Communication from the Commission to the Council and the European Parliament - The European Community's Development Policy
Date: 2000-04-26
Institutions: European Commission
Subjects: EU aid, cooperation policy, developing countries, development aid, development policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 26.4.2000
COM(2000) 212 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT

The European Community's Development Policy

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT
The European Community's Development Policy

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................. 4

1.

2.

New challenges for development ................................................................................. 7

The role of Europe..................................................................................................... 10

2.1

Combining politics, trade and development.......................................................... 10

2.2. Ensuring coherence and coordination ................................................................... 12

2.3.

Implementation problems are well-known............................................................ 14

2.4. The Community must focus on its value added .................................................... 15

3.

A comprehensive approach to development and poverty reduction............................. 16

3.1. Defining poverty.................................................................................................. 16

3.2. A strengthened focus on poverty reduction........................................................... 17

3.3. Links between poverty, economic growth and trade ............................................. 20

3.4.

Promoting the development of the private sector .................................................. 21

3.5. Linking relief, rehabilitation and development ..................................................... 22

4.

Strategic activities...................................................................................................... 23

4.1.

Integrated framework for Community activities ................................................... 23

4.2. The need for differentiation.................................................................................. 24

4.3.

Priority activities for Community development aid............................................... 24

5.

Partnerships ............................................................................................................... 28

5.1. Ownership and participation................................................................................. 28

5.2. Working with civil society ................................................................................... 28

5.3.

Increasing complementarity through the sectoral approach................................... 29

6.

Implementation.......................................................................................................... 29

6.1.

Improving effectiveness through administrative reform........................................ 29

6.2. The need for improved policy orientation structures and comitology.................... 30

6.3.

6.4.

6.5.

Improving impact of development assistance ....................................................... 30

Improving internal control.................................................................................... 31

Strengthening monitoring, evaluation and feedback ............................................. 32

7.

Conclusion................................................................................................................. 32

2

ANNEXES
1. Trends in the integration of developing countries into the world economy
2. EC Aid in figures – regional distribution
3. Official Development Assistance flows by categories of beneficiary countries
4. Sectoral allocation of EC aid
5. Personnel in EU bilateral aid agencies, EC and World Bank
6. Acronyms
7. DAC list of aid recipients – Part I: Developing countries and territories

3

INTRODUCTION

Development policy is today one of the three principal components of the EU's external
action, alongside trade policy and the political dimension. In addition to the objectives
specific to development policy, other factors - such as geopolitics,
trade, and global
environmental problems - affect the EU's external choices. This explains the diversity of its
interregional partnership and cooperation agreements concluded with countries in different
regions of the world (EuroMed, Eastern Europe, ASEAN, Mercosur, etc). In this context, the
EU's objective interests have led it to give priority to the stability and development of
neighbouring countries and to aid for countries in crisis in the regions nearest to the EU.

At the same time, Europe has not neglected the challenges for development policy arising
globally. The marginalisation of many economies, the increase in poverty in the world, the
need to better manage environmental
interdependencies and the resulting challenge to
Europe’s own environment, the destabilising effects of migration, the consequences of armed
conflicts and pandemics are major concerns for all.

The European citizens expect the Community to become a partner in solidarity with the
developing countries and refocus its activities to combat poverty. The global projection of our
fundamental values and the pursuit of our objective of sustainable development must be
manifested in strong solidarity, supported by a commercial policy that shows concern for
shared interests. Beyond development co-operation, our objective must be to integrate these
countries in the world economy and encourage sound domestic strategies. This objective must
be attained through greater consistency between the whole range of our policies that have an
impact on developing countries. This greater consistency also depends on greater co-
ordination and complementarity with the actions of the Member States.

The European Union is one of the major actors in international co-operation and development
assistance. In total, the European Community and the Member States provide some 55 per
cent of total international Official Development Assistance (ODA) and more than two thirds
of grant aid. The share of European aid managed by the Commission and the European
Investment Bank (EIB) has gradually increased from 7 per cent thirty years ago to 17 per cent
today. The European Community has the political and financial responsibility for more than
10 per cent of total ODA world-wide an increase from 5 per cent in 1985. It is also the largest
donor of humanitarian aid in the world.

As the EU’s external relations have evolved, the regional distribution of Community aid has
altered appreciably, largely reflecting the political factors underlying European policy and its
capacity to adapt to new situations. These new regional cooperation agreements have been put
in place by increasing the total financial resources allocated by the Community to external
aid, and not by redirecting existing flows. Total external aid (in commitments) climbed from
€
8.6 billion in 1999, - of which 6.8 billion correspond to

3.3 billion in 1990 to

€

“development assistance” according to commonly agreed (DAC) definitions.

Community development policy is part of an international strategy where a comprehensive
view is currently emerging. The strategy adopted by the Development Assistance Committee
of the OECD1,
in which the Community takes part, has a key role in international
coordination efforts. Other initiatives go in the same direction – such as the World Bank

1

Shaping the 21st Century: the contribution of Development Cooperation, May 1996.

4

Comprehensive Development Framework2, or the IMF/World Bank Poverty Reduction
Strategy Papers3. The guiding principles behind these initiatives are ownership in the
developing countries of their own development process and increased attention to the social
dimension of growth and development. Community development policy is already to a large
in particular in the new Agreement
degree fully consistent with these strategic lines,
concluded with the ACP States4. Some adjustments are however to be considered,
in
particular with a view to facilitating complementarity with the Member States' bilateral
policies.

The framework proposed in this Communication relates to the Community's development
policy in relation to all countries that can be regarded as developing countries from an
economic, social and structural point of view. This includes in particular countries that have
in the past been covered by instruments such as the Lomé Convention, the ALA or the MEDA
Regulations, but is not limited to these. By way of example, reference is made to the list of
developing countries developed by the Development Assistance Committee of the OECD (see
list in annex 7).

Like other international donors the Community is faced with the challenge to further increase
the quality and impact of its contribution to development efforts throughout the world. A
number of criticisms have been made by the DAC or other stakeholders, especially the lack of
an overall Community strategy and the fact that the objectives of Community development
policy are too numerous, too vague and not ranked in any way.

A coherent overall strategy focussing on core activities must be based on the Community's
comparative advantages and specific characteristics; its capacity to ensure coherence and
synergies between trade, aid, economic cooperation and political dialogue; its neutrality and
pursuit of overall Community interests; its critical mass in financial terms but also in terms of
economic and political weight and influence at an international level; the global dimension of
its development policy, its presence on the ground and in multilateral bodies; its experience
in regional integration and finally the role of the Community as an anchor for co-ordination
and consistency in development efforts.

The overarching objective is to refocus the Community development policy on poverty
reduction and on aligning the policy framework in different regions. The method would be to
support action that would enable developing countries to fight poverty themselves.

For this to be effective differentiation of development co-operation must be applied. This
differentiation must reflect the level of development of each partner country, taking into
account issues of equity and economic, social and poverty indicators. Their diversity will be
reflected in the development policy mix and instruments used in individual partner countries.
This implies, for instance, that middle-income developing countries will continue to benefit
from Community support to macroeconomic stability under appropriate social conditionality.

It is equally clear that trade and development, regional integration, transport and institution
and capacity building remain relevant areas of co-operation in developing countries even

2

3

4

James D. Wolfensohn, A Proposal for a Comprehensive Development Framework, The World Bank,
Washington D.C., January 1999
The World Bank, Building Poverty Reduction Strategies in Developing Countries, Washington D.C.,
September 1999
Partnership Agreement between the ACP States and the EC and its Member States, to be signed in June
2000.

5

where the incidence of poverty is declining. In addition, the EC’s development cooperation
will continue to reflect the variety of partnerships, which govern the EC’s relations with the
developing countries world-wide. These
extend beyond development
cooperation and reflect political, economic, and cultural and trade relations.

relationships

Community development support has to be concentrated on a more limited number of core
areas. This means giving sufficient staff to these core areas to execute programmes, while
focusing on co-financing and leaving the leadership to Member States and other donors in
programmes outside these areas. Other activities of important interest to developing countries
such as in the area of research, technology and environment, which are prolongations of
internal policies, will play an important role supporting the main objective.

Other important decisions will also guide development policy. The Commission presented a
Communication on the integration of environmental concerns into development
to the
Helsinki Council5, which will improve our strategy of how to consider environment in the
elaboration and implementation of development policy.

The Helsinki Council asked the Commission to prepare a comprehensive long-term
sustainable development strategy dovetailing economic, social and environmental policies, to
be presented in Gothenburg in June 2001. Development policy will be an integral part of this
overall sustainable development strategy. The progress made in implementing the ideas set
out in the current Communication will be an important element in preparing the overall
strategy.

Adjustment in the implementation of developing policy is also required at the operational
level with a view to increasing the effectiveness of aid. This would be done by streamlining
aid instruments, promoting sector-wide
increasing decentralisation and
devolution of responsibilities, and seeking complementarity with the Member States and other
donors. To do this the Commission intends to further strengthen its efforts in coordinating its
activities with Member States.

approaches,

This Communication on the Community’s development policy fits into a number of policy
papers on the Community’s external assistance which the Commission plans to present in the
first half of 2000. They will cover the reform of the Commission’s external assistance
programmes to improve delivery, the coherence between development and other EU policies
and the perspectives for the EC’s external spending. This latter document will analyse the
poverty focus of the Community’s development assistance. It will reflect the fact that the
allocations for Category 4 reflect both development objectives and the political and strategic
priorities of the European Union.

A fresh strategy for the Community’s development policy has to be established which builds
on the positive achievements of the past, responds to the weaknesses of the EC performance ,
and which reflects the evolving international debate on development issues. It must be seen in
the context of the Commission’s reform strategy and responds to demands highlighted in
several external evaluations, and by the Council6.

5

6

Communication (COM/99/499)
At
in its conclusions on the outcome of the evaluation of Community
its May 1999 session,
development instruments and programmes, the " Development" Council asked the Commission to
frame a proposal for a general policy statement on development aid.

6

In elaborating the present statement, the Commission has benefited from comments and
suggestions made by stakeholders in civil society, multilateral development agencies, NGOs,
private sector, during a preliminary consultation process.

1.

NEW CHALLENGES FOR DEVELOPMENT

Sustainable development, a new approach…

ten years and
"North-South" relations have changed fundamentally in the last
political, economic and social developments have called development cooperation
policies into question. The major UN conferences7 and the commitments entered
into,
inter alia by the Member States and the Community, constitute a new
framework for a development approach centred on social and human aspects and on
the sustainable management and use of natural resources and the environment. The
need for a better integration of political, economic, social and environmental
is widely recognised. The Community considers
dimensions of development
development policy as a multidimensional process that covers broad-based equitable
growth, social services, environment, gender
issues, capacity and institutional
building, private sector development, human rights and good governance. The
concept of "sustainable development" encompasses these new priorities.

Drawing opportunities from globalisation…

Globalisation processes, resulting from liberalisation policies and technological
advance, have provided fresh opportunities for development in trade, investment and
access to know-how.

They have also highlighted the importance of trade for the development process.
Trade is the most efficient means to generate resources necessary for self-sustained
development. Burgeoning economic growth in emerging areas (Asia, Latin America)
has stemmed more from the rise in exports and private flows of investment than from
development aid.

Beyond its positive aspects, globalisation involves increased risks of marginalisation,
if the country is not prepared to cope with these new opportunities. This will be the
case in particular for the poorest countries. The financial crisis that shook the Asian
countries in 1998 and its contagion effects highlighted new vulnerability. Rising
poverty in many countries and regions, which today affects 1.5 billion people world-
wide, and the increase in the world's population (2 billion more in the next twenty
increasing pressure on the
years) especially in developing regions will exert
resources
emergence of global
the
for development. Moreover
environmental problems has brought a new level of interdependence between
industrialised and developing countries.

available

Globalisation is to a high degree driven by technological progress. But whereas the
economies of developed countries are experiencing a fundamental transformation
towards the information society based on the international exchanges in knowledge,

7

This refers to the political statements and action plans adopted at the following conferences: Rio 1992
(environment and development), Vienna 1993 (human rights), Cairo 1994 (population and
development), Copenhagen 1995 (social development), Beijing 1995 (women and development), Rome
1996 (food), Istanbul 1996 (Habitat II).

7

research and information, developing countries are facing an increasing digital
divide. Unless the opportunities flowing from these new technologies are seized, this
implies the risk of a new form of marginalisation as access to global networks and
advanced services become necessary elements of integration into the world economy.
The G/7-G/8 Summit in Okinawa will focus on this issue.

There is a real opportunity in both developed and developing countries to use
research and information technology in applications that support health care,
education, food security, etc. This of course requires setting up an appropriate
economic and regulatory environment, in particular to mobilise the private sector in
these countries. The risk is even greater given that we are entering a global
knowledge society. In this context, research and development has a strategic role to
play in strengthening know-how and build the necessary specific knowledge base.
Scientific and technological knowledge is a strategic element
in promoting
sustainable and equitable development and consequently in reducing poverty.

Aid is still needed…

Over the last few years, there has been a significant decrease in aid to developing
countries8. There are signs however that this downtrend in the volume of aid may
now have come to an end.

Official Development Assistance of OECD/DAC Members in 1998

Total DAC (OECD)

0.23% of donors ' GNP

Of which EU

Of which non-EU

0.34 % of GNP

0.18 % of GNP

UN target:
Source: DAC and Commission estimates, 1999.

0.70% of GNP

There are strong reasons for a further increase. Due to highly competitive and
demanding capital markets, there is a need to provide the least developed countries
with aid and access to capital.

Foreign Direct Investment flows into developing countries

Foreign direct investment into developing countries has emerged as the largest and fastest
growing single component of external finance for this group of countries, taken together.
Foreign direct investment to developing countries has increased from a mere $ 25 billion in
1990 to $ 170 bn in 1998. In the same period official development assistance flows
decreased from $ 59 bn to $ 52 bn.

Asia and countries in Latin America have achieved most success in attracting FDI. However
the gap among developing countries widens with the top five countries receiving 55% of all
developing countries’ inflows and the 48 Least Developed Countries receiving less than 1%.
Certain regions, in particular Africa, remain particularly marginalised.

Source: World Investment Report, UNCTAD, 1999.

8

This resulted in a decline in the aid effort of OECD countries in relation to their GNP, which fell in
1997-98 to its lowest level, 0.22% of GNP, compared with an average of 0.33% in the 1980s, and with
an overall objective of 0.70%.

8

Crises and conflicts, a growing concern…

combination of population growth, unsustainable debt,

The
environmental
degradation and natural catastrophes as well as new diseases has thrown a number of
countries into conflict and extreme deprivation. The increase in unstable political
situations, in the number and extent of violent conflicts, can undo in a matter of
weeks the development efforts of several years. In Africa, poverty has replaced the
external struggle for influence during the Cold War as a major cause of armed
conflict. This makes development cooperation more necessary and also potentially
more effective.

Population living on less than $1 per day, 1987-98

1987
(million
people)

1998
(million
people)

Change
(million
people)

Headcount
population)

(% of

South Asia

Sub-Saharan Africa

East Asia & Pacific (excl. China)

Latin America & Caribbean

Middle East & North Africa

Europe and Central Asia

Source : World Bank, January 2000

474

217

417

64

9

1

522

291

278

78

6

24

+48

+74

- 139

+14

- 3

+23

40

46

15

16

2

5

A refocusing of international cooperation…

More coherent action between various organisations and donors working in the field
of development is essential to increase the impact of cooperation. The quest for
efficiency and effectiveness presupposes a consensus on the fundamental objectives
of development cooperation. The international community has been actively debating
these issues over recent years and several
to refocus
cooperation on shared objectives.

initiatives have sought

The strategy adopted by the OECD's Development Aid Committee has pinpointed,
amongst the key undertakings made at UN conferences, a handful of quantified
objectives for poverty alleviation, better education and health provision, narrowing
the disparities between men and women and sustainable management of the
environment and natural resources. The G7 has adopted guidelines for easing the
developing countries' integration into the global economy and reducing the external
debt burden.9 International (IMF, World Bank, UNDP) and regional bodies (e.g.
development banks) recently began to reconsider their strategies in order to focus
their efforts on the fight against poverty.

The need for co-operative efforts to solve problems mean that there are an increasing
number of Multilateral Environmental Agreements of which both the Community
and its Member States are parties. Obligations deriving from those agreements

9

G8 Communiqué Köln 1999, Deepening the Development Partnership, and Launching the Köln Debt
Initiative.

9

should also be considered as a part of the international development agenda. The
strong focus on the integration of environmental concerns into all Commission
development activities has to be seen as a sign of our commitment
to the
implementation of those obligations. The Commission will also continue to be fully
involved in all relevant policy discussions, notably on the link between Multilateral
Environmental Agreements and development.

Efforts to devise consistent frameworks for effective coordination between aid
donors of which the international financial institutions are gradually emerging. There
is presently work in progress at the European level to formulate strategy papers with
a view to fostering better complementarity between EU Member States and the
Community.

Objectives agreed by the Development Assistance Committee (OECD, 1996) Strategy for
the 21st century

• Economic well-being: reduce by one-half, by the year 2015, the proportion of

people living in extreme poverty in developing countries

• Social development: primary education for all by 2015, gender equality in primary
and secondary education by 2005, fall by two-thirds in mortality rate of new-born
and young children by 2015, access to reproductive health for all those of
procreating age by 2015.

• Environment:

implementation by 2005 of national sustainable development
strategies in order to reverse by 2015 the current trend towards degradation of
environmental resources.

• Other qualitative aspects : social integration, good governance, etc.

2.

THE ROLE OF EUROPE

The global projection of European values of democracy, social
justice and
sustainable development calls for an EU policy of solidarity. A trade and agricultural
policy that takes greater account of the interests of developing countries should
support this policy. The Community’s exclusive powers in these areas reinforce the
responsibility of the Community to adopt a coherent policy mix.

2.1

Combining politics, trade and development

The Community has three principal means of action to pursue its objectives in the
field of development - political dialogue, development cooperation and trade. These
three dimensions should be mutually reinforcing.

The Community also acts through the external dimension of other Community
policies, in particular in the areas of environment, research and technology, and the
information society. For instance, Community research activities in sustainable
development
(crop improvements, animal health, etc) clearly complement
development policy goals. Likewise, enlargement of the European Union will also
bring new countries in as donors and will enlarge the size of the European market
from which the developing countries might take advantage. These policies all have
components that will support development objectives, and should as such be seen as

10

important positive complementary component of the Community’s role vis-à-vis the
developing countries.

Dialogue and the political dimension…

The political dialogue conducted at the level of a particular country or with regional
groupings (Euro-Med partnership, ASEAN, ASEM, SAARC, Rio Group, Mercosur)
makes it possible to tackle many issues of common interest, including those where a
multilateral debate may be more difficult. Dialogue also takes place in the framework
of the Common Foreign and Security Policy as well as in the framework of the
association and cooperation agreements or partnership relations (ACP-EC councils
and joint assemblies; South Africa-EC joint Council).

Trade policy…

Trade policy is a key lever for development: at the multilateral level, by contributing
to a fair and equitable multilateral trading system and thereby facilitating the
integration of developing countries into the world trading system; at bilateral level by
facilitating access to the markets of the developed countries.

the interests of developing countries and of
This involves taking into account
economies in transition (and their economic and social constraints) in international
bodies regulating the framework of trade and investment, in particular the WTO. The
Community’s approach towards the upcoming WTO negotiating round reflects these
intentions.

At bilateral level, the Community’s trade policy can contribute to development by
facilitating access to its market. In this spirit, the EC grants all developing countries
non-reciprocal trade preferences, with more favourable arrangements for the least
developed countries.

Despite these concessions LDCs still face a trade deficit with the EU:

1998

Trade with LDCs

Exports to LDCs

EU
€

€

18.8 bn

10.1 bn

US
€

€

7.7 bn

2.1 bn

Japan
€

€

2.9 bn

2.0 bn

Canada
€

0.4 bn

€

0.2 bn

% QUAD* - exports

Imports from LDCs

70%
€

8.7 bn

% QUAD* – imports

56%

15%
€

5.6 bn

36%

14%
€

0.9 bn

6%

1%
€

0.2 bn

2%

Source: Eurostat - * Quad = EU+US+J+Can

The Community’s trade policy can also contribute to streamlining and consolidating
the developing countries’ own trade policies. In this spirit the EC has concluded
economic and trade cooperation agreements with several countries or regional
groupings in the Mediterranean, Latin America and ACP regions, providing for the
progressive removal of barriers to trade between the parties.

11

The EC can furthermore, through cooperation in all areas relevant for trade (sanitary
and phytosanitary measures, health standards, etc.) enhance the capacity of
developing countries to handle all these issues and thereby remove unintended
obstacles to developing countries exports. These aspects are becoming increasingly
important for the development of trade and the improvement of a country's ability to
attract private investment.

Development co-operation…

The EC provides support for general and sectoral policies, programmes and projects
in partner countries according to jointly defined priorities. A relevant element for
interaction and synergy between trade and development is the need for trade related
technical assistance for capacity building to help countries integrate into the trading
system and make use of the opportunities offered for growth and sustainable
development. Furthermore, having both humanitarian and development aid at its
disposal, the Community is well placed to ensure sound management of the difficult
transition between emergency aid, rehabilitation and development.

The ACP-EC new partnership Agreement…

The recently concluded post-Lomé negotiations provide an example of how these
three aspects - politics, trade and development - can be brought together. The new
agreement between the EU and ACP countries combines a substantive political
dialogue among the partners with an innovative cooperation in the field of trade and
new mechanisms for development cooperation. Trade cooperation is based on
regional integration initiatives in developing countries that will ultimately negotiate
trade agreements with the Community. The resulting Regional Economic Partnership
integration into the world
Agreements should facilitate developing countries'
economy while monitoring the effects of liberalisation. Development cooperation
In addition to its combination of politics,
will support
is made unique by its concrete
development and trade,
mechanisms for North-South and South-South partnership, its long-term character
and its contractual nature.

the new agreement

the entire process.

2.2.

Ensuring coherence and co-ordination

Art. 3(2) TEU demand that the consistency of the Union’s external activities be
ensured. Art. 178 TEC10 furthermore requests that the Community take account of its
objectives in the area of development cooperation when it implements other policies
that are likely to affect developing countries. A Development Council Resolution of
May 1997 has asked the Commission to come up with proposals to improve
coherence, including practical procedures and regular reporting.

2.2.1. Coherence of external policies

Coherence has several dimensions. One is the general coherence of our external
policies. The gradual and harmonious integration of developing countries in the
world economy (Art.177.1) needs, on the one hand, a dramatic improvement of these
countries’ internal policies, and, on the other hand, a stronger and more coherent
international support to these policies. The EU is the first donor and the first trading

10

Respectively Treaty on the European Union and Treaty establishing the European Community

12

partner of the developing countries. Its international weight has increased with the
introduction of the euro. It has a growing role in international negotiations on
environment and consumer protection. As such, it has to maximise its capacity to act
within the various pillars of the international economic system, with a view to ensure
coherence between trade liberalisation (WTO), assistance and financial co-operation
(Bretton Woods Institutions) and normalisation aiming at sustainable development
(Environment, ILO, Codex Alimentarius, etc.). The Commission will soon put
forward an action plan to use its external policies to improve the coherence and the
international economic governance, to further promote the gradual and harmonious
integration of developing countries into the World economy.

2.2.2. Avoiding unintended incoherence

Art.178 of the Treaty and common sense oblige the EU to check that the objectives
of its development policy are taken into account when the implementation of other
policies are likely to affect developing countries. This coherence-check is relevant
for many areas of Community policy including, e.g. trade, agriculture, environment,
energy, research and technological development, fisheries,
immigration, asylum,
conflict prevention, health, competition, consumer protection and humanitarian aid.
Development objectives should also be reflected in the overall policy guidelines in
areas such as investment, debt management,
transport and telecommunication
networks, education and training.

When implementing these other policies, the EU can indeed affect, positively or
adversely, developing countries. The least that can be expected is that those who
make the decisions have full knowledge of these indirect effects of policies.
Thorough analysis and quantification of these effects will be promoted.

It is still possible that the EU makes the political choice to go ahead with a policy
despite its potentially negative,
indirect and unintended impact on developing
countries. In these cases, it is important to ensure that this decision is made in full
knowledge of its indirect consequences. When various options are available, such
policies will have to be implemented in the least damaging way to developing
countries. If necessary and possible, measures or programmes may be devised to put
developing countries in a position to offset or resist the negative, unavoidable effects
of EU other policies.

the Commission and the Council

institutions,
to begin with. For its part,

This pursuit of improved coherence is the responsibility of all
the
the
Parliament,
Commission will make all necessary efforts to ensure that the principle of coherence
is more and more applied in its own proposals. At the same time, conflicting requests
should be avoided or resisted, or, when equally legitimate, the conflict should be
brought
to the fore and solved. Incoherent decisions and orientations will be
highlighted. The co-ordinating mechanisms of each institutions have used to the
fullest possible extend.

2.2.3. Co-ordination and complementarity

It is for the EC to promote coordination and ensure complementarity between the
Community and Member States in the broader international framework. One of the
most critical aspects of coordination within the EU is to enhance the ability of the EU
to present common positions in international bodies, thus realising the potential for

13

increased European influence. This coordination effort has also to be enhanced at the
level of the country strategies, sectoral policy guidelines, and at operational level in
the partner countries. This is important for developing countries, which have only
limited manpower resources and have to deal with many donors.

Building on past experience of coordination, the European Union has to move ahead
and to establish a division of labour to achieve commonly established goals. Progress
in defining European policy guidelines,
is
essential, while pursuing coordination in the various existing fora. There is definitely
a need not to confine the Community to being a sixteenth implementing actor in the
area of development cooperation, but to consider it as a promoter and facilitator in
the search of new forms of European governance.

integrating Member States’ policies,

2.3.

Implementation problems are well-known

The evaluations of Community aid policies11 have pinpointed a number of problems.
The Commission has recognised their relevance and considers that these problems
are mainly signs of a growth crisis, where policies and structures have not been
adapted sufficiently fast to meet the growing responsibilities of the Community in
the more-and-more complex area of development cooperation.

The main evaluation results can be summarised as follows:

• The Community's aid system is too complex and fragmented in terms of
objectives, instruments, procedures and institutional mechanisms. Streamlining
should be an objective in itself.

• Policies are guided by the instruments rather than by policy objectives and clearly
defined priorities. The Commission should develop more precise sectoral
strategies to make the objectives operational.

• Human resources are too thin both on the ground and in Brussels in relation to the
volume of aid managed. On average, to manage 10 million USD of aid, there are
2.9 staff at the Commission, compared with 4.3 at the World Bank and from 4 to 9
in the major Member States.

• The concern to disburse substantial funds rapidly is often at odds with the concern
to ensure quality of interventions, with focus on input to the exclusion of outputs
and impacts.

• Financial controls have to be simplified, by putting more stress on ex-post

controls on the basis of verifiable performance indicators.

• Monitoring, evaluation and institutional learning need to be strengthened.

•

Internal and external control systems should avoid duplication and be mutually
reinforcing and designed with complementarity in mind.

• Finally, it has to be recognised that EU’s large-scale disbursement does not entail
proportional influence. The EU bears a significant share of multilateral financing.

11

Global evaluation reports: ACP (951338), ALA (951401), MED (951405).

14

Its presence should be reinforced in the discussions on economic reform policies
or other major topics which constitute key issues for developing economies.12

The Commission has undertaken to address these problems through administrative
reforms. Many innovative means and reforms have also been decided in the
framework of the new ACP-EC Agreement. The Commission also draws the
attention of Parliament and the Member States to the fact that some of the problems
cannot be resolved without
their support. This is particularly the case for
complementarity, the instruments of financial control and the procedures for Council
oversight.

2.4.

The Community must focus on its value added

The Community and Member States play a major role in development but their
potential for impact and action is grossly under-exploited. More effective linkages
between all the participants would make it possible to remedy this. However, even if
improved, coordination is not enough. There is a need to go one step further and to
envisage a division of labour. This means identifying areas where Community action
offers added value.

The special features and value added of Community policy can be identified as
follows.

In relation to the Member States …

–

–

–

–

–

–

Community policy pursues EU's shared objectives and interests. In principle,
this policy is dictated by political, economic and trade interests that are shared
by all or by a majority of Member States;

The Community has a presence in virtually all developing countries through
trade and cooperation agreements, and a broad network of representations in
the field;

The EC projects and programmes are usually bigger than those of most
Member States. The Community is a natural focal point for mobilising the
Union's economic and political weight, its existing technical resources, and its
expertise in areas where the required critical mass is high.

The Community embodies Europe's collective experience of
integration.

regional

The Community’s capacity to formulate sectoral policies can benefit from the
accumulated experience of fifteen Member States, including major donors, and
countries with quite different experiences and approaches.

Community development policy conveys a certain image of Europe in the
world. The culture and values of co-operation and collective action carries a
strong and positive message to partners in developing countries.

12

The EU, as a whole, financed for example 64% of the cost of the structural adjustment programmes in
Africa, while the cumulated voting right of the Member States in the IMF is only 27%.

15

–

European social values, the diversity of the existing social systems and the
importance attached to environmental considerations, give EU policy a distinct
profile as regards the quality of sustainable development.

In relation to the IFIs 13 and other multilateral bodies …

–

–

–

The Community’s competence is not only on financial and technical aid, but
extends to trade, economic and monetary matters and to political issues. This
enables it to incorporate these various aspects into development cooperation
processes.

The Community is a major donor and the biggest
developing countries.

trading partner of the

The Community’s aid is given almost exclusively in the form of grants (except
for EIB loans and certain kinds of balance of payments support).

3.

A COMPREHENSIVE APPROACH TO DEVELOPMENT AND POVERTY REDUCTION

3.1.

Defining poverty

The definition of poverty has evolved significantly over the years. Today, there is a
wide consensus that poverty cannot be defined merely as the lack of income and
financial resources but should be recognised as a multi-faceted concept. This new
definition includes deprivation of basic capabilities and encompasses non-monetary
factors such as the lack of access to education, health, natural
resources,
employment, land and credit, political participation, services and infrastructure. It
also covers the risk dimension and the notion of vulnerability. Reducing poverty
therefore implies addressing these economic, political, social, environmental and
institutional dimensions.

• 86% of global consumption is concentrated on 20% of the world's population. In
1960, the world' s richest 20% had an income 30 times higher than the 20%
poorest, rising to 82 times higher in 1995 (Report on Human Development,
UNDP 1998).

• A significant group of developing countries carry an external debt burden which
can,
in terms of repayment, represent up to six years of their GDP. These
countries are known as Heavily Indebted Poor Countries (HIPCs) and currently
number about 41, of which 29 are eligible for the multilateral debt relief initiative.
• The flow of private investment to developing countries has increased substantially

in the last ten years, but 80% of that goes to just a dozen countries.

• Out of a global population of 6 billion, 1.5 billion people live on less than USD 1
a day. Most of those living below the poverty threshold are in South and East Asia
(800 million); in sub-Saharan Africa and in South Asia poverty affects over 40%
of the population (World Bank, 1999).

13

In particular the IMF and the World Bank.

16

3.2.

A strengthened focus on poverty reduction

The general objective of development cooperation is to encourage sustainable
development that leads to a reduction in poverty in developing countries.

However past experience has revealed that certain forms of aid and economic growth
do not always lead to a fall in poverty levels. In fact, over the last few decades, the
number of poor people have risen. Furthermore, certain studies have demonstrated
that some development policies have had a negative impact on poverty and have
indirectly contributed to the further marginalisation of vulnerable groups. A greater
is therefore
focus on the nature of poverty and the complex causes behind it
necessary. It is fundamental that we ensure that the Community’s development
cooperation policies contribute to the short, medium or long term objectives of
poverty reduction and that these policies do not have negative effects on certain
groups of the population.

Consequently, the Community must take an increased focus on poverty reduction in
all its development activities. This has implications both for the distribution of
Community aid between and within countries. For countries where the incidence of
poverty is declining, the Community should gear its cooperation more towards the
encouragement of trade and economic links between private-sector entities (trade
agreements, investment protection, scientific cooperation, etc.).

Poverty-related problems in developing countries are complex and multidimensional.
Therefore a development policy that fosters poverty reduction requires an integrated
approach.

• Institutional support and capacity-building must be an integral part of such an
is progressive and

approach which must have a long-term perspective that
continuous.

• Political responsibility of governments is a key factor and the effectiveness of the
strategies adopted depends first and foremost on the priority these governments
attach to poverty reduction in their domestic policy. In order to be truly effective,
these strategies must be fully "owned" by the governments and civil societies and
be based on a commitment to good governance.

• Ownership can only be promoted in the framework of balanced partnerships, at all
levels, including policy dialogue, capacity building and adequate implementation
systems. Ownership also implies local availability of knowledge and the ability to
analyse the complex problems of society and to design policies and strategies
accordingly. Research policy and capacity building therefore need sustained
attention.

• It must be ensured that macroeconomic reform programmes move towards an
integration of social, economic and environmental objectives. Macroeconomic
policy must give priority to creating the conditions necessary for sustainable and
equitable growth, which creates jobs, reduces inequality, redistributes wealth and
safeguards the environment. Any increase in inequality reduces the potentially
positive effects of economic growth. The same holds for the strategies to promote

17

private sector development which are essential for integrating into the world
economy and can be a powerful means for poverty reduction.

• Gender issues are particularly important in this context. Gender inequality hinders
growth, poverty reduction and progress in health and education. These issues are
even more important when one considers that
in many regions women and
children are increasingly and disproportionately the victims of poverty.

• The lack of access to drinking water and to health and education services is
particularly acute in South and South-East Asia and in sub-Saharan Africa (UNDP
1998).

• Nearly half the world’s population is under 25, most of whom are in the

developing countries.

• Average life expectancy is 62 years in the developing countries (51 in the least
advanced) as against 74 years in the industrialised countries. School attendance
rate is 57% (36% in the LLDCs) compared with 83% in the industrialised
countries.

• AIDS kills 2 million people per year in Africa. Life expectancy is diminishing in a

number of countries.

• 800 million people (1 in every 5 in the developing countries), 200 million of them

children, suffer from chronic malnutrition.

• The development of social policies such as health, food security, education and
training, as well as access to and sustainable management of water resources, are
of the utmost importance. Social sector policies must aim at widening access to
basic social services and social protection. Access to reproductive health care
services, especially the prevention of HIV/AIDS, including research on vaccins
and diagnostics is an essential component. Resources must also be properly
targeted towards the poorest of the poor.

• The fight against poverty must be an integral part of policies on the environment,
the sustainable management of natural resources, food security and urban and
rural development. An effort in favour of coherence between the objectives of
social development and the objectives of environmental policies and sustainable
use of environmental resources must be undertaken, as inadequate responses on
environmental issues have a negative impact on long term growth and on the
reduction of poverty.

• Access to sustainable energy services has a key role to play in supporting social
and economic development. The provision of energy services,
in particular
through decentralised activities and the promotion of renewable energy sources, is
an increasingly important issue.

18

• The number of mega-cities (more than 8 million inhabitants) rose from 2 in 1950
to 23 in 1995, of which 17 were in developing countries. In 2015 there will be 36.
Africa and Asia are the regions in which urbanisation is rising fastest (World
Resources, 1998-99).

• The phenomenon of deforestation is concentrated in the developing countries
(200 million hectares lost between 1980 and 1995) (World Resources, 1998-99).

• The water problem looks set

to become one of the most pressing in the
21st century. In 1997, one third of the world's population lived in countries
experiencing a shortage of resources compared with consumption needs; this
could rise to two thirds by 2025. (World Resources, 1998-1999).

• Current trends show that in 2010, developing countries carbondioxide emissions
will surpass those of developed countries including eastern Europe (EC, Poles
Model, 1999).

• One third of the world’s population (around 2 billion people) does not have access

to adequate energy services.

• In 1990-98, developing countries suffered more than 97% of natural disaster-

related deaths (World Bank draft Report 2000-2001).

• The fight against poverty and the promotion of sustainable development require a
peaceful and stable political environment. Conflict prevention and conflict
management are therefore of particular significance.

• Natural disasters have increased over the last

ten years, and mainly affect
developing countries. Disaster mitigation and preparedness is thus another
important element of poverty reduction strategies.

In relative terms the emphasis of Community aid on the poorest nations has
diminished. This is due to a globalisation of Community policy and to new external
priorities. There is however a clear limitation in an analysis of poverty-focus on the
sole basis of the categorisation of the recipient country by level of income. A number
of countries, especially in the middle-income bracket, have large percentages of their
population below the poverty level (Brazil, Botswana, Costa Rica, the Dominican
Republic, Ecuador, El Salvador, Paraguay, Peru, the Philippines, Trinidad & Tobago,
South Africa).

Share of Official Development Assistance to Least Developed Countries

EU member States

Community aid

Total DAC

(see annex 3 for a more complete picture)

1986/87

1996/97

44.3 %

51.3 %

38.1 %

34.2 %

33.6 %

31.5 %

19

On the basis of this approach, three ways of enhancing and measuring the poverty
focus of Community aid can be identified:

(a)

(b)

improve the primary poverty focus: meaning more concentration of efforts on
LDC's and other LIC category countries;

improve the secondary poverty focus: meaning more poverty-focused
cooperation programmes in middle-income countries (MIC) where more than
20% of the population lives under the poverty lines of $ 1/per day per capita;

(c)

improve the tertiary poverty focus: meaning greater focus on poverty reduction
in cooperation programmes in all other developing countries.

Improving the primary poverty focus is clearly limited by the setting of the political
priorities and the consequences for the distribution of the financial resources to the
regions.

Improving the secondary and tertiary poverty focus is a process which starts at the
level of the definition of overall development priorities and leads through the
Community support strategies to the individual countries and regions to concrete
interventions. This methodology will need to be refined in order to mainstream the
poverty focus in all Community cooperation programmes. The Commission will
elaborate concrete proposals to this end. A more poverty-focused, formulation of the
Country Support Strategies which are at the basis of the cooperation programmes of
the Community is essential in this process.

3.3.

Links between poverty, economic growth and trade

Poverty reduction cannot be achieved without sustained growth. The integration of
developing countries, and especially the Least-Developed Countries, into the world
economy is a necessary, albeit insufficient, condition for their growth and sustainable
economic and social development. It is also important to avoid developing countries
being further marginalised by not
in the emergence of a global
information society.

taking part

Preferential access to developed countries’ markets contribute to their development
as well as to their integration in the world economy. MFN based liberalisation in
sectors of interest to developing countries is equally important for development. A
predictable and transparent trade policy of the developing countries themselves is
another precondition for their development. In this context, the Community’s trade
policy can make an important contribution to sustainable development. This will in
particular be the case in the framework of economic integration agreements, which
will, through the introduction of trade liberalisation, allow for a better allocation of
resources and thereby increase the country’s competitiveness. They will further
contribute to greater transparency and predictability in the developing countries’ own
trade policies and thereby contribute to mobilise economic operators and potential
investors.

Trade policy reforms and domestic development strategies carried out by the
developing countries must be in line with their development objectives and need to
be supported by development assistance. Trade liberalisation is not an end in itself,
and should not impose excessive burdens on developing countries. There is a need to

20

set a pace of liberalisation which will not have counterproductive effects, in order to
obtain a balanced result which maximises the long-term dynamic welfare effects
while minimising the adjustment costs.

Enhanced market access and an improved trading environment are not sufficient.
Experience has shown that many countries are unable to benefit
from the
opportunities offered due to capacity constraints of government, infrastructure or
human resource nature. It is therefore essential that the core trade policy elements be
supported by in particular trade related technical assistance for capacity building.
Hence, apart from market access issues,
the
Community should also address supply-side constraints and competitiveness, trade-
related areas,
to
information and global networks, strategies to promote investment and private sector
development. To really benefit from the potential of globalisation, developing
countries and notably the LDCs have also to set up adequate domestic policy
environments which also promote sustainable development. Comprehensive private
sector development strategies are essential in this respect.

including its non-tariff aspects,

trade development measures,

technology transfers, access

The Community must aim at making development and trade and investment policies
mutually reinforcing and complementary. This is a major challenge for the next
decade. This implies that development aid should help and encourage developing
to incorporate international best practices based on multilaterally
countries
negotiated norms,
in areas such as core labour standards, consumer protection,
environment protection and investment and financial regulations.

The importance of sound domestic policies and international governance underlined by
globalisation

Since 1948, helped by rapid growth in trade (6% per year) and FDI (12% per year since
1973), world GDP have increased at a rate of 3.7% yearly. This has meant the quadrupling of
real world GDP and the doubling globally of GDP per head since 1960. However, this has not
led to any real convergence (i.e. GDP/head) between rich and poor countries. Developing
countries share of world GDP, at 20%, is even smaller than its level in 1960 (21%) and the
GDP/head ratio between developing countries and industrialised countries has remained
around 1 to 20 in dollar terms.

Analysis of this period underlines the crucial role of sound domestic governance. If anything,
globalisation adds further importance to the need for promoting macroeconomic stability and
structural reforms. Better domestic strategies also call for more effective international
support. This highlights the need for reinforced policy coherence between international
economic policies in the areas of trade, finance, and promotion of multilaterally negotiated
rules in environment, consumer protection and core labour standards. As the major trade
partner for developing countries and the largest aid donor, the EU has a major role to play in
enhancing coherence both at the international and Community level in these areas.

3.4.

Promoting the development of the private sector

The private sector is an engine for growth, a source of employment and revenue. It is
also a key actor and partner in the development process. The Commission’s strategy
combines support at the macro level - aiming at improving the business environment
and the investment climate -, at meso - financial and non-financial - or intermediary

21

level, and at micro level to help increase business competitiveness. Consultation with
private sector organisations and a strengthening of their capacities is an integral part
of this strategy.

For the implementation of its strategy the Commission helps to design country or
region-level strategies with emphasis on economic and institutional reforms, but also
including support at intermediary and micro levels. It provides demand-driven/cost-
sharing facilities
and
strengthening the capacity of private sector and non-financial intermediaries. To
foster inward investment and economic cooperation the Commission supports cross-
investment cooperation encouraging continuity and sustainability in
border
investment and partnership promotion as a catalyst
for business-to-business
cooperation.

increasing competitiveness of

enterprises

aimed at

Community support to private sector development should be strengthened and given
additional focus on poverty reduction notably through more attention to local
development and the development of services more adapted to the needs of the poor.
Specific attention should be given to the specific needs of micro, small and medium-
sized enterprises and to the development of a sustainable financial sector.

3.5.

Linking relief, rehabilitation and development

Increasingly, political crises and natural disasters render sustainable development
and sectoral policies impracticable. In these situations humanitarian aid often
becomes the only substantial source of Community – and other donors' - financing in
the regions concerned. The Community's Humanitarian Office (ECHO) is called on
more and more to finance post-conflict programmes outside the remit of emergency
aid, due to the absence of other instruments that are sufficiently flexible and swift.

The Commission will shortly present a communication on this link between relief
and development. The objectives of this exercise are: (1) to devise strategies at
national and regional level that take account of the dynamic nature of crises and post-
war situations; (2) to ensure that the Commission and Member States make the best
use of existing analytical capacity and instruments; and (3) to organise the various
Commission services in a way that allows for rapid reaction, timely planning and
smooth implementation.

ECHO will refocus its actions on its core mandate, and the Commission will consider
how to better address post-crisis situations. Special financial provisions in this regard
have for example been defined in the new ACP-EC partnership Agreement,
including in order to take account of the particular difficulties of post-conflict
countries in the framework of the assessment of countries’ financial needs14.

14

The new ACP-EC Agreement contains the following provision: Post-emergency action, using effective
and flexible mechanisms, must ease the transition from the emergency phase to the development phase,
promote the socio-economic reintegration of the parts of the population affected, remove as far as
possible the causes of the crisis and strengthen institutions and the ownership by local and national
actors of their role in formulating a sustainable development policy.

22

4.

STRATEGIC ACTIVITIES

4.1.

Integrated framework for Community activities

Whilst respecting the specific circumstances of different countries and regions, the
EC's development cooperation would gain in visibility and coherence with the
adoption of a common integrated framework for development programmes and
policies for all geographical areas. In such a framework, best practices, as identified
within the DAC, must be promoted.

Integrated framework for Community activities

Central objective: Poverty reduction

Strategic areas deriving from the Treaty

A Sustainable development, in particular through promoting

equitable growth, investment, employment, social and human
development and environmental protection

B Integration into the world economy, including through support to

regional cooperation and integration

C Fight against poverty
D Democracy, human rights, rule of law and when necessary peace-

making and conflict prevention.

Guiding principles (mainstreaming)

Effect on poverty reduction
Support for institutional development and capacity-strengthening
Gender equality
Sustainable management and use of environment and natural
resources
Enhancement of economic, social, political and cultural rights

Levels of action

Global, regional national, local
Partners and actors (public sector, private sector, civil society)

1
2
3
4

5

(cid:1)
(cid:1)

This framework should be used for guiding country strategies and programming. Its
application should be tailored to the individual circumstances and specific situation
of partner countries and could evolve over time. The country strategy dialogue will
be decisive in choosing the appropriate application of its components. It should also
serve to decide on the division of tasks between the Community and the Member
States.

23

4.2.

The need for differentiation

The regional approach and the existence of several partnerships with groups of
countries should favour rather than discourage a move towards greater consistency in
development cooperation activities. These partnerships constitute a useful framework
for political, economic, social and environmental policy dialogue. In this way they
ensure that the diversity of partner countries can be taken into account and the added
value of Community action can be identified on a case-by-case basis.

Within this overall framework, Community development strategies must necessarily
be differentiated in accordance with the level of development of each partner country
– based on a wide range of socio-economic indicators - and its degree of integration
into the world economy, taking into account economic, social and poverty indicators.

the definition of

Furthermore,
those sectors on which the Community can
concentrate must be based on a dialogue with other donors on their policies and
specific interventions. In this dialogue the Community should clearly state that it
cannot be active in all areas.

4.3.

Priority activities for Community development aid

Refocusing priorities in Community development aid is a necessity, as highlighted
by the evaluations referred to in point 2.3. Community development cooperation
must do fewer things and do them better in order to ensure greater impact. In
particular the Community has to decide in which areas of development cooperation it
needs to concentrate its human resources in headquarters and delegations. Such
refocusing must be based on a combination of two main criteria: first, the areas
chosen must contribute to the objective of poverty eradication and sustainable
development; second, in the areas chosen Community action must have added value
as identified in point 2.4.

The areas chosen should also be interrelated and mutually reinforcing so as to
maintain internal coherence of Community development policy and increase its
impact. At the same time, the range of areas must remain sufficiently broad to allow
for interventions that are adapted to the needs of each country and its own
development strategy. However, this can be achieved without the Community itself
being directly involved in a particular sector. Coordination, cofinancing and
devolution must be encouraged and a division of labour has to take place at country
level.

The Commission’s human resources
cooperation will be
concentrated in the listed areas and in those needed to apply the crosscutting
principles. In other areas the Community could continue the funding of schemes, but
principally through supporting initiatives led by partner donors and institutions. This
is what effective coordination and complementarity is about.

for development

Considering the time required in programme preparation, this sectoral concentration
should be fully reflected in Community programmes within a time span of four
years. In areas outside this concentration, the Community should enhance its ability
to contribute to other donors’ programmes.

24

The following priority fields are proposed as those in which Community
development cooperation activities will be concentrated. The order in which they are
listed does not reflect a ranking. Rather,
the priority areas should be seen as
interdependent.

1.

Trade and development, including the development of trade and investment policies,
assistance with integration into the multilateral trading system and into the world
market, including by trade related technical assistance and support for increasing
capacity in trade and strengthening the competitiveness of the private sector

Without integration into the world economy, be it directly or through regional trade
agreements, development will not be sustainable. Trade is a major factor of growth
and creation of wealth for all countries. While this is in itself insufficient to foster
development, which also depends on the distribution of wealth, it is a necessary
precondition for long-term sustainability of poverty eradication.

is the
The European Community has exclusive competence for trade policy. It
developing countries'
the
Community is well placed to include a trade dimension in its development policy. In
order for the European Union to successfully combine trade and aid, this has to be
done at Community level.

trading partner. Based on this competence,

largest

2.

Regional integration and cooperation, including tackling of transboundary economic,
social and environmental problems

Regional integration is a key element of sustainable development in all regions.
Many developing countries have chosen regional integration as a mechanism of
integrating their economy into the world economy.

However, regional
integration has other aspects that relate directly to poverty
eradication and sustainability. It includes an important institution- and capacity-
building component and is the only effective way of addressing transboundary
problems. Last but not least, regional integration has become in many areas of the
world the most effective conflict prevention and resolution mechanism there is.

The Community’s own experience pleads for an active and leading role in this area.
This is not to say that the Community's experience can or should simply be copied in
other regions of the world. However, no other international actor has as many means
at its disposal to support and foster regional integration in developing countries as the
Community. The political dialogue,
trade relationships and development co-
operation of the Community all take an increasingly regional dimension. This is true
for all priority areas of Community development co-operation presented here.

3.

Support to macroeconomic policies with an explicit link with poverty reduction
strategies, in particular sector programmes in social areas (health and education)

Economic growth through trade must be part of the service of poverty eradication.
This can only be done by ensuring that the gains from trade are distributed equally.
In many developing countries, only a minority of the population enjoys the benefits
of economic growth. In addition, highly unequal income distribution is actually an
impediment to domestic economic growth because it stifles domestic demand.

25

Besides the importance of income distribution, macroeconomic policy is key to
ensuring sustainable and accessible social services. Sectoral programmes in health
and education, which are a key element in any strategy of poverty eradication, cannot
be sustainable if they disregard the macroeconomic framework in which they
operate. Therefore, it is both efficient and effective to integrate them right from the
beginning in macroeconomic policy, in particular in developing countries that are
planning or already undergoing structural reforms.
In those countries where
macroeconomic reform has been successful, financing of sector programmes in
health and education should continue if there is a need. Macroeconomic stability is
facilitated if policy-making takes place in a regional framework that ensures
monetary stability, stable trade relationships and reliable communication and
transport networks.

The Community has over the last years mobilised substantial financial means and
acquired considerable expertise in support to macroeconomic policies in developing
countries. The Commission has been at the forefront of the debate on the relations
between macroeconomic and sectoral policies in health and education, sectors that
are at the core of sustainable development. Its efforts to integrate economic and
social policies and to develop social sector conditionalities that are results oriented
financed transborder
have been appreciated by its donor partners.
macroeconomic programmes with a view to facilitating regional economic growth
and stability. The IMF and the World Bank have made the Commission the European
partner of choice for discussions of adjustment in developing countries.

It has

4.

Transport

Reliable and sustainable transport plays a key role in access to basic social services.
Not only the formal but also the informal economy in many developing countries
develops along transport routes. Sectoral policies in transport are necessary to make
it sustainable, to keep it balanced in terms of social, economic and environmental
requirements. In many parts of the world transport networks still reflect historical
trade patterns. Regional integration thus depends to a large extent on creating and
maintaining reliable transport.

Transport is an area in which the comparative advantage of the Community derives
from the fact that it has been the major donor in the sector for many years and on this
basis has considerably built up experience and expertise. Recent evaluation reports
have recognised the quality and added value of Commission support to transport in
developing countries. In addition, the Community can mobilise the substantial initial
investments needed in the creation of transport networks. At the same, by supporting
the integration of sectoral transport policies with macroeconomic and fiscal reform,
the Community can help developing countries in ensuring the regular maintenance
needed to make transport networks sustainable.

5.

Food security and sustainable rural development strategies

Together with health and education, food security is an essential element in any
poverty reduction strategy. Food security addresses itself directly to the vast majority
of the poor in developing countries, who live in rural areas. A coherent food security
the considerable
policy reduces the necessity of
environmental damage caused by the struggle for food is minimised. As opposed to
food aid, food security must be part of a larger framework of sustainable rural

food aid and ensures that

26

development. It is only through such a framework, integrating economic, social,
gender and environmental aspects that food security can be assured. Food security
also has an important regional element in that it can often only be ensured through a
regional rather than a national framework of production and distribution. Finally,
issues to be addressed in the transition from
food security is one of the first
humanitarian and relief aid towards long-term development.

terms;

In this area the Community has the following comparative advantages: its critical
the importance of food security in the link between
mass in financial
humanitarian aid, rehabilitation and development; its experience in this field and
long-term research and development co-operation in this area.
In this area, the
Community has been at the forefront of donors who want to facilitate food security
through a regional approach, including purchase in regional markets in developing
countries.

6.

Institutional capacity-building, good governance and the rule of law

It is generally recognised that the lack of institutional capacity and institutional
control of the use of public funds are a fundamental obstacle to sustainable
development. In all the above presented areas well functioning institutions with a
capacity for long-term planning are needed in order to achieve the desired impact of
aid. Without institutions capable of analysing poverty in all its facets, impact cannot
be measured at all. Institutional capacity building must thus be a key element in the
fight against poverty. In this context, good governance and the rule of law are key
element in ensuring social peace and stability as well as economic growth. Finally,
developing countries also need to build up their negotiating capacities
in
international fora dealing with, for instance, economic policy, trade, social issues and
environmental protection.

Cooperation in this area is reflected in the content of the recently negotiated ACP-EC
agreement, the ALA and MEDA Regulations, current co-operation under TACIS and
OBNOVA , and instruments such as the Human Rights Regulation. This priority area
also reflects the valuesof the EU's common foreign and security policy. The
Commission is therefore proposing to strengthen its own capacity to manage
programmes in this area while intensifying in parallel cooperation with other donors.

* * *

In all these areas, cross-cutting principles (good governance, human rights and the
rule of law, effect on poverty reduction, institutional and capacity building, gender
equality, environment15) will apply and be mainstreamed.

In addition, humanitarian aid will remain a crucial element in the Commission's
efforts to quickly react to humanitarian crises throughout the world.

15

For example, the way in which environmental issues will be integrated has been recently described in a
Communication (COM/99/499).

27

5.

PARTNERSHIPS

5.1. Ownership and participation

The quality of dialogue with the partner countries is the key to successful
development policies. Partnership, ownership of development processes by the
population, strengthening of institutional and administrative capacity as well as
human resources, reduction of dependence on external aid, participation of economic
and social actors and the representation of civil society, donor coordination, are all
principles which are now largely shared by donors.

These principles call for new modalities and fundamental changes in procedures and
practices. At political level, they are based on the respect for essential elements that
have systematically been introduced into all the agreements with third countries since
1995 (respect for human rights, democratic principles and the rule of law). Good
involving in particular a reciprocal
governance has also to be encouraged,
financial
to ensure transparent and accountable management of
commitment
resources earmarked for development, and to prevent and fight corruption16.

5.2. Working with civil society

The Commission considers civil society one of the key pillars of its development
policy. Close cooperation with and promotion of civil society is essential to ensure
the widest possible participation of all sectors of society to provide the conditions for
greater equity,
inclusion of the poor in the benefits of economic growth and
strengthening the democratic fabric of society. This approach must be implemented
whilst respecting the diverse and complementary roles of the State, decentralised
local authorities and the private sector.

organisations,

The Commission cooperates with a wide range of civil society actors, including
human rights groups and agencies, grassroots organisations, women’s associations,
youth organisations, child-protection organisations, environmental movements,
associations,
farmers’
religious
organisations, development
teaching and research
establishments), cultural associations and the media. The selection of civil society
partners is based on the way they respond to people’s needs,
their specific
competencies, their democratic character, the transparency of their operations and
management and their ability to strengthen civil society in partner countries.

structures (NGOs,

consumers’

support

unions,

trade

Future EC policy will aim at the further strengthening of civil society and the further
involvement of civil society actors in the community development policy. This will
include the definition of methodologies and framework for the:

• Information, consultation and dialogue with civil
establishment of development policies and strategies.

society actors on the

• Reinforcement of the capacities of civil society actors.

16

The ACP-EC new partnership Agreement provides a good example of innovative approaches in this
regard.

28

• The involvement of civil society actors in the design and implementation of

cooperation programmes.

• Decentralised cooperation whereby actors at

take direct
responsibility for the drawing up and implementation of cooperation programmes.

the local

level

5.3.

Increasing complementarity through the sectoral approach

Definition of EU sectoral policies and support for national sectoral policies will be
encouraged. Within the framework of national policies and in coherence with EU
approaches, the transition to "sector programme" replacing "project" support should
be accelerated. This approach facilitates ownership by the partner countries, donor
coordination, harmonisation of procedures, greater effectiveness of financial support
and provides an overall view of the problems of a sector. This process needs to be
carefully led with a view to ensuring effective additionality of resources for the
supported sectors, good management of public finance, and respect for national
sovereignty. It facilitates the use of direct budgetary aid where the partnership and
the capacity in a given sector are sufficiently mature, and represents a more result-
oriented support. It requires a comprehensive policy dialogue on specific sectors,
capacity building, coherence and linkage with macroeconomic support.

In addition, a concentration of EC efforts at the level of the development of sectoral
policies and programmes would facilitate complementarity, coordination and the
cofinancing of operations with other donors. Such a move would have a number of
implications, in particular as regards issues related to the untying of aid.

The Comprehensive Development Framework and, more recently,
the Poverty
Reduction Strategy Papers, launched by the World Bank to provide a framework for
mainstreaming poverty reduction in national strategies for sustainable development
and donors’ policies, constitute appropriate frameworks for devising effective
complementarity and division of tasks.

In the areas where it has a comparative advantage and in the priority fields set out in
section 4.3., the Commission will take the initiative to coordinate the efforts of
Member States, in particular in the context of applying the sector programming
approach.

6.

IMPLEMENTATION

6.1.

Improving effectiveness through administrative reform

A review of the management of Community aid is currently being prepared along the
lines of the principles set up in the Reform White Paper adopted on 1 March. The
reforms under discussion foresee:

• reunification of project cycle management within a new delivery structure whose
capacity will be reinforced, and ensuring a clear link between the programming
exercise, budget procedures, evaluation and the feed back into the next cycle of
programming;

• a radical overhaul of the approach to programming assistance to reflect policy
objectives and priorities. Multi-annual programming of aid will be given greater

29

substance to ensure the right “policy-mix ” for each country or region in terms of
policy and Community instruments. It will take account or the policy dialogue
with beneficiary countries. The consistency and quality of the programming
exercises will be monitored by an interdepartmental Quality Support Group;

• more extensive devolution of project management to the Commission’s external
Delegations and, where conditions permit, the authorities in beneficiary countries.
The role of the Delegations of the Commission in the partner countries will be
adapted with the aim of maximising the use of this very large network and
benefiting from their experience on the ground.

6.2.

The need for improved policy orientation structures and comitology

The political control and guidance which Parliament and the Member States exercise
over Community development programmes should be improved. Concentrating these
functions on questions of strategy and coherence could render management more
the same time help concentrate development
effective and "lighter" and at
programmes on priority objectives.

The role of the Council Working Groups and Committees needs in particular to
evolve towards a concentration on policy guidelines, periodic review of individual
country strategies, sectoral strategies and issues requiring European coordination
upstream in the context of international discussions. This supposes, in the context of
a rolling programming system, that administrative rules are adapted with a view to
respecting the timeframes set for the completion of the strategic reviews17.

This also implies that less time would be devoted to the approval of individual
projects, while maintaining a completely transparent system of consultation on policy
questions and on regular ex-post reporting on progress in programme execution.

Finally, as part of the follow-up to this communication, the Commission will present
to Council a framework for Country Strategy Papers to become the main instrument
for guiding, managing and reviewing EC assistance programmes.

6.3.

Improving impact of development assistance

The nature of EC cooperation instruments has to be adapted to the needs and
capacity of the partner countries. The recent increase in the number of countries in
conflict or "politically fragile" countries requires the development of appropriate
intervention methods. This involves, on the one hand, ensuring the necessary
consistency between emergency aid, rehabilitation and development actions; and, on
the other hand, developing methods of direct support for the populations concerned
by paying particular attention to the most vulnerable population groups.

Increased selectivity should be applied in programme implementation and in the
allocation of resources among countries within each of the large regional financial
envelopes. This means that, starting with general financial programming, resources
are allocated not only according to need but also according to countries' performance
in terms of policy reforms and outcomes. Efforts undertaken in the area of

17

This issue has been addressed in a Council and Commission Declaration on the programming process,
attached to the new ACP-EC Partnership Agreement.

30

institutional
accountability in partner countries.

capacity-building should promote

a high degree of

financial

The EC has to continue its re-examination of its policy on aid conditionality, which
no longer solely applies to balance of payments support, but also to other
intervention methods. Within this framework, the conditions for disbursement will
no longer relate only to measures undertaken by governments, but rather to the
results obtained, on the basis of impact indicators approved beforehand. This would
make it possible to leave to the countries greater latitude on the ways and means
employed to obtain the desired impact and to give real meaning to the concept of
ownership. Fully coherent with the introduction of a new system of resource
allocation, this would thus involve passing from a "stop-go" disbursement system
("yes/no") towards a continuous one ("more/less"), linking the level of disbursement,
and not the totality, to the results obtained.

The fragmentation of development aid instruments has to be addressed. Each
programme has its own legal basis and its own procedures and allocation criteria (the
funds at the Community's disposal are spread among more than 60 different budget
headings, in addition to EDF resources, which remain outside the budget). This
fragmentation facilitates neither sound management nor coherence of development
programmes. Therefore, it would be desirable over time to harmonise the operation
of financing instruments, starting with the inclusion in the budget of the EDF
combined with a reduction and a regrouping of the existing budget headings around
some central topics.

The possibility of having a part of the management costs financed from the
operational appropriations allocated to cooperation programmes - as is the case for
other donors – should be considered in the context of the revision of the Financial
Regulation.

Based on the guidelines adopted by the Council of Ministers in 1998, relations
between the EC and Member State representatives in partner countries will have to
be re-examined with a view to ensuring closer links and to setting-up more effective
and regular coordination and cooperation mechanisms.

6.4.

Improving internal control

The inadequacy of current internal control methods, which are both too intrusive and
is mentioned in the majority of evaluation reports. The
not very effective,
multiplication of controls and the number of prior approvals needed reduces the
responsibility of the services concerned and results in their weakening.

As explained in the White Paper for Reform, during the transitional period until the
new Financial Regulation enters into force, the ex-ante visa will be carried out by
controllers to be gradually deconcentrated to operational Directorates-General. After
this period the ex-ante visa will be abolished and control integrated into the relevant
units of the operational Directorates General. The proximity of controllers to the
controlled actions, which deconcentration brings, will increase both the effectiveness
and the efficiency of financial management and control, while also ensuring a clearer
allocation of responsibility.

31

6.5.

Strengthening monitoring, evaluation and feedback

In the context of the Activity-Based Management (ABM) system established in the
White Paper
for Reform, monitoring and evaluation to properly assess the
effectiveness and costs of activities will provide essential feedback into the process
in order to better identify activities.

Monitoring systems including quantitative and qualitative performance indicators
which focus on results will be established. This will help to get real feedback from
the field. The use of monitoring indicators will be generalised, on the basis of
acquired experience and of the work carried out under the DAC in order to ensure a
link with international objectives.

The evaluation function should be strengthened in order to improve accountability,
support management and strengthen learning. For all the geographical areas where
the EC intervenes, the link between evaluations and the lessons to be drawn from
them for the formulation of development projects and programmes has to be made in
a more systematic fashion and in a harmonised way. It implies a direct feed-back
from the policy dialogue with beneficiaries and from delegations into the policy
formulation and programming at headquarters. It also implies that ex-ante evaluation,
both at programme and project
in order to
strengthen appraisal and programming.

level, should become systematic,

7.

CONCLUSION

To European Community should further improve the quality and impact of its
development policy by adapting its approach. At the policy and strategic level it
should:

• Better integrate the economic, trade and political aspects of its development

cooperation by:

–

–

–

Strengthening the links between trade and development, giving particular
attention to the poorest countries with a view to enhancing their smooth,
gradual and beneficial integration into the world economy;

Centring development policy on the aim of poverty reduction within the
general framework of the external relations of the Union;

Continue to make full use of other external policy instrument at
the
Community’s disposal, and in this context seek in a systematic way the highest
possible degree of coherence between development policy and other
Community policies with an impact on the developing countries such as trade,
agriculture, fisheries, migration, research and technological development and
environment;

• Increase the linkages between relief, rehabilitation and development, in particular

in the social areas essential for vulnerable populations;

• Adopt an integrated development

framework and apply common sectoral
development policy guidelines, based on the priority fields identified in this
document;

32

• Within the overall strategy, concentrate Community interventions in a more
limited number of priority areas and sectors, including an increased emphasis on
budgetary support and sector programming;

• Ensure better co-ordination among Member States’ bilateral development
programmes, within sectoral programmes and, to the greatest extent possible,
using the procedures of the beneficiary States;

• Ensure better coherence between Community policy positions vis-à-vis the
developing countries taken in the Bretton Woods institutions, WTO and various
United Nations and other norm and standard-setting agencies

• Improve the EU’s presence and influence in international

forums where

development policies are discussed.

At the level of implementation, the Community should apply the guiding principles
and increase effectiveness by:

• Drawing practical conclusions from the principles of partnership, participation

and ownership and applying international best practices

• Refining the criteria used in allocate financial resources to place more emphasis

on results, and to include appropriate conditionality;

• Proceeding with a decentralisation and deconcentration of tasks,

• Reunifying project cycle management, ensuring a clear

link between the
programming exercise, budget procedures, evaluation and the feed back into the
next cycle of programming.

• Improving monitoring and evaluation,

• Redefining the respective roles of the Commission, member states and the
European Parliament with respect to programming in order to make it more
efficient and effective;

The Commission intends to gradually strengthen its ability to provide credible
statistical reporting on efforts undertaken in these areas.

The Commission will
reports on the Community’s
development assistance, which should try to consolidate other requested reports, to
be submitted to the Council and Parliament with a view to:

start producing annual

–

–

–

Reporting on the implementation of agreed policies,

Adapting the policy priorities and objectives where necessary,

Reviewing the priorities for Community strategic activities.

The Council and the European Parliament are invited to work with the Commission
to take forward the ideas in this Communication.

* * *

33

34

ANNEX 1

Trends in the integration of developing countries into the world economy

(Trade in goods)

The first half of the 1980s saw a decline in the importance of trade for developing countries.
This was caused by the debt crisis (leading to decreasing imports) and the ensuing
stabilisation programs that temporarily suppressed economic activity. Since 1985 trade grew
three times faster than the previous decade. Developing countries now count for nearly 35 per
cent of world exports and 31 per cent of world imports. However, middle income countries
drive these aggregate figures upwards. Low-income countries still suffer from the debt crisis
and show trade trends that are flat and even decreasing in some cases.

Trade as share of GDP (%)

50

40

30

20

10

0

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

:High income

:Low income

:Middle income

Source: World Bank, 1999d.

Developing Countries’ Share of World Trade

Japan
6.4%
(253)

World Imports

Other
23.5%
(934)

EU
17.9%
(712)

DEV
30.9%
(1229)

US
21.2%
(843)

Japan
9.4%
(351)

World Export

Other
21.5%
(799)

EU
19.7%
(732)

DEV
33.0%
(1227)

USA
16.3%
(607)

(%(Ecu bn) intra-EU trade excluded)

35

ANNEX 2

EC AID IN FIGURES

TOTAL AID VOLUME 1986-1998

€

EC aid has increased considerably over the last decade from a total of
€
1988, all regions accounted for, to
aid to developing countries and

1.8 billion of aid to other countries.

8.6 billion in 1998. This amount represents

€

4.2 billion committed in
6.8 billion of

€

REGIONAL DISTRIBUTION OF EC AID 1988-1998

1998
€
m)
(

%

1998 as %
of total aid

2983

43.6

617

485

9.0

7.1

1368

20.0

9.0

3.6

7.8

100

614

243

534

6843

1771

8614

34.7

7.2

5.6

15.9

7.1

2.8

6.2

79.4

100

Source: ODI, 1999

€
(

1988
million)

%

1990
€
m)
(

ACP (incl SA)

2899

69.4

1393

%

52.1

11.8

8.3

14.4

4.1

-

9.3

317

222

386

110

-

249

226

159

309

1

-

5.4

3.8

7.4

0.0

-

Asia

Latin America

Mediterranean

CEECs

NIS

Not
aid

attributable

582

13.9

TOTAL ODA

4176

100

2678

100

Pm Official
assistance*

Grand Total

20

4196

578

3256

*Aid to countries in transition (DAC definitions)

36

ANNEX 3

Official Development Assistance by categories of beneficiary countries

ODA to LLDC

ODA to other LIC

ODA to LMIC

ODA to UMIC

ODA to HIC

1986/87

1996/97

1986/87

1996/97

1986/87

1996/97

1986/87

1996/97

1986/87

1996/97

Germany

Austria

Belgium

Denmark

Spain

Finland

France

Ireland

Italy

Luxembourg

The Netherlands

Portugal

United Kingdom

Sweden

EU member states

Community aid

Total DAC

37,4

21,8

64,7

49,6

39,1

56,9

35,3

67,5

60,4

-

42,2

-

44,9

54,0

44,3

51,3

38,1

29,6

21,5

43,7

47,4

21,2

41,0

27,9

66,2

37,6

37,1

39,4

91,6

38,4

41,6

34,2

33,6

31,5

26,1

14,0

19,6

33,9

15,5

30,0

26,3

23,7

23,9

-

29,5

-

34,8

35,8

27,6

24,1

26,9

36,3

35,9

23,5

26,8

26,6

34,8

26,8

17,2

33,2

26,0

27,0

2,8

37,1

28,1

30,6

20,2

31,6

29,4

62,0

13,1

14,7

42,4

11,4

17,0

7,7

14,0

-

20,3

-

10,5

8,7

18,8

22,1

27,9

28,4

35,7

26,0

17,8

45,8

20,3

23,5

9,4

19,3

26,1

21,6

3,9

17,2

24,3

24,2

38,3

29.7

6,8

1,1

1,5

1,8

2,9

1,6

6,8

1,0

1,7

-

1,9

-

8,1

1,5

4,7

1,8

4,2

5,4

5,9

6,8

8,0

6,4

3,9

6,7

7,2

9,8

10,7

5,7

1,6

7,2

6,0

6,5

7,5

5,1

0,3

1,1

0,1

0,1

0,1

0,1

0.3

1,0

0,0

0,0

0,0

0,0

14,7

15,0

0,0

0,0

-

6,0

-

1,6

0,1

4,6

-

2,9

0,0

0,1

0,1

6,3

-

0,1

0,0

4,6

-

2,1

37

ANNEX 4

EC aid – sectoral allocation

Commitments

1986
(million

€

)

1986
(% of total)

1998
(million

€

)

1998
(% of total)

Programme aid (struct adj, Stabex, Sysmin)

Food aid

Humanitarian aid

Aid through NGOs

Natural resources

Other productive sectors

Econ infrastructure and services

Of which transport & com

Of which energy

Of which banking & finance

Social infrastructure & services

Of which education

Health & population

Water supply

Other social

Governance & civil society

Crosscutting

Of which environment

Gender

Rural devt

Other

Not attributable by sector

TOTAL

159

655

80

49

163

214

249

130

112

8

86

13

24

49

1

3

89

4

0

7

78

796

2553

6.2

26.0

3.1

1.9

6.4

8.4

9.8

5.1

4.4

0.3

3.4

0.5

0.9

1.9

-

0.1

3.5

0.1

0

0.3

3.1

31.2

100

974

690

936

204

437

592

1850

928

434

488

1291

450

313

293

235

525

481

146

13

215

107

632

11.3

8.0

10.9

2.4

5.1

6.9

21.5

10.8

5.0

5.7

15.0

5.2

3.6

3.4

2.7

6.1

5.6

1.7

0.2

2.5

1.2

7.3

8614

100

Source: Overseas Development Institute, The European Community External Cooperation Programmes, 1999.

38

ANNEX 4A

EC aid -sectoral allocation 1986-1998 (Commitments)

2000

1800

1600

1400

€

1200

n
o

i
l
l
i

m

1000

800

600

400

200

0

aid

Programme

1986 (million

1998 (million

€
)
€
)

sector
by

Crosscutting
Unallocable

aid

Food

Humanitarian

aid

NGOs
Aidthrough

sectors
Naturalresources
Otherproductive
Econinfrastructure

services
and

Socialinfrastructure

&

services
Governance

civilsociety

&

39

ANNEX 4B

EC aid-sectoral allocation 1986 (Commitments)

EC aid-sectoral allocation 1998 (Commitments)

Programme aid
6%

Food aid
27%

Humanitarian aid
3%

Aid through NGOs
2%

Natural resources
6%

Other productive
sectors
8%

Unallocable by sector
32%

Crosscutting
3%

Governance & civil
society
0,1%

Social infrastructure &
services
3%

Econ infrastructure and
services
10%

Unallocable by sector
7%

Crosscutting
6%

Governance & civil
society
6%

Social infrastructure &
services
15%

Programme aid
11%

Food aid
8%

Humanitarian aid
11%

Aid through NGOs
2%

Natural resources
5%

Econ infrastructure and
services
22%

Other productive
sectors
7%

40

ANNEX 5

PERSONNEL IN EU BILATERAL AID AGENCIES,
EUROPEAN COMMISSION AND WORK BANK

Country

1995

n° Staff

Bilat. Aid (in $ mil) Staff unit for 10 mil $

Austria

Belgium

Denmark

Finland

France

Germany

Ireland

Italy

Netherlands

Portugal

Spain

UK

CE

(1997) [*]

34

360

400

159

3073

3904

45

530

540

157

760

1077

2534

560

514

895

220

6429

4815

88

806

2245

179

816

1670

8658

0.61

7.00

4.47

7.23

4.78

8.11

5.11

6.58

2.41

8.77

9.31

6.45

2.90

[*] C E/ODI

Source: Comparative Overview of EU Aid Agencies, ODI/EC DPM - Nov. 1995 plus DAC Reports

WORLD BANK - 1995 DATA

4.26

41

ANNEX 5A

Personnel in EU Bilateral Aid Agencies, European Commission and World Bank

$
M
0
1
r
e
p
f
f
a
t
s
f
o
r
e
b
m
u
n

10

9

8

7

6

5

4

3

2

1

0

Austria

Netherlands

CE(1997)

Denmark

France

Irland

UK

Italy

Belgium

Finland

Germany

Portugal

Spain

42

ANNEX 6

Acronyms

ACP

ASEAN

CEECs

DAC

EDF

EIB

African, Caribbean and Pacific States

Association of South East Asian Nations

Central and Eastern European Countries

Development Assistance Committee

European Development Fund

European Investment Bank

EuroMed

Euro-Mediterranean Partnership

GNP/cap

Gross National Product per capita

G 7/8

HIPCs

IFIs

ILO

IMF

Group of 7/8

Heavily Indebted Poor Countries

International Financial Institutions

International Labour Organisation

International Monetary Fund

LDCs

Least-developed countries

LIC, LMIC,
UMIC, HIC

Low-Income, Lower-middle Income, Upper middle Income, High Income
Countries

Mercosur

Mercado Común del Sur (Latin American regional organisation)

MFN

NGO

NIS

OECD

REPA

SA

SAARC

Stabex

Sysmin

UN

UNDP

USD

Most Favourite Nations

Non-governmental organisation

New Independent States of the former Soviet Union

Organisation for Economic Cooperation and Development

Regional Economic Partnership Agreement

South Africa

South Asian Association for Regional cooperation

Special Lomé instrument to STABilise EXport earnings from agriculture
commodities

Special financing facility for safeguarding mining production (Lomé)

United Nations

United Nations Development Programme

US Dollar

43

WTO

World Trade Organisation

ANNEX 7

DAC list of aid recipients – Part I: Developing countries and territories

(Official development Assistance)

Upper middle
income
countries and
territories (per
capita GNP
$3036-$9385 in
1995)
Brazil
Chile

High income
countries and
territories (per
capita GNP
>$9385 in
1995)

Aruba
French
Polynesia

Cook Islands
Croatia

Gibraltar
Korea, Rep Of

Gabon
Malaysia

Mauritius
Mayotte

Mexico

Macao
Netherlands
Antilles
New Caledonia
Northern
Marianas
Virgin Islands
(UK)

Swaziland

Nauru

Least
developed
countries

Other low
income
countries (per
capita
GNP<$765 in
1995)

Lower middle income countries
and territories (per capita GNP
$766-$3035 in 1995)

Afghanistan
Angola

Albania
Armenia

Algeria
Belize

Bangladesh
Benin

Bhutan
Burkina Faso

Azerbaijan
Bosnia and
Herzegovina
Cameroon
China

Bolivia
Botswana

Colombia
Costa Rica

Burundi
Cambodia

Congo, Rep
Côte d'Ivoire

Cuba
Dominica

Cape Verde

Georgia

Ghana

Guyana
Honduras
India

Dominican
Republic
East Timor

Ecuador
Egypt
El Salvador

Kenya
Kyrgyz Rep.

Fiji
Grenada

Central African
Republic
Chad
Comoros
Congo, Dem.
Rep.
Djibouti
Equatorial
Guinea
Eritrea

Palau Islands
Palestinian
administered
areas
Panama
Papua New
Guinea
Paraguay
Peru

Philippines
St Vincent &
Grenadines
Suriname

Syria
Thailand
Tokelau

Tonga
Tunisia

Mongolia

Guatemala

Turkmenistan

Ethiopia
Gambia
Guinea

Nicaragua
Nigeria
Pakistan

Indonesia
Iran
Iraq

Guinea-Bissau

Senegal

Jamaica

Haiti
Kiribati
Laos

Lesotho
Liberia

Sri Lanka
Tajikistan
Vietnam

Zimbabwe

Jordan
Kazakhstan
Korean
Democratic
Republic of
Lebanon
Macedonia
(former
Yugoslav

Uzbekistan
Venezuela
Wallis and
Futuna
Yugoslavia,
Federal
Republic

44

South Africa
St Lucia
Trinidad and
Tobago
Uruguay
Anguilla

Antigua and
Barbuda
Argentina
Bahrain
Barbados

Libya

Malta
Montserrat
Oman

Saudi Arabia
Seychelles

Republic)
Marshall Islands
Micronesia
Federated States
Moldova

Morocco

Namibia
Niue

Slovenia
St Helena

St Kitts and
Nevis
Turks and
Caicos Islands

Madagascar
Malawi

Maldives

Mali

Mauritania
Mozambique
Myanmar
Nepal
Niger
Rwanda
Samoa
Sao Tome and
Principe
Sierra Leone
Solomon
Islands
Somalia
Sudan
Tanzania
Togo
Tuvalu
Uganda
Vanuatu
Yemen
Zambia

Source: DAC, March 2000.

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