# EUR-Lex - 52012SC0199 - EN

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# 52012SC0199

**COMMISSION STAFF WORKING DOCUMENT EU Accountability Report 2012 on Financing for Development_Review of progress of the EU and its Member States Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Improving EU support to developing countries in mobilising Financing for Development.__Recommendations based on the 2012 EU Accountability Report on Financing for Development. /* SWD/2012/0199 final */**

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COMMISSION STAFF WORKING DOCUMENT

EU Accountability Report 2012 on Financing
for Development
Review of progress of the EU and its Member States

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Improving EU support to developing
countries in mobilising Financing for Development.
Recommendations based on the 2012 EU Accountability Report on Financing for
Development.

TABLE OF CONTENTS

1........... Reducing aid dependency and
increasing sustainable Financing for Development............ 12

1.1........ Improving domestic resource
mobilisation...................................................................... 12

1.1.1..... Strategic Orientations.................................................................................................... 12

1.1.2..... EU assistance to developing
countries in tax and customs reform and related capacity building  14

1.2........ Maintaining sustainable debt
levels................................................................................. 20

1.2.1..... Honouring EU commitments on debt
relief..................................................................... 21

1.2.2..... Public Debt Management: a critical
component of debt sustainability.............................. 21

1.2.3..... Diversified sources of lending and
debt vulnerabilities..................................................... 23

1.2.4..... The status of Vulture Fund
Litigation............................................................................. 24

2........... International Private Flows for
Development.................................................................. 27

2.1........ Supporting trade as an engine for
development.............................................................. 27

2.1.1..... Towards a
more focused EU policy framework on Trade and Development................... 27

2.1.2..... Taking
stock of the way the EU has delivered on its Trade and Development commitments
since 2002 28

2.1.3..... Progress on Aid for Trade............................................................................................ 29

2.2........ Remittances as an instrument of
development................................................................. 31

2.2.1..... Towards a renewed EU overarching
framework for the cooperation with third countries in the area of migration and
mobility.................................................................................................................. 31

2.2.2..... Progress on remittance outflows.................................................................................... 32

2.2.3..... Reducing transfer costs of
remittances........................................................................... 33

2.2.4..... Donor initiatives............................................................................................................ 34

3........... Leveraging International
Development Finance: beyond official, beyond development and beyond assistance    35

3.1........ Innovative Financing – Sources
and Mechanisms........................................................... 35

3.1.1..... Distinction
between innovative financing sources and mechanisms................................... 36

3.1.2..... State of
play and revenues raised by existing innovative mechanisms............................... 37

3.1.3..... Major EU
initiatives...................................................................................................... 38

3.1.4..... EU Blending Mechanisms............................................................................................. 38

3.2........ Facilitating Private Investment....................................................................................... 39

3.2.1..... Framework
for Private sector-led growth...................................................................... 39

3.2.2..... Corporate Social Responsibility
(CSR)......................................................................... 46

4........... International Development
Finance: EU support to global goals...................................... 50

4.1........ Scaling up Official Development
Assistance (ODA)....................................................... 50

4.1.1..... EU ODA Commitments in the Global
Context............................................................... 50

4.1.2..... EU ODA Performance 2005-2011
compared to other donors...................................... 51

4.1.3..... Performance on ODA targets
(2005-2011)................................................................... 52

4.1.4..... Achievement of the 0.7% ODA/GNI
Target by 2015.................................................... 54

4.1.5..... The Way Forward........................................................................................................ 58

4.1.6..... Falling short of EU’s promise on
ODA to Africa............................................................ 58

4.1.7..... Honouring the EU commitment on ODA
to Least Developed Countries......................... 59

4.2........ Scaling up funding for tackling
Climate Change and Biodiversity in the context of Sustainable Development       61

4.2.1..... Climate change fast-start finance................................................................................... 61

4.2.2..... Biodiversity.................................................................................................................. 65

4.2.3..... Sustainable Development.............................................................................................. 69

4.3........ Seeking synergies in EU support................................................................................... 70

5........... Making EU actions more effective
for development....................................................... 71

5.1........ Making EU aid more effective....................................................................................... 71

5.1.1..... EU and Member States performance
in implementing the Paris Declaration (2005-2010) 72

5.1.2..... EU and Member States action on
alignment................................................................... 73

5.1.3..... EU and Member States action on
complementarity and division of labour effectiveness... 75

5.1.4..... EU and Member States actions on
mutual accountability and managing for results........... 76

5.1.5..... The Post-Busan Dialogue on
Development Effectiveness............................................... 78

5.2........ Supporting better Global
Governance............................................................................ 79

5.2.1..... The Evolving Global Context......................................................................................... 79

5.2.2..... Reforming Multilateral
Institutions.................................................................................. 80

Annexes 82

LIST OF ACRONYMS ||

A2II || Access to Insurance Initiative

ACP || Africa, Caribbean and Pacific

ADA || Austrian Development Agency

ADB || Asian Development Bank

ADF || Asian Development Fund

AfDB || African Development Bank

AFI || Alliance for Financial Inclusion

AfT || Aid for Trade

AMC || Advance Market Commitment

ASEAN || Association of Southeast Asian Nations

AT || Austria

ATAF || Africa Tax Administration Forum

B4D || Business for Development

BE || Belgium

BIO || Belgian Investment Company for Developing Countries

BMI/SBI || Belgian Corporation for International Investment

BMZ || Germany’s Federal Ministry for Economic Cooperation and Development

BPC || Building Productive Capacity

CBD || Convention on Biological Diversity

CDE || Centre for the Development of Enterprise

CDM || Clean Development Mechanism

CER || Certified Emission Reduction

CGAP || Consultative Group to Assist the Poor

CIAT || Inter-American Centre of Tax Administrations

COP || Conference of the Parties to the CBD

CPA || Country Programmable Aid

CPSS || Committee on Payment and Settlement Systems

CRS || Creditor Reporting System

CRW || IDA Crisis Window

CSO || Civil Society Organisation

CSR || Corporate Social Responsibility

CZ || Czech Republic

DAC || Development Assistance Committee

DDA || Doha Development Agenda

DE || Germany

DFI || Development Financial Institutions

DFID || Department for International Development - UK

DK || Denmark

DMF || World Bank Debt Management Facilitaty for Low Income Countries

DMFAS || Debt Management and Financial Analysis System from United Nations UNCTAD

DTC || Double Taxation Convention

DTIS || Diagnostic Trade Integration Study

EAC || East African Community

EBRD || European Bank for Reconstruction and Development

ECB || European Central Bank

EDF || European Development Fund

EDFI || European Development Finance Institution

EGI || Ethical Globalisation Initiative

EIB || European Investment Bank

EIF || Enhanced Integrated Framework

EITI || Extractive Industries Transparency Initiative

EPA || Economic Partnership Agreement

ES || Spain

ETS || EU Emission Trading System

EU || European Union

EUR || Euro

FAC || Foreign Affairs Council

FAO || Food and Agriculture Organisation

FAT || Financial Activities Tax

FDI || Foreign Direct Investment

FI || Finland

FIRST || Financial Sector Reform and Strengthening Initiative

FLEGT || Forest Law Enforcement, Governance and Trade

FR || France

FTA || Free Trade Agreement

FTT || Financial Transaction Tax

G20 || Group of Twenty (G8 countries plus Argentina, Australia, Brazil, China, EU, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, and Turkey)

G8 || Group of Eight (i.e. Canada, France, Germany, Italy, Japan, Russia, United Kingdom and USA, plus EU)

GAVI || Global Alliance for Vaccines and Immunisation

GDP || Gross Domestic Product

GEEREF || Global Energy Efficiency and Renewable Energy Fund

GEF || Global Environment Facility

GIZ || Gesellschaft für Internationale Zusammenarbeit

GNI || Gross National Income

HDI || Human Development Index

HIPC || Highly Indebted Poor Countries

HLF || High Level Forum

HU || Hungary

IBRD || International Bank for Reconstruction and Development

IDB || Inter-American Development Bank

IE || Ireland

IF || EIB Investment Facility

IFAD || International Fund for Agricultural Development

IFCA || Investment Facility for Central Asia

IFFIm || International Financial Facility for Immunisation

IFI || International Financial Institutions

ILO || International Labour Organisation

IMF || International Monetary Fund

IPD || Innovative Partnerships for Development

IPSAS || International Public Sector Accounting Standards

IT || Italy

ITC || International Tax Compact

ITF || EU–Africa Infrastructure Trust Fund

ITRS || International Transactions Reporting System

KfW || Kreditanstalt für Wiederaufbau

LAIF || Latin America Investment Facility

LDC || Least Developed Countries

LT || Lithuania

LIC || Low Income Countries (LDC+OLIC)

LMIC || Lower Middle Income Countries

LU || Luxembourg

LV || Latvia

MDG || Millennium Development Goals

MDRI || Multilateral Debt Relief Initiative

MIGA || Multilateral Investment Guarantee Agency

MoU || Memorandum of Understanding

MS || Member States

MSME || Micro, Small and Medium Enterprises

MT || Malta

MTO || Money Transfer Organisation

NGO || Non Governmental Organisation

NIF || Neighbourhood Investment Facility

NL || Netherlands

NORAD || Norwegian Agency for Development Cooperation

ODA || Official Development Assistance

OECD || Organisation for Economic Cooperation and Development

OECS || Organisation of Eastern Caribbean States

OJ || Official Journal

OLIC || Other Low Income Countries

PCD || Policy Coherence for Development

PEFA || Public Expenditure and Financial Accountability

PEM || Public Expenditure Management

PFM || Public Financial Management

PPP || Private Public Partnerships

PSD || Payment Services Directive

PT || Portugal

REDD and REDD+ || Reducing Emissions from Deforestation and Forest Degradation. REDD+ goes beyond deforestation and forest degradation, and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks.

REGMIFA || Regional Micro Small and Medium-Sized Enterprises Investment Fund for Sub-Saharan Africa

REPARIS || The Road to Europe: Programme of Accounting Reform and Institutional Strengthening

ROAP || Regional Office for Asia and the Pacific

ROSC || Report on the Observance of Standards and Codes

SE || Sweden

SME || Small and medium-sized enterprises

SWC || System-Wide Coherence Reform

TA || Technical Assistance

TCX || The Currency Exchange

TD || Trade Development

TEEB || The Economics of Ecosystems and Biodiversity Study

TIEA || Tax Information Exchange Agreements

TNA || Trade Needs Assessment

TPR || Trade Policy Regulations

TRA || Trade Related Assistance

TRAdj || Trade Related Adjustment

TRI || Trade Related Infrastructure

UK || United Kingdom

UMIC || Upper Middle Income Countries

UN || United Nations

UNCCD || United Nations Convention to Combat Desertification

UNCTAD || United Nations Conference on Trade and Development

UNEP || United Nations Environment Programme

UNFCCC || United Nations Convention on Climate Change

UNITAID || International Drug Purchasing Facility

US or USA || United States of America

USD || United States Dollar

WB || World Bank

WBIF || Western Balkans Investment Framework

WFP || World Food Programme

WTO || World Trade Organisation

EXECUTIVE
SUMMARY

This Staff Working Document is the tenth in
a series of annual progress reports drafted since 2003 for the purpose of
assessing where the EU and its Member States stand in relation to their common
commitments on financing for development, including aid effectiveness, aid for
trade, fast-start climate finance and good governance in tax matters.

The EU and its Member States are making
substantial efforts to achieve international targets on the quantity and
quality of Official Development Assistance (ODA), as enshrined in the
Millennium and Paris Declarations. Collectively the EU is not only the world’s
largest provider of ODA in value, but its ODA/GNI ratio is more than double
those of Japan and the USA. The EU has also made a greater contribution to the
achievement of the aid effectiveness agenda than any other bilateral donor. The
EU is keeping to its commitments on fast-start climate finance, has achieved
the goal of providing ODA to LDCs equivalent to 0.15 % of GNI, and has
increased EU ODA to Sub-Saharan Africa by around EUR 5.5 billion in real terms
over the period 2004-2011.

While the direction of change is positive,
the pace of implementation is modest. This report shows in fact that the EU and
its Member States missed their collective 2010 ODA/GNI target of 0.56%, and in
2011 the ODA/GNI ratio declined from 0.44% to 0.42%, while aid volumes fell by
about EUR 400 million. The EU scaling-up process has been uneven, with
asymmetric efforts. Member States that do not contribute fairly to the
burden-sharing effort endanger the performance of the EU as a whole and
substantially increase the risk of failure for future ODA targets.

The projections confirm that Member
States do not plan to make the necessary increases under the current tight
budget conditions. At today’s pace, the 0.7% target
will not be achieved by 2015 as planned. Based on the projections provided by
Member States and/or estimates prepared using their 2006-2011 compound annual
growth rate, the EU27 ODA is expected to increase to 0.45% by 2015. Considering
the expected GNI growth rate till 2015, reaching the 0.7% ODA/GNI target would
require the EU and its Member States to dramatically step up efforts and almost
double their current ODA in nominal terms. At the current pace, there is a
delay equivalent to about 25 years on the path to 0.7%, as ODA is projected to
increase at an annual rate of 0.01% of GNI.

Progress on improving aid effectiveness
has also been modest. As noted by the OECD DAC Secretariat in its analysis of
the 2011 Paris Declaration Survey’s findings, these were ‘sobering’ for all
donors, including the EU and its Member States. As a whole, the EU met only one
of the twelve indicators relating to donor performance (i.e. coordinated
technical cooperation). However, OECD DAC also concluded that ‘considerable
progress has been made towards many of the remaining targets’. Most of the
overall progress among bilateral donors worldwide was made possible by the
performance of EU Member States, which was generally above the ‘all donors’
average, showing a significant commitment to achievement of the goals of the
Paris Declaration under difficult global conditions.

The Monterrey Consensus and the Doha
Declaration recognise the importance of other financial flows besides ODA. If
sustainable progress towards the MDGs is to be achieved, the financing
discussion should concentrate on increasing developing countries’ overall
revenue base for development. The EU can effectively assist its partners in
increasing their domestic resources for development in line with the principles
of good governance in tax matters (transparency, exchange of information and
fair tax competition). Enhanced international cooperation in tax matters in
particular will not only increase domestic revenues in developing countries by
reducing tax evasion, it will also help to address money laundering, corruption
and the financing of terrorism.

As noted in recent EU policy statements on
budget support, and on increasing the impact of EU development policy, fair and
transparent tax systems are central to fostering citizenship and
state-building, leading to enhanced domestic accountability and political
participation. Member States are increasingly focusing on the issue of taxation
and development. The EU and most Member States undertook new initiatives in
2011 to support tax reforms in developing countries. Many Member States
delivered training indirectly by funding specialised programmes managed by
international organisations ( such as the IMF, OECD, etc.). Other support
focused on tax policy reforms and related legislation.

The EU has consistently supported
developing countries in using trade as a tool for development. Since
2007, the EU and its Member States have been driving the global Aid for Trade
efforts, confirming again in 2010 the EU’s position as collectively the
largest provider of AfT in the world. Indeed, the EU and its Member States
together accounted for around 32% of total AfT flows in 2010, reaching more
than EUR 10.7 billion (EUR 8.2 billion from Member States and EUR 2.5 billion
from the EU), an increase of 4.2% in comparison with 2009. The EU and its
Member States have exceeded their 2010 EUR 2 billion target for Trade Related
Assistance (TRA) since 2008. However, for the first time since 2005 there has
been a decrease of TRA, in 2010. Total TRA in 2010 reached EUR 2.6 billion,
compared to EUR 2.8 billion in 2009 (or -8% in 2010, as compared to +24% in
2009).

The Commission and the EU Member States
are steadfastly committed to providing debt relief and are increasingly
prioritising the prevention of unsustainable debt.
In 2011, the EU provided debt relief through participation in the World Bank's
Debt Relief Trust Fund (DRTF) to fund the participation of the African
Development Bank in the HIPC Initiative. By the end of 2011, 32 countries had
reached HIPC completion point, with another seven sub-Saharan countries
potentially eligible.

The 2011
Commission Staff Working Paper on ‘Migration and development’ provides further
analysis of the achievements since 2005 in the area of remittances, and
identifies some remaining challenges, including capacity building to support
partner countries interested in designing regulatory frameworks and in
promoting financial literacy, new technologies and access to credits to
stimulate productive investment and job creation. According to the latest
estimations of the World Bank, global remittance flows to developing countries
increased by 12.1% in 2011, and are expected to grow at a rate of 7-8 %
annually to reach EUR 333.5 billion by 2014. At EU level,
total EU27 remittance outflows
amounted to EUR 31.2 billion in 2010, a 3% increase from the previous year (EUR
30.4 billion in 2009), most of which are sent to developing countries.

At EU level, remittance
services have been made cheaper, more transparent, more competitive and more
reliable. In particular, the transposition of the 2007 Payment Services
Directive (PSD) into the national legislation of a majority of EU Member States
has contributed to increased transparency in the provision of payment services,
including the remittance market. Moreover, several EU Member States (including
France, Germany, Italy, the Netherlands and the United Kingdom) have set up
their own remittance price comparison websites on costs and quality of
services.

In the
current context of financial crisis and budgetary austerity, discussions on
innovative financing mechanisms have gained a new resonance, both within the EU and at global level. A good illustration of
this growing interest in innovative financing mechanisms is the G20’s formal
agreement for the first time to support innovative financing for development
and climate change and to move forward by using a menu
of options. Twelve Member States are currently using or are planning to use one
or more of the existing innovative financing mechanisms to raise funds for
development and/or climate action. Examples of these mechanisms are the
International Finance Facility for Immunisation (IFFIm), the Advance Market
Commitments (AMC), the air ticket levy, and the EU Emissions Trading System.
Following on from a Commission proposal, the EU is currently discussing the
possible establishment of a Financial Transaction Tax as a new own resource for
the EU budget. While the revenues raised would not be
earmarked for development per se, they could nonetheless
facilitate Member States’ efforts to mobilise funding required for meeting aid
targets and tackling other global challenges.

Recent EU policy statements have given
added emphasis to inclusive and sustainable economic growth as a crucial
element contributing to long-term poverty reduction and also leading to wealth
and job creation. The EU and its Member States support programmes to achieve
these goals by improving competitiveness of local private sectors,
enhancing the investment climate, promoting MSMEs, facilitating access to
finance and encouraging public-private partnerships. Blending mechanisms
can leverage additional financial resources for development at a time when the
prospects for increased foreign investment look uncertain. The Busan
meeting put forward a framework to enable the participation of the private
sector in the design and implementation of development policies. Furthermore,
Corporate Social Responsibility has been given added prominence in order to
improve the quality of growth.

The need for improved global governance
has been recognised following the Busan Forum during which the EU played a
prominent role. This involves broadening cooperation to all development
partners. The EU is committed to self-restraint with regard to avoiding further
proliferation of global and thematic programmes or vertical funds, and will
seek to use and strengthen the existing channels. Completing the reforms of
multilateral institutions thus takes on added prominence. These reforms entail
increasing developing countries’ representation and voice.

The way forward

In the context of various ongoing
international processes, discussions on ODA, climate finance, sustainable
development, biodiversity and global public goods are closely linked. There
seems to be an emerging international consensus that a joined-up approach
is thus needed to tackle global challenges. The proposals for defining new
aggregates that would enhance accountability fall into three broad categories:
(a) changing how we measure development efforts; (b) changing what
we measure (including by complementing/replacing ODA with a broader aggregate);
or (c) changing where we measure ODA/GNI ratios (at the recipient level
rather than at the donor’s level). These discussions will have an impact on
future EU Accountability Reports.

Introduction

This Staff Working Document is the tenth in
a series of annual progress reports drafted since 2003 (previously labelled
‘Monterrey report’). Building on previous reports, it assesses where the EU and
its Member States stand in relation to their common commitments on financing
for development. This report is especially focused on the evolution in key
areas since the previous one, and thus only summarises issues discussed at
length last year.

The Report fulfils the Council’s invitation
to the European Commission to monitor progress and report annually on common EU
commitments, initially focusing on ODA commitments made at the 2002
International Conference on Financing for Development in Monterrey. The Council
later expanded the original monitoring mandate to cover all areas of financing
for development, including aid effectiveness, aid for trade, tax governance and
development, and fast-start climate finance.

The report is also intended to serve as
input for EU preparations for several international meetings to be held in
2012, for the operationalisation of the Busan High Level Forum IV on aid
effectiveness held in late November 2011, and the bi-annual WTO/ OECD
monitoring meeting of all donors on aid for trade. It will also contribute to
discussions on the post-2015 MDG framework, including the UN MDG Review Summit.

The report is based on input provided by EU
Member States and the Commission through (i) the 2012 EU annual questionnaire
on Financing for Development, which covers key EU commitments related to the
international financing for development agenda, (ii) the bi-annual 2011 trade
and development WTO/OECD survey, (iii) the complementary in-country monitoring,
through EU Delegations, of aid for trade provided by EU donors and (iv) public
sources and OECD online databases on development cooperation (IDS Online).

The
Council also called on the Commission to make the annual progress report a
model of transparency and accountability, and for the second time the
Commission is presenting a single, comprehensive report covering all topical
issues of the international financing for development agenda. Furthermore, like
last year, all Member States have agreed to the online publication of their
replies to the annual questionnaire on financing for development. The
Commission complements this exercise through Donor Profiles that give an overview of the overall development strategy of each Member
State. These are available on the EuropeAid webpage. Annex
1 lists the bibliography for all chapters. Annex 2 presents the
methodology applied for analysing ODA and climate finance. Annex 3 is
the Statistical Annex on ODA trends (including individual graphs for all EU
Member States showing the gaps from 2010 to reaching 2015 targets for ODA to
Africa and ODA to LDCs). Annex
4 consists of the Aid for Trade Report 2012.

1.           Reducing
aid dependency and increasing sustainable Financing for Development

1.1.        Improving
domestic resource mobilisation

EU Commitments

●
EU policy on tax and development is set out in the 2010 Communication on “Tax
and Development - Cooperating with Developing Countries on Promoting Good
Governance in Tax Matters”[1]
and accompanying Staff Working Document. Their main recommendations were endorsed
by the Council in its Conclusions of 14 June 2010[2] and by the
European Parliament resolution of March 2011.

●
The relevance of this agenda was reinforced through the 2011 Commission
Communication on “The future approach to EU Budget support to third countries”.[3] The “Agenda for
Change” Communication provides further emphasis on tax policy and
administration by stating that “the EU will continue to promote fair and
transparent domestic tax systems in its country programmes, in line with the EU
principles of good governance in the tax area, alongside international
initiatives and country by country reporting to enhance financial
transparency”.[4]
The main recommendations of the Agenda for Change were endorsed by the Council
in its Conclusions of 14 May 2012.[5]

The objective of this chapter is to present
EU progress in implementing the Monterrey consensus, and subsequent Doha
declaration in the area of tax and development. The recent Busan Partnership
for Effective Development Cooperation highlights the relevance of this area by
emphasising its role in underpinning sustainable development and combating
illicit flows by addressing tax evasion.[6]

As evidenced by the fiscal difficulties
experienced worldwide during 2011, domestic resource mobilisation is more crucial
than ever for creating a sustainable fiscal space to implement and support
development programmes.

1.1.1.     Strategic
Orientations

Taxes are essential for sustainable
development, the legitimacy of the State, economic stability, and the financing
of public services and infrastructure. The Commission's Communication on Tax
and Development argued that development aid policies should contribute to
building effective, efficient, fair, and sustainable tax systems in line
with the principles of good governance in tax matters (transparency, exchange
of information and fair tax competition) and to helping generate sustainable revenues
in partner countries. The Council Conclusions on Tax and Development of 14 June
2010 stated that the EU would support developing countries in tax policy, tax
administration and tax reforms, including the fight against tax evasion and
other harmful practices.[7]
A recent IMF paper[8]
reviews issues and good practices concerning revenue mobilisation in developing
countries and provides a useful complementary road-map on implementing reforms
in this area. Some of its proposals are taken on board below.

Following the Monterrey Conference of 2003,
there has been no visibly increased emphasis on tax reform in developing
countries, which is in contrast to the significant scale-up of reforms in the
mirror area of public expenditure management. The 2011 Agenda for Change
Communication[9]
calls on the EU and its Member States to accelerate progress in this area
through promoting more domestic resource mobilisation in line with the
principles of good governance in tax matters, inter alia in the context of
budget support operations. Furthermore, as noted in the 2011 Communication on
Budget support[10],
fair and transparent tax systems are central to fostering citizenship and
state-building, lead to enhanced domestic accountability and political
participation. Both Communications also reaffirm the principle whereby EU
budget support should complement the partner country's own efforts to mobilise
domestic revenues. The EU will thus continue to promote domestic resource
mobilisation in its country programmes and will pay special attention to
reforms in this area when considering eligibility to Budget Support.

Complementing the above-mentioned EU
policies, Member States are increasingly focusing on the issue of taxation and
development. Recently issued policy statements or analysis include:

· 
A DFID briefing note issued in 2009, but still
reflecting current UK policy, highlights how effective tax systems are central
to core priorities including promoting economic growth, tackling climate change
and achieving the Millennium Development Goals. It points that the tax system
is at the heart of an effective State. Taxes, raised in ways that encourage
economic growth and promote political accountability, build the political
legitimacy of the State and offer the eventual “exit strategy from aid”.
Furthermore, in February 2012, a select committee[11] of the UK Parliament
reporting on tax and development made the case that in view of substantial
funding available to tax agencies, UK aid should focus more on neglected areas
such as international and subnational taxation, encouraging broader citizen
engagement, and building specialised expertise in tax administrations.[12]

· 
In 2011, the French Ministry of Finance
issued a working paper entitled “Orientations for French Cooperation in Tax
Matters.”[13]
Noting that taxes are the largest source of development finance, the report
argues for more attention to be paid to revenue mobilisation through taxes. It
concludes that in order to enhance the impact of actions this context justifies
strengthening bilateral cooperation in the field of tax mobilisation while
ensuring it is well articulated with both France’s bilateral budget support and
with all the multilateral programmes.

· 
The German Ministry of Economic
Cooperation and Development, in collaboration with the OECD, has funded a
report on appropriate modalities for supporting tax systems.[14] The objective of this 2011
study was to assess the role of various aid approaches and to identify
practical recommendations for improving development assistance in this area.

1.1.2.     EU
assistance to developing countries in tax and customs reform and related
capacity building

Supporting domestic resource mobilisation
in developing countries remains the most important element of tax reform from a
macroeconomic standpoint. For low income countries, it is important not only to
increase domestic revenues, but possibly to consider the tax system as a whole:
its composition, its impact on economic activity and private investment, its
redistributive effects and its impact on state-building.

There is limited systematic and comparable information on tax
systems of developing countries. There appears to be support for establishing a
standard diagnostic framework for assessing tax programmes, styled after
the Public Expenditure and Financial Accountability (PEFA) framework that has
been widely used for budget assessments. Nevertheless, recent studies provide
insights for specific regions:

· 
A news release by OECD in January 2012
underlines the role of rising tax revenues in Latin America’s economic
development. It shows that the average tax to GDP ratio in 12 Latin American
and Caribbean countries rose almost continuously from 14.9% in 1990 to 19.2% in
2009. This increase reflects strong economic growth, taxation of non-renewable
natural resources, and better management of tax administrations. As these
countries find themselves in relatively strong economic conditions, they are
able to consider reforms that generate long-term, stable resources for
governments to finance development.

· 
A 2012 report by the Asian Development Bank[15] considers the issue of how
mobilised revenue can help alleviate inequality. It notes that both government
spending and taxation can affect inequality and that more tax revenues can be
mobilised by broadening tax bases and improving tax administration.

The need for additional revenue is
substantial in many developing countries, but the quality of measures also
matters. More fundamentally still, the centrality
of taxation in the exercise of State power means that more efficient, fairer,
and less corrupt tax systems can spearhead improvement in wider governance
relations. Developing countries bear primary responsibility for building and
improving efficient and fair tax systems and committing the necessary resources
thereto, with EU and Member States supporting these efforts.

It is unclear whether Member States pursue coordinated
and complementary approaches to avoid aid fragmentation and unmet demand in
some countries – especially those with limited donor presence. Nevertheless, a
division of labour based on comparative advantage seems to be applied in
practice to improve coverage of recipient countries.

In contrast to the previous period, the
EU and its Member States do not report initiating any new support to national
supreme audit institutions, nor were civil society organisations (CSOs) and
parliaments specifically targeted. The relatively
low level of engagement with CSOs and national parliaments may lead to low
level of stakeholder ownership of tax reform. Indeed, where CSOs are weak, key
stakeholders in reforms may lack a voice. Similarly, parliaments lacking an
adequate understanding of public financial management issues may not fully
appreciate the importance of the laws presented to them in this area, and may
not sufficiently scrutinise public financial management and hold governments to
account.

Mobilising
domestic financial resources for development

The EU and most Member States undertook
new initiatives in 2011 to support tax reforms in developing countries. Exceptions include both new Member States and some Eurozone
members. The breadth and scope of activities were quite diverse with respect to
focal countries and type of assistance. Capacity building activities commonly
reported included the development of financial management systems, research
programmes, training and study tours. Many Member States deliver training
indirectly by funding specialised programmes managed by international
organisations (such as the IMF, OECD etc.). Other activities focused on tax
policy reforms and related legislation. Most of the assistance was concentrated
on ACP countries, ENP countries and candidate countries for EU membership, as
well as Latin America, in contrast with what was reported last year. Ministries
of finance as well as tax and customs administration constituted the bulk of
beneficiaries in recipient countries. While three-quarter of Member States provide
no or limited support for domestic resource mobilisation in the context
of Public Financial Management reforms, they nonetheless recognise its
importance and monitor progress. Only Portugal reports a substantial level of
support.

The EU and about one-third of Member States
monitor domestic resource mobilisation. Typically, this is done in the
context of budget support operations, notably through a Financial Management
criteria. Some Member States such as Austria and Finland rely on specific
indicators to monitor domestic resource mobilisation. Similarly, Sweden and
Germany refer to indicators embedded in joint assessment frameworks. The latter
also conducts annual fiduciary risk assessments in each country receiving
budget support; revenue/GDP below 10% is considered as grounds for exclusion
from such support. Finally, DFID’s monitoring is indirect, through project
monitoring of interventions which aim to improve revenue collection in
countries.

Limiting
the impact of tax expenditures

The general EU position is to discourage
tax avoidance. However, a number of developing
countries, investors and development partners have put forward arguments either
in favour of or against specific regimes. The basic case made in favour of tax
expenditures (including exemptions, deductions and credits) is that they
promote economic development, for instance by reducing investment costs, help
overcome market distortions elsewhere and avoid regressive taxation, such as
taxation of humanitarian aid. The case against specific regimes argues that
they lead to revenue loss, may reduce transparency and create an uneven playing
field, while many of the benefits may be gained through appropriate provisions
in the general tax code.

Tax expenditures are substantial in most
developing countries and half of EU Member States support initiatives aimed at
improving tax collection and reducing exemptions.
The EU supports partner countries in this area through various initiatives. The
Commission Communication on Tax and Development gives a strong signal towards
reducing tax exemptions and provides the basis for technical cooperation with
partner countries in the tax area, as well as for the bilateral support
provided through the EU Delegations. Most of the aid provided by Member States
is through technical assistance. This includes direct support such that
provided by Belgium to Burundi, Germany to African and Latin American
countries, France’s fiscal diagnostic, dissemination of best practice by
Latvia, and the UK's support to Kosovo[16].
Romania’s support is provided through the sponsoring of study tours for experts
from Iraq and Palestine. Another approach is to fund regional centres,
especially those associated with the OECD and the IMF. Member States providing
such support include Germany, Spain, Hungary and the UK. Finland’s involvement
in this area was through participation in joint public expenditure reviews in
Tanzania.

There is no consensus between Member
States on whether or not tax exemptions should continue to be sought on
projects financed through external aid. The debate
concerns whether tax exemptions reflect a specific case or should be dealt with
by encouraging coherence with the general EU stance against it, and if taxes
are to be financed who should do so (donor, beneficiary, and/or government).
One rationale for continued exemptions as opposed to funding of taxes by donors
is to ensure that maximum amount of funding is used to support the specific
project, as opposed to providing the government’s consolidated budget with resources.
Austria for example notes the risk of providing such additional resource to
governments with weak governance structure. The UN has also argued that
taxation hinders humanitarian assistance and proposes that this type of aid be
exempted. In addition to being in-line with the general position on tax
exemption, one argument in favour of funding taxes by development partners is
pragmatic, in line with growing programmatic lending and to avoid project
implementation difficulties due to insufficient counterpart funding and/or
delays in granting of tax exemption.

Some donors and international financial
institutions, including the World Bank[17]
in 2004, have already changed their rules and regulations towards funding all
reasonable project costs including taxes. The
practice regarding tax exemptions of EU projects is also moving in this
direction. However, a common approach has not yet been adopted by Member
States. Some are considering eliminating the requirement that their projects be
tax exempt without necessarily adopting a formal position on the matter (e.g.
Finland, Denmark and UK), while others have either expressed cautious support
(e.g. Austria, Cyprus, Czech Republic, Germany) or are in favour of no longer
requiring tax exemptions (Estonia, Slovenia, France and Romania are already
implementing this measure) and/or start funding taxes. Despite progress, the
following considerations still remain: (a) certain types of exemptions may need
to remain (humanitarian aid, officially supported credits, and exemptions based
on double taxation treaties); (b) donor approaches (EU, OECD and UN) would need
to be harmonised; and (c) as pointed out by Hungary, specifics would need to be
worked-out.

1.1.3.     Promoting
good governance in the tax area

The EU and most Member States have provided
support in the past for addressing tax evasion and harmful tax competition, and
promote the principles of good governance in tax matters in their cooperation
policy.

The EU promotes the principles of good
governance in tax matters with partner countries by:

· 
Including specific references to the principles
of good governance and to the need for strengthening tax systems in economic
cooperation, partnership and other agreements with third countries.

– 
Making the best use of its relevant dialogue and
assessment tools for the monitoring of domestic revenue efforts and good
governance commitments. Mainstreaming DRM issues into EU budget support
programmes.

– 
Providing capacity building in tax matters to
developing countries committed to the principles of good governance in the tax
area.

The Commission and nine Member States
reported new activities in 2011. Member States completing new Tax Information
Exchange Agreements (TIEA) were Belgium, Czech Republic and Slovak Republic.
Technical assistance and training seminars were also funded by Germany
(supporting the East Africa Community and Central American countries) Spain,
France (Chad), Slovak Republic (Georgia and Serbia) and UK (Kenya and Ghana).
The German Federal Ministry for Economic Cooperation and Development (BMZ) also
continued its support of the International Tax Compact[18] (ITC) – an informal
international action and dialogue platform grouping bilateral and multilateral
donors to strengthen international cooperation with developing and transition
countries to fight tax evasion and avoidance.

Adoption
and implementation of the OECD Guidelines on Transfer Pricing

Transfer pricing rules determine how
international transactions within a multinational company must be priced to
ensure each country receives its fair share of tax. The OECD Transfer Pricing
Guidelines, approved by the OECD Council in their original version in 1995
(last updated in 2010), provide guidance on its application. At the OECD’s
first Global Forum on Transfer Pricing on 28 March 2012, tax officials from 90
countries agreed on the need to simplify transfer pricing rules, strengthen the
guidelines on intangible issues and improve the efficiency of dispute
resolution. In the coming year, the Global Forum will carry out a transfer
pricing risk assessment, developing a detailed “how-to” manual[19] which will establish good
practices for governments when they assess transfer pricing risk at the
beginning of an audit.

In the past years, about half of the Member
States had already provided assistance with implementing OECD guidelines on
transfer pricing. Eight Member States, as well as the EU, supported new
initiatives in this area during 2011. The Commission, Netherlands and Belgium
participated in the OECD task force subgroup on Transfer Pricing. Belgium,
Spain, France, Slovenia and UK organised training seminars – some in
collaboration with OECD. The EU and some Member States, at times in
collaboration with OECD, supported developing countries in drafting transfer
pricing regulations: EU pilot initiative in Ghana and Vietnam; Germany’s
support to Ghana; Estonia’s support to Moldova; and UK’s assistance to Kenya
and Ghana.

In 2011, the EU funded a study[20] on transfer
pricing oriented towards strengthening this area in developing countries. The study recommends suitable approaches for supporting developing
countries in the adoption and implementation of transfer pricing rules in line
with international standards in order to increase tax revenue. The study
outlines the current transfer pricing situation in Ghana, Honduras, Kenya and
Vietnam, and makes recommendations for donor support to developing countries.
As a follow up to the study, the Commission envisages providing support to
capacity building in transfer pricing to a number of developing countries.

To increase donor coordination in the field
of transfer pricing which results in better targeted and more coordinated
assistance to the partner countries an OECD/EU/WB initiative on transfer
pricing was initiated.

Revenue
Transparency[21]

The OECD’s 2011 publication on tax
transparency[22]
documents substantial progress in areas such as multilateral conventions,
and Tax Information Exchange Agreements as well as double taxation conventions.
The number of agreements that meet the international standard has increased by
more than 700 since the G20 put a spotlight on the issue. These agreements are
starting to yield real results as mechanisms for the enforcement of tax laws.
During 2011, members of the Global Forum on Transparency and Exchange of Information
for Tax Purposes have issued reports (peer reviews) on the 14 EU Member States.[23] These reviews provide
information on agreements with developing countries.

EU Member States also participate in other
initiatives that contribute to transparency and combating corruption. In
particular, 23 EU Member States report their support and/or adherence to the
United Nations Convention against corruption[24]
and 20 Member States participated in the implementation of the OECD convention
on combatting bribery of foreign officials.[25]
A further 9 Member States participated in the Stolen Asset Recovery initiative[26] launched in 2007 by the World
Bank and UN.

In addition, in October 2011 the Commission
adopted a legislative proposal[27]
for a new set of disclosure requirements for extractive companies that are
based in EU countries. Under the new rules, companies in the EU would have to
publish all payments to the governments in countries they operate in. This
proposal is currently being discussed in the Council and the European
Parliament. The increase in transparency will contribute to fighting
corruption, increase resource-rich countries' accountability and improve
domestic revenue mobilisation.

Box 1.1.3 The
Extractive Industry Transparency Initiative (EITI)

Some 3.5 billion people live in countries rich in oil,
gas and minerals. Through good governance the exploitation of these resources
can generate large domestic revenues to foster inclusive growth, discourage
conflict and reduce poverty.

The EITI is a voluntary process aimed at strengthening
governance by improving transparency and accountability in the extractive
industries sector. With 35
implementing countries now, the initiative is becoming a global standard for
corporate governance and transparency. The EITI requests that companies publish
payments to governments, and that the latter, in turn, disclose revenues
received from companies. This enhances domestic accountability and strengthens
the demand for good governance so as to reduce corruption related to extractive
activities. EITI implementation slowed down in 2011. Nevertheless, 13 countries
have now achieved EITI-compliant status (compared to 11 last year) and 20
countries are new candidates.

The EU is an increasingly active participant in, and
supporter of, this initiative. Its position is reflected in the recent European
strategy on the sustainable supply of raw materials, and in the follow-up to
the commitments on enhanced support made in the 2010 Tax and Development
Communication. The Commission is a member of the Steering Working Group of EITI
and a member/observer of the EITI Board. It provided further support to EITI
during 2011 through (a) co-financing of two conferences (i.e., 5th Global
Conference and National Coordinators Conference); (b) bilateral support via
Delegations; and (c) contribution to World Bank EITI Trust Fund.

Several Member States listed activities in support of
EITI:

· 
Belgium and UK provided
funding to the multilateral Trust Fund administered by the World Bank. In
addition to funding the Trust fund, Germany, Denmark and Netherlands also
supported the EITI secretariat by funding its activities. Denmark also funded
the 2011 EITI Global Conference. Netherlands was an EITI board member in 2011,
hosting the 17th board meeting June 2011, and has seconded a staff member to
EITI secretariat for the period 2012 – 2015.

· 
Germany is supporting
the EITI implementation through various bilateral as well as regional
TC-projects, e.g. in DR Congo.

· 
The Italian Government
continues to support EITI by: (a) favouring its outreach proposing a suitable
scoring system so as to provide an incentive for good performance by
implementing Countries; (c) supporting the New EITI rules without expanding the
scope of the Initiative; (d) improved monitoring. A private Italian enterprise
engaged in the oil and gas, power generation, petrochemicals, oilfield services
and engineering industries is implementing pilot projects and initiatives in
Congo, Gabon, Nigeria, Kazhakstan and Timor Leste.

Support
to international and regional initiatives, and organisations

The EU and many Member States indicated
that they continued relying on intermediaries when
supporting developing countries’ tax reform agendas. This is being done through
international initiatives such as the Africa Tax Administration Forum (ATAF),
the OECD, the International Tax Compact (ITC) and International Tax Dialogue[28] (ITD),
“Centro Inter-Americano de Administraciones” (CIAT) and three IMF facilities
(i.e. Regional Technical Centres, the Trust Fund on Tax Policy and
Administration, and the Topical Trust Fund on Managing Natural resource
Wealth).

The IMF remains the
prime partner,receiving by far the most financial support. ITC was the next
largest recipient, albeit at a much smaller scale. While there are a number of
institutions receiving support, there is insufficient information to assess
whether this leads to inefficiency and unnecessary segmentation in delivery of
tax reforms.

Emerging
themes

While the impact of the new approach to EU
budget support will only be evident in the future, it is likely that EU and
Member States will incorporate tax administration and fair tax collection as
part of their budget support eligibility criteria.

1.2.        Maintaining
sustainable debt levels

EU Commitments

●
Council Conclusions of 11 Nov 2008[29],
§ 44: ‘The EU will take action to help restore
and preserve debt sustainability in low-income countries (...), to prevent
unsustainable lending behaviour by lenders which have not contributed to
alleviating the burden of poor countries, and to deter aggressive litigation by
distressed-debt funds. The EU also agrees not to sell claims on HIPCs to
creditors unwilling to provide debt relief.’

●
Council Conclusions of 18 May 2009[30]:
(§12): ‘the EU will continue supporting the existing debt relief initiatives,
in particular the Heavily Indebted Poor Countries (HIPC) Initiative and
Multilateral Debt Relief Initiative (MDRI) and values the Evian approach as an
appropriate flexible tool to ensure debt sustainability’.

●
In line with the Doha Declaration, the EU has also confirmed in the Council
Conclusions of 18 May 2009 (§12), that it ’supports discussions, if relevant,
on enhanced forms of sovereign debt restructuring mechanisms, based on existing
frameworks and principles, including the Paris Club, with a broad creditors’
and debtors participation and ensuring comparable burden-sharing among
creditors with a central role for the Bretton Woods Institutions in the debate.

In 2011, the European Commission and the
EU Member States have maintained their engagement in providing debt relief and
are increasingly prioritising actions on the prevention of unsustainable debt, including by:

· reducing debt levels through debt relief, using existing mechanisms
(HIPC, Paris Club, etc.);

· strengthening public debt management capacity to avoid unsustainable
debt levels;

· supporting greater transparancy in the new forms of financing;

· fighting against aggressive litigation by vulture funds.

In addition, most EU Member States have
highlighted three current challenges to continue ensuring debt
sustainability:

· In light of the increased weight of
bilateral non-Paris Club creditors, there is a need for more transparency and
closer collaboration between these creditors and the Paris Club in order
to guarantee that debt relief operations deliver sufficient relief and preserve
a fair burden sharing.

· 
Debt relief under the HIPC Initiative and MDRI
has also created new borrowing space. Domestic debt is likely to grow in
importance as domestic savings increase and governments seek to develop
domestic debt markets. Low Income Countries (LICs) are likely to face new
risks as the range of creditors and debt instruments continues to expand.[31]

· 
Moreover, due in part to the current economic
context, many countries remain vulnerable to shocks, particularly
exporters, facing risk of unsustainable debt in the future.

1.2.1.     Honouring
EU commitments on debt relief

For the past decade, debt relief has
been a key tool for achieving debt sustainability.
It has been implemented through the HIPC/MDRI initiative, complemented with
bilateral and other types of debt forgiveness.

The Commission and EU Member States have
continued to deliver on their commitments on debt relief. In 2011, the EU provided debt relief through participation to the
World Bank's Debt Relief Trust Fund (DRTF) to support the participation of the
African Development Bank in the HIPC Initiative. HIPC Interim debt relief in
the form of coverage of debt service payments or arrears clearance was also
provided to the following countries: Comoros, DRC, Ivory Coast, Guinea and
Togo. Full relief further to reaching HIPC completion point was provided to
Liberia in early 2011.

As of end-2011, 32 countries had reached
HIPC completion point, with another 7 sub-Saharan
countries potentially eligible.[32]

Debt relief has markedly improved the
debt position of the 32 post-completion point Highly Indebted Poor Countries, bringing their debt indicators to sustainable levels. Debt
cancelation has brought, and still brings, strong positive effects for
debt-distressed countries, allowing more fiscal space for poverty related
expenditures.

To date, debt reduction packages under
the HIPC Initiative have been approved for 36 countries, 30 of them in Africa, providing EUR 54.6 billion (USD 76 billion)
in debt-service relief over time. The debt stocks of the 36
post-decision-point HIPCs have been reduced by over 90 %.[33]

It is to be
mentioned that the IMF and IDA Boards had informal discussion on the future of
the HIPC Initiative during 2011.
So far, this question remains an open issue and the focus is rather on ensuring
a close monitoring of vulnerabilities of Low Income Countries than only
focusing on HIPC.[34]

1.2.2.     Public
Debt Management: a critical component of debt sustainability

In 2002, the Monterrey Consensus called for
a speedy, effective and full implementation of the enhanced Heavily Indebted
Poor Countries initiative and for increased international cooperation for
sustainable debt financing.[35]
The G8/Africa Joint Declaration of the Deauville G8 summit of May 2011
reiterated the call to preserve debt sustainability in Africa.[36]

Debt relief alone is not sufficient to
guarantee debt sustainability. As illustrated in
the latest World Bank report on HIPC Status[37],
strengthening debt management capacity and institutions in HIPC countries is
also a priority. According to this study, seven post-Completion Point HIPCs
remain at high risk of debt distress after HIPC and MDRI relief, and 10 at
moderate risk.

While good debt management has proven to be
a valuable asset in mitigating the effects of external shocks, poor public debt
management contributes to the negative impact of these shocks and seriously
undermines a country’s ability to achieve sustainable growth. Governments, both
creditor and borrower, need to closely monitor debt management.

"Debt management systems in most
African countries have advanced, albeit only
marginally" according to the mutual review of development effectiveness in
Africa.[38]
To reduce their debt vulnerabilities sustainably, countries need to pursue
cautious borrowing policies and strengthen their public debt management
capacity.

Beyond HIPC and MDRI, EU Member States have
maintained a strong support to enhance debt management capacities of developing
countries. The main international initiatives to support better debt management
and to which the EU contributes include the Debt Management Facility and the
Debt Management and Financial Analysis Software.[39] (see box 1.2.2) The European
Commission has committed new contribution of EUR 3 million to the World Bank's
Debt Management Facility (DMF Trust Fund) and EUR 3 million to UNCTAD's Debt
Management and Financial Analysis Software (DMFAS); both signed in December
2011.

Box 1.2.2: The
Debt Management Value Chain

● The World Bank Debt
Management Facility‘s covers “upstream” activities:

- Diagnosing the
performance of debt management in a country (DEMPA)

- Assistance in
formulating reform plans to correct the weaknesses identified by the DEMPA
(Reform Plan)

- Preparing a reform plan
to address the weaknesses identified (Reform Plan)

- Preparing a medium term
debt strategy (MTDS)

● The Debt Management and Financial Analysis Software from
UNCTAD comparative advantage is in the ‘downstream’ activities needed for
implementing the DMF Reform Plan and strategy, through:

- Supporting countries in
implementing debt management reform plans

- Providing debt
management systems (the DMFAS system)

- Training the debt
management staff in debt reporting, operations, statistics and analysis

- Advising on debt office
reorganisation, integration and staffing

- Providing sustainable
support (Helpdesk) for these areas

1.2.3.     Diversified
sources of lending and debt vulnerabilities

In a number of LICs, finding sources to
finance priority infrastructure investments has led to an increase of reliance
on non-concessional external borrowing, requiring a close monitoring on the
evolution of debt vulnerabilities in those countries.[40] In addition, keeping debt at
sustainable levels will continue to be a necessity in the context of EU
blending operations in developing countries. Debt sustainability is assessed by
the European Commission in all of the activities in the framework of innovative
financing (see chapter 3.1 on Innovative Financing).

Over recent years, a number of new
public and private creditors have increased their lending to Africa’s
Low-Income Countries, creating concerns of swelling
debt burdens. Intra-developing country lending, or so-called South-South flows,
have been a driving force behind the rise in lending by bilateral creditors and
new commitments. Between 2007 and 2010, bilateral creditors signed new loan
agreements totaling around EUR 102 billion (USD 135 billion), of which China
accounted for close to one third.

Figure 1.2.3

Net Debt Flows by Creditor Type, 2001-2010                     Net Debt
Flows by Borrower Type, 2001-2010

Source: World Bank Debtor Reporting System in World
Bank Global Finance 2012: External Debt of Developing Countries

In an effort to cast more light on the
recent activities of new donors, the OECD, in
collaboration with the World Bank, the United Nations Development Programme
(UNDP), and the United Nations Department of Economic and Social Affairs
(UNDESA), conducted a survey of nine developing countries that are considered
as important new lenders (Brazil, Chile, China, India, Malaysia, Russia, South
Africa, Thailand, and Venezuela). So far only Chile, Malaysia, and Thailand
responded to the survey.[41]

A recent analysis by the Africa Economic
Outlook[42]
shows a relatively limited impact of financing from the non-Paris Club
creditors, though the lack of transparency does not
allow to fully measure the situation. The lack of transparency in loan
contracting processes from non-Paris Club continues to constitute a risk,
especially for the most fragile nations. Raising transparency standards for
financial transactions between African countries and their new partners would
help developing economies to borrow more sustainably. This would strengthen the
credibility of the "emerging" partners as part of the international
financial governance structure.[43]
The G8 Action Plan for Good Financial Governance in Africa emphasises the
importance of the joint World Bank-IMF Debt Sustainability Framework as the
framework of choice for the “new” donors and lenders.

The growing importance of private
creditors within the new lenders also increased the
need for closer coordination amongst different types of lenders. In 2010,
lending by private creditors to developing countries significantly increased
from EUR 61.9 billion (USD 86 billion) in 2009 to EUR 320.1 billion (USD 424
billion) in 2010.[44]

The EU as a whole believes that creditor
coordination is key to reaching the objective of restoring and preserving debt
sustainability in LICs. In that connection, EU Member States call for enhanced
dialogue and outreach to non-Paris Club offical bilateral creditors.

1.2.4.     The
status of Vulture Fund Litigation

The
problem posed by vulture funds is also a major concern. Vulture fund modus operandi is
simple: commercial creditors purchase distressed debt on the secondary market,
significantly below its face value, and seek to recover the full amount,
including through litigation.

Litigation
is possible because most debt relief initiatives, such as the HIPC initiative,
do not alter the legal rights and obligations between HIPCs and their external
creditors. Accordingly, creditors are legally entitled to use available legal
mechanisms to enforce their credit claims against HIPCs, unless the HIPC
debtors and their creditors reach bilateral legal agreements which would put
their debt into the authority of HIPC initiative.

Figure 1.2.4 Where Vulture Funds Strike[45]

The
IMF reports that in some cases, the claims by vulture funds constitute as much
as 12-13 % of a country’s gross domestic product; 11 HIPCs have been targeted
so far in forty-six lawsuits and the plaintiffs are concentrated in three
countries, ie. USA (8), British Virgin Islands (7), and
the United Kingdom (4).[46]
The lawsuits are mostly concentrated in a few courts
(New York (15), London and Jersey (7), Paris (7)).[47]

Box 1.2.4: Vulture Funds in Figures[48]

– 
Vulture funds have average recovery rates of
about 3 to 20 times their investment, equivalent to returns of (net legal
fees) 300-2000 %.

– 
The vulture funds exert pressure on the
sovereign debtor by attempting to obtain attachment of the government’s assets
abroad: in a recent case against Zambia, a vulture
fund, having bought a debt for EUR 2.16 million (USD 3 million), sued Zambia
for EUR 39.55 million (USD 55 million) and was awarded EUR 11.14 million (USD
15.5 million) at High Court of England and Wales.

– 
Litigation is typically protracted with many
lawsuits taking 3 to 10 years to “settle.” Legal documents indicate six years
as a conservative medium estimate for recovery, which suggests that
annualised returns average 50 to 333 %

– 
Some of these claims were bought at roughly 10 %
of face value, implying very high gross recovery rates. Subtracting
legal costs, often recouped from the sovereign debtor, these recovery rates are
probably the highest in the distressed debt market.

– 
The World Bank estimates that more than one-third
of the countries which have qualified for its debt relief have been targeted
with lawsuits by at least 38 litigating creditors with judgments totalling USD
1 billion in 26 of these cases. Out of this amount 72% of the judgments have
been against Regional Member Countries.[49]

In 2010, the Paris Club confirmed its deep concern over vulture fund
litigation. Taking stock of the harmful
consequences of litigation for HIPC countries, and consistent with the
principle of comparability of treatment, the Paris Club had resolved[50] in May 2007 to avoid the sale
of their claims on HIPCs to other creditors who do not intend to provide debt
relief under the HIPC initiative. The Paris Club had also urged other creditors
to follow suit.

In
that connection, five EU Member States have implemented specific interventions
in order to prevent the actions of distressed-debt funds:

– 
On April 6, 2008, Belgium has passed a
bill to prevent the seizure or transfer of public funds for international
cooperation, in particular related to the methods of the Vulture Funds. Belgium
also aims to assist African countries in their legal protection against vulture
funds through financial support to the African Legal Support Facility.

– 
Spain regularly
supports, on a case by case basis, the initiatives and discussions that take
place in the Paris Club in order to prevent aggressive litigation against
HIPCs. Spain is committed not to sell or securitize debt owed by HIPC
countries. Spain also supports the Debt Reduction Facility by the World Bank,
that addresses the issue of litigating creditors.

– 
France is
strongly supporting the Debt Reduction Facility by the World Bank.

– 
Italy is commited
with any intervention to prevent aggressive litigation against HIPCs within the
Paris Club and through the World Bank.

– 
In 2011, the UK made the Debt Relief
(Developing Countries) Act 2010 permanent. This legislation limits the amount
of money that commercial creditors can recover from developing countries
progressing through the HIPC Initiative, removing the incentive to pursue them
in courts.

2.           International
Private Flows for Development

2.1.        Supporting
trade as an engine for development

EU Commitments

In 2007,
the EU Aid for Trade Strategy[51]
aimed at increasing financial resources for Aid for Trade and improving its
impact on poverty reduction. In particular, the EU committed to:

– 
Increasing EU Aid for Trade  within the gradual
increase of overall EU aid;

– 
Enhancing the Pro-poor Focus and Quality of EU
AfT;

– 
Increasing EU-wide and Member State donors’
capacity in line with globally agreed aid effectiveness principles;

– 
Building upon, fostering and supporting ACP
regional integration processes with an ACP specific angle of EU AfT.

– 
Collectively spend EUR 2 billion annually on
Trade-Related Assistance by 2010 (EUR 1 billion from MSs and the Commission
respectively). In the range of 50% of the increase to be available to ACP
countries.

2.1.1.     Towards a more focused EU policy framework on Trade and Development

The EU's new trade, growth and development
policy outlines how the EU’s trade and investment policies should be used to
foster inclusive growth and sustainable development in developing countries. In
particular, the EU has agreed on the need for more differentiation among
developing countries in order to better reflect their differences in needs,
potentials and objectives, and to better target Aid for Trade initiatives at
LDCs and other countries most in need. At the same time, LDCs need to more
systematically and effectively include trade in their development strategies.

Many developing
countries have deepened their integration into the world economy and have
become increasingly important players in multilateral and international trade.
The rise of emerging economies such as Brazil, Russia, India, China and
South Africa (BRICS), both as economic and political players, is striking in
that regard and it serves as  a positive illustration that increased
participation in world trade can be an engine for economic growth and poverty
reduction in developing countries. While these changes have helped lifting
hundreds of millions out of poverty, not all developing countries have
enjoyed the same improvements. This is particularly true for LDCs,
especially in sub-Saharan Africa, which have been further marginalised and
whose economy remains vulnerable to economic shocks, notably because of their
dependence on a few export products, particularly primary commodities. This
points to the fact that while trade is a necessary condition for development,
it is not sufficient and domestic reforms are essential to harness the benefits
of trade for growth and poverty reduction.

In times of
budgetary constraints and when aid budgets are being closely scrutinised, the
need to improve accountability and to show results becomes even more stringent.
This is especially true in the case of Aid for Trade, which has become an
increasingly important priority in development cooperation. The topic was
discussed at highest level in 2011, in the framework of the Third Global Review
of Aid for Trade[52].
The OECD, with financial support from the European Commission, is preparing a
study to analyse and assess good practices in developing country-owned results
measurement frameworks for trade-related aid activities, with a view to
providing the development and trade community with recommendations on how to
measure Aid for Trade results.[53]
The European Commission is also providing funding to the International Trade
Centre (ITC) for the launch of a re-developed Market Access Map, which will
provide global trade related information in particular to low income countries.

2.1.2.     Taking stock of the way the EU has delivered on its Trade and
Development commitments since 2002

In its 2002 Communication on “Trade and
Development”[54],
the Commission had pledged to grant developing countries greater access to the
EU market. In the 2007 Joint Aid for Trade Strategy[55], the EU and its Member States
committed to provide developing countries with more Aid for Trade. The EU
has delivered well on both accounts, leading the way at global level and
making the EU the most open market to developing countries in the world.[56] This has mainly been achieved
through the EU's Generalised System of Preferences. In particular, the
'Everything but Arms' scheme provides LDCs with duty-free quota-free market
access to the EU for all their products except arms. As for the GSP+, it is the
flagship EU trade policy instrument supporting sustainable development and good
governance in developing countries.

In addition, the EU has facilitated the use of existing
preferential schemes through new and simpler GSP rules of origin[57], and made it easier for
developing countries to get practical information on access to the EU market
through the establishment of the online Export Helpdesk.[58]

The EU has also boosted its bilateral trade relations with
developing countries. Since
2002, the EU and ACP countries have been negotiating Economic Partnership
Agreements. In addition, a series of Free Trade Agreement negotiations have
been launched, and in several cases already concluded, with more advanced
developing countries and regions.

The EU’s
trade policy has also supported the promotion of regional integration of developing countries’ markets, although results have often
fallen short of expectations. A key difficulty is the limited capacity of
regional organisations to formulate project proposals that are viable and
supported by their members.

In line with the EU PCD commitments, the EU
has strived to improve the coherence and complementarity between the EU’s trade
and development policies. Several key areas of progress were identified in the
“EU 2011 Report on Policy Coherence for Development”[59], including trade negotiations,
market access, the decent work agenda, corporate social responsibility, and
intellectual property rights. These orientations were fully taken into
consideration in the 2012 Communication on "Trade, Growth and
Development", adopted by the Commission on 27 January 2012[60]. The Communication
sets new orientations for the next decade on ways to improve the contribution
of the EU's trade and investment policies to development. This was followed, on
16 March 2012, by the adoption of Council Conclusions[61] on this topic. The latter set
out how Aid for Trade from the EU and its Member States can be better targeted,
notably through:

– 
continued global leadership of the EU and its
Member States to respond to the Aid for Trade demands;

– 
better targeted, result-oriented and coordinated
Aid for Trade as part of the aid and development effectiveness agenda, as
agreed in Busan;

– 
encouraging developing countries to integrate
trade as a strong component in their development strategies;

– 
enhancing the complementarity and coherence
between trade and development instruments;

– 
greater focus on LDCs and developing countries
most in need;

– 
better coordination of EU and Member States’ AfT
and alignment with strategies of partner countries;

– 
support aimed at helping developing countries'
small-scale operators to capture the benefits of trade;

– 
work with new and traditional partners to
increase the effectiveness of the Enhanced Integrated Framework and other
internationally recognised frameworks, and focus on impact and results.

2.1.3.     Progress on Aid for Trade[62]

Since 2007, the EU and its Member States
have been driving the global Aid for Trade efforts, confirming again in 2010
the EU’s position as collectively the largest provider of AfT in the world.
Indeed, the EU and Member States accounted for around 32% of total AfT flows in
2010, reaching more than EUR 10.7 billion (EUR 8.2 billion from EU Member
States and EUR 2.5 billion from the EU), an increase of 4.2% in comparison with
last year.

As highlighted in last year’s report, the
EU and its Member States had already met their 2010 EUR 2 billion target for
Trade Related Assistance (TRA) since 2008, however, for the first time since
2005, there was a decrease of TRA between 2009 and 2010Total TRA in 2010
reached EUR 2.6 billion, compared to EUR 2.8 billion in 2009 (or -8% in
2010, to be compared to +24% in 2009).

Figure 2.1.3. Aid for Trade (EU and Member states, in
EUR million)

A central
observation is the growing complementarity between the EU and its Member States, in terms of geographical distribution, sector presence,
instruments used and size of projects.

– 
In terms of geographical distribution: Africa continues to receive the largest share of AfT flows (38% of
the total), both from the EU and from the Member States, with a total of EUR
3.9 billion in 2010. It is followed by Asia (20%), Europe (13%) and America
(9%). The second primary destination of EU AfT flows is Europe, while it is
Asia for Member States. The share of AfT to LDCs declined to 16% of total AfT
in 2010 (EUR 1.7 billion against EUR 8.7 billion to non-LDCs), compared to 22%
in 2009. This is partially due to cyclical and EU programming factors.

– 
In terms of sectoral presence: while the EU AfT projects are essentially focused on three main
sectors, namely agriculture (35%), transport and storage (29%) and energy
(13%), Member States are more focused on energy (33%), with agriculture and
transport representing smaller shares of the total (17% and 12%). Moreover,
Member States are also present in banking and financial services, while the EU
is not.

– 
In terms of instruments used: while grants still represent 100% of AfT programmes of the EU
institutions, Member States finance 43% of their AfT programmes through loans,
and 13% through equity investments. As a result of this, the share of grants
has decreased in the overall AfT flows of the EU and Member States, while it
has substantially increased for loans. This could also explain the decrease of
the share of AfT flows to LDCs, which are the primary beneficiaries of grants.

– 
In terms of size of projects: the average size of EU projects is ten times the average size of
Member States projects (EUR 11.2 million in the case of EU and EUR 1.1 million
for Member States).

The analysis of replies from the EU Delegations and Member States
Representations in developing countries to this year's AfT questionnaires shows a moderate improvement in terms of the partner-donor policy
dialogue; the availability of updated trade needs assessments; joint operations
and harmonisation; the inclusion of strategic regional economic integration
priorities into the national development plan or trade strategy; and in
highlighting the prominent hurdles for assessing AfT programmes and projects.

2.2.        Remittances
as an instrument of development

EU Commitments

· 
Since 2009, the EU and its Member States are
committed “to promote transparent, cheaper, faster and more secure flows of
remittances to migrants’ countries of origin, and to ensure that relevant
legislation does not contain provisions hampering the effective use of legal
remittance channels”[63].

2.2.1.     Towards
a renewed EU overarching framework for the cooperation with third countries in
the area of migration and mobility

On 29 May 2012,
the Council adopted Conclusions[64]
on “The global approach to migration and mobility”, following the Commission
Communication on this subject issued in November 2011.[65] The objective was to
strengthen the overarching framework for the cooperation with third countries
in the area of migration and mobility, which was defined for the first time in
2005. One of the operational priorities is precisely to maximise the
development impact of migration and mobility, including by facilitating
remittances and reducing transaction costs. In particular, the Council
reaffirmed “the need to ensure faster, easier and cheaper remittance
transfers and enhance the impact on development of social and financial
remittances while ensuring coherence with other development priorities”.

The 2011
Commission Staff Working Paper on “Migration and development”[66] accompanying the
afore-mentioned Communication provides further analysis of the achievements
since 2005 in the area of remittances, and identifies some remaining
challenges, including on capacity building to support partner countries
interested in designing regulatory frameworks and into promoting financial
literacy, new technologies and access to credits to stimulate productive
investment and job creation.

In 2011, the
European Commission launched a study to assess the state of implementation of
existing EU commitments with regard to remittances. The study will be published
in the second half of 2012.

While migration
and mobility can, if properly managed, contribute to the reduction of poverty
in developing countries, proper attention is now also being paid to minimising
the negative side-effects of the EU migration policy.[67] In particular, in line with
the Policy Coherence for Development commitments, the EU and its Member States
must pay due attention to the possible downsides of migration, notably its
social costs and the risks of households becoming dependent on income from
remittances.

2.2.2.     Progress
on remittance outflows

According
to the latest estimations of the World Bank[68],
recorded[69]
global remittances flows to developing countries are estimated at EUR
267.5 billion (USD 372 billion) in 2011, an increase of 12.1% over 2010,
and are expected to grow at a rate of 7-8 % annually to reach EUR 333.5 billion (USD
467 billion) by 2014.

As
shown in the graph below, global remittance flows have
been growing steadily during the crisis in comparison to other private resource flows. However remittances from the EU have kept momentum since 2008[70].

Figure 2.2.2

Source: World Bank, 2012[71]

At EU level,
total EU27 remittance outflows amounted to EUR 31.2 billion
in 2010, a 3% increase from last year (EUR 30.4 billion in 2009), most
of which are sent to developing countries.

According to Eurostat[72], the outflow of workers' remittances was highest in 2010 in Spain (EUR 7.2 billion or
23% of total EU27 remittances), Italy (6.6 billion
or 21%), Germany (3.0 billion or 10%), France (2.9 billion or 9%), the Netherlands (1.5
billion or 5%) and Greece (1.1 billion or 3%). Among these Member States,
the share of extra-EU27 remittances in the total ranged
between 67% in Germany and 91% in Greece. In 2010, the
majority of Member States recorded similar levels of outflows of workers'
remittances to 2009.

2.2.3.     Reducing
transfer costs of remittances

At the Cannes
G20 Summit in November 2011, G20 members agreed to reduce the average cost of
transferring remittances from 10% to 5% of the amount transferred by 2014.[73]

Although
remittance costs have fallen steadily in recent years, they remain high,
especially in Africa.

Figure 2.2.3

Source: World Bank, 2011[74]

As seen in
figure 2.2.3 above, remittance costs on average continue to remain high,
impacting many poor migrants and their families. Efforts to reduce remittance
costs include increasing market competition in many remittance corridors and
wider application of cheaper and more convenient remittance technology. Also
there is a great need to improve data on remittances and migration at the
national and bilateral corridor levels, for more accurate monitoring of
progress towards the agreed objective. It is estimated that reducing these
costs to an average of 5 % (compared to the current average, which is roughly
twice that) would save EUR 10.8 billion (USD 15 billion).[75]

At EU level,
remittance services are being made cheaper, more transparent, more competitive
and more reliable.

In particular,
the transposition of the 2007 Payment Services Directive (PSD) into the
national legislation of a majority of EU Member States has contributed to
increased transparency in the provision of payment services, including the
remittance market. Moreover, several EU Member States (including France,
Germany, Italy, the Netherlands and the United Kingdom) have set up their own
remittance price comparison websites on costs and quality of services. The
above mentioned (par. 2.2.1.) study launched by the European Commission will
include elements to assess the feasibility of a common EU portal on Remittances.

2.2.4.     Donor
initiatives

Several EU
Member States such as Austria, France, Germany, and the Netherlands have either
launched or supported the launch of studies and workshops aimed at improving
the knowledge about the main remittance channels and payment systems. For
instance, France has funded a study on “Reducing the costs of migrants’
remittance and optimising their impact on development remittance channels from
France to Maghreb and the ‘franc’ area”, the results of which were presented in
February 2012.[76]
The recommendations of the study, carried out by the credit institution
“Epargne sans Frontières” (Savings without Borders) and co-financed by AfDB and
the French Development Agency, centred on cutting the cost of migrant money
transfers and boosting their effect on the development of African countries.

A
number of EU Member States (including Denmark, France, Germany, the
Netherlands, and Poland) have also taken specific actions in 2011 aiming at
increasing remittances’ channelling to productive and social investments.
For example, Germany is in the process of setting up a social lending and
knowledge brokerage project aiming at offering migrants a systematic way of
collecting and spending remittances as well as sharing knowledge on small
enterprise development or social investment in their countries of origin.

3.           Leveraging
International Development Finance: beyond official, beyond development and
beyond assistance

3.1.        Innovative
Financing – Sources and Mechanisms

EU Commitments

●
Council Conclusions of 14 June 2010[77]
(§31): Innovative financing sources and mechanisms complement other resources.
The EU seriously considers proposals for innovative financing mechanisms with
significant revenue generation potential, with a view to ensuring predictable
financing for sustainable development, especially towards the poorest and most
vulnerable countries. The EU calls on all parties to significantly step up
efforts in this regard, welcomes the ongoing work by the Leading Group on
innovative Financing for Development, and takes note of the ongoing work of the
Task Force on International Financial Transactions for Development and of the
Task Force on Innovative financing for Education.

●
Council Conclusions of 14 November 2011[78]
(§3.5): Engage the private sector in aid and development effectiveness in order
to advance innovation, create income and jobs, mobilise domestic resources and
further develop innovative financial mechanisms. (§52): The EU calls (...) on
development partners to further develop and increase the use of innovative
financial instruments and blending of grants and loans that enhance the
catalytic role of aid in promoting private sector engagement and private sector
development.

●
Busan partnership for effective development cooperation, December 2011[79] (§32. C):
Further develop innovative financial mechanisms to mobilise private finance for
shared development goals.

In the current
context of financial crisis and budgetary austerity, discussions on innovative
financing mechanisms have gained a new resonance,
both within the EU and at global level. A good illustration of this growing
interest in innovative financing mechanisms is the G20’s formal agreement for
the first time to support innovative financing for development and climate
change and to move forward by
using a menu of options.[80]

According to the Leading Group on Innovative
Financing for Development[81],
which is the main recognised international forum for discussions on this matter,
about twenty countries in the world have already set up
one or more innovative financing mechanisms so far. Thanks to these mechanisms,
close to EUR 4.3 billion (USD 6 billion) have been raised since 2006.[82]

At the 10th Plenary Session of the Leading Group,
which took place in Madrid in February 2012, the emphasis was put on the
important advocacy role of the Leading Group in multilateral fora. Following
the successful experience in 2010 at the UNHLPM on MDGs, the Leading Group
organised another high-level side event in the context of the Rio+20
Conference, in partnership with the United Nations, in order to raise awareness
on the potential of innovative financing mechanisms to mobilise resources
for sustainable development.

3.1.1.     Distinction between innovative financing sources and mechanisms

There is no universally accepted definition
of Innovative Financing Mechanisms[83]
(IFM). While the term initially referred to new sources of development
financing that could complement traditional ODA[84] in a stable and predictable
way[85],
it has progressively been expanded to include new and innovative financial mechanisms
aiming at enhancing the effectiveness and efficiency of financial flows.

The main characteristic of these mechanisms
is that they differ from traditional approaches to mobilising and/or delivering
development finance. They are usually complementary to traditional ODA and tend
to address a specific negative externality.

IFM are thus mechanisms that (i) support
fund-raising by tapping new sources and engaging investors beyond the financial
dimension of transactions, as partners and stakeholders in development; and/or
(ii) deliver financial solutions to development problems on the ground. They
can therefore be considered "innovative" either because of the nature
of sources, the way they are collected and used, or their modes of governance.

Broadly speaking, IFM can be divided
into innovations in fund-raising and innovative
financial solutions for development:

(1) 
Mechanisms that generate additional financing
for development by tapping into new and innovative finance (or funding)
sources (non-traditional or non-conventional ODA resources, emerging donors
and the private sector). For example, global solidarity
levies (such as the airline ticket tax or the Adaptation Fund) or national
lotteries.

(2) 
Mechanisms that offer innovative financial
instruments/solutions in the way revenues are collected and pooled,
traditional development finance is used and aid is delivered. For example,
public-private partnerships such as the International
Finance Facility for Immunisation (IFFIm), or copayment
schemes such as the Advance Market Commitment (AMC) mechanism.

According to a World Bank working paper[86], four
types of innovative mechanisms can be distinguished:

– 
Private mechanisms: they involve private-to-private flows in the
market and in civil society.

– 
Solidarity mechanisms: they include public-to-public or
sovereign-to-sovereign transfers and form the backbone of multilateral and
bilateral ODA and other official flows (OOF).

– 
Public-private partnership mechanisms: they use public funds to leverage or
mobilise private finance in support of public service delivery and other public
functions, such as risk management.

– 
Catalytic mechanisms: they involve public support for creating
and developing private markets (inter alia by reducing risks of private entry).

3.1.2.     State of play and revenues raised by existing innovative mechanisms

Twelve Member States are currently using or
are planning to use one or more of the existing innovative financing mechanisms
to raise funds for development[87].

For example:

· 
International Finance Facility for
Immunisation (IFFIm): Six Member States (France,
Italy, Netherlands, Spain, Sweden and the UK) indicated that they are
contributing to the IFFIm under the GAVI Alliance. It is estimated that a total
of EUR 2.4 billion (USD 3,4 billion) were levied through this mechanism for
GAVI between 2006 and 2011[88].

· 
EU Emission Trading System[89] (ETS): Four Member States (Czech Republic, France, Germany and Hungary)
indicated that they are using or considering using the auctioning of allowances
under the ETS with a view to financing climate action in developing countries.
In that context, Germany also explicitly targets climate adaptation activities
that have biodiversity co-benefits.

· 
Air ticket levy:
France is the only EU Member State to have introduced an air ticket levy to
finance UNITAID, IFFIm and the Global Fund. France estimates that EUR 175.8
million will have been raised through this mechanism in 2011. Cyprus,
Luxembourg, Spain and the UK are also supporting UNITAID[90], albeit with direct
contributions from their general budgets[91].

· 
Advance Market Commitments (AMC): Two Member States (Italy, UK) participate in the AMC for the
development and production of affordable vaccines (France indicated its support
for this mechanism without contributing to it at this stage). In 2011, Italy
and the UK have contributed to this mechanism by more than EUR 79 million
(compared to 55 million in 2010).

· 
Debt2Health:
Germany is the only Member State participating in this initiative, which it is
using for the Global Fund to fight Aids, Tuberculosis and Malaria. In 2011,
Germany contributed with EUR 3.3 million under this debt swap mechanism.

· 
National Lotteries: Belgium is the only Member State having declared the use of
receipts from its national lottery to finance development cooperation. Part of
the receipts (EUR 18.3 million) are earmarked for financing food security
projects through the Belgian Fund for Food Security.

3.1.3.     Major EU initiatives

At EU level, two recent initiatives are
worth underlining.

First, the
Commission's “Proposal for a Council Directive on a common system of financial
transaction tax and amending Directive 2008/7/EC”[92], which proposes setting up a
harmonised framework for financial transaction tax in the EU. Such a tax, if
adopted, would be levied as a rule on all financial transactions relating to
financial instruments when at least one party to the transaction is established
in a Member State and a financial institution established in a Member State is
involved in the transaction. The idea of an EU FTT is strongly debated among
Member States with very differing views. Discussions are currently on-going in
the Council and the European Parliament in order to look at all the aspects of
the proposal and their implications in practice.

The financial
transaction tax was proposed as a new own resource for the EU budget, in the
context of the preparation of the next multiannual financial framework
2014-2020. The Commission has recently announced that, if adopted as a new own
resource of the EU budget, the financial transaction tax could significantly
reduce the contributions of Member States to the EU budget, in the magnitude of
EUR 54 billion by 2020.[93]

Second, the extension
of the EU Emissions Trading System (EU ETS) to aviation transport, the scheme for greenhouse gas emission allowance trading within the
Community. As foreseen in the Directive
2008/101/EC of the European Parliament and of the Council of 19 November 2008
amending Directive 2003/87/EC, aviation activities are since
January 2012 included in the
emissions from all domestic and international flights that arrive at or depart
from an EU airport.[94]

While these two
initiatives do not foresee earmarking of resources for development per se,
they are nonetheless expected to facilitate Member States' efforts to mobilise funding required
for meeting aid targets and tackling other global challenges.

3.1.4.     EU Blending Mechanisms

The EU blending
mechanisms are an innovative financing mechanism as they leverage additional
resources and investments in a context of constrained resources. In particular,
involving the private sector as a partner in development to create jobs and
income opportunities for the poor, as well as to leverage additional funding
through blending for achieving inclusive and sustainable growth, has been
recognised by the ‘Agenda for Change’, the ‘Busan Outcome document on Aid
Effectiveness’ and has become common practice in development finance.

The
EU blending mechanisms combine grants with additional flows (such as loans and
risk capital) to gain financial and qualitative leverage, and increase EU
development policy impact. The strategic use of a grant element can make
projects and initiatives by public or commercial investors financially viable,
thereby exerting a leveraged policy impact. The grant element may take various
forms such as: direct investment grants; interest rate subsidies; technical
assistance, risk capital and risk sharing mechanisms such as guarantees.[95] Beyond unlocking additional project
financing, the EU grant element also reduces the price of the project for the
beneficiary and contributes to complying with debt sustainability criteria.

Since
2007, the EU has set up a number of regional
blending facilities: the
EU-Africa Infrastructure Trust Fund (ITF) and Investment Facilities for the
Neighbourhood (NIF), Latin America (LAIF) and Central Asia. Since 2007, more
than EUR 760 million EU grants have been committed to 115 projects. EU grant
contributions have leveraged approximately EUR 10 billion of loans by European
Finance Institutions, unlocking total project financing volume totalling in at
least EUR 26 billion. With three new facilities for Asia, the Caribbean and the
Pacific, worldwide coverage is expected in 2012.

3.2.        Facilitating
Private Investment

EU Commitments

Current
EU thinking on engaging with the private sector is set out in the following
Council Conclusions:

· 
November 2008 Conclusions on a Common EU
position for the Doha Financing for Development Conference[96], §10: “The EU
is committed to promote policies and instruments supporting private investment
and the expansion of partner countries' private sector in support of an
inclusive and sustainable economic growth”.

· 
December 2011 Conclusions on Reinforcing industrial policy across the EU[97]: The Council welcomed the
Communication from the Commission “A Renewed EU Strategy 2011-2014 for Corporate Social
Responsibility as well as of the Social Business
Initiative.

3.2.1.     Framework
for Private sector-led growth

As emphasised in the
recent Communication on ‘Increasing the impact of EU Development policy: an
Agenda for Change’[98],
“inclusive and sustainable economic growth is
crucial to long-term poverty reduction”. In many developing countries, the expansion of the
private sector, notably micro-, small- and medium-sized enterprises (MSMEs) is
a powerful engine of economic growth and the main source of job creation.
Foreign investment also plays an important role, including through the linkages
of domestic firms to international markets and through investments in
infrastructure and natural resource based activities. One of the main
challenges for governments in developing countries is to establish, design and
implement institutional, organisational and regulatory frameworks which are
conducive to, and often a pre-condition for, private sector development.
Governments alone cannot create a private sector with an enterprise culture,
but their actions can either hinder or facilitate it. The latter often requires
far-reaching economic reforms aimed at improving the investment climate and
facilitating access to finance.

A framework for
private sector-led growth is incorporated within the ‘Agenda for Change’. It advocates for inclusive and sustainable
economic growth, resulting in wealth and job creation through inter alia an
increased focus on:

· 
Key drivers for inclusive and sustainable growth, notably a stronger
business environment and deeper regional integration. This will be achieved by:
(a) supporting the development of competitive local private sectors including
by building local institutional and business capacity, and promoting MSMEs; (b)
facilitating legislative and regulatory framework reforms and their
enforcement; (c) improving access to business and financial services; (d)
promoting agricultural, industrial and innovation policies; (e) developing new
ways of engaging with the private sector, notably with a view to leveraging
private sector activity and resources for delivering public goods; (f)
extending the scope and scale of the EU regional blending facilities to further
leverage addition financial resources for development; and (g) encouraging
regional and continental integration efforts.

· 
Sectors which build the foundations for growth
and help to ensure that it is inclusive and sustainable, notably education,
health, employment, and social protection; and on those sectors that have a strong multiplier impact
on developing countries’ economies and contribute to environmental protection,
climate change prevention and adaptation, notably sustainable agriculture and
energy. EU support would help insulating developing countries from shocks and
thus help provide the foundations for sustainable growth. It should tackle
inequalities, in particular to give poor people better access to land, food,
water and energy without harming the environment. In both sectors, the EU
should support capacity development and technology transfer.

The recent 4th High-Level
Forum on Aid Effectiveness in Busan provided
further impetus for the above approach. It highlighted the need for
inclusion of new actors on the basis of shared principles and differential
commitments, including the private sector. In particular, it recognised the
central role of the private sector in advancing innovation, creating wealth,
income and jobs, mobilising domestic resources and in turn contributing to
poverty reduction. To this end, the meeting put forward a framework[99] to enable the participation of
the private sector in the design and implementation of development policies and
strategies to foster sustainable growth and poverty reduction.

The EU promotes foreign
and domestic investments, especially for MSMEs, through its support for private
sector development in developing countries. The vast majority of EU support is
provided through bilateral cooperation programmes, the remainder being through
regional programmes (including all ACP programmes[100]). In addition,
the European Investment Bank (EIB) is entrusted with the management of the
Investment Facility (IF) provided from the EU Member States' budgets via the
European Development Fund (EDF). The IF, alongside the EIB own resources, meets
the financing needs of investment projects in the ACP region with a broad range
of loans and flexible risk-bearing instruments. In line with the EU Development
Policy objectives, the EIB’s overriding aim is to support projects that deliver
sustainable economic, social and environmental benefits through: supporting
responsible private and public investments; fostering regional cooperation and
integration; mobilising domestic savings and acting as a catalyst for foreign
direct investment; encouraging the broadening, deepening and strengthening of
the local financial sector; and relying on/promoting partnerships.

Private flows, notably foreign direct investments, play an
important role within the above approach and contribute to provision of needed
capital.[101]
However, this source of financing from the EU27 has been limited in recent
years. According to Eurostat, net FDI from the EU27 to developing countries
peaked in 2007 and declined in 2008 before growing in 2009. As shown in Figure
3.2.1[102]
below, FDI fell significantly in 2010, reaching a level last observed in 2005.
The decline in FDI from the EU, together with resource constraints faced by
developing countries, underscores the importance for EU Member States to help
mobilise a critical mass of investments in developing countries.

Figure 3.2.1 – Net FDI Flows
from EU to Developing Countries (EUR billion, current prices)

Source: Eurostat

3.2.1.1.  Business and Investment Climate

Investment climate
encompasses economic, institutional, financial and market conditions affecting
investment and business operations. It is determined by the legal and
regulatory framework, existence of barriers to entry and exit, and conditions
in markets for labour, finance, information, infrastructure services, and other
productive inputs. It is thus a cross-cutting issue that affects all aspects
of private sector development. For instance, a typical MSME programme not
only addresses access to finance issues but targets improvements in aspects of
the investment climate that especially affects the sector.

In developing
countries, a conducive investment climate is therefore an important determinant
of private sector investment and growth. The EU supports the improvement of the
macroeconomic framework and regulatory environment for enterprise development
through bilateral cooperation and regional programmes like the Intra-ACP
programme “Private Sector Enabling Environment Facility of the Business
Environment[103]
(PSEEF / BizClim)”. Several EU Member States are also active in this area, such
as Austria, Netherlands and Germany who work closely with partner countries and
donors to improve the business investment climate. Other examples worth
mentioning include:

· 
The Belgian
Development Cooperation aims at improving the business and investment climate
in developing countries by supporting UNDP, the World Bank and Transparency
International in their efforts. These are embedded into the bilateral
cooperation in countries such as Burundi, Rwanda and DRC.

· 
The UK provides
financing for technical assistance and research to improve the investment
climate and strengthen growth policies in developing countries. Both are
critical for supporting private investment. This assistance helps transform
policies, legislation, regulations and government administration to become more
efficient and predictable which helps create a more conducive environment for
private investment.

3.2.1.2.  Financial Services for trade and investment

Financial mechanisms aimed at supporting
private sector development usually tackle two inter-related issues of cost and
access. The type of funding and the repayment terms are both key determinants
on the cost side. Blending of grants with market-based financing is thus a way
to reduce costs, especially for investment with long gestation period and with
social rates of return well above the financial rate of return. While other
measures such as guarantees help address both issues, other mechanisms
discussed below help improve access.

The European Commission uses blending
mechanisms, in which grants are combined with
non-grant financing such as loans and risk capital as a way to leverage
additional private and public financing for developmental projects. The
strategic use of a grant element and risk-sharing mechanisms may also catalyse
public-private partnerships and crowd-in private investment.

The potential range of financial tools used
in the EU blending mechanisms includes: technical assistance (TA); investment
co-financing; interest rate subsidies; risk-capital operations and risk-sharing
mechanisms such as guarantees. To date the EU regional blending facilities have
covered similar broadly defined, sectors, i.e. transport, energy, social,
water/wastewater, environment, ICT and access to finance for MSMEs. Partners in
the beneficiary country can be public or private, with public partners
dominating the current projects aside from MSME support.

The European Commission also plays an
active role in the sector approach, mainly through Trust Funds in cooperation
with Member States.

Box 3.2.1.2 Example
of Blending Mechanisms

The Global Energy Efficiency and Renewable Energy Fund (GEEREF) is an innovative Fund-of-Funds,
providing global risk capital through private investment for energy efficiency
and renewable energy projects in developing countries and economies in
transition. Launched in 2004, GEEREF aims to accelerate the transfer,
development, use and enforcement of environmentally sound technologies for the
world's poorer regions, helping to bring secure, clean and affordable energy to
local people. GEEREF is sponsored by the European Union, Germany and Norway and
advised by the European Investment Bank Group.

Support to the Facility for Euro-Mediterranean
Investment and Partnership
(FEMIP) promotes private sector development in the Mediterranean region by
providing capital to the private sector on terms that are not available
locally. This is done mainly through risk capital operations and facilitated
through technical assistance. Managed by the EIB, the Support to FEMIP’s
risk-capital portfolio includes more than 500 operations.

Guarantee mechanisms can reduce risk and enhance access to finance.
Such mechanisms can be put in place to promote trade and investment. These
instruments are managed and implemented by specialised agencies within EU
Member States. Most Member States have established banks for this purpose,
including Romania, Hungary and Slovakia’s Eximbanks, also Estonia’s Fund KredEx
and the Latvian Guarantee agency. Austria, Estonia, Hungary and Italy are also
amongst the countries that also provide political risk insurance and/or
investment guarantees. The case of Austria helps illustrate how such schemes
work. The Austrian export credit agency, assumes guarantees for political
risks. The “Austria Wirtschaftsservice” (AWS) assumes investment guarantees
which cover the commercial risk of Austrian private investments abroad. Being
an Austrian government promoted bank, it is the key focus of AWS international
activities, to support the establishment and formation of subsidiaries and
joint ventures or to enable the acquisition of companies abroad[104].

Finally, MSME access to finance can be
improved through the strengthening of the financial sector and most
Member States also have on-going, mutually reinforcing programmes supporting
private sector development through improved access to finance. The insufficient availability of term finance may hinder
the ability of the financial sector in many developing countries to fund
investments through medium-term to long-term loans targeting MSMEs and larger
private projects. Donors address this problem by providing term resources on
both commercial and concessional terms, including through the provision of
lines of credit and/or equity funding and guarantees. Further, the lack of capacity and/or know-how at the level of the
financial intermediaries as well as beneficiaries may affect implementation of
lines of credit, equity and guarantee funds. Donors thus often use a small part
of the resource envelope to provide complementary technical assistance.

Some of these programmes are quite broad in
type and coverage. For example, Germany cooperates bilaterally with over 70
partner countries in over 200 programmes to advance financial sector
development, including the banking sector. It is active in several
international initiatives that aim at improving the overall banking system,
e.g. Financial Sector Reform and Strengthening Initiative (FIRST), Alliance for
Financial Inclusion (AFI), Consultative Group to Assist the Poor (CGAP, an independent policy and research centre
dedicated to advancing financial access for the world's poor also funded by the EU), and Access to Insurance Initiative (A2II).
Other EU Member States reported activities in these
areas are:

· 
Germany co-chairs
the working group on SME Finance in the G20 Global Partnership for Financial
Inclusion, particularly aiming at improving access to finance for SMEs in
developing countries also focusing on improving access for agricultural
enterprises and women entrepreneurs. Germany contributes to the Partnership for
Making Finance Work for Africa. Jointly with other donors, the regional MSME
Fund for Sub-Saharan Africa (REGMIFA[105]) and SANAD[106]
(set up in 2011, also with EU funding) in the MENA region aims to enhance long
and medium financial needs of local financial intermediaries. The AATIF[107]
fund invests in the agricultural sector in Africa with a focus on agricultural
value chains. The European Fund for Southeast Europe[108]
(EFSE) provides sustainable funding to entrepreneurs and private households in
Southeast Europe.

· 
The Austrian Development Bank (OeEB)
supports the private sector in developing countries by providing long-term
finance on commercial terms. Particular attention is given to the financing of
micro finance institutions in partner countries. Additional technical support
to projects is funded separately, but usually linked to financing provided by
OeEB.

· 
Italy provides
grants and loans to support investments in developing countries including
Lebanon, Serbia, Albania, Jordan, Tunisia, Afghanistan, India, Senegal, Ghana, Uruguay, Vietnam and Iraq.

· 
Portugal provides
long-term finance for upgrade, expansion or new agricultural, industrial,
tourism, infrastructural and financial projects from private companies, in
Portuguese Speaking African countries, Northern Africa, Latin America and Asia.

· 
The Danida Business Finance[109] facility is an example of
term credit that targets the infrastructure sector while promoting
climate-friendly and clean technology development projects. A minimum
investment of EUR 1 million is eligible and interest-free or low-interest loans
are extended.

· 
Luxembourg
provides TA to support activities and institutions in the financial sector.

· 
The Belgian Development Cooperation
supports micro finance activities, notably in Morocco, Rwanda, Senegal and
Vietnam. Latvia funds loans for the development MSMEs and Co-operative Unions
Providing Agricultural Services. Sweden extends equity and loans also to
SMEs primarily through the Swedish Swedfund.

· 
 “The Currency Exchange” (TCX), supported by Germany,
France and others, provides market risk management products in developing
and emerging markets by focusing on currencies and maturities which are not
covered by regular market providers.

· 
Greece provides
subsidies to private productive investments in the framework of implementation
of the “Hellenic Plan for the Economic Reconstruction of the Balkans”.

· 
Finnfund is a
Finnish development financing institution that offers long-term risk funding
for commercially profitable investments in developing and transition countries.

· 
The UK uses a range of financial
instruments to catalyse private investment in developing countries. Instruments
include grants to support activities such as capacity building and seed funding
channelled through their challenge funds; risk-sharing instruments including
equity, debt and guarantees deployed through intermediaries such as the Private
Infrastructure Development Group. The UK also supports private investment
through shareholdings in CDC and the Investment Finance Corporation.

· 
France provides a
guarantee fund for Sub-Saharan SMEs, which are estimated to have contributed to
the creation of 90,000 jobs, as well as investment finance through FISEA[110]
and AFD loans. AFD also supports upscaling of microfinance institution and
downscaling of bank to better serve MSMEs.

3.2.1.3.  Access to finance programmes

Most of the access to finance programmes
aims to facilitate availability of financing to the MSME sector. Programmes
reported by Member States are:

· 
The Belgian Development Cooperation
supports micro finance activities, notably in Morocco, Rwanda, Senegal and
Vietnam. Latvia funds loans for the development MSMEs and Co-operative Unions
Providing Agricultural Services. Sweden extends equity and loans also to SMEs
primarily through the Swedish Swedfund.

· 
Germany co-chairs
the working group on SME Finance in the G20 Global Partnership for Financial
Inclusion, particularly aiming at improving access to finance for SMEs in
developing countries also focusing on improving access for agricultural
enterprises and women entrepreneurs. Germany contributes to the Partnership for
Making Finance Work for Africa. Jointly with other donors, the regional MSME
Fund for Sub-Saharan Africa (REGMIFA[111]) and SANAD[112]
(set up in 2011, also with EU funding) in the MENA region aims to enhance long
and medium financial needs of local financial intermediaries. The AATIF[113]
fund invests in the agricultural sector in Africa with a focus on agricultural
value chains. The European Fund for Southeast Europe[114]
(EFSE) provides sustainable funding to entrepreneurs and private households in
Southeast Europe.

· 
France provides a
guarantee fund for Sub-Saharan SMEs, which are estimated to have contributed to
the creation of 90,000 jobs, as well as investment finance through FISEA[115]
and AFD loans. AFD also supports upscaling of microfinance institution and downscaling
of bank to better serve MSMEs.

3.2.1.4.  Support for Public-Private Partnerships for the delivery of goods
and services

A Public-Private Partnership (PPP) is a partnership between the public and the private sector for
the purpose of delivering a project or a service traditionally provided by the
public sector. PPPs leverage private funding, can draw on the operational
efficiencies of the private sector, allow faster implementation and can enhance
the quality of the service delivered. PPPs may be especially important in
poorer countries where over-extended governments do not have the human
resources and fiscal space to fulfil the requirements of their growing economy.
It should be noted that PPPs can take many forms, ranging from private investment
in the sector concerned and private provision of service, with regulatory
oversight provided by a specialised public institution, to some type of
“enhanced lease” where the operator is only responsible for service delivery
and part of the maintenance. Another feature of PPPs is that they are typically
time-bound. PPPs are usually undertaken in infrastructure, even though there is
growing opportunities in social sectors and other developmental activities.

The Private Infrastructure Development
Group (PIDG) is a multidonor organisation[116], including Austria, Germany,
Ireland, Netherlands, Sweden and UK. It was established in 2002 to promote
private participation in infrastructure in developing countries with a strong
focus on Africa. It provides long-term capital and local currency guarantees,
and TA. The Public-Private Infrastructure Advisory Facility (PPIAF)[117] is a multi-donor technical
assistance facility, set up in 1999 and financed by 17 multilateral and
bilateral donors including Austria, France, Germany, Italy, Netherlands,
Sweden, and United Kingdom. It is a complementary scheme to deliver technical
assistance to developing country governments.

In terms of bilateral initiatives, AFD
supports PPPs through funding of concessions and enhanced leases, including in
the education and vocational training sector. Complementary TA may also be
provided. The UK is investing £130 million in a Climate Public Private
Partnership (CP3). CP3 will support projects delivering renewable and efficient
energy, new technology and protect natural resources in emerging and developing
countries including Africa and Asia.

3.2.1.5.  Other partnerships

Complementary measures used by donors to
promote private investments include matching-grants and match-making for
know-how and technological acquisitions and upgrading, and technical assistance
and studies. The following related activities have been reported by Member
States:

· 
German
Development Cooperation co-finances feasibility studies and accompanying
measures for foreign direct investments in developing countries. It also
supports foreign direct investments by SMEs and PPPs through subsidies to cover
the administrative costs for advisory services, project review, etc.

· 
Danida’s Business
Partnerships, Finnpartnership and Austria partnership initiative facilitate the
establishment of commercial partnerships that have a significant impact on
development in poor communities.

· 
The Finnish business-to-business
partnership programme allocates funding for long-term partnerships between
Finnish and developing country entities, normally companies. Partnerships must
contribute to development. Forms of business partnerships are e.g. long-term
trade partnership, investment and joint venture.

· 
France provides
grants funded TA complementary to investment projects, as well as various TA to
financial institutions. Capacity building is offered to enterprises, including
upgrading to international norms, and for trade.

3.2.2.     Corporate
Social Responsibility (CSR)

CSR concerns the impact of companies on
society. It has become an increasingly important
concept and is part of the debate about globalisation, climate change,
competitiveness and social and environmental sustainability. CSR practices are
not a substitute for public policy, but they can contribute to a number of
public policy objectives in developing countries, especially in relation to
labour markets, labour standards, skills development, more rational use of
natural resources and overall poverty reduction. Developing countries benefit
from good practices in CSR in a number of ways notably through the better
quality of development and increased private and public financial flows.

3.2.2.1.  A
renewed EU Policy on Corporate Social Responsibility

On 25 October 2011 the European
Commission issued a new CSR Communication[118] which was welcomed by the Council of the European Union in its
Conclusions on “Reinforcing Industrial Policy in the EU”.[119] In particular, the Council
encouraged Member States to develop or update their plans and/or priority
actions in this area, and recognised CSR as a voluntary assumption of social
responsibility.

The CSR Communication states that to fully
meet their social responsibility, enterprises “should have in place a
process to integrate social, environmental, and ethical and human rights
concerns into their business operations and core strategy in close
collaboration with their stakeholders”. The aim is both to enhance positive
impacts – for example through the innovation of new products and services that
are beneficial to society and enterprises themselves – and to minimise and
prevent negative impacts.

The Communication puts forward an action
agenda for the period 2011-2014 covering 8 areas:

· 
Enhancing the visibility of CSR and
disseminating good practices.

· 
Improving and tracking levels of trust in
business.

· 
Improving self- and co-regulation processes.

· 
Enhancing market reward for CSR by leveraging EU
policies in relevant fields.

· 
Improving company disclosure of social and
environmental information.

· 
Further integrating CSR into education, training
and research.

· 
Emphasising the importance of national and
sub-national CSR policies: EU Member States to present or update their own
plans for the promotion of CSR by mid-2012[120].

· 
Better aligning European and global approaches.

The new European strategy on CSR makes
reference to a number of international initiatives. Among these are the OECD Guidelines for Multinational Enterprises.
The Guidelines[121]
were updated in 2011 and include chapters on human rights, due diligence and
responsible supply chain management, and important changes in many specialised
chapters, such as on Employment and Industrial Relations; Combating Bribery,
Bribe Solicitation and Extortion, Environment, Consumer Interests, Disclosure
and Taxation. There is also guidance to strengthen the mediating role of the
National Contact Points and a pro-active implementation agenda. EU and some
Member States contributed to this document.[122]

Other important international initiatives
to which the European Commission participates, are the UN Guiding Principles on
business and human rights[123]
(the "protect, respect, remedy" framework), in respect of which the
Commission will provide a priorities report for the end of 20120), the ILO
Tripartite Declaration on Multinational Enterprises and Social Policy[124], and the UN's Global Compact.[125]

3.2.2.2.  Update
on activities relating to CSR

The EU and a majority of Member States
undertook/continued national action to promote CSR principles, and 15 of them,
including the Commission, report on-going or new activities in this area. In
addition to areas already reported in the 2011 Accountability Report, there are
a variety of other activities with important contribution to the financing for
development agenda supported by Member States:

The UK food retail Industry Challenge
Fund aims to increase African farmers and farm
worker incomes through access to international food supply chains, including
ethical and fair trade. The UK also expanded the operations of the Business
Innovation Facility with an increased focus on lesson learning on inclusive
business.

The Austrian Government supports private
sector projects on CSR activities and on setting
up/strengthening of value chains.

The Netherlands funds a small
pilot-programme for 50 international CSR-vouchers.
These vouchers give SME’s a reduction (50% with a maximum of EUR 10,000) in the
fee of a CSR-consultant for advice on how to encourage CSR in the supply chain
in developing countries.

Initiatives contributing to better
aligning approaches to CSR included (a) UN Global
Compact; continued support to its secretariat was provided by Denmark, mandate
of local group was renewed by Latvia, and Italy hosted a meeting of local
European Networks; (b) the UN Guiding Principles signed by Spain in 2011; and
(c) the ISO 26000; capacity building in this area in favour of 19 Latin America
countries was funded by Germany in November 2011 and self-evaluation was
undertaken by 50 Latvian enterprises.

Strategic, training and dissemination
activities by Member States during 2011 included:
(a) an Organisational Capacity Assessment Instrument (OCAI) to support
companies in Germany and worldwide to adopt the new UN-principles on business
and human rights, and the promotion of the new OECD-Guidelines for
Multinational Companies in German; (b) approval of the work plan for the
Spanish CSR working group; (c) Employers’ Confederation of Latvia with support
of organised business society and European Social Fund organised a social
campaign “Against shadow economy – for business competitiveness; and (d)
national strategy to promote CSR, for the period 2011-2016 has been adopted by
the Romanian Government.

The EU is in the process of funding the
fourth tranche of the SWITCH Asia Programme.[126] Its aim is to promote
Sustainable Consumption and Production (SCP) in Asia so as to minimise the use
of natural resources and the emissions of greenhouse gases, waste and other
pollutants. To achieve this objective, the Programme works simultaneously on
the ground, with producers and consumers, and at the level of policy-making
through supporting for formulation and implementation of SCP-related policies.
The allocation of the present tranche is about EUR 30 million. So far, the
Programme is funding 47 projects in 15 Asian countries in areas such as Green
Public Procurement, Cleaner Production, Eco-labelling, etc. Each of the funded
projects will bring about quantifiable reductions of CO2 emissions and
resource, water and energy consumption. In the area of policy enhancement four
countries have already gathered experience in applying SCP tools. An example of
this programme is illustrated in Box 3.2.2.2 below.

Box
3.2.2.2 Green Philippines Islands of Sustainability (GPIoS)[127]

The key objectives of GPIoS are to minimise the
environmental impacts caused by SME's in the target region (Metro Manila and
the Calabarzon region), by adopting preventive environmental production and to
integrate sustainable growth, social progress and environmental protection
within the businesses of participating companies. Partnership agreement was
signed between GPIoS and Plantersbank last December 14, 2011.

GPIoS will serve as a tool to increase profitability
while being environmentally friendly, making SMEs more bankable. Results of the
project show significant financial and environmental benefits:

‒ Total energy savings can light up 47, 367
street lamps during one year 12 hours each day

‒ The amount of water savings can fill 256
Olympic sized pool

‒ The amount of waste avoided can fill up 23
garbage trucks

‒ Return of Investment = 0.8 and Payback time
of 9.6 months

4.           International
Development Finance: EU support to global goals

4.1.        Scaling
up Official Development Assistance (ODA)[128]

EU Commitments

● In 2002, the EU Member States adopted joint commitments on
ODA increases. These commitments were further developed and broadened, and
endorsed by the European Council in 2005 ahead of the UN World Summit that
undertook the first review of progress on the Millennium Declaration and the
MDGs. The EU and its Member States agreed to achieve a collective ODA level of
0.7% of GNI by 2015 and an interim target of 0.56% by 2010, both accompanied by
individual national targets. The EU Member States agreed to increase their ODA
to 0.51% of their national income by 2010 while those countries which had
already achieved higher levels (0.7% or above) promised to maintain these
levels. The Member States that acceded to the EU in or after 2004 (EU-12)
promised to strive to spend 0.17% of their GNI on ODA by 2010 and 0.33% by
2015.[129]

● In addition the EU committed in 2005 to: (a) increase ODA to
Sub-Saharan Africa and (b) provide 50% of the ODA increase to Africa as a whole
(North Africa and Sub-Saharan Africa).

● In 2008 the EU as a whole also committed to provide between
0.15 and 0.20% ODA/ GNI to the Least Developed Countries by 2010.[130]

4.1.1.     EU
ODA Commitments in the Global Context

Although the goal of allocating annually
0.7% of GNI to ODA is accepted by all DAC donors except the United States of
America, only EU donors and Norway have set a date to achieve it, transforming
the long-standing UN 0.7% goal, considered by many as aspirational, into a
realistic, time-bound target. The EU decided to move forward and achieve this
goal in steps within 15 years (2000 – 2015), in line with the deadlines of the
Millennium Declaration and based on a mix of individual and collective
intermediate targets. The first intermediate EU ODA objectives were defined in
2002 during the preparation for the Monterrey International Conference on
Financing for Development, based on the EU’s ODA levels in 2000.

4.1.2.     EU
ODA Performance 2005-2011 compared to other donors

The EU has not only pledged to deliver more
aid, but its combined efforts are already delivering substantially greater
amounts of ODA than non EU donors, and individual EU countries (with a few
exceptions) are also making more substantial efforts in relative terms.

Figure 4.1.2 –ODA/GNI by Donor (% and EUR million,
current prices)

Source: OECD DAC and European Commission

As shown in Figure 4.1.2 and Table
4.1.2, both the EU’s per capita ODA and its ODA/GNI ratios are greater
than those of non-EU DAC Members. Indeed, its ODA/GNI ratio is more than
double that of Japan and the USA. Collectively, the EU outperforms most other
donors by a wide margin. The USA, Japan and Switzerland have higher per capita
income than rge average for EU Member States but much lower per capita ODA. The
US GNI is close to 90 % of the EU27 GNI, but US ODA is only 40 % of EU ODA. It
is clear that most of the gap to achieving the global 0.7 % target is outside
the EU.

Table 4.1.2 – ODA/GNI and ODA per capita
of EU Member States and Non-EU DAC Members

Donor || ODA per capita (EUR) || ODA/GNI (%) || ODA (EUR Billion)

2009 || 2010 || 2011 || 2009 || 2010 || 2011 (E) || 2009 || 2010 || 2011 (E)

EU || 98 || 107 || 105 || 0.42 || 0.44 || 0.42 || 49.2 || 53.5 || 53.1

Non EU DAC Members || 68 || 79 || 78 || 0.23 || 0.23 || 0.23 || 37.7 || 44.4 || 44.0

USA || 67 || 74 || 71 || 0.21 || 0.21 || 0.20 || 20.7 || 22.9 || 22.1

Japan || 53 || 65 || 60 || 0.18 || 0.20 || 0.18 || 6.8 || 8.3 || 7.6

Canada || 85 || 115 || 111 || 0.30 || 0.34 || 0.31 || 2.9 || 3.9 || 3.8

Source: OECD DAC/European Commission

4.1.3.     Performance
on ODA targets (2005-2011)

ODA
figures on 2011 net disbursements are preliminary, based on information
provided by EU Member States and the European Commission. For those EU Member
States that report to the OECD/ DAC final and more comprehensive ODA figures
will become available towards the end of 2012.

The EU collective ODA spending in 2011
was EUR 53,1 billion, which translates into the ODA/GNI ratio decline from
0.44% in 2010 to 0.42%.[131]
The reduction in absolute terms was of EUR 342 million.

Since making its ODA commitments in 2002,
EU ODA has seen fluctuations, but overall has been on an upward trend. The
growth of EU ODA is especially significant if one considers the declining
importance of debt relief in the overall ODA effort of EU Member States. Over
the period 1995-2011, EU15 ODA net of debt relief grew by 0.07% of GNI from
0.34% in 1995 to 0.41% in 2011.

Since
2008, the financial crisis has hit EU Member States hard, triggering the
deepest global economic recession in decades. State-financed rescue packages
for the affected banking sector, higher social protection costs and lower
budget revenues have dramatically changed the fiscal situation in many Member
States. Low or negative economic growth rates in the EU as a consequence of the
crisis, and the related austerity measures that Member States introduced, led
to different pressures on ODA. Due to economic contraction, the aid level could
appear higher when expressed as a percentage of GNI, but provides no additional
ODA funding for developing countries.

Also,
lower GNI growth combined with need for higher public expenditure elsewhere led
to restrictions to spending on development cooperation. Through the first three
years of the crisis, the EU continued aid increases, but succumbed to the
pressure in 2011, resulting in a lower trajectory of scaling up to meet 2015
targets.

The
2011 decline in ODA by EUR 342 million was the outcome of mixed performance by
Member States. Eleven Member States reduced their ODA by a total of EUR 2.5
billion, while sixteen Member States increased their ODA in nominal terms by a
total of EUR 2.2 billion. The biggest cuts in nominal terms were in
Spain (1.4 billion), France (400 million), Belgium (250 million) and Greece
(EUR 145 million). As a proportion of 2010 ODA, biggest cuts were in Greece
(38%), Spain (32%) and Cyprus (29%).

Biggest increases in nominal terms were in Italy (EUR 788 million), Germany (EUR 648 million) and
Sweden (EUR 609 million). The ODA/GNI ratios of Germany and Italy are,
respectively, over 20% and almost 70% below their individual targets for 2010. As
a proportion of 2010 ODA, biggest increases were in Malta (43%), Romania
(37%), Lithuania and Italy (35% both). We can note that all EU12 with the
exception of Cyprus have either raised or maintained their aid levels, in part
due to the fact that several contributed to the EDF for the first time.

Looking at overall developments since
2004, all countries except Portugal and Greece saw
their ODA/GNI ratio grow between 2004 and 2011 (see Annex 3 for
details). For Germany, UK, Lithuania, Bulgaria, Romania, Malta, Estonia, 2011
was the highest or very close to the highest ODA/GNI ratio in the period.
Sweden, Luxembourg, Belgium, Finland, Ireland, Cyprus had grown above their
2011 level and then back-tracked a little but progress since 2004 has remained
substantial. Denmark, Netherlands, France, Poland had grown above their 2011
level and then back-tracked a little, with limited progress since 2004;
Denmark and France had gone below their 2004 level and recovered. ODA/GNI
ratios of Spain, Austria, Italy grew well above their 2011 level and then back-tracked
substantially so that progress since 2004 has been limited.

Figure 4.1.3 – Gap
between 2015 targets and 2011 results

Source: OECD DAC and European Commission (EU annual
questionnaire on financing for development)

In 2011, the EU Member States stand in
different position with regard to 2015 target. Four
EU Member States (Sweden, Denmark, the Netherlands and Luxembourg) continue to
exceed the 0.7% target, with Denmark, Luxembourg and Sweden aiming to reach 1%
of GNI by 2015. Despite stalling in 2011, the UK with 0.56% is above the linear
track from 2010 target towards the 0.7% target. Belgium, Finland and Ireland
are above the 2010 target of 0.51% of GNI, but below the linear track. With the
exception of Malta, no EU12 Member State is above the 2010 ODA target (see
figure Figure 4.1.3).

4.1.4.     Achievement
of the 0.7% ODA/GNI Target by 2015

Based on the
projections provided by Member States and/or estimates prepared using their
2006-2011 compound annual growth rate,[132]
the EU27 ODA is expected to increase to 0.44% by 2015. Considering the expected
GNI growth rate till 2015, reaching the 0.7% ODA/GNI target would require the
EU and its Member States to dramatically step up efforts and almost double
their current ODA in nominal terms. Figure 4.1.4 below shows the
long-term trends in ODA volumes for the EU27. At the current pace, there is a
delay equivalent to about 25 years on the path to 0.7%, as ODA is projected to
increase at an annual rate of 0.01% of GNI.

The EU scaling-up process has been uneven,
with asymmetric efforts. Those Member States not contributing their fair share
to the burden-sharing effort have kept the collective EU performance below the
targets, and would also need to make the greatest efforts to reach the 2015
targets.

Table 4.1.4a:
Estimates and gaps to be bridged for reaching the 2015 ODA targets, based on
Member States' forecast information and Commission simulation

Shaded cells are Commission estimates

Figure 4.1.4 - EU 27 ODA/GNI Ratios
(1995-2015)

Source: OECD DAC and European Commission (EU annual
questionnaire on financing for development)

Table 4.1.4a
shows the projections and the sometimes drastic increases needed by individual
Member States in their budgets of 2012-2015. For example, to reach the 2015
target Latvia and Greece would need to sextuple their current ODA volumes over
the next four years, Poland and Romania quintuple; Bulgaria, Italy, and the
Slovak Republic would need to quadruple; and Austria, the Czech Republic,
Estonia, Hungary, Lithuania, Portugal, Slovenia and Spain would need to triple
their aid allocations.

The projections confirm that Member
States do not plan to make these increases under the current tight budget
conditions. 20 Member States provided some
projections for their ODA in the coming years and 13 have provided projections
up to 2015. Excluding 4 Member States that are already above 0.7% ODA/GNI, only
Belgium, Malta and the United Kingdom foresee reaching their 2015 targets. Of
the other 20 Member States, we foresee either lower pace of increases or even
decreases, remaining far from the 2015 target. Based on these indications and
the Commission projections, we expect 17 Member States to at least marginally
increase their ODA/GNI ratio by 2015, however remaining far from reaching their
individual targets.

For 2012, the projections based on Member
Sates’ replies or budget data available online, point to a stagnation in ODA
budgets. This is due in great part to significant ODA budget cuts in Spain,
Italy, and the Netherlands (in order of magnitude), only partially compensated
by relevant projected increases in the United Kingdom, France, and Austria ODA
allocations. The expected rebound in subsequent years is largely based on the
positive average trend of 2006-2011.

The ODA graphs in Annex 3 show each
EU Member State's readiness to meet the individual ODA target levels of 0.7%
and 0.33% of GNI for EU15 and EU12 respectively in 2015, as well as the size of
the gap and how much is likely to be filled by 2015.

There are several factors that reduce
the likelihood of achieving the 2015 target under the status quo:

First, the reduced ambition of some
national plans has had a real impact on collective progress on ODA. Some of the
more ambitious Member States have reduced their targets compared to the ones
that formed the basis for the 2005 Council Conclusions. Most of the Member
States do not plan for reaching their individual targets.

Second, the current fiscal crunch
has led some countries to revise downwards their commitments and targets. Spain,
after increasing ODA substantially until 2009, has reduced its ODA in 2010 and
2011 and announced a further reduction of EUR 1.3 billion for 2012. After
remaining above 0.80% since 2005, the Netherlands is reducing its ODA
target to 0.70%. Italy has consistently missed targets and its aid has
been declining for most of the past decade. Net of debt relief, Italy’s ODA is
projected to remain essentially unchanged in nominal terms (below EUR 2 billion
per year) between 2012 and 2013 at already minimal levels.

Third, back-loading the increase in ODA
expenditure has been one of the main factors in missing target levels.
Experience shows that missing intermediate targets in a significant way leads
to missing subsequent targets too. A good example is provided by the Member
States that significantly missed the 2006 target of 0.33% GNI: Greece, Italy
and Portugal. Once the target was missed, statements were made that the
2006 target would be achieved by 2007 or 2008. In reality, the 2006 target has
not been met by any of them even by 2010 and these three Member States ended up
missing both the 2006 and the 2010 targets.

Fourth, reaching the EU ODA targets is
contingent not only on the medium-sized donors, but also on EU countries
with large economies such as France, Germany, Italy and the UK to boost
average aid levels so as to reach targets. These countries account for almost
70% of the gap to be filled between 2010 and 2015. If the EU as a whole is to
meet the collective target of 0.7% ODA/GNI by 2015, it is imperative that all
the big players step up their efforts, whereas only the United Kingdom
has so far committed to do so.

Table 4.1.4b
below shows the funding gap between the 0.7% target and the current level of
ODA from EU Member States. It is clear that unless decisive action is taken,
the 2015 target will be missed by a large margin.

Table 4.1.4b - Gap between 2011 ODA
levels and 0.7% and 0.33% ODA/ GNI individual targets, 
by Member State

Source: OECD DAC and European Commission (EU annual
questionnaire on financing for development)

4.1.5.     The
Way Forward

The European Union and its Member States
have repeatedly reiterated their commitments to achieve the 0.7% ODA to GNI
ratio by 2015, as a concrete, time-bound goal. The rationale for a time-bound
target was to provide adequate funding to achieve the Millennium Development
Goals. This was not solely an act of solidarity but a strategy to tackle the
root causes of poverty and fragility before they spiral out of control,
generating refugee flows and security threats. It was also designed to face
challenges that know no boundaries and that affect the entire planet, such as
climate change, loss of biodiversity, desertification or the spread of
infectious diseases. EU Heads of State and Government confirmed that ODA
remains an important element of the EU support to developing countries, and
repeatedly reaffirmed their commitment to reaching the individual and
collective ODA targets by 2015. At the same time, the Council has not agreed
any concrete measures to ensure the national steps necessary for fulfilling
this commitment.

The Commission has, in the last five annual
reports, proposed three ways ways to step up efforts: (a) drawing up of
realistic and verifiable national ODA action plans outlining how Member States
aim to scale up and strive to achieve the 2015 ODA targets; (b) introducing a
peer review mechanism whereby the European Council would assess the progress of
each Member State and give guidance for further joint EU progress for attaining
the agreed ODA targets; and (c) enacting national legislation ring-fencing ODA.

4.1.6.     Falling
short of EU’s promise on ODA to Africa

Since making the commitment to direct 50%
of EU aid increases to Africa in 2005 (based on 2004 aid levels), the combined
EU aid to Africa has risen by about EUR 6.2 billion at constant prices so that
28% of total EU ODA growth between 2004 and 2011 went to Africa, as shown in Figure
4.1.6.

In Member States' replies on their
individual actions, the target of allocating 50% of the ODA increase to
Africa does not seem to be considered relevant, as no reference is made to
this. On the other hand, Member States often cite the share of Africa in their
overall ODA or geographically programmable ODA for measuring/displaying their
effort. Most EU Member States are taking actions to increase ODA targeted to
Africa. For some, aid to Africa already accounts for most of their bilateral
ODA (e.g. 80% for Ireland, 65% for Portugal). A few Member States will not
contribute to that target through their bilateral ODA as they believe their
comparative advantage is in other regions of the world. An important dimension
is the imputed multilateral share of EU aid to Africa, which amounted to an
estimated EUR 11 billion in 2011 and contributed 50% of the collective EU
increase from 2004 to 2011. Overall 43% or EUR 25.3 billion of EU ODA was
targeted to Africa in 2011.

Figure 4.1.6 - ODA to Africa from EU15 in EUR million
and as a % of GNI (including imputed multilateral flows)

Source: OECD DAC data for 2004 – 2010 and Commission
simulation on DAC data for 2011

How did EU ODA to Sub-Saharan Africa
increase since 2005?

EU ODA to Sub-Saharan Africa grew by around
EUR 5.5 billion in real terms over the period 2004-2011, thus meeting the less
demanding target of increasing EU aid to Sub-Saharan Africa. 80% of this growth
was due to aid through multilateral channels. Only Austria, Greece, Netherlands
and Portugal decreased their ODA to Sub-Saharan Africa over this period.
Estimates for 2011 indicate there was no further growth.

4.1.7.     Honouring
the EU commitment on ODA to Least Developed Countries

In November 2008, Member States promised, as part of the EU’s
overall ODA commitments, to provide collectively 0.15% to 0.20% of their GNI to
Least Developed Countries (LDCs) by 2010 while fully meeting the differentiated
commitments set out in the ’Brussels Programme of action for the LDCs for the
decade 2001-2010’.

Since making
the commitment to direct 50% of EU aid increases to Africa in 2005 (based on
2004 aid levels), the combined EU aid to Africa has risen by about EUR 6.2
billion at constant prices so that 28% of total EU ODA growth between 2004 and
2011 went to Africa, as shown in Figure 4.1.6.

Figure 4.1.7 -
EU ODA to LDCs as a % of GNI including imputed multilateral flows

Source: OECD DAC

The LDCs' share of EU ODA has increased
both in absolute and relative terms since 2004 and reached EUR 18.8 billion
in 2011, corresponding to 35% of EU ODA or 0.15% of EU GNI, thus meeting the
target.

Figure 4.1.7 summarises the evolution of
ODA to LDCs over GNI ratios for EU Member States reporting to DAC over the
period 2004-2011. The peak in 2005 and 2006 is due to large debt relief
operations in those years. Belgium, Denmark, Finland, Ireland, Luxembourg,
Portugal, Sweden and the United Kingdom remained above the ODA to LDC
target in 2011. Ireland is the only Member State that has kept a share
of ODA to LDC greater than or equal to 50% for the entire period. Member States
that have not reached the target need to make enhanced efforts to increase
their overall ODA and, within this, to increase the proportion of aid that goes
to LDCs, although a majority of Member States (14 - including all the EU12
Member States) do not expect to be able to reach the 0.15 target any time soon.

4.2.        Scaling up funding for tackling Climate Change and
Biodiversity in the context of Sustainable Development

4.2.1.     Climate
change fast-start finance

EU Commitments

European Council
Conclusions on 10/11 December 2009[133]:
The EU and its Member States are ready to contribute with fast-start funding of
EUR 2.4 billion annually for the years 2010 to 2012.

4.2.1.1.  Background

The EU as a whole is committed to playing a
leading role in the fight against global warming and is an active participant
in the negotiations on climate change under the United Nations Framework Convention
on Climate Change (UNFCCC).

The EU and its Member States have
pledged to contribute fast-start funding totalling EUR 7.2 billion for the
years 2010 to 2012. Developed countries also
committed to a long-term goal of jointly providing USD 100 billion per year by
2020 to address the needs of developing countries in the context of meaningful
mitigation action and transparency of implementation. This funding will come
from a variety of sources, public and private, bilateral and multilateral,
including alternative sources of finance. Through numerous Council Conclusions,
the EU and its Member States have reaffirmed their commitment to doing their
fair share in this context and actively working towards identification of a
pathway for scaling up available financing together with international
partners.

The Commission
has proposed that for the next Development Cooperation Instrument (DCI)
(2014-2020) “no less than 50% of the programme for Global Public Goods and
Challenges will be spent on climate change and environmental objectives.”
The Commission proposal also foresees an overall climate expenditure target of
20% applied to all of the external heading instruments during the next
multiannual financial perspectives. To validate progress towards this objective
the provisions in the respective horizontal regulations introduce both ex-ante
and ex-post tracking in line with the OECD Development Assistance
Committee's Rio-markers definitions.

Better policies are at least as
important as more funding. For example, the
agreement by the G20 to rationalise and phase out fossil fuel subsidies
(amounting to EUR 308.8 billion - USD 409 billion - in emerging and developing
countries in 2010) is a step in the direction that the EU has adopted for
several years. As a matter of fact, a recent OECD study[134] shows that removing consumer
subsidies for energy over the next decade would reduce global greenhouse gases
emissions by over 10 % in 2050.

4.2.1.2.  Volume
and focus of EU support

Monitoring ODA which is related to climate
change and other environmental issues has long been a difficult task due to the
complexity of the issues and their multidimensional character. To help carry
out this task, two markers have been set up within the DAC/CRS system: “climate
change-adaptation” and “climate change-mitigation”.[135] Data prepared using these
markers have been released for the first time in January 2012, covering ODA
disbursed during 2010.

Different conversion factors are used by
the Commission where only 40% of total project costs are considered for Rio
Marker 1. Several EU Member States apply similar methodologies. EU estimates on
climate change related ODA are therefore quite conservative. There are no
guidelines on the application of such conversion factor internationally or at
EU level.

Based on the 2011 and 2012 EU annual
questionnaire on Financing for Developments, the EU and its Member States
committed in their budgets EUR 2.26 billion in 2010 and EUR 2.33 billion in
2011 respectively. Accordingly the EU, having collected EUR 4.59 billion in
2010-2011, remains on track to achieve the goal of EUR 7.2 billion over the
period 2010-2012, despite difficult economic situation and budgetary
constraints. These are preliminary figures as the accounting year for many
Member States has not been concluded yet. Non fast start finance for climate
change increased from EUR 2.8 billion in 2010 (as recorded in the DAC CRS) to
an estimated EUR 3.5 billion in 2011, based on the answers given by Member
States to the 2012 questionnaire. It must be emphasised that, as shown in Table
4.2.1.2 below, data on the overall climate finance envelope is not
available for all Member States.

Table 4.2.1.2 below analyses ODA provided in 2010 for climate change adaptation
and mitigation by all donors and combines two sources: (a) new CRS data that
allow us to determine how much ODA was given for adaptation and mitigation
(last year’s report included an estimate); and (b) data from last year’s
questionnaire to determine the share of fast start climate finance. Unfortunately,
detailed ODA data are released over a year after the close of the financial
year they refer to, and 2011 data will only be available by January 2013, too
late to be included in this report.

The EU has been by far the largest
contributor to both mitigation-related and adaptation-related ODA in 2010 with
a share above 70%, demonstrating strong commitment to fight climate change at a
time of significant budget cuts in many Member States. Non fast start and
fast start finance were broadly equivalent, unlike last year’s estimations
which anticipated that the latter would be almost twice the former. The high EU
share could be due to uneven reporting by other DAC Member States on the new
climate change markers, but it is nevertheless a good indication of the efforts
made by the EU.

Table 4.2.1.2 - ODA estimate for Climate Change
Adaptation and Mitigation in 2010

(Net disbursements, EUR
million at current prices)[136]

Type || All || % of total || EU || Non EU || EU Share

Adaptation || 1,664.71 || 23% || 979.63 || 685.09 || 59%

Principal || 532.69 || 7% || 161.59 || 371.10 || 30%

Significant || 1,132.02 || 16% || 818.04 || 313.98 || 72%

Mitigation || 3,831.62 || 53% || 2,842.12 || 989.50 || 74%

Principal || 2,679.69 || 37% || 1,867.12 || 812.56 || 70%

Significant || 1,151.93 || 16% || 975.00 || 176.94 || 85%

Adaptation and Mitigation || 1,761.15 || 24% || 1,341.53 || 419.61 || 76%

Both Principal || 1,126.05 || 16% || 741.64 || 384.42 || 66%

Both Significant || 635.09 || 9% || 599.90 || 35.20 || 94%

Total Climate Change || 7,257.48 || 100% || 5,163.28 || 2,094.20 || 71%

of which: || || || || ||

Fast-start finance (as reported in May 2011) || 2,340.00

Non Fast-start finance (actual) || 2,823.28

Non Fast-start finance (est. in 2011) || 3,959.92

Climate change ODA 2010/Average 2007-2009 || 1.30

Sources: DAC CRS for all data except Fast Start
Finance which is from the 2011

4.2.1.3.  Measuring
additionality

In 2009, the Council agreed that climate
financing required additional resources, and that ODA should continue to play a
role in supporting adaptation (including disaster risk reduction) in the most
vulnerable and least developed countries.[137]

A methodology to determine additionality
was proposed in last year’s report. The average EU total ODA for the period
2007 to 2009, net of climate change related activities, was set as benchmark
and estimated at EUR 46.5 billion in constant 2010 prices.[138] By this reasoning, if climate
finance is to be additional, the EU’s total ODA excluding climate-related ODA,
should be higher than this benchmark level in the years 2010-12.

The above criterion for additionality
was met in 2010, using this report’s data for the EU’s total ODA in 2010 – namely EUR 53.5 billion in constant 2010 prices. This is EUR 0.7
billion above the benchmark level, which corresponds to the maximum potential
volume of climate finance that would be additional without cutting into support
to other sectors. This is enough to cover the EUR 2.3 billion dedicated to
fast-start finance and EUR 2.8 billion of
non-fast-start finance for 2010 determined using the latest CRS data.

As shown in Figure 4.2.1.3, the
preliminary figures available for 2011 seem to indicate that the above criterion
for additionality was met also in 2011, although with a further contraction
of the margin above the 2007-2009 benchmark.

Figure 4.2.1.3: Calculating the additionality of
climate finance in 2011 – EUR million in 2010 prices

Source: OECD DAC for ODA and mitigation data 2007-2009
for DAC reporting Member States as well as climate change adaptation and
mitigation for 2010. EU annual questionnaire on Financing for Development for
fast-start finance.

4.2.2.     Biodiversity

EU Commitments

● European Council Conclusions on the
Convention on Biological Diversity (CBD): outcome of and follow-up to the
Nagoya biodiversity conference, 20 December 2010.[139] The EU and
its Member States have committed to implementing the strategy for resource
mobilisation and to substantially increasing resources (financial, human and
technical) from all possible sources balanced with the effective implementation
of the CBD and its strategic plan. The EU will actively involve in developing
baselines for monitoring the implementation of the strategy, and in
implementing the COP 10 decision to adopt targets at CBD COP 11, provided that
robust baselines have been identified and endorsed and that an effective
reporting framework has been adopted.

● June 2011 Council Conclusions on the EU
Biodiversity Strategy[140]
and succeeding December 2011 Conclusions on implementation of the Europe 2020
Biodiversity Strategy.[141]

4.2.2.1.  Background

A global strategy to combat biodiversity
loss for the coming decade was adopted at the tenth meeting of the Conference
of the Parties (COP 10) of the Convention on Biological Diversity (CBD) in
Nagoya (Japan) in October 2010.[142]
The plan is backed up by a strategy for mobilising resource to help achieve the
CBD’s three objectives.

The Council adopted Conclusions on the
implementation of the Europe 2020 Biodiversity Strategy at its meeting on 19
December 2011.[143]
The new strategy has six main targets with 20 actions to help the EU address
biodiversity challenges. Internationally, the EU contribution to averting global
biodiversity loss is to be stepped up, through a reduction of indirect drivers
of biodiversity loss (e.g. changing consumption patterns, reducing harmful
subsidies, and including biodiversity issues in trade negotiations) and
mobilisation of additional resources for global biodiversity conservation.
Specifically, the EU and its Member States committed to “contributing their
fair share to international efforts to significantly increase resources for
global biodiversity as part of the international process aimed at estimating
biodiversity funding needs and adopting resource mobilisation targets for
biodiversity at CBD CoP11” to be held in Hyderabad, India on October 8-19,
2012. The Council Conclusions of 11 June 2012 on the preparation of CBD COP 11
emphasise the need to continue to play a proactive role to fulfil those
commitments and keep the momentum from Nagoya. They also recognise the need to
further improve the effectiveness of existing funding and mobilise new types of
funding sources, including the private sector and other stakeholders, e.g.
through mainstreaming and integration of biodiversity considerations at all
levels. The importance of IFM as an essential and necessary funding source, in
addition to traditional financing mechanisms, and as a tool for mainstreaming
biodiversity is also emphasised.

The EU recognises that the link between
ecosystems, on the one hand, and employment, income and livelihoods, on the
other hand, is even stronger in developing countries than in developed
countries.[144]
In that connection, the Commission’s 2010 Work Programme on Policy Coherence
for Development and the PCD report of 2010 have specific sections on
biodiversity. This ambition is carried forward in the new EU Development Policy
framework as set forth in the ‘Agenda for Change’, which states that “EU
development policy should promote a ‘green economy’ that can generate growth,
create jobs and help reduce poverty by valuing and investing in natural
capital.”[145]

4.2.2.2.  Volume
and focus of EU support

Similar to climate finance, support to
biodiversity is measured through a specific marker in the CRS, and may suffer
irregularities from uneven reporting by DAC members. Based on this data, the
volume of EU ODA relating to biodiversity increased by over 140% during the
period 2006-2010 in real terms, from EUR 1.3 billion in 2006 to EUR 3 billion
in 2010 (see Figure 4.2.2.2), although only 26% had biodiversity as
a principal objective. During this period, the EU committed, on average, EUR
1.7 billion per year for biodiversity-related aid, representing 53% of total
ODA for biodiversity from all bilateral donors and multilateral organisations
reporting to DAC CRS.

Figure 4.2.2.2a: EU's
biodiversity-related ODA by objective. 2007-2010

(Commitments,
EUR million at constant 2010 prices)

Source: OECD DAC/CRS[146]

Among EU Member States, France, the United
Kingdom, Germany and Spain were the largest donors in 2010, but several other
countries also donated substantial amounts during this period (see Table
4.2.2.2 below).

The EU’s biodiversity-related aid as a
share of total EU ODA increased from 2.1% in 2006 to 5.6% in 2010, in line with
the increasing focus on sustainable development. Most Member States see
biodiversity and its associated ecosystem services both as a crosscutting and a
sectoral issue in their development cooperation, and thus mainstream it in
their development programmes, though more efforts are needed to ensure that
biodiversity is included in the priorities of partner countries.

Table 4.2.2.2: EU’s biodiversity-related
bilateral aid, 2006-2010[147]
adjusted deflators

(Commitments, EUR million at constant 2010 prices)

Member State || 2006 || 2007 || 2008 || 2009 || 2010 || Average 2006-2010

Austria || 13 || 11 || 24 || 22 || 12 || 16

Belgium || 29 || 52 || 92 || 95 || 135 || 81

Denmark || 122 || 81 || 128 || 87 || 191 || 122

EU Institutions || 378 || 226 || 254 || 526 || 502[148] || 377

Finland || 3 || 38 || 98 || 84 || 90 || 63

France || 111 || 126 || 166 || 171 || 649 || 244

Germany || 231 || 182 || 205 || 223 || 441 || 256

Greece || 2 || 3 || 3 || 6 || 3 || 4

Ireland || - || 20 || 13 || 70 || 31 || 27

Italy || 10 || 88 || 59 || 46 || 4 || 42

Luxembourg || - || - || - || - || 3 || 1

Netherlands || 236 || 170 || 183 || - || 75 || 133

Portugal || 1 || 2 || 2 || 3 || 3 || 2

Slovenia || || 1 || 1 || 1 || 1 || 1

Spain || 67 || 73 || 255 || 209 || 229 || 166

Sweden || 24 || 0 || 11 || 5 || 150 || 38

United Kingdom || 9 || 6 || 10 || 11 || 451 || 97

Total || 1,234 || 1,079 || 1,503 || 1,558 || 2,969 || 1,670

Source: OECD DAC/CRS[149]. EU annual
questionnaire on Financing for Development for Slovenia. Hungary and Romania
reported amounts below Euro 0.5 million and are therefore not included.

Over a third of the EU’s
biodiversity-related aid goes to Africa and around one fifth to Asia and one
seventh to America (see Figure 4.2.2.2.b). The support is divided among
145 countries and territories. One fourth of the support has no specific
geographical focus.

Figure 4.2.2.2b - EU’s
biodiversity-related bilateral aid by geographic area, 2007-2010, percentage
share, commitments

Source: OECD DAC/CRS

In terms of sectors, the EU’s
biodiversity-related aid falls primarily within environmental protection,
followed by water supply and sanitation, agriculture and forestry (see Figure
4.2.2.2.c).

Figure 4.2.2.2c: EU’s
biodiversity-related bilateral aid by sector, 2007-2010,
percentage share, commitments

Source: OECD DAC/CRS[150]

4.2.3.     Sustainable
Development

The ‘Agenda for Change’ aims at putting a
greater focus on investing in drivers for inclusive and sustainable economic
growth. It envisages a greater focus on helping reduce developing countries'
exposure to global shocks, such as climate change, ecosystem and resource
degradation, and volatile and escalating energy and agricultural prices, by
concentrating investment in sustainable agriculture and energy. It foresees support to the decent work agenda, social protection schemes and
floors, providing the workforce with the right skills and encouraging policies
to facilitate regional labour mobility.

The United Nations Conference on
Sustainable Development (Rio+20), held in Rio de Janeiro on 20-22 June 2012
provided a unique opportunity for all involved to renew strong political
commitment to sustainable development at all levels, to assess the progress
made to date, identify remaining implementation gaps and address new and
emerging challenges.

In the EU Common position for Rio+20[151], two priorities were
highlighted. First, the need for a green economy
roadmap with specific goals, objectives and actions at international level;
second, the need for a package of reforms in the Institutional framework for
sustainable development, which should lead to a strengthened international
environmental governance (IEG).

During preparations, the Council of the
European Union highlighted in March 2012[152]
that funding for the implementation of sustainable development will have to
come from both public and private sources, and called for a more
effective use of existing resources and the identification of innovative
sources. It underscored that mobilisation of funding must be undertaken in a
way that is consistent with the objectives of global economic recovery, and
underlined the important role of International Financial Institutions and the
Global Environment Facility (GEF). In that connection, the EU submission to UN
DESA in November 2011, stated that “a joint approach by traditional donors,
emerging economies, international financial institutions (IFIs) and the private
sector is needed, addressing the 'silo' approach to channelling funds and
ensuring a more effective identification and use of existing resources, as well
as mobilisation of available and innovative sources of finance.”

The EU is also constructively engaging in the discussion about
launching a process on Sustainable Development Goals (SDG) to be
coordinated by the UN Secretary General. The establishment of SDGs, fully
encompassing all three dimensions of sustainable development, will provide the
opportunity to focus efforts at the global, regional and national level and
could be an important driver for mainstreaming sustainable development and
integration of its three dimensions in a balanced and synergistic way. The work
on SDGs should be coordinated and coherent with the Millennium Development
Goals (MDG) review process, without deviating efforts from the achievement of
the MDGs by 2015. Furthermore, the EU considers that it would be important to
have an overarching framework for post 2015 that encompasses the three
dimensions of sustainable development with goals that address key challenges in
a holistic and coherent way to ensure the optimal mix of measures for attaining
lasting solutions.

4.3.        Seeking
synergies in EU support

In the context of ongoing various
international processes, discussions on ODA, all aspects of sustainable
development and global public goods in general are closely linked. For example,
building a dam provides various services in a developing country: job creation,
resilience to droughts (climate adaptation), sustainable energy (green growth
and climate mitigation), and may at the same time have negative social and
environmental impacts (need for moving people and changed river flows) that
needs to be mitigated – all these services and impacts are aspects of
sustainable development in the widest sense. This calls for an integrated
approch that truly integrates all three dimensions of sustaianble development
in a balanced and synergistic way, and for seeking coherence across different
policy areas.

There seems to be an emerging international consensus that better
measures of progress and development efficiency are needed to tackle global
challenges. The proposals for defining new
aggregates that would enhance accountability fall into three broad categories:
(a) changing how we measure ODA efforts (notably by revising the ODA concept)[153];
(b) changing what we measure (including by complementing/replacing ODA with a
broader aggregate like “total net resource flows for development”[154]);
or (c) changing where we measure ODA/GNI ratios (at the recipient level rather
than at the donor’s level).[155]

5.           Making
EU actions more effective for development

5.1.        Making
EU aid more effective

EU Commitments

●
On 17 November 2009[156],
the Council (General Affairs and External Relations) adopted the Conclusions on
an Operational Framework on Aid Effectiveness, with additions made in June 2010
(cross country division of labour DoL) and December 2010 (accountability and
transparency).[157]

●
The Operational Framework includes detailed commitments on accelerating
Division of Labour (DoL); increased use of country systems; ensuring technical
cooperation for enhanced capacity development; and strengthening accountability
and transparency.

The EU and its Member States are working
on a range of measures to implement commitments in relation to the Paris
Declaration principles, the Accra Agenda for Action, and the Busan Partnership
for Effective Development Cooperation. Since the
Rome Declaration on aid harmonisation of 2003, the EU has embedded the evolving
international aid effectiveness consensus in various Council Conclusions and
has reviewed the related efforts of EU Member States in all previous editions
of the present report.

In November
2009, the General Affairs and External Relations Council adopted an
Operational Framework on Aid Effectiveness containing measures in key areas
of the aid effectiveness agenda, such as division of labour, use of country
systems and technical cooperation for enhanced capacity development. Based on
Commission proposals, the Operational Framework was complemented in 2010
by a subchapter on
cross-country division of labour[158] and a new chapter on a common EU approach
for implementing commitments on mutual accountability and transparency.[159]

The Council Conclusions on the EU Common
Position for the Fourth High Level Forum on Aid Effectiveness[160]
emphasised the need for an inclusive Post-Busan Agenda, building bridges
towards different development actors, notably emerging economies, civil society
organisations and the private sector as well as for domestic accountability
mechanisms in partner countries.

The Council Conclusions of 14 May 2012[161] on
“Increasing the impact of EU Development Policy: an Agenda for Change”
emphasise the importance of improved mutual accountability, sector
concentration, targeting of resources, joint multiannual programming,
cross-country division of labour, ownership, sustainable growth and
transparency. In particular, they stress that “the EU should develop a common
framework for measuring and communicating the results of development policy,
including for inclusive and sustainable growth. In line with the Operational
Framework on Aid Effectiveness, the EU will work with partner countries and
other donors on comprehensive approaches to domestic and mutual accountability
and transparency, including through the building of statistical capacity.”

Article 210 of the Lisbon Treaty states
that the Union and its Member States shall coordinate their policies on
development cooperation, and consult each other on their aid programmes, including in international organisations and during international
conferences, and may undertake joint action, and contribute if necessary to the
implementation of Union aid programmes.

This new legal and policy framework
provides a new opportunity to make EU development aid more effective,
efficient, and successful in terms of actual impact on the ground. It should
also make a real difference in terms of EU political impact and visibility.
Studies carried out on behalf of the European Commission[162] found that fully implementing
the Aid Effectiveness Agenda[163]
would allow efficiency savings and gains of EUR 5 billion per year, and gains
from redistribution effects through coordinated country allocation of an
additional EUR 7.8 billion per year.

5.1.1.     EU
and Member States performance in implementing the Paris Declaration (2005-2010)

The 2011 OECD/ DAC Paris Declaration
Survey, the results of which were published in September 2011, together with
the replies of the Member States to this year’s questionnaire provide good
evidence for a thorough review of EU aid effectiveness performance.

As noted by the OECD DAC Secretariat in its
analysis of the 2011 Paris Declaration Survey’s findings, these were “sobering”
for all donors, including the EU and its Member States. Reference is made here
to the EU collective performance, as individual Member States performed better
than others.

The main conclusion is that the EU
missed its 2010 ODA quantitative targets, as described above in this report, as
well as most of its qualitative targets as enshrined in the Paris Declaration. As a whole, the EU in fact met only one of the twelve indicators
relating to donor performance (i.e. coordinated technical cooperation).

However, OECD DAC also concluded that
“considerable progress has been made towards many of the remaining targets.”
Most of the overall progress among bilateral donors worldwide was made possible
thanks to progress by EU Member States. Most EU Member States performed above
the “all donors” average, showing a significant commitment to the achievement
of the goals of the Paris Declaration under difficult global conditions.

Out of twelve
indicators and sub-indicators referring to the performance of donors, the EU
and its Member States met one and improved eleven over the period 2005-2010. In
contrast, non-EU bilateral donors met no target, and improved only three
indicators, all closing at a much lower level and further from their target
than the EU and its Member States.

The EU was also
the group that made most progress on the use of country procurement systems,
predictability and the reduction in the number of parallel Project
Implementation Units (PIU’s).

5.1.2.     EU
and Member States action on alignment

Increasing alignment of aid with partner
countries’ priorities, systems and procedures and helping to strengthen their
capacities is a central principle of the Paris Declaration. To improve
alignment donors agreed to use country systems (i.e. national
arrangements and procedures for public financial management, accounting,
auditing, procurement, results frameworks and monitoring) to the maximum extent
possible. Using a partner country’s own institutions and systems has a positive
impact on aid effectiveness: it creates a special incentive to strengthening
the partner country’s institutional capacities in programme implementation,
accounting, monitoring and evaluation and in reporting to Parliament and to its
citizens. EU donors also committed to aligning their conditions,
whenever possible, with their partner’s national development strategy, and to
make them public. In addition, EU donors have committed to disbursing aid in a
timely and predictable fashion according to agreed schedules. In terms
of technical cooperation, EU donors have significantly reduced the number of
parallel project implementation units, in order to build on the
capacities of partner countries.

Use of Country Systems (UCS)

The use of country systems by the EU and
its Member States has improved substantially since 2005, particularly as far as
procurement systems are concerned, but still fall short of targets. On using
country systems as a first option[164],
Member States have scaled up their efforts compared to last year.

– 
13 Member States revised the design of aid
instruments irrespective of modality (up from 11 in 2010);

– 
staff training was provided by 17 Member States
(up from 11 in 2010),

– 
19 Member States supported partner country
capacity development for improving the quality of country systems (up from 17
in 2010).

– 
14 out of 25 Member States supported the use of
country systems through an assessment to identify internal constraints,
slightly down from the 15 reported one year ago.

The 2011 Communication on The Future
Approach to EU Budget Support to third countries[165] states that “budget support,
in particular ‘Good Governance and Development Contracts’, should be used to
strengthen core government systems, such as public finance management and
public administration.” The ensuing Council Conclusions of 14 May 2012[166]
emphasise the commitment to use budget support effectively to support (...) the
use of country systems.

Making aid more predictable

Table 5.1.2 below
presents the ratios between actual 2009 and 2010 ODA flows and budgets prepared
one, two or three years before (the latter is available only for 2010). Ratios
below 100% mean that actual expenditure was below budget, while ratios above
100% indicate that actual expenditure was above budget. Overall, most EU
Member States achieved a good degree of predictability with ratios above the
DAC average for one-year, two-year, and three-year predictability.

Table 5.1.2 –
Predictability Ratios of DAC Members’ Country Programmable Aid

(2009-2010, percentages)

DAC Members || Predictability Ratios

One-year Predictability ratio || Two-year predictability ratio || Three-year predictability ratio

2009 || 2010 || 2009 || 2010 || 2010

2009 Outturn/ programmed early 2009 (%) || 2010 Outturn/ programmed early 2010 (%) || 2009 Outturn/ programmed early 2008 (%) || 2010 Outturn/ programmed early 2009 (%) || 2010 Outturn/ programmed early 2008 (%)

Australia || 111 || 89 || 134 || 102 || 118

Austria || 100 || 82 || n/a || n/a || n/a

Belgium || 119 || 95 || 56 || 129 || 67

Canada || 67 || 79 || 97 || 70 || 102

Denmark || 91 || 122 || 101 || 97 || 110

EU Institutions || 117 || 94 || 100 || 114 || 97

Finland || 103 || 104 || 98 || 102 || 98

France || 107 || 122 || 68 || 146 || 97

Germany || 120 || 90 || 140 || 152 || 86

Greece || n/a || n/a || n/a || n/a || n/a

Ireland || 88 || 90 || 48 || 76 || 39

Italy || 60 || 79 || 63 || 36 || 34

Japan || n/a || n/a || n/a || n/a || n/a

Korea || 89 || 113 || n/a || 126 || n/a

Luxembourg || 104 || 109 || 97 || n/a || 92

Netherlands || 85 || 89 || 87 || 80 || 83

New Zealand || 73 || 85 || 86 || 66 || 82

Norway || 71 || 110 || 82 || 90 || 83

Portugal || 97 || 200 || 91 || 159 || 232

Spain || 82 || 81 || 121 || 45 || 77

Sweden || 101 || 101 || 113 || 85 || 94

Switzerland || 99 || 92 || n/a || n/a || n/a

United Kingdom || 99 || 111 || 86 || 98 || 95

United States || n/a || n/a || n/a || n/a || n/a

DAC countries total || 93 || 100 || 94 || 88 || 90

Source: OECD DAC forward spending plans (2010 and
2011)

The table shows a satisfactory
performance on predictability, with one-year predictability ratios increasing
for eight and declining for five Member States, and two-year predictability
ratios increasing for nine and declining for four Member States. The European
Commission improved its two-year predictability, but worsened its one-year predictability.
Only Ireland, Italy, Netherlands and Spain have one-year, two-year, and three
year predictability ratios all below DAC average, and only Spain has reduced
both its one-year and two-year predictability ratios between 2009 and 2010.

Fifteen EU Member States can make
multi-annual commitments for projects, twelve for general programme based
support, and eleven for budget support. For several, outer year budgets are
indicative and subject to change (e.g., Ireland).

5.1.3.     EU
and Member States action on complementarity and division of labour
effectiveness

The EU and its Member States have strongly
promoted the move towards improved complementarity and division of labour in
partner countries (in-country division of labour) and across partner countries
(cross-country division of labour). Over the recent years, not only did the EU
and its Member States adopt a set of key policy documents on implementing the
division of labour agenda in the EU context, they also successfully contributed
to an international consensus on division of labour, as agreed in the outcome
documents of the Aid Effectiveness fora in Paris, Accra and Busan.

In-country division of labour

With the EU Code of Conduct on
Complementarity and Division of Labour, EU donors have committed to
establishing a more effective in-country division of labour. Since 2008,
the EU Fast Track Initiative on Division of Labour and Complementarity (FTI
DoL), which involves the European Union and Member States as facilitators, has
supported DoL processes in approximately 30 partner countries. The network of
EU DoL is being continuously updated and is regularly used for communication
between EU donors. Most partner countries included in the joint programming
exercises described below are also part of the FTI DoL. In general, the regular
monitoring of the FTI revealed that the implementation of in-country division
of labour principles by the EU and its Member States is progressing.

However, progress in sector concentration
has been very limited. Member States entered 71 and exited 90 sectors. Most
exits were from social sectors (about two thirds of the total), mostly in
Sub-Saharan Africa (34), followed by South and Central America (25) and Middle
East and North Africa (15). Most entries concerned the first two regions:
Sub-Saharan Africa (28) and South and Central America (22).

Improving multi-donor analysis and
response

As shown in Table 5.1.3, Member
States reported 226 cases of multi-donor analyses in 66 partner countries, of
which roughly one third (75) resulted in a multi-donor response. Almost half of
the multi-donor analyses concerned Sub-Saharan African countries but only a
fourth resulted in multi-donor responses, compared to two thirds in the Middle
East and North Africa and three fourths in South America.

Table 5.1.3 – Number of EU Multi-donor Analyses in
2010-2011 by Region

Region || Multi-donor Analyses || % resulting in multi-donor responses

Sub-Saharan Africa || 107 || 25%

East Asia || 27 || 41%

Central America & the Caribbean || 23 || 39%

Middle East and North Africa || 21 || 67%

Europe || 19 || 11%

South America || 12 || 75%

South Asia || 11 || 18%

Central Asia || 11 || 9%

Total || 231 || 32%

Source: European Commission (EU annual questionnaire
on financing for development 2012)

Joint Programming

The EU has taken concrete steps towards
making joint programming a reality. Following the Development Council of 14
November 2011, adopting the policy on joint programming through the Council
Conclusions for the Busan Forum on Aid Effectiveness, the EU identified 11
country candidates for joint programming in 2012. Ensuing reports from EU Heads
of Missions in these countries confirmed that joint programming in 6 of them is
feasible for commencement in 2012. Others may follow in subsequent years.

In order to strengthen partner countries'
ownership and to better align with their strategies and priorities as well as
to facilitate joint programming, the EU is substantially changing its way of
programming. As highlighted in the ‘Agenda for Change’, EU programming will be
synchronised with strategy cycles of partner countries and will no longer cover
the same period for all partner countries. Member States, too, are adapting
their way of programming for the same reasons.

Cross-country division of labour

Increasing the geographical focus can
substantially contribute to more aid and development effectiveness by reducing
administrative costs of ODA delivery. In recent years, EU Member States have
reorganised their bilateral aid portfolios by geographically focusing their
assistance, even in the presence of increasing aid budgets. In 2010 and 2011,
there were 71 cases of exits by EU Member States from 43 partner countries, 50
already completed and 21 to be completed between 2012 and 2016.

5.1.4.     EU
and Member States actions on mutual accountability and managing for results

Mutual accountability lies at the heart of the Paris Declaration, and is a process by
which two or more partners agree to be held responsible for the commitments
that they have voluntarily made to each other. It helps build trust and
partnership around shared agendas and provides incentives for behaviour change
needed to achieve better results. A central aspect is making aid flows more
transparent. As stated in the Operational Framework on Aid Effectiveness[167], “in the Accra Agenda for
Action, donors and partner countries agreed to provide timely and detailed
information on current and future aid flows in order to enable more accurate
budget, accounting and audit by developing countries”.

The new EU development policy as set forth
in the ‘Agenda for Change’ calls for “comprehensive approaches to domestic and
mutual accountability and transparency.” At this stage, 16 Member States
already participate in mutual accountability arrangements in more than 10% of
their priority countries, eight of which do so in 50% or more of their priority
countries.

Performance Assessment.

Performance assessments use mostly policy
dialogue (16 Member States use them), but consultative groups (12) and joint
review panels (10) are also present. Fourteen Member States participate in
Performance Assessment Frameworks, but only a few Member States have currently
a formal result framework in place. Eleven Member States are active in the
post-Busan activities of the Building Bloc on Results and Accountability.
Fourteen Member States support partner countries’ statistical capacities for
monitoring progress and evaluating impact. Fifteen Member States participate in
country-level results framework and platforms in more than 10% of their
priority countries, and 7 in 50% or more of their priority countries. The
Commission has recently proposed a common result reporting framework that could
accelerate adoption of a harmonised way to monitor performance at the country
level.

Making aid more transparent.

Most EU non-DAC donors report their ODA to
the OECD/DAC. The Commission encourages all of them to do so, in line with the
OECD/DAC reporting rules, although none of the EU-12 is yet a DAC member.
Bulgaria is the only Member State that has yet to start reporting
systematically to DAC. The Commission will continue to work with the DAC
secretariat to provide support to the EU’s non-DAC donors to enhance their
statistical reporting capacity. The EU15 countries have all adhered to the new
DAC CRS++ reporting formats.

The International Aid Transparency
Initiative (IATI) was launched in 2008 to develop consistent and coherent
international standards so that donors report more timely information on past
and future aid spending. The European Commission and eight Member States (i.e.
Denmark, Finland, Germany, Ireland, Netherlands, Spain, Sweden and the United
Kingdom) are signatories to IATI, and are implementing or are preparing to
implement its standards. Belgium has decided to join IATI, while the Czech
Republic is designing a new ODA internal reporting system in full compliance
with IATI standards, and Estonia is exploring the possibility of making its ODA
statistics compatible with IATI standards.

Nineteen Member States have developed and
use national aid transparency tools, usually through their development
cooperation’s websites, and annual reports. Denmark is preparing a new law on
International Development Assistance that will require increased transparency
both at partner country level, and domestically. The EU adopted the EU
Transparency Guarantee in November 2011, while both Sweden and the United
Kingdom launched national Aid Transparency Guarantees in 2010 (see Box
5.1.4.a).

Box 5.1.4a – Aid Transparency Guarantees

· 
In November 2011, EU
Foreign Affairs Ministers agreed on the EU Transparency Guarantee,
ensuring that EU Member states will publicly disclose all information on aid
programmes so that it can be more easily accessed, shared and published. It
will also make information available on all aid to partner countries, to enable
them to report them in their national budget documents and help increase
transparency towards parliaments, civil society and citizens.

· 
In 2010 Sweden
introduced a transparency guarantee into its development cooperation. The
guarantee means that all public documents and public information will be made
available online. The information shall explain when, to whom and why money has
been made available, and what results have been achieved. Sweden’s flagship
website - www.openaid.se - was launched in 2011. Openaid.se is a democratic
initiative, facilitating accountability towards Swedish tax payers as well as
towards people in Sweden’s partner countries, by opening up development
cooperation to the public. It is a data-hub providing Swedish aid information
on disbursements in an open format. This means that the format allows for
citizens, CSOs and entrepreneurs to use, refine, and develop the data provided.
The aid information is provided on a global scale, at country level, per sector
or by implementing agency. It covers a time period of four decades. The Swedish
Government is committed to continuing its implementation of the transparency
guarantee and supports initiatives such as the Open Government Partnership, the
Open Aid Partnership, and the EU Transparency Guarantee (see below).

· 
The UK Aid
Transparency Guarantee was launched in June 2010. It commits the United Kingdom
to publishing detailed information about new DFID projects and policies in a
way that is comprehensive, accessible, comparable, accurate and timely. Information
will be published in English and with summary information in major local
languages, in a way that is accessible to citizens in the countries in which
DFID works. The United Kingdom will allow anyone to reuse its information,
including for the creation of new applications which make it easier to see
where aid is being spent. The United Kingdom will finally provide opportunities
for those directly affected by its projects to provide feedback on their
performance.

The European Commission has developed an
information gathering tool called Transparent Aid (TR-AID) to support sharing
of aid information across major international donors with the aim of using aid
funds most effectively. Sharing of aid data with the public and amongst
donors has always been a challenge, due to a large number of data formats in
use, and because data is available in different repositories. (see Box
5.1.4.b).

Box 5.1.4b – TR-Aid

· 
TR-AID incorporates
data from multiple sources in varied formats, and allows the publication of comprehensive
information about both development and humanitarian aid. These include data
from the OECD (Organisation for Economic Cooperation and Development), UN OCHA
(United Nations Office for the Coordination of Human Affairs), and some EU
Member States (Greece, Spain and Belgium for example). TR-AID imports data in
different formats such as comma separated values, excel, xml etc. TR-AID
implements the first phase of IATI thus making it compliant with the standard
proposed, and potentially opening TR-AID up to incorporate any data published
via the IATI registry.

· 
TR-AID is not yet
available for the public, a step foreseen for late 2012.

· 
The TR-AID user
interface is currently available in English, French, Spanish, Italian and
German, with plans to make it available in the 23 official languages of the EU
by early 2013. The users can search the database for information relating to
projects such as sectors, aid type, flow type, markers, status, countries,
regions, etc. They can also search for organisation details such as those
relating to recipients, implementing partners and donors.

5.1.5.     The
Post-Busan Dialogue on Development Effectiveness

The EU and its Member States played an
active and constructive role in the Busan Fourth High-Level Forum on Aid Effectiveness
as well as during its preparation. The Busan outcome document is in line with
the priorities of the EU and its Member States: it is inclusive, it focuses and
deepens aid effectiveness commitments while expanding to development
effectiveness and, finally, it emphasises country level implementation while
scaling down global governance structures.

Final decisions on the mandate and the
governance structure of the Global Partnership as well as monitoring framework
set in the Busan outcome document were made by the Working Party on Aid
Effectiveness in late June. The main function of the Global Partnership will be
to ensure continued accountability at the political level based on the evidence
arising from country level implementation. Global monitoring arrangements, in
turn, will build on country level monitoring processes based on a global set of
core indicators on Busan priority themes. The decisions of the Working Party
were based on the proposals negotiated by the Post-Busan Interim Group. From
the EU and its Member States, the Commission (representing the EU), the United
Kingdom, Germany and Sweden were members of the group and played an active role
in it.

As
stated in the EU Common Position for Busan, the priority after Busan is to
focus on the country level implementation of its aid and development
effectiveness commitments. As shown by the available evidence, country-led
and country-level results and mutual accountability frameworks are essential
elements of country level implementation and partner countries' leadership.
Many EU Member States are already engaged in these frameworks. However, there
is room for further collective EU action to strengthen these frameworks or
support their establishment. The EU and its Member States are progressing in implementing
division of labour principles at the country level. This continued progress may
provide opportunities to support country level implementation beyond
complementarity and division of labour.

5.2.        Supporting
better Global Governance

5.2.1.     The
Evolving Global Context

The EU Common Position for the Fourth High
Level Forum on Aid Effectiveness emphasised the
importance of effective delivery for improving the quality of aid and
increasing the impact of development financing from all sources.

Improved global
governance is one of the means for achieving this objective. It involves
broadening cooperation will all relevant development partners, reducing and
streamlining the global governance structure, and using existing mechanisms and
fora to promote the aid and development effectiveness
agenda and monitor its implementation.

In that context, reducing
aid fragmentation is a central challenge in order to move from individual
country strategies towards partner country-led joint assistance strategies and
to streamline the multilateral aid architecture. The EU is committed to
self-restraint with regard to avoiding further proliferation of global and
thematic programmes or vertical funds, and to use and strengthen the existing
channels. The existing structures, notably UN, World Bank/IMF, regional
structures, G20 and DAC should be used as fora to discuss aid effectiveness
implementation and to strengthen wide development partnerships.

The issue of
institutional framework is also taken-up under the
auspices of the OECD/DAC as the follow-up to the Busan Forum. The process aims
to (a) establish a new, inclusive and representative Global Partnership for
Effective Development Cooperation to support and ensure accountability for the
implementation of commitments at the political level; and (b) agree on light
working arrangements for this Global Partnership, including its membership and
opportunities for regular ministerial-level engagement that complements, and is
undertaken in conjunction with, other fora. Representatives from the EU, Sweden
and UK are members of the working group considering this issue.

EU Member States are
contributing to the processes described above. For example, the UK played a
full role in negotiations leading to agreement at the Busan High Level Forum on
Aid Effectiveness to form a new Global Partnership for Effective Development
Cooperation. This sets the stage for a new development architecture reflecting
a broader and more inclusive partnership for development than ever before.

5.2.2.     Reforming
Multilateral Institutions

The 2011 Accountability Report provided a
detailed account of the status of these reforms and only recent evolutions are
presented herein. As mentioned above, the proposed continued reliance on
existing structures underscores the importance of completing the reforms of
multilateral institutions.

A number of recent studies by EU Member
States help identify areas of improvements for multilateral organisations. While primarily focused on efficiency and aid delivery, these studies
have a bearing on governance of these organisations from the standpoint of
responsibilities of their boards and how they operate. Partly because of
the differing objectives and methodology, there is no common platform used by
EU Member States to undertake such studies. The UK’s 2011
Multilateral Aid Review[168]
(MAR) provided a comprehensive overview of the strengths and weaknesses of the
multilateral organisations that DFID works with. The MAR confirmed that the
multilateral system is a critical complement to what any government can do
alone. It also found evidence of significant weaknesses. DFID has thus drawn on
its value for money assessment to decide on funding through multilateral
organisations, communicated its key reform priorities to each multilateral
organisation and engaged closely both with the institutions themselves and
their boards, and with other stakeholders to promote reform. Other EU Member
States are also involved in assessments of multilateral organisations, notably
through the Multilateral Organisation Performance Assessment Network (MOPAN).[169] Similarly, Sweden has
made assessments of multilateral organisations[170], which are an important part
of the implementation of its strategy for multilateral development cooperation.
Lastly, in 2011 Denmark initiated its first full-scale annual
multilateral review aimed at strengthening the strategic approach and coherence
in its engagement in multilateral organisations system-wide.

5.2.2.1.  IMF,
World Bank and other international fora

The issue of improved African
representation and voice, such as the African
Union, in international fora, such as the G20, remains very important to the
EU.

The EU sees the implementation of the World
Bank voice and participation reforms agreed in April 2010 as a priority. In
accordance with the second phase of voice reforms of March 2011, the voting
power of developing countries and transition economies in the International
Bank for Reconstruction and Development (IBRD) increased by 3.1 percentage
points to a total of 47.2%. Under the new reforms, the Bank is required to
review its shareholding every five years, starting in 2015. Also in April 2011
the Executive Director Board approved a new process for selecting the World
Bank President and then, for the IMF Managing Director. The process has been
improved by adopting the recommendations of the Executive Directors' Working
Group which was created in response to the Development Committee Communiqués of
2010 calling for open, merit-based and transparent selection of the World Bank
President.

The IMF quota reform[171] agreed in 2010 will, once approved, shift more than 6% of quota to
dynamic emerging market countries and from over-represented to
under-represented countries; significantly re-distribute quotas and preserve
the voting share of the poorest countries. Once implemented, the voting shares
of US and EU members will fall below 50%. The EU intends to fully implement the
2010 quota and governance reform of the IMF by the agreed deadline of the 2012
Annual Meetings. A significant number of EU Member States have already
concluded national ratification procedures in that direction. The process is
on-going in the remaining Member States and is projected to be completed by
most Member States during 2012. Moreover, by consenting to two fewer seats for
advanced European economies once the 2010 quota reform becomes effective, EU
members will play their part in giving emerging markets and developing
countries more visibility in the IMF Executive Board. Furthermore, the move to
an all-elected Board will create a level-playing field for all IMF members. The Commission is continuously working to deepen and broaden the
coordination between EU Member States, in order to strengthen Europe's voice in
the IFIs.

As regards Commission - IFI strategic
relations in the area of development, a Taskforce has been established
for an Enhanced Dialogue with International Organisations, focusing on the IFIs. The taskforce aims to develop a platform for
a more structured dialogue with the IFIs (IMF, World Bank Group, Asian
Development Bank, African Development Bank, Inter-American Development Bank) at
senior management level, to identify joint actions and intervention frameworks
in areas of mutual interest, and to formulate, co-ordinate and promote Commission
and EU positions on development issues in the IFIs. Since the creation of the
task force, dialogue and cooperation with the IMF (vulnerability/resilience in
LICs, budget support and public financial management, capacity building) and
the World Bank Group (private sector development, fragility and conflict
situations, budget support) have been enhanced, with far more frequent meetings
with the Bretton Woods institutions at senior management and political level.

5.2.2.2.  Other
initiatives

The following notable initiatives were
launched recently:

· 
The close cooperation between the EU, and the
EIB and EBRD, particularly in the Neighbourhood region and (for EIB) ACP region
was strengthened in 2011 and a new Tripartite MoU between the EC, EIB and EBRD
on cooperation outside the European Union was signed in March 2011.

· 
There is also a Commission proposal[172] to the European Parliament
and the Council to extend EBRD's mandate to the Middle East and North Africa
region.

Annexes

See Vol.2.

[1] COM(2010) 163 final, http://ec.europa.eu/development/icenter/repository/COMM_COM_2010_0163_TAX_DEVELOPMENT_EN.PDF

[2] Council Conclusions on Tax and Development
– Cooperating with developing countries in promoting good governance in tax
matters, 11082/10, 15 June 2010, http://register.consilium.europa.eu/pdf/en/10/st11/st11082.en10.pdf

[3] COM(2011) 638 final, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0638:FIN:EN:PDF

[4] COM(2011) 637 final, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0637:FIN:EN:PDF

[5]
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/130243.pdf

[6] See European Parliament resolution on combating tax fraud and tax
evasion. While mainly concerned with Member States, the resolution also
mentions third parties. http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2012-0137+0+DOC+XML+V0//EN&language=EN

[7] More details were provided in the 2011 Accountability Report.

[8] “Revenue Mobilization in Developing Countries”, IMF, March 2011. http://www.imf.org/external/np/pp/eng/2011/030811.pdf

[9] COM(2011) 637 final, Op. Cit.

[10] COM(2011) 638 final, Op.Cit.

[11] Appointed by the House of Commons.

[12] http://www.publications.parliament.uk/pa/cm201012/cmselect/cmintdev/writev/1821/tax04.htm

[13] http://www.diplomatie.gouv.fr/fr/IMG/pdf/Rapport_cooperation_en_matiere_fiscale.pdf

[14] Draft of September 2011: http://www.taxcompact.net/documents/2011-11-02_Appropriate-Aid-Modalities-for-Supporting-Tax-Systems_DRAFT.pdf

[15] Asian Development Bank, Asian Development Outlook 2012 -
Confronting rising inequality in Asia, 2012, http://www.adb.org/sites/default/files/pub/2012/ado2012.pdf

[16]under UNSCR 1244/1999

[17] See http://www1.worldbank.org/operations/eligibility/index.html

[18] http://taxcompact.net/index.html

[19] In parallel with this UN is working on a manual that provides
practical guidance on dealing with transfer pricing issues and applying the
arm’s length principle to developing countries.

See: http://www.un.org/esa/ffd/tax/documents/bgrd_tp.htm

[20] EuropeAid, Implementing the Tax and Development policy agenda –
Transfer pricing and developing countries, http://ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/transfer_pricing_dev_countries.pdf

[21] The Kimberley process was covered in some detail in the 2011
Accountability Report. One notable recent event is that in November 2011, the
EU played a key role in reaching a consensus on trading Marange diamonds from
Zimbabwe.

[22] OECD, Tax transparency 2011 – Report on progress, http://www.oecd.org/dataoecd/52/35/48981620.pdf

[23] OECD, Op. cit. see P. 14

[24] http://www.unodc.org/unodc/en/treaties/CAC/

[25] http://www.oecd.org/dataoecd/4/18/38028044.pdf

[26] See website for further information. http://www1.worldbank.org/finance/star_site/

[27] COM(2011) 683 final of 25.10.2011 http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/734&format=HTML&aged=0&language=EN&guiLanguage=en

[28] The International Tax Dialogue (ITD) is a collaborative arrangement
involving the European Commission, IDB, IMF, OECD, UK (DFID) and World Bank
Group to encourage and facilitate discussion of tax matters among national tax
officials, international organisations, and a range of other key stakeholders.
The ITD Secretariat is currently hosted by the OECD. http://www.itdweb.org/Pages/Home.aspx

[29] Council Conclusion on Guidelines for EU participation in the
International Conference on Financing for Development (Doha, 29 November - 2
December 2008), 15480/08,

[30] Council Conclusions on Supporting developing
countries in coping with the crisis, 10018/09

[31] Revisiting the Debt Sustainability Framework for Low-Income Countries
(2012), WB and IMF http://www.imf.org/external/np/pp/eng/2012/011212.pdf

[32] HIPC Fall Meeting 2011: Chad, Côte d’Ivoire, Comoros and Guinea
have past the Decision Point and half of them expected to reach completion
point in 2012, while Eritrea, Sudan and Somalia are potentially eligible.

[33] HIPC Initiative country documents and
IDA/IMF staff estimates, Fall 2011

[34] The former option would neither be consistent with the original
intent of the Initiative nor justified by the current debt sustainability outlook
in LICs. It would also be beset with moral hazard. At the same time, fixing a
timeline for the closure of the Initiative might not allow the debt situation
of some potentially eligible countries to be addressed. While this option would
respond to concerns raised about the longevity of the HIPC Initiative, it would
eventually require either the setting up of a new debt-relief framework or
dealing with each country on a case-by-case basis, which would be politically
challenging, time consuming, and ultimately costly.” In “Status of
Implementation and Proposals for the Future of the HIPC Initiative”, IDA and
IMF, 8 November 2011

[35] http://www.un.org/esa/ffd/monterrey/MonterreyConsensus.pdf

[36] http://www.g8-g20.com/g8-g20/g8/english/live/news/shared-values-shared-responsibilities-g8-africa.1320.html

[37] WB 2011 HIPC status report.
http://siteresources.worldbank.org/INTDEBTDEPT/ProgressReports/23063134/HIPC_MDRI_StatusOfImplementation2011.pdf

[38] Mutual Review of Development Effectiveness 2011.

http://www.oecd.org/document/0/0,3746,en_39862406_39906520_49370432_1_1_1_1,00.html

[39] DMFAS Programme, Strategic Plan 2011 – 2014,
http://r0.unctad.org/dmfas/docs/Strategic_Plan_2011-2014.pdf

[40] IDA-IMF (2011) HIPC and MDRI – Status of Implementation and
proposals for the future of the HIPC Initiative, p17. This highlights the need
to broaden the use of the Debt Sustainability Framework (DSF)for Low Income
Countries as an appropriate first step towards tracking debt sustainability on
a continuous basis (see: http://siteresources.worldbank.org/INTDEBTDEPT/ProgressReports/23063134/HIPC_MDRI_StatusOfImplementation2011.pdf)

[41] OECD: “Prudent versus Imprudent Lending to Africa: From debt relief
to emerging lenders”,
http://www.oecd-ilibrary.org/development/prudent-versus-imprudent-lending-to-africa_242613675043

[42] “Transparency needed to end debt sustainability fears”, 2 march
2012 http://www.africaneconomicoutlook.org/en/in-depth/africa-and-its-emerging-partners/industrialisation-debt-and-governance-more-fear-than-harm/transparency-needed-to-end-debt-sustainability-fears/

[43] http://www.g8.utoronto.ca/finance/g8finance-africa.pdf

[44] Global Development Finance 2012: External Debt of Developing
Countries. World Bank 2012. page 17. http://data.worldbank.org/sites/default/files/gdf_2012.pdf

[45] African Legal Support Facility, Tunisia, 26 January 2012,

http://www.aflsf.org/attachments/article/57/02.%20Amir%20SHAIKH%20(ALSF)-%20Vulture%20Fund%20Overview.pdf

[46] Presentation by IMF, Litigating Creditors in the Context of the
HIPC Initiative: An Overview – G-7 Debt Experts Meeting, presented December
12, 2007, Paris, France

[47]http://www.aflsf.org/attachments/article/60/Annex%201_Memorandum%20for%20the%20establishment%20of%20ALSF.pdf

[48]
African Development Bank 2011, http://www.aflsf.org/attachments/article/60/Annex%201_Memorandum%20for%20the%20establishment%20of%20ALSF.pdf

[49] cf list of RMC http://www.afdb.org/en/about-us/members/

[50] http://www.clubdeparis.org/sections/communication/archives-2007/communique-presse-du/downloadFile/PDF/PR_Paris_Club_Lit___HIPCmay2007.PDF?nocache=1180459594.89

[51] Council Conclusions on “The EU Strategy on
Aid for Trade: Enhancing EU support for trade-related needs in developing
countries”, 14470/07, 29 October 2007.

[52] OECD/WTO (2011), “Aid for Trade at a Glance
2011: Showing Results”

[53] OECD (2011), Strengthening Accountability in Aid for Trade, The
Development Dimension, OECD Publishing.

[54] COM(2002) 513 final

[55] COM(2007) 163 final

[56] http://trade.ec.europa.eu/doclib/docs/2012/january/tradoc_148990.pdf

[57] Council Regulation (EC) No 1063/2010,
18.11.2010

[58] www.exporthelp.europa.eu

[59] SEC(2011) 1627 final

[60] Communication on "Trade, Growth and Development: Tailoring
Trade and Investment for those Countries most in Need", COM(2012)22 final
of 27 January 2012, and accompanying Staff Working Document on "Trade as a
Driver of Development" - http://ec.europa.eu/trade/wider-agenda/development

[61] http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/129019.pdf

[62] For more detailed analysis, see the “Aid for Trade monitoring
report 2012” which is included in annex 4.

[63] Council Conclusions on Migration for Development, 15806/09, 30 November 2009

[64] Council Conclusions on the global approach to migration and
mobility, 9417/12

[65] COM(2011) 743

[66] SEC(2011) 1353 final

[67] SEC(2011) 1627 final

[68] World Bank (2012), “Migration and Development Brief n°18”, World
Bank, Migration and Remittances unit, http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1110315015165/MigrationandDevelopmentBrief18.pdf

[69] Only remittances flowing through financial channels are recorded.
Actual remittances, including remittances flowing through non-financial
channels, are guessed to outperform considerably those figures.

[70] Eurostat Statistic Focus 4/2012.

[71] World Bank, “Migration and Development Brief n°18”, Idem.

[72] Eurostat News release, 12 December 2011, STAT/11/183, http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/11/183&format=HTML&aged=0&language=EN&guiLanguage=en

[73] G20 Cannes Summit final declaration, http://www.g20-g8.com/g8-g20/g20/english/for-the-press/news-releases/cannes-summit-final-declaration.1557.html

[74]http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1110315015165/MigrationandDevelopmentBrief17.pdf

[75] “Innovation With Impact: Financing
21st Century Development”, Report by Bill Gates to G20 leaders,
Cannes Summit, November 2011.

[76] Reducing the costs of migrants’ remittance and optimising their
impact on development remittance channels from France to Maghreb and the
‘franc’ area , http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/2011_12%20Remittances_executive_summary_en.pdf

[77] Council Conclusions on the Millennium
Development Goals for the United Nations High-Level Plenary meeting in New York
and beyond - Supporting the achievement of the Millennium Development Goals by
2015, 11080/10, 14 June 2010.

[78] Council Conclusions on the EU Common
Position for the Fourth High Level Forum on Aid Effectiveness, 16773/11, 14
November 2011.

[79] http://www.aideffectiveness.org/busanhlf4/images/stories/hlf4/OUTCOME_DOCUMENT_-_FINAL_EN.pdf

[80] G20 Cannes Summit final declaration, 4 November 2011, http://www.g20-g8.com/g8-g20/g20/english/for-the-press/news-releases/cannes-summit-final-declaration.1557.html

[81] Thirteen EU Member States plus the European Commission are now
members of the Leading Group, which was recently chaired by Spain.

[82] Leading Group, “Peer review of existing
innovative financings for development”, http://www.leadinggroup.org/IMG/pdf/Mapping_FIDENG-3.pdf

[83] According to the Leading Group on Innovative
Financing for Development, Innovative Financing Mechanisms are "mechanisms
for raising funds for development [which] are complementary to official
development assistance. They are also predictable and stable. They are closely
linked to the idea of global public goods and aimed at correcting the negative
effects of globalisation."

[84] The question of whether or not innovative financing can be counted
as ODA in the understanding of the OECD/DAC remains in the remit of each donor
country. A thorough discussion on the perimeter of ODA is currently ongoing in
view of better identifying and measuring the various financial flows, in the
broad sense, benefitting developing countries ("ODA+"). Initiated
within the OECD/DAC, this discussion could inspire a general debate on the modernisation
and the diversification of the measuring instruments of the financing effort
for development.

[85] See Declaration of Doha UN Conference on
Financing for Development: §51 - "...these funds should supplement
and not be a substitute for traditional sources of finance, and should be
disbursed in accordance with the priorities of developing countries and not
unduly burden them."

[86] World Bank (2009), “Innovating Development Finance: From Financing Sources
to Financial Solutions”, CFP
Working Paper Series No. 1

[87] For a
short review of existing innovative financing mechanisms, refer to last year’s
Accountability Report.

[88] Leading Group, “Peer review of existing
innovative financings for development”, Op. Cit.

[89] Since January 2012, the emissions from all domestic and international
flights that arrive at or depart from an EU airport are covered by the EU
Emissions Trading System.

[90] “Mapping of IFM”, Leading Group, “Peer
review of existing innovative financings for development”, Op. Cit.

[91] Budgetary contributions are based on what an air ticket levy would
bring in.

[92]
COM(2011) 594 final, 28 September 2011

[93]http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/300&format=PDF&aged=0&language=EN&guiLanguage=fr

[94]http://europa.eu/rapid/pressReleasesAction.do?reference=CJE/11/139&format=HTML&aged=1&language=EN&guiLanguage=en

[96] Council Conclusions on Guidelines for EU participation in the
International Conference on Financing for Development (Doha, 29 November – 2
December 2008), 15480/08, 11 November 2008, http://register.consilium.europa.eu/pdf/en/08/st15/st15480.en08.pdf

[97] Council Conclusions on Reinforcing
industrial policy across the EU, http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/intm/126548.pdf

[98] COM(2011) 637 final, http://ec.europa.eu/europeaid/what/development-policies/documents/agenda_for_change_en.pdf

[99]
http://www.aideffectiveness.org/busanhlf4/images/stories/hlf4/OUTCOME_DOCUMENT_-_FINAL_EN.pdf

[100] For more details see http://ec.europa.eu/europeaid/what/development-policies/intervention-areas/trade/private_sector_en.htm

[101] Remittances are also relevant; discussed in section 2.2 of the
report

[102] The 2010 figure needs to be treated with caution as reporting may
not be complete.

[103] http://acpbusinessclimate.org/bizclim/index.php?option=com_content&view=article&id=50&Itemid=28&lang=en

[104] While there is a general agreement that guarantees link to a
development project have a positive impact, the value of this approach if
supply driven needs to be assessed on case by case basis.

[105] http://www.regmifa.com/

[106] http://www.microfinancegateway.org/p/site/m/template.rc/1.11.170553/

[107]http://www.rural21.com/english/news/detail/article/kfw-entwicklungsbank-and-deutsche-bank-launch-africa-agriculture-trade-and-investment-fund-aatif/

[108] http://www.efse.lu/

[109] http://um.dk/en/danida-en/activities/business/finance/

[110] http://www.proparco.fr/lang/en/Accueil_PROPARCO/fisea-proparco

[111] http://www.regmifa.com/

[112] http://www.microfinancegateway.org/p/site/m/template.rc/1.11.170553/

[113]http://www.rural21.com/english/news/detail/article/kfw-entwicklungsbank-and-deutsche-bank-launch-africa-agriculture-trade-and-investment-fund-aatif/

[114] http://www.efse.lu/

[115] http://www.proparco.fr/lang/en/Accueil_PROPARCO/fisea-proparco

[116] current members are: the UK
Department for International Development (DFID), the Swiss
State Secretariat for Economic Affairs (SECO), the Netherlands Ministry of Foreign
Affairs (DGIS), the Swedish
International Development Cooperation Agency (Sida), the World Bank
Group (currently represented by IFC), the Austrian Development Agency, Irish Aid, KfW of Germany and the
Australian Agency for
International Development (AusAID). Source:
http://www.pidg.org/sitePages.asp?step=4&navID=2&contentID=10

[117]
http://www.ppiaf.org/ppiaf/

[118] COM(2011) 681 final, A renewed EU strategy
2011-14 for Corporate Social Responsibility, http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr/new-csr/act_en.pdf

[119]
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/intm/126548.pdf

[120] See compendium of CSR Policies in the EU as of end-2010 in: CSR -
National Public Policies in the European Union, dated November 2010. Further
insights may be found in a report by CSR Europe (network of 70 multinationals
and 27 partner organizations) dated October 2010. http://ec.europa.eu/social/main.jsp?catId=331&langId=en
and http://www.reportingcsr.org/force_document.php?fichier=document_495.pdf&fichier_old=guide_to_csr_2010[1].pdf

[121] OECD guidelines for multinational enterprises, 2011 edition;
http://www.oecd.org/dataoecd/43/29/48004323.pdf

[122] For example, France reports that it advocated the introduction of a
comprehensive approach to due diligence and responsible supply chain
management.

[123] http://www.un.org/apps/news/story.asp?NewsID=38742&Cr=human+rights&Cr1=

[124] http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/documents/publication/wcms_094362.pdf

[125] http://www.unglobalcompact.org/

[126] http://ec.europa.eu/europeaid/where/asia/regional-cooperation/environment/switch_en.htm

[127] http://www.switch-asia.eu/switch-projects/project-progress/projects-on-greening-supply-chains/creating-greenphilippines-islands-of-sustainability.html

[128] Depending on data availability, the text sometimes refers to EU15 and
EU20, which can nevertheless be taken as approximations of the EU’s collective
performance. For explanations, see Annex 2: Methodology.

[129] The exact wording is as follows: ‘In the context of the commitment
to attain the internationally agreed ODA target of an ODA/GNI ratio of 0.7%,
the European Council notes with satisfaction that its Member States are on
track to achieve the 0.39% target of GNI in 2006 for ODA volumes contained in
the Barcelona commitments. While reaffirming its determination to fulfil these
commitments, the Council decided on a new collective European Union target of
an ODA/GNI ratio of 0.56% by 2010. That would result in an additional EUR20
billion a year in ODA. In this context, the European Council can reiterate, in
accordance with the outcome of the Council on 24 May 2005 that Member States,
which have not yet achieved an ODA/GNI ratio of 0.51% undertake to attain that
level, within their respective budget allocation processes, by 2010, while those
that are already above that level undertake to continue their efforts. Member
States which joined the EU after 2002, and have not yet achieved an ODA/GNI
ratio of 0.17%, will endeavour to increase their ODA to attain that level,
within their respective budget allocation processes, by 2010, while those that
are already above that level undertake to continue their efforts; Member States
undertake to achieve the target of an ODA/GNI ratio of 0.7% by 2015, while
those which have achieved that target commit themselves to remaining above that
target; Member States which joined the EU after 2002 will endeavour to increase
their ODA/GNI ratio to 0.33% by 2015. European Council, 18 June 2005, Doc.
10255/05 Conc. 2.

[130] European Council, 11 November 2008, Doc. 15075/1/08, Rev. 1

[131]            The final 2010 ODA/GNI ratio of 0.44% is 0.01 higher
than the estimated ratio included in the 2011 EU Accountability Report due to
revised GNI statistics.

[132] Annex 2 outlines the methodology used to analyse ODA
indicators and forecasts provided by Member States.

[133] European Council Conclusions on 10/11 December 2009, EUCO 6/09

[134] For reference and a summary of other relevant studies see for
example: OECD (2011), Tackling Climate Change and Growing the Economy. Key
messages and recommendations from recent OECD work http://www.oecd.org/dataoecd/28/18/44287948.pdf

[135] An activity should be classified as adaptation related (with a
score of principal – 2, significant – 1, or 0 – not targeted, in declining
order of importance) if it intends to reduce the vulnerability of human or
natural systems to the impacts of climate change and climate-related risks, by
maintaining or increasing adaptive capacity and resilience. An activity should be
classified as mitigation (with the same scoring grid) if it contributes to the
objective of stabilisation of greenhouse gas (GHG) concentrations in the
atmosphere at a level that would prevent dangerous anthropogenic interference
with the climate system by promoting efforts to reduce or limit GHG emissions
or to enhance GHG sequestration. Some development cooperation activities could
do both, and there are therefore overlaps.

[136] The table avoids double counting using the following method.
Principal (2) always prevails over substantial (1). If mitigation is set as
principal and adaptation substantial for the same activity, the higher mark
prevails and the activity is classified as mitigation. When the ratings are
equal, the ODA is classified under “Adaptation and Mitigation”. The
combinations are as follows. Mitigation or Adaptation: Principal (2-0 and 2-1);
Substantial (1-0). Mitigation and Adaptation: Principal (2-2); Substantial
(1-1).

[137] Council Conclusions on Climate Change and Development, 16071/09, 17 November 2009

[138] See last year’s report for a description of the methodology. We
have updated the volumes using the latest DAC deflators to convert ODA at 2008
prices into ODA at 2010 prices.

[139] http://www.eu-un.europa.eu/articles/fr/article_10510_fr.htm

[140] Council Conclusions on the EU Biodiversity Strategy to 2020,
11978/11, 23 June 2011, http://register.consilium.europa.eu/pdf/en/11/st11/st11978.en11.pdf

[141] Council Conclusions on the EU Biodiversity Strategy to 2020 –
Towards implementation, 18862/11, 19 December 2011, http://consilium.europa.eu/media/1379139/st18862.en11.pdf

[142] The Convention on Biological Diversity entered into force in 1993
and has three main objectives: i) the conservation of biological diversity; ii)
the sustainable use of the components of biological diversity; and iii) the
fair and equitable sharing of the benefits arising out of the utilisation of
genetic resources. The Convention obliges developed countries to provide new
and additional financial resources related to the implementation of the
Convention (Article 20).

[143] See http://ec.europa.eu/environment/nature/biodiversity/comm2006/2020.htm
for details.

[144] Council conclusions on Biodiversity: Post-2010 EU and global vision
and targets and international ABS regime, 7536/10, 15 March 2010

[145] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0637:FIN:EN:PDF

[146] Luxembourg does not report on the Rio
markers. No data for the Netherlands for 2009

[147] The breakdown between principal and significant objective is not
available for 2006. Data for years 1998-2006 were obtained by DAC on a trial
basis; reporting became mandatory starting with 2007 flows.

[148] The 2010 data for EU Institutions is currently being updated in the
OECD DAC statistics.

[149] Luxembourg did not report on the Rio
markers up to 2009 and there is no data for the Netherlands for 2009. OECD DAC
Full List of biodiversity aid activities (2007-2009) (http://www.oecd.org/dataoecd/14/30/46809641.xls),
OECD DAC Full List of biodiversity aid activities (2010) (http://www.oecd.org/dataoecd/27/25/49450525.zip),
and OECD DAC Aid targeting the objectives of the Rio Conventions 1998-2007 (http://www.oecd.org/dataoecd/58/60/48895957.pdf
).

[150] Luxembourg does not report on the Rio
markers and there are no data for the Netherlands for 2009. Activities marked
with a ‘principal’ or a ‘significant’ objective are included.

[151] Council Conclusions on Rio+20: Towards achieving sustainable
development by greening the economy and improving governance, 15388/11, 11
October 2011, http://register.consilium.europa.eu/pdf/en/11/st15/st15388.en11.pdf

[152] European Council Conclusions on 9 March_2012, Rio+20 Pathways to a
Sustainable Future

[153] See for example, Brzoska, Michaela (2010). Analysis of and
recommendations for covering security relevant expenditures within and outside
of official development assistance, Paper 53, Bonn International Center for
Conversion

[154] See for example, OECD DAC (2011), Identifying New Measures for
Non-ODA Development Contributions, DCD/DAC(2011)43; or Severino,
Jean-Michel and Ray, Olivier (2009). The End of ODA: Death and Rebirth of a
Global Public Policy. CGD - Center for Global Development - Working Paper
Number 167.

[155] See for example, ODI (2012), From high to low aid: a proposal to
classify countries by aid receipt, Background Note, March 2012.

[156] Council Conclusions on An Operational Framework on Aid
Effectiveness, 15912/09, 18 November 2009

[157] Council Conclusions on an Operational Framework on Aid
Effectiveness – Consolidated text, 18239/10, 11 January 2011.

[158] Council Conclusions on Cross-country division of labour, 10348/10, 14 June 2010.

[159] Council Conclusions on Mutual accountability and transparency, 17769/10, 10 December 2010.

[160] Council Conclusions on the EU Common Position for the Fourth High
Level Forum on Aid Effectiveness, 16773/11, 14 November 2011.

[161] Council Conclusion on Increasing the impact of EU Development
Policy: an Agenda for Change, 9369/12, 14 May 2012 http://register.consilium.europa.eu/pdf/en/12/st09/st09369.en12.pdf

[162] HTSPE, Aid Effectiveness Agenda: Benefits of a European Approach,
October 2009.

[163] SOGES, The Aid Effectiveness Agenda: The benefits of going ahead,
2010.

[164] See European Council, 11 January 2011, Doc. 18239/10. Operational
Framework on Aid Effectiveness – Consolidated text: paragraphs 6, 8, 12 and 13
(A. Use of country systems as a first option),

[165] COM (2011) 638 final.

[166] Council Conclusions on The Future Approach to EU Budget Support to
Third Countries, 9323/12, 14 May 2012, http://register.consilium.europa.eu/pdf/en/12/st09/st09371.en12.pdf

[167] Consolidated version: IV Accountability and transparency, paragraph
1

[168] http://www.dfid.gov.uk/Documents/publications1/mar/multilateral_aid_review.pdf

[169] http://www.mopanonline.org/
Austria, Belgium, Denmark, Ireland, Finland, France, Netherlands, Norway,
Spain, Sweden and UK are members of MOPAN.

[170] http://www.sweden.gov.se/sb/d/11747/a/122004

[171] An IMF paper analysing quota reforms was issued in 2011: “Global
Economic Governance:

IMF Quota Reform”. http://www.imf.org/external/pubs/ft/wp/2011/wp11208.pdf

[172]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0905:FIN:EN:PDF

COMMISSION STAFF WORKING DOCUMENT

EU Accountability Report 2012 on Financing
for Development
Review of progress of the EU and its Member States

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Improving EU support to developing
countries in mobilising Financing for Development.
Recommendations based on the 2012 EU Accountability Report on Financing for
Development.

TABLE OF CONTENTS

Annexes 5

Annex 1 – Bibliography................................................................................................................. 5

Annex 2 – Methodology............................................................................................................... 8

Annex 3 – Statistical Annex on ODA trends................................................................................ 12

Annex 4 - Aid for Trade Report for 2011.................................................................................... 44

Annexes

Annex
1 – Bibliography

Tax

- Cooperating
with developing countries in promoting good governance in tax matters, Council
Conclusions on Tax and Development, 11082/10, 15 June 2010

- European
Parliament resolution of 19 April 2012 on the call for concrete ways to combat
tax fraud and tax evasion

- UK
Parliament, Session 2010-12, Tax in Developing
Countries: Increasing Resources for Development, written evidence submitted
by the International Centre for Tax and Development, prepared 22 February 2012

- Orientations for
French Cooperation in Tax Matters, Working Paper, Ministère Des Finances,
Direction générale de la mondialisation, du développement et des partenariats,
2011

- Implementing
the Tax and Development policy agenda – Transfer pricing and developing
countries, EuropeAid, 2011

- OECD,
Tax transparency 2011 – Report on progress

- Convention
on combating bribery of foreign public officials in international business
transactions and related doc, OECD, 2011

Debt

-Revisiting
the Debt Sustainability Framework for Low-Income Countries, World Bank and
IMF, Jan 2012

- Debt
Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative, IMF, Dec
2011

-
Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief
Initiative (MDRI)—Status of Implementation and Proposals for the Future of the
HIPC Initiative, IDA / IMF, Nov 2011- HIPC/ MDRI Annual
Meetings 2011

- 2011
Report of the Development Working Group, G8-G20, Oct 2011

- DMFAS
Programme, Strategic Plan 2011 – 2014, UNCTAD, 2012

- Mutual
Review of Development Effectiveness 2011, OECD 2012.

- Global
Development Finance 2012: External Debt of Developing Countries. World Bank
2012

- Prudent
versus Imprudent Lending to Africa: From debt relief to emerging lenders,
OECD, 2008

- The
New Vulture Culture: Sovereign debt restructuring and trade and investment
treaties, Kevin P. Gallagher, THE IDEAs WORKING PAPER SERIES, February 2011

- Transparency
needed to end debt sustainability fears, Africa Economic Outlook, 2 March
2012

- G8
Action Plan for Good Financial Governance in Africa, Finance Minister Meeting, Potsdam, 19 May 2007

- Vulture
Fund Overview, African Legal Support Facility, Tunisia, 26 January 2012

- Litigating
Creditors in the Context of the HIPC Initiative: An Overview, G-7 Debt
Experts Meeting, presented by IMF, 12 December 2007

Remittances

-
Migration and Development Brief n°18, World Bank, Migration and Remittances
unit, World Bank, April 2012

- Outlook
for Remittance Flows 2012-14, World Bank, Dec 2011

- Innovation
With Impact: Financing 21st Century Development, Report by Bill
Gates to G20 leaders, Cannes Summit, November 2011

- Reducing
the costs of migrants’ remittance and optimising their impact on development
remittance channels from France to Maghreb and the ‘franc’ area , AFDB, Dec
2011

Innovative
Financing

- G20
Cannes Summit final declaration, 4 November 2011

- Peer
review of existing innovative financings for development, Leading Group, 2012

- Innovating
Development Finance: From Financing Sources to Financial Solutions, CFP Working Paper Series No. 1, World Bank 2009

- EU
Blending Facilities: Implications for future governance options, ECDPM, January
2011

- Innovative
Approaches to EU Blending Mechanisms for Development Finance, CEPS, 2011

Private
Sector

- Technical
assistance, a development tool serving the private sector, Proparco , July
2011

- OECD
guidelines for multinational enterprises, 2011 edition

- Tripartite
Declaration on Multinational Enterprises and Social Policy: Translating labour
principles into practice, ILO, 2012

Climate Change, Sustainable Development

- Tackling Climate Change and Growing the Economy. Key messages
and recommendations from recent OECD work, OECD, 2011

- Analysis
of and recommendations for covering security relevant expenditures within and
outside of official development assistance, Paper 53, Bonn International
Center for Conversion, 2010

- Identifying
New Measures for Non-ODA Development Contributions, OECD DAC, 2011

- The
End of ODA: Death and Rebirth of a Global Public Policy. CGD - Center for
Global Development - Working Paper Number 167, 2009

- From
high to low aid: a proposal to classify countries by aid receipt,
Background Note, Overseas Development Institute (ODI), March 2012

Aid
Effectiveness

- Aid
Effectiveness Agenda: Benefits of a European Approach, HTSPE, October 2009

- The
Aid Effectiveness Agenda: The benefits of going ahead, SOGES, 2010

Governance
/ IFIs

- Ensuring
maximum value for money for UK aid through multilateral organisations, Multilateral
Aid Review, DFID, March 2011

-
Global Economic Governance: IMF Quota Reform, IMF Working Paper, July 2011

Annex 2 –
Methodology

Figures on Official Development
Assistance (ODA) are in current prices and taken from:

– 
the OECD Development Assistance Committee (DAC)
for those Member States for which DAC reports.

– 
Member States' replies for those Member States
whose ODA data are not available through DAC.

– 
From 2012 onwards, ODA figures are taken, as far
as available, from Member States’ replies.

– 
Where a Member State presents only the ODA/GNI
ratio, ODA will be calculated by multiplying it with the Commission’s GNI
figure. Where a Member State gives both the ODA figure and the ODA/GNI ratio,
we will give preference to using the ODA figure as this gives a better
indication of where the achievement of ODA/GNI targets is sensitive to
differing assumptions on GNI.

– 
When information on both ODA and ODA/GNI ratio for
2012 and/or beyond is missing, the trend for the missing years is established
on the basis of Compound Annual Growth Rate of 2006-2011, except if indicated
differently in the slides.

Exchange rates used for conversion into
EUR are:

– 
the annual DAC exchange rate in the case of the
OECD DAC data,

– 
for Members States national currencies, the
Commission’s annual average exchange rates from Ameco database (extracted
6/03/2012) up to 2013, beyond that, nominal exchange rate stability is assumed.

Figures for Gross National Income (GNI)
are taken in current prices from:

– 
the OECD DAC statistics when available to ensure
consistency of the ODA/GNI data.

– 
the AMECO database as of 02.04.2012, for other
Member States and for the years not covered by the DAC.

There is often reference to OECD, and
DAC membership of EU Member States. All EU OECD
members report to DAC, while only EU DAC Members report to DAC in great detail.
The list of non DAC Members reporting to DAC is available online at http://www.oecd.org/document/2/0,3746,en_2649_34447_41513218_1_1_1_1,00.html .

The table below summarises the OECD and DAC
membership of EU Member States.

EU MEMBER STATES || OECD MEMBERS || DAC MEMBERS || REPORTING TO DAC

AT || Y || Y || Y

BE || Y || Y || Y

BG || || ||

CY || || || Y

CZ || Y || || Y

DK || Y || Y || Y

EE || Y || || Y

FI || Y || Y || Y

FR || Y || Y || Y

DE || Y || Y || Y

EL || Y || Y || Y

HU || Y || || Y

IE || Y || Y || Y

IT || Y || Y || Y

LV || || || Y

LT || || || Y

LU || Y || Y || Y

MT || || || Y

NL || Y || Y || Y

PL || Y || || Y

PT || Y || Y || Y

RO || || || Y

SK || Y || || Y

SI || Y || || Y

ES || Y || Y || Y

SE || Y || Y || Y

UK || Y || Y || Y

|| 21 || 15 || 26

There is often reference to EU 27, EU 15
and EU 12. The table below gives the list of Member
States in each category:

EU MEMBER STATES || EU 27 || EU 15 || EU 12

AT || Y || Y ||

BE || Y || Y ||

BG || Y || || Y

CY || Y || || Y

CZ || Y || || Y

DK || Y || Y ||

EE || Y || || Y

FI || Y || Y ||

FR || Y || Y ||

DE || Y || Y ||

EL || Y || Y ||

HU || Y || || Y

IE || Y || Y ||

IT || Y || Y ||

LV || Y || || Y

LT || Y || || Y

LU || Y || Y ||

MT || Y || || Y

NL || Y || Y ||

PL || Y || || Y

PT || Y || Y ||

RO || Y || || Y

SK || Y || || Y

SI || Y || || Y

ES || Y || Y ||

SE || Y || Y ||

UK || Y || Y ||

The ‘Rio markers’ – monitoring ODA
to climate change, biodiversity and desertification.

In 1998 the OECD/DAC added the so called
‘Rio markers’ to the CRS system to enable the identification of aid activities
related to the three Rio Conventions signed in 1992: the United Nations
Framework Convention on Climate Change (UNFCCC), the Convention on Biological
Diversity (CBD) and the United Nations Convention to Combat Desertification
(UNCCD). The use of the markers was made compulsory for DAC reporters for aid
from 2007 onward. All bilateral aid activities should be screened and marked as
having the objectives of each Convention as a ’principal objective’,
’significant objective’ or ’not targeted’. Activities can be marked for more
than one convention, so there are overlaps between ODA volumes targeted at the
individual conventions.

The original Rio marker on climate change
only covers mitigation related activities. For aid data from 2010 onwards, a
new marker has been introduced in use that also tracks aid in support of
climate change adaptation, in order to give a more complete picture of
climate-change-related ODA. Using the Rio markers is fraught with
methodological difficulties. The OECD/DAC points out that the marker data do
not produce exact ODA volumes. Rather, they give an indication of the amounts
allocated or spent and the extent to which donors address the objectives of the
Rio Conventions in their aid programmes.

Measuring additionality.

The general understanding of additionality
is that certain financing sources or types of expenditure should not be lower
than a pre-defined benchmark or reference level. In the case of climate
finance, this concerns in particular the relation of climate finance to
official development assistance (ODA), as referred to by the Council.

Climate-related financing will normally be
reported as ODA as long as the support fulfils the OECD/DAC criteria of ODA. As
climate and development finance are mutually reinforcing and the objectives
intertwined, trying to separate the two would appear artificial and
unproductive. While adaptation projects will, as a rule, show multiple
benefits, most mitigation projects will also have developmental benefits (e.g.
reducing deforestation or renewable energy projects). Climate-related financing
will also come in non-ODA form, e.g. through non-concessional loans or official
export credits which do not qualify as ODA and possibly in countries not
included in the DAC list of ODA recipients.

At an aggregate EU level, given that the EU
pledge was made collectively, the additionality requirement of the Copenhagen
Accord should also be applied collectively. Since the EU’s view is that
’traditional’ aid to reduce poverty should not be diverted in order to fund
climate change activities, total ODA less climate related ODA would be an
appropriate benchmark for gauging to new and additional climate finance, within
the context of the specific definitions used by various Member States. This
would make it possible to check whether increases in ODA-related climate
finance is really additional or whether it encroach on other areas of ODA.

To even out annual variations, the ODA part
of the benchmark has been defined as the average level of EU ODA budgetary
commitments in the period 2007 to 2009, expressed in absolute and real terms. A
benchmark level for climate-related ODA is harder to obtain because, as was
highlighted above, the current climate change marker only covers mitigation. A
distinction has been made between fast-start finance and other climate-related
finance, but there is no way to track fast-start finance within the DAC system and
we therefore used self-reported data from the EU and Member States.

Annex
3 – Statistical Annex on ODA trends

EU
ODA volumes and as % of GNI 2004 – 2010 and gaps for reaching the 2010
intermediate ODA targets

EU ODA to LDCs – Net disbursements

(Including Imputed Multilateral Flows for MS reporting to DAC - Euro millions, constant 2010 prices)

Country || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010 || 2011

EU15 || 9,351 || 10,122 || 11,653 || 14,103 || 13,812 || 12,375 || 13,292 || 14,132 || 15,529 || 15,138 || 17,257 || 18,706

Austria || 146 || 182 || 216 || 171 || 153 || 214 || 213 || 195 || 207 || 254 || 347 || 140

Belgium || 336 || 432 || 472 || 1,117 || 601 || 541 || 624 || 596 || 681 || 700 || 1,093 || 854

Bulgaria || || || || || || || || || || || || 5

Cyprus || || || || || || || || || || || 2 || 1

Czech Republic || 7 || 9 || 10 || 14 || 25 || 28 || 34 || 41 || 67 || 53 || 54 || 54

Denmark || 772 || 792 || 725 || 738 || 742 || 757 || 778 || 850 || 799 || 815 || 851 || 853

Estonia || || || || || || || || || || || 6 || 8

Finland || 144 || 155 || 186 || 185 || 194 || 218 || 257 || 278 || 290 || 325 || 361 || 393

France || 1,649 || 1,652 || 2,268 || 3,063 || 3,093 || 1,950 || 2,239 || 2,256 || 2,222 || 2,370 || 2,779 || 3,543

Germany || 1,620 || 1,526 || 1,686 || 2,424 || 2,026 || 1,601 || 2,199 || 2,278 || 2,644 || 2,449 || 2,759 || 2,759

Greece || 43 || 46 || 79 || 60 || 63 || 75 || 92 || 88 || 112 || 85 || 80 || 36

Hungary || - || - || - || 3 || 13 || 31 || 19 || 38 || 24 || 28 || 31 || 35

Ireland || 152 || 187 || 249 || 251 || 271 || 284 || 390 || 406 || 442 || 359 || 376 || 393

Italy || 697 || 786 || 1,487 || 1,158 || 744 || 1,268 || 674 || 996 || 1,181 || 821 || 896 || 1,967

Latvia || || || || || || || || || || || ||

Lithuania || || || || || || || || || || || 10 || 10

Luxembourg || 59 || 67 || 77 || 71 || 81 || 87 || 101 || 117 || 119 || 115 || 117 || 125

Malta || || || || || || || || || || || ||

Netherlands || 1,104 || 1,335 || 1,455 || 1,394 || 1,494 || 1,430 || 1,155 || 1,369 || 1,437 || 1,184 || 1,403 || 859

Poland || 12 || 33 || 4 || 5 || 43 || 49 || 133 || 56 || 73 || 80 || 82 || 96

Portugal || 212 || 215 || 242 || 169 || 768 || 146 || 164 || 155 || 163 || 153 || 216 || 331

Romania || || || || || || || || || || || || 1

Slovak Republic || - || - || 2 || 6 || 9 || 34 || 27 || 27 || 31 || 13 || 15 || 14

Slovenia || - || - || - || - || - || - || - || - || 10 || 10 || 11 || 12

Spain || 272 || 381 || 450 || 465 || 484 || 728 || 655 || 848 || 1,077 || 1,229 || 1,222 || 711

Sweden || 621 || 623 || 760 || 816 || 729 || 973 || 963 || 1,038 || 1,125 || 1,135 || 1,063 || 1,314

United Kingdom || 1,505 || 1,733 || 1,288 || 2,005 || 2,304 || 2,011 || 2,684 || 2,553 || 2,893 || 3,010 || 3,533 || 4,252

Total EU || 9,353 || 10,156 || 11,657 || 14,115 || 13,837 || 12,423 || 13,401 || 14,186 || 15,595 || 15,188 || 17,290 || 18,766

Source: DAC Online (Table 2A). DAC Advance questionnaire for 2011. EU annual questionnaire on financing for development

EU
ODA to Africa – Net disbursements (Including Imputed Multilateral Flows - Euro million,
constant prices)

Country || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010 || 2011 || Increase 2011/2004

EU15 || 18,216 || 22,238 || 25,999 || 20,129 || 20,497 || 21,564 || 21,659 || 23,566 || 5,350

Austria || 259 || 273 || 658 || 503 || 265 || 340 || 406 || 190 || -69

Belgium || 729 || 816 || 996 || 777 || 794 || 903 || 1,247 || 974 || 245

Bulgaria || || || || || || || || 5 || 5

Cyprus || || || || || || || 1 || 1 || 1

Czech Republic || 25 || 37 || 41 || 41 || 46 || 42 || 50 || 50 || 25

Denmark || 802 || 822 || 967 || 1,020 || 961 || 924 || 914 || 1,036 || 235

Estonia || || || || || || || 5 || 6 || 6

Finland || 226 || 254 || 308 || 316 || 339 || 392 || 405 || 376 || 150

France || 4,639 || 5,391 || 5,880 || 4,135 || 3,903 || 5,090 || 5,083 || 4,610 || -29

Germany || 2,616 || 3,222 || 4,365 || 3,375 || 3,573 || 3,141 || 3,178 || 3,800 || 1,184

Greece || 85 || 86 || 117 || 112 || 142 || 126 || 118 || 43 || -42

Hungary || 15 || 25 || 26 || 38 || 27 || 28 || 30 || 43 || 29

Ireland || 296 || 311 || 428 || 439 || 507 || 411 || 396 || 415 || 119

Italy || 957 || 2,016 || 1,545 || 1,215 || 1,245 || 1,050 || 1,044 || 3,396 || 2,440

Latvia || || || || || || || || || -

Lithuania || || || || || || || || || -

Luxembourg || 108 || 111 || 126 || 141 || 139 || 142 || 141 || 140 || 32

Malta || || || || || || || || || -

Netherlands || 1,693 || 1,783 || 1,573 || 1,802 || 1,613 || 1,353 || 1,528 || 1,047 || -646

Poland || 54 || 67 || 152 || 74 || 90 || 105 || 94 || 95 || 41

Portugal || 791 || 171 || 183 || 177 || 256 || 201 || 305 || 408 || -383

Romania || || || || || || || - || 1 || 1

Slovak Republic || 10 || 33 || 30 || 31 || 34 || 17 || 19 || 22 || 12

Slovenia || - || - || - || - || 12 || 14 || 12 || 14 || 14

Spain || 679 || 1,027 || 1,068 || 1,177 || 1,468 || 1,787 || 1,587 || 923 || 245

Sweden || 825 || 1,149 || 1,162 || 1,267 || 1,284 || 1,318 || 1,157 || 1,826 || 1,000

United Kingdom || 2,656 || 3,632 || 5,238 || 2,813 || 3,106 || 3,477 || 4,185 || 4,278 || 1,622

Total EU || 17,462 || 21,225 || 24,864 || 19,451 || 19,804 || 20,861 || 21,904 || 23,697 || 6,235

Source: DAC Online (Table 2A). DAC Advance questionnaire for 2011.
EU annual questionnaire on financing for development

EU ODA to Sub-Saharan Africa – Net
disbursements

(Including
Imputed Multilateral Flows - Euro million, constant prices)

Country || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010 || 2011

EU15 ||  11,099 ||  11,635 ||  14,137 ||  16,290 ||  15,901 ||  20,074 ||  23,593 ||  17,606 ||  17,910 ||  18,574 ||  19,401 ||  20,558

Austria ||    157 ||   342 ||   212 ||   188 ||   221 ||   234 ||   618 ||   459 ||   225 ||   292 ||   373 ||   161

Belgium ||    404 ||   505 ||   610 ||   1,197 ||   667 ||   746 ||   928 ||   713 ||   733 ||   827 ||   1,186 ||   926

Czech Republic ||    0 ||    1 ||    2 ||    6 ||    16 ||    16 ||    26 ||    26 ||    29 ||    31 ||    32 ||    32

Denmark ||    811 ||   800 ||   751 ||   717 ||   743 ||   769 ||   894 ||   939 ||   878 ||   856 ||   844 ||   880

Finland ||    142 ||   153 ||   185 ||   188 ||   195 ||   222 ||   269 ||   280 ||   297 ||   336 ||   369 ||   324

France ||   2,210 ||   2,096 ||   3,552 ||   3,849 ||   3,784 ||   4,585 ||   4,964 ||   3,406 ||   3,237 ||   4,338 ||   4,394 ||   3,902

Germany ||   1,831 ||   1,632 ||   1,810 ||   2,796 ||   2,269 ||   2,827 ||   3,961 ||   2,836 ||   3,087 ||   2,566 ||   2,717 ||   2,800

Greece ||    48 ||    51 ||    75 ||    57 ||    62 ||    68 ||    98 ||    85 ||   116 ||    96 ||    93 ||    16

Hungary ||    - ||    - ||    - ||    4 ||    36 ||    63 || ||    70 ||    70 ||    83 ||    80 ||    79

Ireland ||    161 ||   192 ||   261 ||   271 ||   286 ||   301 ||   416 ||   428 ||   483 ||   401 ||   384 ||   402

Italy ||    752 ||   833 ||   1,573 ||   1,164 ||   765 ||   1,847 ||   1,406 ||   1,028 ||   1,140 ||   937 ||   949 ||   1,990

Luxembourg ||    428 ||   384 ||   421 ||   504 ||   637 ||   594 ||   489 ||   579 ||   593 ||   517 ||   572 ||   590

Netherlands ||    806 ||   1,103 ||   1,128 ||   1,013 ||   1,071 ||   1,195 ||   1,141 ||   1,266 ||   1,080 ||   898 ||   1,049 ||   700

Poland ||    1 ||    1 ||    2 ||    5 ||    18 ||    11 ||    93 ||    15 ||    22 ||    23 ||    17 ||    14

Portugal ||    348 ||   441 ||   426 ||   433 ||   1,074 ||   495 ||   692 ||   629 ||   736 ||   671 ||   804 ||   1,075

Slovak Republic ||    - ||    - || || || ||    20 ||    17 ||    15 ||    28 ||    12 ||    12 ||    13

Slovenia ||    - ||    - ||    - ||    - ||    - ||    - ||    - ||    - ||    10 ||    12 ||    11 ||    11

Spain ||    365 ||   333 ||   578 ||   425 ||   381 ||   921 ||   599 ||   837 ||   1,008 ||   1,239 ||   1,116 ||   650

Sweden ||    977 ||   1,060 ||   926 ||   1,444 ||   1,250 ||   1,396 ||   1,999 ||   1,823 ||   1,923 ||   1,836 ||   2,338 ||   3,750

United Kingdom ||   1,105 ||   1,158 ||   927 ||   1,221 ||   1,704 ||   2,778 ||   3,797 ||   1,511 ||   1,621 ||   1,951 ||   2,214 ||   2,391

Total EU (20 Member States) ||  10,546 ||  11,085 ||  13,438 ||  15,481 ||  15,181 || 19,086 ||  22,406 ||  16,947 ||  17,317 ||  17,921 ||  19,553 ||  20,707

Source: DAC Online
(Table 2A). DAC Advance questionnaire for 2011. EU annual questionnaire on financing for development

G A P

G A P

Annex
4 - Aid for Trade Report for 2011

See VOL 2.

COMMISSION STAFF WORKING DOCUMENT

EU Accountability Report 2012 on Financing
for Development
Review of progress of the EU and its Member States

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Improving EU support to developing
countries in mobilising Financing for Development.
Recommendations based on the 2012 EU Accountability Report on Financing for
Development.

Annex
4 - Aid for Trade Report for 2011

TABLE OF CONTENTS

1........... Main messages............................................................................................................... 4

2........... Preliminary remarks........................................................................................................ 5

3........... Progress in EU Aid for Trade
Flows............................................................................... 7

3.1........ Wider Aid for Trade....................................................................................................... 7

3.2........ Trade Related Assistance.............................................................................................. 13

4........... Complementarities between EU and
its Member States................................................. 16

4.1........ Analysis by category and sector.................................................................................... 16

4.2........ Size and number of projects.......................................................................................... 19

4.3 ....... Instruments used........................................................................................................... 22

4.4........ Geographical coverage................................................................................................. 23

5........... AfT flows to LDCs and ACPs...................................................................................... 26

5.1........ Evolution of the AfT flows to
LDCs.............................................................................. 26

5.2........ AfT to LDCs by donor and sector................................................................................ 30

5.3 ....... LDCs and other income groups..................................................................................... 31

5.4........ AfT flows to ACP countries.......................................................................................... 31

6........... Qualitative Assessment of EU Aid
for Trade.................................................................. 33

6.1........ Ownership.................................................................................................................... 34

6.2 ....... Joint operations and
harmonisation................................................................................ 35

6.3 ....... Regional dimension of AfT............................................................................................ 35

6.4 ....... AfT Monitoring and Evaluation...................................................................................... 36

6.5 ....... LDCs and EU AfT....................................................................................................... 36

6.6 ....... Conclusions.................................................................................................................. 38

Appendixes................................................................................................................................ 40

1.           Main
messages

The European Union (EU) and its Member States are longstanding providers of development assistance in support of increased
international and regional trade.

Since 2007, the EU and its Member States have been driving the global Aid for Trade (AfT) efforts, confirming again in
2010 the EU’s position as collectively the largest provider of AfT in the
world. Indeed, the EU and Member States accounted for around 32% of total AfT
flows in 2010, reaching more than EUR 10.7 billion (EUR 8.2 billion from EU
Member States and EUR 2.5 billion from the EU), an increase of 4.2% in
comparison with last year.

As highlighted in last year’s AfT
monitoring report, the EU and its Member States had already met their 2010 EUR
2 billion target for Trade Related Assistance (TRA) in 2008 and in 2009. TRA
remained over the target in 2010, at EUR 2.6 billion, but for the first time
since 2005 there was a decrease if compared to the previous year (- 0.2 billion
or -8% on 2009) Nevertheless EU and its Member States remain the major
providers of TRA, with 60% of total TRA commitments.

Beyond increasing AfT volumes, the EU AfT
Strategy is focused on enhancing the impact of the support. This year’s AfT monitoring exercise demonstrates that EU and Member States continue to advance in the implementation of EU AfT Strategy through a
continued effort to increase the impact of AfT delivery. It also shows
important complementarities between the EU and its Members States in terms of categories and sectors, size of projects, instruments used and geographical
coverage.

The responses to the
AfT questionnaire from EU Delegations elaborated together with EU MS field
offices indicate a progressive improvement in terms of partner-donor policy dialogue,
joint operations and harmonisation, the inclusion of strategic regional
economic integration priorities into the national development plan or trade
strategy. Despite the progress, there is the need for a better targeted,
result-oriented and coordinated AfT as part of the aid and development
effectiveness agenda, by encouraging developing countries to integrate trade as
a strong component in their development instruments.

To further
bolster the effectiveness of AfT, and as a result of this year's reporting,
additional efforts by EU and Member States will be made in the following key areas:

· 
More attention should be paid to LDCs and
developing countries most in need through mainstreaming of trade in their
national and regional development strategies and a better use of existing
multi-country instruments like the Enhanced Integrated Framework (EIF) to
identify their needs and priorities.

· 
Better coordination and dialogue between
Commission and MSs to align to development strategies of partner countries as
much as possible, supporting efforts to integrate inclusive and sustainable
growth dimension in these strategies.

· 
AfT strategy should continue supporting regional
and continental integration efforts (including South- South initiatives)
through partners’ policies in areas such as markets, infrastructure and cross
border cooperation on water, energy and security.

· 
Need for more transparency
and efficiency in trade policy making. EU Questionnaires show that while in
three quarters of AfT beneficiary countries trade is a regular topic of
discussion, it seems that civil society is little involved in the AfT
dialogue.  The role of civil society, including private sector, is very
important to legitimate trade policy at the domestic level.

· 
Continue the support to partner countries'
own monitoring of results and impact of Aid for Trade and the progress of their trade development strategies.  According
to the findings of the field questionnaire, obtaining in-country data and
defining suitable indicators remain the main challenges in assessing AfT
programmes and projects.

2.       Preliminary
remarks

Aid for Trade entered the WTO agenda with
the Doha Development Round. In 2005, several donors, including the EU and its Member States, made commitments to increase their trade-related support. In December 2005,
the WTO Ministerial Conference in Hong Kong set up a Task Force to
‘operationalize Aid for Trade’.

In its 2006 recommendations, this Task
Force stated that ‘Projects and programmes should be considered as Aid for Trade
if these activities have been identified as trade-related development
priorities in the recipient country’s national development strategies’. It
specified six groups of activities that it considered to constitute Aid for
Trade: Trade Policy and Regulation (category 1), Trade Related Infrastructure
(category 3), Building Productive Capacity (category 4, including trade
development), Trade Related Adjustment (category 5) and Other Trade Related
needs (category 6). Categories 1, 2 and 6 (category 2 is a subset of category
4) correspond to standard Trade Related Assistance (TRA) and categories 1, 3, 4,
5 and 6  are usually referred as ‘the wider Aid for Trade agenda’ or AfT[1] .

Different sources of information on AfT
flows are available. The 2012 AfT monitoring report is based on four main
sources of information:

· 
The OECD Creditor Reporting System (CRS)
database is the most comprehensive and accurate database available on AfT flows
for the period 2000-2010. It does not report on AfT flows from new EU Member
States (only the EU and 15 Member States report to the OECD CRS as DAC members),
on trade development markers before 2007 (important to identify category 2) and
on category 6 data.

· 
The Doha Development database is a publicly
available database on Trade Related Assistance (TRA) flows over the period
2001-2007. It is provided by the World Trade Organization (WTO) through the
Doha Development Agenda website (tcbdb.wto.org). This database is particularly
useful for historical evaluations of TRA for the period 2001-2006/2007, and
particularly for category 2 (Trade Development).

· 
The Monterrey Questionnaires, sent annually to
EU MS for the monitoring of the EU commitments on financing for development,
provide useful information on AfT flows. These questionnaires are particularly
useful to obtain data from new EU MS, on which AfT figures are not available in
the primary sources of data (OECD CRS and Doha Development Agenda Database) and
data regarding category 6.

· 
Replies to the AfT Questionnaires from EU
Delegations coordinated with MS field offices in Developing Countries. The
questionnaire is an important tool for the qualitative assessment of AfT
activities.

3.       Progress
in EU Aid for Trade Flows

EU and Member States adopted a joint AfT
Strategy on 15 October 2007 which aims at supporting all developing countries,
particularly the Least Developed Countries (LDCs), to better integrate into the
world trading system and to use trade more effectively in promoting the
overarching objective of eradicating poverty in the context of sustainable
development.

EU commitments

In 2007, the EU Aid for Trade Strategy[2] aimed at increasing financial
resources for Aid for Trade and improving its impact on poverty reduction. In
particular, the EU committed to:

- Increasing EU Aid for Trade in coherence
with the gradual increase of overall EU aid;

- Enhancing the Pro-poor Focus and Quality of EU AfT;

- Increasing EU-wide and Member State donors’ capacity in line with
globally agreed aid effectiveness principles;

- Building upon, fostering and supporting ACP regional integration
processes with an ACP specific angle of EU AfT.

The EU AfT Strategy confirmed the 2005 EU committement,
pledging to strive to increase its collective Trade Related Assistance expenditure
to EUR 2 billion per year by 2010, with EUR 1 billion coming from the EU and EUR
1 billion from the Member States.

3.1     Wider
Aid for Trade

Main trends

Following a strong increase observed in
2008 (+44%), last year's report (with data for 2009) indicated an all-time high
of collective EU and Member States Aid for Trade commitments. In 2010 AfT
commitments continued to increase but at a slower pace of  +4.2%, reaching a
total of almost EUR 10.7 billion.

The 2010 increase in collective AfT was due
to EU Member States (+17% compared to 2009), mainly explained by new German AfT
commitments (+77%), while from the  EU the volume decreased (-24%).

Figure 1 - Aid
for Trade (EU and Member states, in EUR million)

Sources: OECD CRS,
Monterrey Questionnaires, EU

In 2010, Germany was the major AfT contributor
among EU and EU Member States, with EUR 3.3 billion committed. It was followed
by the EU, with EUR 2.5 billion committed, France (EUR 1.3 billion, +17%
compared to 2009) and Spain (EUR 1.0 billion, +52% compared to 2009).

Table 1 - Amounts of AfT by Country: 2001-2010

In EUR million || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Austria ||  15 ||  63 ||  21 ||  17 ||  27 ||  26 ||  44 ||  51 ||  58 ||  68

Belgium ||  114 ||  186 ||  135 ||  178 ||  155 ||  156 ||  209 ||  221 ||  389 ||  315

Bulgaria || || || || || ||  0 ||  0 ||  0 ||  0 ||  0

Cyprus || || || || || ||  - ||  - ||  - ||  - ||  -

Czech Rep. || || || || || ||  3 ||  3 ||  0 ||  0 ||  0

Denmark ||  81 ||  206 ||  188 ||  367 ||  410 ||  189 ||  255 ||  173 ||  251 ||  314

Estonia || || || || || ||  0 ||  0 ||  0 ||  0 ||  0

Finland ||  31 ||  41 ||  38 ||  43 ||  100 ||  64 ||  84 ||  135 ||  256 ||  195

France ||  635 ||  329 ||  466 ||  527 ||  722 ||  744 ||  1 017 ||  1 738 ||  1 090 ||  1 277

Germany ||  962 ||  816 ||  776 ||  889 ||  1 138 ||  1 495 ||  1 213 ||  2 036 ||  1 889 ||  3 345

Greece || ||  6 ||  4 ||  12 ||  14 ||  22 ||  11 ||  10 ||  13 ||  15

Hungary || || || || || ||  - ||  - ||  - || - || -

Ireland ||  19 ||  19 ||  22 ||  26 ||  20 ||  29 ||  30 ||  52 ||  44 ||  49

Italy ||  105 ||  164 ||  187 ||  70 ||  310 ||  239 ||  111 ||  186 ||  197 ||  131

Latvia || || || || || ||  0 ||  0 ||  0 ||  0 || -

Lithuania || || || || || ||  0 ||  0 ||  1 ||  0 ||  0

Luxembourg ||  3 ||  2 ||  15 ||  14 ||  11 ||  12 ||  27 ||  28 ||  22 ||  26

Malta || || || || || ||  - ||  - ||  - || - || -

Netherlands ||  343 ||  463 ||  303 ||  461 ||  384 ||  686 ||  510 ||  466 ||  482 ||  424

Poland || || || || || ||  - ||  - ||  0 || - || -

Portugal ||  30 ||  17 ||  8 ||  41 ||  61 ||  7 ||  47 ||  13 ||  66 ||  41

Romania || || || || || ||  - ||  0 ||  0 || - ||  1

Slovakia || || || || || ||  - ||  - ||  - || - || -

Slovenia || || || || || ||  1 ||  1 ||  2 ||  0 ||  2

Spain ||  253 ||  306 ||  366 ||  247 ||  135 ||  561 ||  474 ||  622 ||  660 ||  1 002

Sweden ||  192 ||  135 ||  170 ||  150 ||  200 ||  259 ||  267 ||  225 ||  247 ||  283

United Kingdom ||  631 ||  422 ||  670 ||  286 ||  665 ||  480 ||  380 ||  1 240 ||  1 329 ||  716

Member States ||  3 413 ||  3 175 ||  3 369 ||  3 327 ||  4 352 ||  4 975 ||  4 685 ||  7 200 ||  6 995 ||  8 203

EU ||  1 741 ||  2 036 ||  1 903 ||  1 444 ||  2 117 ||  2 563 ||  2 436 ||  3 056 ||  3 298 ||  2 520

Grand Total ||  5 154 ||  5 210 ||  5 272 ||  4 770 ||  6 468 ||  7 538 ||  7 120 ||  10 256 ||  10 293 ||  10 723

Sources:
OECD CRS, Monterrey Questionnaires, EU MS revisions

Other donors

EU
and Members States still represent a large share of both total AfT flows (32%) and
of total ODA (38% in 2010). However, after a peak at 40% in 2006, the share of
EU and Member States in total AfT has been decreasing. A similar trend of a
decreasing share can also be observed as regards total ODA flows from EU and Member States.

Figure 2 - Share of EU and its Member States in Total AfT and Total ODA

Sources: OECD CRS,
Monterrey Questionnaires, EU

The
share of EU and Member States AfT in relation to  total ODA has been inceasing constantly
since 2006 (from 14% in 2006 to 23%  in 2010) and the positive trend is also
observed for other donors (from 18% in 2006 to 27% in 2010 for all DAC Members).

Figure 3 - Share of Aft in Total ODA for EU and its Member States and other donors

Sources: OECD CRS,
Monterrey Questionnaires, EU

AfT
has become increasingly important for all DAC members. Total AfT was equal to
EUR 34 billion in 2010 and increases were reported for all major donors.

Figure 4 - Aid
for Trade by major donor

Sources: OECD CRS,
Monterrey Questionnaires, EU

Categories

Building Productive Capacity (BPC) and Trade-related
Infrastructure (TRI) represent the most important components of AfT,
respectively EUR 5.1 billion and EUR 4.8 billion in 2010. The three other
categories (Trade Policy and Regulation, Trade Related Adjustments and Other
Trade Related Needs) represent less than 8% of the total (a share that has been
almost stable since 2007).

Figure 5 - Aid
for Trade by Category (EU and Member states, in EUR million)

Source: OECD
CRS

Geographical coverage

Africa still accounts for the largest share
of AfT from EU and Member States at 38% (EUR 3.9 billion). It is followed by
Asia (20%), Europe (13%), America (9%), and Oceania (1%).

Figure 6 - Aid
for Trade by Region

(bilateral
& regional programmes, EU and Member states, in EUR million)

Source: OECD
CRS

In terms of growth rates, there is a slight
decrease in the amount committed to all regions except for Europe, which has
seen an increase of 82% since 2009. “Unspecified” programmes now represent 20%
of total AfT.

Disbursements

The EU and its Member States maintain a
high level of disbursements. In 2010, disbursement represented 82% of
commitments for EU and Member States, in comparison with 68% of committed
amounts disbursed for other donors. Moreover, since 2008 a positive trend for
EU and Member States has been observed in this regard.

Figure 7 - Aid
for Trade: Disbursement versus Commitments

EU and its Member States (disbursements in dark red, in EUR million and percentages) || Other Donors (disbursements in dark blue, in EUR million and percentages)

Source: OECD
CRS

3.2     Trade
Related Assistance

Main trends

In the joint 2007 AfT Strategy, EU made
specific financial commitments in relation to TRA, pledging to increase its
collective spending to EUR 2 billion per year by 2010. The EU and its Member States met the EUR 2 billion target for TRA already in 2008 and 2009 and for 2010
this continues. However, for the first time since 2005, commitments were
slightly down, at EUR 2.6 billion compared to EUR 2.8 billion in 2009 (-8% in
2010, to be compared to +24% in 2009).

The substantial increase of TRA over the
2006-2009 period and the decrease in 2010 were attributable to Member States (+52% between 2008 and 2009 and -12% in 2010) while EU has maintained almost
the same level of commitment since 2006.

Figure 8 -
Trade Related Assistance (EU and its Member States, in EUR million)

Sources: OECD CRS, Doha
Development Database, Monterrey Questionnaires, EU

With almost 70% of TRA provided by 3 Member States and EU providing 34% of commitments in 2010, TRA continues to remain highly
concentrated among EU donors. Germany provides 29% of total TRA from Member States, UK 27% and Spain 12%. Germany, the first contributor of TRA among Member
States since 2007, reduced its contribution to EU 497 million in 2010, while UK
confirmed the substantial increase started in 2009 (from EUR 92 million in 2008
to EUR 457 million in 2010).

Table 2 - Trade
Related Assistance by country: 2002-2010

In EUR million || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Austria ||  1 ||  0 ||  2 ||  8 ||  5 ||  14 ||  24 ||  18 ||  23

Belgium ||  8 ||  52 ||  46 ||  28 ||  52 ||  33 ||  58 ||  204 ||  4

Bulgaria ||  - ||  - ||  - ||  - ||  0 ||  0 ||  0 ||  0 ||  0

Cyprus ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  -

Czech Rep. ||  - ||  - ||  - ||  0 ||  0 ||  0 ||  0 ||  0 ||  0

Denmark ||  5 ||  35 ||  4 ||  28 ||  48 ||  48 ||  73 ||  97 ||  113

Estonia ||  - ||  - ||  - ||  - ||  0 ||  0 ||  0 ||  0 ||  0

Finland ||  6 ||  9 ||  0 ||  15 ||  33 ||  2 ||  51 ||  91 ||  56

France ||  129 ||  100 ||  65 ||  83 ||  106 ||  215 ||  16 ||  84 ||  18

Germany ||  81 ||  89 ||  64 ||  81 ||  31 ||  238 ||  680 ||  700 ||  497

Greece ||  6 ||  2 ||  1 ||  0 ||  4 ||  6 ||  4 ||  5 ||  1

Hungary ||  - ||  0 ||  - ||  - ||  - ||  - ||  - ||  - ||  -

Ireland ||  0 ||  0 ||  0 ||  0 ||  5 ||  8 ||  16 ||  0 ||  15

Italy ||  9 ||  1 ||  8 ||  4 ||  6 ||  15 ||  29 ||  33 ||  32

Latvia ||  - ||  - ||  - ||  - ||  0 ||  0 ||  0 ||  0 ||  -

Lithuania ||  - ||  - ||  - ||  - ||  0 ||  0 ||  0 ||  0 ||  0

Luxembourg ||  0 ||  0 ||  0 ||  0 ||  0 ||  0 ||  0 ||  - ||  2

Malta ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  -

Netherlands ||  67 ||  128 ||  61 ||  81 ||  196 ||  126 ||  62 ||  40 ||  159

Poland ||  - ||  - ||  - ||  - ||  - ||  - ||  0 ||  - ||  -

Portugal ||  15 ||  2 ||  1 ||  2 ||  1 ||  0 ||  2 ||  4 ||  1

Romania ||  - ||  - ||  - ||  - ||  - ||  0 ||  0 ||  - ||  1

Slovakia ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  - ||  -

Slovenia ||  - ||  - ||  - ||  - ||  1 ||  1 ||  2 ||  0 ||  1

Spain ||  1 ||  3 ||  2 ||  7 ||  57 ||  73 ||  133 ||  217 ||  207

Sweden ||  5 ||  18 ||  9 ||  46 ||  25 ||  29 ||  36 ||  75 ||  131

United Kingdom ||  54 ||  41 ||  36 ||  90 ||  106 ||  32 ||  92 ||  381 ||  457

EU MS ||  388 ||  482 ||  299 ||  473 ||  677 ||  841 ||  1 280 ||  1 949 ||  1 719

EU ||  566 ||  733 ||  811 ||  695 ||  902 ||  1 032 ||  1 007 ||  879 ||  897

Grand Total ||  954 ||  1 215 ||  1 110 ||  1 168 ||  1 579 ||  1 874 ||  2 287 ||  2 828 ||  2 616

Sources: OECD CRS, Doha Development Database, Monterrey Surveys, EU MS
revisions

Other donors

EU and Member States have been the major
providers of TRA since 2008, with 59% of total TRA commitments reported in the
whole OECD CRS database in 2010, compared to the 20% committed by USA, the
second TRA provider.

Figure 9 - Trade Related Assistance by major donor (in EUR million)

Sources: OECD
CRS, Monterrey Questionnaires, EU

Categories

Trade Development (TD) (Category 2, which
is a sub-set of Category 4) has continued to make up the bulk of total TRA
since 2001 (75% on average). In 2010, the relative shares of the TRA categories
were as follows: Trade Policy and Regulation representing 20%, Trade
Development almost 70% and Other Trade Related Needs approximately 10%.

Figure 10 - Trade Related Assistance by Category (EU and Member states,
in EUR million)

Source: OECD
CRS, EU

Geographical coverage

Africa has continued
to receive the largest share of EU and Member States TRA in 2010 with EUR 817
million (35% of the total). Almost 70% of these amounts were dedicated to the
South of Sahara (see section 4.4). Asia remains the second destination of TRA
commitments  (EUR 472 million, 20% of total TRA) followed by America (16% of total TRA). All three were affected by the decrease in AfT commitments. A tendency
to commit TRA through global programs and projects not specifically connected
to a geographic region (“Unspecified”) is also observed.

Figure 11 -
Trade Related Assistance by Region

(bilateral
& regional programmes, EU and Member states, in EUR million)

Source: OECD
CRS

4.       Complementarities
between EU and its Member States

The EU AfT strategy is not only based on
quantitative pledges but also on efforts aiming at enhancing the quality of EU
AfT in line with globally agreed aid effectiveness principles. An effort to
achieve a greater complementarity, harmonisation and cooperation among donors
is one of the pillars of the Strategy. The analysis below shows strong complementarities
between the EU and Members States in terms of categories and sectors, size of
projects, instruments used and geographical coverage.

4.1     Analysis
by category and sector

Figure 1 in section 3.1 shows an increase
of EU and Member States AfT flows since 2005 (almost 66%), which has been much
more accentuated in the case of Member States (88%) compared to the EU (19%).
This rise is mainly attributable to the evolution of the support to Trade
Related Infrastructure and Building Productive Capacities which represent more
than 90% of total AfT. A decomposition of growth rates by category points out
important differences between EU and Member States. The 19% increase of EU
commitments is mainly explained by a 56% increase in commitments towards Building
Capacities, which has been partly compensated by a 26% decrease towards Infrastructures.
Conversely, the 88% increase in commitments by Member States is the result of a
more homogeneous increase in both TRI and BPC (82% in TRI and 86% in BPC).

Figure 12 - Trade Related Infrastructure (in EUR million) Source: OECD CRS || Figure 13 - Building Productive Capacity (in EUR million) Source: OECD CRS

A focus on sectors reveals other
interesting differences in AfT commitments between EU and Member States. EU commitments are mainly directed towards three main sectors, namely agriculture
(35%), transport and storage (29%), and energy (13%), while commitments by Member
States are focused on energy (33%) with agriculture and transport representing respectively
only 17% and 12% of the total. Moreover, while the EU presents no commitments in
banking and financial services, this sector represents 11% of total commitments
by Member States.

Figure 14 - Aid for Trade by Sector (EU 2005-2009, in percentages) Source: OECD CRS || Figure 15 - Aid for Trade by Sector (Member States 2005-2009, in percentages) Source: OECD CRS

Figure 16 - Aid for Trade by Sector (EU in 2010, in percentages) Source: OECD CRS || Figure 17 - Aid for Trade by Sector (Member States in 2010, in percentages) Source: OECD CRS

The analysis of these major sectors (table
below) stresses a strong degree of concentration among donors. Energy (with 67%
of the programmes financed by Germany and 24% by France), and banking and
financial services (with 55% of the programmes financed by Germany, 15% by UK, and 12% by Belgium) are the sectors that show the highest degree of
concentration.

Table 3 - Aid for Trade by sector: breakdown by donor (in 2010)

Sectors || Relative Shares of Member States

Energy || Germany (67%), France (13%)

Agriculture || Spain (31%), Germany (20%), France (17%)

Transport & Storage || Germany (37%), France (24%), Spain (16%)

Banking & Financial Services || Germany (55%), United Kingdom (15%), Belgium (12%)

Business & Other Services || Germany (34%), Netherlands (16%), Denmark (15%), Spain (14%)

Industry || Germany (34%), Netherlands (16%), Denmark (15%), Spain (14%)

Source: OECD CRS

4.2     Size
and number of projects

The graph below shows the historical mean
averages of project size for EU and Member States since 2000, calculated on the
basis of total new commitments divided by the number of new committed projects.
Complementarities between EU and Member States emerge from the analysis. The
average size of EU projects is ten times the average size of projects financed
by Member States (EUR 11.2 million in the case of EU compared to EUR 1.1 million
for Member States) and the types of projects that have been financed are
different.

Figure 18 - Aid for Trade - Average Size of Projects
(EU and Member states, in EUR million)

Source: OECD CRS

Both in the case of EU and Member states
there has been an upward trend in the average size of projects since 2000, with
an average compound annual growth rate (CAGR) of 11% for the EU and of 3% for
Member States. The detailed analysis of Member States projects shows that only
six of them (The Netherlands, Germany, France, Sweden, United Kingdom and Denmark) manage AfT programmes with an average size of EUR 1 million or more.

Spain is the Member State that has been implementing the largest number of AfT projects.

Table 4 - Number of AfT projects by Country                                                2010 Austria                      172 Belgium                    809 Denmark                   301 Finland                      293 France                       644 Germany                 1677 Greece                         22 Ireland                       203 Italy                           440 Luxembourg              168 Netherlands               155 Portugal                     91 Spain                       1 968 Sweden                       212 United Kingdom        572 EU                           198 Source: OECD CRS || Figure 19 - Size of AfT Projects (EU and Member states, in EUR thousand) Source: OECD CRS

The distribution of the size of projects (graph
below) stresses the asymmetry between EU and Member States. In the case of EU the
average size is close to EUR 10 million and the clear majority of projects  in
the range EUR 1 - 100 million. Member States show an opposite pattern, with the
majority of the projects in the range EUR 0 - 1 million.

Figure 20 - Distribution of the Size of Projects in 2010 (EU and its
Member states)

Source: OECD CRS

EU transport projects have the biggest
average size (EUR 18.28 million) followed by agricultural projects (EUR 16.22
million). In Member States, mining projects are characterised by the biggest
average size (EUR 4.08 million).

Table 5 - Size of EU AfT Projects by Sector in 2010 (% of total and
ranges in EUR million)

Ranges (mn €) || <0.1 || [0.1-1[ || [1-10[ || [10-100[ || >100 || Total || Average Size

Transport & Storage || 3% || 3% || 43% || 51% || 0% || 100% || 18.28

Communications || 11% || 22% || 67% || 0% || 0% || 100% || 2.54

Energy || 3% || 5% || 70% || 22% || 0% || 100% || 7.77

Banking & Financial Services || 0% || 0% || 100% || 0% || 0% || 100% || 1.17

Business & Other Services || 10% || 0% || 60% || 30% || 0% || 100% || 8.67

Agriculture || 2% || 6% || 44% || 46% || 2% || 100% || 16.22

Forestry || 0% || 13% || 75% || 13% || 0% || 100% || 5.11

Fishing || 0% || 0% || 67% || 33% || 0% || 100% || 7.25

Industry || 0% || 0% || 65% || 35% || 0% || 100% || 9.90

Mineral Resources & Mining || 0% || 0% || 0% || 0% || 0% || 100% || 0.00

TPR || 24% || 21% || 31% || 24% || 0% || 100% || 5.58

Tourism || 0% || 0% || 0% || 100% || 0% || 100% || 11.00

Source: OECD CRS

Table 6 - Size
of Member States AfT Projects by Sector in 2010 (% of total and ranges in EUR
million)

Ranges (mn €) || <0.1 || [0.1-1[ || [1-10[ || [10-100[ || >100 || Total || Average Size

Transport & Storage || 51% || 26% || 15% || 7% || 1% || 100% || 3.25

Communications || 80% || 15% || 4% || 1% || 0% || 100% || 0.32

Energy || 62% || 18% || 12% || 7% || 1% || 100% || 3.81

Banking & Financial Services || 60% || 23% || 15% || 2% || 0% || 100% || 1.15

Business & Other Services || 65% || 23% || 10% || 2% || 0% || 100% || 0.80

Agriculture || 60% || 34% || 6% || 1% || 0% || 100% || 0.52

Forestry || 65% || 24% || 9% || 2% || 0% || 100% || 0.68

Fishing || 58% || 35% || 7% || 0% || 0% || 100% || 0.40

Industry || 66% || 27% || 6% || 1% || 0% || 100% || 0.50

Mineral Resources & Mining || 61% || 34% || 3% || 0% || 2% || 100% || 4.08

TPR || 55% || 30% || 13% || 1% || 0% || 100% || 1.52

Tourism || 67% || 31% || 2% || 0% || 0% || 100% || 0.15

Source: OECD CRS

4.3
    Instruments used

Since 2000, most EU and Member States AfT
flows have been channelled through grants (almost 60% in 2010 in the collective
AfT), even if the share of loans and equity investments has been increasing
over the past few years. Also in this respect, EU and Member States show remarkable complementarities. In the case of EU, grants have been representing 100%
of AfT programmes since 2007, while in the case of Member States 43% of
programmes have been financed through loans and 13% through equity investments.

Figure 21 - Aid for Trade by Type of Flow (EU and Member States, in EUR million) Source: OECD CRS || Figure 22 - Aid for Trade - ODA Loans (in EUR million) Source: OECD CRS

A comparison with other DAC donors shows
that the share of grants in EU projects remains very high particularly since
2007, while it is much lower in the case of projects financed by Member States
which tend to converge towards the average share of grants for all DAC donors
(a 43% of total AfT flows in 2010).

Figure 23 - Share of grants in AfT (EU and Member States and other donors in 2010)

Source: OECD CRS

The EU is the most important source of grants
(38% of collective EU and MS AfT grants) followed by Germany (15%). Loans are
mostly provided by Germany (64%), and France (27%), while equity investments are
mainly used by UK (38%), Spain (37%), and Germany (22%).

Figure 24 - Aid for Trade – ODA Grants (EU and Member States in 2010) Source: OECD CRS || Figure 25 - Aid for Trade – ODA Loans (EU and Member States in 2010) Source: OECD CRS

Figure 26 - Aid for Trade - Equity Investment (EU and Member States in 2010) Source: OECD CRS

4.4     Geographical
coverage

For both EU and Member States, Africa was the most important region for AfT flows in 2010. The second priority was
Europe for the EU and Asia for Member States. We also observed the importance
of unspecified flows for Member States (box below).

Figure 27 - Aid
for Trade by Region EU / Member states (bilateral & regional programmes, in
EUR million, 2010)

Source: OECD CRS

A breakdown of the total amounts of AfT towards
 Africa in 2010 (charts below) shows that the majority of programmes was
directed towards South of Sahara (80% of EU programmes and 60% of programmes
financed by Member States). For Member States the shares of flows directed
towards North of Sahara and Pan African programmes (respectively 32% and 8%)
are more important than in the case of EU.

Figure 28 - Aid for Trade by Region – Africa (break down) (EU in 2010, in percentages) Source: OECD CRS || Figure 29 - Aid for Trade by Region - Africa (break down) (Member States in 2010, in percentages) Source: OECD CRS

In recent years, Eastern Africa is the most
important destination of AfT for both the EU and Member States and Western Africa remains the second destination of AfT. Support from Member States to the Southern Africa is relatively higher as compared to EU financing.

Figure 30 - Aid for Trade on South of Sahara (EU, in EUR million) Source: OECD CRS || Figure 31 - Aid for Trade on South of Sahara (Member States, in EUR million) Source: OECD CRS

Box 1 - What are the projects under the category “unspecified region”? The volume of AfT projects in the category “Unspecified” is large and has been regularly increasing over the past years, particularly in the case of Member States (more than 20% of programmes in 2010). Figure 32 - Aid for Trade: the category "unspecified" (EU and Member States, in EUR million) Source: OECD CRS What are the programmes that are classified in this category? The following table shows a list of the ten most important programmes in this category, with their description, donor country, AfT category and amount allocated to the project. Among the 1007 programmes classified in this category in 2010, more than 72% of the total volume is explained by these ten most important ones. Table 7 - The Category “unspecified”, list of 10 most important projects in 2010 (in EUR million, 72% of the category is covered)                        Volume       AfT                               Sector                                                       Title                      (EUR mln)   Category Germany            500.0          3             Power generation/renewable sources         Clean Technology Fund (CTF) Spain                  285.5          4             Agricultural policy & admin. mgmt           FIDA's financial facilty Netherlands       157.1          1             Regional trade agreements (rtas)                DGI CBI budget 2005 France                110.9          4             Agricultural research                                  Recherches scientifiques et technolgiques                                     autour du développement des pays du sud Germany            110.1          4             Formal sector financ. intermediaries          Infrastructure Crisis Facility - Debt trust EU                       80.8          3             Power generation/renewable sources         Premier engagement financier global (GFC) de la Facilité Energie 10è FED Belgium                72.0          4             Formal sector financ. intermediaries          BIO - Fonds de Dévelopment – Globale Netherlands         69.5          4             Business support services & institutions DDE PSOM 2007-2013 Netherlands         60.3          3             Energy policy and admin. management     DME Scalingup Renewable Energy EU                       31.8          4             Agricultural development                          LRRD Component 4 FSTP AAP 2010 Source: OECD CRS In 2010, the bulk of the flows come from Germany (37%), The Netherlands (17%), and Spain (15%). Table 8 - The Category “unspecified”, by donor (in EUR million, 2010)                                Volume               % of total                                                              (in EUR million) Austria                  12.6                       1% Belgium                90.2                        4% Denmark                 2.4                       0% Finland                  46.6                       2% France                  145.0                      7% Germany              766.9                   37% Ireland                     6.7                       0% Italy                         0.1                      0% Luxembourg            7.6                       0% The Netherlands   344.2                    17% Portugal                    0.5                     0% Spain                    304.4                    15% Sweden                  59.3                       3% United Kingdom     60.2                     3% EU                        205.7                    10% Total                   2052.3                   100% Source: OECD CRS

5.       AfT
flows to LDCs and ACPs

The EU AfT Strategy explicitly refers to
supporting LDCs to better integrate into the rules-based world trading system
and to more effectively use trade in promoting the overarching objective of eradicating
of poverty in the context of sustainable development.

Moreover, one of the aims of the EU AfT
Strategy is building up, fostering and supporting ACP regional integration
processes through a support to ACP regions and countries to take full advantage
of the increased trading opportunities and maximise the benefits of trade
reforms, including those of the Economic Partnership Agreements (EPAs), while
the collective EU delivery of AfT does not depend on the outcome of such
negotiations.

5.1     Evolution
of the AfT flows to LDCs

In 2010 the share of AfT to LDCs as
percentage of total AfT from EU and Member States decreased to 16% compared
with 23% in 2009 (in 2010 the support to LDCs amounted to EUR 1.7 billion compared
with EUR 8.7 billion to non-LDCs). This decrease can be probably explained by
cyclical and EU programming factors. Furthermore, the share of LDCs in the
total AfT remains underestimated because of the increasing tendency to provide
support through programmes under the category "Unallocated by income"
(see box 2).

Figure 33 - Aid
for Trade to LDCs (EU and its Member states, in EUR million)

Source: OECD CRS

Since 2001, the share of EU AfT provided to
LDCs (22% in 2010) has been higher than the share Member States delivered to
LDCs (15% in 2010). Both curves are characterised by a highly cyclical profile.

Figure 34 - Aid
for Trade to LDCs (EU and its Member states, in EUR million)

Source: OECD CRS

The share of AfT provided to LDCs by other
DAC donors is much higher than that of the EU and its Member States.

Figure 35 – Share
of Aid for Trade to LDCs in comparison with other donors (in percentages)

Source: OECD CRS

Box 2 – Underestimation of AfT share to LDCs   In the OECD CRS database, regional programmes are classified in the category "Unallocated by income", but some of them are clearly LDCs-oriented, in particular regional programmes in Africa (EUR 615 million in 2010). Recalculating the share of LDCs taking these regional programmes in Africa into account, the share of AfT flows to LDCs increases. Figure 36 - AfT for EU and its Member States: Adjusted share of LDCs (in % of total AfT)                                                                                                 2000     2005      2009      2010 Share of LDCs                       34%     31%      23%     16% Adjusted share of LDCs         39%     35%      31%     22% Source: OECD CRS, Authors calculations                                                                                                                                                            Source: OECD CRS The following list summarises the top receivers of AfT flows (regional or bilateral). The whole list of countries represented account for 65% of total AfT, and the same list explains 66% of programmes dedicated to LDCs. However, countries or regions are not always provided and the category “Unspecified” is the primary recipient of AfT flows (see Box 1 for details about this category). Therefore, for some of them, a share could be allocated to LDC (for example the “FIDA's financial facility” with EUR 286 million, the “DGI CBI budget 2005” with EUR 157 million, or the “Recherches scientifiques et technolgiques autour du développement des pays du sud” with EUR 111 million). To evaluate the potential sensibility of this evaluation, these three programmes have been added to the category. With such an adjustment, the share of LDCs would be 21% instead of 16% in 2010, and with the assumption of 25% of the rest being allocated to LDC this share would rise to 25% (a 10% increase compared to the initial evaluation). Table 9 - AfT for EU and its Member States by Recipient Country: how many LDCs? (in EUR million, these countries account for 65% of total AfT)                                             2000       2005       2008       2009       2010       LDC Unspecified                       384         551         1 065      1 866      2 052      ? Morocco                              108         118         789         438         441         China                                   205         228         461         359         404         Egypt                                  42           137         308         87           402         Kenya                                  61           190         39           255         354         Turkey                                64           102         554         199         347         South of Sahara                158         190         126         423         336         regional India                                    149         234         391         425         308         Vietnam                               104         168         52           162         248         Tunisia                                141         32           332         172         245         Africa                                 42           30           243         391         237         regional Serbia                                   87           190         174         57           203         Mozambique                     113         138         154         84           198         Yes Afghanistan                      2             63           161         273         194         Yes Europe                                 18           29           101         48           192         Bosnia-Herzegovina             13           36           84           57           163         Asia                                    53           30           162         111         149         regional Brazil                                   26           35           33           144         149         Burkina Faso                    120         95           56           12           142         Yes Source: OECD CRS

5.2     AfT
to LDCs by donor and sector

In 2010, almost 30% of collective EU and
Member States AfT towards LDCs have been granted by the EU followed by Germany (13% of collective AfT) even if the support to this group of countries equals only
7% of the total German AfT. AfT activities of Ireland (68% of the total Irish
AfT), Sweden (45%), Belgium (40%) and Denmark (38%) are highly focused on LDCs.

Figure 37 - Aid for Trade to
LDCs, by donor                    Table 10 - Share of LDC in AfT, by donor (in
2010)

(EU and its Member states,
in 2010

Austria                 11%        Luxembourg                 23%

Belgium               40%        Netherlands                 4%

Denmark             38%        Portugal                        5%

Finland                25%        Spain                            14%

France                  16%        Sweden                         45%

Germany              7%          UK                                 14%

Ireland                 68%        EU                                  19%

Italy                      32%

Source: OECD CRS

Source: OECD CRS

More than 70% of AfT towards LDCs were
directed towards three sectors (transport and storage, agriculture, and energy)
in 2010

Figure 38 - Aid
for Trade to LDCs, by Sector

(EU and its
Member states, 2010)

Source: OECD CRS

|| ||

5.3     LDCs and other income groups Among the categories of countries monitored (LMIC: lower middle income countries, MADCT: more advanced developing countries, LIC: low income countries and UMIC: upper middle income countries), LDCs are the only category showing a decline in absolute amount compared to the 2005-2009 average. This decrease is probably due to cyclical factors.  Moreover, in 2010 a considerable part of programs is unallocated by income (see § 5.1 and box 2). Figure 39 - Aid for Trade by Income Group (bilateral & regional programmes, EU and Member states, in EUR million) Source: OECD CRS ||

5.4     AfT
flows to ACP countries

In 2010, collective EU AfT flows provided to
ACP countries decreased to EUR 3.1 billion (29% of the total collective EU AfT)
in comparison with EUR 3.7 billion (36% of the total collective EU AfT) in 2009
(chart below). This decrease was due to the fall in EU commitments both on
bilateral and regional levels. However, ACP countries remain a strong priority for
the EU, with 39% of total EU commitments compared to 27% of total in the case
of Member States. 
Figure 40 – Aid for Trade to
ACP countries (EU and Member states, in EUR million)

Source: OECD CRS

Figure 41 – Aid
for Trade to ACP countries

Bilateral (in EUR million) Source: OECD CRS || Regional (in EUR million) Source: OECD CRS

As far as Trade Related Assistance to ACP
countries is concerned, 2007 EU AfT Strategy states that "In the
context of efforts to increase the collective EU TRA to 2 billion EUR annually
by 2010, in the range of 50% of the increase will be available for the ACP
needs". Between 2008 and 2010, the total EU TRA increased at the rate
of 26% but at the same period of time the EU TRA to ACP countries grew by 105%.
The increase of EU TRA to ACP, in absolute values, represents almost 92% of
total TRA increase (TRA to non-ACP countries was relatively stable).  In 2010,
the part of ACP in total EU TRA was equal to 37%.

Figure 42 - Trade Related Assistance to ACP
Countries (EU and EU MS, in
EUR million)

Source: OECD CRS

6.       Qualitative
Assessment of EU Aid for Trade

The important part of the EU AfT Strategy
is focussed on enhancing the effectiveness of AfT delivery.

As in previous years' monitoring exercises
the European Commission submitted a questionnaire to EU Delegations in
developing countries and invited them to provide a joint reply to be elaborated
with the Member States present in the country and active in sectors covered by
AfT. In addition to collecting important feedback from the field on how the AfT
agenda is progressing at country and regional level, this exercise also helped
catalyse and facilitate a discussion on AfT matters in the partner country in
question.

This year's analysis contributed in
particular to reinforce the understanding of a series of key issues including:
the possibility of more coordinated EU and EU Member States work on AfT in
partner countries, the use of trade needs assessments in AfT strategies,
constraints to donor's support to LDCs, opportunities for greater regional
integration support and difficulties in the   area of AfT monitoring and
evaluation.

EU delegations and EU Member States’
embassies in 64 partner countries across the developing world completed the field
questionnaire[3]. 34 of the respondents are based
in the ACP States, 11 in Asia, 10 in Latin America and 9 in the
Neighbourhood country group. 21 of the total responses came from field offices
in LDCs. Many Member States significantly involved in AfT in the partner
countries provided contributions to the questionnaire (in almost 70 % of
cases).

6.1     Ownership

Trade issues in the EU donor – partner
policy dialogue

EU Delegations and Member States
representatives report that for nearly three-quarters of AfT beneficiary
countries trade was a regular topic of discussion.
This reflects the situation in thirty-seven partner countries out of 64,
with only six responding negatively. 61% of respondents affirmed that no
particular changes had occurred compared to 2009[4]
while a still sizeable 39% observed an improvement.

A dialogue on AfT within partner countries
appears to involve civil society only on an irregular basis. The replies
indicate that 11% of recipient countries consistently incorporate civil society
in AfT discussions while 54% occasionally do so. More importantly, about 31%
rarely or never involve civil society in the policy dialogue, suggesting that
opportunities for a broader dialogue exist.

Compared to 2009, 52% of Delegations in partner
countries report that demand for AfT has increased. Despite not reflecting the general opinion of recipient countries, a
non- negligible 23 respondents (35%) answered that AfT demand had seen little
or no change since 2009. Moreover, the overwhelming majority of non-ACP
countries (64%) have an existing intra-ministerial/institutional committee to
coordinate trade issues whereas the same existed only in 39% of ACP countries.

Coordination process to develop and
implement trade strategy

Half of EU field responses show that
partner country has an existing government-donor coordination mechanism in
place to develop and implement trade strategies, mainly in ACP countries. The other half of the countries are said either not to have such
coordination processes or to have them formally but not using them actively.  Reasons
are generally related to lack of capacity or scarcity of human resources.

Trade Needs Assessment and Strategies

This year's exercise shows that 56% of partner countries have not
conducted a comprehensive trade needs assessment over the past five years.  This
percentage was lower in the case of ACP countries (47%). It appears that even if a recent comprehensive trade needs assessment
is available, its findings are fully or partially reflected in the trade
strategy only in 30% of countries. Countries are either failing to integrate
assessment findings or do not have an existing trade strategy in place. This
remains a serious concern in that EU and Member States may be providing AfT
support on the basis of an obsolete or non-existent trade needs assessment.

Figure 43 – Dialogue on Aid for Trade (% of total responses)  Source: TAC, EAMR 2011 || Figure 44 – Trade Needs Assessment (Has a comprehensive trade needs assessment been undertaken in the last five years?)  Source: TAC, EAMR 2011

6.2
    Joint operations and harmonisation

Survey results for 2010 show that compared
to 2009 there has been a moderate improvement in donor's coordination. This
year's field responses indicated that in 51% of Partner Countries EU donors
improved their coordination compared to 2009 (moderate improvements were
reported in 43% of countries). However, at the same time, the replies show
a softening in the pace of improvement, as only about 12% of those surveyed
witnessed significant progress relative to 21% in the previous year.

6.3
    Regional dimension of AfT

Field questionnaire's responses indicate
that within 62% of partner countries EU donors were supportive/partially
supportive in strengthening the inclusion of strategic regional economic
integration priorities in national development plans or the trade strategies of
partner countries. The remaining 38% reported there was no support. Compared
to 2009, 13% of respondents considered that this represented an improvement.

EU donors seem especially supportive to the
inclusion of strategic regional economic integration within national
development plans or trade strategies in ACP countries, accounting for 73% of
those that responded ‘yes’ to EU support, following distantly by Asian
countries.

6.4
    AfT Monitoring and Evaluation

Asked about the problems that donors
encounter in assessing AfT programmes and projects, 26% of replies indicated
the difficulty of obtaining in-country data as one of the leading challenges. For
the responses that reported the difficulty of obtaining in-country data as
either ‘most important’ or ‘important’, the share increases to 83%. The
second most importanthurdle is the difficulty in defining suitable indicators
(74%).

A critical element in monitoring and
evaluation is to feedback results into the government’s trade development
strategy for which specific processes need to be in place. According to survey
results, this is far from being the case. Only 6% indicated that this
process ‘significantly’ applies whereas 36% stated it applies ‘moderately’.

6.5
    LDCs and EU AfT

Trade related policy dialogue

When asked whether trade is a regular
topic of discussion in AfT dialogue with EU and Member States, 60% responded ‘yes’
while 33% ‘only a limited extent’. For a relatively
insignificant 7% of partner countries trade is not part of the AfT dialogue at
all. Compared to 2009, the trend has improved noticeably for at least eight
countries (38%). Several reasons for changes or lack of changes in the LDCs
policy dialogue were mentioned in the questionnaires. Among those, the
circumstance that several LDCs were in crisis or post-crisis situations leads
to a scaled down dialogue or to a focus on constitutional and socio-economic
issues.

AfT demand

More than 70% of EU donors in LDCs (fifteen
countries) reported an increase in AfT demand since 2009, while 29% reported
‘little or no change’ (six countries).

National
coordination mechanisms

In five out of
twenty-one (25%) LDCs, EU field offices considered that national coordination
mechanisms were in place to coordinate trade policy. Nine (45%) responded that
these mechanisms exist formally but not actively used. In six LDCs (30%), such
mechanisms were said not to exist.

It should be noted that LDCs responses indicate a lower degree of
availability and use of trade policy coordination mechanisms in LDCs as
compared to the total sample (Here 49% indicate that such mechanisms are
available and used).

Trade needs assessment

The replies from the EU Delegations
indicate that only seven (two partially) LDCs countries (33%) carried out a
comprehensive trade needs assessment in the last five years. For the few
countries that have conducted a comprehensive trade needs assessment, six
reflected the findings in their respective trade strategies.  44% of answers
from LDCs show that there was no trade strategy in place in these countries.

Main LDCs constraints to increasing
attention to trade

According to 19 responses (out of 21), the
main constraint to increasing attention to trade is related to the low capacity
to identify needs and priorities.17 responses indicated that the most important
challenge is the low absorption capacity of LDCs. Other constraints highlighted
as important or very important included ‘trade-related needs not substantiated’
(11 countries), ‘other more pressing priorities’ (11 countries), and
‘insufficient availability of funds from donors’ (7 countries). However, the
latter constraint was considered to be the least important with 11 ‘less
important’ and 4 ‘not important’ responses.

The case study

Supporting coffee and tea production in Rwanda

An EU project, set up to help support the
Rwandan tea and coffee industry, creating more jobs and increasing the
livelihoods of farmers as a result, has benefitted 60,000 farmers. Some 85% of
the Rwandan population works in the agricultural industry.

The programme helped to provide new facilities
and equipment (for example new washing stations and new and rehabilitated
storage systems, as well as pesticides, to protect the crops). To help tea
production, drainage canals were built, road works carried out to improve
access to tea estates, and training provided. It also helped farmers to
diversify into other products: for example; soya, macadamia nuts, mushrooms and
potatoes.

Figure 45 – Aid for Trade in LDCs (% of total LDC responses)  Source: TAC, EAMR 2011 || Figure 46 – Monitoring and Evaluation ('Important'  % of total responses)  Source: TAC, EAMR 2011

6.6
    Conclusions

This year’s AfT monitoring exercise
demonstrates that EU and Member States continue to advance in the implementation
of EU AfT Strategy particularly through a continued effort to increase the
impact of AfT delivery.

The responses to the AfT questionnaire show
that albeit from a low level a progressive improvement is taking place  in
terms of joint operations and harmonisation, inclusion of strategic regional
economic integration priorities into the national development plan or trade
strategy and partner-donor policy dialogue. However, it appears from the
report  that in many cases a national trade needs assessment has not been
undertaken or a trade strategyis not in place and not reflected into the
national development plans. Furthermore, civil society and private sector seem
to be little involved in the AfT dialogue

In order to preserve this momentum and
further bolster the effectiveness of the AfT:

It is vital to pay more attention to LDCs
  through a direct support to mainstreaming of trade in their national and
  regional strategies and a better use of existing multi-country instruments
  like the Enhanced Integrated Framework (EIF) to identify their needs and
  priorities. Furthermore, particular attention should be paid to improve
  the Business Enabling Environment in these countries in order to attract
  more foreign and domestic investments and reduce their dependence on
  grants in AfT. 
 Better coordination and dialogue between
  Commission and Member States are required to benefit the most from
  complementarities and to align to development strategies of partner
  countries as much as possible, supporting efforts to integrate inclusive
  and sustainable growth dimension in these strategies. 
 Need for more transparency and efficiency
  in trade policy making through a more regular involvement of civil society
  and private sector in AfT dialogue.

· 
Continue the give support to partner countries'
own monitoring of results and impact of Aid for Trade and the progress of their
trade development strategies. Obtaining in-country data and defining
suitable indicators remain among the major challenges in assessing AfT
programmes and projects.

Appendixes

See VOL 4.

[1] See Appendix 1.

[2] Council Conclusions on “The EU Strategy on
Aid for Trade: Enhancing EU support for trade-related needs in developing
countries”, 14470/07, 29 October 2007.

[3] There were 89 responses in the last year
Report.

[4] To be in line with the OECD CRS data,
currently available till 2010, the questionnaire asked to describe the
situation in 2010 in comparison to 2009.

COMMISSION STAFF WORKING DOCUMENT

EU Accountability Report 2012 on Financing
for Development
Review of progress of the EU and its Member States

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Improving EU support to developing
countries in mobilising Financing for Development.
Recommendations based on the 2012 EU Accountability Report on Financing for Development.

TABLE OF CONTENTS - Appendixes

Appendix 1 – Definitions of AfT Categories................................................................................... 3

Appendix 2 – EU Member States AfT Donor
Profiles................................................................... 5

Appendix 3 – Aid for Trade by Region, Country
and Category.................................................... 34

Appendix 4 –Trade Related Assistance by
Region, Country and Category................................... 53

Appendix 5 – Category 6 in EU AfT 2010.................................................................................. 69

Appendix 6 – List of Least Developing
Countries (LDC) and ACP Countries.............................. 74

Appendixes

Appendix
1 – Definitions of AfT Categories

Aid for Trade (AfT) figures are obtained
summing the following five categories: Trade Policy and Regulation (category
1), Trade Related Infrastructure (category 3), Building Productive Capacity
(category 4, including trade development), Trade Related Adjustment (category
5) and Other Trade Related needs (category 6).

Trade Related Assistance can be viewed as a
subset of Aid for Trade comprising three categories: Trade Policy and
Regulation (category 1), Trade Development (category 2), and Other Trade
Related Needs (category 6).

These categories are computed as follows:

· 
Trade Policy and Regulation (TPR or category 1)
refers to trade policy and planning, trade facilitation, regional trade
agreements, multilateral trade negotiations, multi-sector wholesale/retail
trade and trade promotion. This category includes training of trade officials,
analysis of proposals and positions and their impact, support for national
stakeholders to articulate commercial interests and identify trade-offs,
dispute issues, and institutional and technical support to facilitate
implementation of trade agreements and to adapt to and comply with rules and
standards.

Technically,
this category is the sum of the following sectors codes: 33110, 33120, 33130,
33140 & 33181(in the OECD CRS online database).

· 
Trade Development (TD or category 2) includes
support aimed at stimulating trade by domestic firms and encouraging investment
in trade-oriented industries, such as trade-related business development and
activities to improve business climate, privatisation, assistance to banking
and financial services, agriculture, forestry, fishing, industry, mineral
resources and mining, and tourism. This category is the trade-related subset of
category 4 (which includes all building productive capacity of a trade-related
and non-trade-related nature).

This
category is obtained my extracting all lines marked as “trade development” from
category 4.

· 
Trade Related Infrastructure (TRI or category 3)
includes physical infrastructure including transport and storage,
communications, and energy generation and supply.

Technically,
this category is the sum of the following sectors codes: 210**, 220**, 230**
(in the OECD CRS online database).

· 
Building Productive Capacity (BPC or category 4)
includes business development and activities aimed at improving the business
climate, privatisation, assistance to banking and financial services,
agriculture, forestry, fishing, industry, mineral resources and mining,
tourism. It includes trade- and non-trade-related capacity building.

Technically,
this category is the sum of the following sectors codes: 25010, 240**, 311**,
312**, 313**, 321**, 322**, 332** (in the OECD CRS online database).

· 
Trade Related Adjustment (TRA or category 5).
This code was created by OECD/DAC at the end of 2007. It covers contributions
to the government budget to assist with the implementation of recipients’ own
trade reforms and adjustments to trade policy measures taken by other countries,
as well as assistance to manage balance of payments shortfalls due to changes
in the world trading environment.

Technically,
this category is the sum of the sectors codes 33150 (in the OECD CRS online
database).

· 
Other Trade Related Needs (OTRN or category 6)
refers to programmes supporting trade in sectors not comprised in the other
five categories (including the wider Aid for Trade agenda), such as vocational
training or public sector policy programmes. It is also used to report on
larger cross-sectorial programmes with important subcomponents in the other AfT
categories. This is useful, as the CRS methodology requires the use of one single
CRS code per reported programme, an approximation which limits in some cases
the ability of the CRS to capture TRA.

The change in methodology from the Doha
Trade-Capacity-Building Database to CRS in 2007 and the new definitions create
some limitations in the comparisons of figures over time. The amounts captured
in the former database as "Trade Policy and Regulation" (category 1)
and "Trade development" (category 2) are nowadays split into three
categories, namely categories 1, 2 and 6. Due to the definitions of codes in
the CRS, it is not possible to continue counting some activities as TPR or TD,
since they have different CRS purpose codes and so they are captured in
category 6. Moreover, figures prior to 2007 do not include category 6, which
did not exist at the time. Therefore, comparisons of TRA before and after 2007
need to be taken with caution.

The evaluation of TRA for the period
2001-2010 is therefore inferred from the direct combination of the four
different databases: OECD CRS, Doha Development Database, Monterrey
Questionnaires and EU (for category 6).

Appendix 2 – EU
Member States AfT Donor Profiles

Aid for Trade flows reported in the
following donor profiles come from the following data sources:

· 
The OECD Creditor Reporting System (CRS), in
which most of EU Member States (15 out of 27) provide quantitative data on
their Official Development Assistance (ODA).

· 
Information included in the "Monterrey
questionnaire" for data of EU Member States that did not report to the
OECD CRS and for the category 6 for EU.

AUSTRIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 675 || 2 113 || 97 || 71

|| || Trade Development (category 2) || 12 904 || 21 681 || 18 109 || 23 265

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 13 579 || 23 794 || 18 205 || 23 336

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 675 || 2 113 || 97 || 71

|| || Trade Related Infrastructure (category 3) || 22 802 || 11 503 || 22 692 || 19 886

|| || Building Productive Capacity (category 4) || 20 541 || 36 988 || 35 512 || 47 880

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 44 018 || 50 604 || 58 301 || 67 837

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  12 613 China                                                           10 585 South of Sahara, regional                          8 406 Europe, regional                                         6 250 Egypt                                                            3 625 Nicaragua                                                    3 616 North & Central America, regional            2 600 Africa, regional                                           2 000 States Ex-Yugoslavia                                   2 000 Mozambique                                                1 385 Source: OECD CRS

BELGIUM

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 2 101 || 7 219 || 14 257 || 3 800

|| || Trade Development (category 2) || 30 474 || 51 189 || 190 243 ||

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 32 575 || 58 408 || 204 500 || 3 800

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 2 101 || 7 219 || 14 257 || 3 800

|| || Trade Related Infrastructure (category 3) || 80 036 || 44 369 || 105 272 || 59 985

|| || Building Productive Capacity (category 4) || 127 023 || 169 282 || 269 502 || 251 588

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 209 160 || 220 871 || 389 031 || 315 373

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  90 161 Senegal                                                        17 921 Burundi                                                       17 659 Mozambique                                                15 347 Rwanda                                                        15 331 Congo, Dem. Rep.                                       12 055 Peru                                                              11 429 Nicaragua                                                    10 870 Congo, Rep.                                                 10 000 Mali                                                             8 668 Source: OECD CRS

BULGARIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 3 || 4 || 5.5

|| || Trade Development (category 2) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Trade-Related Assistance || 3 || 3 || 4 || 5.5

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 3 || 4 || 5.5

|| || Trade Related Infrastructure (category 3) || n/a || 0 || 0 || 0

|| || Building Productive Capacity (category 4) || n/a || 0 || 0 || 0

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Aid for Trade || 3 || 3 || 4 || 5.5

n/a: data not
provided

CYPRUS

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 0 || 0 || 0

|| || Trade Development (category 2) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Trade-Related Assistance || n/a || 0 || 0 || 0

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 0 || 0 || 0

|| || Trade Related Infrastructure (category 3) || n/a || 0 || 0 || 0

|| || Building Productive Capacity (category 4) || n/a || 0 || 0 || 0

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Aid for Trade || n/a || 0 || 0 || 0

n/a: data not
provided

CZECH REPUBLIC

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 124 || 46 || 53 || 28

|| || Trade Development (category 2) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Trade-Related Assistance || 124 || 46 || 53 || 28

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 46 || 53 || 28

|| || Trade Related Infrastructure (category 3) || n/a || 0 || 0 || 0

|| || Building Productive Capacity (category 4) || n/a || 0 || 0 || 88

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Aid for Trade || 2 520 || 46 || 53 || 116

n/a: data not
provided

DENMARK

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 940 || 5 621 || 1 465 || 1 893

|| || Trade Development (category 2) || 47 230 || 67 317 || 95 038 || 111 385

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 48 170 || 72 939 || 96 503 || 113 278

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 940 || 5 621 || 1 465 || 1 893

|| || Trade Related Infrastructure (category 3) || 136 160 || 36 995 || 63 382 || 65 585

|| || Building Productive Capacity (category 4) || 117 951 || 130 851 || 186 367 || 246 061

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 255 050 || 173 468 || 251 213 || 313 639

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Mozambique                                                70 360 Kenya                                                           47 295 Bolivia                                                         25 193 Vietnam                                                        24 732 Ghana                                                          22 177 Africa, regional                                           20 633 Tanzania                                                     19 463 Zimbabwe                                                    12 392 Sri Lanka                                                     11 221 Maldives                                                      7 936 Source: OECD CRS

ESTONIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 46 || 13 || 32

|| || Trade Development (category 2) || n/a || 32 || 1 || 3

|| || Other Trade Related Needs (category 6) || || || 0 || 0

|| || Total Trade-Related Assistance || 36 || 78 || 14 || 35

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 46 || 13 || 32

|| || Trade Related Infrastructure (category 3) || n/a || 320 || 320 || 400

|| || Building Productive Capacity (category 4) || n/a || 32 || 1 || 3

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Aid for Trade || 36 || 398 || 334 || 435

n/a: data not
provided

FINLAND

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 1 603 || 9 141 || 8 448 || 8 545

|| || Trade Development (category 2) || 0 || 42 304 || 82 501 || 47 955

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 1 603 || 51 445 || 90 950 || 56 500

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 1 603 || 9 141 || 8 448 || 8 545

|| || Trade Related Infrastructure (category 3) || 8 070 || 14 443 || 123 189 || 40 216

|| || Building Productive Capacity (category 4) || 74 762 || 111 764 || 124 280 || 146 131

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 84 436 || 135 347 || 255 917 || 194 892

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  46 595 Kenya                                                           27 671 Ethiopia                                                       21 173 Africa, regional                                           14 995 South of Sahara, regional                          14 139 Tanzania                                                     12 375 Asia, regional                                              8 983 Mozambique                                                8 769 South America, regional                             7 816 Vietnam                                                        3 459 Source: OECD CRS

FRANCE

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 3 295 || 2 671 || 2 036 || 1 597

|| || Trade Development (category 2) || 211 646 || 13 809 || 81 534 || 16 203

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 214 941 || 16 479 || 83 571 || 17 800

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 3 295 || 2 671 || 2 036 || 1 597

|| || Trade Related Infrastructure (category 3) || 412 657 || 1 142 527 || 576 485 || 591 916

|| || Building Productive Capacity (category 4) || 600 822 || 593 016 || 511 581 || 683 690

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 1 016 774 || 1 738 213 || 1 090 103 || 1 277 202

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  301 906 Kenya                                                           150 539 Unspecified                                                  144 959 Tunisia                                                        82 502 Egypt                                                            77 683 Vietnam                                                        67 332 Ghana                                                          44 000 Haiti                                                             39 189 Yemen                                                          38 039 Mayotte                                                        37 906 Source: OECD CRS

GERMANY

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 30 770 || 33 762 || 33 857 || 31 831

|| || Trade Development (category 2) || 207 240 || 646 247 || 666 561 || 464 794

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 238 010 || 680 008 || 700 418 || 496 625

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 30 770 || 33 762 || 33 857 || 31 831

|| || Trade Related Infrastructure (category 3) || 406 768 || 1 037 126 || 746 676 || 2 199 494

|| || Building Productive Capacity (category 4) || 775 445 || 965 506 || 1 108 401 || 1 113 210

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 1 212 984 || 2 036 394 || 1 888 934 || 3 344 536

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  766 908 China                                                           311 971 Egypt                                                            283 676 India                                                            134 514 Vietnam                                                        127 505 Brazil                                                           106 201 Africa, regional                                           105 992 Serbia                                                           101 577 Georgia                                                        100 273 Albania                                                        91 239 Source: OECD CRS

GREECE

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 31 || 1 353 || 509 ||

|| || Trade Development (category 2) || 5 944 || 2 594 || 4 148 || 729

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 5 974 || 3 947 || 4 657 || 729

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 31 || 1 353 || 509 ||

|| || Trade Related Infrastructure (category 3) || 1 544 || 4 359 || 7 237 || 13 717

|| || Building Productive Capacity (category 4) || 9 293 || 4 178 || 5 283 || 904

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 10 868 || 9 891 || 13 030 || 14 621

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Serbia                                                           8 188 Albania                                                        5 319 Egypt                                                            400 West Bank & Gaza Strip                             320 Sri Lanka                                                     152 The former Yugoslav Republic of Macedonia    100 Syria                                                             78 Europe, regional                                         37 Montenegro                                                 18 Armenia                                                       9 Source: OECD CRS

HUNGARY

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Development (category 2) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Trade-Related Assistance || n/a || n/a || n/a || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Related Infrastructure (category 3) || n/a || n/a || n/a || n/a

|| || Building Productive Capacity (category 4) || n/a || n/a || n/a || n/a

|| || Trade Related Adjustment (category 5) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Aid for Trade || n/a || n/a || n/a || n/a

n/a: data not
provided

IRELAND

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 16 || 2 500 || 295 ||

|| || Trade Development (category 2) || 8 150 || 13 325 || 0 || 14 414

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 8 166 || 15 825 || 295 || 14 414

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 16 || 2 500 || 295 ||

|| || Trade Related Infrastructure (category 3) || 1 493 || 2 088 || 664 || 1 087

|| || Building Productive Capacity (category 4) || 28 588 || 47 742 || 43 310 || 47 757

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 30 097 || 52 330 || 44 269 || 48 844

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Malawi                                                        7 887 Unspecified                                                  6 690 Tanzania                                                     6 423 Mozambique                                                3 676 Uganda                                                        2 965 Kenya                                                           2 669 Ethiopia                                                       2 542 Vietnam                                                        1 787 Congo, Dem. Rep.                                       1 505 Afghanistan                                                 1 241 Source: OECD CRS

ITALY

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 13 || 577 || 84 || 13

|| || Trade Development (category 2) || 15 055 || 28 905 || 32 452 || 31 593

|| || Other Trade Related Needs (category 6) || 0 || 0 || 5 200 || 0

|| || Total Trade-Related Assistance || 15 067 || 29 482 || 37 736 || 31 606

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 13 || 577 || 84 || 13

|| || Trade Related Infrastructure (category 3) || 58 366 || 37 070 || 34 168 || 57 502

|| || Building Productive Capacity (category 4) || 52 701 || 148 546 || 162 624 || 73 245

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 5 200 || 0

|| || Total Aid for Trade || 111 079 || 186 194 || 202 076 || 130 759

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Malawi                                                        31 109 Serbia                                                           30 447 Bolivia                                                         17 321 Lebanon                                                       14 679 West Bank & Gaza Strip                             2 753 Brazil                                                           2 512 Albania                                                        2 264 Bosnia-Herzegovina                                    1 955 Egypt                                                            1 878 Ethiopia                                                       1 583 Source: OECD CRS

LATVIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 257 || 38 || n/a

|| || Trade Development (category 2) || n/a || 0 || 0 || n/a

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || n/a

|| || Total Trade-Related Assistance || 77 || 257 || 38 || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 257 || 38 || n/a

|| || Trade Related Infrastructure (category 3) || n/a || 0 || 0 || n/a

|| || Building Productive Capacity (category 4) || n/a || 0 || 0 || n/a

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || n/a

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || n/a

|| || Total Aid for Trade || 77 || 257 || 38 || n/a

n/a: data not
provided

LITHUANIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 273 || 232 || 74 || 66

|| || Trade Development (category 2) || 0 || 60 || 144 || 13

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 273 || 292 || 218 || 79

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 273 || 232 || 74 || 66

|| || Trade Related Infrastructure (category 3) || 4 || 426 || 87 || 82

|| || Building Productive Capacity (category 4) || 183 || 114 || 144 || 13

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 460 || 772 || 305 || 161

n/a: data not
provided

LUXEMBOURG

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 128 || 300 || 0 || 1 795

|| || Trade Development (category 2) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 128 || 300 || 0 || 1 795

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 128 || 300 || 0 || 1 795

|| || Trade Related Infrastructure (category 3) || 6 344 || 3 456 || 590 || 1 785

|| || Building Productive Capacity (category 4) || 20 717 || 24 292 || 21 215 || 22 744

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 27 189 || 28 048 || 21 805 || 26 323

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  7 606 Africa, regional                                           3 109 Vietnam                                                        2 533 Burkina Faso                                              1 844 Montenegro                                                 1 675 North & Central America, regional            1 174 Rwanda                                                        1 048 Mali                                                             873 West Bank & Gaza Strip                             600 Laos                                                              600 Source: OECD CRS

MALTA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Development (category 2) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Trade-Related Assistance || n/a || n/a || n/a || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Related Infrastructure (category 3) || n/a || n/a || n/a || n/a

|| || Building Productive Capacity (category 4) || n/a || n/a || n/a || n/a

|| || Trade Related Adjustment (category 5) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Aid for Trade || n/a || n/a || n/a || n/a

n/a: data not
provided

NETHERLANDS

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 35 779 || 62 356 || 40 348 || 159 345

|| || Trade Development (category 2) || 90 305 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 33 100 || 0

|| || Total Trade-Related Assistance || 126 084 || 62 356 || 73 448 || 159 345

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 35 779 || 62 356 || 40 348 || 159 345

|| || Trade Related Infrastructure (category 3) || 69 461 || 237 787 || 204 559 || 93 638

|| || Building Productive Capacity (category 4) || 405 096 || 165 495 || 237 193 || 171 397

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 33 100 || 0

|| || Total Aid for Trade || 510 337 || 465 638 || 515 200 || 424 380

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  344 181 South of Sahara, regional                          14 879 West Bank & Gaza Strip                             10 891 Africa, regional                                           9 930 Bolivia                                                         8 805 Sudan                                                          7 507 Asia, regional                                              5 182 Pakistan                                                       4 307 Yemen                                                          3 855 Colombia                                                     2 901 Source: OECD CRS

POLAND

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 8 || n/a || n/a

|| || Trade Development (category 2) || n/a || 0 || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || 0 || n/a || n/a

|| || Total Trade-Related Assistance || n/a || 8 || n/a || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 8 || n/a || n/a

|| || Trade Related Infrastructure (category 3) || n/a || 0 || n/a || n/a

|| || Building Productive Capacity (category 4) || n/a || 0 || n/a || n/a

|| || Trade Related Adjustment (category 5) || n/a || 0 || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || 0 || n/a || n/a

|| || Total Aid for Trade || n/a || 8 || n/a || n/a

n/a: data not
provided

PORTUGAL

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 150 || 33 || 91 || 1

|| || Trade Development (category 2) || 0 || 1 483 || 3 910 || 1 466

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 150 || 1 516 || 4 001 || 1 467

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 150 || 33 || 91 || 1

|| || Trade Related Infrastructure (category 3) || 44 239 || 9 845 || 61 515 || 38 741

|| || Building Productive Capacity (category 4) || 2 715 || 2 957 || 4 349 || 2 075

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 47 104 || 12 835 || 65 955 || 40 818

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Cape Verde                                                   37 608 Timor-Leste                                                  636 Unspecified                                                  452 Mozambique                                                447 South of Sahara, regional                          437 Angola                                                         436 Guinea-Bissau                                            350 Sao Tome & Principe                                  325 Guatemala                                                   81 Brazil                                                           25 Source: OECD CRS

ROMANIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 0 || n/a || n/a

|| || Trade Development (category 2) || n/a || 93 || n/a ||

|| || Other Trade Related Needs (category 6) || n/a || 0 || n/a || n/a

|| || Total Trade-Related Assistance || 100 || 93 || n/a || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 0 || n/a || n/a

|| || Trade Related Infrastructure (category 3) || n/a || 0 || n/a || n/a

|| || Building Productive Capacity (category 4) || n/a || 93 || n/a || 800

|| || Trade Related Adjustment (category 5) || n/a || 0 || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || 0 || n/a || n/a

|| || Total Aid for Trade || 100 || 93 || n/a || 800

n/a: data not
provided

SLOVAKIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Development (category 2) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Trade-Related Assistance || n/a || n/a || n/a || n/a

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || n/a || n/a || n/a

|| || Trade Related Infrastructure (category 3) || n/a || n/a || n/a || n/a

|| || Building Productive Capacity (category 4) || n/a || n/a || n/a || n/a

|| || Trade Related Adjustment (category 5) || n/a || n/a || n/a || n/a

|| || Other Trade Related Needs (category 6) || n/a || n/a || n/a || n/a

|| || Total Aid for Trade || n/a || n/a || n/a || n/a

n/a: data not
provided

SLOVENIA

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 0 || 634 || 350 || 939

|| || Trade Development (category 2) || 1 200 || 900 || 0 || 269

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Trade-Related Assistance || 1 200 || 1 534 || 350 || 1 208

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || n/a || 634 || 350 || 939

|| || Trade Related Infrastructure (category 3) || n/a || 0 || 38 || 317

|| || Building Productive Capacity (category 4) || n/a || 900 || 0 || 269

|| || Trade Related Adjustment (category 5) || n/a || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || n/a || 0 || 0 || 0

|| || Total Aid for Trade || 1 200 || 1 534 || 388 || 1 525

n/a: data not
provided

SPAIN

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 5 475 || 4 535 || 2 692 || 4 766

|| || Trade Development (category 2) || 67 955 || 128 800 || 214 101 || 202 612

|| || Other Trade Related Needs (category 6) || 0 || 78 948 || 98 198 || 0

|| || Total Trade-Related Assistance || 73 430 || 212 283 || 314 992 || 207 378

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 5 475 || 4 535 || 2 692 || 4 766

|| || Trade Related Infrastructure (category 3) || 244 132 || 301 918 || 329 370 || 326 893

|| || Building Productive Capacity (category 4) || 224 538 || 315 529 || 327 509 || 670 110

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 78 948 || 98 198 || 0

|| || Total Aid for Trade || 474 145 || 700 930 || 757 769 || 1 001 769

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  304 434 Tunisia                                                        106 259 Europe, regional                                         103 099 South of Sahara, regional                          62 765 Haiti                                                             47 140 Bosnia-Herzegovina                                    32 261 Nicaragua                                                    30 931 America, regional                                        29 195 Cambodia                                                    26 740 Dominican Republic                                  22 115 Source: OECD CRS

· 
Amount reported in category 6 for 2008 taken
from the 2010 AfT report and for 2009 in Monterrey Questionnaire.

SWEDEN

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 27 640 || 25 359 || 36 256 || 36 487

|| || Trade Development (category 2) || 1 778 || 10 261 || 38 750 || 94 572

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 29 418 || 35 621 || 75 006 || 131 058

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 27 640 || 25 359 || 36 256 || 36 487

|| || Trade Related Infrastructure (category 3) || 57 641 || 78 993 || 32 032 || 93 087

|| || Building Productive Capacity (category 4) || 181 315 || 121 107 || 179 013 || 153 320

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 266 597 || 225 459 || 247 302 || 282 894

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Unspecified                                                  59 286 Mozambique                                                36 874 Tanzania                                                     28 114 Africa, regional                                           23 434 Afghanistan                                                 19 624 Uganda                                                        12 918 Ukraine                                                        9 911 Burkina Faso                                              9 792 Bolivia                                                         8 389 Bosnia-Herzegovina                                    726 Source: OECD CRS

UNITED KINGDOM

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 21 449 || 62 741 || 152 932 || 131 498

|| || Trade Development (category 2) || 10 805 || 29 647 || 227 711 || 325 102

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Trade-Related Assistance || 32 254 || 92 388 || 380 644 || 456 600

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 21 449 || 62 741 || 152 932 || 131 498

|| || Trade Related Infrastructure (category 3) || 90 252 || 226 262 || 347 231 || 251 655

|| || Building Productive Capacity (category 4) || 268 643 || 950 580 || 828 103 || 333 125

|| || Trade Related Adjustment (category 5) || 0 || 0 || 0 || 0

|| || Other Trade Related Needs (category 6) || 0 || 0 || 0 || 0

|| || Total Aid for Trade || 380 344 || 1 239 583 || 1 328 266 || 716 278

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| India                                                            131 457 South of Sahara, regional                          104 364 Unspecified                                                  60 193 Africa, regional                                           44 689 China                                                           37 860 South Africa                                                35 693 Afghanistan                                                 29 877 Brazil                                                           28 945 Nigeria                                                         27 637 Indonesia                                                     22 728 Source: OECD CRS

EU

AfT Commitments
(in thousand EUR)

|| || 2007 || 2008 || 2009 || 2010

|| Trade-Related Assistance (TRA) || || || ||

|| || Trade Policy and Regulations (category 1) || 212 452 || 238 095 || 315 655 || 145 111

|| || Trade Development (category 2) || 569 858 || 317 330 || 262 995 || 451 904

|| || Other Trade Related Needs (category 6) || 249 830 || 451 526 || 332 496 || 299 605

|| || Total Trade-Related Assistance || 1 032 140 || 1 006 951 || 911 146 || 896 620

|| Wider Aid for Trade Agenda (AfT) || || || ||

|| || Trade Policy and Regulations (category 1) || 212 452 || 238 095 || 315 655 || 145 111

|| || Trade Related Infrastructure (category 3) || 1 111 541 || 1 661 064 || 1 103 032 || 950 198

|| || Building Productive Capacity (category 4) || 862 039 || 701 599 || 1 535 414 || 1 108 553

|| || Trade Related Adjustment (category 5) || 0 || 4 037 || 11 312 || 16 580

|| || Other Trade Related Needs (category 6) || 249 830 || 451 526 || 332 496 || 299 605

|| || Total Aid for Trade || 2 435 862 || 3 056 322 || 3 297 909 || 2 520 047

Aid for Trade flows for OECD CRS Reporters:
top recipient countries and regions 
(in thousand EUR, bilateral
flows in red and regional flows in black)

|| Turkey                                                          284 861 Unspecified                                                  205 679 Morocco                                                       125 000 South of Sahara, regional                          108 777 Malawi                                                        82 000 Burkina Faso                                              71 200 Kenya                                                           66 637 Moldova                                                       59 000 Serbia                                                           55 080 Sierra Leone                                                51 000 Source: OECD CRS

Appendix 3 –
Aid for Trade by Region, Country and Category

WEST AFRICA

|| 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 3 || 2 || 2 || 4 || 4 || 14 || 7 || 2 || 45 || 14

3.TRI || 119 || 166 || 388 || 259 || 557 || 230 || 274 || 668 || 271 || 344

4.BPC || 269 || 245 || 251 || 241 || 287 || 280 || 332 || 283 || 356 || 288

5.TRAdj || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 1 || 0 || 0

6.Other TR Needs || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 391 || 413 || 641 || 505 || 848 || 524 || 613 || 954 || 672 || 647

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CENTRAL
AFRICA

|| 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.0 || 0.4 || 0.0 || 0.0 || 0.0 || 0.2 || 5.6 || 2.3 || 29.1 || 2.0

3.TRI || 164.2 || 155.5 || 83.2 || 56.3 || 183.4 || 304.9 || 111.0 || 198.0 || 233.2 || 41.9

4.BPC || 46.9 || 92.6 || 75.6 || 49.6 || 63.2 || 83.1 || 90.5 || 58.4 || 49.6 || 70.5

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

TOTAL || 211.1 || 248.6 || 158.8 || 105.8 || 246.6 || 388.3 || 207.1 || 258.6 || 311.9 || 114.4

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

EAC

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.9 || 0.0 || 0.6 || 0.6 || 9.5 || 3.1 || 2.4 || 7.5 || 27.3 || 19.0

3.TRI || 182.0 || 99.8 || 106.5 || 138.2 || 331.8 || 183.1 || 182.4 || 122.9 || 565.6 || 322.8

4.BPC || 124.3 || 123.8 || 108.9 || 126.4 || 115.9 || 159.1 || 98.6 || 230.1 || 225.0 || 272.4

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.4 || 0.0 || 0.0

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

TOTAL || 307.2 || 223.7 || 216.0 || 265.2 || 457.1 || 345.3 || 283.4 || 360.9 || 817.9 || 614.2

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

EAST
AFRICA EXCL. EAC

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.2 || 0.5 || 0.5 || 0.6 || 2.3 || 8.8 || 5.4 || 1.0 || 2.3 || 13.3

3.TRI || 113.6 || 183.4 || 280.3 || 206.3 || 388.7 || 316.0 || 200.6 || 510.4 || 135.8 || 171.2

4.BPC || 112.4 || 116.7 || 186.4 || 113.3 || 170.3 || 188.0 || 151.7 || 167.3 || 327.7 || 194.3

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 2.2 || 0.3 || 0.0

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

TOTAL || 226.3 || 300.6 || 467.2 || 320.2 || 561.3 || 512.9 || 357.7 || 680.9 || 466.1 || 378.9

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

SOUTHERN
AFRICA

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.4 || 0.1 || 0.2 || 3.9 || 1.8 || 4.3 || 1.9 || 18.3 || 3.0 || 1.7

3.TRI || 80.4 || 127.1 || 148.7 || 41.7 || 244.4 || 86.7 || 121.2 || 228.8 || 82.8 || 253.8

4.BPC || 193.1 || 143.6 || 84.0 || 69.3 || 239.7 || 157.2 || 158.8 || 158.9 || 115.4 || 187.9

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

TOTAL || 273.9 || 270.8 || 232.8 || 114.9 || 485.9 || 248.2 || 282.0 || 405.9 || 201.2 || 443.3

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CARIBBEAN

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.3 || 0.0 || 0.0 || 0.1 || 1.6 || 5.0 || 0.8 || 0.1 || 0.1 || 0.1

3.TRI || 69.6 || 21.6 || 53.5 || 62.9 || 38.9 || 17.6 || 26.9 || 26.7 || 193.2 || 53.5

4.BPC || 110.0 || 82.0 || 26.9 || 97.2 || 72.9 || 73.9 || 94.8 || 94.9 || 67.3 || 160.0

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.8 || 10.9 || 16.6

6.Other TR Needs || || || || || || || || || ||

TOTAL || 179.8 || 103.6 || 80.4 || 160.1 || 113.3 || 96.5 || 122.4 || 122.4 || 271.6 || 230.1

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

PACIFIC

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 3.2 || 0.0 || 0.1 || 0.3

3.TRI || 14.6 || 9.0 || 10.1 || 10.2 || 11.4 || 0.1 || 2.3 || 0.7 || 23.4 || 2.3

4.BPC || 5.0 || 55.6 || 11.7 || 8.6 || 13.5 || 8.0 || 7.2 || 10.4 || 8.8 || 10.4

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

6.Other TR Needs || || || || || || || || || ||

TOTAL || 19.6 || 64.6 || 21.8 || 18.8 || 24.9 || 8.1 || 12.7 || 11.1 || 32.2 || 13.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

NEIGHBOURHOOD

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 1.9 || 77.3 || 63.4 || 1.1 || 22.2 || 16.8 || 24.0 || 78.7 || 3.3 || 1.2

3.TRI || 94.7 || 329.0 || 334.3 || 342.0 || 393.4 || 453.9 || 692.5 || 1317 || 632.9 || 862.2

4.BPC || 200.5 || 297.2 || 223.9 || 130.8 || 244.5 || 354.3 || 315.2 || 435.7 || 410.7 || 706.9

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.2 || 0.0

TOTAL || 297.2 || 703.4 || 621.6 || 473.8 || 660.2 || 825.1 || 1031.7 || 1830.9 || 1047.1 || 1570.2

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ENLARGEMENT

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.2 || 0.1 || 17.0 || 8.9 || 8.5 || 45.7 || 3.8 || 66.4 || 30.2 || 4.6

3.TRI || 130.8 || 301.7 || 313.8 || 167.3 || 169.1 || 460.1 || 218.7 || 484.8 || 229.1 || 583.0

4.BPC || 124.1 || 319.7 || 91.3 || 125.2 || 202.5 || 131.8 || 209.1 || 493.7 || 258.8 || 387.8

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

6.Other TR Needs || || || || || || || || || ||

TOTAL || 255.0 || 621.6 || 422.2 || 301.3 || 380.1 || 637.6 || 431.6 || 1044.9 || 518.1 || 975.4

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

LATIN
AMERICA

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 14.0 || 9.2 || 5.1 || 39.5 || 16.0 || 18.7 || 6.0 || 17.0 || 60.2 || 2.2

3.TRI || 181.2 || 154.0 || 89.1 || 95.1 || 7.3 || 15.5 || 35.0 || 82.8 || 168.0 || 201.5

4.BPC || 236.7 || 292.9 || 206.5 || 209.7 || 211.6 || 174.8 || 317.9 || 260.2 || 347.3 || 376.3

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || || || || || || || || || ||

TOTAL || 432.0 || 456.1 || 300.7 || 344.3 || 234.9 || 209.0 || 358.9 || 360.0 || 575.5 || 580.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

SOUTH
ASIA

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.6 || 0.8 || 28.5 || 5.0 || 4.4 || 17.8 || 1.2 || 30.6 || 2.0 || 13.7

3.TRI || 309.6 || 167.9 || 177.9 || 179.3 || 342.2 || 196.3 || 147.2 || 354.7 || 244.8 || 225.2

4.BPC || 163.3 || 167.1 || 266.9 || 97.7 || 192.0 || 280.8 || 304.7 || 402.0 || 377.6 || 148.0

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || || || || || || || || || ||

TOTAL || 473.6 || 335.8 || 473.3 || 282.0 || 538.6 || 495.0 || 453.2 || 787.3 || 624.3 || 387.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

MIDDLE
EAST

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.2 || 7.0 || 0.0 || 0.0 || 0.0 || 6.5 || 0.0 || 0.3 || 0.0 || 1.6

3.TRI || 12.8 || 0.1 || 36.9 || 44.5 || 79.1 || 6.8 || 22.5 || 29.3 || 10.9 || 38.4

4.BPC || 0.3 || 4.3 || 5.5 || 55.9 || 22.1 || 1.2 || 1.2 || 5.4 || 136.5 || 25.0

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || || || || || || || || || ||

TOTAL || 13.3 || 11.4 || 42.5 || 100.4 || 101.2 || 14.4 || 23.7 || 35.0 || 147.4 || 64.9

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CENTRAL
ASIA

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.0 || 0.0 || 0.0 || 1.2 || 0.1 || 0.0 || 0.6 || 0.1 || 0.0 || 0.1

3.TRI || 31.1 || 0.0 || 12.6 || 3.0 || 39.7 || 0.1 || 66.7 || 47.8 || 9.6 || 5.1

4.BPC || 17.1 || 6.0 || 17.1 || 12.0 || 14.5 || 16.5 || 42.9 || 27.0 || 47.6 || 26.4

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

TOTAL || 48.2 || 6.1 || 29.6 || 16.2 || 54.2 || 16.6 || 110.2 || 74.9 || 57.3 || 31.6

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ASEAN

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 0.9 || 0.1 || 12.2 || 8.8 || 4.1 || 7.9 || 26.1 || 20.8 || 0.5 || 20.3

3.TRI || 240.6 || 168.5 || 46.4 || 133.1 || 161.4 || 239.1 || 175.5 || 74.8 || 178.6 || 208.5

4.BPC || 182.7 || 159.3 || 196.9 || 210.7 || 233.9 || 189.6 || 290.7 || 187.4 || 152.3 || 229.9

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || || || || || || || || || ||

TOTAL || 424.1 || 328.0 || 255.4 || 352.7 || 399.5 || 436.6 || 492.4 || 283.1 || 331.3 || 458.7

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ASIA
(other)

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 1.9 || 22.6 || 0.3 || 4.8 || 21.7 || 13.4 || 0.6 || 63.7 || 47.9 || 29.9

3.TRI || 256.3 || 103.2 || 232.5 || 180.2 || 179.3 || 340.4 || 93.8 || 298.0 || 263.9 || 425.4

4.BPC || 106.2 || 62.1 || 129.9 || 128.5 || 104.7 || 63.2 || 87.1 || 276.5 || 333.9 || 165.2

5.TRAdj || || || || || || || || || ||

6.Other TR Needs || || || || || || || || || ||

TOTAL || 364.3 || 187.9 || 362.7 || 313.6 || 305.8 || 417.0 || 181.5 || 638.1 || 645.7 || 620.5

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

REGIONAL

(mn €) || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

1.TPR || 43.5 || 73.8 || 106.3 || 67.2 || 132.5 || 321.9 || 254.1 || 149.7 || 358.1 || 402.6

3.TRI || 301.2 || 282.7 || 236.3 || 246.3 || 272.2 || 585.4 || 381.5 || 405.1 || 515.2 || 1066.3

4.BPC || 892.9 || 579.1 || 602.8 || 782.4 || 654.4 || 1451.1 || 1269.2 || 1398.5 || 2366.0 || 1822.9

5.TRAdj || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0 || 0.0

6.Other TR Needs || || || || || || || || || ||

TOTAL || 1237.7 || 935.5 || 945.4 || 1095.9 || 1059.1 || 2358.5 || 1904.8 || 1953.3 || 3239.3 || 3291.8

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

Appendix 4
–Trade Related Assistance by Region, Country and Category

WEST
AFRICA

(mn €) || 2008 || 2009 || 2010

1.TPR || 2.1 || 44.9 || 14.4

2.TD || 49.8 || 122.0 || 92.6

6.Other TR Needs || 0.0 || 0.0 || 1.0

TOTAL || 51.9 || 166.9 || 107.9

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CENTRAL
AFRICA

(mn €) || 2008 || 2009 || 2010

1.TPR || 2.3 || 29.1 || 2.0

2.TD || 16.8 || 13.6 || 25.6

6.Other TR Needs || || ||

TOTAL || 19.1 || 42.7 || 27.6

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

EAC

(mn €) || 2008 || 2009 || 2010

1.TPR || 7.5 || 27.3 || 19.0

2.TD || 94.2 || 77.3 || 98.0

6.Other TR Needs || || ||

TOTAL || 101.8 || 104.6 || 117.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

EAST
AFRICA EXCL. EAC

(mn €) || 2008 || 2009 || 2010

1.TPR || 1.0 || 2.3 || 13.3

2.TD || 41.9 || 66.4 || 52.1

6.Other TR Needs || || ||

TOTAL || 42.9 || 68.7 || 65.4

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

SOUTHERN AFRICA

(mn €) || 2008 || 2009 || 2010

1.TPR || 18.3 || 3.0 || 1.7

2.TD || 23.5 || 40.9 || 65.4

6.Other TR Needs || || ||

TOTAL || 41.7 || 43.9 || 67.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CARIBBEAN

(mn €) || 2008 || 2009 || 2010

1.TPR || 0.1 || 0.1 || 0.1

2.TD || 74.3 || 49.3 || 113.4

6.Other TR Needs || || ||

TOTAL || 74.4 || 49.4 || 113.5

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

PACIFIC

(mn €) || 2008 || 2009 || 2010

1.TPR || 0.0 || 0.1 || 0.3

2.TD || 8.1 || 6.1 || 1.0

6.Other TR Needs || || ||

TOTAL || 8.1 || 6.2 || 1.3

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

NEIGHBOURHOOD

(mn €) || 2008 || 2009 || 2010

1.TPR || 78.7 || 3.3 || 1.2

2.TD || 203.6 || 137.9 || 204.6

6.Other TR Needs || || ||

TOTAL || 282.3 || 141.2 || 205.8

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ENLARGEMENT

(mn €) || 2008 || 2009 || 2010

1.TPR || 66.4 || 30.2 || 4.6

2.TD || 95.5 || 46.2 || 72.7

6.Other TR Needs || || ||

TOTAL || 161.9 || 76.4 || 77.3

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

LATIN
AMERICA

(mn €) || 2008 || 2009 || 2010

1.TPR || 17.0 || 60.2 || 2.2

2.TD || 124.5 || 172.6 || 199.4

6.Other TR Needs || || ||

TOTAL || 141.6 || 232.9 || 201.7

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

SOUTH
ASIA

(mn €) || 2008 || 2009 || 2010

1.TPR || 30.6 || 2.0 || 13.7

2.TD || 124.8 || 200.1 || 65.3

6.Other TR Needs || || ||

TOTAL || 155.4 || 202.0 || 79.1

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

MIDDLE
EAST

(mn €) || 2008 || 2009 || 2010

1.TPR || 0.3 || 0.0 || 1.6

2.TD || 1.4 || 18.0 || 20.5

6.Other TR Needs || || ||

TOTAL || 1.7 || 18.0 || 22.1

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

CENTRAL
ASIA

(mn €) || 2008 || 2009 || 2010

1.TPR || 0.1 || 0.0 || 0.1

2.TD || 9.0 || 36.2 || 18.0

6.Other TR Needs || 0.0 || 0.0 || 0.0

TOTAL || 9.0 || 36.2 || 18.1

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ASEAN

(mn €) || 2008 || 2009 || 2010

1.TPR || 20.8 || 0.5 || 20.3

2.TD || 58.5 || 30.2 || 99.7

6.Other TR Needs || 0.0 || 0.0 || 0.0

TOTAL || 79.4 || 30.7 || 120.0

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

ASIA
(other)

(mn €) || 2008 || 2009 || 2010

1.TPR || 63.7 || 47.9 || 29.9

2.TD || 134.5 || 86.6 || 69.8

6.Other TR Needs || 0.0 || 0.0 || 0.0

TOTAL || 198.2 || 134.5 || 99.7

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

REGIONAL

(mn €) || 2008 || 2009 || 2010

1.TPR || 149.7 || 358.1 || 402.6

2.TD || 314.4 || 782.6 || 588.8

6.Other TR Needs || 0.0 || 0.0 || 0.0

TOTAL || 464.1 || 1140.7 || 991.4

Source: OECD CRS

Source: OECD CRS

Source: OECD CRS

Appendix 5 – Category
6 in EU AfT 2010

Country || Region || Commitment (in Euro million) || || DAC Code name

ENPI South || Community Budget contribution to the NIF - ENPI South Region || 158,000 || Neighbourhood South  || Multisector Aid

Lebanon || Support Programme for Infrastructure Sector Strategies and Alternative Financing (SISSAF) || 9,000 || Neighbourhood South  || Multisector Aid

West Bank and Gaza Strip || PEGASE INFRASTRUCTURE FACILITY 2010 || 15,000 || Neighbourhood South  || Multisector Aid

Latina America || Latin America Investment Facility || 74,850 || Latina America || Multisector Aid

Montenegro || IPA 2010 Cross-border Cooperation Programme for Serbia - Montenegro (ME part) || 0,600 || Enlargement || Multisector Aid

IPA region || 2010 Multi-Beneficiary Programme under the IPA Transition Assistance and Institution Building Component - part implemented by DG TAXUD || 1,300 || Enlargement || Multisector Aid

IPA region || 2010 Multi-Beneficiary Programme under the IPA Transition Assistance and Institution Building Component - part implemented by DG ENTR || 0,300 || Enlargement || Multisector Aid

IPA region || Multi-Beneficiary Programme 2010 under the IPA Transition Assistance and Institution Building Component - part implemented by DG ESTAT || 1,000 || Enlargement || Multisector Aid

Gabon || Appui à la gouvernance sectorielle || 16,000 || Central Africa || Multisector Aid

Southern Africa region || 10th EDF Technical Cooperation Facility || 5,000 || Southern Africa, regional || Multisector Aid

Croatia || Cross-border programme Croatia - Montenegro under the IPA component II for the year 2010 (Croatia part) || 0,400 || Enlargement || Multisector Aid

Montenegro || Cross-border programme Croatia - Montenegro for the year 2010 (Montenegro part) || 0,500 || Enlargement || Multisector Aid

Serbia || Cross-border programme Croatia - Serbia under the IPA Component II for the year 2010; Serbia part || 1,000 || Enlargement || Multisector Aid

Bosnia and Herzegovina || Cross-border programme Bosnia and Herzegovina - Serbia for the year 2010 (BA - part) || 0,700 || Enlargement || Multisector Aid

Serbia || Cross-border programme Bosnia and Herzegovina - Serbia for the year 2010 (RS- part) || 1,000 || Enlargement || Multisector Aid

Serbia || IPA 2010 Cross-border Cooperation Programme for Serbia - Montenegro (RS part) || 0,600  || Enlargement || Multisector Aid

Montenegro || IPA 2010 Cross-border Cooperation Programme for Serbia - Montenegro (ME part) || 0,600 || Enlargement || Multisector Aid

Bosnia-Herzegovina || Cross-border programme Croatia - Bosnia and Herzegovina under the IPA Component II for the year 2010; BiH part || 1,000 || Enlargement || Multisector Aid

Croatia || Cross-border programme Croatia - Bosnia and Herzegovina under the IPA component II for the year 2010; Croatia part || 1,000 || Enlargement || Multisector Aid

The Former Yugoslav Republic of Macedonia || Cross-border co-operation programme the Former Yugoslav Republic of Macedonia  and Albania for the year 2010 (The Former Yugoslav Republic of Macedonia   part) || 1,000 || Enlargement || Multisector Aid

Albania || Cross-border co-operation programme THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA and Albania for the year 2010 (AL part) || 0,850 || Enlargement || Multisector Aid

Croatia || Cross-border programme Croatia - Serbia under the IPA component II for the year 2010; Croatia part || 0,800 || Enlargement || Multisector Aid

Albania || Cross-border co-operation Albania and Montenegro for the year 2010 (AL part) || 0,850 || Enlargement || Multisector Aid

Montenegro || Cross-border co-operation Albania and Montenegro for the year 2010 (ME part) || 0,600 || Enlargement || Multisector Aid

Bosnia- Herzegovina || Cross-border programme Bosnia and Herzegovina - Montenegro for the year 2010 (BA - part) || 0,500 || Enlargement || Multisector Aid

Montenegro || Cross-border programme Bosnia and Herzegovina - Montenegro for the year 2010 (ME - part) || 0,600 || Enlargement || Multisector Aid

Albania || Cross-border co-operation programme Albania and Kosovo[1] for the year 2010 (AL part). || 0,600 || Enlargement || Multisector Aid

Kosovo || Cross-border co-operation programme Albania and Kosovo for the year 2010 (XK part). || 0,600 || Enlargement || Multisector Aid

The former Yugoslav Republic of Macedonia || Cross-border co-operation The Former Yugoslav Republic of Macedonia and Kosovo for the year 2010 (The former Yugoslav Republic of Macedonia part). || 0,600 || Enlargement || Multisector Aid

Kosovo || Cross-border co-operation The Former Yugoslav republic of Macedonia and Kosovo for the year 2010 (XK part). || 0,600    || Enlargement || Multisector Aid

Turkey || Participation of Turkey in the ENPI Black Sea Basin programme CBC component for 2010 || 1,000 || Enlargement || Multisector Aid

Albania || Cross-border programme Albania - Greece for the years 2010 and 2011 (2010 part) || 1,659  || Enlargement || Multisector Aid

The Former Yugoslav Republic of Macedonia || Cross-border programmeThe Former Yugoslav Republic of Macedonia  - Greece for the years 2010 and 2011 (2010 part) || 1,495 || Enlargement || Multisector Aid

Total: 299,604

Appendix
6 – List of Least Developing Countries (LDC) and ACP Countries

LDC

Afghanistan || Comoros || Kiribati || Myanmar || Sudan

Angola || Congo, Dem. Rep. || Laos || Nepal || Tanzania

Bangladesh || Djibouti || Lesotho || Niger || Timor-Leste

Benin || Equatorial Guinea || Liberia || Rwanda || Togo

Bhutan || Eritrea || Madagascar || Samoa || Tuvalu

Burkina Faso || Ethiopia || Malawi || Sao Tome & Principe || Uganda

Burundi || Gambia || Maldives || Senegal || Vanuatu

Cambodia || Guinea || Mali || Sierra Leone || Yemen

Central African Rep. || Guinea-Bissau || Mauritania || Solomon Islands || Zambia

Chad || Haiti || Mozambique || Somalia ||

ACP

Angola || Cote D'Ivoire || Jamaica || Nigeria || Sudan

Antigua & Barbuda || Djibouti || Kenya || Niue || Suriname

Barbados || Dominica || Kiribati || Palau || Swaziland

Belize || Dominican Republic || Lesotho || Papua New Guinea || Tanzania

Benin || Equatorial Guinea || Liberia || Rwanda || Timor-Leste

Botswana || Eritrea || Madagascar || Samoa || Togo

Burkina Faso || Ethiopia || Malawi || Sao Tome & Principe || Tonga

Burundi || Fiji || Mali || Senegal || Trinidad & Tobago

Cameroon || Gabon || Marshall Islands || Seychelles || Tuvalu

Cape Verde || Gambia || Mauritania || Sierra Leone || Uganda

Central African Rep. || Ghana || Mauritius || Solomon Islands || Vanuatu

Chad || Grenada || Micronesia, Fed. Sts. || Somalia || Zambia

Comoros || Guinea || Mozambique || South Africa || Zimbabwe

Congo, Dem. Rep. || Guinea-Bissau || Namibia || St.Kitts-Nevis ||

Congo, Rep. || Guyana || Nauru || St.Lucia ||

Cook Islands || Haiti || Niger || St.Vincent & Grenadines

[1]               under UNSCR 1244/1999