EN COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 1.7.2009 SEC(2009) 831 final/2 Corrigendum : annule et remplace la version du 30.6.2009; concerne uniquement la version EN COMMISSION STAFF WORKING DOCUMENT Annex to the REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Annual Report 2009 on the European Community's Development and External Assistance Policies and their Implementation in 2008 {COM(2009)296} COMMISSION STAFF WORKING DOCUMENT Annex to the REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Annual Report 2009 on the European Community's Development and External Assistance Policies and their Implementation in 2008 {COM(2009)296} TABLE OF CONTENTS COMMISSION STAFF WORKING DOCUMENT Annex to the 1 REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Annual Report 2009 on the European Community's Development and External Assistance Policies and their Implementation in 2008 1 1.POLICY8 1.1.Introduction8

1.2.Annual Policy Objectives10 1.3.Implementation of the European Consensus on Development11 1.4.Coherence between development and other policies13 1.5.Mainstreaming cross-cutting issues17 1.6.Aid effectiveness and co-financing22 1.6.1.Aid effectiveness22 1.6.2.Division of labour and co-financing23 1.7.Partnership with United Nations and World Bank25 1.7.1.United Nations25 1.7.2.International Financial Institutions26 1.7.3.OECD26 1.8.Poverty focus in middle-income countries27 1.9.Sectoral policy and strategy developments28 1.10.Outlook 200934 2.IMPLEMENTATION36 2.1.European Neighbourhood and Partnership Instrument37 2.1.1.Bilateral and regional cooperation37 2.1.1.1.Introduction37 2.1.1.2.Aid effectiveness and donor coordination39 2.1.1.3.Working towards the MDGs40

2.1.1.4.Regional cooperation and integration41 2.1.1.5.Implementation43 2.1.1.6.Monitoring49 2.1.1.7.Results52 2.1.1.8.Prospects54 2.1.1.9.Success stories56 2.1.2.Cross-border cooperation57 2.2.European Development Fund58 2.2.1.Africa58 2.2.1.1.Introduction58 2.2.1.2.Aid effectiveness and donor coordination59 2.2.1.3.Working towards the MDGs60 2.2.1.4.Regional cooperation and integration62 2.2.1.5.Implementation63 2.2.1.6.Monitoring64 2.2.1.7.Results65 2.2.1.8.Prospects66 2.2.1.9.Success stories67 2.2.2.Caribbean (including OCTs)68 2.2.2.1.Introduction68

2.2.2.2.Aid effectiveness and donor coordination69 2.2.2.3.Working towards the MDGs69 2.2.2.4.Regional cooperation and integration70 2.2.2.5.Implementation70 2.2.2.6.Monitoring71 2.2.2.7.Results72 2.2.2.8.Prospects73 2.2.2.9.Success stories73 2.2.3.Pacific (incl OCTs)73 2.2.3.1.Introduction73 2.2.3.2.Aid effectiveness and donor coordination75 2.2.3.3.Working towards the MDGs75 2.2.3.4.Regional cooperation and integration76 2.2.3.5.Implementation76 2.2.3.6.Monitoring77 2.2.3.7.Results78 2.2.3.8.Prospects78 2.2.3.9.Success stories79 2.2.4.ACP-wide activities83 2.3.Development Cooperation Instrument85

2.3.1.Asia85 2.3.1.1.Introduction85 2.3.1.2.Aid effectiveness and donor coordination86 2.3.1.3.Working towards the MDGs87 2.3.1.4.Regional cooperation and integration88 2.3.1.5.Implementation88 2.3.1.6.Monitoring91 2.3.1.7.Results92 2.3.1.8.Prospects93 2.3.1.9.Success stories94 2.3.2.Central Asia95 2.3.2.1.Introduction95 2.3.2.2.Aid effectiveness and donor coordination95 2.3.2.3.Working towards the MDGs96 2.3.2.4.Regional cooperation and integration96 2.3.2.5.Implementation97 2.3.2.6.Monitoring97 2.3.2.7.Results99 2.3.2.8.Prospects99 2.3.2.9.Success stories100

2.3.3.Middle East100 2.3.3.1.Introduction100 2.3.3.2.Implementation101 2.3.3.3.Prospects102 2.3.4.Latin America103 2.3.4.1.Introduction103 2.3.4.2.Aid effectiveness and donor coordination105 2.3.4.3.Working towards the MDGs105 2.3.4.4.Regional cooperation and integration106 2.3.4.5.Implementation108 2.3.4.6.Monitoring110 2.3.4.7.Results112 2.3.4.8.Prospects113 2.3.4.9.Success stories113 2.3.5.South Africa114 2.3.5.1.Introduction114 2.3.5.2.Aid effectiveness and donor coordination114 2.3.5.3.Working towards the MDGs115 2.3.5.4.Regional cooperation and integration115 2.3.5.5.Implementation115

2.3.5.6.Monitoring116 2.3.5.7.Results117 2.3.5.8.Prospects117 2.3.5.9.Success stories118 2.3.6.Accompanying measures for Sugar Protocol countries120 2.3.7.Investing in people122 2.3.8.Non-state actors and local authorities in development125 2.3.9.Migration and asylum125 2.3.10.Environment and sustainable management of natural resources including energy127 2.3.11.Food security129 2.4.Democracy and human rights131 2.5.Stability139 2.5.1.Crisis response and preparedness139 2.5.2.Global and regional trans-border challenges142 2.6.Nuclear safety147 2.7.Humanitarian assistance150 2.7.1.Context150 2.7.2.Humanitarian policy152 2.7.3.Disaster preparedness152 2.7.4.Budget152

2.8.Macro-financial assistance153 3.FEATURE ARTICLES154 4.RESULTS165 4.1.Introduction165 4.2.Project results: results-oriented monitoring (ROM)166 4.3.Evaluation: review of the 2008 work programme171 4.3.1.Organisation of the evaluation function171 4.3.2.The 2008 work programme172 4.3.3.Results from evaluations finalised in 2008172 4.3.4.Synthesis of main lessons learned175 4.3.5.Outlook for 2009175 5.AID MANAGEMENT176 5.1.Introduction176 5.2.Developments in aid delivery modalities and channels177 5.2.1.The 'Backbone Strategy' for reforming Technical Cooperation177 5.2.2.Budget support178 5.3.Progress on qualitative issues in aid management181 5.4.Simplification of procedures183 5.5.Cooperation with international organisations and other donors184 5.6.Visibility and communication188

6.ANNEXES188 6.1.Introduction to financial tables188 6.2.Financial tables191 6.3.Glossary214



1.POLICY 1.1.Introduction Development and external assistance are now central policies of the EU. They are major components of its international influence and effective instruments of its soft power. Their main purpose is to fight poverty and promote economic development and democracy. The present decade has seen the rise of the EU as a leading actor in the development field. The figures are impressive: the amounts committed have increased by 90% since 2001. In 2008, the EU and its Member States were again the biggest international donor, providing almost 60% of global aid. The amount committed at EU level in 2008 (€12 billion) enabled the EU to implement an external assistance policy which is global, focused long-term and responsive. It is global with more than 160 countries and organisations benefiting from European funds. It has acquired a long-term focus through its regular project evaluations which seek to optimise their developmental impact year on year. It is responsive and flexible, as shown by the comprehensive assistance package of up to €500 million pledged by the European Commission to support Georgia after its conflict with Russia in August 2008. In 2008, the world faced a number of severe challenges which have hampered progress towards the Millennium Development Goals (MDGs). The steep increase in food and energy prices and the global financial crisis have contributed to driving over 100 million people back into poverty. The Commission took various actions to meet the food crisis challenge. It mobilised €200 million from the reserve for unforeseen needs under the 10th European Development Fund (EDF) to respond to the macroeconomic and social consequences of soaring food prices in the worst-affected African-Caribbean-Pacific (ACP) countries. The budget for humanitarian food aid was reinforced with €140 million. Following a proposal from the Commission, a €1 billion EU Food Facility was adopted to mitigate the effects of the steep rise and volatility of food prices on the most vulnerable populations in all developing countries. Several important events relating to the achievement of the MDGs took place in 2008. The European Commission together with the Member States played a leading role at a number of international meetings including the Third High Level Forum on Aid Effectiveness in Accra (2-4 September 2008), the High Level Event on the MDGs in New York (25 September 2008) and the Follow-up International Conference on Financing for Development in Doha (29 November – 2 December 2008). The priorities agreed by the Council of the European Union in July 2008 (use of country systems, the division of labour among donors, increased aid predictability, mutual accountability for results and less aid conditionality) were reflected in the Accra Agenda for Action (AAA) adopted at the Third High-Level Forum on Aid Effectiveness in Accra. Likewise, during the UN follow-up Conference on Financing for Development in Doha, the EU was instrumental in reaching consensus on important policy issues including the need to maintain donors’ commitments to increase official aid volumes to 0.56% of Gross National Income (GNI) by 2010 and 0.7% of GNI by 2015. In this context, the Commission played a key role in coordinating a common EU response. Its Communication in April, The EU - a global partner for development. Speeding up progress towards the Millennium Development Goals, confirms the EU as the world’s largest donor providing 60% of total international Official Development Assistance (ODA) and reiterates the EU commitment to improve on aid delivery and aid effectiveness. As part of that commitment, the MDG-Contract approach was finalised, providing longer-term, more predictable and results-focused budget support in seven ACP countries. At partner country level, a fast-track process was launched together with the EU Member States to expedite the implementation of the Code of Conduct on Complementarity and Division of Labour, which was adopted in 2007. Furthermore, the EU Agenda for Action approved in June 2008 set out a number of intermediate milestones against core social and environmental targets to be reached by 2010. These initiatives were complemented by a number of other papers and Communications, aimed at further reinforcing European development policy (as set out in the 2005 European Consensus on Development). These included the Communications on: The EU, Africa and China: Towards trilateral dialogue and cooperation Regional integration: a vision for the developing world A Special Place for Children in EU External Action. The Commission also issued a policy paper on Local Authorities: Actors For Development to set out the first elements of a strategy which will capitalise on local authorities' experience as partners in development and draw up a coordinated approach for a structured involvement in development cooperation policy. The growing number and changing role of local authorities in development was the key issue during the European Development Days held in Strasbourg on 15-17 November 2008. The Commission gave new impetus to relations between the EU and neighbouring countries with the creation of a Union for the Mediterranean. The aim is to reinforce the existing partnership, offering more balanced governance of the process, increased visibility and stronger focus on projects promoting intra- and inter-regional cooperation. For its eastern neighbours, the Commission adopted a Communication proposing the creation of an Eastern Partnership on 3 December 2008. This initiative aims at strengthening the links between the EU and six partners in the East, reinforcing the bilateral agenda in the context of the European Neighbourhood Policy (ENP) and establishing a new framework for multilateral cooperation. 1.2.Annual Policy Objectives

In 2008, the Commission's external action sought to achieve the following objectives: Build on the European Neighbourhood Policy by focusing on the implementation of sectoral programmes in the areas of migration, education and energy. Make progress towards the conclusion of new agreements and advance economic and political relations with neighbouring countries. Continue the European Union’s contributions to the Middle East peace process. Step up cooperation with ACP and other developing countries, particularly in areas such as energy, climate change and migration. Develop together with the African Union a Joint EU-Africa Strategy which will define the new priorities in the EU’s relations with Africa. Start implementing the Economic Partnership Agreements and the 10th European Development Fund. Prepare a proposal for a second revision of the EC-ACP Partnership Agreement. Make progress on or conclude negotiations for agreements with China, India, South Korea, ASEAN and Latin America (Andean Community, Central America). Strengthen the transatlantic partnership with the United States. Support the successful completion and implementation of the Doha Development Round of world trade talks. Except in the last case, substantial progress has been achieved in these different areas. In addition, to respond to emerging challenges during 2008, the Commission also took concrete initiatives to: Mobilise additional funding for poor countries at risk from the rise in food prices; Launch an Adaptation Fund for the most vulnerable countries in response to climate change; Take the lead on the Accra Agenda for Action to improve aid effectiveness; Enhance relations between the Union and neighbouring countries with the creation of a Union for the Mediterranean, an Eastern Partnership and the development of the Black Sea Synergy. 1.3.Implementation of the European Consensus on Development The European Consensus on Development, which constitutes a milestone in EU development cooperation, defines at EU level the common values, principles, objectives and means in order to eradicate poverty and achieve the Millennium Development Goals. What are the Millennium Development Goals? The Millennium Development Goals (MDGs) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations and signed by 147 heads of state and government during the UN Millennium Summit in September 2000. Goal 1: Eradicate extreme poverty and hunger Goal 2: Achieve universal primary education Goal 3: Promote gender equality and empower women Goal 4: Reduce child mortality Goal 5: Improve maternal health Goal 6: Combat HIV/AIDS, malaria and other diseases

Goal 7: Ensure environmental sustainability Goal 8: Develop a Global Partnership for Development The Commission ensured that, throughout 2008, the objectives and principles of the Consensus were reinforced. In its April Communication on speeding up progress towards the Millennium Development Goals, the Commission confirmed its commitments to help eradicate poverty in developing countries by increasing the amount of aid, making it more effective and strengthening the coherence between development assistance and other policy areas. The EU presented its position at international fora, especially in Accra (on aid effectiveness), in New York (on the MDGs), at the UN summit and in Doha (on aid volumes). In this context, the Commission was instrumental in preparing the EU Agenda for Action on MDGs adopted in June 2008. This Agenda is a collective offer by Europe to its development partners and the international community, setting a number of intermediate milestones against core social and environmental targets to be reached by 2010. This initiative should facilitate the achievement of the MDG targets by 2015. Referring to estimated financing gaps per sector, the Agenda presents examples of EU actions foreseen in the next two years and assesses the expected impact of increased EU aid in specific sectors. As part of the initiative on Mobilising European Research for Development Policies which seeks to provide a European perspective on international development issues, the Commission issued a first EU Research paper. The document Millennium Development Goals at Midpoint: Where do we stand and where do we need to go? places ongoing efforts to fulfil MDG commitments in the broader context of the changing world economy, challenging current development thinking and making policy recommendations for the way forward. Building on the international and multilateral aspects of the Consensus concerning values like democratic governance and human rights, the Commission proposed a structured dialogue with China and Africa in its Communication on The EU, Africa and China: Towards trilateral dialogue and cooperation. This document acknowledges that the EU and China are long-standing partners of Africa who have in recent years responded to Africa’s transformation with increased trade, investment and aid. It calls for joint efforts to find common solutions to common challenges such as peace and security, agriculture and food security, climate change, infrastructure and sustainable management of the environment and natural resources. Following the adoption of the EU-Africa Partnership in Lisbon in December 2007, the Commission issued its 2008 review of progress entitled One year after Lisbon: the Africa-EU partnership at work. The document confirms the step-change in Europe's relations with Africa and seeks to stimulate debate among stakeholders on both continents in order to boost implementation of the strategy. Its eight sector partnerships have been developed and are now starting to deliver concrete results. The Joint EU Africa Strategy The Joint Africa-EU Strategy provides an overarching long-term framework for Africa-EU relations, while its first action plan specifies concrete proposals for 2008-2010, structured along eight Africa-EU strategic partnerships: - Peace and security, - Democratic governance and human rights, - Trade, regional integration and infrastructure, - Millennium Development Goals, - Energy, - Climate change, - Migration, mobility and employment, - Science, information society and space http://ec.europa.eu/development/geographical/regionscountries/euafrica_en.cfm Particular attention was paid in 2008 to regional integration as a driver of development. The Commission presented a shared EU vision in its Communication on Regional integration for development in ACP countries. Citing Europe's successful integration over the last 50 years, the paper looks at opportunities for ACP countries to develop and expand their own regional initiatives. Acknowledging a sometimes difficult context, marred by limited ownership and capacity at regional or national level, fragmentation of regional markets, insufficient economic diversification and infrastructure development, the document highlights the need for a joined-up EU approach. This requires a strong political partnership within the joint EU-Africa Strategy, increased EU support for regional integration and strengthening existing regional integration processes through the conclusion of fully-fledged Economic Partnership Agreements. Similar efforts towards aid effectiveness are underway in the field of humanitarian aid. Adopted in December 2007, the European Consensus on Humanitarian Aid has given the European Union a common set of values, principles and objectives intended to strengthen the coherence of its overall humanitarian action. The Consensus was followed by the adoption of an action plan in 2008. The overall aim is to ensure that the European Union maximises the effectiveness of its contribution to the collective international humanitarian response and this inter-alia through a more closely co-ordinated approach with all donors involved, a better linking of humanitarian aid with long-term development and other assistance and a strengthening of disaster reduction activities supported increasingly by long-term aid approaches.

1.4.Coherence between development and other policies As part of the European Consensus on Development, the Commission has increasingly focused on the contribution that other policies with an impact on development – trade, agriculture, environment, security, migration, the social dimension of globalisation, employment and decent work, and international scientific cooperation (including research on agriculture and health) – can make towards achieving the Millennium Development Goals. As pointed out in the research paper on MDGs at midpoint, it is widely agreed that development policy alone will not bring sufficient results and that a number of other policies can have a major impact. The EU’s aim is to maximise the positive effect of these policies while minimising their negative impact on developing countries. Following the adoption of the first EU report on Policy Coherence for Development (PCD) in 2007, the Commission explored the impact on development of four EU policy areas: climate change, energy (through the example of biofuels), migration and research. The EU research paper lays the basis for further policy work required at EU level. In the climate change and energy areas, a key element in EU strategy is its long-term commitment to the development of renewable energies. Among renewable energies, biofuels are of particular relevance in the context of development policy given the multidimensional policy perspective they offer (e.g. energy, environment, agriculture, research). Hence the proposal that the EU help developing countries to benefit from the opportunities created by the biofuels market for fighting poverty, while carefully monitoring the impact it can have on third countries, particularly in terms of food security, access to land and environmental degradation. On migration, any European policy on structuring and managing migration flows is bound to interact with development policy. The EU research paper concentrates on 'brain drain' and 'brain waste' issues. It focuses on measures to address the related challenges such as 'training for export' of highly skilled workers in developing countries, the retention of skilled workers, the facilitation of temporary or permanent return to migrants' countries of origin, or the strengthening of 'ethical recruitment' in the EU. On research, the paper indicates how research policy can better contribute to development. It suggests promoting research on MDG-related issues, and improving access to the results so that developing countries also benefit from them. To strengthen the knowledge base of developing countries, it proposes to promote the participation of their researchers in European research programmes while at the same time strengthening their research capacity through a more balanced mobility of researchers between the EU and developing countries. In addition to these specific initiatives in four key policy areas the Commission has been integrating development concerns in all initiatives with important impacts on developing countries. With regard to trade, an Economic Partnership Agreement (EPA) was finalised with the Cariforum region, while negotiations took place with other regional groupings. In addition, a number of Interim Agreements were signed with individual developing countries as further negotiations toward fully-fledged agreements continued. The EPAs are intended to consolidate regional integration initiatives among ACP countries and to foster their gradual integration into the global economy on the basis of an open, transparent and predictable framework for trade in goods and services. EPAs are trade and cooperation agreements at the service of development. As indicated in the recently adopted Communication on Promoting Good Governance in tax matters, the Commission is of the view that the coherence between EU financial support and provision of access to EU markets to particular countries and their level of cooperation with the principles of good governance in the tax area should also be considered. As for climate change, environment and energy, the EU's ambitious climate policy will directly benefit the poorest and most vulnerable developing countries as it aims to limit global temperature rise to an average of 2°C above pre-industrial levels. In a Communication of October 2008, the Commission presented the challenges of dealing with deforestation in the context of international efforts to tackle climate change. The document stresses the importance of policy coherence, and calls for a review of the impact of EU policies on global deforestation. Then in December 2008, the EU reached political agreement on the Climate action and renewable energy package which confirms the EU's commitment to fight climate change and promote renewable energy up to 2020 and beyond. The package offers opportunities for developing countries, in particular through its decision to increase the share of renewable energy in final energy consumption to 20% of total energy use by 2020 and to reach a minimum 10% share of renewables in transport by the same date. In that context, the package sets out sustainability criteria that biofuels will have to meet to ensure they deliver real environmental benefits. Finally, of particular relevance to this policy area, 2008 has seen the operational launch of the Adaptation Fund giving developing countries direct access to the funds generated by a 2% levy on the Clean Development Mechanism (CDM) which is part of the Kyoto Protocol on climate change. Thanks to its far-reaching agricultural policy reforms, and as part of an overall package deal in the Doha Development Agenda during 2008, the EU has been endeavouring towards a steep reduction in the ceiling on its trade-distorting support, the elimination of its export subsidies and a significant reduction of its border protection in the context of a deal. In 2008, EU agriculture ministers reached a political agreement on a 'health check' of the Common Agricultural Policy. This modernises and simplifies some aspects of the CAP. Among a range of measures, the agreement abolishes arable set-aside, adjusts milk quotas in the lead-up to their abolition in 2015, reduces the role of price support and aims to create a genuine safety net for farmers. Support for agriculture and rural development in Africa has been further reinforced via EU development cooperation instruments and, in response to the food crisis of 2007-2008, through the adoption of a €1 billion EU Food Facility for 2008-2010. The facility makes funds available to support a rapid and direct response to volatile food prices in developing countries, covering measures in support of agricultural production as well as safety nets. With regard to fisheries, preliminary discussions started on a review of the Common Fisheries Policy. The review will be based on an analysis of the achievements and shortcomings of the current policy, and will look at experiences in other fisheries management systems to identify potential avenues for the reform of this policy, including its external aspects. As far as migration is concerned, the EU strategy, the so called "Global Approach" includes three pillars: promoting legal migration and mobility, fighting irregular immigration, and maximising the impacts of migration on development in the country of origin. The same logic prevails in the European Pact on Immigration and Asylum, adopted by the European Council in October 2008. The Pact intends to foster synergies between migration and development, and will provide solid ground on which to build initiatives to support circular migration and knowledge transfer. Initiatives have been launched enabling members of the migrant diaspora to contribute to the development of their country of origin for example through remittances or to support the temporary return of highly-qualified migrants. The Africa-EU Partnership on Migration, Mobility and Employment provides the framework to incorporate aspects of migration into education and health policies as well as social and economic development strategies. With regard to European Security and Defence Policy (ESDP), the EU continued efforts to increase coherence between security and development notably through the revision of the 2003 European Security Strategy, the ongoing work towards an action plan on the security-development nexus, and increased interaction between conflict and development analyses as well as between ESDP planning and development programmes. However, the report on the implementation of the European Security Strategy recognises the need to further strengthen coherence, through better institutional coordination and more strategic decision-making. Throughout 2008, work continued to develop science and technology cooperation with partner countries. This included the negotiation and adoption of agreements with several of them and the launch of regional multi-stakeholder platforms for dialogue and exchange. A Communication on A Strategic European Framework for International Science and Technology Cooperation, setting out a new partnership with Member States to coordinate international S&T cooperation was endorsed by the Council in December. Through the EU's Seventh Research Framework Programme (FP7), projects were funded to support developing countries in reaching the MDGs, particularly in the health, food and environment areas. 1.5.Mainstreaming cross-cutting issues The Commission is committed to mainstreaming certain cross-cutting issues throughout its activities as agreed in the European Consensus on Development. They include: the promotion of human rights, gender equality, democracy, good governance, rights of children and indigenous peoples, environmental sustainability and combating HIV/AIDS. These objectives are promoted and supported in their own right through projects and programmes. They are at the same time vital factors in strengthening the impact and sustainability of development cooperation in general and should be taken into account and integrated into all projects and programmes. The Commission is taking steps to strengthen efforts to fully integrate cross-cutting issues into all its cooperation activities. Democratic governance In recent years, the EU has moved democratic governance to the top of its agenda. It makes major efforts to translate this political commitment into a comprehensive policy framework and to provide concrete support for democratic governance in its development cooperation activities. While recognising that improving democratic governance is an internal process in each country, the Commission is determined to address democratic governance both as a specific policy area (i.e. support for human rights, democracy, public administration, decentralisation, civil society and rule of law) and as a cross-cutting issue concerning all programmes and sectors (i.e. support for democratic governance within sectors like food security, education, transport, justice, etc).

This is why the Commission not only integrates democratic governance into its own policy-making process, but also makes it a core element in its Partnership and Cooperation Agreements with countries in all regions. Democratic governance is a basis for dialogue with partners at country, regional and continental level. It is taken into account at all steps of the programming cycle: programming dialogue, drafting of Country Strategy Programmes and National Indicative Programmes, programme implementation and review. During 2008, the Commission developed a methodology to analyse and address governance in sector operations as a way to further improve results and to integrate democratic governance into all cooperation programmes at sector level. Promoting democratic governance and supporting partner countries’ efforts are therefore an integral part of EU cooperation strategies. Respect for ownership, dialogue between partners and a focus on incentives for result-oriented reforms are the main principles. To put this approach into practice and build on existing support, the Commission launched the Governance Initiative for ACP countries and Africa. This provides ACP countries with access to additional funding according to their governance commitments: €2.7 billion from the 10th European Development Fund were reserved for such incentives. More than 60 countries have put forward plans for reform and benefited from an extra allocation. A review of this instrument was finalised in 2008. Working on democratic governance is a highly sensitive political process. It also takes time. The Commission strategy is first to consider each specific situation from a country and a sector perspective, and thereafter to aim for a pragmatic and gradual approach. Increased attention is given to monitoring the impact and results of development efforts to promote democratic governance. To strengthen understanding and knowledge in this field and to find out how it can help partners to measure progress in democratic governance, the Commission together with the UNDP's Oslo Governance Centre launched a study in 2008 on governance indicators and governance assessments. Gender Gender equality is not only an end in itself, it is also a strong driver for development. The year 2008 saw major initiatives in promoting gender equality: in the context of achieving the MDGs, on the issue of women in conflict or post-conflict countries, in the fight against violence, and in the area of aid effectiveness. Within the so-called MDG 3 Torch Campaign promoted by the Danish Government, Commissioner for External Relations Benita Fererro-Waldner and Commissioner for Development and Humanitarian Aid Louis Michel were Champion Torch Bearers and made personal commitments to do something extra to promote better equality and achieve MDG 3 (gender). The Commission prepared a joint paper in collaboration with the Slovenian Presidency of the EU entitled Women and Armed Conflict. The EU Agenda for Action on MDGs, adopted in 2008 with a strong focus on gender equality, will also stimulate concrete actions. For the second edition of the drawing competition on gender equality organised by the Commission, some 30 000 children around the world aged between eight and 10 expressed their views on equality between women and men. The Comprehensive EU approach for the implementation of United Nations Security Council Resolutions 1325 and 1820 on women, peace and security, adopted in December 2008, provides guidance and commitments to ensure that the Union’s external actions are shaped to protect women from violence, and that they contribute to better equality between women and men during and after armed conflict and in situations of fragility. Women: Stabilising an Insecure World was the theme of the March 2008 high-level international conference promoted by Commissioner Ferrero-Waldner. As a result of the conference, over 40 women political leaders joined her in proposing to the UN Secretary-General that a Ministerial-level meeting be organised in 2010 – the 10th anniversary of the adoption of UN Security Resolution 1325 – to reinforce global commitment to its implementation. To advance the implementation of Resolution 1325, the Commission will also support the 2009 International Colloquium on women’s leadership. These initiatives will help take effective action to end impunity for violence against women, and ensure women’s participation in all aspects of reconstructing institutions and communities after conflicts. In December 2008, the EU adopted the Guidelines on violence against women and girls and combating all forms of discrimination against them. This marks the EU's clear political will to treat women's rights as a priority and to take long-term action in this field. The Guidelines were welcomed and their implementation discussed by civil society organisations at the 10th EU-NGOs Annual Human Rights Forum, which in 2008 focused on Equality in Action: Ending Discrimination Against Women. In September 2008, donors and partner countries agreed the Accra Agenda for Action on aid effectiveness which includes commitments on gender equality. The Commission has been at the forefront of efforts to link the gender equality and aid effectiveness agendas. The EC/UN Partnership on Gender Equality for Development and Peace has produced significant findings on aid effectiveness and gender equality in 12 pilot countries through mapping researches. This has provided useful messages for both donors and partner countries. The EC/UN partnership will continue by supporting in-country and regional capacities to bring a stronger gender equality perspective to aid effectiveness. An interactive website has been set up to provide information on resources, material and good practice. The EC/UNIFEM programme on integrating gender-responsive budgeting into the aid effectiveness agenda, launched in early 2008, has also been a valuable resource for generating knowledge in this area. In the Mediterranean region, the EU leads efforts to put gender equality at the heart of the Euro-Mediterranean Partnership. The 2006 Istanbul Conclusions on Strengthening the role of women in society are closely monitored and a stock-taking Euro-Mediterranean Ministerial conference will take place in 2009. The Role of Women in Economic Life programme has come to an end after a successful contribution to capacity building, carrying out analyses and disseminating good practices. Building on this, a new regional programme has started and will encourage the implementation of the Convention on the Elimination of All Forms of Discrimination against Women. Providing Commission staff with knowledge on gender issues is vital to enable them to engage in dialogue with partner countries and civil society. Capacity-building activities continued throughout 2008 via training workshops. Within the Commission's Inter-service Group on Gender Equality, an External Relations working group was established to strengthen internal coordination. Dissemination of information and exchange of good practice amongst European Commission Delegations is ensured through a network of gender-focused persons. In 2009, the Commission will prepare an EU Action Plan on Gender Equality and Women's Empowerment in External Action. Support for civil society organisations active in the field of gender equality and women's empowerment will continue to fight women's illiteracy, promote women's ownership rights and empower non-state actors. A second Ministerial conference on gender equality within the Euro-Mediterranean Partnership will take place. The extraordinary creativity of children will again be solicited by the Commission's third worldwide drawing competition on the issue of gender equality. Children Children's rights were a focus of attention in 2008. A Communication entitled A Special Place for Children in EU External Action and two accompanying Staff Working Papers, The European Union’s Action Plan on Children’s Rights in External Action and Children in Emergency and Crisis Situations, were issued in February jointly by four Commission Directorates-General: Development, Humanitarian Aid, External Relations and Justice Freedom and Security. The package outlines a comprehensive policy on children in the EU's external policies, using all available instruments from political dialogue to development cooperation and humanitarian aid. The Action Plan on Children's Rights in External Action sets a number of priorities at regional and global level. These concern: child labour, child trafficking, children affected by armed conflict and violence against children. In 2008, a number of projects on children affected by armed conflict and on trafficking in children were shortlisted as a result of a call for proposals. In addition, the Commission reinforced its internal coordination by creating an Inter-service sub-group on children. A Children's Toolkit to support the work of partner countries, delegations and other relevant actors and stakeholders is being prepared jointly with UNICEF. Additionally, the implementation of action against the worst forms of child labour in conflict or post-conflict situations started with a study whose results will be published in 2009. The Commission is also carrying out a study on positive incentives on the sale of products that have been produced without using child labour. Indigenous people Constant efforts are being made to improve the design and the impact of EC external assistance programmes on indigenous people (IPs) by strengthening the Commission's ability to draw on lessons learnt and best practices. During 2007-2008, a specific EC initiative was devoted to ways to better integrate the rights of indigenous people into development cooperation. In 2007, the Commission launched a study on promoting indigenous rights and issues under the Cotonou Partnership Agreement and the 10th EDF based on two case studies in Kenya and Suriname. This led to the preparation of a Draft Tool for EC Cooperation with Indigenous Peoples in ACP countries designed to provide advice and assistance to European Commission Delegations in formulating and implementing development cooperation programmes. Only mechanisms that enable the full and effective participation of indigenous peoples in all stages of development, from design, implementation, monitoring and evaluation to benefit-sharing, can make the application and operation of these concepts work. This tool could be extended to other regions. Environment

In the new generation of country and regional strategy papers, increased consideration was given to environmental sustainability concerns in sector programmes in sensitive areas. This included strategic environmental assessments in sectors like transport, sugar sector reform, sea defences. Efforts to conceptualise and provide operational guidance on integrating climate change adaptation into external cooperation were stepped up. These efforts also focused on donor coordination mechanisms. Activities to strengthen staff capacities to include the environmental dimension into all EC cooperation programmes continued successfully in 2008 with increasing focus on climate change adaptation. Renewed emphasis on this objective was given in the Green AIDCO Action Plan adopted at the beginning of the year. Environmental integration seminars were held, methodological support provided and awareness-raising sessions organised. Combating HIV/AIDS The European Consensus on Development recognises HIV/AIDS as a key development challenge, which requires a multi-faceted response, including more attention to mainstreaming. In most 10th EDF Country Strategy Papers of countries for sub-Saharan Africa, HIV/AIDS mainstreaming figures prominently. The HIV/AIDS mainstreaming process includes integration of awareness raising, educational activities, condom promotion and other AIDS prevention activities in sector work on education and vocational training, transport and infrastructure and rural development. In addition to mainstreaming, HIV/AIDS is explicitly addressed as a main focus for focal sectors in four countries and an identified priority for General Budget Support in four others. Growing recognition of the HIV/AIDS challenge is evident in some countries which have defined their focal sectors on the basis of a careful analysis of the interplay between the sectors concerned and HIV/AIDS. A regional HIV/AIDS helpdesk has been created in Southern Africa, and supports EC Delegations in mounting an expanded EC response to AIDS in the region. The Commission's "HIV in workplace policy", introduced in 2007, is now being implemented through education and training programmes in non-EU countries. 1.6.Aid effectiveness and co-financing 1.6.1.Aid effectiveness The Third High-Level Forum on Aid Effectiveness in Accra, Ghana, in September made 2008 an important year for the global aid effectiveness agenda. Monitoring by the OECD's Development Assistance Committee (DAC) showed that, despite progress, donors risked falling short of the targets agreed in the Paris Declaration of 2005. A further push and a renewed commitment to aid effectiveness were needed. In May, the Council called on Member States and the Commission to seek an ambitious outcome from Accra. In July, the EU consolidated its common position in advance of the forum. Special emphasis was given to division of labour, use of country systems, predictability of aid and mutual accountability for results, including less conditionality. The outcome of the High-Level Forum, the Accra Agenda for Action (AAA), reflects the aspirations of the EU. While the AAA, unlike the Paris Declaration, contains few numerical targets, it nevertheless consists of significant political commitments by donors and developing countries. Touching more themes than ever before, the aid effectiveness agenda now also involves a wide range of partners from the development community. Partner countries themselves, emerging donors, middle-income countries and non-state actors all play an increasingly important role. The Commission has set out the broad lines of its approach for implementing the Accra Agenda, in particular at operational level. It is building on its earlier strategies on use of country systems and joint missions, as well as on the recent "Backbone strategy" to increase effectiveness and the overall quality of technical cooperation and project implementation arrangements (see Sections 4.2. and 5.1.1. below for details). Discussions with Member States will continue on how the EU will carry forward the aid effectiveness agenda at a European and international level, such as in the ongoing work in the OECD/DAC Working Party on aid effectiveness. EU performance will be monitored as part of the annual Monterrey reporting system as well as in the overall Paris Declaration monitoring exercise. As part of its response to the commitments on the use of country systems and aid predictability, the Commission finalised its proposals for MDG-Contracts. Under the 10th EDF some 44% of resources programmed in ACP countries will be budget support (€13.5 billion). The aim of MDG contracts is to make budget support more effective in accelerating progress towards the MDGs by increasing its predictability and focusing on results. Individual MDG contracts will provide longer-term general budget support targeted at countries with a proven track record. MDG contracts were initially approved for seven ACP countries (Burkina Faso, Ghana, Mali, Mozambique, Rwanda, Uganda, and Zambia), representing over 40% of programmed general budget support under the 10th EDF. 1.6.2.Division of labour and co-financing The EU Code of Conduct on Complementarity and Division of Labour in Development Policy, adopted by the Council in May 2007, presents 11 principles for reducing aid fragmentation at the country, regional and global level. Dependent on local circumstances at country level, the Code is being implemented at varying speeds. A fast-track initiative aimed at speeding up division of labour has been established with an EU Member State or the European Commission leading the work in a number of countries. This initiative incorporates a proposal by Commissioner Louis Michel whereby responsibility for specific projects in a particular sector can be delegated by the Commission to a Member State and vice-versa in what is called delegated cooperation. Implementation of fast-tracking has started, and more cases of delegated cooperation are expected. Delegated cooperation/co-financing works in two directions: from the Commission to a Member State, after prior assessment of the Member State's capacity to manage EC funds, and from a Member State to the Commission. Examples are the delegation of the Central Kenya Roads programme from the Commission to Germany's Kreditanstalt für Wiederaufbau, and the co-financing arrangements with Germany for the Global Energy Efficiency and Renewable Energy Facility and with Sweden for the Global Climate Change Alliance, both of which come under the Thematic Programme Environment and Sustainable Management of Natural Resources, including Energy (ENRTP). The mid-term reviews for the Strategy Documents under the financial instruments of the EC Budget (2009) and the EDF (2010) provide a further opportunity to enhance division of labour. An EU toolkit on complementarity and division of labour was prepared by the Commission together with the Member States to facilitate practical work on the ground. A compendium of good practices was drawn up to support international dialogue. Monitoring the Paris Declaration: results of the 2008 survey The first challenge for developing countries is to improve the quality of their poverty-reduction strategies (better prioritisation, stronger links with national budgets and more results-oriented). The second is to improve and reform their national systems for public financial management and procurement. Donors should use country systems more and increase the predictability of aid. They should also refrain from setting up parallel project implementation units, which undermine local capacity development, make more use of programme-based approaches and better coordinate in-country missions and analytical studies. In the light of these recommendations, the Commission should be able to meet the following commitments: coordinate technical cooperation (including missions and analytical studies), cut the number of parallel project implementation units, and raise aid predictability. Major challenges for the Commission concern the use of country systems.

1.7.Partnership with United Nations and World Bank 1.7.1.United Nations The EU sees the UN as one of its most important partners in the field of development. The EU-UN partnership is guided by the international policy agenda, in particular the UN Millennium Declaration and the Millennium Development Goals. Throughout 2008, the Commission continued its contacts, cooperation and dialogue with the UN and its agencies, funds and programmes. This cooperation has developed into a mutually beneficial partnership in policy, normative and operational terms with individual UN bodies and the UN system as a whole. These joint efforts have resulted in saving and protecting lives, strengthening governance, protecting human rights, preventing and overcoming crises as well as promoting human development and sustainable livelihoods. The Commission has continued to give particular attention to projecting EU policy priorities and values in the UN context. This goes hand in hand with the Commission's increased presence and input in policy-making and debates at UN institutional fora, conferences and conventions. UN reform remains a key priority for the Commission, which supports UN efforts to promote system-wide coherence and to increase UN effectiveness in its country-level operations. The Commission has shown particular interest in progress in the implementation of the 'Delivering as One' initiatives. In 2008, the Commission took an active part in the first Development Cooperation Forum, a new initiative of the UN Economic and Social Council to strengthen the UN's role in the development cooperation dialogue. In the context of UN efforts to mobilise global support towards achieving the MDGs, the Commission called on all partners to reaffirm their existing commitments. Its positions on development cooperation policies achieved high visibility in the UN context thanks to the participation of Commission President José Manuel Barroso and several Commissioners. This built on the Commission's active participation in the UN Secretary-General's Africa MDGs Steering Group of which President Barroso is a member. The positive conclusion of the UN events in September led to the further enhancement of the global partnership for development at the UN Review Conference on Financing for Development in Doha, Qatar, in early December. The action-oriented outcome of the conference reaffirmed the donors' commitment to increase their development assistance despite the financial crisis. The EU as a whole showed strong leadership throughout the conference, building bridges with partners in the spirit of global partnership and always aiming for a consensual result. The protection of human rights was an important theme in 2008, which saw the 60th anniversary of the Universal Declaration of Human Rights. In the UN framework, the Commission worked to secure the universal rights of people, as well as principles for respect of cultural diversity, and an emerging consensus on women's rights through the strengthening of the UN's so-called gender equality architecture. Together with the UN, the Commission gave high priority to mainstreaming human rights into development policy so as to demonstrate that the two are mutually reinforcing goals. Throughout the year, the Commission played a leading role in other UN events and high-level conferences such as the FAO Conference on World Food Security, Climate Change and Bioenergy (Rome, 3-5 June). At the UN Conference on Trade and Development (UNCTAD XII) in April in Accra, progress was made on UNCTAD reform. The commitment to make globalisation a tool for poverty eradication was reaffirmed. The European Community, as a full member of the Food and Agricultural Organisation (FAO), played an important bridge builder role in the FAO reform process. 1.7.2.International Financial Institutions Cooperation between the Commission and International Financial Institutions (IFIs) especially the World Bank (WB) and the International Monetary Fund (IMF) continued to grow in 2008. Important steps were taken in EC relations with regional development banks. World Bank and IMF The Commission and the World Bank cooperated on crucial policy initiatives including the response to the food crisis, climate change financing and support for fragile states. In 2008, the Limelette Process, which was launched in 2003 between the Bank and the Commission to improve their cooperation in Africa, was expanded to incorporate the Tunis Process, a joint EC-African Development Bank initiative which aims to achieve greater development results. The Merged Process was initiated in June 2008 when senior officials of the three institutions met in Tunis to launch a tripartite partnership on budget support and public finance management (PFM). They agreed to start cooperation with four African pilot countries: Ghana, Mali, Mozambique and Rwanda. Regional Development Banks The Commission maintained strong bilateral ties with the African Development Bank (AfDB), providing financial support for the African Economic Outlook, published jointly by the AfDB, the Development Centre of the OECD and the UN Economic Commission for Africa. 1.7.3.OECD Cooperation with the OECD on development issues intensified in 2008, notably in preparation for the High-Level Forum in Accra. Commissioner Michel spoke at the annual High-Level Meeting of the Development Assistance Committee, stressing the need for donors to live up to their commitments and use the challenge of the key development events in 2008 to help achieve the MDGs. The Commission participated actively in a reflection group preparing a new mandate for the DAC. As part of the DAC's regular peer reviews of its members, the Commission and Canada examined Norway's development assistance. 1.8.Poverty focus in middle-income countries More than 80 countries are classified as Middle-Income Countries (MICs). A large and diverse group of countries, MICs make up just under half of the world’s population and are home to one third of those people across the globe living on less than two dollars per day. The highest income MICs have a per capita income 10 times higher than the lowest income ones. In fact, MICs break down into two groups: Lower Middle Income Countries ($936-$3 705 GNI per capita) and Upper Middle Income Countries ($3 706-$11 455 GNI per capita). Disparities in income and levels of social exclusion remain significantly high, especially in Latin America and Asia. The recent global economic slowdown and the related decrease in capital investment and development aid may further worsen this situation. Commission assistance to MICs aims to enhance sustainable development and reduce poverty in line with the MDGs. The Commission uses several financial instruments including: the Development Cooperation Instrument (DCI) for Latin America and Asia and the European Neighbourhood Partnership Instrument (ENPI) for eastern European and southern Mediterranean countries.

All 17 Latin American countries are presently defined as MICs. In line with the European Consensus on Development and the recent Communication on a stronger partnership between the EU and Latin America, the Commission takes a flexible approach that corresponds to the level of development of each country. For the Lower Middle Income Countries, EC-funded cooperation concentrates mainly on supporting policies to reduce poverty, inequality and exclusion through the promotion of social cohesion and institution building. This cooperation with countries such as Honduras, Ecuador, Paraguay, Peru and Nicaragua includes budget and sector support programmes, which focus mainly on social sectors and the improvement of public financial management. Other countries like Colombia and Bolivia benefited from cooperation on peace, stability, the rule of law, the fight against drugs or water management. For Higher Middle Income Countries, more emphasis was put on economic and trade cooperation, the promotion of sectoral dialogues and support for higher education. The overarching objective of EC assistance under the Development Cooperation Instrument for Asian MICs is poverty reduction. Aid provided by the Commission covers areas such as economic and environmental issues, education, health, government and civil society depending on countries' priorities at national or regional level. The regional poverty level has diminished in recent years, mainly due to the rapid growth of large countries such as China. Nevertheless those people recently lifted out of poverty in Asian MICs remain highly vulnerable to negative effects caused by the recent food, energy and financial crises. The EU's eastern neighbours are now classified as MICs. While poverty in the region has been reduced, significant social inequalities and exclusion persist. The introduction of the European Neighbourhood Partnership Instrument and increased assistance in the form of sector budget support added to the efficiency of the EC assistance. However, needs remain significant in this region (for example the Republic of Moldova is still the poorest country in Europe). The southern Mediterranean region is also affected by poverty. The consequences were especially visible in 2008 when rises in commodity prices provoked social unrest in some countries. Therefore, in countries with particularly high poverty levels, ENPI assistance supported the development of basic social infrastructure (social safety nets, health and education). 1.9.Sectoral policy and strategy developments Human and social development To accelerate the implementation of the EU policy to provide human resources in health, the Commission prepared a Progress Report on the implementation of the European programme for action to tackle the critical shortage of health workers in developing countries (2007-2013). The report, with input from 18 Member States, shows that the EU supports health programmes with a human resources for health (HRH) component in 51 of the 57 countries identified by the World Health Organisation as facing an HRH crisis. It provides support for regional research, capacity-building and knowledge-generating initiatives. The report begins to explore, at the global level, opportunities to encourage circular migration and the introduction of other mechanisms to deal with the pull factors in the migration of health workers from poorer countries. Yet, the responses from the Member States indicate that actions in health and on HRH are largely uncoordinated. This runs counter to the idea of the programme for action as a guiding tool for EU collective action on health and HRH. The Commission will work with the Member States in 2009 to translate the existing policy into more robust joint action on the ground. In collaboration with the French EU Presidency, the Commission prepared a document on Social health protection and health-care financing in developing countries: towards a framework for concerted intervention by the European Union which was discussed at an informal ministerial meeting in Bordeaux on 29 September 2008. In November, the Council of the EU adopted formal conclusions on strengthening health systems in developing countries. The Commission initiated the progress review on the European Programme for Action to Confront HIV/AIDS, Malaria and Tuberculosis Through External Action (2007-2011) through a wide consultation of European and African stakeholders at meetings in Brussels and Dakar, Senegal. These produced recommendations on policy updates, options and priorities for collective action by the European Union. Stressing the need for continued investment in new tools and technologies, the Commission organised the international conference Challenges for the Future: Research for HIV/AIDS, Malaria and Tuberculosis to rally political support and define research priorities for the Commission's 7th Research Framework Programme. The Commission reinforced its internal coordination on communicable diseases to promote policy coherence, coordination and collaborative action. Ten Commission services are involved. The Commission worked closely with the European G8 members to consolidate their response to HIV/AIDS, malaria and tuberculosis as a basis for a broader and more comprehensive G8 involvement in global health and health-system strengthening as well as donor harmonisation and aid effectiveness. On 1 December, the Commission collaborated with the EU Presidency and Member States on the EU Statement One Word: Leadership - Keeping the promise to stop HIV/AIDS. Working with Member States and other donors and stakeholders, the Commission strengthened its international position in education and health. As in previous years, the Commission played a key role in the Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) to which the EC contributed €100 million in 2008. The EC's total contributions have reached €672 million over the last seven years. The Commission argued strongly for a better alignment of the GFATM-funded programmes with countries' national strategies and worked for better coordination between EU Member States to prepare EU positions. It also actively participated in the International Health Partnership. The Commission continued its close involvement in the Education for All – Fast Track Initiative (FTI), especially on governance reform, strengthening of country level processes and the oversight of its evaluation. The Commission was involved with the UN and its agencies in the preparations leading up to the UN events on Africa and on the MDGs in New York in September 2008. This gave it considerable influence on the various outcome documents on education and health feeding into the UN Secretary General's MDG Africa Group. During the events, the Commission signed up to the Class of 2015, an initiative for stepping up international advocacy on education goals. In line with the Joint Africa-EU Strategy, an active dialogue with UNESCO in the context of the Education for All (EFA) process was instrumental in establishing the international Task Force on Teachers for EFA. Food Security Global food security was negatively affected by food price increases in 2007 and 2008. In the course of 2008, the European Community responded to this challenge in various ways. First, an additional €130 million from the Commission's Directorate-General for Humanitarian Aid was allocated for food assistance. Second, where feasible, resources from other development cooperation instruments were mobilised, making available a further €250 million. Third, following a proposal by the Commission of July, the European Parliament and the Council adopted a Regulation establishing a facility for rapid response to soaring food prices in developing countries. This Regulation provides for the implementation of a €1 billion Food Facility, and constitutes the main EU response to the worsening global food security situation in 2008. The Food Facility will support measures in developing countries to (1) encourage a positive supply response from the agricultural sector; (2) respond rapidly and directly to the negative effects of volatile food prices on local populations, and (3) strengthen the productive capacities and the governance of the agricultural sector to enhance sustainability. It will operate for a period of three years (2008-2010) and thus be an instrument that operates in the time-spectrum between emergency assistance and long-term development cooperation. Sugar As part of the accompanying measures to support the adaptation process of ACP Sugar Protocol countries following the reform of the EU sugar regime, the Commission decided on 13 June 2008 to add €3 million to the indicative allocation of the available budget between eligible countries (€670 million in total for the 2007-2010 period). Following the adoption of all country strategies and Annual Action Plans (AAPs) for 2007, the 2008 AAPs were adopted. Environment The Commission's services finalised in July 2008 a staff working document on the implementation of the Global Climate Change Alliance (GCCA) which was allocated €60m for 2008-2010 to create awareness and jointly address climate change between the EU and the most vulnerable developing countries (typically least developed countries and small island developing states). Based on a number of criteria, four countries have been identified to start up activities under the GCCA. They are Vanuatu, the Maldives, Cambodia and Tanzania. The activities will be mostly in the form of budgetary assistance for the implementation of their Climate Change Action Plans. The first Voluntary Partnership Agreement (VPA) under FLEGT (Forest law enforcement, governance and trade) was concluded with Ghana on 4 September 2008. Negotiations progressed with Malaysia, Cameroon and the Republic of Congo, with a view to reaching an agreement in the first half of 2009. Negotiations are ongoing with Indonesia, and a number of countries have expressed their interest in starting negotiations in 2009: Central African Republic, Gabon, Liberia and Vietnam. The VPA negotiations have demonstrated that stakeholder involvement in developing national policy and systems is essential for their successful conclusion and has resulted in new working practices and relationships in the forest sector. As a key element of the FLEGT Action Plan, the Commission has proposed a new regulation to strengthen the EU's efforts to stop illegal logging. It is designed to encourage the purchase and use of timber products from identified authorised sources and to support timber-producing countries to develop FLEGT voluntary partnership agreements. Energy

The EU is engaged in several initiatives to support the provision of adequate, affordable and sustainable energy to developing countries. These include the EU Energy Initiative for Poverty Eradication and Sustainable Development and the EU-Africa Partnership on Energy. EU energy policy which aims to deliver sustainable, secure and competitive energy to all Member States, also aims to integrate Europe’s energy and external and development policies. The Second Strategic Energy Review, adopted in November 2008, reiterates that energy must be given the political priority it merits in the EU's international relations. Developing countries facing similar energy and climate challenges will benefit from EU efforts to diversify energy supply and to develop energy-efficient and renewable energy technologies. The Review urges the EU to assess the increasingly important role of Africa in EU energy security, to intensify its energy relationships with Africa, together with its support for the regional integration of electricity markets and the promotion of renewable energy. Following the launch of the Africa-EU Energy Partnership in December 2007, several high-profile initiatives of the Commission have kick-started the cooperation including a joint energy mission of Commissioners Andris Piebalgs and Louis Michel to Africa. EC support for energy has become more visible with its inclusion as a priority area in the European Consensus on Development and the awareness created through the ACP-EU energy facility and the EU-Africa Partnership on Infrastructure. Energy is a development sector in the indicative programmes of 15 countries under the 10th EDF. Six of them are in Africa and nine in the Pacific region. Additional support for energy is included in the thematic programme on environment and sustainable management of natural resources, including energy. The replenishment of the Energy Facility (€200 million) and the reinforcement of the EU-Africa Infrastructure Partnership and its Trust Fund (€300 million) are foreseen under the 10th EDF intra-ACP programme. In 2008, a number of initiatives were launched at continental/regional and bilateral level to support African Power Pools and the Forum for Utility Regulators, to promote energy interconnections, renewable energy and energy efficiency and to encourage investment in the energy sector. Energy is also a major concern of the European Neighbourhood Policy, in both its southern and eastern dimensions. As part of the proposed Eastern Partnership, the EU plans to include energy-interdependence chapters in the new Association Agreements with its eastern neighbours. These chapters intend to increase energy security in the partner countries as well as in their relations with the EU. The multilateral approach will also include a platform on renewables and energy efficiency. Looking south, energy issues have long been a priority in Euro-Mediterranean relations. The Union for the Mediterranean sets a framework to foster cooperation in order to offer secure and affordable energy. Concrete initiatives have also been launched, such as the development of a Solar Plan in support of solar energy. The energy related activities in both the Development Cooperation Instrument and the European Neighbourhood Policy Instrument take into account the objectives of the European Strategic Energy Technology Plan (SET-Plan). Transport In the first half of 2009, the Commission will look at ways to strengthen cooperation on transport between the European Union and Africa. This follows the launch of the EU-Africa Partnership on Infrastructure and the first steps by the EU in 2008 to support the African Union Commission on infrastructure planning. EU efforts will focus on the ongoing cooperation in civil aviation, as wells as road safety, multi-modal transport, and maritime transport (in particular the motorways of the sea). The Commission is also willing to share methods and instruments of its Trans-European Networks in the area of transport as a benchmark for further infrastructure coordination and development. In addition, the Commission has sought to establish a close partnership in the area of aviation with its African partners: the African Union, regional economic communities and individual states. The aim is to support the liberalisation of access to air transport markets in Africa, through sharing the experience of the EC internal market. The Commission has provided €750 000 to the African Union Commission under the EU-Africa Partnership on Infrastructure for Yamoussoukro Decision support initiatives. The EU – Africa transport cooperation will also look at the experience gained with North African countries in the framework of EuroMed Transport. The implementation of the Regional Transport Action Plan (RTAP) for the Mediterranean for 2007-2013 is ongoing. First results in terms of approximation of legislation to the EU acquis in the fields of market liberalisation, safety and security are expected for 2009. Discussions on the methodology for defining a trans-Mediterranean transport network are also proceeding. Information and Communication Technologies The Commission considers information and communications technology (ICT) as an enabling tool to reach other development objectives via job creation, and to underpin efforts to attain the MDGs. Attracting private investments requires a stable legal environment and an appropriate regulatory framework. This is why the Commission directs its actions towards creating national and regional regulatory frameworks for electronic communications that ensure a level playing field for all entrants. Further investments are being supported in broadband telecommunication networks through public-private-partnerships and in non-commercial electronic applications, such as telemedicine and e-learning. The EU-Africa Partnership on the Science, Information Society and Space aims to strengthen cooperation in building knowledge-based economies in Africa and will formulate a response to the African Regional Action Plan on the Knowledge Economy. Research In the research domain, the Africa-EU Partnership for Science, Information Society and Space received impetus following a joint statement issued by European Research Commissioner Janez Potočnik and African Union Commissioner Jean-Pierre Ezin in October 2008. Six priority projects for immediate implementation were identified. Another concrete step was the secondment of a senior European scientific officer to the Secretariat of the African Union in Addis Ababa. Progress was made with China and India, in particular in issuing coordinated calls for projects in selected research fields of mutual interest. Several regional information and matching events to enhance scientific and technological cooperation were held with the participation of research teams from European and ASEAN countries. Latin American teams had a good participation rate in the Seventh Research Framework Programme. Research results from collaborative projects were show-cased during events such as the First Environment Ministerial Meeting between the EU, Latin American and Caribbean countries and the Lima Summit. Aggregate data from 2007-2008 (as of February 2009) shows a total of some 8400 evaluated applications from different regions in the 7th Research Framework Programme (2007-2013), with Africa, Asia and the Caribbean having proportionately the highest number of successful applicants. Almost €170 million were attributed to the 1 529 most successful candidates.

1.10.Outlook 2009 In 2009, the global financial crisis and issues of food security and volatility in fuel/commodity prices combined with the long-term effects of climate change, will limit the potential for progress by developing countries towards reducing poverty and achieving the MDGs. The Commission will closely monitor and analyse how these crises affect progress towards the MDGs, and propose measures to support developing countries. The Commission will also issue its annual monitoring report on EU commitments to development financing and aid effectiveness. In addition, short-term actions under the €1 billion Food Facility will continue while a long-term strategy will be worked out, in particular through strengthening or expanding EU food security policy. In this context, cooperation with international partners will be crucial and the Commission will further engage with multilateral financing organisations and contribute to multilateral processes and platforms (G8, G20, the UN conference on the development impact of the financial and economic crisis) in order to maximise the impact of international efforts. Similarly, the Commission will further develop the trilateral cooperation and dialogue with Africa and China as well as with Africa and Brazil, both initiated in 2008. In parallel, the Commission will seek the proactive involvement of ACP countries to initiate the second revision of the Cotonou agreement. The negotiations with the ACP should be concluded by February 2010. The year 2009 will be one of consolidation and implementation of EU regional strategies with the Caribbean, the Pacific and Africa. In the context of the Africa-EU Joint Strategy, the eight specific partnerships, particularly those on trade and regional integration and on water and energy, should see rapid progress. As regards environment and climate change, 2009 will be marked by the Copenhagen Conference on the post-2012 follow-up to the Kyoto Protocol, which will take place in December. Policy dialogue in the context of the Global Climate Change Alliance will aim to develop a shared vision with the most vulnerable developing countries. The Commission will continue to work on innovative sources of funding for climate change issues. To complement these efforts, the Commission will adopt a new strategy on disaster risk reduction and revise its Environmental Integration Strategy. In 2009, the Commission will prepare policy documents on financing of health systems and social protection in health, and on fostering more and better education in developing countries. Progress on the European Programme for Action to Confront AIDS, Malaria and Tuberculosis through External Action (2007-2011) will be reviewed. The Commission will continue to be actively involved in the Global Fund to fight AIDS, Tuberculosis and Malaria and in the Education for All Fast Track Initiative. On cross-cutting issues, prioritised by the European Consensus, other reports will be produced in 2009. An EU action plan on gender equality and women's empowerment in EU external action will be proposed, outlining a coherent approach to implement the 2007 Communication on gender equality. As requested by the Council and the Court of Auditors, a specific report will be prepared on ways to make environmental policy more operational on the ground. Special attention will be given to strengthening cultural cooperation. A high-level international colloquium on Culture and Creativity as Vectors for Development will bring together ministers of culture and professionals from both EU and ACP states in April 2009 to debate the role of cultural sectors in boosting local economies and ways of improving access of ACP cultural goods to EU and international markets. The Commission, together with the Member States involved, will further develop its activities with the research community and produce a European Report on Development, building on the first research report issued in 2008. The focus of this forward-looking exercise in 2009 will be development in the context of fragility. Finally, Policy Coherence for Development will be a major undertaking for the Commission in the coming year with the publication of the second EU Report on Coherence. The paper will attempt to provide concrete evidence of the 'beyond-aid agenda', namely the contribution made by other EU policies to economic and social development in poor countries. It will illustrate how European policies affect the ability of these countries to make progress towards the MDGs. The report will highlight the EU's multiple and increasingly diversified relationships, and set out innovative approaches for a more inclusive global development. 2.IMPLEMENTATION This synopsis of the EU's external assistance is presented through six major implementation instruments: the European Neighbourhood and Partnership Instrument (ENPI), the European Development Fund (EDF), the Development Cooperation Instrument (DCI) the European Instrument for Democracy and Human Rights (EIDHR) the Instrument for Stability (IfS) the Instrument for Nuclear Safety Cooperation (INSC)

A section of this chapter is dedicated to humanitarian assistance. This report does not cover the Instrument for Pre-Accession (IPA) nor the Common Foreign and Security Policy (CFSP). The geographical cooperation for sub-Saharan Africa, the Caribbean and the Pacific regions (ACP) is mainly financed, South Africa excepted, from the European Development Fund (EDF), i.e. outside the EU budget. External assistance for other geographic areas and the thematic programmes are financed from the general budget of the European Community. Some figures are given to illustrate this chapter but exhaustive financial information can be found in Chapter 6. 2.1.European Neighbourhood and Partnership Instrument The ENPI provides EC assistance at a bilateral or regional level to 17 countries: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, the Republic of Moldova (hereafter Moldova), Morocco, the occupied Palestinian territory, Syria, Tunisia, Ukraine and Russia. It comprises a specific cross-border cooperation component covering border regions of EU Member States. 2.1.1.Bilateral and regional cooperation 2.1.1.1.Introduction Relations between the EU and its neighbours are handled within two political frameworks: the European Neighbourhood Policy (ENP) covering relations with 16 of the EU's immediate neighbours, and the separate Strategic Partnership with the Russian Federation. The ENP seeks to build, together with partner countries, a prosperous, secure and stable neighbourhood on the basis of shared values and common interests, promoting greater prosperity and economic development, better governance as well as common stability and security. The implementation of the 12 ENP Action Plans (jointly agreed with Armenia, Azerbaijan, Egypt, Georgia, Israel, Jordan, Lebanon, Moldova, Morocco, the Palestinian Authority, Tunisia and Ukraine) as well as corresponding bilateral and regional strategy papers provide the main operational tools to achieve this objective. In 2008, further progress was achieved in key aspects of the ENP. Political and financial cooperation was strengthened as was economic integration. Mobility between the EU and some ENP partner countries was enhanced (pilot project on 'mobility partnership' in Moldova), cooperation on justice and the fight against organised crime improved and transport links strengthened. Progress was also made towards opening EC programmes and agencies to ENP partners. In April 2008, the Commission issued a Communication on the implementation of the European Neighbourhood Policy, accompanied by a sectoral progress report and 12 country-specific progress reports on the implementation of the ENP Action Plans by the respective countries. The Communication concluded that the ENP has enabled the EU and its partners to make clear progress in deepening their cooperation and in better targeting the needs and ambitions of partners, thus leading to a more differentiated policy for each one. In 2008, the Union created two further policy frameworks, one each for its southern and eastern neighbours. To complement the ENP and strengthen further the Euro-Mediterranean Partnership, the Barcelona Process: Union for the Mediterranean was launched in Paris on 13 July 2008. It aims to reinforce the partnership, offering more balanced governance of the process, increased visibility and focus on projects promoting intra-and inter-regional cooperation. In June 2008, the Commission adopted a report on the first year of implementing the Black Sea Synergy. The BSS complements the bilateral relations with the region and boosts ongoing cooperation, promoting dialogue and coordination at the regional level. On 3 December 2008, the Commission adopted the Communication proposing an Eastern Partnership to strengthen the links between the EU and the six eastern ENP partners, reinforcing the bilateral agenda in the context of the ENP and establishing a new framework for multilateral cooperation. The seperate relationship between the EU and the Russian Federation continued via the Strategic Partnership and its four Common Spaces (economic cooperation; freedom, security and justice; external security; research and education including culture). Negotiations for a new overall EU-Russia agreement are ongoing. Implementing the comprehensive EU cooperation agenda with the ENP partners and Russia has been supported since 2007 by the European Neighbourhood and Partnership Instrument. This supports a wide range of cooperation activities. These include the 15 bilateral assistance programmes, the main part of EU financial assistance to the Palestinian Authority, key regional initiatives and projects in the south and in the east as well as the cross-border cooperation programmes at the external border of the EU. In 2009 the ENPI programming documents will be subject to a mid-term review. In 2008, the Neighbourhood Investment Facility (NIF) was established to pool grants from the Community and the Member States so as to leverage investments in partner countries provided by the European public financing institutions. Lending operations supported through the NIF focus on the priorities set by the agreed ENP Action Plans mainly in the transport, energy, environment and social sector. In 2008, the Facility approved 15 projects for financing with a total NIF contribution of €71 million. This leveraged loans from European financing institutions worth approximately €1.65 billion. For the period 2007-2013, the Commission has earmarked a total of €700 million for the NIF. In addition, the Member States have to date pledged €37 million in direct contributions to the NIF Trust Fund managed by the EIB, for the period 2008-2010. Cooperation in the field of higher education continued through the programmes Tempus IV and Erasmus Mundus External Cooperation Window. 2.1.1.2.Aid effectiveness and donor coordination Donor coordination is further improving in ENPI partner countries, especially with the introduction of sector budget support (SBS) in place of project funding. This results in increased ownership of reforms by recipient governments. Donor coordination is central to the whole SBS approach and Commission experience emphasises the importance of a clear government-led management and coordination framework for a given sector.

In Armenia and Azerbaijan, the opening of fully-fledged Commission Delegations in 2008 is further enhancing donor coordination and aid effectiveness in these countries. Ukraine has established a Donor-Government Working Group for each sector as part of its coordination commitment under the Paris Declaration. Other facilities like the establishment of a Cabinet-level or Minister-level Bureau of European and Euro-Atlantic Integration should improve dialogue and coordination not only with the Commission and Member States, but also with other donors. In addition, the Commission has developed a matrix of all EU technical and financial cooperation activities with Ukraine, including those of the Commission and Member States. The preparation of a sector budget support in environment, to be financed under the 2009 Annual Action Programme, is being done jointly by the Commission and Sweden. The Commission was active in sector working groups in Moldova on health and social protection. These groups were led by the respective ministers and, in some cases, co-chaired by the Commission Delegation. They took a sector-wide approach, analysing the sector allocations foreseen in Moldova's Medium-term Expenditure Framework 2009-2011, as well as in the main donor projects. The Commission played a leading role in coordinating this sector, through its 2007 SBS for social protection and the 2008 SBS on health. In Belarus, EU coordination with major donors was actively promoted. Following seminars organised by the Commission, in cooperation with the UNDP, Belarus has announced its interest in signing the Paris Declaration. Improved coordination and donor effectiveness is further illustrated, by the example of assistance to the occupied Palestinian territory with the smooth transition from the Temporary International Mechanism (TIM) to PEGASE between February and March 2008. The TIM was established in June 2006 by the Commission at the request of the Quartet and of the European Council to maximise support from international donors. Building upon the TIM, PEGASE was launched on 1 February 2008 to support the three-year Palestinian Reform and Development Plan and channel funding from a wide range of donors, helping to optimise the use of overall external assistance to the Palestinian people. The NIF represents a practical step towards donor coordination, the division of labour among donors and harmonisation of procedures. By enabling joint European operations, the NIF generates greater donor coherence and coordination in line with the objectives of the Paris Declaration and the Accra Agenda for Action, bringing greater visibility to the European dimension of external cooperation. 2.1.1.3.Working towards the MDGs Helping to achieve the UN Millennium Development Goals is one of the objectives of the ENPI. For instance, the substantial sector budget support (SBS) programme on Vocational Education and Training (VET) in Armenia explicitly supports its poverty reduction strategy. In Ukraine and Belarus, a number of major gender equality projects (MDG 3) have been launched, along with two initiatives to combat HIV/AIDS (MDG 6). The action programme for Belarus focused entirely on environmental sustainability (MDG 7). A project involving Moldova, Ukraine and Russia to protect the Eurasian steppe ecosystems also focused on environmental sustainability. Other significant programmes in the region also concentrated on the environment. In Azerbaijan, an EC-funded project led to the adoption of a social assistance master plan. Comprehensive healthcare programmes in various partner countries contributed to MDGs 4 and 5. In any case, it can be said that virtually all ENPI external assistance contributed directly or indirectly to reducing poverty and reaching other MDGs. The same applies to southern neighbours. Reducing extreme poverty and providing basic social services (MDG 1) for the population were aims actively pursued in 2008 in the occupied Palestinian territory, as well as in Lebanon, where the Palestinian refugee camp of Nahr el Bared needs to be reconstructed. Equitable access to healthcare will gradually be developed in Algeria and Morocco through health sector reform support programmes. In Egypt, the improvement of water quality and waste water treatment will be reinforced through the IWSP Programme, while the education sector programme will increase access to education, particularly for disadvantaged children (MDG 2). It is also expected that women's rights will be strengthened and that their conditions will be improved through a project to promote civil society development and raise the level of human rights protection in Egypt (MDG 3). Sustained EC support to Libya in the field of AIDS/HIV prevention and care reflects, along with other measures to combat infectious diseases, the attention paid to the achievement of MDG 6. 2.1.1.4.Regional cooperation and integration ENPI programmes for regional cooperation play an important role in fostering cooperation between countries on issues of mutual interest, both in the East and the Mediterranean basin. Regional cooperation facilitates policy dialogue, builds synergies, promotes the sharing of experiences and creates networks between people in the EU and the partner countries. In 2008, the political dialogue between the EU and its partners progressed, with a number of successful ministerial conferences on key areas of cooperation such as the environment, health, culture and infrastructure investments. Cooperation with Mediterranean partners In 2008, €85 million were made available for new regional initiatives in the Mediterranean region. Four new projects were identified and launched in line with the main priority areas of the Union for the Mediterranean. They concern the environment, transport, energy and infrastructure investments. Recognising the region's growing environmental problems, the EU and its partners are addressing the issue of water scarcity and quality by initiating a reform of environmental standards and investing in infrastructure. The next steps will be to improve governance, strengthen capacities and develop a sustainable Mediterranean Environment Reporting Mechanism. One of the greatest potentials for energy saving can be found in the construction sector. An ongoing project (MED-ENEC) will be continued to provide assistance to partner countries to control their energy consumption in this sector. It will explore how energy needs, particularly for cooling purposes, can be satisfied by energy efficient solutions combined with greater use of solar energy. Further support to renewable energy and energy efficiency is also provided through a project on the integration and the security of the Euro-Mediterranean energy market (MED-EMIP). Furthermore, market integration in both the electricity and gas market has continued to receive support in 2008 in the Mashreq and the Maghreb sub-regions. To support the economic and social development of the region, the Commission encourages the creation of a regional Euro-Mediterranean transport infrastructure network allowing more functional and efficient transport connections between the two shores of the Mediterranean. A new initiative will consolidate the political dialogue, carry out analyses on regulatory reform, infrastructure planning and assessment of financing needs and support the implementation of priority projects. Particular efforts will be made to create the Motorways of the Sea. Economic development and innovation will also be encouraged through the creation of a Euro-Mediterranean information society. A new project will foster the establishment of a harmonised and investment-friendly enabling environment in the electronic communications sector. In 2008, the Commission also continued to support civil society initiatives in favour of the Middle East peace process through a new allocation for the Partnership for Peace programme, which encourages cooperation between Israeli and Arab people through a number of civil society initiatives. Finally, the Commission has continued to support the Facility for Euro-Mediterranean Investment and Partnership (FEMIP), with an additional €32 million allocated in 2008. Seven new risk capital operations were contracted by the EIB in 2008 for a total amount of €60 million. More than €10 million was approved for technical assistance operations which support FEMIP operations such as environmental projects, as well as investment funds. Cooperation with eastern partners

In the framework of the Baku Initiative, INOGATE and TRACECA programmes continued to support policy dialogue and capacity building in the energy and transport sector. New regional projects with the EU's eastern neighbours received €45 million funding in 2008. These include a project to reduce environmental risks and pollution and to promote more sustainable use of natural resources in the region, as well as to improve the management of waste. Furthermore, a project was launched in 2008 to assist partner countries in preparing for post-Kyoto negotiations. On energy, a new project under INOGATE's umbrella is to develop energy efficiency in the building sector so as to help partner countries reduce their dependency on fossil fuels and improve security of their energy supply. As regards the strategic issue of energy supply, the Commission supports investigations into the development of a Trans-Caspian–Black Sea gas corridor. Both suppliers and consumers of gas have an interest in securing and diversifying their gas supplies. The next step is to develop the proposal for a "Caspian Development Corporation" and subsequently to identify infrastructure needs associated to a new gas supply route. The continuation of the European Union Border Assistance Mission to Moldova and Ukraine (EUBAM) was also financed in 2008 The Eastern Partnership initiative, launched by the Commission in December 2008, will strengthen the multilateral framework to the EU’s relations with its partners. This includes four thematic platforms intended to foster links among the partners themselves and with the EU as well as flagship initiatives to mobilise multi-donor support. It is planned also to launch an Eastern Partnership Culture Programme with the aim of strengthening the capacity of cultural operators, fostering regional links and contributing to the development of inclusive cultural polices in partner countries. 2.1.1.5.Implementation The European Neighbourhood and Partnership Instrument entered its second year in 2008 and implementation is now well underway. A total of €1.7 billion was committed for the EU's 17 eastern and southern neighbours from the 2008 EC Budget and the respective annual action programmes were adopted (except for Russia). Eastern Neighbourhood In the eastern ENPI countries, the bulk of funds went into sector budget support programmes, except for Russia and Belarus, where there is no budget support. A European Commission Delegation was opened in Armenia in February 2008. The 2007 SBS programme started in the domain of Vocational Education and Training, supporting Armenia's poverty reduction strategy and boosting job creation. The 2008 SBS programme concentrates on justice reform. It aims to help restore the trust of the population toward the courts and judges and to improve the quality of, and achieve better access to, justice. Further SBS was provided through the ongoing Food Security Programme. The TAIEX facility has begun to be extensively used and the first Twinning projects were launched in the field of economy and justice. The Commission has also extensively supported civil society and NGOs. Further projects focused on the environment, nuclear safety and migration. A Commission Delegation was also opened in Azerbaijan. It is scheduled to be fully staffed by mid-2009. EC-funded projects successfully supported the reform of the social protection system, and set up an integrated border management model on the border with Iran. Forthcoming technical assistance projects will seek to improve the investment and export climate, strengthen the capacity of the Ministry of Economic Development and enhance the vocational education and training system. The 2007 SBS on energy will start in 2009 after late signature by the authorities. The first three Twinning contracts were signed in 2008 and two other Twinning projects were awarded. Two new projects were launched. Five more projects are already in the pipeline. TAIEX continued but was underused, while the Sigma programme was launched with a focus on public administration reform and public internal financial control. The focus of assistance to Belarus was on continued support to young Belarusians in higher education, with sizeable contributions for the benefit of students enrolled at the European Humanities University, which is in exile in Vilnius, Lithuania, for political reasons. Dialogue was enhanced with the administration in the areas of energy, customs, agriculture and transport. Application of the 2007 action programme to support the implementation of a comprehensive energy policy will start in 2009. The Commission has also adopted an action programme to support Belarusian environmental policies. Other projects dealt with promotion of human rights, support for democratic electoral and political processes and mitigating the consequences of the Chernobyl catastrophe. TAIEX was successfully launched following the official appointment of the National Contact Point (NCP). For the time being, Belarusians have expressed no desire for Twinning projects and the possible introduction of Sigma would be premature. Georgia became a particular focus of attention following the crisis in August 2008. A comprehensive assistance package of up to €500 million over three years was then pledged by the Commission. Of these funds, the Commission allocated more than €60 milli