EUROPEAN COMMISSION Brussels, 24.11.2015 COM(2015) 578 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2015 Annual Report on the European Union’s development and external assistance policies and their implementation in 2014 {SWD(2015) 248 final}



Millennium Development Goals and beyond – A Decent Life for All, Everywhere In 2014, the European Union (EU) and its Member States remained the world's largest development aid donor and promoted European core values of peace, security, sustainable development, poverty reduction and human rights worldwide. The EU continued to support priority areas of the ‘Agenda for Change’, notably human rights, democracy and other key elements of good governance and inclusive and sustainable growth. During 2014, the EU developed comprehensive responses to address major crises such as the conflict in Ukraine, the crises in the Central African Republic and South Sudan, the terror spread by Dae’sh in the Middle East and beyond, and the Ebola outbreak in West Africa. The Commission Communication 'A Decent Life for all: from vision to collective action' of June 2014, sets out the EU position in international negotiations on Sustainable Development Goals (SDGs), as the follow-up to the Millennium Development Goals (MDGs), describing key principles and proposing priority areas and potential targets for the post-2015 development agenda and the SDGs. The Communication was endorsed by the Council on 16 December 2014. Achieving the Millennium Development Goals With the 2015 target deadline for the MDGs approaching, progress towards their achievement has been substantial. The first MDG of halving extreme poverty was successfully met five years ahead of schedule in 2010. The MDG to halve the proportion of people without access to clean drinking water was also reached then. The target of halving the number of people suffering from hunger is within reach, with the proportion of undernourished people globally having decreased from 23.2 % in 1990-1992 to 14.9 % in 2010-2012. The MDG to ensure that children everywhere in the world complete a full course of primary schooling has been achieved in Latin America and the Caribbean, East Asia and the Pacific, and Europe and Central Asia. Great progress has been achieved on gender parity in primary education, with an enrolment ratio for boys to girls standing at 97 % for developing countries. Significant EU support has contributed to progress on the health-related MDGs. The mortality rate for children under five years of age in 2012 was almost half that in 1990. Similarly, maternal mortality rate has decreased by 45 % between 1990 and 2013. New HIV infections declined by 44 % between 2001 and 2012. Incidence of tuberculosis and resulting deaths are falling and the target of halving its spread is within reach. The target on Malaria can also be fully met with a decline in malaria mortality rates of 42 % between 2010 and 2012. Working together for the future The EU and its Member States remain the world’s largest official development assistance (ODA) donor. EU collective ODA amounted to a total of EUR 58.2 billion in 2014, corresponding to 0.42 % of combined Gross National Income (GNI). The total ODA of the EU Member States alone in 2014 stood at EUR 56.1 billion, or 0.41 % of combined GNI. In 2014, the European Commission continued its political and financial support for development worldwide, committing over EUR 9.9 billion to external development assistance representing some 7 % of the general budget of the EU for 2014.

Article 208 of the Treaty on the Functioning of the European Union (TFEU) stipulates that the EU ‘shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries’. The inclusion of Policy Coherence for Development (PCD) in its primary law sets the EU apart on the international stage. With the inauguration of the Juncker Commission on 1 November 2014, a new way of working was set up that is a policy coherence tool in itself. Clusters of competency areas headed by Commission Vice-Presidents favour cross-cutting policy making that helps to ensure a comprehensive approach to development objectives that increases the effectiveness of the EU’s development cooperation. In 2014, the Commission continued its efforts to strengthen PCD at all levels. At the beginning of 2014, Commission services and the European External Action Service (EEAS) jointly conducted a first reporting exercise from delegations on PCD. The 41 reports received covered 62 partner countries. The new Commission also brought a change of mandate and name. In response to the evolving global development agenda, the Directorate-General for Development and Cooperation became the Directorate-General for International Cooperation and Development (DG DEVCO). Neven Mimica was appointed European Commissioner for International Cooperation and Development. The Commissioners' Group on External Action (CGEA) chaired by the High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the Commission (HRVP) Federica Mogherini, started meeting regularly in November 2014. The members of the CGEA are the Commissioners for International Cooperation and Development, the Commissioner for European Neighbourhood Policy and Enlargement Negotiations, the Commissioner for Trade and the Commissioner for Humanitarian Aid and Crisis Management. Other Commissioners are invited to join depending on the topics on the agenda of each meeting. The year 2014 also saw the creation of the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR), following the transfer of the Directorate for the European Neighbourhood from DG DEVCO to the former Directorate-General for Enlargement. Programming for future development cooperation 2014 marked the first year of the multi-annual financial framework 2014 to 2020 and the adoption of a large number of multiannual indicative programming documents covering both bilateral country and regional cooperation and thematic programmes. The programming documents for cooperation with partner countries followed almost exclusively an approach in which separate, specific EU country strategy documents were no longer drawn up, but where the programming referred directly to the partner countries’ own policies and strategies. In line with the ‘Agenda for change’, the programming was characterised by a strong sector focus to enhance the impact and manageability of EU aid. At the Africa-EU Summit held in Brussels in April 2014, new impetus was given to the Joint Africa-EU Strategy and along with political guidance to take the EU-Africa Partnership forward. The new priorities set in the Joint Roadmap for 2014-2017 were immediately reflected in the EU programming process, in particular with regard to the African Peace Facility under the European Development Fund (EDF) and the newly created Pan-African Programme, the first continent-wide programme under the Development Cooperation Instrument (DCI). In 2014, the Commission and Member States sustained their efforts towards Joint Programming of development cooperation. The process was taken forward in 18 partner countries and, in 14 partner countries, Joint Programming documents were finalised. The majority of joint programming countries are either in the least developed or lower-middle income group, with more than half classified by the Organisation for Economic Co-operation and Development (OECD) as fragile states. The implementation of six new external financing instruments – the Development Cooperation Instrument, the European Neighbourhood Instrument , the Instrument for Pre-Accession Assistance (IPA II) , the Instrument contributing to Stability and Peace , the European Instrument for Democracy and Human Rights, and the Partnership Instrument- funded by the EU budget started in 2014. The new instruments translate into operational terms the priorities of the Agenda for Change. Over the period 2014-2020, the total amount allocated for the instruments is EUR 51.4 billion. The 11th European Development Fund (EDF), which remains outside the EU budget, entered into force in March 2015 with a financial volume of EUR 30.5 billion for cooperation with African, Caribbean and Pacific (ACP) countries, as well as Overseas Countries and Territories (OCTs).

Implementing the Agenda for Change The Global Partnership for Effective Development Cooperation (GPEDC), a voluntary and multi-stakeholder forum, is a key framework for the aid and development effectiveness agenda. The first GPEDC High Level Meeting (HLM) took place in Mexico in April 2014 convening a genuinely diverse group of donors and partners to focus on important issues for developing countries, the mechanisms to monitor and measure progress, and the commitment to improve effectiveness on the ground. At the meeting in Mexico 39 voluntary initiatives were launched. The ‘EU Aid Explorer’ was launched at the Mexican meeting and is part of EU action to further increase transparency and improve accountability. EU citizens and partners can examine the use of donor funds; and donors themselves can improve coordination and effectiveness. The Commission adopted on 13 May 2014 a Communication on ‘A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries’. This new strategy introduces private sector engagement as a new and vital dimension of EU development cooperation seeking to improve the business environment and conditions for private sector development in partner countries and encourage closer engagement of the private sector with development. The Commission recognises ‘blending’, i.e. combining EU grants with loans or equity from other public and private financiers, as an important vehicle for leveraging additional development resources. By the end of 2014, more than EUR 1.99 billion in grants from the EU budget, the EDF and Member States had financed 233 projects and leveraged approximately EUR 19 billion of loans from European finance institutions and regional development banks. By strategically combining EU grants with market financing, blending has helped to leverage investments of more than EUR 44 billion in EU partner countries. In 2014 a total of EUR 419 million in EU grants leveraged an expected total investment volume of almost EUR 7.7 billion. The Commission is committed to increase the share of EU aid through innovative financial instruments and has identified instruments, key areas and sectors where blending can be used more. Since 2011 November and the launch of the ‘New Deal for Engagement in Fragile States’, substantial progress has been made to improve current development policy and practice at country level and through reforms. The EU is playing an active role in the OECD International Network on Conflict and Fragility and in the inter-governmental International Dialogue on Peace-building and State-building. As a strong promotor of Human Rights, the EU had discussions on the subject with 37 partner countries and regional groupings in 2014. The EU’s commitment in this area was reflected in the development and deployment of ‘a right based approach’ toolbox encompassing all human rights elements in EU development cooperation. In May 2014, Council conclusions welcomed this significant step. Building on EU political commitments to support Non-State Actors, such as civil society organisations (CSO) and local authorities , the Civil Society Organisation-Local Authorities Thematic Programme adopted in July 2014 under the DCI aims to strengthen these actors in partner countries. In 2014, 56 countries benefitted from a country allocation of a total of EUR 152 million in support of country-level initiatives supporting CSO actions for strengthening governance, accountability of public institutions and inclusive policy-making. Likewise, 29 countries benefitted from a country allocation of a total of EUR 14.5 million for country-level initiatives supporting local authorities and national associations of local authorities.

In 2014, the positive results of the 2011 policy on budget support and its new operational approach were consolidated. This has substantially improved consistency and reporting, as well as the management of risks and policy dialogue. By the end of 2014, 233 budget support programmes were being implemented in 84 countries and OCTs for a total amount of EUR 11.175 billion. In 2014, budget support disbursements amounted to over EUR 1.6 billion, representing 15.9 % of total ODA disbursements. The EU remains committed to devoting at least 20 % of EU aid to support social inclusion and human development. Spending on human development currently represents 25 % of the allocated funds of the Global Public Goods and Challenges thematic programme under the DCI, in line with the commitments made to the European Parliament. Research and innovation can foster development by enhancing human potential and infrastructures as well as designing new services and products through the EU’s Horizon 2020 programme. The EU is also firmly committed to make at least 20 % of its total spending climate-relevant. Mainstreaming of environment and climate change issues in development cooperation remains a top priority with at least 20 % of the budget allocated to climate-relevant actions. Ensuring that biodiversity financing is doubled by 2015 is another important policy goal. The EU Biodiversity for Life (B4Life) flagship initiative was launched on 22 May 2014 to help the poorest countries to protect ecosystems, combat wildlife crime and develop green economies. The initiative will have an estimated budget of up to EUR 800 million for 2014-2020. During 2014, a strategic evaluation of the EU’s support to gender equality and women’s empowerment in partner countries was launched. Inclusive and sustainable growth Around the world, some 1.4 billion people have no access to electricity and almost three billion people rely on solid fuels (traditional biomass and coal) for cooking and heating. Energy is linked to eradicating poverty, access to clean water, economic growth, health, education, women’s empowerment and food security. In September 2014, in the margins of the UN Climate Summit in New York, the EU signed five Joint Declarations with African countries on enhanced energy cooperation to reinforce the political ties between partner countries’ political commitments in the field of energy and supporting actions financed by the EU and other relevant donors. EUR 75 million was allocated to catalyse private sector investments in energy access. A proposal for a new rural Electrification Financing Initiative (ElectriFI) was put forward to reinforce further the feasibility, sustainability and leverage of EU resources allocated to energy cooperation, in particular for rural electrification. Good governance In 2014, the EU continued to support democracy around the globe, from the EU's neighbourhood to Sub-Saharan Africa, Asia and Latin America. More than EUR 93 million was committed to support elections, strengthen parliaments and political parties, and to develop the media. In 2014 the EU continued to support the operationalisation of the African Governance Architecture by providing EUR 9.8 million to the African Union Commission to improve its capabilities to monitor elections, and to the Pan-African Parliament and the African Commission and Court on Human and Peoples' Rights.

With an annual budget of around EUR 40 million from the European Instrument for Democracy and Human Rights, the EU’s Election Observation Missions (EOMs) continued to build confidence and enhance the reliability and transparency of democratic electoral processes. In 2014, seven EOMs were deployed to Egypt, Guinea Bissau, Kosovo, Malawi, the Maldives, Mozambique and Tunisia. An Election Assessment Team mission was deployed to Afghanistan, while nine Election Expert Missions were deployed to Algeria, Bolivia, El Salvador, Fiji, Iraq, Libya, Mauritania, Nigeria and Thailand and two Election Follow-up Missions were deployed in Nigeria and the Democratic Republic of the Congo (DRC). Strengthening justice In 2014 justice and the rule of law continued to be at the core of EU objectives and operations. The EU continued to be engaged in rule of law, security and justice capacity building programmes in more than 50 countries worldwide. By supporting third country efforts to reinforce justice systems the EU contributed to bridging the gap between the capacity of states and the International Criminal Court. Corruption is a major impediment to development. With the 2014 Communication 'A decent Life for all: from vision to collective action', the EU renewed its anti-corruption commitment by promoting the adoption and implementation of appropriate legal frameworks and national policies in the post-2015 framework. In 2014, projects worth nearly EUR 77 million addressed anti-corruption at country level through advocacy, awareness-raising and reporting and capacity building for control and oversight bodies and the judiciary. Peace and stability The Instrument contributing to Stability and Peace (IcSP), enables the EU to react quickly with targeted actions in emerging crisis situations. During 2014, this allowed the EU to provide urgent, timely support to high-priority crises like Ukraine, Syria/Iraq, Central African Republic and the Ebola outbreak. These IcSP actions usually constitute the initial EU action towards building peaceful societies and eradicating poverty in fragile and conflict-affected countries - a top priority for the EU. In 2014, the EU continued to support the New Deal process to ensure that EU interventions have a positive impact on poverty reduction and conflict prevention. At the end of 2014, the EU had 16 Common Security and Defence Policy (CSDP) civilian and military missions or operations in place. Two civilian missions (EUCAP Sahel Mali and EUAM Ukraine) and one military operation in the Central African Republic (EUFOR CAR) were established in 2014. CSDP missions vary in size (from 10 to 1000 personnel) and mandate. One military mission was launched in Mali in 2013 (EUTM Mali) and will last till 2016. Since the beginning of the political and security crisis, the EU has consistently supported Mali's territorial integrity, its return to constitutional order and the search for a political settlement of the crisis through dialogue. The EU has been involved in the Algiers peace process since June 2014 as a co-mediator. During 2014, state-building contracts were signed with a number of fragile countries affected by the Ebola epidemic, including Guinea, Sierra Leone, and Liberia, to provide support to health services, maintain macroeconomic stability and create fiscal space for measures related to the epidemic. In the Central African Republic the EU supported the regional effort for stabilisation. Since January 2014, a new transitional government has been in place and in September the African Union force MISCA was replaced by a UN Peace-Keeping Operation: MINUSCA.

The EU is the primary ODA donor to the Central African Republic and on 15 July 2014 launched an innovative EU-managed multi-donor trust fund: "Bêkou". With contributions from the EDF, France, Germany and the Netherlands during 2014 this new trust was endowed with EUR 36 million. In addition the fund has received EUR 27 million for health and education, EUR 20 million for electoral processes and EUR 33 million of budget support for fragile situations from a 'State Building Contract' that enabled basic state functions. In December 2013, the Joint Communication from the HRVP and the European Commission on the EU's comprehensive approach to external conflict and crises presented proposals on how to strengthen the coherence, comprehensiveness and effectiveness of EU external action, with a particular focus on conflict and crisis situations. Following the May 2014 Council conclusions on the EU’s comprehensive approach, Commission services and the EEAS have worked in cooperation with EU Member States to develop an action plan that was adopted in 2015. In 2014, the EU continued to implement its Strategic Framework for the Horn of Africa in pursuit of a comprehensive approach to peace and stability in the region. At the country level, the EU has taken the role as lead international partner in Somalia providing political, financial and security support. The EU also remains the biggest financial contributor to the African Union Mission in Somalia (AMISOM). During the course of 2014, EUR 89 million of support to Somalia was approved from the EDF. Bilateral cooperation with the Syrian government has been suspended since 2011, but vital humanitarian aid (EUR 41 million) was provided through the ENI during 2014 to support the beleaguered citizens of Syria. These funds supported actions in health, education, support to livelihoods and civil society capacity building. Support has also been provided in neighbouring countries, notably Jordan and Lebanon, to help these countries cope with the consequences of the crisis. A total of EUR 213 million was committed in 2014 through the ENI to the three countries. In Jordan, the aid is primarily used to defray the cost of providing education for Syrian refugee children. In Lebanon, the aid is used to deal with strains on the country’s infrastructure, including schools, primary health care and waste water treatment. EUR 20 million was committed to establish the EU Regional Trust Fund in Response to the Syrian Crisis (Madad Fund) with a further EUR three million contribution from Italy as the initial co-funding partner. Strategic partnerships The EU has a strategic interest in promoting links with partners playing an increasingly important role in world affairs including those that are no longer eligible for bilateral development aid such as Brazil, China, India and Mexico. In addition, the EU fosters equitable partnerships with emerging economies (i.e. South East Asia, Latin America). It is to respond to these needs that the Partnership Instrument (PI) was adopted in 2014. The PI supports the external dimension of EU internal policies ranging from competiveness and migration to research and innovation, and addresses major global challenges, such as energy security, climate change and environmental protection, as well as specific aspects of the EU’s economic diplomacy. The instrument also covers public diplomacy (including cultural diplomacy) and outreach activities to promote the EU’s values and interests. Solidarity and support In 2014, the EU Humanitarian Aid and Civil Protection Directorate-General (DG ECHO) provided over EUR 1.3 billion of assistance in response to natural disasters, armed conflicts and protracted crises. In West Africa, the key challenge in 2014 was the outbreak of Ebola, which killed over eleven thousand people. One of the first international donors to react, the Commission mobilised EUR 210 million in development and early recovery assistance for delivery in 2014 and 2015. With the addition of contributions for humanitarian aid and with EUR 138.4 million for research on treatment, diagnostics and vaccines, the European Commission's total contribution amounted to EUR 414 million. The overall funding from the EU, including the EU budget's and Member States’ contributions was more than EUR 1.2 billion. In addition over EUR 100 million was funded by industry in the context of the Innovative Medicines Initiative.

Significant Commission support to global health initiatives, such as the Global Alliance on Vaccines and Immunisation (GAVI), has contributed to progress on the MDGs, in particular in reducing under-fives mortality. In 2014 GAVI received a new commitment of EUR 10 million to make pneumococcal vaccines more available in less developed ACP countries. The Parliament and the Council approved in June 2014 the EU’s participation in the second European and Developing Countries Clinical Trials Partnership programme with sub-Saharan Africa with an EU contribution of EUR 683 million. The EU's financial support to the Global Programme of Education has been instrumental in efforts to improve MDG targets on education. In June 2014, the Commission hosted the second education replenishment pledging conference of the Global Partnership of Education in Brussels. The Conference raised an unprecedented commitment of EUR 26 billion in additional domestic funding for education. Gender equality remained a key challenge in 2014 with a comprehensive EU response strategy that included both strong gender mainstreaming activities in virtually all major aid programmes. In the newly adopted programme, DCI - Global Public Goods and Challenges, more than EUR 100 million has been earmarked during 2015-20 to women and children’s wellbeing, with special attention to harmful practices such as female genital mutilation/cutting, and child, early and forced marriage. Gender equality and women's empowerment are important cross-cutting elements of development activities. The key role women play across all development sectors in ACP countries was particularly evidenced by the study ‘ACP Women, Actors of Development’. The publication illustrated the vital role of grassroots organisations in the realisation of women's rights, and their contribution to sustainable development. Ten years on from the devastating tsunami of 26 December 2004 the EU is still actively helping the region to recover. In total, over the past decade the European Commission has committed EUR 123 million to tsunami victims across the region (Indonesia, Sri Lanka, India, The Maldives and Thailand) through humanitarian assistance. Reconstruction efforts for Indonesia alone amounted to an additional EUR 200 million. Looking ahead The EU has declared 2015 as the European Year for Development (EYD2015) with the motto ‘Our world, our dignity, our future’. EYD2015 is the first ever European Year for Development and aims to engage with EU citizens and other stakeholders to raise awareness of EU external action in the area of development. 2015 is a pivotal year for international development and marks a transformation to an integrated approach to tackling poverty eradication and sustainable development. Three high-level international meetings provide the opportunity to agree the new agenda including the setting of the 2030 Agenda for Sustainable Development with the SDGs, the Third International Conference on Financing for Development in Addis Ababa in July 2015 and the United Nations (UN) Sustainable Development Summit in New York in September. As important, the UNFCCC COP21 conference in Paris in December 2015 should adopt vital targets to limit climate change, which has a significant impact on international development policies. The joint programming exercise will be further extended during 2015 and the first reporting on the basis of the new international cooperation and development results framework is scheduled for the last quarter of 2015. Migration, and in particular the migratory crisis in the Mediterranean, is an issue of growing importance for the whole European Union. The European Council decided therefore that a dedicated Summit with the African Union and key countries on this policy area will be convened in Malta on 11 and 12 November 2015.