2 EU AID EFFECTIVENESS
(30978)
13732/09
SEC(09) 1264
| Commission Staff/Presidency Joint Paper: An Operational Framework for the EU to Promote Aid Effectiveness
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| Legal base | — |
| Document originated | 24 September 2009
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| Deposited in Parliament | 7 October 2009
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| Department | International Development
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| Basis of consideration | EM of 15 October 2009
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| Previous Committee Report | None; but see (29616) 8408/08: HC 16-xxi (2007-08), chapter 1 (14 May 2008) and (30544) 8695/09: HC 19-xv (2008-09), chapter 10 (29 April 2009)
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| To be discussed in Council
| 16-17 November "development" General Affairs and External Relations Council
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| Committee's assessment | Politically important
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| Committee's decision | For debate in European Committee B
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Background
2.1 The eight goals UN Millennium Development Goals (MDGs) that,
in 2000, the UN set itself to achieve, most by 2015, are: eradicate
extreme poverty and hunger; achieve universal primary education;
promote gender equality; reduce child mortality; improve maternal
health; combat HIV/Aids, malaria and other diseases; ensure environmental
sustainability; develop a partnership for development —
each with associated targets and benchmarks to measure progress.
2.2 On 14 May 2008, we considered Commission Communication
8408/08, Speeding up progress towards the UN Millennium Development
Goals, and supporting Staff Working Papers, which provided
a mid-term assessment of progress towards the MDGs and put forward
priority areas for action and proposals in each area. The Commission's
aim was "to make a contribution to the formulation of a European
common position, with an eye to the Accra and Doha meetings[6]
and the high-level UN event in September 2008
in particular, and so confirm the EU's key role on the international
scene and its commitment to the MDGs." The Commission said
efforts needed to be redoubled to ensure the goals were met by
2015 and identified four priority areas for EU action: Aid
Volumes, Aid Effectiveness, EU policy coherence
and Aid for Trade.
2.3 Given the importance of the subject and the widespread
interest in the House therein, we recommended that the Communication
be debated in European Committee B prior to the June European
Council at which it was to be adopted.[7]
That debate took place on 9 June 2008.[8]
2.4 A year later, the theme of a similar, pre-May
"development" GAERC "April Package" was supporting
developing countries in coping with the economic crisis. The Communication
set out how the Commission would address the impact of the crisis
on developing countries, whilst also encouraging Member States
to join in particular initiatives. Broadly, it stressed: Honouring
existing commitments and leveraging new resources; providing counter-cyclical
funding; improving aid effectiveness; cushioning the social impact
whilst supporting the real economy, governance and stability.
The Commission identified four priority areas for action by the
EU: Aid for Trade; Aid Volumes; Millennium Development Goals;
and Aid Effectiveness. All of this is set out in detail
in our relevant Report.[9]
2.5 The Minister at the Department for International
Development (Mr Gareth Thomas) regarded the overall picture the
four specific areas as mixed. A much greater effort was required
to meet the 2010 and 2015 ODA targets, which were particularly
important, but more challenging, in the current economic crisis.
On "Aid for Trade", he was pleased to note the commitment
to increase grant funding for the EU-Africa Infrastructure Trust
Fund, and was considering increasing DFID's contribution; but
other Member States had yet to commit. The Financing for Development
Report gave a clear picture of EU implementation of its commitments;
however, he shared the Commission's concern that the collective
EU commitment to reach 0.56% ODA/GNI might be missed, despite
the fall in expected GNI which had reduced the level of ODA required
to meet this commitment. The Government remained committed to
provide 0.56% of GNI as ODA in 2010, and to reach 0.7% by 2013,
had also set out its plans to meet ODA commitments to Africa,
and already met the target to provide 0.15% ODA/GNI to the least
developed countries; the Minister would continue to press other
donors to meet their commitments — "a key issue for
the EU and the G8 this year and for the UN High-Level Conference
on the Financial Crisis in June and at Copenhagen in December."
He said that the Commission had rightly identified the sheer scale
of the challenge in meeting the MDGs, particularly in the current
economic climate, and correctly pointed to the EU's leadership
role on this and the importance of fulfilling its commitments,
including "the helpfully highlighted, EU MDG Agenda for Action."[10]
UK officials would continue to be actively engaged in expert groups
on improving the EU's analysis and response to fragility and vulnerability
in developing countries and policy coherence, and to ensure that
the most off-track MDGs (those focused on education and health)
were addressed.
2.6 The Minister said that the Financial Crisis reinforced
the importance and urgency of meeting the Paris[11]
and Accra targets on aid effectiveness; while the Commission had
improved its aid predictability through the MDG Contracts,[12]
the UK would lobby for greater prominence for this in the Council
Conclusions (as lack of aid predictability increased costs by
15-20%), and for the Commission to encourage Member States to
join the International Aid Transparency Initiative, as a way of
meeting their commitments to aid transparency.
2.7 Given the Minister's comprehensive and helpful
analysis and assessment of this important set of papers, we both
reported them to the House because of the widespread interest
in the issues involved and forwarded them to the International
Development Select Committee, so that they might be aware of them
and of the Minister's analysis and evaluation.[13]
The Commission Staff/Presidency Joint Paper
2.8 As is clear, there is much in these earlier documents
about the importance of aid effectiveness. Against that background,
this document, An Operational Framework for the EU to Promote
Aid Effectiveness, has been prepared jointly by the Commission
and the Swedish Presidency. It looks ahead to the Fourth High
Level Forum on Aid Effectiveness (HLF IV), which will be held
in Seoul in 2011. There:
"the European Commission and Member States
will be held accountable for the commitments made in the 2005
Paris Declaration and the Accra Agenda for Action (AAA) of 2008.
The EU was a driving force behind much of the content of these
agreements, and therefore has a special obligation to ensure that
we deliver on our commitments. While, individually, the Member
States and the Commission are making progress on their commitments,
achieving the targets in the short time remaining before Seoul
presents a formidable challenge. The purpose of this operational
framework is to catalyse EU action to achieve the massive change
necessary to meet this challenge."
2.9 The discussion paper directly responds to the
Council's May 2009 Conclusions which called for an operational
framework to be presented before the end of 2009. The
four EU aid effectiveness
priorities agreed in Conclusions of May 2008 and 2009 are: division
of labour; use of country systems; predictability of aid; and
mutual accountability for results, including less conditionality.
2.10 The proposed Operational Framework identifies
concrete actions to improve EU performance against its aid effectiveness
commitments, including under the Paris Declaration, before the
2010 deadline. Three areas — division of labour between
donors, enhanced use of national systems by donors to deliver
aid, and technical cooperation for improving capability
— are covered as follows:
Division of labour: EU
approaches to the division of labour between donors in-country
are well established in the EU Code of Conduct on Complementarity
and Division of Labour, adopted in 2007. The Operational Framework
calls on the Commission and member states to re-confirm their
political commitment and speed up implementation. It proposes
meetings between EU country and headquarters staff to make faster
progress in selected countries. It also calls for a joint approach
amongst EU members and the Commission on division of labour between
countries.
Use of country systems
has been a priority since 2005 when the EU committed to channel
50% of government-to-government assistance through national mechanisms
and systems. However, the report notes that overall progress in
using country systems is weak. The paper proposes practical steps
on how to increase the use of partner country systems by the Commission
and Member States whilst tackling issues including partner capacity
and accountability to member states' own tax payers, e.g.:
Support the role of parliaments, civil society,
the media, audit institutions, and public procurement monitoring
agencies, in holding governments accountable for public expenditure;
Support partner country capacity development for
improving the quality of country systems;
Initiate or continue dialogue with our Member States
parliaments and national audit offices on the use of country systems.
Although not one of the four EU priorities on
aid effectiveness, technical
cooperation has been noted in the May
2008 and May 2009 Council Conclusions as an important area to
make progress. The practical steps proposed in the discussion
paper aim to make capacity building efforts better coordinated,
more need-driven and better integrated into the wider development
policies of countries.
The Government's view
2.11 In his Explanatory Memorandum of 15 October
2009, the Parliamentary Secretary at the Department for International
Development (Mr Michael Foster) says that the UK is "strongly
committed to deliver on its aid effectiveness commitments, ensuring
that development is driven by partner countries and helps build
capable, accountable, and responsive states", and continues
as follows:
"We strongly support the EU's focus on aid
effectiveness. The urgent need for EU members and the Commission
to step up efforts on implementing aid effectiveness commitments
was recognised in the Commission's 2009 report on EU performance
against its aid volume and aid effectiveness commitments.[14]
The analysis in that report indicates that in 2008 the EU as a
whole was off-track on at least four of the ten 2010 Paris targets.
Increased effort is also important as the EU, influenced by the
UK and other donors, played a lead role in securing an ambitious
international agreement on aid effectiveness at the Accra High
Level Forum in 2008. The concept of the Operational Framework
was originally proposed by Sweden, current EU Presidency. The
UK welcomes the Operational Framework as a way of achieving meaningful
and concrete actions before the 2010 deadline for the Paris targets."
2.12 Noting that the Operational Framework does not
yet cover all four EU aid effectiveness priorities agreed in previous
Council Conclusions, the Minister says that it is proposed that
actions on other aid effectiveness commitments will be agreed
and added to the Framework in future.:
"We are working with other EU member states
such as Ireland and Spain to ensure mutual accountability (between
donors and partner countries, one of the four EU priorities) is
referenced as an urgent area for the EU to agree operational actions
as soon as possible. International progress on mutual accountability
remains extremely slow. This area is fundamental to improved aid
effectiveness and development results."
2.13 The Minister welcomes the measures on division
of labour to improve progress on what he regards as an area of
strong EU leadership. He notes that in 2007, all EU Development
Ministers agreed an EU Code of Conduct on the division of labour
between donors in country: "DFID is supporting the Code,
with country offices working with the European Commission to promote
division of labour in a number of countries. The UK leads on an
initiative to fast track the EU Code of Conduct in Kyrgyz Republic
and Rwanda"
2.14 The Minister is, however, concerned about the
proposal in the Operational Framework for meetings of donor country
and headquarters staff to be held in EU capitals on two grounds:
"… cost, and the danger that decisions
will be made about division of labour in a particular country
in isolation from that country's government and non-EU donors.
We are working with our EU partners to ensure decisions on division
of labour are made with partner governments and other donors at
the country level, as agreed in the Accra Agenda for Action, and
that this is reflected in the Operational Framework."
2.15 The Minister supports actions proposed on the
"use of country systems" which, he says, are broadly
in line with the UK's own practices:
"With a score of 66% on use of country systems
in the last 2008 Paris Declaration Survey, the UK already meets
the EU's commitment of channelling 50% of government to government
assistance through partner country systems and the EU as a whole
has almost met the target. The UK will seek clarification of the
practical implication of the proposed action on allowing aid from
EU donors to be subject to democratic scrutiny within the partner
country processes."
2.16 The Minister also welcomes actions on technical
cooperation which are "in line with DFID's current guidance,
emphasising the need for technical cooperation to be demand-driven,
country-led and coordinated with other donors." However,
the Minister says that he would have preferred to see the Operational
Framework first address the EU's four priorities on aid effectiveness
before introducing technical cooperation:
"We support most of the concrete actions
proposed, but would prefer that detailed approaches to technical
cooperation in situations of fragility are not included at this
stage. The issues around fragile states are many and complex and
the EU's aid effectiveness technical group has not had time to
debate them fully or link with the technical group on conflict
and fragility. Fragility is a cross-cutting issue and would need
to be addressed across all areas of an Operational Framework."
2.17 The Minister concludes by noting that:
— there
has been no external consultation by DFID on this proposal;
— there are no additional costs to the
UK as the proposal is in line with the Government's aid effectiveness
commitments;
— the proposal is currently under discussion
in the EU Working Group on Development Cooperation (CODEV);
— in order for the operational framework
to be adopted, EU agreement will be required at the GAERC on 16-17
November 2009.
Conclusion
2.18 "Effectiveness" is generally understood
as the capacity to achieve the results desired. On that basis,
it is plain that, notwithstanding all that has gone before (the
previous Communications, the Paris Declaration, the Accra Agenda
for Action), the EU has much room for improvement. Given that
the EU — the Commission and its Member States — provides
nearly 60% of development assistance to the world's neediest countries,
it is all the more important that the Commission and the Member
States respond to the "formidable challenge" to which
the document refers at the outset, and achieves "the massive
change necessary to meet this challenge".
2.19 It is with these considerations in mind that
we recommend that this document be debated in the European Committee.
6 The Third High-Level Forum on Aid Effectiveness,
Accra, 2-4 September 2008; Follow-up International Conference
on Financing for Development, 29 November-2 December 2008. Back
7
See headnote: (29616) 8408/08 HC 16-xxiii (2007-08), chapter 1
(14 May 2008). Back
8
See http://www.publications.parliament.uk/pa/cm200708/cmgeneral/euro/080609/80609s01.htm
for the record of the debate. Back
9
See head note: (30544) 8695/09: HC 19-xv (2008-09), chapter 10
(29 April 2009). Back
10
The EU Agenda for Action was adopted by the 20 June 2008 European
Council. It sets a number of milestones which will contribute
to the achievement of the MDGs and provides examples of EU actions
and support as part of the commitments already taken by the EU.
For example, the health section estimates that the additional
finance to reach the health MDGs at € 13,4 billion by 2010
based on the WHO Commission on Macroeconomics and Health's estimations;
on the basis that the EU continues to provide 60% of ODA, this
would mean the EU would increase its support to health by €8
billion by 2010, almost €6 billion of which would be for
Africa. It is to be implemented in application of the European
Consensus on Development, the EU Code of Conduct on Complementarity
and Division of Labour, the Paris Declaration on Aid effectiveness
and the EU commitments on Policy coherence for development. The
EU will further ensure that the implementation of the Agenda for
Action is fully in line with partner countries' poverty reduction,
development and reform strategies. The involvement of the private
sector, both in the EU and in the partner countries, is seen as
a key element for poverty reduction and for the achievement of
the MDGs. For the full text, see http://register.consilium.europa.eu/pdf/en/08/st11/st11096.en08.pdf. Back
11
The Paris Declaration, endorsed on 2 March 2005, is
an international agreement to which over one hundred Ministers,
Heads of Agencies and other Senior Officials adhered and
committed their countries and organisations to continue to
increase efforts in harmonisation, alignment and managing aid
for results with a set of monitorable actions and indicators. Back
12
The MDG Contract is described by the Commission as "a longer
term, more predictable form of general budget support that the
EC has launched in a number of countries at the start of EDF 10
[which] … is part of the Commission's response to international
commitments to provide more predictable assistance to developing
countries": see http://ec.europa.eu/development/how/aid/mdg-contract_en.cfm
for further information. Back
13
See head note: (30544) 8695/09: HC19-xv (2008-09), chapter 10
(29 April 2009). Back
14
Commission Staff Working Paper accompanying the Communication
Supporting developing countries in coping with the crisis: 'Aid
Effectiveness after Accra: Where does the EU stand and What more
do we need to do?' Full text available at http://ec.europa.eu/development/icenter/repository/COMM_NATIVE_SEC_2009_0443_4_Aid-Effectiveness-after-Accra.pdf
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