First, this year’s package is an Action Plan in support of the Millennium Development Goals (MDGs). Last year, the focus was on the financial crisis. The MDG agenda offers scope for discussion of issues like trade and migration, the EU’s so-called policy coherence for development (PCD) agenda. The document makes that connection, with a call for the EU to be proactive on PCD, and paragraphs on regional integration, trade and climate change. There is a strong emphasis on the need to address capital flight from developing countries to retain development resources: a fundamental area of development finance that has been largely ignored.
But we miss the broad sweep of last year’s package, which said important things about global economic governance, and protecting the poorest. There is no sense here of how the Commission thinks developing countries have weathered the crisis. Nor is there much addressed directly to the G7 Finance Ministers or the G20.
Last year, we described the Commission proposals as ‘balanced and far-reaching’, with 28 concrete proposals, some of which made it into the final Council Conclusions. This year, we are simply told that ‘the EU agreed a series of actions to support developing countries in coping with the crisis’. That is not good enough. The European Parliament should demand a systematic account of what happened to last year’s proposals (see our review in Europe’s World), from the Vulnerability Flex mechanism to the EU-Africa Infrastructure Trust Fund.
Second, the MDG ‘story line’ focuses on off-track countries and goals – especially fragile states, and maternal mortality and sanitation (plus education and food security). There is a commitment to ‘reallocate funding to the most off-track countries’ and a promised list of priority countries for action by the EU and Member States on education and health in time for the UN MDG Summit in September. The principle of national ownership is seen as paramount, and local political engagement as essential: donors are to use recipient countries’ own systems, and give aid in the form of budget support wherever possible. However, there is also strong support for vertical funds like the Global Fund for fight Aids, Tuberculosis and Malaria, and GAVI. There are also positive words about the MDG Contract, in which aid is tied to performance against targets.
Frankly, this part of the text is full of equivocations and ambiguities. The European Commission already spends a lower percentage of its aid on low income countries than pretty well any other donor, with some notable exceptions (Greece and Spain): a mere 42% of the total in 2008, compared to around 85% for the UK. Is there really political will to reallocate from the European neighbourhood and Latin America to Sierra Leone and Somalia? Is the architecture flexible enough to do that? And if so, is it realistic for fragile states to rely on national systems and budget support?
Third, the aid shortfall. The latest DAC figures show that EU aid fell last year. Official development assistance (ODA) fell from Austria, Germany, Greece, Ireland, Italy, Netherlands, Portugal and Spain. Overall, there will be a shortfall of nearly $ 20 billion compared to pledges for 2010 made in 2005. Africa will receive less than half the extra aid it was promised. France, Germany, Austria, Portugal, Greece and Italy will all miss the EU target of 0.51% of GNI by 2010.
To its credit, the package does not shy away from the shortfall in aid, though without naming and shaming specific countries. There are positive proposals for verifiable annual action plans and an EU-internal ODA peer review. There is also support for national legislation to set targets for ODA, with reference to Belgium and the proposed legislation in the UK. And it proposes new interim ODA targets for 2012 of 0.57% for the EU-15 and 0.22% for the EU-12, giving a collective EU average of 0.6%.
It will be interesting to see which of these specific proposals makes it through to the Council Conclusions in the summer. Our judgement? Don’t hold your breath. It was brave of Commissioner Piebalgs to highlight the aid shortfall, but the chances of the worst back-sliders meeting their commitments are close to zero.
A big issue is the siphoning of aid money to meet climate commitments. The Communication does not mention the need to make climate change financing additional to ODA. Instead priority is given to ‘reflecting on the relation between climate funding and ODA’. The UK has set a ceiling of 10% of ODA for this, and it is a pity the package did not follow suit.
Fourth, the PCD agenda sounds promising, with an emphasis on a proactive approach to trade and finance, climate change, food security, migration and security. There are few concrete targets and indicators in the summary document itself.
The supporting document, however, goes further, with specific targets and indicators. On trade, for example, it suggests targets and indicators that are stronger than the summary: a conclusion to the Doha Round that is ‘ambitious, comprehensive and balanced’. On security: specific commitments to develop EU-wide political strategies for conflict-affected countries, and specific measures to control the spread of small arms. The challenge to the Commission and the Member States will be to carry the detail through from the background documents to the formal discussion in Council and the final Council conclusions.
Fifth, the Commission makes its usual plea for a whole of Union approach, committing not just the Commission itself, but also the Member States. So the MDG Conclusions should ‘constitute a unified EU contribution’ to the MDG Summit. The peer review proposal for ODA is designed to pool national programmes, not just contributions made through Brussels.
The aid effectiveness proposals talk of harmonising the timing of national and EU programming cycles at country level by 2013, and developing joint European country strategy papers and multi-annual programmes. There are no recommendations on implementing the EU Code of Conduct on Division of Labour, with joint in-country programming, based on the EU Common Framework for Country Strategy Papers, seen as ‘the best way to achieve coordination of aid and division of labour’. There is a proposal for a single European seat in the World Bank and the IMF, but no detail on how this will happen.
Some of this will be watered down by the time the Council issues its Conclusions in the summer. Pigs will fly before the Council agrees to a single European seat in Washington. But there is evidence that the EU is working better together. A notable recent example is Haiti, where Baroness Ashton intervened at the New York pledging conference in March, announcing a single strategy and single pledge on behalf of the Commission and the 27 Member States. The Commission should build on this.
To summarise, there is much that is good in this Spring package. It may lack the grand narrative that might inspire rapid change, and some of the best ideas will no doubt fall by the wayside. It is also infuriating that there is so little reference back to last year’s good ideas. However, some important political risks have been taken. It would be good for European development cooperation if the package were adopted unchanged. For a Commissioner in office for only a few weeks, this is a promising start.