THE FUTURE OF THE EC DEVELOPMENT BUDGET
INTRODUCTION
2. Thirty per cent of the budget of the Department
for International Development (DFID) is spent not by the Department
itself but by the European Community.[3]
Day-to-day decisions on development policy, on distribution of
these funds and on the implementation and evaluation of programmes
are made by Commissioners and officials of the Commission, not
by United Kingdom ministers and civil servants. This significant
portion of DFID's expenditure, amounting for 1998-99 to an estimated
£783 million[4], should
of course still come under the scrutiny of the House of Commons
- to ensure that the amount if justified; that it is well targeted
and well spent; above all that this Community expenditure furthers
the objectives of DFID's Development White Paper - the eradication
of poverty. The Committee has therefore, from its inception, taken
an interest in the European Community's development policy.[5]
3. The development work of the European Community
is important not only because of the percentage of DFID's budget
which it consumes but because, as the Secretary of State for International
Development, the Rt Hon Clare Short MP, put it, "If we could
get the EC to be a really effective development player ... the
potential is enormous."[6]
The EC is the fifth largest donor of official development assistance
(ODA) and the second largest multilateral donor.[7]
Furthermore, when the ODA of the EC and the members states' bilateral
programmes are taken together they account for 60 per cent of
world ODA.[8] In the last
few years there has been a growing realisation that for aid to
be effective it should be properly coordinated, with agreed objectives.
There has been considerable momentum behind the targets set out
by the Development Assistance Committee (DAC) of the Organisation
for Economic Cooperation and Development (OECD) in the document
"Shaping the 21st Century"[9],
in particular the aim to halve the proportion of the world's population
living in extreme poverty by the year 2015. If the Community and
its member states were to share a poverty-focussed development
strategy there could well be real progress towards these international
development targets.
4. There is then a two-fold reason for our interest
in the future of the EC development budget - an examination of
the effectiveness of DFID expenditure and a concern to maximise
the developmental impact of the considerable resources at the
disposal of the Community. In Community matters the timing of
policy discussions is crucial and 1999 will be a year of immense
importance. During 1999 the Community will agree its "Financial
Perspective", setting development expenditure for the next
seven years, from 2000 to 2006, as well as a number of multi-annual
expenditure envelopes for particular development programmes. Decisions
taken in the next few months will determine the character and
effectiveness of EC development policy for several years to come.
As the following paragraphs will make clear, we have serious criticisms
of both the priorities and effectiveness of current EC development
expenditure.
5. In December 1998, the Department for International
Development published their Institutional Strategy Paper on the
European Community. Many of the criticisms made by DFID, both
in its Institutional Strategy Paper and in evidence, are also
made by the Committee in this Report. The Department has been
active, particularly during the United Kingdom presidency[10],
in promoting the interests of the poorest developing countries
within Community institutions. We congratulate the Secretary of
State and her Department on this important work and trust that
the Committee's Report will also contribute to the long overdue
reform of the European Community's development budget.
6. We are grateful to all who gave oral evidence
to the Committee during the course of this inquiry: the Rt Hon
Clare Short MP, Secretary of State for International Development,
Mr Richard Manning, Director-General (Resources), Mr Tony Faint,
Director, International Division, Mr Mark Lowcock, Head of EU
Department, Department for International Development, and Mr Nigel
Sheinwald, Director, EU, Foreign and Commonwealth Office; Mr Philip
Lowe, Director-General, DGVIII, European Commission; and Mr Clive
Robinson, Christian Aid, Ms Claire Godfrey, Oxfam, and Ms Helen
O'Connell, One World Action. We would also thank all those who
supplied the Committee with written evidence. In December 1998
the Committee visited Brussels and had meetings with representatives
of the European Commission, Members of the European Parliament,
and representatives of non-governmental organisations (NGOs).
Notes of discussions are included as an Annex to this Report.
3 Evidence p.2. The European Union was established
by the Maastricht Treaty (the Treaty on European Union) in November
1993. The TEU established, in addition to the existing European
Communities, two additional 'pillars': a Common Foreign and Security
Policy and cooperation in the field of Justice and Home Affairs.
Both trade and development cooperation policies fall within the
European Community, which is in turn subsumed by the institutional
framework of the European Union Back
4 DFID
'Departmental Report 1998-99', Cm3907, p.12 Back
5 see
Second Report from the Committee, Session 1997-98, 'The Development
White Paper', HC 330, and Fourth Report from the Committee, Session
1997-98, 'The Renegotiation of the Lomé Convention', HC
365 Back
6
Q205 Back
7
Evidence p.1 Back
8
Q205 Back
9
'Shaping the 21st Century: The Contribution of Development Cooperation'
May 1996, OECD DAC, pp.1-3 Back
10 Q245 Back
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