Memorandum submitted by Mrs Glenys Kinnock
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 whetherafter only 18 monthsit
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
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
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 draftor adoptedcountry
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
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
cyclefrom 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 policywe 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 staffthe
Head of Delegation and an Administrative Attachéan
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 Balkanswhere there are enough people on the groundshows
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
Authoritythe Member States and the European Parliamentto
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
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.
III. THE POVERTY
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
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,
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
28. In addition, the European Development
Fund (EDF)which accounts for approximately half of all
EU development assistanceremains 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 assistancewill
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 supportwith 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,
(i) within the Commissionbetween DG RELEX, DG Development
and EuropeAid, (ii) within the Member States' administrationsbetween
Embassies, capitals and Permanent Representations, and (iii) between
the field and headquarters.
The complexity of the decision-making
processfor 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
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 progressto datehas
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 programmeseither 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 instrumentsas 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 donorsand 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.
V. IMPROVED COHERENCE
BETWEEN EC POLICIES
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
44. There is clearly always a hierarchy
of priorities for the EUand development aid is not always
at the top, sometimes justifiably. For example, it is difficult
to defend the continued export of asbestos into the EUeven
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.
VI. THE FUTURE
45. The European Community now spends over
9 billion (£5.5 billion) per annum in official
development cooperationwhich 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 Commissionsuch as internal financial
control and auditbut also in terms of RELEX-specific concernssuch
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
48. The Commission should, by September
2002, provide the European Parliamentand Member Stateswith
a progress report on the RELEX reform process.
Mrs Glenys Kinnock MEP
21 November 2001