Select Committee on European Scrutiny Thirty-Ninth Report





COM(02) 490


Commission's Annual Report 2001 on the EC development policy and the implementation of the external assistance.

Legal base:


Document originated:

12 September 2002

Deposited in Parliament:

27 October 2002


International Development

Basis of consideration:

EM of 27 September 2002

Previous Committee Report:


Discussed in Council:

18-19 November Development Council

Committee's assessment:

Politically important

Committee's decision:




    1. In 2001 the EU committed _9.7 billion and paid _7.7 billion in overseas development assistance, representing 10% of the world total and making the EU the largest donor of development assistance in the world.
    2. The Commission published its first annual report on the implementation of its external assistance programme last year, relating to its activities during 2000. This was the first time that information on all the EC programmes had been put together in a single document. It was produced in response to a recommendation of the May 1999 Development Council. However, the first annual report was heavily criticised by Member States. For example the Secretary of State for International Development (Clare Short) told us last year that the first report had made "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."
    3. Such criticism led to a number of recommendations by the November 2001 Development Council. Future annual reports were to be more analytical and have a greater focus on assessing the effect of the EC's development policy.
    4. The document

    5. The second annual report details the activities under the European Community's development programme during 2001.[66]
    6. The first chapter summarises progress made in priority areas for the Community's external assistance management reforms. The principal objectives of the management reforms are to: improve the quality of projects and programmes; reduce the time needed for implementation; ensure that procedures for financial, technical and contractual management conform to the highest international standards; and increase the impact and visibility of the EU's external assistance. According to the Commission, a number of key instruments have been identified to achieve the objectives of reform, including the use of country strategy papers[67]; lessons from evaluations which will feed systematically into the decision-making process, as well as into the design and implementation of projects and programmes; the development of a results-oriented monitoring system for projects to be linked to improvements in the management of evaluations; and greater devolution of project and programme management to the Commission Delegations. The Commission says:
    7. "The reform process, launched in May 2000, still has a way to go in achieving its objectives, but improvements are already evident. For example, for the first time since 1990, there was a reduction in the level of outstanding commitments waiting to be paid."

    8. This report summarises the first year of the EuropeAid Co-operation Office's implementation of EC external assistance.[68] The establishment of the EuropeAid Co-operation Office on 1 January 2001 brought together in a single organisation responsibility for managing the whole life-cycle of projects from identification to evaluation. Responsibility for programming is consolidated within DG Development and DG External Relations. The chapter notes that a new Inter-service Quality Support Group was set up to contribute to improvements in programming.
    9. Chapter two covers progress towards the Millennium Development Goals and the EC's Development Policy Declaration. A recurring feature of the chapter is the increasing disparity between sub-Saharan Africa and the rest of the world. The report says:
    10. "Sub-Saharan Africa faces the most difficult challenges in its fight against poverty. Progress towards achieving the Millennium Development Goals has been modest in 2001 and negative trends have not been consistently reversed. More than three hundred million Africans still live in absolute poverty. HIV/AIDS has emerged as the leading cause of death and is now a fundamental threat to Africa's future."

    11. The chapter also comments on the EC's six priority areas: trade and development; regional integration and co-operation; support for macroeconomic policies and equitable access to social services; transport; food security and sustainable rural development; institutional capacity building, good governance and the rule of law.
    12. Chapter three covers implementation of some of the Community's main thematic budget lines such as democracy and human rights, food security, AIDS and co-financing NGOs. The chapter describes the instruments designed to ensure that these priorities are translated into activities. Details are given of individual projects carried out in 2001, as well as budget allocations and prioritisation by region.
    13. Chapter four covers each of the EC's geographical programmes: the Balkans; Eastern Europe and Central Asia; Southern Mediterranean and the Middle East; Africa, Caribbean and the Pacific; Asia and Latin America. Activities of the European Community Humanitarian Aid Office and European Investment Bank loans can also be found in this chapter.
    14. Chapter five deals with the Commission's attempt to develop a results-oriented management system. It explores the criteria for monitoring country performance and describes a pilot exercise on a results-oriented monitoring system of development projects.
    15. Chapter six contains financial data. It provides further background information, including information on the EC's evaluation and audit programmes.
    16. The Government's view

    17. The Secretary of State for International Development (Clare Short) tells us:
    18. "We have welcomed the publication of an Annual Report and see it as an important tool for sharing information and analysing the impact and policy aims of EC aid.

      "The first Annual Report was heavily criticised by Member States and led to a number of recommendations spelled out in the November 2001 Development Council conclusions. These said that the Annual Report should serve as a vital management instrument, be analytical and focus on qualitative assessment of impact. It also called on the Commission to present proposals on results indicators in the 2001 Annual Report to be agreed at the next November 2002 Council.

      "The 2001 Report is an improvement on the first one, but it falls short of many of the needs spelled out by the November 2001 Council. Most importantly, it is still not a strategic, analytical document making a coherent assessment of impact and staking out orientations for the future. It is too descriptive, repetitive and far too long. It is also focussed on actions rather than results and does not link them clearly to the EC's broad policy aims. The report describes at length how the Commission will go about measuring performance using indicators but does not present any concrete proposals for such indicators. We have however seen the Commission taking a much more active role in this field and it is closely coordinating its work with Member States, donors and the European Parliament.

      "Responding to last year's criticism, the report has given more emphasis to the EC Development Policy's priority areas and to mainstream commitments such as coherence, coordination and complementarity. It also gives ample information about the reform process, which was actively pursued during 2001.

      "I intend to voice my continued concerns with the EC's Annual Report when it is discussed at the November 2002 General Affairs and External Relations Council, and I will press the Commission to ensure that future Reports can contribute towards building public confidence in the EC's development cooperation programmes."


    19. Although this second annual report is an improvement on the previous one, it is still unsatisfactory. We support the Government in criticising the annual report for being neither strategic nor sufficiently analytical. An annual report on international development should provide measurable objectives with valid indicators to show how the Commission is working towards the declared objectives. It should contain concise assessments of the Commission's work in particular areas and on particular projects. It should also provide an overall assessment of the EC's international development activity.
    20. The report also fails to provide a good description of EC development policy, and is repetitive, muddled and unfocused in places. For example, it notes that there are six priorities of EC development policy and refers the reader to section 2.5 for details. Unfortunately, owing to muddled side-headings, that section actually describes seven priorities. The average reader is also likely to be confused by the main series of tables, which owing to the omission of a proper running title and definitions are rendered generally incomprehensible.[69] Two important tables relating to the European initiative for democracy and human rights (EIDHR), which presumably were included to allow a comparison between the sums allocated and actually used for projects, are so badly laid out that important comparisons are impossible.
    21. In our view, the Commission has a duty to present information in a comprehensible form, especially on such an important policy area. The Commission should adopt the method and presentation of the Member States highly commended by the Development Assistance Committee of the OECD. A good example to follow would be DFID's annual report and Statistics on International Development, which provide good, concise information which is sufficiently descriptive and analytical to give the reader a clear account of the UK's development policy.
    22. The Commission says that the 2001 Annual Report is a response to the request for a report which is based on solid data and is results-oriented. In our view, the Commission has failed to meet the request from the Council and the European Parliament for such a report. Anyone curious about how EC development policy was working towards its declared objectives would profit little by reading this annual report. At _9.7 billion, the EC development assistance budget has an important role in supporting international development. The annual report should allow readers to identify what was spent, where, for what purpose and to what effect and to assess the worth of the overall effort. We share the Secretary of State's concern about the annual report, and support her in pressing the Commission for improvements.
    23. Meanwhile, we clear the document.


66   The development assistance goes to ACP (African, Caribbean and Pacific) countries and non-ACP countries. Back

67  The report notes that the Commission presented 112 new Country Strategy Papers, which establish coherent multi-annual frameworks for defining relations with third countries. Back

68  Assistance to candidate countries is not covered by this report, but is covered in various separate reports relating to the Phare, Ispa and Sapard programmes.  Back

69  See pages 225 to 228 of the annual report. Back

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Prepared 11 November 2002