ANNUAL REPORT ON IMPLEMENTATION OF EC
AID DURING 2000
Report on the implementation of the European Commission external assistance during 2000.
||6 November 2001|
|Forwarded to the Council:
||7 November 2001|
|Deposited in Parliament:
||28 November 2001|
|Basis of consideration:
||EM of 14 November 2001
|Previous Committee Report:
|Discussed in Council:
||8 November Development Council
||Not cleared; referred to the International Development Committee for its Opinion
9.1 Publication of an Annual Report was
one of the principal recommendations of the May 1999 Development
Council. This first report covers activities during 2000. It is
the first time that information on all the EC programmes has been
put together in a single document.
9.2 In its introduction, the Commission
makes no reference to the Development Council's Conclusions, but
describes the document as a pilot exercise which follows its decision
to reform its management of external aid.
These reforms, including the establishment of the EuropeAid Co-operation
Office on 1 January 2001, did not start during the period covered
by the report but reference is made to them.
9.3 The first chapter summarises
the European Community's new development policy and provides an
update on the Commission's reforms. It emphasises that the
fight against poverty has become the main objective of the EC's
9.4 Experience had shown that, if donors
were to be effective, it was not possible for them to address
all the issues connected with poverty reduction. Aid had, therefore,
been focussed on the six priority areas set out in the Commission's
Communication of 26 April 2000:
" the link between trade and development;
- support for integration and regional co-operation;
- support for macro-economic policies which has
a direct link with strategies to reduce poverty;
- food security and sustainable rural development;
- the strengthening of institutional capabilities,
notably in the areas of good governance and the rule of law."
9.5 Poverty reduction is the central objective
of the Cotonou Agreement, which sets out the legal framework for
trade and development co-operation between the EU and ACP countries
over the next 20 years. The Commission has also been active in
drawing up the Poverty Reduction Strategy Papers, an initiative
of the World Bank.
9.6 Introducing the section on improving
the management of external aid, the Commission says:
"At the same time as defining new directions
for the Community's development policy, an ambitious reform of
the way external aid is managed has been launched, aimed at improving
project quality and cutting the time taken to implement them.
"A first step towards unification of the services
tasked with executing the third country aid programmes, and towards
improving management was the setting up, in 1998, of the Common
Service for External Relations (SCR). The SCR set to work to eliminate
payment delays, reduce commitment backlogs, harmonise and simplify
contracting and subsidy-granting procedures, and rationalise information
systems (see details in the Annex).
"On 16 May 2000, the Commission decided to go
a further step and set in motion a major reform programme. The
concern was, in particular, to:
- considerably improve the quality and adaptability
of project management;
- significantly reduce the time taken to implement
- provide harmonised financial, technical and contract
management procedures to meet the best international standards
of ethics and responsibility; and
- strengthen the impact and visibility of the European
Union's co-operation and development aid."
9.7 This reform programme has four main
" a total revision and unification
of external aid programming, in line with the objectives and priorities
of European Union policies;
- integrated management of the entire operations
- setting up a single department (EuropeAid Co-operation
Office) tasked with the project cycle from identification to evaluation;
- large-scale devolution of project management
towards the Commission Delegations."
9.8 A box provides a helpful synopsis of
assistance to the candidate countries, which in 2000 amounted
to _3 billion.
9.9 Since 1 January 2001, DG Development
and DG External Relations have been responsible for setting policies
and multi-annual programming, while the EuropeAid Co-operation
Office is responsible for managing the remainder of the operations
9.10 The EuropeAid Co-operation Office is
a Commission Department supervised by the Commissioners for External
Relations, Development and Humanitarian Aid, Enlargement, Trade
and Economic and Monetary Affairs. The External Relations Commissioner,
Chris Patten, and the Development and Humanitarian Aid Commissioner,
Poul Nielson, are President and Chief Executive Officer, respectively.
It is tasked with identifying and preparing projects and programmes,
preparing financing decisions, implementation and monitoring,
and project and programme evaluation. The creation of this office
is described as a central element of the reform of the foreign
aid management mechanism. It implements the full range of the
Commission's external aid instruments, with the exception of the
pre-accession programmes (Phare, Ispa, Sapard), the humanitarian
activities, macro-financial aid, the Common Foreign and Security
Policy (CFSP) and the Rapid Reaction Facility.
9.11 Chapter 2 covers the thematic budget
lines in priority areas, such as democracy and human rights,
partnerships with non-governmental organisations (NGOs), gender
equality, health (aids and demography), drugs, refugees and rehabilitation,
food security, environment and forests.
9.12 Chapters 3 to 7 cover each of the
EC's large geographical programmes including: South Eastern
Europe (the Balkans); Eastern Europe and Central Asia; Africa,
Caribbean and the Pacific (ACP); Asia; and Latin America. Financial
data are in Chapter 8. The Annexes provide some background information,
including some on the EC's evaluation and external audit programmes.
9.13 At the end of the section on South
Eastern Europe, the Commission concludes:
"EU activities in the Western Balkans
have expanded rapidly, now that democratic governments have been
elected in Croatia and the Federal Republic of Yugoslavia, while
the level of EU activities in the NIS for example, remains broadly
unchanged. The more favourable political climate in the Western
Balkans is reflected in the doubling of assistance from 2000 to
2001: from about _400 million through the Obnova/Phare programmes
to _800 million through CARDS, their successor programme. The
European Agency for Reconstruction is well staffed and was therefore
able to deliver EC emergency and reconstruction assistance speedily
and effectively in FRY during 2000.
"The CARDS programme in the Western Balkans
will continue to be a large, politically sensitive and visible
EC assistance programme. However, in an environment of rapid and
recurring political tension, it will be a major challenge to continue
speedy and effective delivery of the right sort of assistance.
Gradually, as stability begins to return to the region, our assistance
is focussing less on emergency support and reconstruction, and
more on broad-based and sustainable development, in particular,
on institution-building. This assistance is embedded in the overall
framework of EU relations; it is being used to further the objectives
of the Stabilisation and Association Process and the growing number
of Stabilisation and Association Agreements signed, or under negotiation,
with the countries in that region."
9.14 The Commission's conclusion on the
section covering the Partner States of Eastern Europe and Central
"The TACIS programme, covering the countries
of Eastern Europe and Central Asia, is now a well-established
programme with an annual commitment budget of around _450 million.
It is adapting to the evolving needs of the region, including
recognition of the growing differentiation between the countries.
Enlargement of the EU to the east is leading to a shift of focus
towards the Western NIS in terms for example of border management,
spill-over environmental concerns and cross-border initiatives.
Greater attention will be paid to promoting investments, including
the co-financing of investment projects with international financial
institutions. Investment support will also be extended to the
social sectors, where the needs are huge after a decade of very
sharp economic decline. At the same time, the overall focus on
promotion of reforms is being strengthened. More prominence will
be given to providing high-level policy advice, and to other activities
in connection with the implementation of the Partnership and Co-operation
Agreements but also to long-term institution building, in particular
to support of the rule of law. As devolution continues, more and
more assistance will be delivered through the local Commission's
9.15 The conclusion to the section on the
South Mediterranean, Near and Middle East is "a positive
assessment in spite of structural difficulties". The Commission
"The Barcelona Process has been able to demonstrate
several remarkable successes although five years is not
long enough for it to deliver all its promises. Initial expectations
were high, boosted by the bright prospects of agreement that the
Middle East Peace Process appeared to offer in the mid-90s
perhaps they were too high to live up to.
"The crisis situation in the Middle East has
seriously endangered the Peace process and had a strong detrimental
effect on regional co-operation in general. These shortcomings
were so substantial that they called into question the political
determination of both sides to achieve the goals they set in 1995.
"On the positive side, despite serious political
odds, the Union has been able to initiate and formalise continuous
dialogue amongst its 27 partners. The multilateral approach is
now more widespread even prevailing over traditional bilateralism.
All EU Member States recognise the strategic importance of the
EU's southern neighbours, so substantial financial assets have
been committed to the Mediterranean region and the first encouraging
results of the reform efforts in the Mediterranean Partners are
"On the other hand, it has been more difficult
than anticipated to establish a free trade area, illustrated by
the slow progress in negotiating Association Agreements, as well
as the slow ratification procedures for Agreements already signed.
Here, both the Mediterranean Partners and the EU Member States
share the blame. South-south integration is still moving forward
at a snail's pace, thus failing to attract sufficient inward investment.
"Too many small-scale projects were set up in
the enthusiasm of the early stages of the Barcelona Process, without
care being taken to set priorities. As a result, implementation
was generally slow, and the low absorption capacity of the Partners
also delayed the disbursement of available funds in previous years.
Nevertheless, this tendency has been reversed in the year 2000
as a result of a considerable effort to 'clear up the weight of
the past'. The EU Council of Ministers decided to endow MEDA with
_5.350 million for 2000-2006. These grants from the European Community
budget are accompanied by substantial lending from the EIB, whose
lending mandate over the same period is _6.400 million. The EIB
has promised to contribute a further _1.000 million from its own
resources. This means that a total of nearly _13 billion will
be available for the Euro-Mediterranean Partnership to use over
the seven-year period starting from 2000."
9.16 On Asia, the Commission refers
to the Communication, which it has since adopted, updating its
1994 strategy paper, Towards a New Asia Strategy.
Since 1994 political dialogue with key partners in the region
has intensified, and trade and investment relations have expanded.
There has been a modest growth in development and economic co-operation
but much remains to be done. The political dialogue needs to be
deepened and broadened, co-operation in the WTO strengthened and
the EC aid programmes to the area must "achieve their full
potential". The degree of mutual awareness between the two
regions remains "insufficient".
The Government's view
9.17 The Secretary of State for International
Development (Clare Short) says in her Explanatory Memorandum of
14 November that the Government welcomes the report as an important
step forward. However, she then adds:
"the report falls short of the needs spelled
out by the Development Council, most recently in conclusions adopted
in May 2001. These said that the report should cover the results
and achievements of EC aid, progress on the EC's six priority
areas and on co-ordination, complementarity and coherence, and
give a perspective on the year to come. Most importantly, there
is no attempt to measure impact or say how the Commission intends
to measure impact in future, or to discuss priorities or compare
the different regional or sectoral programmes.
"At the Development Council on 8 November I
welcomed the production of the Report, but also made it clear
that the text was not as good as it should be and should be improved
next year in line with the framework set out in the Council's
conclusions of May 2001. Other European Ministers made similar
points. The Council adopted procedural conclusions, which emphasise
the importance of the Annual Report in building public confidence
and call for the Commission to work with the Member States, other
donors, and the European Parliament to establish performance indicators".
9.18 The report, which is a Commission staff
working document, is due to be published early in 2002. In a letter
dated 20 November, the Minister regretted that the UK had agreed
conclusions on this document before obtaining scrutiny clearance,
due to the late issue of the document.
9.19 By bringing together in one paper
the budget for each area, the report highlights the effort being
put into each. Particularly striking is the figure of _13 billion
to be made available for the Euro-Mediterranean Partnership over
the seven-year period from 2000. This emphasises the importance
of parliamentary oversight of the Barcelona Process, and we call
on the Government to set a date for the debate in European Standing
Committee B which we recommended in February on this issue and
which has still not taken place.
9.20 We are surprised that the Commission
did not follow the Conclusions of the May Development Council,
or even refer to them in its Introduction, and support the Secretary
of State in asking for next year's report to include the information
the Council required.
9.21 In all, however, our preliminary
view is that this first annual report provides a valuable comprehensive
account of the Commission's external assistance. It demonstrates
the extent of this work and the degree of re-shaping of policy
and delivery which has taken place over the last year or two.
It will be interesting in next year's report to see the extent
to which the reforms are beginning to take effect. By all accounts,
particularly those from non-governmental organisations, the delays
in payments, which the Common Service for External Relations was
supposed to eliminate, are as bad as ever. Meanwhile, the report
provides a considerable body of information on the period immediately
before the reforms were instituted and we consider it appropriate
to refer it to the International Development Committee for its
Opinion, in the context of its inquiry into The effectiveness
of the reforms of European Development Assistance.
9.22 Meanwhile, we do not clear the document.
27 (21359) - ; see HC 23-xxvi (1999-2000), paragraph
16 (26 July 2000). Back
- (21291) 8333/00; see HC 23-xxii (1999-2000), paragraph 3 (21
June 2000). Back
page 185 of the Commission report. Back
12380/01; see paragraph 26 of this Report. Back
11381/00; see HC 28-vii (2000-01), paragraph 1 (28 February 2001)
and (22007) 14778/00; see HC 28-vii (2000-01), paragraph 4 (28
February 2001). Back