7. FINANCIAL AND TECHNICAL MEASURES
TO ACCOMPANY THE REFORM OF ECONOMIC AND SOCIAL STRUCTURES IN THE
FRAMEWORK OF THE EURO-MEDITERRANEAN PARTNERSHIP (MEDA II) (5104/00)
Letter from Lord Tordoff, Chairman of
the Committee, to the Rt Hon Clare Short MP, Secretary of State
for International Development, Department for International Development
At its meeting on 21 March, Sub-Committee A
cleared this document from scrutiny. However, it asked me to raise
the following points with you.
(1) We appreciate from paragraph 10 of your
Explanatory Memorandum that DFID bears most of the United Kingdom's
share of the costs of the MEDA programme; what proportion of DFID's
total budget does the contribution to MEDA represent?
(2) We also note your comment that the present
MEDA programme is "badly focused and poorly managed";
are there other multilateral aid programmes funded by the EU to
which you would apply the same criticism, and, if so, how much
of your budget do they absorb?
(3) How do the claims made on DFID funds
to finance these EU programmes affect the possibilities of attaining
your overall strategic objectives, such as poverty reduction?
27 March 2000
Letter from The Rt Hon Clare Short MP,
Secretary of State, Department for International Development,
to Lord Tordoff, Chairman of the Committee
Thank you for your letter of 27 March informing
me that at its meeting on 21 March, Sub-Committee A cleared this
document from scrutiny.
The following is in reply to the further questions
raised by the Sub-Committee.
The UK share of EC external spending currently
absorbs about 30 per cent of DFID's budget; £679 million
FY 99/00, the MEDA element being about 2 per cent.
It is partly because DFID's obligatory share
of EC spending is so large that I am anxious to improve how the
EC spends this money. With such a large amount of my Department's
budget allocated to the EC it does have important implications
for attaining our poverty reduction objectives. We need to improve
EC programmes so that they have a much bigger impact on poverty.
This would be a major prize since the EC is the largest provider
of grant funding in the world.
The MEDA programme is the weakest of the EC's
development programmes, with too much money allocated to projects
that are poorly implemented, which underspend and are not targeted
on the key poverty targets. Negotiations underway in Brussels
for a new MEDA Regulation for the period 2000-2006, will determine
how MEDA is operated for at least the next seven years. We are
taking a very firm line in those negotiations, for fundamental
improvements. Other programmes—European Development Fund
spending in the African, Caribbean and Pacific countries; programmes
in Asia, South Africa, Latin America, Eastern Europe, the Balkans
and the former Soviet Union—are better, but there is much
room for improvements.
My general criticisms of EC external spending
are that it is insufficiently directed against poverty; there
is too much weight on spending and not enough on achieving and
measuring output; Commission procedures are inflexible and inefficient;
and there is a lack of coherent development policy focus.
However, EC development spending also has strengths—large
financial resources (it is the second biggest multilateral donor,
after the World Bank); some capacity to lever in development funds
from EU member states, and instruments such as the much improved
successor to the Lome Convention which make important links between
development, trade and political cooperation.
Recently the EC has also begun to move towards
addressing some of the weaknesses in its handling of external
programmes. It is helpful, for example, that in the new Commission
the number of Commissioners responsible for external spending
has been reduced from five to two, and that both of these, Poul
Nielson and Chris Patten, are former development Ministers. Both
have stated their commitment to poverty elimination. This month
the Commission will be considering two reform proposals, which
have potential to improve EC development: for a development policy
statement, which for the first time should provide an integrated
and strategic up-to-date development policy; and for the reform
of the Commission's mechanism for implementing development proposals.
We are feeding in constructive ideas on both these proposals.
These intended changes are welcome. However,
the key test will be how effectively the EC delivers them. I and
other member state development Ministers will continue to press
hard for significant, radical improvement. As the Sub-Committee's
question implies, attaining the strategic poverty reduction objectives
will be much harder if there is not a radical reorganisation and
refocusing of EC aid. It is therefore a high priority for my Department
to tackle these issues with vigour and determination.
13 April 2000
Letter from Lord Tordoff, Chairman of
the Committee, on the European Union, to the Rt Hon Clare Short
MP, Secretary of State for International Development, Department
for International Development
Thank you for your letter of 13 April, replying
to mine of 27 March. At its meeting on 9 May, Sub-Committee A
considered your responses to its questions. It welcomed your determination
to tackle the re-organisation and re-focusing of EC aid "with
vigour and determination", and it looks forward to seeing
the results of your efforts.
10 May 2000
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