The primary objective of the Department for International Development (DFID) is to reduce the proportion of people living in extreme poverty by half between 1990 and 2015. The international community has also adopted this objective as a Millennium Development Goal. This objective drives DFID's policies, programmes, and spending decisions.
Some 25 percent of DFID's budget is absorbed by its contribution to European development assistance. If DFID is to maximise its impact on poverty, this money£709 million in 2000-2001must be allocated effectively and managed efficiently.
We have examined the organisation of European development assistance in previous inquiries and have been dismayed at the inefficiencies we have found. A comprehensive programme of reforms was announced in 2000, beginning with a new statement on development policy which made poverty reduction the primary objective of European development assistance.
This report examines the range of these reforms, from policy statements, through resource allocations, to management procedures. Key themes include:
- The coherence of development policy with the European Union's policies in other areas;
- The geographical allocation and poverty focus of European development assistance;
- The relationships between the various Directorates General with an interest in development;
- The management of European development assistance, including Country Strategy Papers and the devolution of project management to Delegations.
Our findings suggest that the reforms have been reasonably successful at the level of policy and institutional change. The EuropeAid Cooperation Office has produced significant improvements in the management of European development assistance, Country Strategy Papers promise an improvement in programming, and the much-needed ability to report clearly on spending by sector as required by the OECD's Development Assistance Committee is being developed. We trust that the real-world impact of these reforms on poverty reductionthe central objective of European development assistancewill be apparent soon.
We remain concerned by the lack of transparency as to which funds are intended for poverty reduction, the continuing division of responsibilities between DG Development and DG External Relations, and the questionable ability of the Commission to staff its Delegations adequately and appropriately.
More worryingly still, a shrinking share of European development assistance is spent on low income countries. If the target of a 50 percent reduction in poverty by 2015 is to be met, resources must be spent effectively and targeted appropriately.