# EUR-Lex - 52011SC1470 - EN

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# 52011SC1470

**COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT /* SEC/2011/1470 final - COD 2011/0406 */**

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1. 
Problem definition

Poverty remains a major
problem in developing countries. While there have been significant advances in
the fight against poverty, most of them are off-track in the achievement of the
Millennium Development Goals (MDGs) and they are not benefitting from sustainable
development. In addition, global challenges continue to be prominent and
developing countries were hit hard by the succession of recent crises resulting
in social and economic instability, forced migration, food insecurity and an
increased vulnerability to external shocks. The environmental and natural
resources are increasingly recognized as being vital for sustainable economic
growth and poverty reduction. Furthermore, climate change is exacerbating an
already fragile situation and risks undoing part of the development
achievements if not properly addressed. The EU remains committed to helping developing countries to reduce
and ultimately eradicate poverty.

To achieve this objective, the Development
Cooperation Instrument (DCI) was established for the 2007-2013 period with the
primary and overarching objective of eradicating poverty in partner countries
and regions. It is one of the key EU instruments providing development
assistance to non-European countries, alongside the European Development Fund
(EDF) and the European Neighbourhood Partnership Instrument (ENPI). It is organised
into three categories of programmes: (i) bilateral and regional geographic
programmes covering cooperation with Asia, Latin America, Central Asia, the
Middle East and South Africa; (ii) thematic programmes covering the following
issues: investing in people, environment and sustainable management of natural
resources, Non-State Actors and local authorities, food security, and migration
and asylum; and (iii) sugar accompanying measures.

New challenges, together with the priorities
set out in the Europe 2020 Strategy, have prompted the Commission to make
proposals to review and adapt the EU’s development policy through the upcoming
Communication "Increasing the Impact of EU Development Policy: An Agenda
for Change". The various reviews undertaken have also highlighted a number
of shortcomings within the DCI while acknowledging its overall added value and its
contribution to the achievement of the MDGs. On the aforementioned basis, the
following problems in the current DCI regulation have been identified:

(1) 
The DCI does not fully take into account the
objectives of the latest trends of EU development policy.

(2) 
The world has changed since 2007 and a number of
current beneficiaries of the DCI have since emerged as new world powers and have
themselves become donors. The DCI does not ensure sufficient differentiation
amongst its beneficiaries with regard to economic and social disparities
amongst and inside partner countries.

(3) 
The DCI does not sufficiently take into account
partner countries' progress on democratisation and respect for basic human
rights.

(4) 
Supporting cross-regional or continent-wide
initiatives has proved difficult given the current architecture of external
assistance instruments, in particular regarding the implementation of the Joint
Africa-EU strategy.

(5) 
Thematic programmes are not sufficiently
flexible and are too fragmented to respond to recent global crises or to
international commitments taken at the highest political level.

(6) 
The specific needs of countries in crisis,
post-crisis and fragile situations do not sufficiently feature in the current
DCI, thus not always allowing a swift EU response to a rapidly evolving
situation.

(7) 
The DCI suffers from an overall lack of
flexibility, as it does not foresee un-programmed funds to be used in response
to unforeseen needs.

(8) 
The current programming process of the DCI is
too complex and rigid. For example, it does not permit the alignment of the EU
programming cycle and strategy to those of its partners, and it also does not
sufficiently facilitate joint programming with Member States, as required by
the aid effectiveness agenda. It does not provide a sufficient legal basis for
using innovative measures for the delivery of aid such as mechanisms for
blending loan- and grant-based assistance or public-private partnerships.

2. 
Analysis of subsidiarity

As the world's largest donor, the EU and
Member States provide more than half (56%) of global aid to developing countries.
The EU provides aid to the poorest people on the planet in more than 150
countries worldwide and is committed to achieving the MDGs on time by the end
of 2015. The official development aid managed by the European Commission alone
represents about 20% of total EU aid so far. The EU is in a uniquely neutral
and impartial position to deliver external action on behalf of and with Member
States, giving it enhanced credibility in the countries where it works in. With
27 Member States acting with common policies and strategies, the EU has a
critical mass to respond to global challenges, in particular the achievement of
the MDGs.

3. 
Objectives of the EU initiative

The general objectives of the successor to
the DCI will remain focused on (i) reducing and, in the long term, eradicating
poverty in partner countries and regions as well as on (ii) promoting
democracy, the rule of law, human rights and good governance. In line with the
proposed revised EU development policy, a third general objective: (iii) supporting
inclusive and sustainable growth-oriented development will also be introduced.

The successor to the DCI will be based on the
existing instrument, which has demonstrated its relevance in contributing to poverty
reduction and, in the long term, to poverty eradication, while addressing the
problems identified under part 1.

4. 
Policy options

Maintaining the DCI without any amendment is
the first option considered (option 1 = no change).

Under option 2 (amend the DCI regulation), two
alternative scenarios were considered against the status quo:

· 
Aligning the objectives of the instrument with
the new trends in EU development policy, considering the strengthening of
development policy in the Lisbon Treaty and latest trends in development policy;

· 
Ensuring significant differentiation by focusing
EU cooperation on a limited number of countries, differentiating through
allocated amounts and altering the type of assistance according to a defined
set of criteria;

· 
Strengthening the inclusion of good governance,
democracy, human rights and the rule of law in the fund allocation mechanism;

· 
Establishing a Pan-African programme within the
DCI;

· 
Increasing the flexibility and reducing the fragmentation
of thematic programmes through a reduction of their number;

· 
Allowing a more flexible (re-)programming
process, tailor made ad-hoc reviews, and specific implementation procedures for
countries in crisis, post-crisis and fragile situations;

· 
Introducing further flexibility in fund
allocations within the DCI through new mechanisms such as an un-programmed
reserve;

· 
Increasing the flexibility of and simplifying
the programming process to facilitate joint programming and alignment to
programming cycle of partner countries.

5. 
Assessment of impacts

Option 1, continuing the status quo, would
not address the problems emerging from past experience, mentioned under Section
1.

Option 2, developing the DCI further, would
allow the following:

· 
aligning the objectives of the successor to the
DCI with the new trends in EU development policy;

· 
applying a clear differentiation amongst partner
countries in order to fight poverty more effectively and giving the EU more
leverage and impact in countries where its assistance is needed the most;

· 
further including good governance, democracy,
human rights and the rule of law in EU assistance in order to ensure more effective
cooperation and dialogue with partner countries regarding these values;

· 
facilitating a more efficient implementation of
the Joint Africa-EU Strategy and, therefore, facilitating the achievement of EU
political objectives within the African continent;

· 
streamlining thematic programmes to provide the
flexibility necessary for the EU to be responsive to global challenges;

· 
putting in place flexible mechanisms to facilitate
a more effective EU response to rapidly evolving situations in crisis, post-crisis
and fragile states;

· 
enhancing the flexibility of fund allocation to address
evolving situations in the external arena due to political circumstances, crises
or new challenges; and

· 
improving the effectiveness of EU aid by
simplifying and making the programming and implementation procedures more
flexible in order to enable joint programming and to align to partner
countries' programming cycles, as well as to promote the use of innovative
measures for aid delivery.

6. 
Comparison of options

The first option would not allow the EU to meet
the objectives described under paragraph 3. Under option 2, for each specific
objective the alternative sub-option B is preferred over sub-option A as they tackle
all problems identified and respond to the objectives defined under section 3
more appropriately. This will allow for incorporating the revised orientations
of EU development policy into the successor to the DCI and thus further
increasing the effectiveness and the impact of EU assistance to developing
countries.

7. 
Monitoring and evaluation

The DCI is an enabling Regulation
establishing the essential elements and the basis for EU intervention. The
exact actions are defined through multiannual programming and annual action
programmes detailing the activities to be carried out by the EU, including the
objectives pursued by the actions in question and the expected results.
Specific indicators are fixed at that moment, bearing in mind the
particularities of the action in question.

Internationally agreed targets and indicators
on the MDGs and climate change are already known. For instance, for the overarching objective for reducing and, in the long term, eradicating
poverty in partner countries and regions, the MDG indicators for Goal 1 may be
used.

Expenditure that promotes climate action or
energy efficiency as well as the protection and sustainable management of
biodiversity and ecosystems, will be tracked based on the established OECD
methodology (‘Rio markers’).