Communication from the Commission to the Council - Preparation of the International Conference on Financing for Development (Monterrey, Mexico, 18-22 March 2002)
Date: 2002-02-13
Institutions: European Commission
Subjects: EU aid, developing countries, development aid, financing of aid, international conference, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 13.2.2002
COM(2002)87 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Preparation of the International Conference on Financing for Development (Monterrey,
Mexico, 18-22 March 2002)

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Preparation of the International Conference on Financing for Development (Monterrey,
Mexico, 18-22 March 2002)

The Conclusions of the Development Council adopted on 8th November 2001 confirmed the

willingness of the European Union to take positive initiatives in view of securing a successful

outcome  of  the  International  Conference  on  Financing  for  Development  to  be  held  in

Monterrey, Mexico, from 18 to 22 March 2002.

The expectations on the contribution of the European Union to the Monterrey Conference are

very high. This not least as this Conference will be followed six months later by the “World

Summit for Sustainable Development”,  which is  planned  to be  held  in Johannesburg,  South
Africa from 26 August to 4 September 2002. The Council has on several occasions confirmed

its  willingness  to  seek  to  achieve  a  “global  deal”  at  the  World  Summit  on  Sustainable

Development in Johannesburg. The Commission will submit to the Council a Communication

on the External Dimension of Sustainable Development, which should give a clear picture of

what a “Global Deal” could encompass.

The European Summits of Gothenburg and Laeken have reconfirmed the commitment of the

EU to the 0.7% GNP target for Official Development Assistance (ODA). This is an important

element  in  the  discussion  on  how  the  international  community  can  make  sure  that  the

Millennium  Declaration  Goals  and  the  other  internationally  agreed  development  targets  are

achieved.

The Development Council asked the Commission to clarify a number of issues and explore,

through a dialogue, potential initiatives to be implemented by the Member States in particular

on “the steps to be undertaken by each of them to reach the 0.7% target including the question

of establishing specific timetables”. In addition to the volume of aid, particular mention was

also made of the  effectiveness of  aid, including the untying  of  aid,  global  public  goods and

innovative sources of financing. These issues have also  been  addressed within the Study  on

Globalisation and Development that the Commission will submit to the Council.

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In  November  and  December  2001,  Mr  Richelle,  Director  General  for  Development,  carried
out  bilateral  talks  with  the  15  Member  States.  This  led  to  the  elaboration  of  a  report1  that

summarises  the  possible  positive  initiatives,  which  have  emerged  as  a  result  of  those

discussions.  These possibilities focus on how the financial  gap  between  the  current  level  of

ODA  and  the  volume  necessary  to  meet  the  Millennium  Declaration  Goals  and  the  other

internationally agreed development goals can be closed.

There are of course different ways to raise the necessary finances. One element necessary for

our  discussions  is  of  course  a  better  calculation  of  the  effective  cost  of  the  Millennium

Development  Goals  to  be  met  in  2015.  Some  recent  calculations  made  by  the  World  Bank

have  helped  the  international  community  in  starting  the  debate  on  how  to  define  the  effort

needed in financial terms. As the World Bank is doing more work on the needs assessment,

especially  in  some  selected  areas,  defining  the  needs  down  to  the  country  level,  it  is  quite

clear that additional resources are needed and they are needed as of now, since we have only

about 13 years.

It will also remain the responsibility of each and every country to set the right priorities both

in political and  financial  terms.  It is  a  reality  however  that  there  is  a  clear  gap  between  the

resources  needed  to  reach  the  Millennium  Development  Goals  and  the  other  internationally

agreed  development  goals  in  the  time  agreed  and  the  means  currently  available.  The  EU

should concentrate on the possibilities to contribute from its side without losing sight on the

implementation  of  good  governance  and  good  management  of  public  expenditures  by  the

recipient countries.

The results of the preparatory process for the Conference have created a positive momentum

which should be used by the EU to take decisions on positive initiatives as a contribution to a

successful  Conference.  The  following  recommendations  will  be  submitted  to  the  General

Affairs Council before the Monterrey Conference:

(cid:1)  The EU Member States could individually and  collectively commit to a sizeable increase

in ODA volume. Such a commitment could include as a minimum that by 2006 all those

States that have not yet reached the 0.7 target, would at least reach the EU average for the

year  2000  (0.33  %  ODA/GNI).  A  number  of  Member  States  are  already  performing  far

above the present EU average, but still need to make further efforts towards the 0.7 target.

1 Document SEC( 2002)154

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An increase by  those countries below 0.33% would imply that the EU average would go

up to at least 0.39% in 2006 at the latest. This figure is in line with the global average that

would  be  required  to  meet  the  World  Bank  estimate  of  the  additional  need  of  $50bn  to

meet  the  Millennium  Development  Goals  and  would  therefore  put  the  EU  in  a  strong

position  in  the  debate  on  burden  sharing.    By  a  similar  process,  the  new  0.39%  average

could  be  used  as  a  minimum  benchmark  for  all  Member  States  to  reach  by  2010  at  the

latest. By this iterative process, the EU could achieve a sequence of realistic milestones on

the way to reach the 0.7 target. The EU could make real and practical progress in the area

of  quality  and  effectiveness  of  aid,  in  particular  by  committing  itself  to  make  concrete

steps  on  harmonisation  of  minimum  standards  for  policies  and  procedures  before  2003,

both at EC and Member States level in line with internationally agreed best practice.

(cid:1)  The  EU,  according  to  its  commitment  to  fully  implement  the  DAC  recommendation  on

untying of aid to Least Developed Countries, could fully untie all bilateral aid. If non-EU

members  of  OECD  would  not  participate  in  this  endeavour,  the  Member  States  should

decide  to  fully  untie  bilateral  aid  amongst  the  15  Member  States  and  vis-à-vis  all  their

partners in the developing world, while maintaining the existing system of price preference

of the EU-ACP framework.

(cid:1)  As part of  our  efforts to enable developing  countries to exploit trading opportunities,  the

EU  could  commit  to  a  significant  increase  in  trade  related  technical  assistance,  capacity

building and in measures addressing supply-side constraints to a set amount over a three-

year period.

(cid:1)  The  EU  could  agree  to  a  participatory  process  designed  to  lead  to  the  identification  of

relevant Global Public Goods.

(cid:1)  The  EU  will  continue  its  reflection  on  innovative  sources  of  financing.  As  well  as

contributing to the overall resources for development, new sources of financing could also

help with the provision of GPGs, on the basis of the principle of additionality in order to

avoid the diversion of existing ODA flows from traditional development assistance.

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