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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)536 final
Brussels ,29th September 1981
FINANCIAL AND TECHNICAL COOPERATION WITH THE NON-ASSOCIATED
DEVELOPING COUNTRIES
(ARTICLE 930 OFTHE BUDGET OFTHE EUROPEAN COMMUNITIES )
*
GENERAL GUIDELINES FOR THE 1982 PROGRAMME
(Communication from the Commission tothe Council )
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/>;/ M
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I
COM (81)536 final

Financialandtechnicalcooperation withthenon–associated
developingcountries
-(Article930oftheBudgetoftheEuropeanCommunities)
GeneralGuidelinesforthe1982Programme
INTRODUCTION
TheRegulationgoverningtheprogrammeoffinancialandtechnical
assistanceinfavourofnon-associated developingcountries','
andsettingupamanagementcommitteeintendedtofurnishopinions
ontheprojectsproposedbytheCommission ,was,officiallyadopted
onlyinFebruaryofI98I.However,thespiritofthisRegulation '
hasalreadybeenappliedsince1977••Firther,thegeneralguide­linesestablishedeachyear(cfarticle9*2oftheRegulation)
haveamplifiedontheobjectives andcharacterofthisassistance ,
particularly intermsofspecifyingthegeographicbreakdownbetween
continents,andindicatingthemajorrecipients,thesectoralbreak­
downoftheassistance,andthescaleoffundingtobereservedfor
post–catastrophereconstruction projects.
I.SUMMARY0F_THE_0BJECTIVESMDNATURE__0FTHEPROGRAM®
TheRegulationstatesthattheaidshould,asageneralrule,be
directedtowardsthepoorestofthedevelopingcountries,while
ensuringaCommunitypresenceinthemajorregionsoftheworld
bymeansofareasonablegeographical balanceamongtheseregions.
Further,itstatesthatthefvoidsavailable -underthisprogrammemay
beusedtocoverthreetypesofaction,contributing essentiallyto
anamelioration oflivingconditionsforthepoorestpopulation
groupsinthesecountries t ..'
"^'CouncilRegulation(EEC)No.442/81of17February1981(publishedin
OJL.48of21Februaryl$8l).
Provision*!address:RuedelaLoi200.d-1049Bruitei?-~eiep.,one73i"v-S.0/73530 "^MEUFi©russe'*"~
Telex:"2't*77COMEU6

-2-
-as"themainpriority,developmentactionsintheruralsectorand
theimprovementoffoodproduction;
-atasubsidiarylevel,projectswitharegionalcharacter;
-forapre-determined proportionofthefunding,actionsintendedto
meetwithexceptional circumstances andparticularly post–catastrophe
reconstruction projects.
II.STJNIMAÏÏYOFFXPWRIKNCE TODATE
Despitetheveryconsiderable needsoftheeligiblecountriestakenasa
whole,itisclearthatthisCommunityaidisappreciatedatitsproper
valuebytherecipients.Theprogramme'spriorityobjectivesarein
evidentcorrespondence withtheneedsofthepoorestdevelopingcountries,
asaretheentirelygrantnatureofthefunds,andthepossibilityof
coveringlocalcostexpenditures .Further,oneshouldnotoverlookthe
effectsofotherCommunityaidinstruments (foodaid,emergencyaid,trade
promotion,NGOs),aawellasthepossibilities offeredinthetradefield
Ij.Vu.".r.
Itisnotpossibletoestablishrigidpoverty-threshold indicatorsfor
potentialrecipients ,sinceincountrieswithaveryunevendistribution
ofincomeandwealth,evenarelativelyfavourablesetofnational
indicatorscanmaskveryseriousregionalorlocalimbalanceswhichshould
notbeoverlooked .
Despitethedifficulties ofidentifying goodregionalprojects,andthe
occasionalneedtostepoutsidetheruralsectorinsuchcases,regional
projectshaveoccupiedasignificant placeunderpreviousprogrammes ,and
providearelevantcounterparttoactionsfinancedatthenationallevel.
Animportantshareoftotalfunding(oftheorderof40%)hasbeen
devotedtocofinancedprojects.However,ithasnotalwaysbeen
simpletosynchronise ourprocedureswiththoseofourcofinancingpartners,
andtheresulthasbeendelaysaveragingoneyearintheeffectiveimple­
mentationofsuchprojects.CofinancingwithMemberStateshasoccupied
anincreasingshareofthetotal,andincreasingcontact .amongthe
concerneddepartmentshasbeguntointroduceamultiannualperspectiveto
theprogramme.
ThestaffavailabletotheCommissioninBrusselsfortheimplementation
ofthisprogrammehasremainedclearlyinsufficient .Theincreaseinthe
numberofprojectsunderexecutionjustifiesastrengthening ofon-site
control,whichtheCommissionhasbeengraduallyimplementing .
III.THEV0LUKE0FAID
Thefinancialandtechnicalassistance madeavailablebytheEECforthe
non–associateddevelopingcountriesisaimedatcontributing totheir
development andparticularlyathelpingtoresolvetheproblemofhunger
intheworld(theCommunity'sbasicinstrumentforthispurpose,according
totheEuropeanParliament),whileatthesametimeensuringaCommunity
presenceinthe.majorregionsofthedevelopingworld.

-3-
ThisCommunityassistanceisaddressedtomorethan30countries
inAsia,LatinAmericaandAfrica,withatotalpopulationofthe
orderof1300million,andofwhich1200millionlivein15^'countrieswithpercapitaincomelevelsbelowUSS360(c.300ECU).
It.might "benotedthatthetotalpopulationofthosedeveloping
countrieswhichareassociatedwiththeCommunityisoftheorder
of400million.-
TheCommission'iswellawareofthedifficultbudgetarycircumstances
facingtheCommunity.Nevertheless ,itbelievesthatitisessential
thatnobackwardstepbetakeninthemodesteffortsmadesince1976
infavourofthepoorestdevelopingcountriesofAsiaandLatinAmerica.
Forthisreason,theCommissionfeelsitindispensable thatthe1982
budgetshouldincludecommitmentcreditsofatleast200MECU,the
amountproposedbytheCommissionforI98I.
Afurtherreasonfornotslackeningthiseffortisthenecessityof
maintaining coherencewiththepositionexpressedbytheCommunity
intheUnitedNationsConference ontheleast-developed countries.-
Asregardsthepaymentscredits,finally,itmustbenotedthatthe
volumeof-fundingrequiredhereisnotavariablecapableof
modification byabudgetaryauthoritybut,onthecontrary,a
completelypredetermined parameterarisingoutofthecommitments
undertakenduringthepastsixyears.Thefactthatthelevelof
paymentsisapproachingthelevelofcommitmentsisnotonlyaproof
thattheprogrammehasemergedfromitsstart-upphase,butequally
anindicationthatitisonlynowthatthisnewCommunityinstrument
isbeginningtohaveaconcreteimpactinthedevelopingcountries.
Theallocationofpaymentscreditsinthe1981budgetatonlyone-
thirdofthelevelproposedbytheCommissionhasledtopayments
beingstoppedafteronlyfourmonthsoftheyear,and,unlessa
solution .isfoundextremelyquickly,willriskdestroyingthe
credibility oftheCommunityandofitspolicies....
IV.GEMGRAMIC^_ALL0CATI0N ANDPRINCIPALRECIPIENTS "
Takingaccountoftheconsiderations expressedintheRegulation,of
theexperienceachievedtodateandoftheleveloffundingnow
proposedbytheCommission,thefollowinggeographical breakdownis
proposedfor1982sAsia75%,LatinAmerica20$,Africa5$.This
doesnotchangethebalancefolloweduptillnow.,
./•
Upperlimitforthegroupoflow–incomedevelopingcountriesas
definedbytheIBRD(1978).

-4-
InAsia,itwillbeappropriate toconsideraspotentialrecipients ,\
allthosecountrieswhichhavereceivedourassistanceinthepast,
whileaddingcertainverypoorcountrieswhichithasnotbeenpossible
toreachuptillnow,suchasBhutan.
ChinahasnotbenefittedunderCommunitycooperationactivities up
tillnow,exceptinaverylimitedfashionundertheheadingsof
emergencyfoodaidandtraining.Ifinthefuture,thiscountry
shouldshowaninterestinpossiblefinancialandtechnicalcooperation ,
theCommunityshouldrespondfavourably .
However,giventhatChinarepresentspractically anentirecontinent,
evenagesturetowardsthiscountrywouldrequireavolumeofresources
whichwouldbeincompatible withthefundsatpresentavailablefor
thenon-associates programme,atleastifthegeneralbalanceestablished
sofarisnottobeprofoundly changed.GiventhattheCommission's
budgetproposalfor1982doesnottakeaccountofthepossibleinclusion
ofChinaamongtherecipients ,itwouldbenecessarytoadjustthe
budgetappropriately ifChinaweretobeincludedduringthisyear.
Thesameprinciples canbeappliedinLatinAmerica.Inadditionto
thecountrieshavingalreadyreceived ,thisformofassistance',itwill
beappropriate toincludeColombiaamongthepotentialrecipients ,
givenhercomparablelevelofdevelopment .Itwouldalsobesuitable
toincludeCostaRica,onanexceptionalbasisandtakingaccountofthe
seriouseconomiccrisiswhichiscurrentthereaswellasofthe
country'sessentialpositioninCentralAmerica.
Assistanceforregionalactionswillbecontinuedasinthepast,
wherevereffectiveactionscanbeidentified ,andwiththeaimof
supportingorganizations forregionalintegration ,directcooperation
amongtwoormorecountries,aswellasthevariousorganizations of
regionalimportance andtheinternational agricultural research
institutes .
Giventheirdynamism,ASEANandtheAndeanPactshallofcourseremain
amongtheprincipalrecipientsunderthisheading.
InAfrica,itwillbenecessarytofindappropriatepossibilities of
intervention ,notablyforprojectsofaregionalcharacter,and
particularly inthefieldofports,communications andtheimprovement
ofaccessforenclaveACPcountries .
V.ÇRITERLAFORPROJECTSELECTION
RecipientsofthefundstobeallocatedunderArticle930ofthe19o2
Budgetshallbechosenfromamongthecountriesandorganizations
referredtointheprecedingparagraph,takingaccountofthefollowing
considerations :
-aidreceivedunderpreviousprogrammes ;
-absorptivecapacityandadministrative ability;
-theavailabilityofgoodprojectssufficiently advancedtobetaken
intoconsideration fortheforthcoming year;

Depending ontheextent towhich these practical criteria aresatisfied ,
priority will ofcourse begiven ;asfaraspossible ,tothepoorest
developing countries .Atthesame time ,aneffort will bemade toachieve
acertain balance between recipients inthemedium term ,taking account of
their population ,thedegree ofpoverty ,theeffectiveness oftheassistance
andofthepolitical priorities oftheCommunity .
Inthis context ,andasinthe 1980 and 1981 programmes ,theprinciple of
concentration will beapplied .Rather than giving assistance toevery
eligible country inevery year ,some countries will receive anincreased -
assistance inoneyear ,while being omitted from one (ortwo)subsequent <
programmes .This principle will permit anincrease intheaverage size of
projects ,andhelp increase theeffectiveness ofprogramme management ,
given thelimited staff resources available totheCommission .
Atthesame time ,amajor effort will continue tobemade tostrengthen
theproject-development andabsorptive capacity ofthepoorest developing
countries ,bymeans oftechnical cooperation (technical assistance ,both
general andproject-linked ,andstudies ).This isparticularly important
toensure that such countries arenotpenalised ,interms ofreduced aid
flows ,byalack ofwell-prepared projects .
Further ,theprinciple of.concentration should notbeconsidered as
excluding certain smaller actions atthegrass-roots level .Such actions
could becovered bymeans ofagrouping ofsmall development actions
(micro-projects )within aspecific project orprogramme .
Finally ,onemay add that inlooking forprojects full account will be
given tothenational development plans oftherecipient countries and
tothepriorities indicated bytheir governments .
' i • '\
SECTORAL BREAKDOWN - ' '
Inconformity with theRegulation ;priority will continue tobegiven to
therural sector ,including agriculture ,livestock ,fisheries andforestry ,
andwhenever possible toactions linked with augmenting thefood supplies
ofthepopulation-groups concerned .These actions will concern notonly
thephases ofproduction andmarketing ,butalso thephases upstream and
downstream ofproduction ,aswell asproduction infrastructure andsupport
services ,andsocial andeducational aspects ,soastomake acomprehensive
contribution totheimprovement ofincomes andliving conditions .
Forregional projects -,priority will begiven where possible tothedirect
orindirect development oftherural sector ,though without forgetting that
efforts towards socio-economic integration arefrequently directed more
through other economic sectors .;Further ,itisparticularly for these
other sectors that Community >support ismost requested ,oreven onoccasion
theonly support available .
Support foragricultural research shall becontinued through known
institutions ,whether attheinternational orregional level ,orthe
national level . •

VII .OTHER ASPECTS OFTHE PROGRAMME \
7.1 .Catastrophe reserve
Taking account ofthelevel offunding expected for1982 ,itis
proposed toreserve from 5%to7%oftotal funds forreconstruction
orprevention actions following catastrophes .After 31October ,in
accordance with theterms oftheRegulation ,funds notused for this
purpose maybemade available for thefinancing ofnormal projects ,
following theindicative geographical breakdown referred toabove .
7.2 .Two types ofsupport arenecessary forensuring aproper management
ofthis aidprogramme : '
-theuse ofexpertise recruited from outside theservices ofthe
Commission ,toprovide assistance inthepreparatory phases ofits
implementation (analysis ,identification ,pre-f easibility and
feasibility studies ,technical studies ),and intheexecution •
phase ,for thesupervision andon-site control ofprojects .
-theestablishment ofasmall number ofdevelopment specialists ,
integrated inthedelegations oftheCommission ,tocontribute to
thevarious phases ofprogramme implementation .
Theproportion ofannual programme funds tobereserved forthese
twopurposes will beoftheorder of3%and 1%respectively .
Such orders ofmagnitude arevery reasonable ,even modest .Infact ,
they cover together practically allcosts relating tothepreparation
ofprojects and thecontrol ofproject execution .Even ifthereal
cost perproject mayvary considerably depending onthenature of
theprojects and theconditions inwhich they areimplemented ,an „
overall percentage oftheorder of8%-10%isgenerally accepted
bymost major donors .
Looking more specifically tothequestion ofproject supervision ,
itisappropriate torepeat that even inrecipient countries where
thenational administration ismost heavily-staffed ,such supervision
bythedonor isanessential element inensuring project effectiveness
Theneed forreinforcing theresources available tothe'Commission for
carrying outthese tasks isevident ,andhasindeed been put inrelief
byrecent reports oftheCourt ofAuditors . -

I ANNEX
List ofdeveloping countries having received EECassistance
under theFinancial andTechnical Cooperation Programme
(Article 930oftheBudget )onatleast oneoccasion upto
-30.6.1981 <
ASIA
India
Bangladesh
Pakistan
Afghanistan
Sri Lanka
Nepal
Maldives
Burma
Thailand
Indonesia
Philippines
Vietnam
Laos
Yemen Arab Republic
-LATIN AMERICA
Honduras
Nicaragua'
Haiti
Dominican Republic
Bolivia
Ecuador
Peru
AFRICA
Angola
Mozambique
Zimbabwe