APPENDICES TO THE MINUTES OF EVIDENCE
TAKEN BEFORE THE INTERNATIONAL DEVELOPMENT
COMMITTEE
APPENDIX 1
Memorandum submitted by Dr Stephen J H
Dearden, Manchester Metropolitan University, Department of Economics
Turning first to the Communication from the
Commission outlining the principles of EC Development Policy (COM(2000)212)
it must be recognised that many of the criticisms of the EC in
this area are acknowledged and addressed. The document identifies
the need for coordination with other international donors, for
complementarity with EU Member States own development policies,
for a focus upon those tasks where it has a comparative advantage,
the tailoring of policy to the particular needs of each developing
country, and above all, for the primacy of the objective of poverty
reduction. However prospective performance will depend upon the
detailed proposals that follow from these broad policy statements.
The Communication on Reform of the Management of External Assistance
(m) is the first of a series of such proposals, to be followed
by papers focusing upon "the coherence between development
and other EU policies and the perspectives for the EC's external
spending" (p 6).
But this initial core policy statement should
principally be judged by whether it answers the criticism that
the EC has itself identified—"the lack of an overall
Community strategy and the fact that the objectives of Community
development policy are too numerous, too vague and not ranked
in any away." (p 5). Does this paper provide the framework
to ensure that development policy is guided by clearly defined
objectives and priorities and not focussed upon the instruments
of policy? Does the "Integrated Framework for Community
Activities" (p 23) meet this need or are the objectives
too broad to be operationally useful? Is there sufficient recognition
of those cases where objectives are conflicting and a trade-off
must be made?
Are the priority activities for Community aid
(paragraph 4.3) consistent with the outlined objectives; are they
too broadly drawn and is the failure to indicate priorities a
fundamental flaw?
The Commission recognises the need to concentrate
upon a limited number of core areas (p 6). How are these to be
identified? Paragraph 2.4 merely outlines the general advantages
that the Community might have in relation to individual Member
State's delivery of an aid programme, but it fails to recognise
that "value added" must also consider all of
the weaknesses and disadvantages that the Community has experienced
in the implementation of its development policy and which are
outlined so comprehensively in the document. There is a failure
to distinguished between the Commission's coordinating role in
regard to the development policies of individual EU Member States
(eg p.13 paragraph 2.2.3); those areas where subsidiarity should
apply and responsibility should lie with Member States; where
comparative advantage suggests a Member State should fulfil the
lead role in a particular developing country; where other international
bodies have greater competence or where there should be direct
administration by the Commission itself. The call for additional
administrative resources, accompanied by a "threat"
to reduce the "volume of aid programmes managed by the
Commission" (pm 17), emphasises the need to address the
issues of where the Commissions comparative advantage or "value-added"
in development policy really lies. Some of these issues may be
addressed in the strategy papers being formulated on "fostering
complementarity between EU Member States and the Community"
(p 10).
The recognition of a "poverty focus"
makes an important contribution in providing a coherent objective
for EU development efforts, but how far is it clearly defined?
What difficulties arise in creating a robust measure of progress
in this area? Are there any difficulties with the adoption of
the OECD's quantifiable objectives (p 9). If too widely drawn
will a "poverty focus" become meaningless (p
16)? The distinction between primary, secondary and tertiary poverty
focuses appears meaningless (p 20). Is insufficient emphasise
given to the potential conflict between the environmental and
poverty reduction objectives, for example in the inevitable increase
in energy use associated with economic development (p 18)? The
answer to some of these questions should be offered in the future
work on a methodology which the Commission indicates that it is
undertaking (p 20).
How will the Community approach the problem
of recipient governments which lack any real commitment to poverty
reduction as their principle political objective—ie. where
there is a failure to "establish ownership of the policy"?
What is implied by "policy dialogue, capacity building
and adequate implementation systems" (p 17). Similar,
and far more problematic issues arise in assessing the fulfilment
of "good governance" criteria. Transparency and
consistency in the assessment of Developing countries progress
in this area is essential. Overtly inconsistent and "political"
assessments will undermine the EU's credibility and the effectiveness
of its development policy. It is also important to distinguish
between "institution building" and "good
governance". Technical assistance may help with "institution
building" but "good governance" involves
more fundamental political and social change. Here the explicit
requirements of commitments to "human rights"
is an important contribution (p 27). The enhanced role for "civil
society" in recipient countries is emphasised and the
approach that will be taken to reinforce their capacities and
involvement. The Committee might seek further elucidation of the
detailed "methodology and framework" (p 28) that
is to be adopted.
How is the EDF to be integrated into the general
budget, given its different contributory basis, and what general
principles are to be applied in order to rationalise the number
of budget heads? (p 31).
TRADE ISSUES
The paper offers little enlightenment in regard
to the trade issues where the EC has competence. The conflict
between the ECs development objectives and WTO obligations is
currently a central concern. The WTO framework will constrain
the REPAs (p 12) that will succeed Lome. How is the EC intending
to approach the current round of WTO negotiations in regard to
the needs of the developing countries? How will development policy
address the problem of adjustment for developing countries required
to open up their economies to reciprocal free trade? Has the Commission
identified those developing countries where the opening up of
trade will present particularly acute problems eg involving significant
devaluations, combined with import dependence, resulting in substantial
and persistent falls in living standards?
Nonetheless the requirements of the WTO may
be seen in a positive light. The move to a regionalisation of
Lome may offer the EC an opportunity to develop a more coherent
treatment of its relations with developing countries. The complex
pattern of individual Association agreements and Lome might now
be rationalised with discrimination on the grounds of income level,
as required by the WTO. This is entirely consistent with the primacy
to be given to a poverty focus and would end the historic anomaly
of the preferential access and aid prioritisation of those developing
countries with which the Member States had historic ties. What
are the political constraints upon the Community in refocusing
its development policy? However, is there a danger that a move
to regionalisation of policy may fail to recognise the differential
needs of particular developing countries (paragraph 4.2)?
REFORM OF
THE MANAGEMENT
OF EXTERNAL
ASSISTANCE
(Page nos. "pm")
Paragraph 2.3 provides a check list of identified
problems on the implementation of EC development assistance against
which the proposals for reform (COM(2000)212) should be assessed.
In the concern to increase the rate of disbursement
of funds it is important that the monitoring of the quality of
the interventions are not neglected (p 14). There is always the
danger that there will be an inappropriate focus upon the administrative
problems of expenditure and auditing over the needs for evaluation
of the effectiveness of the aid programme in its achievement of
the objectives of development policy.
The distinction between auditing and evaluation
is an important one. There is always a danger that administrators
will focus upon the former rather than the latter. The development
of a robust and effective system of evaluation for assessing the
contribution of project and sectoral aid to the achievement of
EC development objectives is an essential requirement. Responsibility
for "identifying best practice inside and outside (benchmarking)"
is to lie with the Quality Support Group (pm 12). However this
group is to be small in number and its views will not bind the
DGs. By contrast the Evaluation Unit within the Common Service
for External Relations (SCR) would appear to have an enhanced
role (pm 12). How is this to relate to the Quality Support Group?
Is it appropriate that the Evaluation service should be within
the implementing SCR? Is there any ambiguity in the relative responsibilities
of the Evaluation Unit and the Court of Auditors?
There is a clear commitment to systematic evaluation
and the full utilisation of the feedback that this should provide.
(p 32). Does the proposed structure under the administrative reform
provide this? Who will be responsible for the development of a
consistent methodology?
Another major criticism of the current administration
of EC aid has lain in the division of responsibilities between
the various DGs and ECHO. ECHOs role in short term emergency assistance
has increasingly overlapped with the long term role of the EC's
other development agencies. This is particularly important as
ECHO will continue to manage its full project cycle outside of
the SCR successor. Again this problem has been identified as one
which must be addressed and awaits a further "communication"
from the Commission (p 22).
The Committee might wish to seek an amplification
of the Commission's thinking as to the "most appropriate
type of body for implementing aid in the long term" (pm
9). Is this only a reference to the implementing body? There appears
to be a suggestion that it might be "floated out of the
Commission itself" (pm 17). The Committee might wish
to explore the Commission's thoughts on this apparently radical
alternative.
Does the fundamental structure of the division
of responsibilities between geographical policy-determining DGs
and the implementing SCR successor deserve reconsideration? Is
there a case for one DG overseeing external aid and responsible
both for policy and implementation? Are the attempts to develop
joint working methods (pm 21) a second-best solution to the problems
created by the current structure?
The shift of emphasise from project aid to sectoral
support may raise greater difficulties in monitoring and evaluating
performance. Issues of "fungibility" and additionality
arise (p 29). How are these to be addressed? Such monitoring would
be expected to form part of the process of review that will feed
into the Country Strategy Papers. A further document on the framework
for these Papers has yet to be presented by the Commission (p
30).
SUMMARY
The following areas might receive the Committees
further attention.
— Are the objectives and priorities
of EC Development Policy clearly identified? How is progress towards
their achievement to be monitored?
— Has the Commission identified its
core responsibilities, reflecting its comparative advantage?
— How are we to define and achieve
"good governance"?
— How is the EDF to be integrated into
the general budget?
— What is the EC's approach to the
current WTO round of negotiations in relation to the objectives
of its Development Policy and its existing obligations?
— Do the administrative reform proposals
create the structure for independent and effective evaluation
of EC development policy?
— Is the current division of responsibility
between geographical DGs, ECHO and the SCR an optimal long term
management structure
Dr Stephen J H Dearden
Manchester Metropolitan University, Department
of Economics
June 2000
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