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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)537final
j
Brussels,26September1930
FINANCIAL ANDTECHNICAL COOPERATION WITH
THENON-ASSOCIATES DEVELOPING COUNTRIES
(ARTICLE930OFTHECOMMUNITY BUDGET)
GENERALGUIDELINES FORTHE1981PROGRAMMES
(Communication fromtheCommission totheCouncil)
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C01l(80)537final

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Financialandtechnicalcooperationwiththenon-associated
developingcountries(Artiole930oftheCommunity "budget)
General'guidelinesforthe1981programfile
Introduction ,. ,
I98IwillbethesixthyearinwhichtheCommunityhasprovidedfinancialand..technicalassistanceforthenon-associated developingcountries ,ofAsia,
LatinAmerica,andAfrica.Thisprogrammebeganin1976asanewformof
Communityaid,inadditiontothevariousotherrelationsalreadyoperatingattheCommunitylevelwiththesecountries(commercialpromotion,foodaid,
etc.). -
Beginningfromamodestbasein197^.(20MUA),thenon-associates programme
hasalreadygrownsignificantly ,reaching138.5MEXJAinI98O.Onthebasis
ofthisexperience' ,however,andsupportedbyamoreexactunderstanding of
thesituationandneedsofthesecountries,itisapparentthatI98Ishould
"becomeapointofinflectioninthegrowthofthisprogramme,allowing"it to
reachapointwhereitwillbeabletooperateonagenuinelyeffectivebasis.
I,Summaryoftheprogramme'sgeneralpolicy '.
,Underthisprogramme,priorityisgiventothepoorestofthenon-associated
developingcountries,tothepoorestsectionsoftheirpopulations ,andtothe
-m-ru-isectorseeninitslargestsense.Theaidisaimedatimprovingthe
livingconditionsofthepoorestgroupsinsociety,withemphasisonimprovements
infoodsupplies;actionscarriedoutundertheprogrammecanbeeitheratthe
nationalortheregionallevel.
Inmeetingtheseobjectives,aCommunitypresenceinthemainregionsofthe
developingworldshouldbeassured,withareasonablegeographicalbalanceamongtheseregions.
Partofthefundsavailableeachyearwillbesetasideforactionsintendedto
copewithexceptionalcircumstances ,andparticularlyforreconstruction projects
followingcatastrophes .
Finally,asignificantjpartofthefundswillbedevotedtocofinancedprojects,
incooperationwithMemberStatesorwithmultilateralinstitutions (internationalorregional).
II.Exoeriencstodate
Thefiveprogrammescarriedoutsofarhaveconfirmedingeneraltermsthat
thepolicyguidelinesofthisprogrammeareappropriatetothepriorityneedsof
thepoorestnori–associatedLDCs.Inapplyingtheseguidelines,however,certain
ciinorQualifications shouldbenoted,particularlyinconnectionwiththenormalcriteriaofpoverty,andwiththerangeofsectorscoveredbytheprogramme:
–nationalpercapitaincomedataarefrequentlymisleading,andcanconceal
regionalimbalances,veryunequalincfome""distributions ,andtheexistencecfextremelydeprivedgroupswithinparticularcountries:
/.

ν»
-improvements inthelivingconditionsofthepoorestgroupsinthepopulation
mustonoccasionbepromotedthroughactionswhichgooutsidetheruralsector
initsstrictsense.
Whiletheidentification ofeffectiveruraldevelopmentprojectsatthenational
levelissometimesverycomplex(andfrequentlyneglectedbyothersourcesof
externalfinance),theidentification ofvaluableregionalprojectsiseven"
moredifficult,anditisoftennecessarytogoclearlyoutsidetheruralsector
inthiscase..-Actionsatbothlevelsin,thesameregionwouldclearly
complement eachother. *
Cofinancedprojectshavealwaysrepresented animportantpartoftheannual
programmes,ineffectoftheorderof40Thistypeofactionisnotwithout
itsowndifficulties ,however.Withtheregionalandinternational banks,the
difficulties haveprincipallyarisenintermsofproceduresandofthe
synchronisation oftheactivitiesofthetwodonors,leadingonoccasionto
seriousdelaysinprojectstartsandindisbursements .
WiththeMemberStates,despiteregularcontactsandasignificant growthin
thisformofcofinancement ,ithasnotyetbeen"possibletoestablisheffective
advanceprogramming .
i
Forcertainrecipientcountries,thenumberofautonomousprojectsunder
executionbytheCommunitywillmakeitnecessary -tostrengthenthecontrol
exercisedbytheCommission.ThenumberofstaffavailabletotheCommission
forimplementingthisprogrammegenerallystillremainsextremelyinsufficient ,
however,evenwiththeapplicationinrecentyearsoftheprincipleofconcen­
tration(permitting "anincreasingvolumeoffundstobespentonroughlythe
samenumberofrecipients andactions.
Finally,theprocurementrulesappliedunderthisprogramme,evenifrelatively
liberal,haveonoccasionledtodifficulties inourcooperationwithcertainregionalbanks. .
Aneffectivecontribution tothedevelopmenteffortsoftherecipientcountries
makesitnecessarytocoverlocal-costexpenditures (oftenaccountingfora
verylargeshareofthetotal),sincetheserepresentaseriousconstraintfor
weaknationalbudgets.ThecharacteroftheCommunity'said,withno
constraininglimitsinthisparticularfield,isveryhighlyappreciatedbymany
donors(andincertaincases,theabsenceofsuchlimitsisinfactcrucial).
." / ■v
•• .xIII.Aidvolumes . .' ■ '
Thenon-associates programmeinfacthastocoverapopulationoftheorder
of1.3milliard(IBRDdata,1978)»inroughly35cotintriesofAsia,LatinAmerica
andAfrica.900millionofthesepeopleliveincountrieswithapercapita
incomebelowUS#200peryear..
Therelativelylimitedfundsavailableundertheearlynon-associates programmeshaveatleastestablishedthevalueofthispolicy,andhavepermittedthesetting--
upofthenecessarymechanisms.However,evenifagenuinelysignificantCommunity
impactonthedevelopmentproblemsofthesecountriescannotbeenvisaged,itis
clearthatamarkedincreaseinthefundsavailable ;;willbenecessarysimplyto
ensurethattheCommunitycaninfactmakeagenuinecontribution.Inorderto
reachatleastaminimumthresholdofeffectiveness ,theCommissionhastherefore
proposedinits3–y©arlybudgetforecasttheamountof200MEUAfornon–associates
aidin1981,and250MEUAand300MEUAforI982and1983respectively.

-*-v#
IV.Geographical allocation offunds '
Taking account both ofpopulation distribution andoftheneed toensure a
Community presence inthemajor regions ofthedeveloping world ,itseems reasonable
tocontinue with thegeneral pattern ofallocation followed sofar .Itis
therefore proposed that thefunds available should bedistributed amonf Asia ,
Latin America andAfrica according totheindicative proportions of73%.20/>
and
Taking account oftheprospects ofaccentuating theCommunity 'sactivities while
notexcessively increasing thetask ofprogramme implementation ,theprincipal
ofconcentration will continue tobeapplied under the 1981 programme .
Bangladesh ,Pakistan andNicaragua should receive aparticular effort this year ,
subject ofcourse totheidentification ofeffective projects ,this being themost
basic criteria governing the {allocation offunds under -this programme .
Presuming that thefunding proposal oftheCommission will be.approved bythe
budgetary authorities ,this will permit amore-effective soaling ofautonomous
projects ,along with amore significant contribution tocofinanced projects .
Thepolicy ofsupport forregional integration which theCommission hasfollowed
uptill now should becontinued ,with particular emphasis being given tothe
three regional groupings which' appear tohave themost significant role inthe
development ofthenon-associated ,areas :ASEAN ,theAndean Pact ,andtheCentral _
American Common Market .(CACM). Onemust remember ,however ,thepractical
difficulties encountered inidentifying valuable regional projects ,andalso
certain possible political developments (notably inthecases ofBolivia ,for
theAndean Pact ,andElSalvador andGuatemala forCACM);these maymake it '
necessary for theCommunity totake certain restrictive measures asappropriate *
where these countries are ,concerned . -
V.Sectoral allocation offunds x
While thedraft Regulation intended togovern thenon-associates programme
indicates thebasic objectives oftheaid ,itdoes leave some considerable scope
totheannual guidelines interms ofdefining theprecise sectors onwhich aid
istobeconcentrated . 1
Since 1978 ,ithasbeen possible tomove somewhat outside therural sector ,
particularly inthecase ofregional projects .This hasbeen unavoidable ,given
that regional integration efforts must frequently commence inthenon-rural
sectors (though this must ofoourse bequalified according tothesituation ).

»_4»V,s*
TheseideasshallbeappliedagainundertheI98Iprogramme,whereitshould
also"bepossibletoincludecertaincarefully-selected activitiesinthe
fieldofenergy.ThequestionofenergyisIjjifactbecomingmoreandmore
a.determiningfactorintheeconomiclifeofthenon-associated developing
countries,includingthepeoplelivingintheruralsector,andenergy
projectsmustbeincludedwithinanyglobal ,andbalancedapproachto
development .
Theforegoingconsiderations shouldnothowevermodifytheprioritytobe
giventotheruralsector,evenforregionalprojects.Therural
sectormustofcoursebeseeninits.largestsense,includinginaddition
toproductionactivitiesandbasicfoodstuffsinparticular,alsoprojects
upstreamand/downstreamfromthis,withtheemphasisonagriculture ,
irrigation,fisheries,forestry,communications ,watersupplies,post-harvest
protection andstorage....andindeedeverything aimedatimprovingthe.
livingconditionsofthepeopleconcerned.Withthesameendinview,
supportforagricultural researchshallbemaintained,attheinternational ,
regional,and(wherepossible)nationallevels.
VI.Otherpoints
VI,1.Catastrophe reserve
Asinpastyears,itisproposedtosetasidebetween510$
theavailablefundsforpost-catastrophe reconstruction ^ndpreventionprojects.
AsforeseeninthedraftRegulation,anyfundsnotutilisedtinderthisheading
shallbereleasedfornormaldevelopmentprojects.
VI.2.Administrative costs
ThisprovisionallowstheCommissiontorecruitoutsideexpertsor
consultingfirmsforidentification orsupervisionmissions,aswellasforthe
strengthening oftheregionaldelegations ,withaviewtoensuringtheproper
technicalandadministrative controlofprojectexecution,asisabsolutely
necessaryifoneistoguaranteetheproperexpenditureofpublicfunds.
Despitethesubstantial growthinthenumberofprojectsunderimplementation ,
anamountoftheorderof2$oftheavailablefundsshouldbesufficientfor
thisprovision. ". •
»
VI.3.Technicalassistance andstudies
Asinpreviousyears,itwillbeimportanttoproperlyprepare
projectsforfutureCommunityfunding,particularly whenoneconsidersthe
complexityofprojectsintheruralsector*,Thetechnicalassistanceand
studiesprovisionwillpermitthefinancingofstudiesortechnical
assistanceforthebenefitofeligiblerecipientcountriesororganizations ,
uptoaunitcostof0,3MELJA.Abovethiscost,studieswillofcourse
followthenorma],proceduresestablishedforotherprojects.
Theamounttobedevotedtothisprovision -inI98Ishouldbeoftheorderof
1%ofthetotalfundsavailable.
VI.4.Cofinancine
InaccordancewiththedraftRegulation,animportantpartofthe
fundsavailableshall "bedevotedtocofinancements withMemberStatesorwith
international developmentorganizations *
./

I)ν
5"ViVf
Theprincipalconsideration inseekingcofinancedprojectswithinternational
organizations willbeessentiallytoincreasetheeffectiveness tothe
recipientofthe.combinedassistance,whileiiithecaseofprojectscofinanced
withMemberStatesthepossibilityofgenerallyreinforcingtheCommunity
presenceshallalsobeimportant. ,
VI.5.Staffin,»
Promthecommencement ofthenon–associates programme,thestaff
devotedtoitsimplementation hasbeeninsufficient.' Variousdevelopments
inourcooperation withtheinternational organizations ,andthestrict
application ofCommunityprocurementrules,havefurtherincreasedthe
implementation workload.Inordertoestablishthevalidityoftheprogramme,
.theCommissionhaschosentoincreasethefundsdevotedtoit,beforeinsisting
onhavingasufficiently largestaff.Nowthatthegrowthinfundinghas
seriouslybegun,theCommissionmustemphasizethatitwillencounterthegreatest
difficulties ineffectivelyadministering thisaidiftheadditionalstaffarenot
urgentlyallocated. ,.