# EUR-Lex - 52011DC0637 - EN

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# 52011DC0637

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Increasing the impact of EU Development Policy: an Agenda for Change /* COM/2011/0637 final */**

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TABLE OF CONTENTS

1........... Reducing poverty in a rapidly changing world.................................................................. 3

2........... Human rights, democracy and
other key elements of good governance............................. 5

3........... Inclusive and sustainable growth
for human development.................................................. 7

3.1........ Social protection, health,
education and jobs................................................................... 7

3.2........ Business environment, regional
integration and world markets.......................................... 8

3.3........ Sustainable agriculture and
energy................................................................................... 8

4........... Differentiated development
partnerships.......................................................................... 9

5........... Coordinated EU action................................................................................................. 10

6........... Improved coherence among EU
policies........................................................................ 11

7........... Embracing the Agenda for Change................................................................................ 12

1.
Reducing poverty in a rapidly changing
world

At a critical juncture
- facing new global challenges, close to the 2015 target for achieving the Millennium Development Goals
(MDGs) and in the midst of preparations for the next Multiannual Financial
Framework (MFF) - the EU must choose the right mix of policies, tools and
resources to be effective and efficient in the fight against poverty in the context of sustainable development.
The Commission is proposing an Agenda for Change to strengthen Europe’s solidarity
with the world’s developing nations in this fight.

As the Lisbon Treaty states, supporting
developing countries’ efforts to eradicate poverty is the primary objective of development
policy and a priority for EU external action in support of EU's interests for a
stable and prosperous world. Development policy
also helps address other global challenges and contributes to the EU-2020
Strategy.

The EU has already done much to help
reduce poverty and in particular to support the achievement of the MDGs. Yet severe poverty persists in many parts of the world. A series of global
shocks has left many developing countries vulnerable. As the world’s
population continues to grow, more action is needed to tackle global challenges
like conflict prevention, security, environmental protection, climate change, and
to deliver global public goods such as food security, access to water and
sanitation, energy security and migration.

Meanwhile, people-led movements in North
Africa and the Middle East have highlighted that sound progress on the MDGs is
essential, but not sufficient. This leads to two conclusions: first, that the objectives
of development, democracy, human rights, good governance and security
are intertwined; second, that it is critical for societies to offer a
future to young people.

EU development policy must take into
account the increased differentiation between developing countries. Recently, several
partner countries have become donors in their own right, while others are
facing increasing fragility. The EU must now explore new ways of working
with them and promote a more inclusive international development agenda.

There is also scope for the EU to work more
closely with the private sector, foundations, civil society and local and
regional authorities as their role in development grows.

At EU level, the Lisbon Treaty has
firmly anchored development policy within EU external action. The creation
of the post of High Representative/Vice-President (HR/VP), assisted by the
European External Action Service (EEAS), offers new opportunities for more
effective development cooperation and more joined-up policy-making.

The EU is not simply the 28th
European donor. While the Commission implements 20 %
of the collective EU aid effort, it also acts as coordinator, convener and
policy-maker. The EU is an economic and trading partner, and its political
dialogue, security policy and many other policies - from trade, agriculture and
fisheries to environment, climate, energy and migration - have a strong impact
on developing countries. It must translate this multi-faceted role into different
policy mixes adapted to each partner country. To be fully effective,
the EU and its Member States must speak and act as one to achieve better
results and to improve EU's visibility.

Difficult economic and budgetary times make
it even more critical to ensure that aid is spent effectively,
delivers the best possible results and is used to leverage further financing
for development.

With this new context in mind, in 2010 the
Commission launched a consultation on EU development policy[1].
This confirmed the relevance of the existing policy framework, while agreeing
on the need to increase impact.

Changes on a number of fronts are called
for. In particular, the EU must seek to focus its offer to partner countries
where it can have the greatest impact and should concentrate its development
cooperation in support of:

–
human rights, democracy and other key
elements of good governance;

–
inclusive and sustainable growth for human
development.

To ensure best value
for money, this should be accompanied by:

–
differentiated development partnerships;

–
coordinated EU action;

–
improved coherence among EU policies.

The
Commission proposes an Agenda for Change that would lead to:

·
an increased share of EU country and regional
cooperation programmes dedicated to the policy priorities given in sections 2
and 3 below;

·
the concentration of EU activities in each
country on a maximum of three sectors;

·
an increased volume and share of EU aid to the
countries most in need and where the EU can have a real impact, including
fragile states;

·
enhanced importance of human rights, democracy
and good governance trends in determining the mix of instruments and aid
modalities at country level;

·
continued support for social inclusion and human
development through at least 20% of EU aid;

·
a greater focus on investing in drivers for
inclusive and sustainable economic growth, providing the backbone of efforts to
reduce poverty;

·
a higher share of EU aid through innovative
financial instruments, including under facilities for blending grants and
loans;

·
a 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;

·
tackling the challenges of security, fragility
and transition;

·
joint EU and Member States response strategies based
on partners' own development strategies, with a sectoral division of labour;

·
a common EU results reporting framework;

·
improved Policy Coherence for Development,
including through new thematic programmes that build synergies between global
interests and poverty eradication.

The proposed Agenda for Change does
not seek to re-write basic policy principles. There will be no weakening of
the EU’s overarching objective of poverty elimination in the context of
sustainable development, as set out in the European Consensus on
Development[2]. EU commitments on
financing for development, MDG achievement and aid effectiveness remain firm,
as do its ambitions as a political leader and key donor.

Development strategies led by the partner
country will continue to frame EU development cooperation in line with the
principles of ownership and partnership. The
EU is seeking greater reciprocal engagement with its partner countries,
including mutual accountability for results. Dialogue at country
level within a coordinated donor framework should determine exactly where
and how the EU intervenes. More effective collaboration within the multilateral
system will also be pursued.

2.
Human rights, democracy and other key elements of
good governance

Good governance, in its political, economic, social and
environmental terms, is vital for inclusive and sustainable development. EU support to
governance should feature more prominently in all partnerships, notably through incentives for results-oriented reform and a focus
on partners’ commitments to human rights, democracy
and the rule of law and to meeting their peoples’
demands and needs.

As long-term progress can only be
driven by internal forces, an approach centred on political
and policy dialogue with all stakeholders will be pursued. The mix and level of aid will depend on the country’s situation,
including its ability to conduct reforms.

Support for
governance may take the form of programmes or project-based interventions to
support actors and processes at local, national and sectoral level. EU
general budget support should be linked to the governance situation and
political dialogue with the partner country, in coordination with the
Member States[3].

Should a
country loosen its commitment to human rights and democracy, the EU should strengthen
its cooperation with non-state actors and local authorities and use forms
of aid that provide the poor with the support they need. At the same time, the
EU should maintain dialogue with governments and non-state actors. In some
cases, stricter conditionality will be warranted.

The focus on results and mutual
responsibility does not mean that the EU will neglect fragile situations
where impact is slower or more difficult to measure. The EU should strive to
help countries in situations of fragility to establish functioning and
accountable institutions that deliver basic services and support poverty
reduction. Decisions to provide budget support to such countries will be taken
on a case-by-case basis, weighing up the benefits, costs and risks.

EU action should centre on:

·
Democracy, human rights and the rule of law. The EU should continue to support democratisation, free and fair
elections, the functioning of institutions, media freedom and access to
internet, protection of minorities, the rule of law and judicial systems in
partner countries.

·
Gender equality and the empowerment of women as development actors and
peace-builders[4] will be mainstreamed in
all EU development policies and programmes through its 2010 Gender Action Plan.

·
Public-sector management for better service delivery. The EU should support national
programmes to improve policy formulation, public financial management, including
the setting up and reinforcement of audit, control and anti-fraud bodies and
measures, and institutional development, including human resource management.
Domestic reform and pro-poor fiscal policies are vital.

·
Tax policy and administration. 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.

·
Corruption. The
EU should help its partner countries tackle corruption through
governance programmes that support advocacy, awareness-raising and reporting
and increase the capacity of control and oversight bodies and the judiciary.

·
Civil society and local authorities. Building on the ‘Structured Dialogue’[5],
the EU should strengthen its links with civil society organisations, social
partners and local authorities, through regular dialogue and use of best
practices. It should support the emergence of an organised local civil
society able to act as a watchdog and partner in dialogue with national
governments. The EU should consider ways of mobilising local authorities’
expertise, e.g. through networks of excellence or twinning
exercises.

·
Natural resources. The EU should scale up its support for oversight processes and
bodies and continue to back
governance reforms that promote the sustainable and transparent management of
natural resources, including raw materials and maritime resources, and
ecosystem services, with particular attention to
the dependence of the poor on them, especially smallholder farms.

·
Development-security nexus. The EU should ensure that its objectives in the fields of development
policy, peace-building, conflict prevention and international security
(including cyber security) are mutually reinforcing. It should finalise and
implement the requested Action Plan on security, fragility and development[6].

3.
Inclusive and sustainable growth for human
development

Inclusive and sustainable economic growth
is crucial to long-term poverty reduction and growth patterns are as
important as growth rates. To this end, the EU should encourage more
inclusive growth, characterised by people’s ability to participate in, and
benefit from, wealth and job creation. The promotion of decent work
covering job creation, guarantee of rights at work, social protection and social
dialogue is vital.

Development is not sustainable if it damages
the environment, biodiversity and natural resources and increases the
exposure/vulnerability to natural disasters. 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[7],
including through supporting market opportunities for
cleaner technologies, energy and resource efficiency, low-carbon development while
stimulating innovation, the use of ICT, and reducing unsustainable use of
natural resources. It should also contribute to improving the resilience of
developing countries to the consequences of climate change.

Public actors should forge partnerships
with private companies, local communities and civil society. Corporate
social responsibility at international and national level can help avoid a ‘race
to the bottom’ on human rights, international social and environmental
standards and promote responsible business conduct consistent with internationally
recognised instruments.

The EU should focus its support for
inclusive and sustainable growth on:

·
those sectors which build the foundations for
growth and help ensure that it is inclusive, notably social protection,
health and education;

·
the enabling vectors for inclusive and
sustainable growth, notably a stronger business environment and deeper
regional integration;

·
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.

3.1.
Social protection, health, education and jobs

The EU should take a more comprehensive
approach to human development. This involves supporting a healthy and
educated population, giving the workforce skills that respond to labour market
needs, developing social protection, and reducing inequality of opportunity.

The EU should support sector reforms that increase
access to quality health and education services and strengthen local capacities
to respond to global challenges. The EU should use
its range of aid instruments, notably ‘sector reform contracts’ with
intensified policy dialogue.

The EU should take
action to develop and strengthen health systems, reduce inequalities in access
to health services, promote policy coherence and increase protection against
global health threats so as to improve health outcomes for all.

The EU should enhance its support for quality
education to give young people the knowledge and skills to be active
members of an evolving society. Through capacity-building and exchange of
knowledge, the EU should support vocational training for employability
and capacity to carry out and use the results of research.

The EU should support the decent work
agenda, social protection schemes and floors and encourage policies
to facilitate regional labour mobility. The EU will support targeted
efforts to fully exploit the interrelationship between migration, mobility and
employment.

3.2.
Business environment, regional integration and world markets

Economic growth needs a favourable business
environment. The EU should support the development of competitive local
private sectors including by building local institutional and business
capacity, promoting SMEs and cooperatives, supporting legislative and
regulatory framework reforms and their enforcement (including for the use of
electronic communications as a tool to support growth across all sectors),
facilitating access to business and financial services and promoting agricultural,
industrial and innovation policies. This will also allow developing countries,
especially the poorest, to harness the opportunities offered by globally
integrated markets. Better and more targeted Aid for Trade and trade
facilitation must accompany these efforts.

In the same vein, crucial to developing
countries’ success is attracting and retaining substantial private domestic
and foreign investment and improving infrastructure. The EU should
develop new ways of engaging with the private sector, notably
with a view to leveraging private sector activity and resources for delivering
public goods. It should explore up-front grant funding and risk-sharing
mechanisms to catalyse public-private partnerships and private investment. The
EU should only invest in infrastructure, where the private sector cannot do so
on commercial terms.

The EU will further develop blending
mechanisms to boost financial resources for development, building on successful
experiences such as the European investment facilities or the EU-Africa Trust
Fund for infrastructure. In selected sectors and countries, a higher
percentage of EU development resources should be deployed through existing or
new financial instruments, such as blending grants and loans and other
risk-sharing mechanisms, in order to leverage further resources and thus
increase impact. This process should be supported by an EU platform for
Cooperation and Development incorporating the Commission, Member States and
European financial institutions.

Regional development and integration can spur trade and investment and foster peace and stability. The
EU should support 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.
Support will be offered to tackle competitiveness gaps, as part of the EU’s
substantial and growing Aid for Trade activities, Economic
Partnership Agreements and other free trade agreements with developing
regions.

3.3.
Sustainable agriculture and energy

The EU should use its support in
agriculture and energy to help insulate developing countries from shocks (such
as scarcity of resources and supply, price volatility) 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 agriculture, the EU should
support sustainable practices, including the safeguarding of ecosystem
services, giving priority to locally-developed practices and focusing on
smallholder agriculture and rural livelihoods, formation of producer groups,
the supply and marketing chain, and government efforts to facilitate
responsible private investment. The EU will continue working on strengthening nutritional
standards, food security governance and reducing food price volatility at
international level.

In energy, the EU should offer
technology and expertise as well as development funding, and should focus on
three main challenges: price volatility and energy security; climate change,
including access to low carbon technologies; and access to secure, affordable,
clean and sustainable energy services[8].

In both sectors, the EU should support capacity development and
technology transfer, including in climate adaptation and mitigation strategies.

The EU is looking for long-term
partnerships with developing countries, based on mutual accountability.

4.
Differentiated development partnerships

The EU must seek to target its resources
where they are needed most to address poverty reduction and where they could have
greatest impact.

Grant-based aid should not feature in
geographic cooperation with more advanced developing countries already on
sustained growth paths and/or able to generate enough own resources. Conversely,
many other countries remain heavily reliant on external support to provide
basic services to their people. In between, there is a spectrum of situations
requiring different policy mixes and cooperation arrangements. A differentiated
EU approach to aid allocation and partnerships is therefore key to
achieving maximum impact and value for money.

The EU should continue to recognise the
particular importance of supporting development in its own neighbourhood[9]
and in Sub-Saharan Africa[10]. It should,
in all regions, allocate more funds than in the past to the countries most in
need, including fragile states.

More precisely, EU development assistance should
be allocated according to:

–
Country needs:
assessed using several indicators, taking into account, inter alia,
economic and social/human development trends and the growth path as well as vulnerability
and fragility indicators.

–
Capacities: assessed
according to a country’s ability to generate sufficient financial resources,
notably domestic resources, and its access to other sources of finance such as
international markets, private investment or natural resources. Absorption
capacities should also be considered.

–
Country commitments and performance: positive account should be taken of a country’s investment in
education, health and social protection, its progress on the environment,
democracy and good governance, and the soundness of its economic and fiscal
policies, including financial management.

–
Potential EU impact: assessed through two cross-cutting objectives:

(1)
Increasing the extent to which EU cooperation
could promote and support political, economic, social and environmental
policy reforms in partner countries;

(2)
Increasing the leveraging effect that EU
aid could have on other sources of finance for development, in particular
private investment.

Through comprehensive political and
policy dialogue with all partner countries, the EU should define the most
appropriate form of cooperation, leading to informed and objective decisions on
the most effective policy mix, aid levels, aid arrangements and the use of new
and existing financial tools, and building on the EU's own experience in
managing transition.

For some countries this may result in less
or no EU development grant aid and the pursuit of a different development
relationship based on loans, technical cooperation or support for
trilateral cooperation.

In situations of fragility, specific
forms of support should be defined to enable recovery and resilience,
notably through close coordination with the international community and proper
articulation with humanitarian activities. The aim should be to maximise national
ownership both at state and local levels so as to secure stability and meet basic
needs in the short term, while at the same time strengthening governance,
capacity and economic growth, keeping state-building as a central element.

This process of country-based
decision-making would give the EU the flexibility to respond to unexpected
events, notably natural or man-made disasters.

5.
Coordinated EU action

Fragmentation and proliferation of aid is still widespread and even increasing, despite
considerable recent efforts to coordinate and harmonise donor activities. The
EU must take a more active leadership role, as mandated by the Lisbon Treaty,
and put forward proposals to make European aid more effective.

Joint programming of EU and Member
States’ aid would reduce fragmentation and increase
its impact proportionally to commitment levels. The aim is for a simplified and
faster programming process, to be largely carried out on the ground.

Where the partner country has formulated
its own strategy, the EU should support it by developing, wherever possible, joint
multi-annual programming documents with the Member States. Where the
partner country has not done so, the EU will endeavour to develop a joint
strategy with the Member States.

This process would
result in a single joint programming document which should indicate the
sectoral division of labour and financial allocations per sector and donor.
The EU and Member States should follow the document when devising their
bilateral implementation plans. Participation should be open to non-EU donors
committed to the process in a given country.

To boost country ownership, joint
programming should be synchronised with the strategy cycles of partner
countries where possible.

Operationally, the EU and Member States should
make use of aid modalities that facilitate joint action such as
budget support (under a ‘single EU contract’), EU trust funds and delegated
cooperation.

On cross-country division of labour, the Commission
encourages all Member States to be more transparent when entering or exiting, in
line with the EU Code of Conduct on Division of Labour[11].
A coordinated approach is needed, including a coordination mechanism
for cross-country division of labour.

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[12], 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.

Transparency is a cornerstone of effective
and accountable aid. The Commission, which has adopted
the International Aid Transparency Initiative standard,
is already one of the most transparent donors. It should continue this effort, along with Member States.

6.
Improved coherence among EU policies

The EU is at the forefront of the Policy
Coherence for Development (PCD) agenda and will continue to evaluate the
impact of its policies on development objectives. It will strengthen its country-level
dialogue on PCD and continue to promote PCD in global fora to help shape an
environment that supports the poorest countries’ efforts.

The future MFF should reinforce PCD. Thematic
programmes are envisaged as instruments to tackle global concerns and will
both project EU policies into development cooperation and help eradicate
poverty.

The EU must intensify
its joined-up approach to security and poverty, where necessary adapting
its legal bases and procedures. The EU's development, foreign and security
policy initiatives should be linked so as to create a more coherent approach to
peace, state-building, poverty reduction and the underlying causes of conflict.
The EU aims to ensure a smooth transition from humanitarian aid and crisis
response to long-term development cooperation.

In terms of the
development-migration nexus, the EU should assist developing countries in
strengthening their policies, capacities and activities in the area of
migration and mobility, with a view to maximising the development impact of the
increased regional and global mobility of people.

7.
Embracing the Agenda for Change

The Commission calls on the Council to endorse
the proposed Agenda for Change which seeks to:

–
equip the EU with high-impact development
policy and practice for the coming decade and give it a leading role in
setting a comprehensive international development agenda up to and beyond 2015;

–
support the change needed in partner countries to
bring about faster progress towards poverty reduction and the MDGs.

The Commission services and EEAS will ensure
that the guiding principles set out in this Communication are progressively reflected
during the remainder of the current programming cycle and in future programming
documents, as well as in the proposals regarding the architecture, legislation
and programming of future financial instruments for external action.

Member States are urged to also implement
the Agenda.

[1]               COM(2010) 629
- http://ec.europa.eu/europeaid/how/public-consultations/5241_en.htm

[2]               2006/C 46/01.

[3]               COM(2011) 638.

[4]               SEC(2010) 265 final.

[5]               http://ec.europa.eu/europeaid/who/partners/civil-society/structured-dialogue_en.htm

[6]               Council Conclusions 14919/07 and 15118/07.

[7]               COM(2011) 363 final.

[8]               Taking account of ongoing initiatives such as the UN
High Level Group on Sustainable Energy for all.

[9]               COM(2011) 303.

[10]             Including through the Joint Africa-EU Strategy.

[11]             9558/07.

[12]             18239/10.