. The UK's view
is that the EU approach needs to be country-led, pragmatic, flexible
and open to others who are willing to align around partner country
led dialogue and coordination. This is reflected in the Communication
stating that the process will be country-led and will support
partner country strategies. The UK has made this clear to the
EC and Member States from the outset that this process should
not be led by the Commission in Brussels — there is evidence
that this increases transaction costs in partner countries. We
will continue to work with the EU, alongside like-minded Member
States such as Sweden, Denmark and the Netherlands, to make sure
coordination will be country-owned, transparent and have a focus
on results."
12.28 The Minister then recalled that a key priority
for the UK, as outlined in DFID's Multilateral Aid Review 2011,
was improving the results focus, value for money and the transparency
of the Commission:
"The Communication has a strong focus on results
and the need to develop a results framework and improved monitoring.
The UK will continue to engage with the EC and like-minded Member
States to ensure that the new emphasis on EU results leads to
a more effective EC with the ability to demonstrate development
results."
12.29 Looking ahead, the Minister said:
— there
has been no consultation process on his Explanatory Memorandum
but he will be consulting with other Government Departments, including
the Foreign and Commonwealth Office, in working with the Commission
on the policy changes it proposes;
— Council Conclusions are expected in the
first half of 2012.
Our assessment
12.30 We discerned a distinct undertone of the
Commission calling the other Member States to order in this Communication
— for example, its description of itself as "not simply
the 28th donor" but the "coordinator, convenor and policy-maker"
— and wondered if it was this that the Minister had in mind
when noting that he had sought to make it clear that a dirigiste
approach from Brussels was not the right one. That he did not
expect early Council Conclusions on the Communication suggested
that this discussion was not yet concluded.
12.31 That being so, we continued to retain the
document under scrutiny until the Minister was able to let us
know what shape he expected those Conclusions to take, and whether
or not he expected them to endorse the proper balance that he
was seeking.
12.32 Given the importance of the policy under
discussion, we also made use of our power under Standing Order
No. 143 (11) to request an opinion on the Commission's approach
from the International Development Committee.[113]
The Minister's letter of 27 April 2012
12.33 The Minister said that, as they were nearing
finalisation following discussions in CODEV (the Council working
group on Development Cooperation) and will be adopted by Development
Ministers at the 14 May Development Foreign Affairs Council, he
was now in a position to update the Committee on the shape of
the Council Conclusions.
12.34 He said that, from the outset, his negotiating
position has been fully in line with his 28 October 2011 Explanatory
Memorandum, and continued as follows:
"As in the Commission Communication, the proposed
outcome of the Council Conclusions is broadly in line with UK
priorities, including a strong focus on poverty reduction and
targeting aid to where it will have the most impact. As a result
of significant UK lobbying, there is a strong emphasis on results,
transparency and value for money — all of which are UK priorities
for EU aid. Furthermore, as stated in the EM, we are determined
to ensure the EU achieves its commitments on Official Development
Assistance (ODA) and engages further with the private sector.
Specific priorities for the UK have been to ensure that vulnerable
small island states are protected in future EU funding and that
middle-income countries graduate away from bilateral grants. As
negotiations conclude, we will continue to press for the EU to
adopt a differentiated approach with a greater focus on low-income
countries.
"The UK has made good progress on influencing
the Council Conclusions — particularly concerning the one
issue of contention. On Joint Programming, we are content that
the approach suggested in the Council Conclusions reflects the
UK's view and that any form of proposed EU coordination will be
country-led, pragmatic, flexible and open to others. Throughout
negotiations, the UK has worked uncompromisingly and tirelessly
to ensure that we retain our sovereign decision-making."
12.35 The Minister concluded by saying that he
will continue to work closely with the Commission, European External
Action Service and Member States to ensure that UK views are reflected
as discussions conclude.
12.36 In its response of 16 May, the Committee
said that it welcomed in particular that the Minister would be
pressing for a greater focus on low income countries, and asked
him, after the Foreign Affairs Council meeting, to send it a copy
of the Conclusions and illustrate how they did indeed reflect
UK positions and protect UK sovereign decision making in the way
that he anticipated.
12.37 The Committee also said that, by the time
he replied, it expected to be able to take into account the Opinion
that it had sought, in its report of 9 November 2011, from the
International Development Committee on this important policy document.
12.38 On 27 April, the International Development
Committee published a report on EU Development Assistance. At
that time, the Chair of the Committee said:
"British taxpayers want the aid they give to
go to the places where it can make the most difference —
to countries where millions of people are getting by on less than
a pound a day.
"Giving aid to relatively rich countries like
Turkey could devalue the concept of aid."[114]
12.39 The International Development Committee
noted that the UK spends approximately £1.23 billion each
year on aid through the European Union, approximately 16% of the
UK's total aid budget; and observed that only 46% of this aid,
however, goes to low income countries — a figure that the
Committee said was "unacceptable" — and that,
instead middle income countries bordering Europe are benefiting
(Turkey having consistently been in the top five recipients of
European Commission aid (€223 million in 2010) as has Serbia
(€218 million in 2010)). [115]
The letter of 21 May 2012 from the Chair of the
International Development Committee
12.40 The letter reads as follows:
"In your Committee's 46th Report of the last
Session you referred the Commission's Communication on: Increasing
the impact of EU development policy: An Agenda for Change
to the International Development Committee for an Opinion, using
your powers under the House's Standing Orders.
"In the last Session of Parliament the International
Development Committee published a report on EU Development Assistance
— the sixteenth report from the Committee —which the
Committee invites you to treat as its Opinion.
"The report came to a number of conclusions
relevant to the Communication, in particular on the following
items:
- 'Targeting resources where
they are most needed and differentiated development partnerships'
— the Committee concluded that too little of the EU's ODA
was spent on the poorest people and the poorest countries and
too much on higher middle income countries bordering Europe; it
also found that the Commission spreads its aid too widely and
this leads to inefficiencies, including high administrative costs.
DFID should press the European Commission to reduce further the
number of countries it has programmes in.
- Joint programming
— The Committee had concerns that, although joint programming
had the potential to prevent the overlap of Member State bilateral
programmes and reduce transaction cost for recipient countries,
the European Commission did not necessarily have the capacity
or the expertise to lead the coordination. The lead donor who
coordinated policy for bilateral donors should be the one with
the most experience in the area and a proven track record.
- Policy coherence —
Greater policy coherence in Europe on development is a worthy
aim. There has been a slight improvement in the trade agenda and
the Minister is optimistic on the potential for coherence between
Climate Change and Development policies. However, the reform of
the Common Agricultural Policy (CAP) could do more good than anything
else. DFID should press Commissioner Piebalgs to engage widely
in Europe on development, challenging those with vested interests
in the CAP and who oppose its reform."
The Minister's letter of 6 June 2012
12.41 The Minister encloses the Council Conclusions
("Improving the EU's contribution to development in a global
world")[116] and
says that they reflect the UK priorities set out in his Explanatory
Memorandum and in his letter of 27 April 2012, and reaffirm the
EU commitment of eradicating poverty and the key role Official
Development Assistance (ODA) continues to play in the EU achieving
its development aid targets, including the collective 0.7% ODA
target to be reached by 2015.
12.42 The Minister then continues as follows:
"Throughout the discussions the UK lobbied for
a strong emphasis on results, transparency and value for money
— all of which are reflected in the Council Conclusions.
They also recognise the importance of the private sector and wealth
creation. EU development policy will need to enable a business
environment that encourages private sector participation and looks
at ways of increasing regional integration so as to develop and
expand existing markets.
"Following UK pressure, the Council Conclusions
propose that future partnerships between the EU and partner countries
now have a differentiated approach. This will allow the EU to
adapt its support to a country's situation but still permit it
to monitor a country's progress on its commitments and record
on the key principles of human rights, democracy and the rule
of law. By implementing these new approaches the EU will be able
to assess more effectively a partner countries' ability to conduct
reforms and meet the needs of its people.
"The Council Conclusions reflect the UK's view
that any form of proposed EU coordination will be country-led,
pragmatic, flexible and open to others, in line with international
consensus agreed in the Busan Partnership for Effective Development
Cooperation. Future EU coordination, including joint programming,
will take into account the existing agreed international and EU
commitments.
"The Coalition Government will continue to work
uncompromisingly and tirelessly to ensure that the UK retains
its sovereign decision-making and continues to hold EU Development
Institutions accountable for the delivery of EU development aid."
Conclusion
12.43 The picture having now been completed,
we are content to allow interested Members to pursue the important
issues covered in the Commission Communication, and in the Council
Conclusions, in the many ways open to them.
12.44 With that in mind, we are forwarding
a copy of this chapter of our Report to the International Development
Committee.
12.45 We also now clear the Commission Communication.
Annex: Commission Agenda for Change[117]
"The Commission proposes an Agenda for Change that would lead to:
- "an increased share of EU country and regional cooperation programmes dedicated to the policy priorities given in sections 2 and 3 below;[118]
- "the concentration of EU activities in each country on a maximum of three sectors;
- "an increased volume and share of EU aid to the countries most in need and where the EU can have a real impact, including fragile states;
- "enhanced importance of human rights, democracy and good governance trends in determining the mix of instruments and aid modalities at country level;
- "continued support for social inclusion and human development through at least 20% of EU aid;
- "a greater focus on investing in drivers for inclusive and sustainable economic growth, providing the backbone of efforts to reduce poverty;
- "a higher share of EU aid through innovative financial instruments, including under facilities for blending grants and loans;
- "a focus on helping reduce developing countries' exposure to global shocks such as climate change, ecosystem and resource degradation, and volatile and escalating energy and agricultural prices, by concentrating investment in sustainable agriculture and energy;
- "tackling the challenges of security, fragility and transition;
- "joint EU and Member States response strategies based on partners' own development strategies, with a sectoral division of labour;
- "a common EU results reporting framework;
- "improved Policy Coherence for Development, including through new thematic programmes that build synergies between global interests and poverty eradication."
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107 See http://ec.europa.eu/europeaid/what/development-policies/european-consensus/index_en.htm
for further information. The text of the Consensus is available
at http://ec.europa.eu/development/icenter/repository/european_consensus_2005_en.pdf. Back
108
The EU seeks to build synergies between policies other than development
cooperation that have a strong impact on developing countries,
for the benefit of overseas development (Policy Coherence For
Development, or PCD). In 2005, the EU agreed to apply the PCD
approach in 12 policy areas that could accelerate progress towards
the Millenium Development Goals For Development: trade, environment
and climate change, security, agriculture, bilateral fisheries agreements,
social policies (employment), migration, research/ innovation, information technologies
and transport and energy. The European Commission reports every
two years on progress made on PCD by the EU in the 12 areas. The
aim is to encourage continual progress, based on feedback from
developing countries, Member States, civil society and the European
Parliament. For full information on PCD, see http://ec.europa.eu/europeaid/what/development-policies/policy-coherence/index_en.htm. Back
109
For the Committee's consideration of that other Green Paper, see
(32105) 15240/10: HC 428-viii (2010-11), chapter 11 (17 November2010).AndforitsconsiderationofthesubsequentCommissionCommunication,see(33245)15561/11:HC428-xl(2010-2012),chapter3(2November2011). Back
110
See headnote: (32174) 16146/10: HC 428-xi (2010-11), chapter 18
(15 December 2010). Back
111
COM(11) 637, p. 3. Back
112
Ibid. Back
113
See headnote: HC 428-xli (2010-12), chapter 6 (9 November 2011). Back
114
See press release: http://www.parliament.uk/business/committees/committees-a-z/commons-select/international-development-committee/news/substantive-eu-dev-report-press-release/. Back
115
Ibid. Back
116
The Council Conclusions are available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/130243.pdf. Back
117
See pp. 4-5 of the Communication. Back
118
"Human Rights, Democracy and other key elements of Good Governance"
and Inclusive and Sustainable Growth for Human Development". Back
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