13.2.91 Official Journal of the European Communities No C 37/3 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Decision concerning general guidelines for financial and technical 
cooperation with the developing countries in Latin America and Asia during the period 1991 to 
1995 
COM(90) 654 final 
(Submitted by the Commission on 20 December 1990) 
(91/C 37/03) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, 
Having, regard to the Council Regulation (EEC) No 
442/81, and in particular Article 9 (2) thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Whereas general guidelines should be determined, for 
financial and technical cooperation with the developing 
countries in Latin America and Asia for 1991, for 
application on a five-yearly basis in order to ensure that 
Community operations in this field are consistent, 
HAS DECIDED AS FOLLOWS: 
Article 1 
General framework 
There are two basic channels of cooperation between the 
Community and the LAA developing countries, namely 
development aid and economic cooperation, which 
supplement trade relations and political dialogue. 
Financial and technical cooperation, which began in 
1976, is one of the main instruments of development aid 
and includes food aid, the export earnings stabilization 
mechanism, opportunities for co-financing operations 
undertaken by European NGOs and various types of 
emergency and humanitarian aid, which have to be coor­
dinated and, where necessary, combined. Article 2 
Objectives 
In general, development aid is the expression of the 
Community's support for the LAA developing countries, 
which face serious problems (population growth, mass 
poverty, financial and environmental difficulties) for 
which they alone cannot muster all the necessary 
resources and know-how. 
Within the range of development instruments, financial 
and technical cooperation is designed to transfer funds 
and targeted know-how to specific operations (projects 
or programmes of varying types) with a view to solving 
general or sectoral problems or carrying out pilot 
schemes aimed at developing new strategies. 
Given the immense scale of the needs of the LAA 
developing countries and the quality of the aid that can 
be mobilized via financial and technical cooperation, 
such cooperation should be directed primarily at 
improving the living standards of the neediest sections of 
the population in the countries in question. It should also 
have a pump-priming or catalytic effect in areas where 
domestic resources or external aid are hard to mobilize, 
but which are of strategic importance either for the 
balanced development of the developing countries or for 
the international community as a whole. 
Article 3 
Eligible countries 
1. All the developing countries in Latin America and 
Asia except for those which belong to the ACP group of 
countries or which are covered by the Community's 
Mediterranean policy are in principle eligible for 
financial and technical cooperation. 
No C 37/4 Official Journal of the European Communities 13. 2. 91 
By its nature, however, such cooperation is principally 
intended to support the efforts of the poorest or most 
disadvantaged countries. 
It will be extended to other countries in the two regions 
in specific fields or cases where Community action is 
taken in response to unforeseen events or in the short or 
long term leads to larger-scale operations or new policies 
to help particularly under-privileged sections of the 
population or essential sectors at regional or world level, 
but which do not constitute a clear priority in terms of 
allocation of domestic resources. The aid will be used 
essentially to deal with problems involving: 
— natural disasters, 
— regional cooperation, 
— strengthening of institutions, 
— the environment and drugs. 
2. Community aid is directed towards development 
centred on people and thus entails respect for and 
promotion of all human rights. Efforts made to further 
or ensure fuller enjoyment of these rights will be taken 
into consideration in the allocation of resources. 
For operations directly targeted at people faced with 
serious development problems, however, the only 
condition governing the granting of such aid shall be the 
assurance that the target populations can effectively be 
reached without interference. 
Article 4 
Main fields of action 
1. The rural sector 
Financial and technical cooperation continues to give 
priority to the rural sector for the simple reason that 
most of the population in the LAA developing countries 
belongs to this sector, that it includes the least-favoured 
strata of society and that the Community has solid 
experience in such matters. 
All the subsectors will be taken into consideration 
depending on the situation and priorities in each 
country: agriculture, fishing, stock-farming, rural loan 
schemes, production and service infrastructure, training 
and so on. 
Improving the level of food security will continue to be a 
matter of the utmost importance. 
The problems of small towns which provide services for 
rural areas will also be taken into consideration. Current Community support for international agri­
cultural research will also be maintained and special 
attention will be given to national and regional research 
requirements, above all the needs of small farmers. 
Particular attention must be given to the fight against 
drugs in cooperation with the LAA developing countries 
where the main production areas are located. 
As part of operations to assist the rural sector, special 
attention will be given to crop conversion schemes, 
provided that these are grounded on normal economic 
criteria. Otherwise such schemes will not be undertaken 
unless additional appropriations are available under other 
Community policies or provided by other aid donors. 
2. The environment and natural resources 
The environment and natural resources will be a new 
priority area for financial and technical cooperation. 
All projects or programmes will be designed and assessed 
to ensure that their environmental impact is as favourable 
as possible and, particularly in the rural sector, where 
there are alternative options, preference will be given to 
projects aimed at environmental protection, such as the 
management of river basins, 'social' reafforestation and 
so on. 
A proportion of all financial and technical cooperation 
funds will be reserved for projects specifically aimed at 
environmental protection (such as protection of tropical 
forests) which the governments of the developing 
countries concerned do not consider to be a high priority 
because of their very long-term results. This reserve 
(minimum 10 %), which could possibly be increased 
under the annual budget procedure, will be used to 
finance projects and programmes aimed at: 
— informing and educating the public, training 
management and technical experts and strengthening 
environmental structures in LAA developing 
countries; 
— carrying out feasibility studies and pilot schemes. 
3. Regional cooperation 
Regional cooperation among developing countries 
continues to be a priority area for financial and technical 
cooperation because of its inherent importance and the 
Community's experience in the field. 
13. 2. 91 Official Journal of the European Communities No C 37/5 
Four areas should be considered: 6. The human dimension of development 
(i) regional cooperation on the environment; 
(ii) the development of intra-regional trade; This heading covers a number of aspects. It should be 
taken into account in all other areas of action because of 
the inherent justification of this form of cooperation. 
(iii) strengthening of regional institutions; 
(iv) communications 
services. — particularly networks and Careful attention should therefore always be given to the 
aspects referred to below when operations are identified 
and implemented, and in addition such issues should be 
the subject of specific projects. 
4. The structural dimension of development 
The structural dimension of development is a new 
priority which should be covered by financial and 
technical cooperation. 
Although the problems of structural adjustment proper 
are generally outside the scope of Community aid to the 
LAA developing countries, macroeconomic and sectoral 
problems should be taken into account in the choice and 
design of schemes. 
Projects and operations financed by Community aid will 
be systematically scrutinized to ensure that they fit into 
sectoral policies conducive to their success (for example, 
farm prices, savings policy, rural loans schemes and so 
on). In appropriate cases, support will be given to 
improving these policies, either as part of larger-scale 
projects or on an independent basis. 
Some structural schemes affecting a whole sector, a 
region of a country or several countries could also be 
considered. For such schemes, cooperation with the 
relevant international bodies and bilateral donors would 
be sought. 
5. Rehabilitation and reconstruction following natural 
disasters and preventive measures 
This is a necessary field of action as it goes further than 
emergency aid and emergency food supplies in alle­
viating the plight of the victims. Some 10 % of resources 
for the whole period should be earmarked for this type 
of aid, with the possibility of exceeding the ceiling in any 
given year. 
As far as the nature of the operations is concerned, they 
can cover any sector according to need. Besides 
financing reconstruction, rehabilitation or disaster 
prevention projects, more rapid means of intervention 
should also be developed, particularly in the case of 
major natural disasters, in the form of direct support 
programmes for the population or financial transfers to 
the national authorities. The role of women in development is of capital 
importance. Steps must be taken to ensure not only that 
the changes brought in by projects and programmes do 
not alter the existing situation to women's cost but that 
specific measures, or even projects or programmes, are 
selected in order to promote their full participation on an 
equal footing in the production and decision-making 
processes and in social activities (*). 
The problems of native ethnic groups deserve special 
attention, particularly because they often belong to the 
most disadvantaged sections of the population. The need 
to respect their desire to maintain their culture and social 
organization should also be taken into particular 
account. 
Population problems are a major issue for a good many 
developing countries and should be taken into account 
by the Community, which must give financial and human 
support for any action put forward in agreement with 
the grassroots communities. 
Community aid could also be used to help improve living 
standards in the big towns via upstream or demon­
stration schemes involving: 
(i) the transfer of know-how for dealing with urban 
problems; 
(ii) developing and undertaking pilot schemes aimed at 
the informal sector, notably the development of 
micro-enterprises. 
Training must be both an end in itself and a regular 
feature of all operations supported by the Community, 
not only for the leaders but also for the people 
concerned themselves. 
(') Conclusions of the Council of 29 May 1990. 
No C 37/6 Official Journal of the European Communities 13. 2. 91 
Wherever necessary, support could be provided for 
specific training schemes in all the various sectors 
covered by these guidelines. 
Regular information must be provided about the oper­
ations financed by the Community, with recourse where 
feasible to new technologies. 
Article 5 
1. Recipients and operators 
Given that aid must be targeted at men and women, 
directly or indirectly the final recipients of every 
operation will be the people of the developing countries. 
The range of operators (and intermediate beneficiaries) 
involved in financial and technical cooperation schemes 
should remain as wide as possible so as to include not 
only States and regions but decentralized public auth­
orities, local or traditional communities, private institutes 
and operators and also NGO's. 
The necessary coordination with the authorities in the 
country concerned need not automatically mean that aid 
must be channelled via the public sector — in some cases 
other operators will be chosen on the basis of their effi­
ciency, qualifications and specific experience. 
2. A country can develop only as a result of joint 
efforts from within the country by the population and 
the government chosen by them, taking account of the 
social values and cultural heritage of each people. 
Outside support can do no more than speed up the 
process, for example by providing the extra financial 
resources and technical and organizational know-how 
which the country does not possess. 
Community cooperation schemes are carried out against 
a background of growing dialogue with the LAA 
developing countries on all issues of mutual interest, 
both political and economic, at all levels — international, 
regional and bilateral. 
As regards financial and technical cooperation the 
priority areas for Community support will emerge from 
this dialogue, which should cover not only the form that 
oprations should take but also general policies which 
could affect these operations and their implementation. Wherever possible, thanks to the multiannual character 
of Community cooperation with the LAA developing 
countries, multiannual programming on the basis of 
objectives will be undertaken for each country and where 
appropriate by region. 
This programming — which will be of an indicative, 
flexible nature — should help to increase the impact of 
Community aid on the general policies of the countries 
concerned. 
It will take account of the possible contribution of other 
Community cooperation instruments, such as food aid 
and economic cooperation. 
Resources will be allocated to the various recipient 
countries and regions by reference to: 
(i) the income levels and development needs of the 
various countries; 
(ii) the intrinsic value of operations in terms of devel­
opment potential and their contribution to healthy, 
realistic macroeconomic policies and to the needs of 
the most disadvantaged sections of the population; 
(iii) the possibility of arousing the country's interest 
and/or mobilizing additional resources to assist 
certain sectors. 
3. Forms of transfer, projects and programmes 
Aid will be allocated to projects and programmes and, 
wherever feasible, to integrated projects, sectoral 
programmes and quick-disbursing programmes. 
The latter type of scheme comprises support for 
economic reform programmes where circumstances 
justify it, and other types of structural measures with a 
sectoral or regional approach within a given developing 
country. 
All aid is in the form of grants because of the developing 
countries' increasing difficulty in repaying debts and the 
social orientation of financial and technical cooperation. 
It might, however, be worth applying suitable mech­
anisms to link the gift of aid to a country (or a 
community or region) with procedures for refunding by 
the individual recipients, in particular when the purpose 
of the scheme is to support profitable activities or small 
businesses. 
13. 2.91 Official Journal of the European Communities No C 37/7 
Similarly, where there are the necessary guarantees and 
where there are grounds for giving Community aid a 
greater role to play, it will be possible to advance the 
requirements in local currency of traditional projects for 
the supply of imported products (or other methods) in 
order to establish counterpart funds (to be deposited in 
inflation-proof accounts) for the use of the project 
managers. 
Each individual scheme (project or programme) will be 
subject to technical and economic analysis. This will 
enable clear objectives backed up by figures to be set and 
thereby make subsequent evaluation of the results easier. 
Efforts must be made to ensure that the local population 
participates not only in undertaking operations but right 
from their conception. A maximum 3 % of the total 
resources allocated to financial and technical cooperation 
with the LAA developing countries could be used to 
cover study costs, the cost of recruiting short and 
long-term experts and other auxiliary staff to assist the 
recipients and the Commission in devising general 
policies, identifying and drawing up projects, monitoring 
their execution and assessing their results during and 
after, none of which would be included in individual 
projects or programmes. 
4. Coordination and integration of aid 
All instruments of Community cooperation should be 
carefully integrated so that they work together with 
maximum efficiency. Integration should be sought not 
only in overall planning of cooperation on a country-
by-country basis (see Article 5 (2)), but also when each 
project or programme is prepared. 
Integration of instruments particularly applies to food 
aid and the Stabex system but it should be extended 
wherever technically feasible to humanitarian aid and 
economic cooperation. 
As much benefit as possible should also be drawn from 
the experience of NGOs, notably in connection with the 
numerous projects co-financed with the Community. 
Coordination with other aid instruments is one way of 
increasing the efficiency of operations by bringing 
together a critical mass of resources so as to obtain the 
maximum benefit from the advantages peculiar to each 
of them. Coordination should be stepped up, particularly with the 
bilateral aid provided by the Member States, which 
would, furthermore, reinforce the European presence. 
Co-financing is the closest possible form of coordination 
and thus deserves particular attention but at the same 
time the decision-making process and execution need to 
be made much less slow and cumbersome — the result of 
the number of decision-makers and the particular rules 
governing each of them. 
Article 6 
Specific regional considerations 
Aid will be adapted to the needs and priorities of each 
country and each region. 
The Community must also take account of the specific 
nature of its relationship with each of the regions of 
Latin America and Asia. 
With regard to Asia, the large number of least developed 
and densely populated countries means that Community 
aid should be concentrated on those developing 
countries with a relatively low level of development. 
In rural areas, in addition to technology transfer, 
Community aid should help to increase investment — 
especially in production. Attention will also be given to 
population policy and to communications, telecommuni­
cations and energy-producing infrastructure in rural 
areas. 
The wide variety of civilizations and development situ­
ations in Asia must be taken into consideration so that 
Community aid is adapted to the needs of the different 
countries. 
There are three important aspects to environmental 
protection: (i) saving the tropical rain forests, 
particularly in South-East Asia, (ii) combating the 
deforestation caused by population pressure, particularly 
on the slopes of the Himalayas, and (iii) limiting the 
adverse effects of industrialization in densely populated 
areas. 
Current developments in the Indochina peninsula give 
hope for much greater respect for human rights. The 
Community must join in international efforts to ensure 
that these political changes are matched by very rapid 
economic recovery and the return of refugees and 
displaced persons. 
No C 37/8 Official Journal of the European Communities 13. 2.91 
Regional cooperation is also an area in which further 
developments seem likely, and this applies to both Asean, 
which has enjoyed longstanding Community support and 
South Asia (SARC), where a more active form of 
regional cooperation is desirable, and also Indochina. 
With regard to Latin America, the development 
threshold of the countries eligible for Community aid 
must take account of the overall situation of the rela­
tively more advanced countries in this region. 
Because of the vast differences between the richest and 
poorest sections of the population in most Latin 
American countries, Community aid must be targeted at 
the neediest sections of the population. 
In this connection, particular attention will be given to 
the production of basic foodstuffs, to measures 
supporting national land reform legislation and to 
programmes enabling the grassroots communities — and 
in particular the indigenous communities — to take 
charge of their own development. 
The determination and efforts of the countries in that 
region to achieve regional and subregional integration 
will continue to receive strong support. 
In this context, Central America will be given particular 
attention, in accordance with the Community's 
commitments — which were reconfirmed at the 1990 
Dublin Ministerial Conference (San Jose VI). 
Some of the proposed new objectives of Community aid 
are of particular interest to this continent: 
— drug production plays a considerable role in the 
economy of some countries in the region. 
Community aid should be able to help, albeit to a 
small extent, in solving this problem. In this 
connection an initial coordinated response should be 
given to the efforts made by Colombia and the other 
Andean Pact countries, 
— aid for the development of micro-enterprises in the 
cities is a special priority in Latin America, even in 
the relatively advanced countries, — protection of the environment, in particular the 
tropical rain forests, is essential not only for the 
countries in this region but for the entire human race. 
One of the reasons for this concern is that a large 
number of useful forest species are native to the 
region; 
— strengthening the macroeconomic management capa­
cities and science and technology capacities of Latin 
American institutions. 
Article 7 
Evaluation and reports 
Regular assessment, both during and after the implemen­
tation of projects, enables means and objectives to be 
adapted to changing realities. 
Such evaluation will be based inter alia on the cost-effec­
tiveness approach set out in Article 2 of the Financial 
Regulation. 
All Community schemes are already subject to regular 
concurrent assessment: this will be maintained and stan­
dardized and ex-post evaluation will be extended and 
made more structured. 
Reports presented to Parliament and the Council on a 
regular basis and publications for the general public will 
ensure that financial and technical cooperation is 
managed in a transparent way. 
Annual reports will be drawn up at the end of each 
budget year giving the results of implementation 
(commitments and payments) and the projects and 
programmes prepared and selected in the course of the 
year. 
More detailed reports also giving the results of 
evaluation will be presented at the end of and halfway 
through the five-year period (1991 to 1995), making it 
possible not only to assess implementation but also to 
decide whether the guidelines for aid should be main­
tained or altered.