APPENDIX 6
Memorandum submitted by Mr Jean Bossuyt
and Ms Terhi Lehtinen, European Centre for Development Policy
Management (ECDPM)
THE CHALLENGES OF THE REFORM OF THE EC EXTERNAL
AID
Introduction
1. The European Centre for Development Policy
Management (ECDPM), an independent foundation specialising in
EU cooperation with ACP countries, has been strongly involved
in the discussions on the effectiveness of the European aid system.
In particular, ECDPM recently finalised a study of the EC external
aid reform, providing a "snapshot" of the on-going reform
process. Based on desk review and consultations with EC officials,
it presents an independent assessment of the reform proposals
from a broad developmental perspective and identifies key challenges
in further improving the performance of EC aid.
2. This short memorandum offers some fresh
thoughts on the challenges of the EC external reform in the perspective
of aid effectiveness and efficiency. The memorandum will focus
on the issues raised in the Commission's Statement on the EC Development
Policy (COM(2000)212) and the Commission's Communication on the
Reform of the Management of External Assistance of 16 May 2000.
The analysis of current crisis as set out in these documents seems
to cover major problem areas, although the suggestions to address
the situation still remain rather general and indicative.
3. A few general comments can be made on
the overall direction of the reform process:
— first, there seems to be a consensus
on the urgency of reforming the way the EC plays its dual role
of global player and donor. Both the credibility and the legitimacy
of European external assistance are seen to be at stake;
— second, the overall policy direction
of the reform package seems quite logical and coherent. In many
ways, the current reform process marks a break with past attempts
in that it adopts a comprehensive approach, linking political
objectives with far-reaching management reforms. Taken together,
these measures have the potential to improve EC aid performance
and impact; and
— third, while the reform agenda looks
rather solid on paper, implementation will be the real test. Managing
the transition from the current crisis situation to the "new-style
Commission" will be a complex and fragile process. Against
this background, it might be useful to adopt a "rolling implementation"
approach to the reform process, thus ensuring a proper monitoring
of the process (what works, what doesn't work), a continuous dialogue
(especially with Member States and the European Parliament) and
remedial action in due time.
4. There are some critical dimensions in
the reform process that merit greater attention, namely the need
(i) to safeguard a "development perspective" in the
new structures, (ii) to reconcile the search for a new "management
logic" with effective policy framework, with participation
of different actors and with quality of aid, (iii) to ensure an
effective role for evaluation and (iv) to make effective progress
in improving the human resource base.
5. In particular, the following broad topics
should be closely monitored in the reform process:
— mainstreaming or marginalizing
the development perspective. The European Development Policy
must embrace all aspects of the European Union's ties with the
developing countries. The political, economic and trade dimensions
are complementary to aid. Reconciling them in a way that takes
into account both the needs of each partner country and the Union's
objective interests, is not easy. This will constitute a specific
challenge for the operationalisation of the EC policy framework,
including the poverty focus. Furthermore, quite little attention
seems to be given to the role and place of partner countries in
the reform process. Also, the consistency between the planned
reforms and the commitments in cooperation agreements will be
a challenge. For example, the tendency to focus on "big projects"
may contradict political objectives to reorientate aid to poverty
reduction or to work more with decentralised actors, whose needs
are often for smaller projects. The main question will be on how
development cooperation could be properly integrated in a more
politically orientated external assistance and in trade policies
and how to ensure that the reforms take into account the partner
countries" views;
— challenges of implementation.
A key objective of the reform is to dramatically improve the
"efficiency" of EC aid (to speed up implementation).
This laudable objective puts pressure on the Commission to increase
disbursements. In the current political climate and taking into
account the scarcity of human resources, this may lead to a situation
where disbursing money becomes the key institutional incentive
rather than the pursuit of quality aid. One of the envisaged solutions
to the disbursement pressure is the increase of budgetary aid,
which, in turn, raises questions of accountability. The devolution
of authority to delegations is seen as the main aspect of implementation.
Therefore, it is important to ensure that the devolution of authority
to EC Delegations starts only after tackling the issue of staffing.
Therefore, the monitoring of the human resources base is crucial
to the success of the reform; and
— complementarity among new actors.
A constructive dialogue among Member States, the European
Parliament and the Commission is a pre-requisite for strengthening
the EC's political profile, building complementarity, simplifying
controls and ensuring greater involvement of new actors in the
field. The Commission proposes to strengthen complementarity as
a management tool by taking a proactive leading role in limited
priority areas in order to restore confidence in its capacity
to deliver aid effectively. By contrast, in areas that fall outside
this concentration, the Community would contribute financially
to the programmes of Member States and other donors. The programming
experience will be critical for the integration of different actors
to the cooperation framework. The issues related to an effective
coordination and task division and definition of added value of
EC aid appear to be vital for the future effectiveness of EC aid.
Monitoring and evaluation methods should feed effectively back
into the programming process.
EC Development Policy Statement
6. The EC Development Policy Statement is
a comprehensive document, designed for all developing countries,
and reflecting most underlying issues of the reform process and
priority-setting for the EC aid management.
7. However, it remains to be seen how this
new policy framework will be used in practice. Critics could easily
argue that the Policy Statement still sees a role for Community
aid in too many areas and that the proposed criteria to define
the EC's "comparative advantage" will not suffice to
set "negative priorities". The issue of coherence in
the external relations sector, but also with regard to other community
policies, such as agriculture, is the key priority for an effective
implementation of the development policy framework.
8. The nature of cooperation[3]
with ALA, MED, ACP, TACIS and PHARE countries is different, constituting
a major challenge to any attempt to "harmonise" policies
through an overall strategic framework, setting the "poverty
focus" as an overall objective. Much more could be done,
with due respect to the principle of differentiation, to translate
the poverty objective more consistently in country strategies,
sectoral policies and monitoring and evaluation systems. The new
system of programming should create opportunities to bring poverty
concerns and development perspective into the elaboration for
country strategies also for non-ACP countries.
Commission Communication on the management of
the reform
9. The reform is an on-going process. The
communication contributes to the setting up of more detailed guidelines
for the implementation of specific managemnent reforms. The questions
of externalization ("office") and devolution to EC delegations
require constant monitoring and dialogue to ensure the allocation
of necessary technical and human resources for an effective implementation.
Multi-annual programming will be the key area of future aid management.
10. However, several issues remain open
to further discussions and negotiations. The inter-institutional
dialogue with Member States and the European Parliament, in particular
on the issues of comitology and the budget measures, is crucial
in ensuring the support and monitoring of suggested reform measures.
Conclusions
11. Some critics say that reform proposals
may not go far enough in setting radically new structures and
detailed procedures, seen as essential for the improved aid effectiveness.
However, many of the key principles of the reform process are
included in the new EU-ACP partnership agreement, and therefore,
there will be legal obligations to implement some of the far-reaching
proposals, for example in the programming process. Detailed discussions
on the methodology of the reform process will certainly continue
in the coming months.
12. Against this background, the inter-institutional
dialogue both with the European Parliament and the Member States
continue to play a crucial role in the success of suggested reform
measures. This dialogue should involve different actors, including
the Select Committee, in order to promote a more constructive
approach and to avoid some major past errors.
13. The reform process has to be seen in
a long-term perspective. The main challenge of the reform will
be to link a strategic vision (what is the specific added-value
of EC aid in a rapidly changing international context?) with concrete
management reforms (what changes can help the EC to effectively
use its different policy instruments while delivering quality
aid?).
14. In this context, ECDPM would like to
suggest that the Select Committee should closely monitor the following
priority areas in the reform process, considered as having a major
impact on the EC aid effectiveness:
— The coherence of suggested reforms
in the external relations sector in relation to the overall reform
of the commission ("Kinnock reform"). It seems that
current reform has focussed more on the management dimension of
the EC crisis, although the underlying challenge is how to save
the political credibility of Europe's external image.
— Special focus on the "sequencing"
of the devolution of responsibilities to the delegations and the
externalisation, ensuring that necessary capacities and human
resources are available for an effective implementation.
— Specification of practical modalities
for the reform of control, monitoring and evaluation mechanisms.
Mr Jean Bossuyt and Ms Terhi Lehtinen
European Centre for Development Policy Management
(ECDPM)
June 2000
3 For example, EC external assistance to MED-countries
is considered part of "economic cooperation" to achieve
a free trade zone by 2010. Similarly, cooperation with ALA countries
combines deveopment (in Central America) and trade. (FTA negotiations
with Mercosur) elements. It is argued that many middle-income
countries (for example within the Mecrosur) do not consider themselves
in the category of "poor countries" where a poverty
focus as a key objective would be justified. These "political"
sensitivities are often coupled with the simplified idea that
a poverty focus would exclusively mean aid to LDC's. Back
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