European development cooperation to 2010: what scenarios for the future?
Baroness Valerie Amos, Secretary of State for International Development
Simon Maxwell, Director, Overseas Development Institute (ODI)
Tony Worthington MP, Chair of All-Party Group on Overseas Development (APGOOD)
1. Tony Worthington, Chair of APGOOD, opened the meeting. He referred to a recent meeting of the Foreign Affairs Select Committee with members of the EU Development Committee in Brussels, which highlighted the breadth and complexity of the issues. He evoked the role of the EU in terms of the provision of global public goods or in terms of fighting large-scale diseases, as well as its new leadership role, exemplified by the recent mission to the Democratic Republic of Congo. These issues, together with the upcoming EU enlargement, had a considerable impact on how to organise development cooperation.
2. Simon Maxwell, Director of the ODI, introduced the project on European Development Cooperation, currently being undertaken by ODI, the European Centre for Development Policy Management (ECDPM), and the European Association of Development and Research Institutes (EADI). Simon stressed that a discussion of the future of European development cooperation needed to have EU-wide collaboration. The discussion was crucial and timely, as the EU controlled all Member States’ trade policy, accounted for a large share of aid programmes (25% in the case of the UK), and had an increasing role in foreign policy. Yet, EU development policy was still rather problematic.
3. Simon Maxwell noted that a reform process was well underway. There had been a new development policy statement, the Commission had been reorganised, and decision-making had been deconcentrated from Brussels to the field offices. However, crucial decisions still needed to be made in the near future. Key issues included the next Intergovernmental Conference that would consider the draft of the Constitution of Europe, the round of enlargement in 2004, the European elections and the appointment of a new Commission, the mid-term review of the Cotonou process, the beginning of the discussions on the next round of financial perspectives, and the scheduled EDF renewal in 2007.
4. The main points of discussion around European development cooperation in the near future were likely to focus on six specific issues: (a) the changing development landscape; (b) emerging ideas about Europe’s role in the world, including the shape of the EU Common Foreign and Security Policy, and the relationship between European Development Cooperation and issues in the ‘near-abroad’; (c) an evolving trade agenda in the Doha Round; (d) new frontiers in aid, including the vexed question of allocation between poor and less poor countries; (e) new structures were emerging for politics and partnership, for example the somewhat uncertain future of the ACP Group; and (f) the architecture of European development cooperation, following the abolition of the Development Council and the reorganisation of the Commission that would take place in 2004.
5. To structure the debate around these issues, the project had adopted the device of ‘scenario planning’. This generated two main drivers of change and four options. The drivers were: (a) more or less policy coherence in European development cooperation and (b) more or less commitment to a pro-poor policy focus. This opened up four possible scenarios for the future of development cooperation that, in a first attempt, Simon Maxwell labelled as Segmentation, Integration, Individualisation, and Compartmentalisation. However, he believed that it was necessary to be more challenging and therefore introduced a second, ‘value-laden’, version of the matrix, replacing ‘more or less development policy coherence’ with ‘more commitment to Europe versus nation-states’. He was convinced that the progression scenario was the best option that Europe could aim at, while retrogression or secession would be the worst. He stressed that in order to achieve progression, all Member States and the EU institutions in Brussels would need to provide input and foster an active debate around the future of European development cooperation.
6. Baroness Valerie Amos, Secretary of State for International Development, agreed that it was a very important time for all of the European Union and for European development cooperation in particular. This discussion was taking place against the background of the declaration of MDGs in 2000. The recent Human Development Report showed very clearly that on current trends, it would be 2147 before the poorest countries in Africa halved poverty. It was in Europe’s own interest to make a greater effort towards achieving the Millennium Development Goals (MDGs).
7. Baroness Amos was convinced that the EU had the potential to do this. Together the Member States accounted for half of global official development assistance (ODA). In Monterrey in 2000, the EU Member States committed to spend an average of 0.39% of GDP on ODA by 2006. This would represent an increase in ODA from 29.4 billion euros in 2000 to 39.1 billion euros in 2006. Furthermore, the EU was a unique international body, able to integrate development, trade, agriculture and foreign policy. Through policy coherence, the EU could offer a wide range of benefits to developing countries.
8. Success in this endeavour would be about delivery and about effectiveness, and Baroness Amos recognised that the EU had some way to go in that respect. With insufficient money going to the poorest countries, the spending of EU external assistance was still largely inconsistent with the MDGs. Also, the EU needed to improve its ways of spending money. It had started this with the EU development policy reform launched in 2000. Nevertheless, Baroness Amos stressed that we needed to be more ambitious.
9. She saw two key challenges for the future: implementation of a coherent development policy and a development cooperation system that worked effectively. Policy coherence, basically being more joined up, would be fundamental. The EU could not provide aid with one hand and impose heavy trade restrictions with the other. Along these lines, she called for a further reform of the Common Agricultural Policy. To do so, the new European treaty needed to secure a place for development in accordance with the goal of poverty reduction. In addition, effectiveness required that the use, allocation and management of EC development resources were built into the reform process; and that procedures were harmonised EU-wide.
10. Referring to Simon Maxwell’s outlined scenarios, she reaffirmed that more coherent efforts on the EU level should coincide with a larger pro-poor policy focus of development assistance. This should be supported by coherent policies, a strong institutional structure, and a global approach to development. Like-mindedness was important to achieve this. All 25 Member States and the Commission needed to work together with the aim of achieving the MDGs. Critical steps included sufficient financial resources, the success of the Doha Development Round, the focus of aid on the poorest countries without neglecting the issue of institutional changes in middle-income countries, the improvement of aid effectiveness through the simplification and harmonisation of aid administration, and a strong voice for development within the EC represented through a single commissioner for development affairs.
11. According to Baroness Amos, the key was to protect poverty eradication specified as a development goal in the EU Constitution during the upcoming Inter-Governmental Conference. The negotiations about the New Financial Perspectives offered an opportunity to clarify the level of external action and to focus efforts on developing countries. They would also represent a decision time as to whether to abandon the European Development Fund (EDF) and bring this spending into the budget. The elections of a new Commission and Parliament next year represented an opportunity to restructure the organisation of development issues within the EC.
12. A number of points were raised in the discussion:
- Coherence was important not only between Member States’ policies but also between EU institutions and issues. It may be necessary to restructure the EU in order to achieve this.
- The goal of poverty eradication was not widely shared in many parts of the EU, especially in Southern Europe.
- At a country level, policies still appear to be largely incoherent and uncoordinated.
- What did greater coherence mean on the global level, e.g., with respect to governance reforms at the IMF and the World Bank, as well as at the UN Security Council?
- The EDF was never part of the EU budget. A deal had been envisaged between the budgetisation of the EDF and an increased focus on the poorest countries within the budget. There were advantages of the current system too, which should be preserved.
- Concerns that development policy was being subsumed as an instrument of foreign and security policy.
- In order to increase aid effectiveness, larger emphasis needed to be put on independent evaluation. There was a difference between aid evaluation and cost effectiveness which should be acknowledged. Along these lines, it was asked whether any success has been made in improving the evaluation of the EU’s aid performance.
13. Baroness Amos responded by emphasising that other Member States needed to be brought on board in order to effectively pursue coherent pro-poor policies. There was a coherence agenda between the EU institutions and the Member States in Europe as well as on the country level. She also stressed that DfID and DTI had the same message regarding the UK government position at the upcoming Cancun WTO Ministerial.
14. Simon Maxwell added that a consensus on development issues across Europe needed to be found. He proposed a model unlike Microsoft with a single dominant policy or a McDonald’s-type franchise, but rather a Star Alliance model in which separate entities worked together with a high degree of trust, cross-guarantees and policy code-sharing. He also pointed out that some of the past difficulties with EU development assistance arose because Member States insisted on tight oversight and were resistant to greater deconcentration. In addition, many individual budget lines were introduced due to pressure from the European Parliament. Hence, laying the blame for the current malaise solely on the shoulders of the Commission was somewhat unjustified. Instead political pressure within the EU Member States was needed.
15. To conclude, Nick Dyer, Head of the EU Department of DfID, defended the progress made on aid effectiveness measurements, although there was still room for improvement. He said it was important to clarify how the impact of the European development cooperation could be measured. He hoped that the new scoring system of EU development assistance would go some way to achieve this.
This event considered issues for Europe's role in development over the coming years.