AID
3. We recommend that the Commission publish
the details of how is has calculated the amount of programmable
aid provided to each ACP country. We also recommend that there
be, in the provision of aid, greater differentiation amongst ACP
countries on the basis of levels of poverty (paragraph 12).
The Government strongly agrees that future aid
allocations to the ACP should be more clearly differentiated on
the basis of poverty.
The EU will propose, during negotiations with
the ACP, that each ACP country should be given an indication of
the amount of aid it can expect for a period of five years. The
figures will be calculated in the light of the country's estimated
needs (based on its size, population, income, structural and geographical
vulnerability and whether the country is an LDC), and an assessment
of performance. The indicative amount is intended to facilitate
a programme of EC aid for the country concerned, but it will not
be a definitive entitlement. The basis for performance assessment
should, the EU proposes, be determined by the Parties during the
negotiation of the Convention. The EU considers that relevant
parameters include the country's commitment to the objectives
of sustainable development and poverty eradication, the quality
of macro-economic and other policy and management, and progress
with political and institutional reforms.
The EU will propose regular reviews of resource
allocations, to take account of developments in a country's situation
and performance. Indicative aid allocations may be adjusted in
the light of these reviews.
4. We trust the post-Lomé IV Convention
will introduce simplicity and flexibility into aid allocation
procedures, which are currently criticised for their inefficiency
and complication. We support further steps to provide aid in tranches
to ensure greater accountability against poverty-relief and other
objectives, but the criteria for assessing performance must be
clarified and agreed by both parties (paragraph 16).
The Government agrees.
The EU will propose during the negotiations
more flexible aid allocation procedures. It will propose a reduction
in the number of separate aid instruments under the Convention.
It will also, in order to increase flexibility, propose more frequent
country level programming and review exercises.
As noted above, performance assessment is a
matter for discussion during the negotiations. The Government
agrees that the EU and ACP need jointly to agree an approach to
this.
5. It is clear that Stabex and Sysmin cannot
continue in their current form. We strongly recommend, however,
that additional and equivalent budgetary support, targeted to
social sectors and to the diversification of the economy, be provided
in cases where commodity price fluctuation merits intervention
(paragraph 19).
The Government consider that Stabex and Sysmin
have proved ineffective and require major reform. There is, however,
a continuing case for additional support for countries where short-term
volatility in earnings from basic products threatens the successful
implementation of macro-economic or sectoral reform efforts. The
EU will propose that the new Convention contains provision for
such assistance. The Government considers that future assistance
should be highly focused, should be allocated on a case by case
basis (rather than through the automatic allocation system which
has characterised Stabex and Sysmin) and should be designed to
support implementation of a country's own macro-economic and sector
reforms. Simpler, more flexible procedures for such future assistance
will also be required.
6. We welcome the proposed incorporation
of the DAC international development targets in to the Lomé
Convention. Effective strides towards the achievement of the DAC
targets will require a coherent donor strategy, in consultation
with developing country partners, and the European Union programme
has a special responsibility to promote consistency among EU donors
(paragraph 21).
The Government agrees.
The Government made a substantial effort to
ensure that the EU's mandate gives priority to implementation
of the international poverty eradication strategy and targets.
The Government also agrees on the importance
of a co-ordinated and consistent donor strategy for achieving
the international development targets at the country level, on
the basis of a country's own poverty elimination strategy.
The Government welcomes recent moves by the
Commission (DGVIII) to strengthen country-level co-ordination
and complementarity among member states and the Commission. A
working group of member states' Directors General for development,
chaired by the Director General of DGVIII, is due to make recommendations
on specific measures in September or October, for discussion at
the Development Council in November.
7. We support the Government's concern to
reform the financial regulations of the Commission to achieve
effective decentralisation coupled with appropriate safeguards.
Simon Maxwell from the Overseas Development Institute suggested
decentralisation take place on a pilot basis in a few countries.
This also appears a useful suggestion and we trust that any changes
to the financial regulations will allow for this possibility (paragraph
25).
The Government continues to attach importance
to a harmonisation and streamlining of EC aid management systems,
including a reform of the Financial Regulation as it applies to
external assistance. The Government looks forward to seeing the
Commission's proposals, which are expected later this year.
The Government also favours a decentralisation
of decision making, including financial delegation, to the country
level. The EU's mandate for negotiations on the new Convention
proposes such a decentralisation. The Government looks forward
to specific proposals on this, and more widely on improving the
efficiency of aid management, from the Commission.
8. We recommend that the Government press
the EU as a matter of urgency for a concerted initiative to address
the problems in staffing identified in the Commission and its
delegations. There should be particular emphasis on the recruitment
of staff with expertise in poverty-related issues and social development,
drawn wherever possible from the local and regional populations
(paragraph 28).
The Government would like to see;
(a) an improvement in the skills mix in
the Directorates General managing external assistance, and the
EC's overseas delegations, especially an increase in the number
of professionally qualified staff in the areas of health and population,
education, social development, environment and institutional development;
(b) improvements in the levels of support
staff able to assist in the implementation of development assistance
activities; and
(c) greater use of local expertise, including
professionally qualified local staff, in EC delegations.
However, the Government also believes that the
EC should decide in which areas it has a comparative advantage
so that its efforts can complement rather than duplicate Member
States' arrangements. Staffing strengths should be adjusted accordingly.
The Government welcomes the Commission's recent
initiative to launch a recruitment exercise for health and population
specialists in the external relations Directorates Generals. The
Government notes that many member states also have a substantial
pool of qualified and experienced development professionals, and
would like to see the Commission make greater use of this expertise.
The Government will continue to pursue these
issues with the Commission.
9. The lack of scrutiny by the European Parliament
of the Court of Auditors' reports on the operation of the Convention
constitutes a serious gap in accountability (paragraph 30).
The Government strongly supports the work of
the Court of Auditors on the Convention. The Court's reports are
considered by member states in Council working groups and the
Commission is required to report on how they follow up the Court's
recommendations.
The Commission is accountable directly to member
states for activities under the Convention, reflecting the fact
that member states contribute funds directly to the Commission,
rather than through the EU budget. The European Parliament, through
its Development Committee as well as through its participation
in the Joint ACP-EU Parliamentary Assembly under the Convention,
plays a significant role in influencing the development and implementation
of the Convention.
10. We have argued in a previous Report,
and do so here, that the EU needs a modern, integrated development
policy. In principle the budgetisation of the Lomé Convention
is a necessary part of such a development policy. We do not, however,
wish to see the budgetisation of Lomé until the EU has
clearly embraced a poverty-focused approach. It would not be acceptable
to see, as a possible result of budgetisation, funds reallocated
for political and strategic reasons from the Least Developed Countries
of the ACP to the richer countries on the EU's borders (paragraph
32).
The Government has sympathy for the Committee's
view that the EU needs a clearer overall statement of development
policy to set priorities and guide the work of the Commission
in managing external assistance programmes. The Treaty establishing
the European Communities, as amended by the Treaty of Amsterdam
signed in October 1997, sets out, in Title XX, broad overall objectives
for Community policy in the sphere of development co-operation.
But there is a wide range of EC legislation, decisions and instruments
through which the EC carried out its external assistance programmes,
and responsibility for these programmes is divided within the
Commission between four Directorates General and ECHO. The Government
recognises that there is a case for a clearer overarching statement
of policy, together with a reorganisation of the external relations
Directorates General Commission (perhaps as part of the overall
Commission reorganisation due by the year 2000).
The Government's assessment is that, as a practical
matter, budgetisation of the EDF is not a serious option for the
foreseeable future. It would require the unanimous agreement of
member states, a number of whom are currently strongly opposed.
For its part, the Government would be willing to consider the
arguments for and against budgetisation on their merits should
the views of other member states change so as to make this a serious
possibility.
The Government agrees with the Committee that
funds should not be reallocated from the Least Developed Countries
to richer countries. It would oppose measures which may have this
effect. The Government will work, as part of the negotiations
under Agenda 2000 and the New Financial Perspectives, for agreement
that a higher proportion of EC aid resources should in future
be allocated to Least Developed and other low income countries.
11. We welcome the commitment to systematic
monitoring of the impact of projects on women (paragraph 35).
12. We also recommend that there be gender
analysis of all Lomé activity, both aid and trade. We recommend
that support be given to institution-building of independent women's
organisations (paragraph 35).
13. We recommend that the EU when agreeing
its negotiating mandate also commit itself to a significant increase
in expenditure and staffing in the Commission on gender issues.
Details should be given of the amount of extra money allocated
and the number of extra staff proposed (paragraph 36).
The Government agrees with these recommendations.
The Government has been a strong advocate of
strengthening attention to gender issues in the negotiations on
the successor to the Lomé Convention and more widely on
the EC's other external assistance programmes. Strengthening the
EC's attention to gender issues was a priority for the UK's Presidency
of the EU, culminating in the agreement of Conclusions on Gender
at the Development Council in May.
14. We welcome the emphasis in the Draft
Negotiating Mandate on sectoral aid, rather than project aid.
With the right conditionality this will help provide appropriate
policy and administrative frameworks for development. It will
also make it more likely that the development strategy is agreed
with and owned by the government of the developing country (paragraph
41).
The Government agrees.
The mandate, as agreed by the EU, maintains
a proposal for assistance increasingly to be provided through
direct budgetary support at the sector level rather than through
discrete projects. This proposal reflects wider trends in international
assistance to developing countries, notably in the programmes
of the World Bank and bilateral development agencies, for an increasing
focus on support, including through direct budget aid, for sector
reform programmes developed and owned by countries themselves.
The Government endorses the Committees references to conditionality
and ownership.
15. We do not consider that enough political
effort and will is as yet being focused on aid co-ordination.
Each ACP country should negotiate, plan and own its country strategy
for the eradication of poverty—ownership by the recipient
is crucial to the success of any programme of development aid.
The EU and member states should then co-ordinate their proposals
for assistance within that strategy. We recognise that some ACP
governments have difficulty employing sufficient expert staff
to plan such a strategy. We therefore recommend that the EU and
other donors provide financial assistance to enable ACP governments
to employ and equip local development experts in the elaboration
of a country anti-poverty strategy.
16. We do not see in principle any objection
to the EU and member states being involved in similar work but
we recommend that the EU nevertheless concentrate on its strengths
and those areas where it has an advantage. These include structural
adjustment funds and sectoral aid. We trust also that sectoral
aid will be poverty-focused, with an emphasis on the health and
education sectors. We recommend that the Commission report annually
on co-ordination, country by country, between the EU and member
states in ACP countries (paragraph 45).
The Government agrees with the emphasis placed
by the Committee on co-ordination, and in particular the central
role to be played by developing country Governments themselves.
As noted above, the Commission is taking steps
to improve co-ordination. The Government supports this work, while
emphasising that co-ordination is most effective when driven at
the country level by developing countries themselves, and where
it involves all significant donors, in particular the World Bank
and the IMF.
The Government agrees that the EC should focus
its assistance on the areas where it can make the most valuable
contribution. The Government welcomes the proposal in the mandate
that in future assistance should be focused on a narrower number
of important priorities within each country. The priorities will
need in each case to be determined through discussions between
the EC and the country concerned. Likewise, the EC should continue
to be able to deploy a range of aid instruments (project aid,
technical assistance, funding for structural adjustment and sector
programmes, etc), deciding on a case by case basis the most appropriate
instruments. The Commission proposes that there should be regular
reviews of country programmes: this should facilitate co-ordination.
17. "The evidence shows that poverty
is reduced more quickly if certain conditions are met. Those conditions
include democratisation, good governance, participation, an economic
framework which encourages labour intensive growth, and the provision
of social services. If those conditions are not met, then aid
is not going to be well used" (paragraph 47).
The Government agrees.
18. We recommend that greater thought be
given in Lomé aid to the preparation and targeting of programmes,
effective monitoring during the implementation of programmes,
and evaluation of the impact of the programmes in the eradication
of poverty and the fulfilment of their objective. This should
not add significantly to the time spent on bureaucratic procedures
(paragraph 50).
The Government agrees.
The purpose of improvements in aid management
under the next Convention should be to improve the effectiveness
and quality of assistance under the Convention and, in particular,
to contribute to the achievement of the targets set under the
international poverty eradication strategy.
19. We recommend that the Government press
for effective communication with NGOs on the availability of evaluation
reports (paragraph 51).
The Government agrees. It will do what it can
to facilitate access by NGOs and others to evaluation reports.
