Select Committee on International Development Second Report


1.We agree with Clare Short's assessment that, "If we could drive forward a really coherent committed development agenda throughout the Commission it could be a fantastically powerful force for good"(paragraph 2).
2.It is highly regrettable that it is not possible to state with any precision how much of the budget for External Action is intended for development, a point we return to, and urge action on (paragraph 7).
3.ECHO has in fact been affected only marginally by the reform process, but, having been highly critical of it in the past, we were pleased to hear that substantial improvements have been made and that ECHO was performing well in Afghanistan and the surrounding region(paragraph 8).
4.The statement on development policy provides a clear statement of objectives, and a benchmark against which the EC can and should be held accountable for its development assistance, to ensure that its policy aspirations produce results. But the Commission must ensure that other EC policies which are likely to impact upon developing countries are compatible with the poverty reduction objectives of EC development policy; and that the goal of poverty reduction is incorporated throughout EC policy. If poverty reduction is a priority, it must not be marginalised within the EC's external relations policies, including those which relate to issues of trade and security (paragraph 14).
5.The fact that some of the gains arising from the Everything but Arms Initiative will come from re-distribution amongst developing countries, should not obscure the fact that the initiative does improve overall developing country access to EU markets. Most importantly this fact must not be allowed as an argument against further improvements in market access—and technical assistance to make market access a reality—for all developing countries (paragraph 17).
6.We recognise that development is one voice among many in EC policy-making, but take the firm view that greater attention must be paid to policy coherence so that EC policies in other areas, be they internal affairs, security, trade, or enlargement, at the very least do not undermine, and preferably promote, development. Most importantly, if we are to take at face value the EC's stated objective of making the Doha round of WTO negotiations a development round, progress must be made with reforming the EU's Common Agricultural Policy (paragraph 18).
7.The EC's ODA is much less focussed on low income countries than that of its member states. If EC development assistance is to contribute effectively to the reduction of poverty and to retain the support of member states whose bilateral aid has a clearer poverty focus, this situation must change. The fact that we have criticised the allocation of European development assistance in our earlier reports only adds to our frustration at the lack of progress. (paragraph 20).
8.We recommend that either, sufficient reserves are set aside, or appropriately flexible procedures are established, to enable the rapid approval of new funds in situations of crisis (paragraph 21).
9.We agree with Clare Short that the attribution of pre-accession funds to DFID's budget does not reduce DFID's budget for poverty reduction, but this accounting practice does give this impression. The Government should remove this source of confusion, and make progress towards the standards of transparency that we expect of the European Commission. (paragraph 22).
10.We would welcome progress towards a separate budget heading for development, in order to make it clear which funds are earmarked for the elimination of poverty. More immediately, we look forward to the full introduction of activity-based budgeting, which needs to be done in a way which allows the EU to report on its development assistance expenditure in DAC-compliant terms so that accurate comparisons can be made, and co-ordination achieved with, the development assistance programmes of member states. Clare Short, DFID officials, and BOND all concurred in seeing DAC-compliant reporting as a priority. This is the only way to ensure that resources are re-allocated to policy priorities and to ensure that decisions about policy priorities are fully informed by related resource requirements. This should allow us, in Chris Patten's words, "to better compare apples with apples rather than other fruit" (paragraph 24).
11.The Mediterranean and the Newly Independent States are important, but events and conditions in Africa and Asia matter too, not least to the billions of people who live there. This should be reflected in the EC's external allocation of resources. Poverty matters globally; as Clare Short reminded us, "bin Laden was in Sudan before he went to Afghanistan"(paragraph 25).
12.We recommend that the Commission adopts clear targets for the proportion of its ODA that is allocated to low income countries, and moves quickly towards a situation where the EC's focus on low income countries matches that of its member states (paragraph 29).
13.The Government needs to win the political argument and persuade other member states of the importance of a clear poverty focus and an effective allocation of aid to low income countries, as well as continuing to press the Commission to become more efficient in its management of European development assistance (paragraph 33).
14.We take the view that the split between policy and implementation which the current structures of European development assistance institutionalise, is likely to lead to tensions and to limit the feedback of experience from implementation to policy which is so important if lessons are to be learnt, and development assistance improved (paragraph 37).
15.We share Poul Nielson's assessment of EuropeAid and the structure of relationships as a "strange construction", and agree with him that putting the whole of implementation under the formal responsibility of someone other than the Development Commissioner—that is, the External Relations Commissioner (paragraph 39).
16.We regard the maintenance within the Commission of an institutional focus for development, and for relations with developing countries, as absolutely essential (paragraph 44).
17.The structures which govern European development assistance should be kept under review, and proposals for their reform examined very carefully. We re-iterate our view that the assignment of countries to DGs on a geographical basis makes little sense, and would welcome progress towards making a single Directorate General and Commissioner responsible for relations with all developing countries (paragraph 44).
18.We warmly welcome the institution of CSPs as a way of focussing country programming. In particular we endorse their philosophy which emphasises country ownership, civil society involvement and donor coordination. As Glenys Kinnock stated in her submission, CSPs have "the potential to improve the focus and clarity of the EC's work", and, as such, are an important step forward. We also join with DFID in applauding the establishment of the IQSG as a mechanism to promote best practice (paragraph 46).
19.It is important that NGOs, DFID, and other donors continue their efforts to build the capacity of civil society organisations in developing countries so that they can participate in consultations, share in the local ownership of development strategies, and hold donors to account for their actions. There may be merit too in examining how civil society consultation takes place as regards the disbursement of the EDF funds within the context of ACP-EU relations. Under this arrangement, consultation with non-state actors is a contractual requirement and resources are provided to help make this a reality. We look forward to seeing CSPs, produced through proper consultation with civil society organisations, assume a central role in the programming and implementation of European development assistance (paragraph 48).
20.We are strongly supportive of the principle of deconcentration. If it is done properly, it is likely to improve dialogue between donors and local communities, to facilitate coordination between donors, and to enable the EC's Delegations to play an important role in the generation and implementation of coherent national development plans (paragraph 49).
21.It is clear to us that the Commission is struggling to balance the demands of speed and quality as regards the process of deconcentration to Delegations. There is a need for action; otherwise the success of the whole reform programme will be put at risk. Firstly, there is a need for more flexible contracts so that suitably qualified staff with development skills can be attracted. We urge the Commission to prioritise its efforts to amend its staffing regulations to allow longer-term contracts. Secondly, it is vital that the budgetary authorities provide, in the 2003 and 2004 budgets, the financial resources needed to complete the process of deconcentration. We urge DFID and the UK Government to support the Commission in meeting its staffing requirements (paragraph 53).
22.We urge the Commission to be as transparent as possible in its dealings with NGOs, because it is the uncertainty—as well as the delays—that causes problems for the NGOs (paragraph 58).
23.We are pleased that evaluation is being taken increasingly seriously in the Commission, and are encouraged that there has been some progress with producing an Annual Report, improving the information systems, and with beginning to report on the sectoral breakdown of spending. Work remains to be done with clarifying which budget categories are focussed on development objectives, and care must be taken to guarantee the independence of the evaluation unit and the transparency of its processes. We do not wish to demand more from the EC than we expect from other donors, but we trust that the EC will continue to work with other donors to develop a set of useful performance indicators (paragraph 64).

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Prepared 23 April 2002