Report on financial and technical assistance to, and economic cooperation with the developing countries in Asia and Latin America, as covered by the Council Regulation (EEC 443/92) of 25 February 1992 (OJ L 52, 27.2.92, p. 1)
Date: 1998-01-29
Institutions: European Commission
Subjects: Asia, Latin America, cooperation policy, development aid, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.01.1998 
COM(1998)  40  final 

Report on financial and technical assistance to, and economic co 
operation with the developing countries in Asia and Latin America, as 
covered by the Council Regulation (EEC 443/92) of 25 February 1992 
(O.J. L52, 27.02.92, p1) 

(presented by the Commission) 

PREAMBLE^. 

THE STRUCTURE OF THE REPORT. 

1. ECONOMIC AND SOCIAL DEVELOPMENTS  IN ASIA AND LATIN  AMERICA. 
1991-1995 

1.1.  OVERVIEW 

1.2.  ASIA 

1.3.  LATIN AMERICA 

2 

3 

3 

5 

ll 

2: EUROPEAN  COMMUNITY  (EC) DEVELOPMENT  CO-OPERATION  WITH  THE 
ASIAN AND LATIN AMERICAN  COUNTRIES  . 

17 

2.1.  GENERAL OVERVIEW OF POLICY 

2.1.1.  THE POLICY FRAMEWORK FOR ASIA 
2.1.2. THE POLICY FRAMEWORK FOR LATIN AMERICA 

2.2  EVOLUTION OF ALA  COOPERATION,  1991-1995 
2.3.  THE ALA  REGULATION N° 443/92  OF 25 /  2 /  1992. 
2.4.  ASSOCIATED BILATERAL CO-OPERATION AGREEMENTS AND MULTILATERAL RE 
LATIONS. 

3: THE DETAILS  OF COMMUNITY  CO-OPERATION WITH ASIA AND  LATIN 
AMERICA, 1991 TO  1995. 

3 . 1.  GENERAL  QUANTITATIVE  OVERVIEW  OF COMMUNITY  COOPERATION 

3 . 2.  QUALITATIVE  COMMENTARY:  FINANCIAL AND TECHNICAL  COOPERATION  AND 

ECONOMIC  COOPERATION 

3.2.1. ASIA 
3.2.2.  LATIN AMERICA 

4. CONCLUDING  POINTS. 

NOTES TO TABLES 

17 
17 
17 
18 
21 

23 

25 

25 

29 
29 
30 

32 

33 

Report on financial and technical assistance to, and economic co 
operation with the developing countries in Asia and Latin America, as 
covered by the Council Regulation (EEC 443/92) of 25 February 1992 
(O.J. L52, 27.02.92, p1) 

Preamble. 

The  purpose  of this  report  is to  respond  to  an obligation  set  down  in the  Council  Regula 
tion  of  25  February  1992  (EEC  443/92)  en  'financial  and  technical  assistance  to,  and 
economic  co-operation  with,  the  developing  countries  in Asia  and  Latin  America'.  In 
particular  article  16 of the Regulation  requires that; 

' 

at  the  end  of  each five year  period1  the  Commission shall  submit  a  compre 
hensive  report  giving  the  results  of  the  regular  evaluation  undertaken  to  show  not  only 
how  the projects  and programmes  have  been  implemented  but  also  the  advisability  of 
maintaining  or amending  the aid guidelines. ' 

In response to  a request  of the Council  made on  1 June  1995, the Commission  has  already 
commenced  work  on  a  substantial  and  comprehensive  evaluation  of  the  European  Com 
munity's  development  co-operation  with  those  countries  covered  by the Lomé  convention 
(ACP)  and  the  developing  countries  of  Asia,  Latin  America  and  the  Mediterranean 
(ALAMED).  As  the  Council  has  already  been  informed,  the  Commission  has  committed 
itself to make the report on this evaluation exercise available to the Council  in the course of 
1998. 

The present  report  in no way anticipates, nor is it in any sense to be construed  as a prelimi 
nary version  of this more extensive and  comprehensive evaluation  exercise. Rather  the  pur 
pose  of  this  document  is to  provide  a  factual  presentation  of the  Community's  assistance 
to,  and  co-operation  with,  the  Asian  and  Latin  American  (ALA)  countries  covered  by  the 
Regulation  cited  above,  for  the first five  years  of its  operation  (1991-1995)  in the  context 
of the  social  and  economic  developments  that  have  occurred  in the  ALA  countries  during 
that  period.  However  to  ensure  consistency  and  coherence  this  report  draws  heavily  upon 
the  same  body  of basic  data  used  in  the  evaluation  exercise,  in  particular  as  regards 
the 
commitments  and  disbursements  of  concessional  development  co-operation  finance  to  the 
countries of Asia and Latin  America. 

These  data  present  various  analyses  of  all  the  forms  of  aid  taken  together  to  the  ALA 
countries,  not  only those covered  by Regulation 443/92.  As a result  of this wide  coverage, 
the  data  only  permit  a relatively  broad judgement  to  be  made  as  to  how  the  development 
co-operation  funds  covered  by the Regulation  have been  committed  and  disbursed,  and  the 
extent  to  which  the requirements  of the Regulation  have been  met.  Thus  it  will  be  recalled 
that  the  Regulation,  whilst  it  makes  a  general  statement  of  Community  development  co 
operation  policy,  and  indeed  is the only  legal text  establishing  a general  framework  for  co 

in this case the period  1991 to 1995 inclusive. 

I* 

operation with the ALA countries, provides the legal basis for  the operation  of four  Budget 
lines.  These  are  B7-3000  and  B7-3001  for  Asia,  and  B7-3100  and  B7-3110  for  Latin 
America,  the  first  in  each  case  covering  Financial  and  Technical  Assistance,  the  second 
Economic Co-operation.  Total commitments made under these four  Budget  lines are avail 
able and  are presented  in the Annexes to this report.  However,  a detailed  analysis  of  such 
commitments  is  not  available  and  this  limitation  makes  the  present  assessment  of  the  ac 
tions undertaken  with  the resources  attributed  to  these Budget  lines, based  on  data  with  a 
wider coverage, at best, approximate. 

It  is  also  important  to  recall  that  the  Regulation  covers  assistance  and  co-operation  with 
China  and  Macao,  Iran,  Iraq  and  the  Yemen.  The tables  that  form  an  integral  part  of  this 
report make allowance for this coverage. 

The Structure  of the Report. 

The  main  part  of  this  report  has three  major  sections  of  which  the  first  consists  of  a  de 
scription  of social and economic developments in the relevant  countries  of Asia  (South  and 
South East Asia and China - subsection  1.2)  and Latin America (sub section  1.3)  during the 
reference  period  and  highlights  the  differing  development  experiences  of  these  regions. 
Section  2  outlines  the  principles  underlying  Community  development  policy  and  examines 
the  extent  to  which  these  have  been  given  operational  meaning  through  the  Regulation. 
Section  3 examines the  commitments  and  disbursements  of official  development  assistance 
(ODA)  -  drawn  from  the  Community's  regular  annual  budget  -  made  by  the  Commission 
during the reference  period  under the principal headings. The report  ends with  a short  con 
cluding section. 

1. Economie and Social Developments in Asia and Latin America, 
1991-1995 

1.1.  Overview 

Table  1.1.1: Basic Data 

South Asia 

East  Asia 

Latin  America 

Total  population  (mill.,  1994) 
Population  growth (% annually,  1980-95) 
Growth of GDP (annual average, %  1990-95) 
Growth of GNP p.c. (annual  average, %,  1985-95) 
Debt service  ratio (% exports,  1995) 
Under 5 mortality  rate (per  '000  live births,  1995) 
Income share of the lowest quintile (%  1990s) 
Poverty  Gap (%  1993) 
Illiterate population (mn) 
Carbon Dioxide emissions  (tonnes per capita,  1992) 
Total Carbon Dioxide emissions (Million tonnes, 
1992)b 

1,270.0 
2.1 
4.6 
2.9 
24.6 
106 
8.8 
12.6 
416 
0.7 
1,625 

1,761.8 
1.5 
10.3 
7.2" 
12.8 
53 
6.9 
7.8 
210 
2.1 
870 

463.9 
1.9 
3.2 
0.3 
26.2 
47 
4.5 
9.1 
43 
3.4 
2,251 

1. Data for Latin America includes Caribbean 
2. Data for East Asia covers South East Asia which includes Vietnam, Cambodia, Laos, and China. 
Source: World Bank-  World Development Indicators,  1997,  World Development Report 1997 
a: East Asia includes Pacific,  b: It should be noted in respect of global carbon dioxide emissions; that national totals of 
carbon dioxide emissions are of limited analytic relevance because they depend on both population size and the level 
of industrial activity. Per capita emissions provide a better yard stick for comparing the emissions that result from the 
average individuals share of national industrial activity.  UNEP  World Resources,  1996-97,  p. 314. 

Asia  has  enjoyed  relatively  high  rates  of  economic  expansion  in  recent  years  (see  Table 
1.1.1). The South  Asian  economies,  for  instance, have expanded  at an average annual  rate 
of  4.6  percent  in  real  terms  during  the  reference  period.  Though  the  region  still  has  the 
highest  share  of  the  population  in  poverty  in  the  world,  nonetheless  partly  as  a  result  of 
relatively  strong growth, the share of poor in the population  diminished from 45% to 43%. 
Human  poverty,  reflected  by social  indicators, is however  still widespread:  more than  50% 
of under-five children in South Asia are underweight,  and only 48% of adults are literate. 

South  East  Asia  has  experienced  much  higher  growth  rates  in  the  reference  period.  In 
substantial  measure  these  growth  rates  reflect  the  growing  integration  of  the  developing 
countries  economies  into  the  mainstream  of  world  trade,  and  in  particular  those  of  South 
East  Asia,  and  the  rapid  development  of  their  exports  and  imports  (see  Tables  1.1.2  and 
1.1.3). Nevertheless in a number of countries  the institutional and structural basis on which 
rapid  growth  and  development  have  been  built  has  shown  important  weaknesses:  lack  of 
effective  regulation  and control over the economy by the government  in general  and  within 
the financial sector  in particular,  insufficient  attention  given to the impact  of growth  on  the 
environment,  and  in  some  cases  insufficient  efforts  in education  so  as  to  upgrade  produc 
tivity as wage differentials  increase vis-a-vis China and Vietnam, Cambodia and Laos. 

As regards Vietnam,  Cambodia and Laos, in Vietnam the results of the liberalisation  pro 
gramme, launched  at the end of the nineteen eighties, have been  positive.  The growth  of 
GDP in real terms averaged 8.3 percent in the period  1990-1995. Despite the loss of East 
ern European  markets, exports boomed, reflecting  the expansion and diversification  of the 
economy  Over the period  1992 to  1995 the average annual growth in exports was in the 
order  of  30  percent.  Cambodia,  with  a  population  of  9  million  (roughly  double  that  of 
Laos) lags behind its smaller neighbour economically. GDP per capita in Cambodia is esti 
mated to have been US $270 in 1995 compared to US $350 in Laos. 

Nowhere has economic growth been more pronounced than in China.  China has moved on 
from the events of Tiananmen Square and continued to implement economic reforms begun 
after Deng Xiaoping's rise to power in 1978. By the end of the reference period China was 
the Community's fourth largest and fastest growing trading partner. 

Table 1.1.2: Imports of the EU(12) from Latin America and East-, South- and South-
East Asia, 1992-1995, Ecu bn. 

1992 

24.6 
8.0 
21.9 
16.8 

Latin  America 
South Asia 
ASEAN 
China 
Memorandum 
item 
Total Elf 

im-

1993 

1994 

1995 

22.1 
9.4 
25.5 
19.6 

27.0 
10.9 
29.8 
22.7 

29.2 
11.7 
32.2 
24.8 

575A 

487.1 

493.2 

543.2 

Source: European Commission. The European Union and World Trade,  1996. a: Extra EU 

Latin  America  has  recorded  improved  but  average  rates  of growth  over  the  period  to 
1995 and a significant  expansion of exports to, and imports from, the EU (see tables  1.1, 
1.2 and  1.3). Indeed, Latin America today is looking back at a decade of major changes and 
far-reaching  political  and  structural  reforms  which  have  substantially  transformed  most 
countries  and  strengthened  their  economic  performance.  Yet  important  as  these  recent 
changes have been, they have not yet been fully translated into a substantial improvement in 
social development based on stronger economic performance  so enabling a more equitable 
distribution  of income and wealth to be achieved. The region is the only region  in the de 
veloping world  besides Sub-Saharan  Africa  where the incidence of poverty  (according  to 
the head-count  measure) has actually increased over the  period  1987-1993 (from  22% to 
23.5%). 

Table 1.1.3: Exports of the EU to Latin America and  East-, South- and South-East 
Asia, 1992-1995, Ecu bn. 

1992 

20.5 
7.9 
19.3 
6.9 

1993 

1994 

1995 

24.1 
9.4 
23.2 
11.3 

29.0 
10.5 
27.8 
12.5 

30.5 
12.2 
33.2 
13.1 

436.1 

491.1 

541.8 

589.7 

Latin  America 
South  Asia 
ASEAN 
China 
Memorandum 
item 
Total Elf  im 

ports 

Source: European Commission. The European Union and World Trade, 1996. a: 

Extra EU 

l i i l i i l l l! •Ill 

1.2. Asia 

Progressively the European Union has conducted its bilateral co-operation with the  major 
ity  of  countries  and  regions  of Asia,  as elsewhere,  in the framework of  Trade  and  Co 
operation  Agreements.  In  addition  to  the  principles  and  approach  set  out  in  the  ALA 
Regulation (443/92) to which this report is addressed, the EU's general  objectives,  as re 
gards all aspects of policy including development co-operation, have most recently been set 
out in the Commission's  communication  "Towards a New Strategy  in Asid\  [COM (94) 
314]. These include contributing to sustainable development and poverty alleviation in the 
least prosperous countries of Asia, pursuing all actions necessary to  ensure open markets 
and  a  non-discriminatory  business  environment  conducive  to  an  expansion  of Euro-Asia 
trade and investment,  and  supporting  efforts  by Asian countries  to  co-operate  at  the re 
gional and sub-regional level. 

The countries of South Asia (with the exception of Sri Lanka), experienced  a certain de 
celeration in their rates of economic growth over the period  1990-95 (see table  1.2.1). In 
India, the dominant economy in the region, political uncertainty slowed the implementation 
of the far  reaching reforms  introduced  in  1991; nonetheless  substantial  progress  has been 
achieved and by  1995 the fiscal and balance of payments deficits had been reduced,  infla 
tion had fallen and foreign  exchange constraints had been eased. Direct foreign  investment 
has risen steadily to reach US $620 million  in 1994. 

South Asia's record on resource mobilisation in the reference period was somewhat mixed. 
In India the ratio of domestic savings to GDP has been relatively weak at approximately 20 
percent over much of the period and has impeded investment in much needed  infrastructure 
and other capital  projects. Pakistan, with a savings to GDP ratio which varied  between a 
high of 17.3 percent in 1992 to lows of 13.2 percent in 1991 and  1993, fared even worse in 
its efforts to mobilise domestic savings. 

In most South East Asian countries, economic expansion has been particularly rapid  dur 
ing the reference  period with high rates of economic growth, varying between  8.7  percent 
in Malaysia and Singapore to 7.6 percent on average annually in Indonesia, being sustained. 
The  Philippines  alone  proved  an  exception  to  this  general  pattern  of  rapid  economic 
growth. However,  the reforms  introduced  in that  country had begun to take effect  in the 

latter part of the reference  period  and GDP  per capita in the Philippines rose sharply in the 
mid nineties, unemployment  fell  and inflation  was contained  at  single digit  figures.  Domes 
tic savings in the economies of this region have been  relatively buoyant  (only  in the Philip 
pines  did  savings  to  investment  ratios  fall  below  the  mid  thirties  and  in  Singapore  they 
ranged between 45 percent in  1995 to 48 percent in  1994)  and, in addition,  a strong  inflow 
of funds from  abroad  have boosted  capital  formation. 

In  Vietnam,  Cambodia  and  Laos,  economic  growth  and  increases  in  foreign  investment 
have been  recorded.  In  Vietnam,  both  export  and  import  growth  have  benefited  from  the 
liberalisation  of the foreign  trade  and  investment  regime and from freer access  to  Vietnam 
for  non  nationals.  Foreign  investment,  though  modest  by  South  East  Asian  standards,  has 
been  increasing  rapidly.  Since the Foreign  Investment  Law  was  enacted  in  1988  (and  fur 
ther liberalised in  1992) the flow of direct foreign  investment has been mounting  steadily to 
reach US  $1.8  billion by  1995 and US  $2.3  billion by  1996. The experience  of the  smaller 
Indo-Chinese  nations has been  similar. Laos sustained  an average  annual  economic  growth 
rate of 6.5 percent in real terms during the first  half of the nineties, whilst that  of Cambodia 
was 6.4 percent  during the same period. 

The Chinese  economy  is the world's  tenth  largest,  using traditional  GNP  data;  if the  more 
technically meaningful  purchasing  power parity measure of GNP is applied  China  ranks  as 
the world's fourth  largest economic power. Its economy grew at a near record  rate in  1992 
and  1993 when  the  annual rate of economic expansion topped  13 percent.  Rising  inflation, 
physical  bottlenecks  and  institutional  weaknesses  struck  at  the  sustainability  of  these 
growth  rates  and  necessitated  a more  cautious  approach.  Real  growth  dropped  to  10  per 
cent in  1995 and  slid back further  to an estimated  8.5  percent  last year largely as a result  of 
tight  fiscal  measures  initiated  to  counter  inflationary  trends.  At  the  same  time  inflation 
which had reached 21 percent in  1994 dropped to  15 percent in 1995. 

Table  1.2.1  Growth  of GDP 
Average annual  rate of growth  (percent) 

1980-90 

1990-1995 

South Asia 

Bangladesh 
India 
Pakistan 
Sri Lanka 

South East Asia 
Indonesia 
Malaysia 
Philippines 
Singapore 
Thailand 
Vietnam 

4.3 
5.8 
6.3 
4.2 

6.1 
5.2 
1.0 
6.4 
7.6 
... 

4.1 
4.1 
4.6 
4.8 

7.6 
8.7 
2.3 
8.7 
8.4 
8.3 

China 

10.2 

12.8 

Source:  World Bank -  World Development  Indicators, 1997 

is  rapidly 

integrating 
China 
with global  capital  markets,  and 
is absorbing  an  increasing  share 
of  cross  border  financial  flows 
to  developing  countries.  The 
World  Bank  estimates  that  cur 
rently  40  percent  of  foreign  di 
rect  investment,  10  percent  of 
international  equity  funds  and  5 
percent  of  international  bond 
flows  to  the  developing  nations 
are  directed  to  China.  China's 
foreign trade recorded  a US $16 
billion surplus  last  year with  ex 
ports  up  by  3  percent  to  US 
$153  and  imports  rising  4  per 
cent  to  US  $137  billion;  by  the 
end  of  the  reference  period 
China  was  the  European  Un 
ion's  fourth  largest  and  fastest 
growing  trading  .partner.  De-

spite a relatively depressed operating environment realised foreign investment rose from US 
$38 billion in  1995 to  US $40 billion  last year.  In a recent  (September  1997) report  the 
World Bank predicts that as the current stabilisation programme takes effect  it is expected 
that the inflow of foreign  investment will again accelerate to the record  levels of the early 
1990s and that China will revert to its status as one of the leading destinations for  foreign 
direct investment by the end of the decade. The Bank expects that by the year 2,000 China 
will account for  as much as 40 percent of the increase in the developing countries exports 
in the current decade.  By the year 2020 the Bank estimates that China may triple its share 
of world trade to  10 percent, becoming the world's second largest trading nation after  the 
United States. 

Demographic indicators reflect the changing structures of Asian society. The fertility rate in 
India,  measured  by births per woman fell from 5 in  1980 to  3.2 by  1995; in Bangladesh 
births per woman dropped  from  6.1  in  1980 to  3.5 by  1995 whilst  in Pakistan  the corre 
sponding figures were 7 and 5.2. South East Asia's fertility  indicators, lower at the outset, 
registered less striking declines - from 4.2 to 3.4 in the case of Malaysia and 3.5 to  1.8 in 
the case  of Thailand.  Only in the Philippines  and  in Indonesia  were  rates  of  fertility  ap 
proximating to those  of  South  Asia recorded. Population  momentum,  an indicator which 
reflects  the proportion  of young people in a given population,  has remained  high in both 
regions. 

Table 1.2.2 Demographic Indicators 

Population 
(million, 1995) 

Population 
growth 
(average annual % 
rate  1995-2010) 

Urban  Population 
(Largest city - growth rate % 
1990-1995) 

Population 
Momentum 
(base=1995) 

Life 
Expectancy 
(1994  -years) 

South Asia 

Bangladesh 
India 
Pakistan 
Sri Lanka 
Total  (1994) 

South East Asia 
Indonesia 
Malaysia 
Philippines 
Singapore 
Thailand 
Vietnam 
Total  (1994) 

China 

120 
929 
130 
18 
1.270.0 

193 
20 
69 
3 
58 
73 
478.8 

1200 

1.5 
1.3 
2.5 
1.1 
1.8a 

1.3 
1.8 
1.8 
1.0 
0.7 
1.6 
1.6a 

0.8 

5.7 
4.2 
4.3 

4.4 
2.0 
3.1 
1.0 
2.2 
1.9 

2.3 

1.6 
1.4 
1.6 
1.4 

1.4 
1.6 
1.5 
1.2 
1.4 
1.6 

1.3 

56.4 
61.3 
62.3 
72.2 
61.3 

63.5 
71.2 
67.0 
77.1 
69.5 
66.0 
64.3 

68.9 

Source:  World Bank 

-  World Development  Indicators,  1997.  UNDP Human Development Report 1997 a:  1994-2000 

y"" 

Population momentum is the ratio of the population at zero growth to the population in the base year, 
assuming that the replacement fertility rate is maintained. It refers to the phenomenon whereby in a situa 
tion of zero actual population growth, the movement of large cohorts of women of reproductive age through 
the age pyramid nonetheless generates more births than are offset by deaths in the older cohorts. For high 
income countries the equivalent measure of population momentum is 1.1. The same figure applies to East 
ern Europe. 

Standard  poverty  indicators  such  as  under  five  mortality,  access  to  clean  water  and  to 
sanitation,  all pointed  to improved  living conditions. By the mid nineties,  81 percent  of  In 
dia's  population  had  access  to  clean  water  and  29  percent  had  access  to  sanitation;  for 
Pakistan the figures were 74 and 47 percent  respectively. 

In countries  of South  East Asia  these indices have shown  such marked  improvements  that 
they are no longer an issue. 96 percent of Thais and 84 percent  of Malaysians had  access to 
sanitation;  even  in  the  less  prosperous  countries,  Indonesia  and  Philippines,  the  figures 
were  51  and  77  percent  respectively.  Summary  indicators  such  as  the  commonly  cited 
World  Bank  upper  poverty  line  (US  $1  per  day)  headcount  index  reflected  an  improve 
ment, particularly in South East Asia. 

Although just  over  52 percent  of the 
Indian  population  and  29  percent  of 
the  Bangladeshi  population  had  to 
do  on  less  than  US  1$  per  day  in 
1993,  in  South  East  Asia  only  the 
Philippines  recorded  equivalent  pov 
erty  levels. Elsewhere  poverty  levels 
varied  between  15 ^ percent  of  the 
population  in  Indonesia  and  6  per 
cent in Malaysia. 

Table  1.2.3.: Poverty and income distribution 

Poor 
(<  ISPPPperday, 
%)1981-95 

Gini index 

Asia 
China 
India 
Bangladesh 
Pakistan 
Indonesia 
Philippines 
Malaysia 
Thailand 
Vietnam 

29.4 
52.5 

11.6 
14.5 
27.5 
5.6 
0.1 

41.5(1989)b 
33.8 (1992)b 
28.3  (1995)b 
32.1 (1992)b 
31.7 (1993)b 
40.7 (1988)b 
48.4  (1989)b 
46.2 (1992)b 
35.7 (1993)b 

Source: UNDP -Human  Development  Report  1997, World Bank -World 
Development  Report  1991a:  Source: World Bank, Poverty Reduction and 
the World Bank: Progress and Challenges in the  1990s. May  1996. Data refer 
to  1993. b: survey year 

1993 

1980 

South Asia 

Table  1.2.4  Health: People per Physician 

Health  indicators  too  improved.  The  under  five  mortality  rate  had  reached  115  per  1,000 
live  births  in  India  and  Bangladesh  by the  mid  nineties  whilst  in  Pakistan  it  was  down  to 
137;  at the beginning  of the  decade 
the  comparable  figures  were  142 
and  180  respectively  for  India  and 
Bangladesh  and  158  for  Pakistan. 
In  the  less  prosperous  South  East 
Asian countries  - Indonesia  and  the 
Philippines  under  five  mortality  in 
the  mid  nineties  were  36  and  53 
respectively.  The numbers of health 
personnel  per 
likewise 
showed  a  marked 
increase  region 
wide.  Bangladesh  proved  an  ex 
ception  to  a general  rule  where  the 
number  of  people  per  physician 
rose  from  8,424  in  1980  to  12,884 

Bangladesh 
India 
Pakistan 
Sri Lanka 
South East Asia 
Indonesia 
Malaysia 
Philippines 
Singapore 
Thailand 
Vietnam 

12844 
2459 
1923 
6843 

8424 
2694 
3500 
7172 

citizen 

12458 
3917 
7848 
1111 
6803 
4151 
1100 

7028 
2441 
8273 
714 
4416 
2279 
1063 

China 

Source:  World Bank  -  World Development  Indicators,  1997 

g 

by  1993.  South  East  Asia's  ready  access  to  health  care  is reflected  in  people  to  physician 
ratios  -  for  Malaysia  the  figure  dropped  from  3,917  in  1980  to  2,441  by  1993  whilst  in 
Thailand the figures were 6,803  in  1980 and 4,416 in 1993. 

In  Vietnam,  Cambodia  and Laos  the cumulative effects  of prolonged  civic strife  and  heavy 
diversion  of  resources  to  the  security  sector  is reflected  in diminished  living  standards  for 
the greater part  of the population.  Cambodia ranks  148 in the UNDP Human  Development 
index  and  Laos  141, significantly  below  Vietnam  at  115.  Life  expectancy  in  Cambodia  is 
49.7  years  (51.7  years  in  Laos),  compared  with  62.7  years  in  Vietnam.  Mean  years  of 
schooling  in Cambodia  are 2.0  compared  with  2.9  in Laos  and  4.6  in Vietnam.  13  percent 
of  Cambodia's  population  have  access  to  sanitation  compared  to  53  percent  in  Vietnam. 
The  infant  mortality  rate  is  120 per  thousand  live births  in Cambodia  compared  to  101  in 
Laos and 59 in Vietnam. 

China's  high  economic  growth  rates  have  been  accompanied  by  a  massive  reduction  in 
poverty; between  1991 and mid  1995 the number of rural  people living in absolute  poverty 
fell  from  94  million  to  65  million.  Today  absolute  poverty  in  China  is  almost  exclusively 
rural phenomenon  and tends to affect  whole communities rather than particular  individuals. 
It  is  largely  concentrated  in the  interior  provinces  of the  relatively  inhospitable  north  and 
south west, where infant  mortality and other poverty indicators remain high relatively to the 
more prosperous  coastal  and north  eastern regions. Largely as a consequence  of  innovative 
rural  development  programmes,  rural  incomes  depend  to  a  decreasing  extent  on  farming. 
There  are  currently  more  than  18 million  rural  and  village  enterprises  employing  some  95 
million former  agricultural  labourers and generating almost a third  of industrial  output.  The 
income  flowing  from  these  industries  has boosted  the  self image  of the  rural  communities 
and, perhaps more concretely, their living standards 

s 

v  _ 

1980 

Sri Lanka 

43 
31 
48 

South Asia 

37 
39 
33 
48 

, 
1993 

Bangladesh 
India 
•  Pakistan 

Table  1.2.5:  Gender and Education: Primary Educa- 
tion: Percent of Female Pupils 

Progress  in  breaking  down 
gender  barriers  has  been 
uneven.  Whilst  the  coun-
tries  of  South  East  Asia 
have  made  important  ad 
vances  in  this  domain,  the 
role  of  women  in  South 
Asia  leaves  some  scope  for 
development. 
Women's 
opportunities  to  participate 
actively  in  economic  and 
communal  life  are  limited. 
Many  of  South  Asia's 
women  are  under-skilled 
and  their  labour  force  par 
to 
ticipation 
the  non-formal, 
low  paid 
production  sector.  Lack  of 
access to  formal  education, 
in  part  attributable  to  a  shortage  of  female  teachers  in  rural  areas,  creates  a  situation  in 
which  women,  and  particularly  women  of  rural  origin,  are  effectively  excluded  from  the 
formal  labour  market.  Female  executives  are few  in Bangladesh  -  a mere  2  percent  of  the 

South East Asia 
Indonesia 
Malaysia 
Philippines 
Singapore 
Thailand 
Vietnam 

Source:  World Bank-  World Development  Indicators,  1997 

46 
49 
49 
48 
48 
47 

is  restricted 

48 
49 
50 

China 

49 

47 

45 

nation's total administrative and managerial staff are female compared to 2.3 percent  in In 
dia, 3.4 percent in Pakistan, and 7 percent in Sri Lanka. These figures contrast sharply with 
those for South East Asia. In Singapore and the Philippines some 34 percent of managerial 
and administrative positions were held by female staff whilst women in Indonesia and Ma 
laysia accounted for 63 and 45 percent of professional and technical workers. 

Official  development aid accounted for a relatively minor part - 10 percent- of the inflow of 
external resources to the developing countries of South East Asia in 1994, and for 3.6% of 
GNP. In the case of South Asia the volume of official  development  assistance accounted 
for slightly less than half (or 46 percent) of total net resource inflows from abroad, and for 
about  2% of GNP (US$ 7 bn.). Net private capital flows to  South  Asia reached  US$  5.2 
bn. in  1995, of which US$ 1.8 bn. were FDI. East Asia (including China), in comparison, 
received  a total  of US$ 84 bn. in  1995, US$ 51.8 bn. of which were in the form  of FDI. 
East Asia received US$ 9 bn. in ODA in 1994, equal to  1.1% of its GNP. The EC's assis 
tance to China during the reference period was concentrated in the agriculture sector. Proj 
ects were agreed to promote improved productivity and technology transfer.  In  1995, the 
final  year of the reference period, priority shifted  to human resource development and sup 
port  to  China's reform  and liberalisation  programme, business co-operation  and the envi 
ronment. 

10 

1.3.  Latin  America 

Table  1.3.1: Basic economic Indicators 

Population,  GDP, 
bn.$ 

mill. 

GNP 
p.c, $ 

1994 

1994 

1994 

463.9 
156.9 
34.3 
14.0 
89.6 
11.2 
4.0 

1,549.0 
554.6 
281.9 
52.0 
377.1 
16.6 
1.8 

3,188 
2,970 
8,110 
3,520 
4,180 
1,280 
340 

Latin  America 

Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

Source: UNDP Human Development Report 1997 

Latin  America  is not  a  homoge 
nous  entity,  but  includes  coun 
tries  at  very  different 
levels  of 
social, economic  and  political  de 
velopment.  Income  p.c.  ranges 
from  $340  in  Nicaragua,  one  of 
the  poorest  and  least  advanced 
countries  in  the  world,  to  more 
than  $ 8.000  in  Argentina.  These 
differences  have  to  be  kept  in 
mind  when  looking  at  the  devel 
opment  of  Latin  America  over 
the last decade. Thus the tables in 
this  section  present  data  for  a 
representative  selection  of  Latin 
American countries. 

Most  Latin  American  countries  have  shared  a  number  of  problems,  such  as  widespread 
poverty,  unequal  income and wealth  distribution,  and high levels of external  debt. Nonethe 
less  despite  the  liberalisation  undertaken,  markets  in  many  countries  still  remain  distorted 
and  uncompetitive  due  in  particular  to  state  intervention  and  oligopolistic  market  struc 
tures.  This has made  it difficult,  in many  cases, for  natural  resource based  development  to 
be complemented  by the strengthening of the manufacturing  and service sectors. 

Table  1.3.2: External  debt 

External  debt 

as  %  of 

Debt  service  as  % 
goods 

and  services 

of exports  of 

GNP 

exports  of  good 

s  and 

services 

1980 

1995 

1980 

1995 

1980 

Latin America 
Brazil 
Argentina 
Chile 
Mexico 
Peru 
Nicaragua 

36.0 
31.2 
35.6 
45.5 
30.5 
47.6 
108.5 

41.0 
24.0 
33.1 
43.3 
69.9 
54.1 
589.7 

201.8 
306.5 
242.4 
192.5 
232.4 
194.2 
426.5 

212.0 
269.8 
320.2 
127.7 
170.5 
399.5 
1,272.7 

36.3 
63.3 
37.3 
43.1 
44.4 
44.5 
22.3 

1995 

26.1 
37.9 
34.7 
25.7 
24.2 
15.3 
38.7 

Source:  World Bank 

- World Devel 

opment  Rq 

wrtl997 

Even though  debt  levels are still high, growth  of debt  has now slowed  down  in many  coun 
tries, reflecting  the  positive impact  of Brady debt  relief programmes. The  strong  increase in 
exports,  together  with  a  fall  in  interest  rates  has  brought  down  the  debt-service  ratio  to 
somewhat  more  manageable  levels.  In  particular  a  number  of  countries,  most  noticeably 
Brazil, have managed  to reduce substantially their debt-to-exports  and debt-to-GNP  ratios. 

11 

However, the debt crisis of the  1980s proved to be a catalyst for reforms and démocratisa 
tion which led to  improved  economic performance.  The economic  reforms  undertaken in 
recent years by almost all countries have three major elements: 

Macroeconomic  stabilisation:  The  main  objective  was  to  lower  inflation.  This  was 
achieved throughout  the region through a combination  of sound fiscal and monetary poli 
cies. Annual  inflation  in Latin  America has fallen  from  almost  900% per year  in  1993 to 
26% in  1995 (see table  1.3.3  below, based on UN data). Another  cornerstone  of macro-
economic  stabilisation  has been fiscal adjustment.  Most  countries  in  the  region  have re 
duced significantly  their fiscal  deficits,  whilst still experiencing pressures and problems re 
sulting  from  inefficiencies  in  tax  collection  and  the  management  of  public  expenditure 
which  could  compromise  medium-  and  long-term  macroeconomic  stability.  In  particular 
many Latin American countries have large and inefficient  bureaucracies and face problems 
of corruption. 

Trade liberalisation: Over the past decade most Latin American countries have unilater 
ally liberalised trade, partly within the framework  of the Uruguay Round  negotiations and 
partly  within  the  context  of  World  Bank  and  International  Monetary  Fund-sponsored 
structural  adjustment  programmes.  Average applied tariff  rates  have  fallen from 45% to 
13%), and non-tariff  barriers have been drastically reduced. However, many tariff bindings 
made as part of the Uruguay Round multilateral negotiations were substantially higher than 
the actual tariffs  applied, and this could, theoretically, lead to tariff increases, without vio 
lation of their Uruguay Round commitments. Despite these risks, the tariff reductions made 
in past  years have clearly had  an important  effect  on trade which  has grown  strongly, in 
particular intra-regional trade, the latter fostered  by regional co-operation schemes, such as 
MERCOSUR and the ANDEAN-COMMUNITY. 

Deregulation  of the  economy:  First  important  steps have been  undertaken,  in particular 
with regard to privatisation, but much remains still to be done. Latin American economies 
are still  heavily  regulated,  labour market  reforms  are not  far-reaching  enough  and unem 
ployment  rates  in  most  countries  are  already  high,  and  have risen further  particularly  in 
Mexico, Uruguay,  Venezuela and Argentina. Many markets remain inefficient  and uncom 
petitive, partly because they are still characterised by oligopolistic forces. 

Nevertheless, in response to these reforms and to a more favourable international economic 
environment (improving terms of trade, higher growth in the US and the EU, Latin Amer 
ica's main export markets, etc.), growth over the last five years has picked up. As a conse 
quence, income per head has grown somewhat over the reference period. 

12 

! » 4 S S J » « W B ) « » 0 W W W « W » M « W W T O S W M W « W W^ 

• « . . . ™ « .. ". 

. r , . ., 

.. „ 

GDP, av. annual 
growth, 
% 

GDP p.c,  av. 
annual growth, 
% 

Inflation,  annual rate, 
% 

7957-90 

7997-95 

7957-90 

7997-95 

1980-89 

1993 

1995 

Latin Amer 
ica 
Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

fm$ffiiW%mW- 
$MêiM$$ÊMà 

s % s vi' 
-X' -.-. 

Source:  CEPAL 

1996 

0.9 
1.3 
-0.9 
3.0 
1.7 
1.7 
-1.8 

3.0 
2.6 
5.2 
7.2 
0.8 
3.8 
1.8 

-1.1 
-0.7 
-2.3 
1.3 
-0.4 
-0.9 
-4.4 
'******* ' 

1.1 
0.8 
3.9 
5.4 
-1.0 
1.5 
-2.0 
\  **>**  ' 

*  N<  v  / % 

s  ' 

388.4 
740.5 
162.0 
10.6 
15.9 
29.1 
1,591.5 

4 

892.7 
2,489.1 
7.4 
12.2 
8.0 
31.0 
19.5 

••  > ' 

25.9 
22.0 
1.7 
8.2 
52.0 
22.8 
11.1 

*  ' '^'"c"  ^  .^  ""  '""  *  SN  v* 

% 

s  <  *  - 

' 

"  w  s  •.••••'  v  •• >&•• 

Trade liberalisation has been quite successful.  Export growth has increased  during the  first 
half of the  nineteen  nineties,  but  imports,  particularly  of  manufactures,  grew  even  faster. 
This was due to the strengthening of economic growth as efforts  at reform and stabilisation 
restored consumer- and producer confidence.  A structural weakness is that Latin American 
exports  are  still  concentrated  in a few  sectors,  mainly  commodities,  in particular  agricul 
tural goods, which limits the potential for export growth. In addition, certain features of the 
macroecbnomic  stabilisation  programmes  adopted,  in particular the pegging  of  currencies 
(such as the Argentinean peso) to the dollar, have led to overvalued  exchange  rates which 
favoured imports over exports. 

As  a counterpart  of  this  deficit,  capital  inflows  have  grown  over the  last  years.  In  1995, 
Latin America received US$  54 billion in capital inflows,  of which 40 per cent  constituted 
FDI,  37  per  cent  portfolio  investment  and the  rest  bank-  and  trade-related  "lending.  The 
strength  of  FDI  and  portfolio  investment  flows  may be  considered  a response  to  micro-
economic reforms,  such as privatisation, and deregulation of the economies; others, mainly 
short-term capital  inflows  as a response to high real interest rates, thereby contributing  to 
the overvaluation  of currencies. Nevertheless,  increasing  capital  inflows,  in particular For 
eign  Direct  Investment,  also  show  growing  international  confidence  in  Latin  American 
economies. There are, however, risks associated with the volatility of international  financial 
flows,  in particular portfolio investment. These risks and the possible adverse effects  on the 
economic development  have been highlighted by the Mexican peso crisis in  1994/95  which 
had a disastrous impact on the Mexican economy, and caused - via its impact on  confidence 
in financial markets -  short  economic  recessions in Argentina and Uruguay.  The  still rela 
tively underdeveloped financial markets of the region,  coupled  with increasing  current ac 
count  deficits  and in some cases still large budget deficits  could prove a serious risk to fi 
nancial stability in the region. 

13 

Table 1.3.4: ExternaUrad^ 

Exports volume, av. annual 
growth, 
% 

Imports volume, av. an 
nual growth, 
% 

1980-90 

1990-95 

1980-90 

1990-95 

Latin America 
Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

5.2 
6.1 
3.1 
5.7 
12.2 
3.0 
-4.4 

6.6 
6.6 
-1.0 
10.5 
14.7 
8.9 
-8.7 

-0.5 
-1.5 
-8.6 
1.4 
5.7 
-3.9 
-4.1 

15.1 
8.5 
45.8 
14.5 
18.7 
10.0 
7.3 

Source: Human Development  Report 1997, World Development Report  1997 

Latin American saving- and investment rates are low by international standards, and saving 
rates even show a falling trend (with the notable exception of Chile). Even if, in the short 
term, insufficient  domestic savings can be complemented with substantial foreign savings to 
finance  necessary investment, such substantial inflows are unlikely to continue indefinitely. 
Most  important for improving  depressed  savings rates is a thorough  reform  of the  fiscal 
system, including not only fiscal adjustment  but also of the tax and social security systems. 
So far the latter have started only in seven countries of the region. 

Graph 1.3.1: Saving and Investment in Latin America compared to the Newly 
Industrialised Countries of Asia. 

1960 

1965 

1970 

1975 

1980 

1985 

1990 

1993 

• 

. 

•  LATIN 

AMERICAN 
GROSS FIXED 
INVESTMENT 

FIXED 
INVESTMENT 

GROSS 
NATIONAL AND 
FOREIGN 
SAVING 

NICTS GROSS 
NATIONAL AND 
FOREIGN 
SAVING 

Source: G. Palma, Whatever happened to Latin America's savings? UNCTAD 1996 

14 

Table  1.3.5:  Poverty  and  income 
distribution 

Gini index 

Poor 
(<1$PPP 
per day, %) 
1981-95 

Latin 
America 
Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

24.6a 
28.7 

15.0 
14.9 
30.4 
43.8 

"•Jv 

63.4(1989)b 

56.5(1994)b 
50.3 (1992)b 
46.6 (1994)b 
50.3 (1993)b 

Source: UNDP - Human Development  Report  1997, World Bank -
World Development  Report  1997 
a: Source: World Bank, Poverty Reduction and the World Bank: Prog 
ress and Challenges in the  1990s. May  1996. Data refer to 1993. 
b: survey year 

According  to  World  Bank  estimates, 
almost  one  quarter  of  the  population  of 
the  region  lives  in  poverty.  The  UN 
Economic  Commission  for  Latin  Amer 
ica  and  the  Caribbean,  using  a  less  re 
strictive  definition,  estimates  about  39 
per  cent  of  the  population  to  be  poor. 
Inequality  in  Latin  America,  in  both  in 
come and  asset  (particularly  land)  distri 
bution, is the highest  in the world.  While 
the richest 20 per  cent  of the  population 
have  average  incomes  of  US  $17,000, 
the poorest  20 per  cent  have  an  average 
p.c. income of US $ 930. According to a 
recent  World  Bank  report,  given  the 
high  inequality  in  the  region,  growth 
rates would  have to  be twice the  current 
rate  of  growth  in  order  to  reduce  the 
number of people living in absolute  pov 
erty. 

Nonetheless  health  indicators have improved  substantially for  almost the whole region  over 
the last decades. Life expectancy increased  and, on average, reaches levels close to those in 
high income countries.  Under-five mortality rates fell  further  in all countries between  1990 
and  1995,  most  significantly  in  Peru  (from  116  per  1,000  live  births  to  55)  and  Bolivia 
(from  160 to  105). Between  70% and  95% of the population  in Latin  America  today  have 
access to health services. 

Table  1.3.6: Health 

Life  expectancy 
years 

number  of  people/ 
doctor 

I960 

1994 

1980 

1993 

Latin  America 
Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

55 
65 
57 
57 
53 
47 

69 
66 
72 
75 
72 
69 
67 

1,458 
1,301 

1,149 

2,308 

970 
844 
330 
942 
615 
652 
2,039 

Source  UNDP -; Human Development  Report  1997, World Bank 
World Development  Indicators  1997 

Policy priorities  should  be to  improve the access of the poor  to  health  care,  and  in general 
to  reform  health  care systems to  strengthen the overall  capacity,  improve  performance  and 
secure sustainable financing. 

15 

Adult  literacy  has  increased  over  the  last  25 years,  reaching  between  80%  and  100%.  Al 
most  all children  receive primary  education  today,  but  enrolment  in secondary  education  is 
still  substantially  lower than  in industrialised  countries.  When  looking  at  enrolment  data,  it 
shows that women in general represent  about  50% of all pupils. 

Table 1.3.7:  Education 

Gross enrolment ratio 
for all levels 
(% of age 6-23) 
1994 

1980 

Gross enrolment  ratio 
secondary 
(% of relevant age group) 

1980 

1995 

Latin America 
Brazil 
Argentina 
Chile 
Mexico 
Ecuador 
Nicaragua 

59 
54 
65 
65 
68 
69 
53 

70 
72 
77 
72 
66 
72 
62 

42 
34 
56 
52 
48 
53 
42 

51 
•  43 
72 
70 
58 
55 
41 

Source:  UNDP -Human Development Report 1997, World Bank -  World Development Indicators  1997 

Therefore,  at  least  at  the  educational  level,  women  do  seem  to  enjoy  equal  opportunities. 
Women  do, however,  face discrimination  in all other  areas of society.  They are more  likely 
to  be affected  by poverty,  unemployment,  and  are  disproportionately  represented  amongst 
those working in the informal  sector. 

Despite  progress  in improving  access to  primary  education  throughout  Latin  America,  the 
poor  also  have very  inadequate  access to  secondary  education,  and  their  access  to  univer 
sity education  throughout  the region  is minimal.  An adequate  and  efficient  educational  sys 
tem  is  crucial  for  sustainable  growth  through  improving  productivity  and  thereby  raising 
growth  rates,  and  reducing  inequality.  Reforms of the educational  system,  and  a better  tar 
geting  of  educational  resources,  in  particular  towards  primary  and  secondary  education, 
remains necessary. 

Official  development  assistance  represented  about  1.7%  of total  Latin  American  GNP,  or 
US$ 6 bn. in  1994, up from 1.4%  in  1990. This figure is dwarfed  by the amount  of private 
capital  flowing  into  Latin  America  which  reached  US$  54  bn.  in  1995.  However,  these 
capital flows are concentrated  in a small number of countries, Brazil alone receiving 35% of 
the  total.  Latin  American  countries  will  further  need  international  support,  especially  to 
continue  to  reduce  poverty,  build  up  and  improve  social,  institutional  and  economic  infra 
structures to  make economic growth  sustainable and  ensure that  the benefits  of growth  are 
distributed  more equally. 

16 

2: European Community (EC) development co-operation with the 
Asian and Latin American countries . 

2.1. General overview of policy 

The  ALA  Regulation  provides  the  basic  point  of  reference  from  which  the  Commission's 
cooperation  policies in respect of Asia and Latin America are formulated.  However,  the  full 
range of the Commission's cooperation  policies with Asia and Latin America go far  beyond 
the  financial  arrangements  of the  ALA Regulation  and  include  inter  alia  political  dialogue 
and the negotiation  of co-operation and trade agreements. 

2.1.1. The policy framework  for Asia 

With regard  to Asia, these broader  considerations  are set out  in the Commissions  Commu 
nication  to  the  Council  of July  1994  Towards a New  Asia  Strategy  [COM  (94)  314]  and 
include,  inter alia,  developing  a series of policy fora  through which the  countries  of  South 
and  South East Asia may be encouraged  to integrate their economies more closely into the 
global  system,  as  well  as  initiatives  to  promote  investment  and  business  friendly  environ 
ments in our partner  countries and to enable those countries to  access  state  of the art  tech 
nology.  Similar  considerations  are  set  out  in  the  Commission  Communication  on  a  Long 
Term  policy  for  China  Europe  Relations  [COM  (95)  279].  The  new  strategy  towards 
Asia  paved  the  way  for  more  recent  Commission  strategy  papers  on  relations  with  India 
and ASEAN.  The EU  in its cooperation  with the developing countries  of Asia  attaches  the 
utmost  importance  to  respect  for  human rights, the  development  and  consolidation  of  de 
mocracy  and  the  rule  of  law.  The  EU  conducts  its  bilateral  cooperation  with  many  coun 
tries  and  regions  in  Asia  within  the  framework  of  Trade-  and  Cooperation  Agreements, 
complemented  by a structured  political dialogue both on a bilateral and regional  level  (such 
as  the  dialogue  with  ASEAN).  The  EU  is  also  taking  part  in  the  only  collective  regional 
security  dialogue, the ASEAN Regional Forum. With China, the EC  signed  the first Trade-
and  Cooperation  Agreement  in  1985.  Though  the  development  of  bilateral  relations  was 
interrupted  by the  1989 Tiananmen  Square  events  (which  led  the EU  to  impose  a  number 
of sanctions), the normalisation  of relations  since the beginning  of the  1990s has paved  the 
way  for  increased  cooperation  and  the  establishment  of  a  new  arrangement  for  political 
dialogue.  All those  initiatives  complement  and round  out the more traditional  objectives  of 
poverty  alleviation  and  economic  co-operation  envisaged  in  the  ALA  Regulation  and  as 
such  must  form  an  essential  part  of  any  overall  assessment  of  the  Community's  relations 
with the nations of this region. 

2.1.2. The policy framework  for Latin America 

Following  the Madrid  European  Council  in December  1995 a new  long-term  strategy  The 
EU  and  Latin  America.  The  Present  Situation  and  Prospects for  Closer  Partnership 
1996-2000  aimed  at  strengthening  the  partnership  and  cooperation  by  the  year  2000  was 
adopted.  This partnership  goes back  several  decades  and  has been  strengthened  considera-

17 

bly  over  the  last  15  years.  The  political  dialogue  between  the  Community  and  its  Latin 
American  partners  has been  institutionalised  in the  San  José  process  (since  1984)  and  the 
dialogue with the Rio Group  (since  1990), leading to  a steady  improvement  of political  re 
lations.  This  dialogue  has  been  complemented  by  cooperation  agreements.  After  'third-
generation'-agreements have been  signed  with all Latin  American  countries  (except  Cuba), 
a new phase of even closer cooperation  has started  with the negotiation  of agreements  with 
Mercosur  (signed  1995),  and  Chile  (signed  1996)  which  eventually  will  probably  lead  to 
further  trade liberalisation  between  the EU  and  Latin  America  countries  and  regions  in the 
framework  of  'Open  Regionalism'.  Against  this background  of  a stronger  partnership,  co 
operation  between  the EU  and  Latin  America  has been  diversified  and  refined  to  meet  the 
new  needs  of  a  highly  heterogeneous  subcontinent  seeking  to  consolidate  the  democratic 
process,  pursue  the  quest  for  international  competitiveness  and  to  tackle  endemic  poverty 
and  social  inequalities.  Traditional  Technical  and  Financial  Cooperation  is more  and  more 
complemented  by instruments  aiming at developing  closer  economic  and  business  ties, and 
instruments  providing  increased  assistance  in  areas  such  as  Gender  and  Development  and 
the  Environment.  Other  areas  of  priority  include  Démocratisation  and  Human  Rights  and 
Education  and Training. In addition, the Interparlamentaty  conferences,  organised  on a bi 
annual basis since  1974 have further  encouraged  dialogue. 

2.2 Evolution of ALA cooperation,  1991-1995 

Within this general  framework,  during the  1991-95 period,  the Community's  relations with 
the  ALA  countries  became  more  comprehensive  and  systematic,  with  economic,  financial 
and  development  co-operation  expanding  significantly.  This  reflected  substantial  improve 
ments  in the field of démocratisation (associated  with  a more effective  involvement  of civil 
society),  the  positive  impact  of  market  and  trade  liberalisation  policies  supported  by  the 
International  Financial Institutions (the IMF in particular),  regional  integration  schemes and 
progress  in  structural  reforms,  (privatisation  of  state-own  assets, fiscal reform,  the  reform 
of financial systems, restructuring of the external debt etc.). 

The Community  has also become more involved  in relief and rehabilitation  programmes, by 
financing  post-war  reconstruction/rehabilitation  schemes,  particularly  in  Nicaragua  and  El 
Salvador.  New  instruments  of  decentralised  co-operation  have  been  developed  by  the 
Commission  and  substantial  amount  of  financial  resources  has  been  channelled  through 
NGOs  and  in favour  of local  private  economic  entities.  Close  co-ordination  on  policy  is 
sues,  fund  mobilisation  and operations  has been established  with the IFIs active in Asia and 
Latin  America.  In  addition,  the  Community  has  encouraged  the  establishment  of  regional 
fora  and  organisations  in the framework  of "open  regionalism",  as a way to  enhance  pros 
pects  of  policy  dialogue,  trade  integration  and  economic  partnership.  This  South-South 
policy  dialogue  and  economic  integration  aims  at  exploiting  complementarities  and  com 
parative  advantages  and  a  more  efficient  use  of  human,  financial  and  technical  resources 
which are needed  to cope with general  problems having a regional  dimension  (such  as envi 
ronmental  protection). 

The  evolving  nature  of  the  Community's  policy  dialogue  with  the  ALA  countries  and  a 
better aid co-ordination  with other  multilateral  and bilateral  donors has led to  a more  effec 
tive use of the financial resources available. Over the last  few years the  Community  has be 
come a significant  partner  for  the ALA countries  by encouraging  policy  reforms,  providing 

assistance to fight poverty in rural and urban areas, supporting private entrepreneurship  and 
SMEs,  encouraging  new  European  private  financial  flows,  supporting  national  "social 
safety  nets"  during  the  adjustment  and  process  of  transition,  and  promoting  the  involve 
ment of grass root  local organisations  in relief and reconstruction  programmes. 

Women  in  Development 

Women  are  particularly  vulnerable  to  adverse  social  and  economic  developments.  They  are  dispro 
portionately  affected  by poverty,  unemployment,  are  more  likely to work  in the  domestic  and  informal 
sector  which  normally  leaves  them  without  social  security  coverage,  have  less  access  to  education 
which  lessens their  opportunities,  and in general face discrimination  by the society  and  its  institutions, 
such as the legal, political or the educational system. 

Improvement  of women's status and promoting gender equality  is not only  important  in  its own right, it 
also  contributes to overall social and economic development.  In particular  improving  women's  access 
to education  is crucial. Breaking the vicious cycle of poverty that  is sustained  by  poor  child  health  and 
low  levels  of  education  can  be  attained  through  better  education  for  women.  Female  education  is a 
powerful  instrument  to  reduce  infant deaths, and to  improve  in general  child  nutrition  and  health. Fe 
male  education also has an impact on fertility  (usually  lower for literate women)  and the  use of contra 
ceptives.  In  addition,  it  improves  women's  ability  to  actively  participate  in  the  labour  market,  and 
raises their opportunities  for formal  employment. 

The ALA-Regulation  puts  a special  emphasis  on the  role  of women  in the development  process  and 
stipulates that  EC aid policy  must  'ensure (...)that specific measures, or even projects,  are  adopted  in 
order  to  increase  their  [women'sj  active  participation,  on  an  equal  footing,  in  the  productive  process 
and  its  results,  and  in  social  activities  and  decision  making.'  (article  5).  It  also  implies  that  all  pro 
grammes  and  projects  within  the  development  co-operation  programme  with the  ALA  countries  have 
to  bear  'in mind particularly  the role  of  women1 (preamble). This was reinforced  by the  Council's  1995 
Resolution  on integrating gender issues in development  co-operation  (12847/95  of 20.12.1995). 

Implementation  of  the  Regulation  thus  adopts  a  dual  approach.  As  promotion  of  gender  equality 
should be an integral  part of all activities, since  1994 all projects are screened to  ensure  proper atten 
tion to  gender  integration. At  the  same  time, specific  projects  may  be  needed  to  combat  gender  ine 
qualities. Of total  EC aid to the ALA  regions since  1992, over 235 MECU has been  committed to  posi 
tive  action  projects  for  women's  empowerment,  not taking  into  account  actions  integrated  in  projects 
and  programmes  under different  budget  lines. A small  specific  budget  line  'Women  in  Development', 
also  exists  to  finance  technical  advice  and  sensitisation  activities  aimed  at  improving  attention  to 
gender  issues  in mainstream development  co-operation. For example, the  Commission  has funded a 
number  of  studies  ('Gender  Profiles)  on the  situation  of  women  in  some  Latin  American  developing 
countries  which  make  it  easier  to  direct  projects  and  programmes  effectively  towards  improving  the 
situation  of women. 

Co-operation  with  the  ALA  countries  has  also  emphasised  gender  awareness  and  the  role 
of women  in development  as well as, on a more general  level, the need to  respect  basic hu 
man rights and  civil liberties,  constitutional  reforms,  the consolidation  of  the  démocratisa 
tion process  and  the reform  of domestic  legal  and judicial  systems. Indeed,  public  account 
ability ("good  practices"), good governance and the respect  of rule of law by ALA  partners 
has  been  an  essential  pre-condition  for  a fruitful  dialogue  and  for  the  mobilisation  of  the 
Community's financial resources in support. 

The  Community's  economic  co-operation  programmes  in  Asia  and  Latin  America  focus 
strongly on the private sector.  The thrust  of these programmes  has been  towards  improving 
the  business  and  regulatory  environment  in  partner  countries  in  order  to  stimulate  a  two 
way flow of trade  and  investment  by developing  a wide range of supportive  instruments  to 

further  the  development  of  business,  and  especially  small  and  medium  scale  businesses. 
These  instruments  include  institutional  support  through  such  structures  as  the  Council  of 
European Chambers of Commerce, Business Councils, and various directly funded training 
programmes  designed  to  enhance  management  skills  in  partner  countries.  The  Commis 
sion's programmes are not, however,  limited to  addressing the economic  dimension  of de 
velopment.  The  importance  of the  social  sector  is  recognised  as  is  the  need  to  ensure an 
equitable  balance  in  the  distribution  of  the  fruits  of  progress.  Projects  and  programmes 
founded  on  Financial  and  Technical  Cooperation  are  targeted  at  poverty  and  focus  on 
health, sanitation and human resource development whilst taking account of the gender and 
environmental dimensions of development. 

Population and Reproductive Health 

Tackling  population growth through creating awareness on family  planning issues and the provi 
sion of  good quality  services to  meet demand  is a key development  issue. Reducing the  hun 
dreds of thousands of maternal deaths and  millions of episodes of illness associated with preg 
nancy  and delivery  is a high priority.  In addition, creating  a safe  environment  for  young people 
free from the risks of violence, abuse and providing information and services to prevent unwanted 
pregnancies  and sexually  transmitted  infections  (including  HIV)  is  an  area  that  is  beginning  to 
receive increased attention. 

In Asia  and  Latin America  the  Commission  is supporting  the  empowerment  of  women  to  take 
control  of  their  reproductive  lives;  it  is  providing  support  to  the  development  of  better  quality 
services that are more freely available to those who need them, and it is working to develop cost-
effective strategies for tackling the spread of HIV/AIDS and other sexually transmitted infections. 

The Special budget line for population polices and programmes in developing countries (B7-631) 
is  used to support  policy  and strategy  development  and to  support  innovative  projects  that  are 
complementary to the larger programmes of support to the health sector. The new Council Regu 
lation for B7-631 (EEC 1484/97, J.O. L 202, 30.07.1997, p1) states that the Commission will work 
towards : 

enabling women, men and adolescents to make a free and informed choice about the number 
and spacing of their children; 
contributing  to the creation of  a socio-cultural, economic  and educational  environment  con 
ducive to the full exercise of choice, especially  for women and adolescents, and in particular 
through  the  condemnation  and  eradication  of  all  forms  of  sexual  violence,  mutilation  and 
abuse which affect their dignity and health; 
helping develop or reform health systems in order  to improve the accessibility  and quality of 
reproductive health care for women and men including adolescents, thereby appreciably reduc 
ing the risks to the health of women and children. 

It is very  important  to  stress that the community  approach to  co-operation  with  the  ALA 
countries is based on the use of a wide variety of instruments reflecting  the diversity of the 
development experiences of the countries of Asia and Latin America. Moreover the mix of 
instruments used changes from country to country and from region to  region with the bal 
ance depending on the level of development and whether the need is for efforts  to promote 
trade and investment,  for project finance,  for structural  adjustment funds,  for financial  and 
technical  assistance,  and/or  economic  co-operation,  or  for  improved  market  access.  It  is 
this diversity which makes development  co-operation  with the ALA countries such a chal 
lenge for the Community. 

As  regards the  developing  countries  in  South-East  Asia  and the Indian  sub-continent,  the 
evolution  and the nature of EC multilateral  and bilateral  dialogue  and co-operation  during 
the  1991-95  period  reflected  the  rapid  growth  achieved  in this  part  of  the  world,  the ar-

20 

rangements  for  strengthening  regional  co-operation  in  the  Asian-Pacific  basin  (ASEAN, 
SAARC,  APEC  etc.)  and the resulting  changes  in the global  balance  of economic  power. 
The need  for policy  differentiation  has also became more and more evident,  in the light  of 
diverging degrees of economic and social progress witnessed by the countries in this part of 
the world. Therefore EC strategies in Asia encompassed market-led trade, trade integration 
and  investment  objectives  in  fast-growing  emerging  economies,  policy  dialogue  and  sup 
porting reforms in adjusting countries (former command economies),  and traditional  devel 
opment co-operation in the poorest, focusing on poverty alleviation strategies. 

During the second  half of the  1980s and in the early  1990s many-, if not  most,  of the Latin 
American  countries  started  implementing  a  démocratisation  process  by  moving  towards 
more  participatory  forms  of  government,  encouraging  greater  transparency  and  account 
ability in government  and promoting the rule of law.  These positive  developments  and the 
accompanying policy orientations have  led to a higher level of political stability in the Latin 
American region. 

These countries proved to be particularly challenging for EC co-operation policy,  reflecting 
a  different  timing  and  sequencing  in  the  structural  adjustment,  market  liberalisation  and 
démocratisation  process  in each  country  concerned.  During  the  second  half of  the  1980s 
and in early  1990s  some  countries in the region undertook  ambitious  stabilisation  and ad 
justment  programmes  (Brazil,  Argentina  and  Chile,  for  instance)  and  many  of  them 
(including Costa Rica, Mexico,  Venezuela,  Uruguay, Bolivia etc.)  started  addressing acute 
financial  and balance  of  payments  problems  deriving  from  an unsustainable  external  debt 
position vis-à-vis western commercial banks. 

The strengthening  of democracy,  political stability,  economic reforms and regional integra 
tion have led to new FDI flows and huge reconstruction-rehabilitation  and development  co 
operation  programmes,  supported  by  bilateral  donors,  the  Community  and  the  Bretton-
Woods Institutions. During the period under consideration major efforts  were deployed by 
the countries in Central  and Latin America to foster  regional  co-operation  and  integration 
(San José Process,  Andean Community,  MERCOSUR  etc.),  reflecting  the  positive  impact 
of new economic liberalisation and trade integration policies. 

2.3.  The Council  Regulation  EEC 443/92 of 25/02/1992. 

The Council Regulation EEC 443/92 on financial and technical assistance to, and economic 
co-operation  with ALA countries (O.J.  L52, 27.02.92, pi)  is a key statement  of the Com 
munity's approach to  development  strategies.  This Regulation,  based  upon  article  235  of 
the Treaty, is particularly innovative because: 

1)  The Regulation  pinpoints  the need  for the Community's  development  co-operation  in 
struments to be closely associated with trade liberalisation strategies (article 1). 

2) The Regulation  introduces the principle that any co-operation and resource  mobilisation 
should be made conditional  upon the respect of basic human rights and fundamental  demo 
cratic  principles  in  each  EC  partner  country.  In this  respect,  the  text  of  the  co-operation 
agreements negotiated  after  1992 all include "human rights" and "démocratisation" clauses 
(article 2). 

21 

3)  According  to  the  Regulation,  a range  of  decentralised  authorities  are  eligible  for  eco 
nomic,  technical  and  financial  assistance.  Potential  beneficiaries  could  include  not  only 
central or local public authorities, but also private entities and NGOs (article 3). 

4)  The  Community's  main  financial  instruments  (and  their  programming  )  should  be  tai 
lored  to meet the specific requirements of ALA  partner countries (article 3). 

5)  The  Regulation  indicates  that,  as  a  matter  of  priority,  financial  and  technical  co 
operation should  aim at providing support to the poorest ALA developing countries and to 
the poorest sections of local populations (article 4). 

6) Financial  and technical  assistance  should focus  on rural development,  food  security,  en 
vironmental  protection,  the role of women,  the fight against  drugs,  démocratisation,  child 
protection  etc  (article  5).  Economic  co-operation,  that  is  scientific  and technological  co 
operation and partnership, institutional  and administrative build up, support for  investment 
and trade integration and assistance to the private sector,  should serve  the mutual interests 
of the  Community  and its  partner  countries.  Support  for  regional  co-operation  is  seen  as 
being an important part of economic co-operation (article 7). 

Fight against Drugs 
The budget line for aid in support of anti-narcotics measures namely 'North-south co-operation in the fight 
against drugs' was created in 1987 (B7-6210) to finance projects in this domain. The Commission has sub 
sequently sought an enabling regulation to serve as a statutory basis for this budget line namely Council 
Regulation EEC 2946/97 (OJ L287, 21.10.1997, p1) following transmission of a Parliamentary Opinion to the 
Council subsequent to the second reading by Parliament on  March 13,1997. 

This budget line does not reflect the full extent of co-operation by DG IB in the fight against drugs in the 
countries which fall in its geographic area of competence because, on the one hand, it does not include the 
cost, over the period as a whole, of the anti narcotics clauses of the GSP (coveringindustrial and agricultural 
products from the Adean Pact countries and agricultural products from the countries of Central America) in 
terms of revenue lost to the Community Budget and nor, on the other hand, does it include funds provided 
for this purpose from other budget lines. 

From 1991 to 1995 funds committed under budget line B7-6210 amounted to roughly Ecu 50 million. 34 per 
cent of these funds were allocated to Latin America, 31.3 percent to Asia, 9.3 percent to the ACP countries, 
19.8 percent to the countries of the Mediterranean basin and 3.5 percent were allocated to several countries 
or served to fund horizontal actions (thematic research) from which a region or a group of countries bene 
fited. 

A breakdown by type of project funded indicates that 52 percent of the funds were allocated to preventive or 
demand reduction programmes, or to the treatment and rehabilitation of addicts, 20 percent went to alterna 
tive development programmes, 10 percent sustained actions against trafficking and supply reduction and 18 
percent provided support to training and research programmes. 

NGOs were the principal  beneficiaries  of the programme, accounting for half of funding  allocations whilst 
governments accounted for 30 percent. Commitments to United Nations Drugs Control Programme made up 
approximately  18 percent  of total  commitments.  Consultants  or universities  received  2  percent  of  funds 
committed to carry out research. 

22 

7)  To  enable  the  Community  to  implement  these  policy  guidelines  and  provide financial, 
economic  and  technical  assistance  to  its  ALA  partners,  the  Regulation  mentioned  a  total 
amount  of  2750  MECUs  deemed  necessary  for  the  1991-  95  period.  Fund  mobilisation 
should  take  place  in  the  framework  of  an  indicative  medium-term  programming  exercise 
due  to  be  carried  out  with  the  developing  countries  concerned.  It  also  decided  that  some 
10%  of  this  total  should  be  used  to  finance  programmes  in  the  field  of  environmental 
protection  and preservation  of tropical forests  (article 9 and  10). 

Environmental  protection  in EC cooperation with ALA  countries 

Environmental  issues have developed to represent  an important  aspect of  EC  cooperation with develop 
ing countries  in Asia  and Latin America. They  are becoming  increasingly  prominent  in the dialogue  with 
partner  countries,  as shown  for  example  by the fact that the  environment  is  integrated  into  all  coopera 
tion  agreements  with  Asian  and  Latin  American  partner  countries/regions.  The  importance  given  to 
environmental  issues  can  also  be judged  by the  level  of  funding  of  projects  and  programmes  with  spe 
cific  environmental  objectives.  In  this  regard,  a  recent  independent  inventory  of  funds  committed  by 
DG1B to  environmental  projects concluded that,  between  1990 and  1995, 596  MECU was  committed  to 
environmental  projects  in Asia, and 255 MECU in Latin America. 

A  large  share  of  this  expenditure  is  channelled  through  the  ALA  budget  line,  which  is  thus,  in  the 
aggregate,  meeting  the  "10  % target"  set  out  in the  ALA  regulation.  However,  the  figures  also  include 
two  budget  lines  intended  specially  for  environment  in  developing  countries  and  for  tropical  forests. 
These complement  activities  have been carried out under the ALA  budget  lines. 

The  budget  line  targeted  at  environment  in  developing  countries  (B7-6200,  15  MECU  in  1995,  for  all 
ALA/MED/ACP countries)  is used for innovative  pilot  projects  related to the  management  of  natural  and 
urban  environment,  as  well  as  for  strategic  studies  in  the  field  of  environment.  Pilot  projects  funded 
under this budget  line  are often taken over for further financing  by the  budget  lines governed  by the ALA 
regulation. There  is thus an important synergy  between the two financing  instruments.  In 1995, work was 
undertaken  to  establish  a legal  basis for these  activities through  the  creation  of  a  regulation.  That  work 
continued  through  1996  and  was  finalised  in  the  beginning  of  1.997  (EEC  722/97,  J.O.  L  108, 
25.04.1997, p1). 

The  second  "environmental" budget  line  concerns the  protection  of tropical  forests  (B7-6201,  50  MECU 
in  1995  for  Asian,  Latin  American  and ACP  countries).  It  is  used  specifically  for  the  protection  and  ra 
tional  management  of  tropical  forests  and  the  improvements  of  conditions  of  forest  dwellers  and  of 
populations  living  on the  fringes  of the  forests.  On 20  December  1995,  a  regulation  was  adopted  (EEC 
3062/95,  J.O.  L  327,  22.12.1995,  p9)  laying  down  the  basic  principles  and  strategies  as  well  as  the 
procedures for  making the financial  commitments  from this  budget  line.  NGOs  play  an  important  role  in 
the execution  of programmes  and projects financed by both these budget  lines. 

Another  important  tool  for  ensuring  the  environmental  performance  of  the  cooperation  activities  fi 
nanced  from  the  ALA  budget  line  is  Environmental  Impact  Assessment  (EIA).  EIA  procedures  were 
introduced  in  1991, and  are  constantly  being  refined  and complemented  with  different  support  such  as 
training courses and guidance material. 

2.4. Associated  bilateral  Co-operation Agreements and multilateral  rela 
tions. 

The  implementation  of  the  ALA-Regulation  has  taken  place  in  the  framework  of  a 
strengthened  policy  dialogue  (which  included  also  cultural  and  science  and  technology 
matters)  and  trade  integration  process  regulated  by a  new  range  of  bilateral  Co-operation 

23 

Agreements  ("third  generation"  Agreements)  and,  at  the  multilateral  level,  by  a  new  rela 
tionship with regional organisations in Asia and Latin America. Thus: 

a)  As regards  new  bilateral  relations  with  partner  countries  in Asia,  over  the  reference  pe 
riod,  Co-operation  agreements  were  signed  with  India  (J.O.  L  223/94,  p23),  Sri  Lanka 
(JO.  L 85/95, p32), Vietnam  (J.O. L  136/96, p28), Nepal (J.O. L  137/96, pl4)  and  Macao 
(J.O.  L 404/92  p26).  Multilateral  co-operation  with  regional  groupings  in  Asia  (ASEAN, 
SAARC  etc.)  was  intensified  significantly  to  encompass  a number  of fields  of common  or 
regional  interest. 

To  provide  a framework  for  this  bilateral  and  multilateral  dialogue  a new  Communication, 
"Towards  a new  Asia  Strategy"  [COM  (94)  314],  was adopted  by the  Council  in  Novem 
ber  1994. The new strategy towards  Asia includes new long-term  objectives  and  policy pri 
orities  aiming  at  ensuring  a  more  effective  and  pro-active  European  political  and  cultural 
role and  economic  presence in this most  dynamic region  of the world  economy,  and  paved 
the  way  for  the  ASEM  process.  This  strategy  was  complemented  by  Communications  on 
future  relations with China, India and ASEAN. 

b) Also in the case of Central  and  South America new Co-operation  Agreements  have been 
signed  with each  country  in the region,  including  recently  Chile, Mexico  and  with  Merco 
sur and the Andean Pact; Cuba alone has been an exception  - there only humanitarian  assis 
tance  through  NGOs  has  been  provided.  Moreover  following  previous  declarations  of 
European  Council  in Corfu,  Essen  and  Cannes, the Madrid  European  Council  in December 
1995 adopted  a new long-term  strategy  aimed at strengthening  EU-LA  partnership  and  co 
operation by the year 2000. 

24 

3: The details of Community co-operation with Asia and Latin 
America, 1991 to 1995. 

3.1. General Quantitative Overview of Community Cooperation 

This section attempts to show as clearly as possible, using those data that provide a compa 
rable picture  for  all ALA regions,  how the implementation  of  the  programme  of develop 
ment co-operation  set down in the ALA regulation has proceeded.  The data discussed  in 
this section and presented in the Annexes are drawn from two sources. 

Firstly the summary Tables  1  and the detailed tables 2A to 2D and 3 A to 3D are taken  from 
the data bank prepared for the comprehensive  evaluation exercise  which  is now  underway 
in DG IB3. These  data provide an overview of commitments and disbursements for the two 
regions  (and  their various  sub-regions),  assembled  according  to  a framework based  upon 
the  OECD  DAC  classification  of  official  development  assistance  (Tables  2A-2D)  and by 
beneficiary  country  (Tables  3A-3D).  These  data include  a wider  range  of  actions  and in 
struments than strictly covered by the terms of the ALA Regulation and use a classification 
by project  type that is somewhat  different from the approach  provided  for  in the Regula 
tion.  Indeed the OECD DAC classification  does not clearly distinguish all the areas of  co 
operation  mentioned,  both  in the  ALA Regulation  and  in the  basic  strategic  Commission 
documents for Asia and Latin America (see 2.1.1. and 2.1.2.). For example, table 2B (Latin 
America)  shows  a total  of  126  Mecu  committed  for the  subsector  'Industry,  Mining and 
Construction'.  In fact,  the largest  share of this amount  is related  to  projects targeting  mi 
cro-businesses in the informal sector. 

The second data source is the data banks maintained by the technical  Units in the Asia and 
Latin American Directorates of DG IB. Here the total  of commitments  is analysed,  for the 
years  covered,  and  for  Asia  and  Latin  America,  by  individual  budget  line.  These  budget 
lines cover the kinds of actions with which the ALA Regulation is at least in principle  con 
cerned or associated  and are grouped under 4 headings; 

Financial and Technical Assistance. 
Economic Co-operation. 
Humanitarian Aid. 
Other4 

Data on commitments according to this classification are set down in Table 4 for Asia and 
Table 6 for Latin America. 

However, the ALA Regulation 443/92 is specifically addressed to the management of the 
budget lines for Financial and Technical Assistance ( B 7-3000  and B 7-3100) and for Eco 
nomic Co-operation narrowly defined (B 7-3001  and B 7-3110). Data for commitments 
under these budget lines only are set down in Tables 5 (Asia) and 7 (Latin America). 

3 See for example the relevant tables given in  'Inventory of European Community Aid'ODI,  London, De 
cember 1996. 
4 For example, Démocratisation, Women in Development, Demography, Tropical Forests etc.. 

25 

The starting point is Table  1  which sets down an overall view of Commission commitments 
and disbursements for  Asia,  including  China, Macao  and the  Yemen,  and Latin  America. 
As already noted this table provides data covering a range of actions much wider than those 
immediately addressed by the ALA Regulation. It does nonetheless provide an illustration -
and as yet the only illustration - of how commitments to Asia and Latin America have been 
met  by  disbursements.  In  addition  the  data  for  South  and  South  East  Asia  have  been 
grouped  together  so  that  the  relation  between  commitments  and  disbursements  can  be 
clearly seen. 

It is important to  note that the amounts of aid both committed  and disbursed  in the years 
1991  to  1995  were  substantially higher than in the previous periods.  It will  be noted  from 
line 8 of Table  1 that the ratio of total disbursements to total commitments over the period 
covered is 60 percent, with the figure for Latin America being higher (at 64  percent) than 
Asia (58 percent). The figure for South and South East Asia alone is somewhat lower at 56 
percent.  Such a figure might be taken as representative  of,  or as a first approximation  to, 
the ratio of disbursements to commitments for operations covered by the ALA Regulation. 
Thus over the period covered by this report total disbursements have fallen well below total 
commitments and  the gap  now appears  to be greater  than in earlier periods  (the  overall 
figure  being  64  percent  in the  period  1986 to  1990).  This reflects  a substantial  fall  in the 
ratio of disbursements to commitments for Asia not offset by an increase for Latin America. 
There are a number of possible explanations for the fall in this ratio. Thus it could be due to 
an  increase  in the  sophistication  of  development  co-operation  implying  that  more  time  is 
needed to get  aid programmes operational,  as well  as to other forces  lengthening  the time 
lag needed to get projects underway, such as difficulties  in absorbing aid resources. 

As regards the balance between disbursements.to Asia and to Latin America,  as a percent 
age of the total,  these were relatively close over the period  1991 to  1995 (54 percent Asia, 
46  percent Latin  America)  compared to figures of 63  percent  and 37  percent  respectively 
for the earlier period from 1986 to  1990.  It is clear therefore  that the more recent  figures 
are distant from the  long  standing  informal  understanding that about two  thirds of the aid 
under the ALA programme should go to Asia, a proportion that seems to been broadly re 
spected in the period to  1990. This evolution will undoubtedly reflect,  at least in part, deci 
sions of the budgetary authorities in the European Institutions. 

Tables  2A-2D  also  set  down  an  analysis  of  total  aid  commitments  and  disbursements  to 
Asia  and  Latin  America  classified  according  to  a  schema  drawn  from  that  used  by  the 
OECD DAC.  Once again the limitations of this classification,  as regards this exercise  (see 
above), should be stressed. Nonetheless it is possible to catch a glimpse of how the priori 
ties  set  down  in  the  ALA  Regulation  have  been  addressed.  Thus  it  is  important  to  note 
from Tables 2A and 2B that as regards commitments: 

- the still important amount of resources committed to rural development for both Asia and 
Latin America compared to earlier periods; 

-  the  funds  attributed  to  the  heading  'Environment ' as also  for  'Women  in Development ' 
only  include  funds  specifically  allocated  to  these  headings  and  so  underestimate  signifi 
cantly the overall EC commitment to these themes. However,  the available evidence  is that 
the requirement  in the Regulation that  10 percent of commitments be directed towards ac-

26 

tions  related  to  the  environment  has  been  met.  This  is  the  conclusion  of  the  study 
'Evaluation of the  Environmental  performance of the EC Programmes,  1990-1995'  (Vol. 1 
ERMOct.  1996). 

- the increased proportion of resources allocated to  'Social Infrastructure and Services'  as 
compared for example to the reduced proportion allocated to Economic Infrastructure and 
Services. 

Economic Co-operation 

The ALA-regulation spells out clearly that economic co-operation with the developing partner countries in 
the two regions shall be of high priority. What distinguishes it from financial and technical assistance is the 
emphasis on mutual interest, i.e. economic co-operation should create and reinforce a network of business 
and other economic  links between the EU and its partner countries. Economic  co-operation  programmes 
and projects 'shall contribute to the development of the ALA developing countries by helping them build up 
their institutional capacity so as to create an environment more favourable to investment and development 
and make the most of the prospects opened up by the growth of international trade,  including the European 
single market and by enhancing the role of businessmen,  technology and know-how from all the  Member 
States, particularly in the private sector and in small and medium-sized undertakings. ' (article 7) 

The EC has developed and implemented a wide range of instruments to promote economic co-operation in 
its various forms. 

Investment promotion takes^place in the framework of ECIP, AL-lnvest, and Asia-Invest.  ECIP, which not 
only covers the ALA countries, but also the Mediterranean region, finances investment  promotion actions 
such as matchmaking  exercises, feasibility studies, pilot projects, individual risk capital financing, training 
programmes and management assistance actions. AL-invest and Asia-Invest are programmes financed by 
the Commission to: 
•  encourage growth in two-way trade and investment flows; 
•  help raise awareness of opportunities in the ALA regions in the European business community; and 
•  assist  companies  from the developing  countries in ALA to enter  into  mutually  beneficial  co-operation 

with European companies. 

Contacts and co-operation between businesses of the two regions and European companies are also sup 
ported through facilities  like  BC-Net  (Business Co-operation Network ), and BCC (Business  Co-operation 
Centre). These  provide  'matchmaking' services for companies, focusing  on small  and medium-sized en 
terprises. 

EC aid is also channelled towards assistance for banking, finance and business services to help a financial 
sector, support privatisation, and strengthen financial institutions in the ALA countries. 

Annual  commitments  under the budget  line  Economic  Co-operation  have  increased  substantially  in the 
period covered by this report since 1990, reaching 56 MECU for Latin America, and 58 MECU for Asia in 
1995. Over the  period  1991 to 1995, 16% of total aid to Latin America was committed for economic  co 
operation and about 10 percent for Asia. 

On the basis of the DAC data it is not easy to make clear  or unambiguous comments about 
the  position  regarding  disbursements  (Tables  2C  and  2D).  Thus,  according  to  this  data 
source,  for  Asia  a substantial  part of the total  (50  percent)  remains unallocated  by  sector 
making  it  impossible  to  draw  any useful  conclusions  about  the  ratio  of  disbursements  to 
commitments by sector for the region over the limited period covered by this report. 
The situation  is somewhat  better in the case of Latin America  where  only  about  one  sixth 
of the  total  disbursements  are unallocated by sector,  roughly the same proportion  as in the 
case  of commitments.  Thus Tables 2B  and 2D, taken together,  appear to  indicate  that the 
ratio of disbursements  to  commitments for Latin America  is  somewhat  higher  in the more 

27 

traditional  sectors  (natural  resources  and other productive  sectors)  than for  those  sectors 
on which,  in principal,  economic  co-operation  activities  are now  seeking  to  focus,  namely 
economic and social infrastructure,  support for governance and civil  society and cross  cut 
ting issues such as women in development  and rural development,  etc. However,  as noted 
above for Asia, this report is by requirement addressed to the period  1991-1995,  and so the 
data for  1996 may present a somewhat different picture. 

Tables 3 A to 3D make possible an analysis of commitments and disbursements by benefici 
ary country.  Here  it will  be  seen  that  a number of  countries  have  exhibited,  despite  their 
need,  a relatively  low  ratio  of  disbursements  to  commitments  over  the  reference  period 
(the Philippines,  India,  Peru,  Nicaragua).  Nevertheless  it  should  be  noted  that  substantial 
proportions of both commitments and disbursements remain unallocated by country and so 
comments of this kind must remain tentative. 

Moving  on from the tables based  on OECD-DAC  data sources,  Tables 4  and 6  set  down 
detailed  data  from  internal  Commission  sources,  on  commitments,  for  Asia  and  Latin 
America, for budget lines financing those actions that may be considered to be covered by 
the general principles set down in the ALA Regulation. 

As already noted, the ALA Regulation provides the basis for the operation  of four  budget 
lines. Data for commitments for these lines, for Asia and Latin America, are given in Tables 
5 and 7. 

From Table 4  it will  be seen that total  commitments to Asia increased  by two  thirds  over 
the period  1990 to  1995.  Almost all of this increase (about  240 Mecu) was accounted  for, 
by proposed  expenditure,  under the  headings Financial and  Technical Cooperation  (140 
Mecu)  and Economic  Cooperation  (55  Mecu),  changes  reflecting  those  aspects  of  devel 
opment  cooperation  emphasised  in the Regulation.  Nonetheless  there were  also  important 
increases in commitments under the Rehabilitation programmes, Food Aid and  Emergency 
Relief. 

As regards Latin America, it is important to note at the outset that the EU is now the main 
provider  of  Official  Development  Assistance  to  Latin  America  and  indeed  accounted  for 
53% of the total transferred in 1995. 

From  Table  6  it  will  be  seen  that  commitments  to  Latin  America  more  than  doubled  be 
tween  1990 and  1995, from 257 Mecu to 520 Mecu. Within this total there were important 
increases in commitments to the themes emphasised in the Regulation,  namely in Financial 
and  Technical Cooperation,  104 to  232 Mecu,  and Economic cooperation  from  15 to  56 
Mecu.  Commitments  regarding the tropical  forests  also rose sharply from  nothing  in  1990 
to 36 Mecu in  1995.  In addition, Emergency aid, negligible in  1990 increased to almost  22 
Mecu in 1995 

28 

3.2. Qualitative Commentary: Financial and  Technical Cooperation and 
Economic Cooperation 

3.2.1. Asia 

Financial  and Technical  Cooperation  accounted  for  about  60% of  EC  Aid  to  Asia  in the 
1990s.  It can - in principle - address all sorts of developmental  needs.  In Asia,  however,  it 
focuses  almost  exclusively  on the poor  countries,  and within  them,  on  the  least  favoured 
groups of the population and the rural poor. 

Poverty Alleviation 

Even though there is a broad correlation between economic growth and social development, the 
link between the two is complex. The crucial question is: How does economic growth translate into 
social  and human development?  High levels of  economic  growth  can go hand  in  hand with in 
creasing social inequality and poverty  and adjustment  policies often do not sufficiently  take into 
account the human dimension of economic reform. Aid  policy therefore  has to focus  on this di 
mension  and on supporting  the  concept  of  pro-poor  growth: Economic  growth  contributes  to 
poverty reduction if it: 
* 
* 
* 
* 

leads to an improvement of  health/education/skills; 
increases employment (SME - high potential); 
improves productivity; 
thereby leads to an increase in real wages; 

In rural areas, where still the highest share of poor live (though there is now a shift towards urban 
areas), pro-poor growth is crucial. Here activities should focus on improving access to education 
and health care, frequently  underdeveloped in rural areas, and on creating an enabling environ 
ment for small-scale agriculture, to increase food security, and for micro-enterprises, for instance 
by improving access to credit. 

Poverty  represents a major problem in both Latin America  and Asia, especially  South Asia. The 
ALA-regulation  explicitly  mentions  that  the  aim of  community  development  and  cooperation 
policies shall be human development' (article 2). 

With  regard to financial and technical  assistance, this  'shall be targeted primarily on the poorest 
sections of the population  and the poorest countries in the two regions,  through  the  implementa 
tion of programmes and projects in whatever sectors community aid is likely to play an important 
role.' (article 4). It also stresses that priority should be given to developing the rural sector, and to 
improving  the  level  of  food security.  Its scope  should  also  be extended to  the  more  advanced 
ALA-countries, in  particular,  among others, in the field  of  pilot  schemes to  help  underprivileged 
strata of the population especially in large conurbations, (article 6) 

Poverty  alleviation  and  human  development  are  key  issues  of  EU aid  policy.  While  indi 
rectly, all aid has the potential to reduce poverty through improving the economic, social and insti 
tutional  environment,  it  nevertheless  remains  necessary  to  specifically  target  the  poor  and pro 
mote human development. Over the period 1991-1995, almost a quarter of total  EU aid to Latin 
America and Asia have been committed for Social Infrastructure & Services and Rural Develop 
ment (23% in Latin America, 22% in Asia), as compared to 15% in the previous five-year period. 
This does not include  projects in other sectors, such as environment,  economic  infrastructure  or 
others, which are also likely to have a positive impact on poverty. This clearly shows the increas 
ing importance of activities directly focusing on poverty alleviation within EC aid policy. Following 
the mandate of the ALA-regulation, poverty alleviation in rural areas is a top priority for financial 
and technical assistance in the two regions. Large projects regarding, for instance, education and 
health, are normally focused on rural and marginal areas. 

29 

Over 40% of all projects  in Asia over the period  1992-1995 have had poverty  alleviation  as 
their explicit  objective.  About  70% of EC funded  projects  have at  least  indirectly  aimed  at 
poverty  reduction  through  improvement  in food  security. But  the objective  of poverty alle 
viation has been approached  also through: 

*  improvement  of incomes  and  promotion  of employment  generating  programmes 

for the rural  poor; 

*  promoting equitable development  for women and men; 
*  protecting and rehabilitating vulnerable ecosystems; 
*  improving access to health and education services. 

Besides  this  overriding  emphasis  on  poverty  reduction,  EC  funds  under  Financial  and 
Technical  Assistance  contribute to government's  efforts  in improving access  and  quality  of 
social  services.  In  India,  for  example,  the  support  is given  to  the  process  of  reform  of  the 
education  and  family  welfare  systems.  In  addition,  NGO  co-financing  has  complemented 
EC aid programmes,  including the gradual involvement  of Asian NGO's  in the  implementa 
tion  of a number  of  rural  development  programmes  funded  under  Financial  and  Technical 
cooperation. 

3.2.2. Latin America 

As regards Financial and Technical Cooperation,  it is important to note that: 
*  even if  still important, the rural development  sector does not constitute the core of fi 

nancial and technical cooperation,  and its relative importance is decreasing; 

*  increased  attention  was  paid  to  the  urban  poor  (street  children  and  other  vulnerable 
groups). Projects  in this area often  stemmed from pilot  projects  funded  from  the  budget 
line  for  "Démocratisation and Human Rights"; 

*  micro-businesses  (mostly  in the informal  sector) and  credit  projects  fostered  in the  early 

90s, but they have recently declined. 

At the end of the reference  period,  an important increase of resources devoted to: 

1.  education  and training projects; 
2.  support  for  national sectoral programmes, namely in the areas of health and  edu 

cation; 

3.  and  programmes  aiming  at  institutional  strengthening  and  reform  of  public  ad 

ministration; 

can be observed. 

As for Economic Cooperation,  within the reference  period the so called  "horizontal  pro 
grammes": 

*  AL-INVEST (business and industrial cooperation); 
*  ALFA (universities networks); 
*  ALURE (energy sector); 

were launched  and  consolidated.  At the end  of the period,  another  horizontal  programme  -
URB-AL,  aiming  to  establish  and  support  networks  of  local  administrations  (towns  and 
regions) -  was being  prepared. 

30 

Each  one  of  those  programmes  provides  a framework  for  decentralised  initiatives  being 
funded,  setting  up  a common  ("programme")  methodology.  Therefore,  each  one  of  those 
programmes  integrates  activities  which,  over  the  period  1986-90  and  in  the  early  1990s, 
were financed through "individual" projects. 

In addition, important programmes, mostly sub-regional ones, in the areas of standards and. 
customs  regulations  were  developed  and  implemented.  At  the  same  time,  there  is  still  a 
number of individual national projects in the field of trade promotion, but their share within 
total Economic Cooperation is decreasing. Lastly, training projects for key target groups in 
Latin  America,  i.e.  within  public  administration,  business  managers,  and  specialists  in 
'regional integration' are funded. 

31 

4. Concluding Points. 

Section  1 of  the  report  describes  economic  and  social  developments  in the  countries  cov 
ered  by the  ALA Regulation  over  the  reference  period  and  points  in  particular  to  the  im 
provements undertaken  and the progress made. It also stresses that much needs to be done, 
in both regions,  and  in particular  points to the importance  of  sound  macroeconomic poli 
cies,  good  governance  and  of  focusing  even  more  resources  on  the  health  and  education 
sectors,  on  institution  building  and  so  both  directly  and  indirectly  on  the  problem  of  pov 
erty. 

Even  if the  EC  budget  for  financial,  technical  and  economic  co-operation  with  the  ALA 
countries  is relatively  limited  vis-à-vis  these  countries'  need  for  foreign  financing  (both 
ODA and investments), the EC has been able to make a positive contribution in: 

*  sustaining  a political and economic dialogue; 
*  focusing  on poverty  alleviation  (in the wider sense and including primary  health 
& population  programmes, primary education, empowerment  of women etc.); 

*  supporting macroeconomic reforms and institutional building; 
*  facilitating  trade, investments and transfer  of technology; 
*  support  of democracy and human rights, in particular the transition towards de 

mocracy; 

*  the progress of regional cooperation and integration among its partner  countries 

in the ALA regions. 

Section 2 describes the general framework  of cooperation with the ALA countries, the aims 
and principles  set  down  in the ALA Regulation  and  shows that  a development  cooperation 
programme based  on these aims and principles will certainly  help the ALA countries to  ad 
dress the problems set out in section  1. 

Section  3  shows  as far  as possible  given  the  limited  data  available  that  the  resources 
made  available  under  the  ALA  Regulation  have been  committed  in line with  the  aims  and 
principles  of  the  Regulation.  It  would  seem  that  the  present  thrust  of  Community  co 
operation policy, and in particular the part of it covered  by the ALA Regulation,  is address 
ing the key development  problems faced  by the ALA countries, is making a positive  contri 
bution to their resolution  as well as supporting and improving  mutually beneficial  relations 
between the EU and the ALA countries. 

Finally, given  the  extensive  and  comprehensive  evaluation  of Community  development  co 
operation  that  will  be  made  available  next year,  no case can  be made, at  this  stage,  on  the 
basis  of available  information,  for  modifying  the  ALA  guidelines  as  set  down  in  the  ALA 
Regulation. 

32 

Notes to Tables 

This  report  draws upon  different  sets  of  data,  each  of which  has been  constructed  with a 
different  aim in mind. Consequently  it is difficult,  if not impossible,  to reconcile  completely 
the figures available. Moreover, in examining and analysing the attached tables, it should be 
borne  in  mind  that  the  figures  presented  are  unaudited  estimates  of  transactions 
(commitments  and disbursements)  during the reference  period.  There is thus a need to ex 
ercise very considerable caution in drawing conclusions in relation to Community develop 
ment  co-operation  programmes  in the  ALA  countries  during  the  reference  period  on  the 
basis of the data submitted. 

In particular it should be emphasised that it is necessary to pay special attention to the fol 
lowing points. 

Commitments  (ODI data) 

Tables 2A and 2B are consistent with table  1. However Table 3 A - commitments Asia by 
country - has a wider coverage than Table 2A and includes data for Iraq, Iran, and the 
Yemen. The totals  for Tables 3 A, less the figures for these three countries, give totals very 
close to those in Tables 2A and 1. 

For Latin America the totals from Tables  1, 2B and 3B are virtually the same (rounding 
errors will account for the major part of the minor discrepancies noted). 

Disbursements  (ODI data). 

For Asia the totals for Tables 2C and 3C are very close. However it is not yet possible to 
reconcile the differences between these totals and those given in Table  1. As regards Latin 
America the totals in Tables  1, 2D and 3D are once more virtually the same (again round 
ing errors will account for a large part of these discrepancies). 

Data from  sources  internal to the Commission 

The data given in Tables 4 and 6 and Tables 5 and 7 are drawn from sources internal to the 
Commission.  They set down commitments data for the Budget lines for which the ALA 
Regulation provides the legal basis (Financial and Technical Cooperation and Economic 
Cooperation) as well as for those Budget lines which may be considered to be covered by 
the general principles set down in the Regulation. 

In drawing up these tables an element of choice is involved. As a consequence, whilst the 
major part of the commitments of aid to the ALA countries are covered by Tables 4 and 6, 
these Tables must not be considered exhaustive. 

33 

ANNEX 1 
ANNEX 1 
ANNEX 1 
ANNEX 1 
ANNEX 1 
ANNEX 1 

TABLES 
TABLES 
TABLES 
TABLES 
TABLES 
TABLES 

->£i 
->£i 
->£i 
->£i 
->£i 
->£i 

T A B LE  I:  IX  AID  TO  A S IA  A ND  LATIN  A M E K I C A . ( m . E C l ) )1. 

Average 
19X6-1990 

1991 

1992 

1993 

1994 

1995 

Total 
1991-1995 

273 
25 
168 
50 
29 

181 
69 
42 
29 
41 

183 
19 
110 
34 
21 

108 
39 
26 
8 

34 

454 

291 

383 
21 
295 
46 
21 

286 
134 
73 
16 
62 

261 
33 
135 
66 
26 

196 
78 
62 
7 
49 

470 
II 
230 
153 
76 

338 
160 
129 
6 
44 

300 
24 
174 
75 
28 

231 
88 
66 
21 
55 

504 
21 
302 
146 
35 

401 
170 
140 
49 
42 

264 
16 
144 
53 
50 

273 
100 
98 
21 
54 

451 
40 
203 
165 
44 

390 
173 
182 
20 
15 

246 
11 
132 
76 
27 

247 
108 
75 
17 
48 

696 
62 
288 
200 
146 

486 
232 
212 
28 
14 

369 
22 
189 
112 
46 

275 
100 
94 
33 
47 

669 

808 

905 

841 

1182 

457 

531 

537 

493 

644 

2504 
155 
318 
710 
322 

1901 
869 
736 
119 
177 

1440 
106 
774 
382 
177 

1222 
474 
395 
99 

253 

4405 

2662 

1) Asia  commitments 

China  and other  East  Asia 
South  Asia 
Soulh-East  Asia 
Unallocable 

2) Latin  America  commitments 

South  America 
North and Central  America 
Regional 
Unallocable 

3) Asia  disbursements 

China and other East Asia 
South  Asia 
South-East Asia 
Unallocable 

4)  Latin  America  disbursements 

South  Ajncrica 
North  and  Central  America 
Regional 
Unallocable 

5) Asia *& Latin America corns. 

6) Asia &  Latin America disbs. 

MEMORANDUM  ITEM. 

7) Asia  less China  and  other  East  Asia2 

a)  Commitments 
b)  Disbursements 

241 
162 

361 
224 

457 
274 

481 
244 

406 
234 

618 
344 

2364 
1320 

RATIOS:  Percentage of  :-

8)  Disbursements to Commitments-

Asia 
Asia  less China  and other  East  Asia 
Latin  America 
Total 

9) Total  Commitments  to 

Asia 
Latin  America 

10) Total  Disbursements  to 

Asia 
Latin  America 

67 
67 
60 
64 

60 
40 

63 
37 

68 
62 
69 
68 

57 
43 

57 
43 

64 
60 
68 
66 

58 
42 

56 
44 

52 
51 
68 
59 

56 
44 

49 
51 

55 
52 
63 
59 

54 
46 

50 
50 

53 
56 
57 
54 

59 
41 

57 
43 

58 
56 
64 
60 

57 
43 

54 
46 

Source: ODI  1996. Small discrepancies  may occur  due lo rounding. 

" Unallocable  has been attributed  by proportion. 

3* 

TABLE 2A : EC AID TO ASIA  BY SECTOR  (COMMITMENTS) 

MECU (rounded  amounts) 

TOTAL 
1986-1990 

1991  1992  1993  1994  1995 

0 

0 

TOTAL 
1991-1995 

0 

0 

Programme Aid * 

Stabex 

Food Aid  (Developmental) 

Humanitarian  Aid 

Humanitarian  aid excl  rehabilitation 
Rehabilitation 

Aid to  NGOs 

Natural  Resources  Productive  Sectors 

Agriculture 
Forestry 
Fisheries 

Other  Productive  Sectors 

Industry,  Mining  &  Construction 
Trade 
Tourism 
Investment  Promotion 

Economic  Infrastructure  &  Services 

Transport  & Communications 
Energy 
Banking,  Finance  & Bus  services 

Social  Infrastructure &  Services 

Education 
Health & Population 
Water  Supply 
Other  Social  Infrastructure  & Services 

Governance &  Civil  Society 

Multisector/Crosscutting 

Environment 
Women  in  Development 
Rural  Development 
Other  Multisector 

Unallocable  by Sector 

24 

24 

273 

86 

86 

46 

436 

401 

36 

22 

7 
7 
8 

93 

53 
19 
20 

31 

25 
4 

1. 

16 

236 

94 

142 

103 

69 

100 

56 

63 

98 

386 

65 

84 

88. 

90 

95 

65 

84 

88 

81 
9 

83 
12 

13 

14 

20 

20 

23 

141 

47 

42 

86 

115 

141 

15 
32 

14 
29 

49 
37 

53 
61  ; 

6 

2 
0 
4 

8 

14 

22 

24 

2 
«' 1 
11 

3 
0 
18 

1 
7 

1 

23 

31 

44 

35 

33 

94 

9 
6 
16 

31 
13 

2 
2 
31 

9 
24 

1 
0 
93 

51 

16 

160 

62 

54 

6 
45 

1 

0 

4 

4 

5 
8 

2 

0 

150 
5 
4 
1 

4 

50 
12 

19 
34 

1 

4 

1 

3 

108 

71 

58 

154 

33 
0 
75 

17 

54 

1 
0 
57 

65 
37 
52 

422 

401 
22 

91 

431 

272 
159 
0 

74 

8 
3 
64 

236 

12 
49 
177 

344 

230 
104 
5 
6 

11 

395 

121 
37 
237 

48 

13 

14 

37 

114 

ASIA TOTAL 

1366 

383  470  504  451  696 

2504 

3£ 

TABLE 2B : EC AID TO LATIN AMERICA  BY SECTOR  (COMMITMENTS) 

MECU  (rounded  amounts) 

TOTAL 
1986-1990 

1991 

1992  1993  1994  1995 

TOTAL 
1991-1995 

Programme Aid 

Food Aid  (Developmental) 

Humanitarian  Aid 

Humanitarian  aid excl  rehabilitation 
Rehabilitation 

Aid to  NGOs 

Natural  Resources  Productive  Sectors 

Agriculture 
Forestry 
Fisheries 

Other  Productive  Sectors 

Industry,  Mining  &  Construction 
Trade 
Tourism 
Investment  Promotion 

Economic  Infrastructure  &  Services 

Transport  &  Communications 
Energy 
Banking,  Finance  & Bus  services 

Social  Infrastructure  &  Services 

Education 
Health  &  Population 
Water  Supply 
Other  Social  Infrastructure & Services 

Governance  & Civil  Society 

Multisector/Crosscutting 

Environment 
Women  in  Development 
Rural  Development 
Other  Multisector 

131 

54 

54 

101 

104 

76 

27 

76 

36 
34 
5 

36 

21 
15 

113 

7 
44 
59 
4 

59 

3 

56 

55 

48 

56 

50 

52 

16 

16 

22 

22 

32 

32 

34 

37 

39 

70 

41 
21 
7 

18 

9 

9 

16 

9 

7 

36 

31 

5 

6 

3 
4 

68 

35 
20 
13 

17 

10 

7 

6 

6 

25 

35 

40 

24 
1 
1 

10 

49 

4 

39 
6 

17 
16 
1 

10 

53 

2 

50 
1 

15 
20 
6 

15 

14 

65 

6 
4 
48 
8 

66 

66 

16 
5 
44 
1 

69 

59 

49 
10 

51 

12 

8 
5 

43 

31 

12 

7 

7 

20 

2 
16 

2 

59 

47 
12 

43 

25 

22 
2 

56 

45 

10 

10 

3 
7 

103 

68 
24 
11 

21 

58 

14 

21 
23 

58 

261 

188 

166 
22 

204 

191 

115 
48 
27 

170 

126 
0 
43 

29 

13 
17 

223 

2 
140 
61 
21 

70 

291 

42 
9 
202 
39 

273 

Unallocable  by Sector 

227 

38 

42 

LATIN AMERICA  TOTAL 

906 

286  338  401  390  486 

1900 

3? 

TABLE 2C : EC AID TO ASIA BY SECTOR  (DISBURSEMENTS) 

MECU  (rounded  amounts) 

TOTAL 
1986-1990 

1991 

1992  1993 

1994  1995 

TOTAL 
1991-1995 

Programme Aid * 

Structural  Adjustment 

Stab ex 

Food Aid  (Developmental) 

Humanitarian  Aid 

Humanitarian aid excl  rehabilitation 
Rehabilitation 

Aid to  NGOs 

Natural  Resources  Productive  Sectors 

Agriculture 
Forestry 
Fisheries 

Other  Productive  Sectors 

Industry,  Mining  & Construction 
Trade 
Tourism 
Investment  Promotion 

Economic  Infrastructure  &  Services 

Transport  &  Communications 
Energy 
Banking,  Finance  & Bus  services 

Social  Infrastructure  &  Services 

Education 
Health  &  Population 
Water  Supply 
Other Social  Infrastructure & Services 

Governance & Civil  Society 

Multisector/Crosscutting 

Environment 
Womenin  Development 
Rural  Development 
Other  Multisector 

Unallocable  by Sector 

ASIA  TOTAL 

25 

24 

241 

45 

45 

34 

0 
0 

4 

12 

0 
12 
0 

2 

0 

2 

536 

902 

0 

0 

107 

108 

37 

19 

57 

328 

36 

48 

59 

23 

36 

36 

48 
0 

59 

23 
0 

36 
0 

202 

202 

20 

13 

15 

15 

18 

81 

0 

0 

4 

0 
0 

4 

2 

0 
2 
0 

1 

0 
1 
0 
0 

0 

0 
0 

0 

0 
0 

0 

0 
0 

2 

0 
2 

6 

11 

13 

21 

55 

0 

6 

5 

5 
0 

1 

0 
1 

0 

' 0 
0 

0 
0 

0 

11 

13 

21 

0 

0 
0 
0 

4 

0 
3 
0 
1 

1 

1 

1 
0 

0 

0 

0 
0 

3 

0 
3 

0 

1 

0 

0 
0 

0 

0 

0 
0 
0 

6 

4 

0 

0 

55 

7 

15 

1 
12 

2 

3 

2 

2 

0 

0 

0 

0 

0 

0 
0 

0 

86 

114 

120 

154 

210 

684 

256  295  248  228  352 

1379 

3s 

TABLE 2D  : EC AID TO LATIN AMERICA  BY SECTOR  (DISBURSEMENTS) 

MECU  (rounded  amounts) 

TOTAL 
1986-1990 

1991  1992  1993  1994  1995 

TOTAL 
1991-1995 

Programme Aid * 

Structural  Adjustment 

Stabex 

Food Aid  (Developmental) 

Humanitarian  Aid 

Humanitarian  aid excl  rehabilitation 
Rehabilitation 

Aid to  NGOs 

Natural  Resources  Productive  Sectors 

Agriculture 
Forestry 
Fisheries 

Other  Productive  Sectors 

Industry,  Mining  & Construction 
Trade 
Tourism 
Investment  Promotion 

Economic  Infrastructure  &  Services 

Transport  &  Communications 
Energy 
Banking,  Finance  & Bus  services 

Social  Infrastructure  &  Services 

Education 
Health  &  Population 
Water  Supply 
Other  Social  Infrastructure  & Services 

Governance  &  Civil  Society 

Multisector/Crosscutting 

Environment 
Women  in  Development 
Rural  Development 
Other  Multisector 

113 

38 

38 

80 

31 

25 

6 

31 

25 
5 

10 

1 
3 
6 

35 

3 
14 
17 
1 

23 

1 

22 

57 

52 

40 

23 

25 

197 

17 

21 

25 

18 

45 

17 

21 

25 

18 

43 
2 

23 

25 

35 

38 

31 

17 

18 

46 

28 

26 

15 

2 

11 
4 
3 

32 
8 
6 

16 
8 
4 

12 
4 
10 

14 

31 

29 

31 

21 

7 
2 

5 

4 

1 
3 
0 

18 
8 

13 
8 

16 
7 

5 

7 

3 
4 
0 

8 

7 

7 
0 
0 

8 

2 

2 
0 
0 

6 
6 

9 

4 

4 
0 

126 

124 
2 

152 

135 

86 
24 
25 

126 

60 
31 

35 

24 

17 
7 
0 

17 

22 

20 

23 

32 

114 

1 
6 
10 
0 

0 
12 
9 
1 

1 
8 
10 
1 

2 
11 
9 
1 

1 
18 
3 
10 

12 

14 

7 

1 

6 
0 

9 

2 
0 
7 
0 

17 

22 

32 

2 
0 
13 
2 

2 
0 
19 
1 

2 
1 
25 
4 

5 
55 
41 
13 

44 

87 

9 
1 
70 
7 

Unallocable  by Sector 

174 

30 

31 

39 

49 

56 

205 

LATIN AMERICA  TOTAL 

535 

195  228  272  234  281 

1210 

15 

TABLE  3A  : EC AID  TO ASIA  BY  COUNTRY  (COMMITMENTS) 

MECU (rounded  amounts) 

TOTAL 
1986-1990 

1991 

1992 

1993 

1994 

1995 

TOTAL 
1991-1995 

14 
227 
8 
6 
118 
8 
471 
43 

5 
19 
1 
8 
85 
87 
28 
85 
9 
9 

4 
145 
6 
3 
21 

98 
13 
116 
2 
1 

1 
34 
6 
7 
8 
15 
7 

19 
74 
6 
23 
8 
3 
41 
33 
3 
2 
4 

3 
78 
51 
9 
13 
27 
2 

24 
67 
1 
15 
19 
2 
176 
6 
22 
5 
16 

3 
29 
49 
2 
9 
50 
15 

37 
75 
0 
68 
38 
2 
43 
10 
23 
3 
17 

18 
26 
27 
4 
12 
27 
2 

38 
98 

37 
61 
1 
103 
66 
30 

15 

30 
7 
52 
10 
11 
18 
4 

122 
459 
13 
146 
146 
7 
462 
128 
194 
11 
52 

54 
175 
184 
32 
54 
138 
30 

Afghanistan 
Bangladesh 
Bhutan 
Cambodia 
China 
Hong  Kong 
India 
Indonesia 
Irak 
Iran 
Laos 
Malaysia 
Nepal 
Pakistan 
Philippines 
Sri  Lanka 
Thailand 
Vietnam 
Yemen 

Unallocable  by  country 
T O T AL  ASIA 

147 
1378 

21 
508 

76 
475 

35 
545 

44 
476 

146 
727 

322 
2731 

TABLE 3B  : EC AID TO LATIN AMERICA BY COUNTRY (COMMITMENTS) 

Argentina 
Bolivia 
Brazil 
Chile 
Columbia 
Costa  Rica 
Cuba 
Ecuador 
El  Salvador 
Guatemala 
Honduras 
Mexico 
Nicaragua 
Panama 
Paraguay 
Peru 
Uruguay 
Venezuela 

Regional 
Unallocable  by  country 
TOTAL  LATIN  AMERICA 

MECU (rounded  amounts) 

TOTAL 
1986-1990 

1991 

1992 

1993 

1994 

1995 

TOTAL 
1991-1995 

9 
107 
25 
40 
29 
8 
12 
29 
36 
37 
26 
19 
66 
5 
4 
95 
4 
2 

144 
205 
902 

3 
21 
13 
19 
10 
1 
5 
13 
14 
18 
3 
8 
23 
0 
14 
37 
3 
1 

4 
42 
24 
25 
23 
2 
7 
3 
55 
15 
11 
9 
27 
1 
1 
32 
3 
2 

3 
34 
18 
20 
17 
11 
14 
13 
44 
29 
2 
7 
25 
7 
5 
45 
2 
13 

6 
7 
30 
13 
11 
2 
22 
21 
17 
55 
16 
13 
56 
1 
17 
60 
4 
3 

18 
35 
27 
18 
15 
5 
31 
21 
22 
34 
31 
7 
61 
21 
5 
58 
14 
22 

34 
139 
111 
94 
77 
20 
79 
71 
152 
151 
63 
44 
192 
29 
42 
232 
26 
41 

16 
62 
284 

6 
44 
336 

49 
42 
400 

20 
15 
389 

28 
14 
487 

119 
177 
1896 

v« 

TAB^E 3C : EC AID TO ASIA BY COUNTRY  (DISBURSEMENTS) 

MECU (rounded amounts) 

TOTAL 
1986-1990 

1991 

1992 

1993 

1994 

1995 

TOTAL 
1991-1995 

Bangladesh 
Bhutan 
Cambodia 
China 
India 
Indonesia 
Laos 
Nepal 
Pakistan 
Philippines 
Sri Lanka 
Thailand 
Vietnam 
Yemen 

130 
5 
4 
88 
300 
38 
7 
14 
52 
28 
29 
79 
8 
16 

53 
2 
3 
32 
30 
10 
2 
3 
38 
13 
7 
21 
12 
7 

64 
5 
16 
21 
50 
9 
2 
2 
40 
13 
3 
19 
14 
9 

62 
3 
15 
16 
31 
10 
3 
4 
19 
6 
6 
8 
12 
4 

47 
2 
7 
8 
46 
11 
5 
3 
14 
18 
5 
11 
17 
2 

101 
2 
18 
20 
45 
18 
"8 
2 
10 
30 
4 
18 
17 
9 

326 
13 
59 
97 
202 
57 
20 
14 
121 
80 
25 
77 
71 
31 

Unallocable by 

country 

104 

26 

28 

50 

27 

46 

178 

TOTAL ASIA 

902 

258 

294 

248 

224 

347 

1371 

TABLE 3D  : EC AID TO LATIN AMERICA  BY COUNTRY  (DISBURSEMENTS) 

MECU (rounded amounts) 

TOTAL 
1986-1990 

1991 

1992 

1993 

1994 

1995 

TOTAL 
1991-1995 

Argentina 
Bolivia 
Brazil 
Chile 
Columbia 
Costa  Rica 
Cuba 
Ecuador 
El  Salvador 
Guatemala 
Honduras 
Mexico 
Nicaragua 
Panama 
Paraguay 
Peru 

Uruguay 
Venezuela 

0 
60 
23 
35 
10 
13 
9 
14 
16 
20 
13 
13 
43 
0 
5 
46 
2 
2 

0 
21 
8 
11 
5 
3 
7 
8 
10 
11 
9 
5 
17 
0 
0 
22 
0 
0 

0 
24 
12 
11 
5 
5 
6 
5 
16 
7 
2 
5. 

21 
1 
2 
27 
2 
0 

0 
22 
13 
15 
11 
5 
11 
7 
34 
13 
10 
6 
16 
2 
4 
27 
0 
1 

0 
22 
19 
13 
9 
3 
2 
7 
20 
14 
5 
10 
18 
3 
3 
32 
0 
2 

0 
16 
12 
9 
12 
7 
15 
8 
18 
17 
5 
7 
23 
2 
7 
34 
0 
3 

Regional 
Unallocable  by  country 
TOTAL  LATIN  AMERICA 

42 
170 
536 

7 
49 
194 

21 
55 
228 

21 
54 
272 

17 
48 
246 

33 
47 
275 

<H 

0 
105 
64 
59 
41 
23 
41 
36 
99 
62 
30 
33 
95 
8 
16 
142 
2 
6 

99 
253 
1215 

Tahlc 4 

Asia:  Commitments  (MEcus) 

Budget 

1990 

1991 

1992 

1993 

1994 

1995 

1991-95 

Financial  and  Technical 
Cooperation 

line 
73000 

Total A 

Economic  Co-operation 

225.05 

210.85 

211.22 

3)0.62 

276.73 

366.29 

137571 

225.05 

210.85 

211.22 

310.62 

276.73 

366.29 

1375.71 

Economic co-operation 
ECIP 
Science and Technology 
Scientific Co-operation 
Energy Co-operation 

73001 
75000 
66224 
68371 
41041 

2.79 
2.88 
1.07 
7.32 
0.21 

11.99 
5.49 
... 
3.97 
1.12 

13.45 
10.00 
3.97 
3.73 
1.51 

49.41 
12.56 
2.31 
11.71 
1.00 

42.21 
... 
4.05 
4.51 
0.91 

57.47 
... 
... 
... 
... 

174.44 
28.05 
10.33 
23.92 
4.54 

Total  B 

Humanitarian 
Assistance 

Refugees 
Rehabilitation 
Drugs 
Food Aid 
Emergency Relief 
Aids 

Total  C 

Other 

14.27 

22.57 

32.66 

76.99 

51.69 

57.47 

241.28 

73920 
75076 
75080 
720(H) 
72010 
75046 

18.99 
... 
1.59 
82.20 
... 
0.21 

28.88 
... 
3.79 
74.94 
... 
1.12 

62.17 
... 
4.99 
110.81 
1.05 
1.51 

43.37 
... 
1.67 
18.02 
14.00 
1.00 

37.07 
10.00 
2.33 
12.00 
... 
0.91 

38.17 
11.50 
2.16 
84.74 
12.70 
... 

209.66 
21.50 
15.05 
300.51 
26.75 
4.54 

103.37 

107.61 

178.02 

77.06 

61.40 

149.27 

586.93 

Environment 
Tropical  Forests 
Women  in Development 
Other (n.c.s.) 

75040 
75041 
75051 

0.1.1 
... 

0.04 
... 

34.76 

30.00 

0.53 
8.73 
0.08 
35.34 

2.46 
11.76 

37.79 

0.80 
9.64 
0.04 
72.70 

3.17 

42.21 

3.83 
33.30 
0.12 
218.04 

Total D 

Total 

34.89 

30.04 

44.68 

52.01 

83.18 

45.38 

255.79 

377.58 

371.07 

469.39* 

520.80 

479.53 

618.41 

2203.93 

Note : Commission estimates - these figures are approximations and should only be considered as representing the 
orders of magnitude of the amounts committed under the budget lines specified. 

f3L 

Tabic 5 

EC  Commitments to Asia  under the ALA  Reg 443/92. 
Budget  Lines B 73000 and  B 73001  (Mccus) 

Financial  and  Technical 
Cooperation 

Budget 
line 
73000 

1990 

1991 

1992 

1993 

1994 

1995 

1991-95 

225.05 

210X5 

211.22 

310.62 

276.73 

366.29 

1375.71 

Economic  Co-operation 

73001 

2.79 

11.99 

13.45 

49.41 

42.21 

57.47 

174.44 

Total 

227.84 

222.84 

224.67 

360.03 

360.03 

318.94 

1550.25 

Note : Commission estimates - these figures arc approximations and should only be considered as representing the 
orders of magnitude of the amounts committed under the budget  lines specified. 

Note: This Tabic and Table 7 provide data on commitments for those Budget lines for which the ALA Regulation 
forms the legal basis. 

Hi 

Table 6 

Latin America: Commitments (IMEcus) 

Budget 
line 
73100 

1990 

1991 

1992 

1993 

1994 

1995 

1991-95 

10.3.78  134.28  152.52  168.20  203.06 

231.57 

899.63 

103.78  134.28  152.52  168.20  203.06  231.57  899.63 

73110 
78720 
66224 
68371 
41041 

14.77 
4.49 
3.67 
7.92 
0.84 
3.52 

20.33 
3.66 
1.85 
9.30 
0.69 
3.46 

35.28 
5.93 
2.19 
11.79 
1.23 
2.61 

46.60 
8.54 
2.01 
16.57 
1.04 
3.59 

46.60 
11.47 
4.15 
14.76 
0.51 
3.07 

56.00 
9.79 

6.45 

204.81 
39.39 
10.20 
52.42 
3.47 
19.18 

Financial  and  Technical 
Cooperation 

Total A 

Economic  Co-operation 

Economic  co-operation 
ECIP 
Science and Technology 
Scientific  Co-operation 
Energy  Co-operation 
Other  (n.e.s.) 

Total  B 

35.21 

^9.29 

59.03 

78.35 

80756 

72.24 

329.47 

Humanitarian  Assistance 

Refugees 
Rehabilitation 
Drugs 
Food Aid 
Emergency  Aid 
Aids 
Other  (n.e.s.) 

Total  C 

Other 

72120 
76410 
76210 
72000 
72010 
76211 

11.96 

15.62 

19.28 

20.00 

1.46 
62.74 
0.32 
0.83 
28.00 

2.89 
60.16 
2.86 
1.16 
38.71 

4.04 
56.78 
2.10 
0.50 
45.36 

4.91 
49.16 
12.25 
1.34 
50.54 

27.77 
9.82 
3.10 
22.43 
21.51 
3.36 
60.04 

20.00 
10.90 
2.64 
47.86 
28.13 
5.62 
43.38 

102.67 
20.72 
17.58 
236.39 
66.85 
11.98 
238.03 

105.31 

121.40 

128.06 

138.20 

148.03 

158.53 

694.22 

Environment 
Tropical  Forests 
Women  in  Development 
Démocratisation 
Other  (n.e.s.) 

76200 
76201 
75051 
77030 

1.99 

3.35 

1.85 
20.23 

5.92 
22.08 

9.99 
1.00 

9.99 
1.01 

9.99 
1.40 

15.00 
1.89 

2.17 
22.10 
0.32 
13.00 
3.22 

3.51 
35.69 
0.36 
14.00 
3.71 

Total  D 

Total 

12.98 

14.35 

33.47 

44.89 

40.81 

57.27 

257.28 

309.32 

373.08 

429.64 

472.46 

519.61 

16.80 
100.10 
0.68 
61.98 

11.23 

190.79 

2104.11 

Note : Commission  estimates  - these figures are approximations and should only be considered  as representing  the 
orders of magnitude of the amounts committed  under the budget  lines specified. 

^ 

Table 7 

EC Commitments Commitments to  Latin  America  under  the ALA  Reg 443/92. 
Budget  Lines  B 73100  and  B 73110 (Mccus) 

Financial  and  Technical 
Cooperation 

Budget 
line 
73100 

1990 

1991 

1992 

1993 

1994 

1995 

1991-95 

10.3.78 

134.28 

152.52 

168.20 

203.06 

231.57 

899.63 

Economic  Co-operation 

73110 

14.77 

20.33 

35.28 

46.60 

46.60 

56.00 

204.81 

Total 

118.55 

154.61 

187.80 

214.80 

249.66 

287.57 

1104.44 

Note : Commission  estimates  - these figures arc approximations and should only be considered  as representing  the 
orders of magnitude of the amounts committed  under the budget  lines  specified 

^ 

ISSN 0254-1475 

COM(98) 40 final 

DOCUMENTS 

EN 

11  01  02 

Catalogue number  :  CB-CO-98-040-EN-C 

ISBN  92-78-30391-7 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg 

^L