Annual Report 2001 from the Commission to the Council and the European Parliament on the EC development policy and the implementation of the external assistance
Date: 2002-09-12
Institutions: European Commission
Subjects: EU programme, aid system, development aid, development policy, report

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.09.2002
COM(2002) 490 final

ANNUAL REPORT 2001 FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

ON THE EC DEVELOPMENT POLICY AND THE IMPLEMENTATION OF THE
EXTERNAL ASSISTANCE

TABLE OF CONTENTS

FOREWORD by the Board of EuropeAid Co-operation Office .............................................. 4

Introduction ........................................................................................................................... 6

1.

1.1.

1.2.

1.3.

1.4.

1.5.

1.6.

2.

2.1.

2.2.

2.3.

2.4.

2.5.

2.6.

3.

3.1.

3.2.

3.3.

3.4.

3.5.

3.6.

3.7.

4.

4.1.

4.2.

4.3.

4.4.

4.5.

The External Assistance management reform, a year of challenges........................... 8

The Reform process.................................................................................................. 8

Improving Programming........................................................................................... 9

Evaluation .............................................................................................................. 11

Results-oriented Monitoring ................................................................................... 11

Deconcentration of Project Management to Delegations ......................................... 13

Coherence, Co-ordination and Complementarity..................................................... 15

PROGRESS TOWARDS THE DEVELOPMENT GOALS.................................... 20

The Millennium Development Goals ...................................................................... 20

Poverty reduction ................................................................................................... 24

Measuring Effectiveness Through Results Indicators.............................................. 26

Sectoral Targeting in the Programming Process...................................................... 28

Policy Initiatives in EC Priority Areas .................................................................... 30

Mainstreaming the Cross-cutting Themes ............................................................... 37

IMPLEMENTATION : HORIZONTAL INSTRUMENTS..................................... 44

European initiative for democracy and Human Rights ............................................ 44

Food Security ......................................................................................................... 49

Health, AIDS and Population.................................................................................. 53

Fighting against drugs ............................................................................................ 55

Linking relief, rehabilitation and development........................................................ 56

Environment........................................................................................................... 59

Co-financing NGOs................................................................................................ 61

Implementation: The Regions................................................................................. 65

Countries covered by the EC External Assistance ................................................... 65

South-Eastern Europe: The Balkans........................................................................ 67

Eastern Europe and Central Asia ............................................................................ 90

Southern Mediterranean and Middle East ............................................................. 107

Africa, Caribbean and Pacific (ACP) .................................................................... 125

2

4.6.

4.7.

5.

5.1.

5.2.

5.3.

5.4.

6.

7.

7.1.

7.2.

7.3.

7.4.

7.5.

7.6.

7.7.

7.8.

ASIA.................................................................................................................... 159

Latin America....................................................................................................... 183

Feature : Results-oriented Approach to Development ........................................... 206

Country Performance and Project Performance..................................................... 206

Monitoring Results: Country Performance............................................................ 207

Project Results: Results-oriented Monitoring ........................................................ 215

Conclusion ........................................................................................................... 221

Financial tables..................................................................................................... 223

Annexes ............................................................................................................... 230

Harmonisation of contract and financial procedures.............................................. 230

External Aid and “RAL”....................................................................................... 231

Evaluation Activities ............................................................................................ 237

Audits................................................................................................................... 241

Innovation ............................................................................................................ 242

Relations with other International Donors............................................................. 244

Transparency and visibility................................................................................... 244

EC Assistance not covered by the Report ............................................................. 245

3

FOREWORD

2001 was a year of fundamental reform for the management of EC external assistance with
the aim of improving the speed, quality, impact and visibility of projects and programmes
throughout the world.

On 1 January 2001, the EuropeAid Co-operation Office was created bringing together in a
single organisation responsibility for managing the whole life-cycle of projects from
identification to evaluation, while responsibility for programming was consolidated within
DG Development and DG Relex. A new Inter-service Quality Support Group was set up to
contribute to improvements in programming and the Commission presented 112 new Country
Strategy Papers, establishing coherent multi-annual frameworks for defining relations with
third countries.

Inevitably for a reform of this scale, the full effects will take time. However, there are already
some positive results, for example in terms of improved budget execution. The recent meeting
of the OECD Development Assistance Committee (DAC) has recognised these efforts: “ The
European Community has substantially improved its development policies and strategies
since the last review in 1998…” This statement is part of the summing up of the DAC
findings. It encourages the Commission to follow up the pace of reform.

With respect to development policy, the EC made significant progress in strengthening the
poverty focus of its programmes, taking concrete measures to support the achievement of the
Millennium Development Goals. This included the adoption of an ambitious action
programme for EC development policy. Within this agenda, the Commission also adopted a
far-reaching Plan of Action on fighting poverty-related diseases in the developing world.

Coherence between development policy and other policies was also strengthened. The
European Council
in Gothenburg agreed on a strategy to integrate environment and
sustainable development into EC development policy. And the launch of a new trade round at
Doha emphasised the links between trade and development.

The 2001 Annual Report responds to requests from both the Council and the European
Parliament that it should be comprehensive, based on solid data and results-oriented. It
represents a positive step in this direction that will be further developed in the future.

This Report provides information on programmes implemented and assesses achievements on
the ground : from promotion of Human Rights in the Balkans to water management in Asia ;
from health in Africa to training and education in Latin America; from rapid mobilisation in
Afghanistan to institution building in Russia.

As a new element this Annual Report contains a feature article. The Commission, as most
other donors, is moving increasingly towards a more result oriented development assistance.
The Feature describes work in progress, and presents “where we are” with developing
effective and reliable ways of measuring the impact of our external assistance.

We still face huge challenges. But the objectives are clear – improving the performance of EC
assistance and contributing to security and prosperity for all.

Chris Patten Member
Chairman of the Board of the EuropeAid Co-operation Office

the Commission

responsible

of

for

External Relations

4

Poul Nielson Member
for
Chief Executive Officer of the Board of the EuropeAid Co-operation Office

Commission

responsible

the

of

Development

Günther Verheugen Member
Member of the Board of the EuropeAid Co-operation Office

the Commission

of

Pascal
Commission
Member of the Board of the EuropeAid Co-operation Office

Member

Lamy

the

of

responsible

for

Enlargement

responsible

for

Trade

Pedro Solbes Mira Member of the Commission responsible for Economy and Finances
Member of the Board of the EuropeAid Co-operation office

5

INTRODUCTION

This report summarises the first year of EuropeAid Co-operation Office’s implementation of
EC external assistance activities1. Its coverage is broad , from overall progress towards the
Millennium Development Goals to individual examples of how EC money has been spent and
what it has achieved. The EU is the largest donor of external assistance in the world, and EC
spending makes up roughly 10 % of world ODA. This report accounts for the
9.7 billion
committed and

7.7 billion paid by the EC in 2001.

€

€

Vital to the success of these activities is the reform of the management of external assistance.
This report
itself is a key output of the reform – bringing greater transparency and
accountability to EC policy and actions in this area. By providing a consolidated account of
all geographical and horizontal programmes, this report replaces a number of programme-
specific reports that have been published in the past.

Progress made in priority areas for reform – improving programming, reunifying the project
cycle under one roof and increasing responsibility for delegations on the ground – is detailed
in Chapter 1. The reform process, launched in May 2000, still has a way to go in achieving its
objectives, but improvements are already evident. For example, for the first time since 1990,
there was a reduction in the level of outstanding commitments waiting to be paid.

first

section also underlines

This
the importance of coherence, co-ordination and
complementarity across EC policies designed to promote development, poverty reduction and
integration into the world economy. The challenge of coherence is to find the right mix of
policies for each region and country using development assistance, humanitarian assistance,
the Common Foreign and Security Policy, trade-related technical assistance, Human Rights,
environment and so on. Improved programming tools are designed to ensure a coherent
overall framework. Co-ordination with other donors and ensuring complementarity of policies
and activities are also essential to effective external assistance. The report describes the steps
the EC has taken in this area with Member States, with the UN, with the Bretton Woods
institutions and with other donors.

The Millennium Development Goals, agreed by the international community in September
2000, provide a common framework for focusing and measuring development progress.
Chapter 2 of this report outlines global achievements towards these goals, and places EC
external assistance activities in the context of this framework. It focuses on EC priority areas
such as health and education and on activities designed to ensure that common themes like
Human Rights and the environment are duly incorporated into projects and programmes
across the board.

The instruments designed to ensure that horizontal policy priorities such as food security and
the fightagainst drugs, as well as those mentioned above, are translated into activities in these
areas, are set out in chapter 3. Details are given on individual projects carried out in 2001, as
well as budget allocations and prioritisation by region.

1

Assistance to candidate countries is not covered by this report. For details of the Phare, Ispa and Sapard
programmes, please see their annual
following addresses:
http://www.europa.eu.int/comm/enlargement/pas/phare/publist.htm
http://www.inforegio.cec.eu.int/wbpro/ispa/ispa_en.htm
http://www.europa.eu.int/comm/enlargement/pas/sapard.htm
For humanitarian Aid see ECHO’s annual report on:
http://europa.eu.int/comm/echo/en/publicat/publications.htm

reports, which are published under

the

6

EC regional programmes are covered in Chapter 4. Activities in the Balkans, Eastern Europe
and Central Asia, the Mediterranean, African, Caribbean and Pacific countries, Asia and Latin
America are presented under common thematic headings reflecting development priorities in
EC spending. This means that comparison can be made easily between regions on for
example rural development or transport. ECHO’s activities as well as EIB loans can also be
found in this Chapter.

Chapter 5 discusses a results-oriented approach to development. Based upon Country Strategy
it explores criteria for monitoring country performance. A pilot
Papers and indicators,
exercise on a results-oriented monitoring system of development projects is also described.

A full set of financial tables makes up Chapter 6. These include a breakdown of figures into
the categories defined by the OECD’s Development Assistance Committee.

the annexes give a detailed account of activities related to the reform of the
Finally,
management of EC external assistance.
It sets out progress in harmonising financial
procedures, both internally and with other institutions. It also gives details activities in 2001
in clearing the backlog of payments, audit activities, the activities of EuropeAid’s Innovation
Unit, relations with other organisations and transparency and visibility.

The Commission is committed to seeing through the reform, allowing it to take root and
ensuring that it meets its objectives. This report marks out the steps made in 2001 towards this
end.

7

1.

THE EXTERNAL ASSISTANCE MANAGEMENT REFORM, A YEAR OF CHALLENGES

This chapter highlights progress during 2001 with the reform of the management of EC
external assistance, launched in May 2000. The management reform process is a natural point
of departure for the annual report, since it affects all aspects of the EC’s external assistance,
which are described in more detail in the following chapters. The reform of the EC’s
development policy,
launched in November 2000 and taking place in parallel with the
management reform, is covered in chapter 2.

1.1.

The Reform process

When the present Commission took up office in September 1999, it was confronted
with an alarming situation regarding the implementation of aid to third countries. The
relevance and quality of Community programmes were the subject of increasingly
explicit criticism, and the Commission’s image and credibility were suffering a
serious decline in the eyes of the beneficiary states, the Member States and its
partners among the multilateral institutions.

On 16 May 2000,
management of external assistance2, the principal objectives of which are to:

the Commission launched a programme of reform of the

• Improve the quality of projects and programmes;

• Reduce the time needed for implementation;

• Ensure that procedures for financial,

technical and contractual management

conform to the highest international standards; and

• Increase the impact and visibility of the European Union’s (EU’s) external

assistance.

The reform process has been accompanied by the search for an improved match
between political priorities and budgetary allocations. At the informal Evian
General Affairs Council, 2-3 September 2000, and the General Affairs Council
(GAC) meeting on 9 October 2000, EU Foreign Ministers underlined that
the
coherence of the EU’s external actions should be reinforced. They also stressed in
the General Affairs Council of January 2001 that the objectives of EC actions should
be translated into concrete commitments, and that the synergy between EC actions
and those of Member States should be improved in order to make the EU’s external
actions more effective.

A number of key instruments have been identified to achieve the objectives of
reform. New planning and programming tools for the EC’s development co-
operation, in particular country strategy papers, have been drawn up and approved
during 2001. These are the main strategic management instrument for EC aid (see
section 1.2. of this chapter). Management of evaluations has been improved. Among
other things, impartiality has been reinforced and lessons from evaluations will be

2

SEC(2000)814 of 16 May 2000 – Communication from the ‘Relex’ Commissioners: Mr Patten (External
Relations), Mr Nielson (Development), Mr Verheugen (Enlargement), Mr Lamy (Trade) and Mr Solbes Mira
(Economic & Monetary Affairs)

8

fed systematically into the decision-making process, as well as into the design and
implementation of projects and programmes (Section 1.3.). Linked to improved
evaluations is the development of a results oriented monitoring system for projects
and programmes (section 1.4.). This is a first step, but a very important part of the
reform. The Commission has also embarked on devolution of project and programme
management to the Commission Delegations (section 1.5.). 18 of the 21 delegations
selected for the first phase are now deconcentrated. Preparation for the second wave
(26 delegations) is well advanced, and most of these should be operating in a
deconcentrated way early in the second semester of 2002. Finally, Section 1.6
explains how the Commission has taken on the challenge of improving coherence,
coordination, and complementarity, the ‘3Cs’. These issues are very much linked to
the country strategy paper process.

1.2.

Improving Programming

1.2.1. Country/Regional Strategy Papers

Programming follows priorities set in Country/Regional Strategy Papers (CSP/RSP)
which set out a ‘strategic framework’ for the EC’s co-operation priorities in a given
country or region3. This is the first time that the Commission has set up a coherent
framework for its relations with third countries covering both development assistance
and other essential relevant Community policies (the ‘policy mix’).

In 2001, the Commission began the process of establishing Country and Regional
Strategy Papers for partners in all regions covered by the different regulations: for
ACP (Africa, Caribbean and Pacific), ALA (Asia and Latin America), CARDS (for
the Balkans), MEDA (for Mediterranean), TACIS (for Eastern Europe and Central
Asia). These strategies have been developed in collaboration with national
governments, Member States, other bilateral multilateral donors and, wherever
possible, with representatives of civil society4. Over 110 country and regional
strategies are either completed or well advanced in the preparation process. It is
estimated that all will be finalised before the end of 2002, and published on the
websites:http://europa.eu.int/comm/external_relations/sp/index.htmand
http://europa.eu.int/comm/development/strat_papers/index_fr.htm

1.2.2.

The iQSG

As part of the reform process, an inter-service Quality Support Group (iQSG) was
established in January 2001. Its main task has been to assess draft Country and
Regional Strategy Papers and Indicative Programmes to ensure a consistently high
quality. In order to achieve maximum impact, the iQSG intervenes at a relatively
early stage in the programming process. It has so far screened over 110 programming
documents. The iQSG has also drafted Guidelines on the implementation of the
Common Framework for Country Strategy Papers and organised four training
seminars on programming. Finally, the iQSG has established a website on the
Commission’s intranet to improve the internal communication between all those
involved in the programming process.

3

4

SEC(2000)814, SEC(2000)1049 of 15 June 2000, and Conclusions of 10 November 2000 Development
Council http:/www.consilium.eu.int/Newsroom/newmain.asp?lang=1
Consultation of Civil Society is an obligation under article 2 of the Cotonou Agreement.

9

The main yardstick for iQSG assessment has been the Common Framework for
Country Strategy Papers adopted by the Council. In addition to commenting on
format, style, presentation and general readability, the iQSG has endeavoured to
focus on certain core aspects:

• The quality of the assessment of the potential for development, the needs and the

constraints thwarting the development process;

• The coherence between the analysis and the proposed Community response
strategy, checking whether EC interventions correspond to key medium term
development challenges;

• The poverty focus of the proposed strategy as well as coherence with other EC

policy objectives;

• The focus / degree of concentration; The degree of complementarity between EC

support and that of other donors, in particular EU Member States;

• The conditions under which support is granted;

• The definition of indicators designed to monitor country performance towards

economic growth and poverty reduction;

• The extent to which all external assistance provided by the Community to the
country concerned is covered (coherence between country allocation and
horizontal budget lines);

• The consideration given to coherence between development policy and other EC

policies relevant for the partner country / region (‘policy mix’).

Based on the findings of the iQSG, the Commission considers that a qualitative leap
in EC programming of external assistance has been achieved. The iQSG found that,
overall, the documents it considered answered most of the requirements set out in the
CSP Framework. Main weaknesses were highlighted to those involved in drafting the
papers, so that they could make necessary changes.

There is still room for further improvement in programming . With this is mind, the
Commission will undertake an analysis of the CSP process and will present its
findings in a report to the Development Council in November 2002. This report will
also cover proposals for further improvements in the programming process in
advance of the next review of Country Strategy Papers.

1.2.3.

Reunification of the Project Cycle and Creation of the EuropeAid Co-operation
Office

On 1st January 2001, the geographic Directorates-General (DG External Relations
and DG Development) took charge of programming and strategy, whilst the new
EuropeAid Co-operation Office (EuropeAid) took on responsibility for the remainder
of the project cycle (from identification of projects to ex-post evaluation). This
reorganisation has led to a corresponding transfer of staff and responsibilities. An
Inter-service Agreement was signed in June 2001, which clarifies the roles and
responsibilities of the three Directorates General most closely involved in the
management of external assistance.

10

1.2.4.

Improving Financial Management and Performance

The first effects of the management reform process, in terms of procedures and
financial management and performance, became visible during 2001. These
included:

• An improvement

in the overall budget execution performance,

including an

increase of 20% in payments compared to 2000.

• The profile of budgetary commitments showed a more even distribution across the
financial year (52 % of budget executed during the last quarter compared to an
average of 68 % over the period 1998 – 2000)

• For the first time since 1990, there was a reduction in the level of outstanding
commitments remaining to be paid (RAL). This reduction was 3 %. The number
of years of payments necessary to clear up the RAL decreased from 4.12 years at
the end of 2000 to 3.66 years at the end of 2001.

• A reduction in the number of individual budget-lines (14 %), compared to 2000;

• The implementation of new, simplified contracting procedures (which reduced in
number from 46 to 8) has been speeded-up through the production of a practical
guide; and

• The functions of 48 Technical Assistance Offices dismantled during 2001 were

internalised.

1.3.

Evaluation

As part of the reform , evaluation of external assistance is being strengthened and
better integrated into decision-making . The impartiality of the evaluation function
has also been assured, as requested by the OECD/DAC. A clear separation is
maintained between the evaluation service, which produces thematic, sectoral and
‘geographical’ (countries and regions) evaluations, and the operational and policy
services responsible for considering them and taking appropriate action responding
to the findings and recommendations.

1.3.1.

The 2001 Evaluation Programme

The Evaluation Unit’s work programme for 2001 was adopted by the EuropeAid Co-
operation Office Board at its first meeting in February 2001. In addition to the usual
policy-level analysis of major sectors, crosscutting themes, instruments and country
programmes, the programming process itself and the “policy mix” were included. By
year’s end, 17 evaluations had been completed and 8 were ongoing. The 2001
programme grouped the evaluations around four themes. A full description may be
found in Chapter 7 -Annexe - section 7.3.).

1.4.

Results-oriented Monitoring

Both country-level indicators and monitoring of project results contribute to the
assessment of performance of EC development co-operation.

11

Their roles are complementary and lessons from each should inform policy-making
at all levels. More detailed information on the two approaches can be found in
chapter 5.

The Commission is in the process of moving increasingly towards results-oriented
development assistance and an important step is also the set-up and first test of a
system to monitor regularly the results projects achieve, i.e. their outcomes and
possible impacts on the beneficiaries.

During 2000, the Commission conceived an improved results-oriented monitoring
system for the ALA/MED/ACP and Balkan regions, which is rooted in the
Commission’s Project Cycle Management system. This system was tested and
improved during 2001.

The main objective is to gather results–oriented information on projects in the field
and to report on progress. The system provides an overview on project progress
towards results for both Delegations and the Office. It is not primarily aimed at
project
requires more detailed
information, although it should of course be of use to them as well as to partner
Ministries and Governments.

authorities, whose day-to-day management

The system involves short field visits to projects by experienced external experts,
who complete semi-standard score-sheets estimating the efficiency, effectiveness,
impact, relevance and likely sustainability of projects and programmes. In order to
ensure consistency in the system, each of the five criteria is thoroughly defined in
conformity with existing methodology and then broken down into its components,
which the monitor has to consider carefully before giving a rating. The external
monitoring experts have varying sectoral and geographic knowledge and experience.
They work in appropriate small teams; their work is based on the analysis of
documents and interviews with representatives from all stakeholders for a given
project, including final beneficiaries. Key data such as the project budget are noted,
but no audit or in-depth financial monitoring is done. The reports, opinions of Task
Managers and basic project documents, are recorded in the central database, which
will be a key management and information tool.

12

Ongoing projects (at least six months of implementation and of another six months
1 million) are monitored. By the end
duration) of a certain minimum size (approx.
of 2001, about 500 projects with a total value of
4.7 billion had been monitored in
Latin America, Asia, Africa, the Caribbean, the Pacific, in the MED – Region and
the Balkans.

€

€

First insights on project performance from the conception and test-phase are detailed
in chapter 5.

1.5.

Deconcentration of Project Management to Delegations

The deconcentration of the management of external aid to the Delegations of the
Commission is a key element of the reform of the management of the external
assistance. The principle is that what can better be managed and decided on the spot,
in the country concerned, should be done there, and not in Brussels.

The Commission has set itself an extremely tight timetable. The objective is to
extend deconcentration to all the Delegations before the end of 2003,
in three
successive waves: 21 Delegations to be covered in 2001, 26 more in 2002 and the
remaining 31 ACP Delegations in 2003.

1.5.1.

Progress achieved in 2001

The ambitious objective for 2001 – to carry out deconcentration in 21 Delegations5 -
covered all the geographical areas and therefore programmes of a very varied nature.
Meeting this objective required the Commission services to carry out work in parallel
on developing the concept, on technical preparations and on logistical planning. This
complex exercise had to be launched at a time when other elements of the reform
process were being put
in place both inside the Relex services (creation of
EuropeAid Co-operation Office, integration of project cycle etc), and at the broader
Commission level (financial and administrative reform). In addition the financial
resources that could be mobilised for this first wave of deconcentration were fairly
modest, particularly concerning the number of new official posts (limited to 40). This
situation will improve in 2002: 114 posts will be available to launch the second wave
and strengthen the first wave where necessary.

1.5.2.

Preparing for Deconcentration

During the first quarter of 2001, a harmonised concept of deconcentration was
defined, covering all the geographical programmes. This was based on the following
principles:

• in time, deconcentration will concern all programmes;

• deconcentration will concern all the phases of the project cycle;

5

The 21 “first wave” Delegations are :
Europe : Croatia, Russia
Mediterranean : Egypt, Morocco, Tunisia, Turkey
Asia : Indonesia, Thailand, India, China
Latin America : Nicaragua, Bolivia, Argentina, Mexico, Brazil
Africa/ACP : South Africa, Senegal, Ivory Coast, Kenya, Mali, Dominican Republic

13

• deconcentration requires the provision of substantial additional resources (human

and material);

• the role of Headquarters will evolve towards a role of co-ordination, quality
supervision, management control, technical support and improvement of working
practices.

At a practical
Delegations:

level, deconcentration involves the following changes for

the

• a more active contribution to programming, although final responsibility will
remain with DGs External Relations or Development according to the
geographical area;

• direct responsibility for identification and instruction work, with methodological
and technical support by the EuropeAid Co-operation Office, who will also be
responsible for final quality control on financing proposals and for taking these
through the decision process (management committee procedures, etc);

• direct responsibility for contractual and financial implementation conditioned by
the strict respect of procedures, and requiring secure access to the systems of
financial and accounting management at Headquarters;

• direct responsibility for technical implementation requiring technical expertise on
the spot and the possibility to call on more specialised advice from headquarters.

Between April and December 2001, the practical preparation process included testing
of secured computer connections, adapting information system for deconcentrated
management, developing or updating manuals of procedure, developing guidelines
on financial circuits, putting in place a specific training programme, and securing
financing for the deconcentration of the 21 first phase Delegations.

1.5.3. Deconcentration towards the 21 First Wave Delegations

The task of preparing the 21 Delegations themselves for deconcentration started early
2001. By July 2001, all Heads of Delegation had gone through a hearing with Relex
Director Generals in order to agree the additional resources needed and to define an
action plan for their mobilisation. The consolidated outcome of this process - and the
challenge it constituted for Commission Services - can best be summarised as
follows:

• 307 additional staff (officials and other agents) had to be selected, recruited and

trained before their posting in the 21 Delegations;

• 18 out of the 21 Delegations had either to move office or to rent additional office

space

• secured computer connections had to be installed in 19 out of the 21 Delegations,
in order to allow them the access to Commission accounting and management
information system.

14

Progress made by end of 2001 was quite satisfactory. The majority of the 21
Delegations were ready to start operating in a deconcentrated way from January
2002, in time for the new financial year.

1.5.4.

Preparation of the Second Wave

The list of 26 Delegations6 to be deconcentrated in 2002 was agreed in September
2001. Afghanistan was added to the list later, for a fast track deconcentration as soon
as local conditions permit.

Preparatory work started immediately thereafter. The experience gained with the first
wave will be put to good use. This expectation is that, for the first set of second wave
candidates, deconcentration will become effective in September 2002 (this assumes
that problems with office space constraints can be resolved).

1.6.

Coherence, Co-ordination and Complementarity

1.6.1.

Improving Policy Coherence

Ensuring coherence between the objectives of the EC’s development policy and its
policies and objectives in other areas is an operational priority as well as a legal
obligation for the Commission.

The European Community has bilateral association and co-operation agreements
with most countries in Africa, Asia, Latin America as well as in the Mediterranean
and the Western Balkans, the majority of which are developing countries. The EC
has established a range of policies to promote development, poverty reduction, and
integration into the world economy. The way this is done differs from country to
country and region to region. The specific objectives and areas of interaction with the
EU depend on a number of factors related to the country concerned; national income,
poverty incidence, political developments, trade structures, geographical proximity to
the European Union etc.

The challenge for the EU is to provide the right mix of policies for each region and
country. The broad range of policies that the EU has at its disposal gives it a unique
opportunity to apply an effective and efficient mix of co-operation instruments,
including development assistance, fishery agreements, trade instruments, political
dialogue, foreign policy instruments. The use of these various instruments is to be
made more coherent through the Country Strategy Paper Process. All EC services are
consulted in the drafting a Country Strategy Paper, in addition to consultations with
the partner country itself. CSPs are required to include a section identifying the
different EU policies affecting the partner country and analysing the appropriate
policy mix.

6

The 26 "second wave" Delegations are :
Europe : Albania, Georgia, Kazakhstan, Ukraine.
Mediterranean : Algeria, West Bank /Gaza Strip, Jordan, Lebanon, Syria.
Asia : Bangladesh, Philippines, Pakistan, Vietnam.
Latin America : Colombia, Peru, Uruguay, Chile, Venezuela
Africa/ACP : Burkina Faso, Benin, Cameroon, Ethiopia, Madagascar, Niger, Republic of Guinea,
Tanzania

15

The section below highlights two concrete examples of how coherence has been
addressed in practice, in the areas of fisheries and food aid/food security. The
following chapter (Chapter 2) provides other examples.

1.6.1.1. Fisheries

In its Communication on Fisheries and Poverty Reduction7 and in supporting the
process of
the
Commission devoted a lot of attention to the issues of coherence and
complementarity in the fisheries area. The key objectives of this effort were:

formulating the conclusions of both Council and Parliament,

• to improve consistency and coherence between the Community Development

Policy and other common policies affecting the fisheries sectors.

• to encourage dovetailing of operations supported by the EC and those conducted
by the Member States, through a common vision of the issues at stake and the
strategies to address them.

This work, carried out with close collaboration between the responsible Commission
services for fisheries and development, has led to a reduction in incoherence between
the EC Development Policy on the one hand, and the Common Fisheries Policy
(CFP) on the other. Key drivers for this development have been:

• the EC’s Development Policy, which has led increasingly to the incorporation of

fisheries sector concerns into country and regional strategy papers;

• the Common Fisheries Policy, which will be increasingly directed towards
sustainable development, both domestically and in terms of the Community’s
international relations in the Fisheries sector.

1.6.1.2. Food Aid/Food Security

In September 2001, the Commission issued a Communication on the Evaluation and
Future Orientation of Council Regulation (EC) No. 1292/96 on Food Aid Policy and
Food Aid Management and Special Operations in Support of Food Security.8
Through this Communication, the Commission has made considerable progress on
coherence.

The Communication has ensured greater internal coherence in the use of food aid in
relation to humanitarian aid and to the Common Agricultural Policy:

• Food aid in-kind provided under the Food Aid/Food Security Regulation and
channelled mainly through direct governmental programmes, EuronAid/NGOs
and WFP will be mobilised (i) in complementarity with ECHO, to provide relief
in cases of major and protracted crisis, (ii) as a contribution to strategic reserves
and safety nets, and (iii) linking relief, rehabilitation and development.

• Food aid in-kind has clearly been dissociated from agricultural surplus disposal

and has become an instrument of development assistance.

7

8

Commission Communication on "Fisheries and Poverty Reduction" (COM(2000) 724 of 08.11.2000).
COM(2001) 473 dated 05/09/2001 modified on 12.09.2001 COM(2001) 473/2.

16

coherence,

Regarding external
concerned made
considerable progress, both in the context of the International Food Aid Convention
and the WTO negotiation process,
to move towards tighter rules and greater
transparency in the provision of food aid to developing countries:

the Commission services

• Food aid should be provided as a grant. It should however be limited to
emergency and humanitarian interventions, to linking relief, rehabilitation and
development and as an element of safety net strategies for particularly vulnerable
sections of the population;

• In order to respect consumption patterns and to avoid market distortion, food aid
should only be provided at the request of the beneficiary countries specifying their
particular needs; and

• Wherever possible, donors should give preference to local or regional purchases.

1.6.2. Coordination and Complementarity

Improved coordination and complementarity are essential elements in the process of
making the EC’s external assistance more effective. At the most basic level, co-
ordination entails greater awareness of what others involved in a particular sector or
country or region is doing; combined with efforts to work together more effectively.
Coordination is critical to avoid overlap or inconsistencies between those seeking to
it goes
achieve common goals. Complementarity begins with co-ordination, but
further: it implies each actor focusing its assistance where it can add most value,
given what others are doing; maximising synergies.

the EC’s and other agencies’

The EC is firmly committed to both of these concepts. At the policy level, the
common framework for
interventions in the
development sphere is provided by the Millennium Development Goals. In terms of
implementation, the EC aims to integrate its own support at the country level within
a wider framework wherever possible. The Poverty Reduction Strategy Paper (PRSP)
process which the EC firmly supports (see Chapter 2), is designed specifically to
promote coordination and complementarity amongst donors’ efforts in low-income
countries. The EC’s new approach to programming , including the use of Country
Strategy Papers and structured dialogue with recipients (e.g. the ACP), are key
mechanisms to ensure greater coordination and complementarity. The EC’s decision
to focus its development interventions overall in six priority areas, with the choice of
these in each country informed by what national priorities and what others are doing,
is a further demonstration of commitment to these principles. Specific changes in the
EC’s policy approach and in individual sectors and regions are discussed in later
chapters. This section highlights some examples of what has been achieved from the
centre during 2001.

1.6.2.1. Between Member States and Commission

The Council and Commission guidelines for improved operational co-ordination
between the EC and Member States covering all countries receiving external
assistance from the Union were agreed during the 2001 Council orientation debate.9

9

General Affairs Council, 22-23 January 2001.

17

The improvements in the programming of EC aid, highlighted above, should help
this process. In addition to consultations on country strategy papers, the sharing of
sector guidelines between the Member States and the Commission has proved to be
useful (the Commission is preparing sector guidelines for each of its 6 priority areas
for intervention; guidelines on the transport priority have already been adopted).

These efforts are beginning to show results. The Commission regularly organises
meetings with member
for Development.These
States’Directors-General
meetingsprovide a forum to exchange views on best practice, common concerns,
current difficulties and new approaches.
International
Conferences in 2002 on Financing for Development (Monterrey) and on Sustainable
Development (Johannesburg) a specific emphasis has been placed on co-ordination
within international bodies. A similar effort has been made to promote stronger
involvement by the Commission in the OECD/DAC.

In view of

the major

The mandate given to the Commission by the Member States to prepare a report in
preparation for the Monterrey Conference was a positive sign of the confidence that
had been built up. At its meeting in November 2001, the Development Council asked
the Commission to clarify a number of issues and explore, through a dialogue with
Member States, potential initiatives to be implemented by them. The Council singled
out, in particular, the issue of increasing the volume of aid, with a view to reaching
the UN target of 0.7% of Gross National Income to be provided as official
development assistance (ODA),
including through the establishment of 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. The Commission’s report was to be presented at the General
Affairs Council in February 2002. It summarised possible positive initiatives that had
emerged as a result of the discussions held by the Commission with Member States
and addressed the issue of how the financial gap between the current level of ODA
and the volume necessary to meet the Millennium Declaration Goals could be closed.
This report, and the action taken by Member States, helped to ensure a positive EU
contribution to the Financing for Development conference.

1.6.2.2. With Other Donors

The Commission has launched several initiatives with other donors in the framework
of the joint EU-USA, EU-Canada, and EU-Japan Summits, with a particular regard
for the Great Lakes Regions and Afghanistan. In addition, several high level
meetings have been conducted in order to improve co-operation with Norway. The
Commission is exploring pilot models for strengthening co-operation with other
donors further. A first initiative has taken place whereby officials from Japan are
hosted within the Commission. Harmonisation of donor procedures is a key element
for the improvement of coordination, efficiency and recipient country ownership. In
this regard, the Commission has launched exploratory exercises with the Member
States and the DAC. A similar effort is being made in relation to the UN, through the
renegotiations of the General Framework Agreement and the recasting of the
financial regulation.

1.6.2.3. With the UN

In order to strengthen its co-ordination with the United Nations and to promote
complementarity, the Commission has been conducting an extensive policy dialogue

18

thrust

and negotiations on the improvement of the EC/UN General Framework Agreement.
This has been done through meetings with, amongst others, UNHCR, ILO, UNDP,
UNICEF, UN-NADAFF, FAO, WHO, WFP, IFAD and UNESCO. In 2001 the
Commission adopted a Communication on “Building an Effective Partnership with
the United Nations in the Fields of Development and Humanitarian Affairs".10 Its
(improvement of EC-UN co-operation) was endorsed by the
overall
Development Council of 31 May 2001. The new approach will
lead to a
strengthening of the EC’s involvement in upstream policy dialogues and to a more
financially predictable and easier-to-monitor operational
effective,
partnership with UN agencies, funds and programs. In the follow-up to this
Communication,
the Commission has conducting a wide analysis of the core
mandate and capacities of the UN agencies, funds and programmes. On this basis,
the Commission will propose, in dialogue with the Member States and where there is
an added value within commonly agreed political objectives, to strengthen the co-
operation with UN bodies through the establishment of a Strategic Partnership.
Therefore, the division of labour among donors will be based on the selection criteria
of core mandate and focus on comparative advantage added value
and
complementarity.

transparent,

1.6.2.4. With the Bretton Woods Institutions

€

Intensive contacts took place with the IMF and the World Bank in the context of the
PRSP process both at staff and management
level. An EC PRSP team visited
Washington in January - in a follow-up of the IMF/WB PRSP meetings in Brussels
in September of the previous year. The mission deepened co-ordination on the PRSP
process notably with an agreement for co-financing of PRSCs11 in some pilot
countries and for a reinforcement of co-operation on support to public finance
management. Progress was also made towards a convergence of views on the
importance of results-based conditionality. The plans with regard to public finance
management led to the creation of the PEFA (Public Expenditure and Financial
Accountability) programme, supported by the Bank, the EC and DFID, and financed
1.9 million EC contribution to a trust fund. Co-financing of PRSCs
partly through a
on the other hand had not yet materialised by the end of the year. This was largely
due to the fact that only 3 countries (of which 2 ACP countries) had received a
PRSC, and that co-operation in the field at times fell short of expectations. In the
meantime, the EC is getting involved in joint budget support with other donors,
which is to some extent limiting future possibilities of PRSC cofinancing with the
Bank. A number of high level contacts took place in 2001, including the visit by
World Bank President James Wolfensohn to the Commission in November. The EC
has become the biggest contributor to World Bank managed trust funds through its
participation in the HIPC initiative. A multiplicity of contacts between the Bank and
the Commission continued during the year, in particular in the context of sector
coordination and special initiatives, such as the long-standing joint involvement in
the Special Partnership for Africa (SPA).

10

11

Commission Communication on "Building an effective partnership with the United Nations in the fields
of Development and Humanitarian Affairs" (COM(2001) 231 of 02.05.2001.
Poverty Reduction Support Credit, the new World Bank programmatic lending instrument for PRSP
countries.

19

2.

PROGRESS TOWARDS THE DEVELOPMENT GOALS

the Millennium Summit

The Millennium Declaration, which was agreed by 147 Heads of State and Government and
189 countries in total at
in September 2000, was an historic
agreement that is shaping international development co-operation efforts today, including
those of the European Community. The Millennium Development Goal (MDG) is contained
in the Declaration and developed in the UN ‘road map’ - for implementation of the
Declaration - provide a common framework for focusing and measuring development
progress. These goals, which grew out of the agreements and resolutions of UN conferences
of the past decade, including the International Development Goals of the 1990s, have also
been endorsed by most major multilateral organisations. They therefore have unprecedented
legitimacy.

This chapter explains how the EC is working with others to achieve the MDGs, as well as the
content of the specific objectives of the new EC development policy agreed in November
2000. A system for tracking progress towards the achievement of the MDGs has been agreed,
although major efforts are still needed to improve statistical capacity in developing countries.
Available data highlights uneven progress across regions and between the different goals
(Section 2.1.). The primary aim of the EC’s own development policy, agreed in November
2000, is the eradication of poverty (Section 2.2.). To help monitor its contribution towards the
MDGs and other policy objectives, the EC is developing a system of indicators for monitoring
country performance (Section 2.3.). It is also monitoring the allocation of resources from the
EC development programme to Low Income Countries, and to priority sectors (Section 2.4.).
To enhance its impact, the EC is targeting its assistance on six priority areas (Section 2.5.). In
addition to these core areas, important crosscutting issues are being mainstreamed into
development activities namely: Human Rights, gender equality, environment and conflict
prevention (Section 2.6.).

2.1.

The Millennium Development Goals

Statistical data on progress towards achieving the Millennium Development Goals12
is scarce, although improving. At the global level, a number of organisations are
tracking progress,
the World Bank and the OECD’s
Development Assistance Committee (DAC). The Commission, along with other
donors, is supporting efforts to enhance statistical capacity in many developing
countries and regions.

in particular

the UN,

The data available shows that there is a long way to go before the international
community achieves the Millennium Development Goals. Prospects vary by region,
and by goal. Progress in sub-Saharan Africa lags behind the rest of the world.

12

see: http://www.developmentgoals.org

20

Progress towards Development Goals

POVERTY

EDUCATION

21

GENDER EQUALITY

CHILD MORTALITY

22

MATERNAL HEALTH

AIDS

23

ENVIRONMENT

Source: World Bank

Progress has been made towards reducing extreme poverty, particularly in Asia. But a vast
discrepancy is occurring between Sub-Saharan Africa and most of the rest of the world. Poverty
rates in Eastern Europe and Central Asia are relatively modest but have risen steeply.

Primary school enrolment is improving, although there is still a long way to go in Middle East
and North Africa, South Asia and Sub-Saharan Africa.

South Asia and Sub-Saharan Africa are only progressing slowly when it comes to gender
equality in school enrolment. The decreasing ratio of girls to boys in school in Latin America is
regrettable

Infant mortality rates are improving, although not fast enough in all cases to reach the 2015
target. Here again, Sub-Saharan Africa is a particular concern.

Failing maternity health care in Sub-Saharan Africa seems to be one of the reasons for this.

Access to clean water and sanitation is still a problem in many countries, particularly in rural
areas.

2.2.

Poverty reduction

The Declaration by the Council and the Commission on the European Community’s
Development Policy of November 200013 defines the main objective of the European
Community’s development policy as the reduction and eventual eradication of
poverty. This objective entails support
for sustainable economic, social and
environmental development, promotion of the gradual integration of the developing
countries into the world economy and a determination to combat inequality.

A Commission Staff Working Paper produced in July 200114 establishes the main
elements necessary to address the poverty reduction objective of EC Development
Policy. This work programme is being implemented progressively. The sections
below highlight the main elements for 2001.

13

14

http://www.consilium.eu.int/Newsroom/newmain.asp?lang=1
SEC (2001)1317 of 26.07.2001

24

2.2.1.

Allocation of financial resources

The EC’s approach to the allocation of aid recognises that particular attention must
be paid to the situation of the Least Developed and other Low Income Countries15.
The EC also takes account of the efforts made by the governments of partner
countries themselves to reduce poverty, both in terms of their performance and their
absorption capacity. Among middle income countries, the Joint Declaration on EC
Development Policy requires that attention should be focused on those countries
which feature both a continuing high proportion of ‘poor’ and a full commitment to
implementing coherent poverty-reduction strategies.

The allocation of EC development resources to Low Income Countries or poor
populations varies between regions.

ACP countries: Close to 90% of European Development Fund (EDF) resources are
earmarked to Least Developed Countries and other Low Income Countries.

Central America, the Andean region, and Paraguay: Two thirds of EC aid to this
region is targeted on the poorest segments of the rural and urban populations.

Asia: EC development co-operation programmes with Asia have been focused on the
poorest countries in the region since their beginning, and on ‘the poorest groups’ in
the populations of these countries. Over the last five years, an average of 80% of EC
assistance has gone to the poorest countries: 32% has gone to the Least Developed
Countries (notably Bangladesh, Bhutan, Cambodia, Laos, the Maldives and Nepal)
and 48% has gone to other Low Income Countries (i.e. India, Indonesia, Pakistan,
Vietnam).

2.2.2.

Poverty focus in Country Strategy Papers

The specific policy reforms and programmes to tackle poverty in different countries
will be affected by the circumstances of the country itself. Sustained economic
growth - although not sufficient by itself - is an essential prerequisite for poverty
reduction, as noted in the November 2000 statement. Many developing countries
have recently gone through major
such as transition from
communism to democratic market economies or from military to civilian democratic
rule. In Eastern and Central Asia, the EC’s focus is on supporting this transition
process, chiefly through institution building, which is judged to be the most effective
remedy against poverty in this region. Conversely, in the Balkan region, peace and
stability measures are seen to be the most effective instruments. In North Africa and
the Mediterranean region, support is aimed particularly at strengthening the capacity
of the region to integrate into the world economy through support to economic and
social development.

transformations,

2.2.3.

The Poverty Reduction Strategy Paper (PRSP) process

sustainable
The EC believes strongly that ownership of
development and poverty reduction by partner countries is the key to the success of

the strategies

for

15

There are currently 49 ‘Least Developed Countries (LDCs)’ which are designated as such by the UN on
the basis of low per capita income, weak human resources, and a low level of economic diversification.
The ‘Low Income Country’ covers a broader group of countries defined by their income alone (the
World Bank classification is based on a per capita income of less than US $ 700 in 2000).

25

development policies. Consistent with this, the Commission strives to integrate its
support, as outlined in its Country Strategy Papers, into a wider framework. For Low
Income Countries, the key framework is the Poverty Reduction Strategy Paper
(PRSP) and the process that accompanies it. The Commission’s efforts have been
made difficult by the lack of full PRSPs: only 8 countries had produced full PRSPs
by the end of 2001. When CSPs are updated, however, they can be adapted to reflect
progress in the country concerned in developing a full PRSP.

Development of the PRSP approach offers a major opportunity to enhance the
effectiveness of the global development effort. The Commission has contributed
substantially to the development of the approach, both through its own strategic
refocusing (including a shift towards direct contributions to the budgets of partner
countries where necessary conditions are met) and through its contribution to
international policy development. This contribution is further reinforced by the
Commission’s role as co-chair of the Technical Group of the Strategic Partnership
for Africa16, and as leader of the Burkina Faso based pilot project on reforming the
conditions imposed on partner countries to trigger the provision of macro-economic
support.

If PRSPs are to become an effective framework for external assistance, however,
they need to have stronger performance indicators. This should include a core set of
indicators, measured annually, for which country governments hold themselves
accountable to their citizens and by which the Commission (and other external
partners) can judge progress. The Commission has played a leading role in
international work to develop tools for such performance monitoring, and aims to
integrate into its CSP monitoring process appropriate indicators drawn from the
PRSPs.

2.3.

Measuring Effectiveness Through Results Indicators

The Commission measures
complementary levels of details:

results

through indicators at

two distinct but

• To measure country performance in terms of economic growth,

increasing
standards of living and poverty reduction over the short, medium and long term.
This level of indicators draws from the most relevant of the indicators associated
with the Millennium Development Goals, possibly complemented by a limited
further set of key indicators.

• To measure in a more detailed way the performance of the country’s sectoral

policies in the sectors supported.

The two levels outlined above constitute in fact two complementary degrees of
detail, which need to be analysed in a coherent way.

At the first level, in all countries where the Commission is working, a limited set of
indicators should be monitored in order to have a global view of progress towards the
MDGs. This limited set should draw from the most relevant of the 48 indicators

16

informal

An
See
http://www1.worldbank.org/prsp/newsletter/Feb_2001/Our_Partners__Perspectives/Strategic_Partnersh
ip_for_Afri/strategic_partnership_for_afri.html

the World Bank.

leadership

grouping

donors

under

the

of

of

26

a

small number of

associated with the MDGs plus, in order to be able to report annually on countries’
annually measurable key indicators. These
progress,
supplementary indicators would include input indicators (which are not part of the
MDG monitoring framework), e.g. indicators to measure the financial support to
specific sectors from both government and donors. It would also include real-time
the definition of development
outcome indicators. The draft guidelines for
indicators17 suggest that this set of indicators, once agreed, should be featured
systematically in all Country Strategy Papers.

Systematic monitoring using this wide range of indicators,
including annually
measurable and input indicators at country level, will allow the Commission to keep
an eye on the evolution of sectors even where it is not an active player. This will
inform the decisions taken at the review of the Country Strategy Papers.

At the sectoral level, in CSP priority sectors, a wider range of indicators will be
monitored. These indicators should be part of the more comprehensive set of
indicators monitored by the relevant national ministries. The Commission will work
with other donors and partner countries to identify a limited set of ‘good practice
indicators’ to monitor sector performance. This indicative list would then serve as a
framework for a more effective and coherent national discussion on sector
monitoring. Policy orientations and regulatory measures by government should also
be monitored, even if they cannot so easily be measured through generalised
quantitative indicators.

In all cases, indicators monitored by the Commission are based on the national
processes taking place in the relevant country (PRSPs for those countries covered by
them). This allows reciprocal influence and experience sharing, as well as a valuable
and increase governments’ domestic
opportunity to discuss policy issues
accountability.

In the framework of programming, guidelines are being developed to support
programmers in introducing development indicators into CSPs. As most donors are
still at a very early stage in the work on development indicators, the Commission has
chosen to associate EU Member States,
the OECD’s Development Assistance
Committee (DAC), and other donors in the drafting of these guidelines.

A joint working group between EU Member States, OECD-DAC, and various
Commission services will start in March 2002. The objective of this working group
including
is to explore the potential for donors to adopt a coherent approach,
common principles and typology, in their monitoring requirements in order to reduce
the burden imposed on recipient countries. The basis for this work is the Draft
indicators18 prepared by the
guidelines
Commission. This is ‘work in progress’, and its outcomes will progressively feed
into the Commission’s programming and review process. EU Member States and the
OECD-DAC have warmly welcomed it.

the definition of development

for

17

18

see http://www.europa.eu.int/comm/development/sector/poverty_reduction/infopack_ann1.pdf
see http://www.europa.eu.int/comm/development/sector/poverty_reduction/infopack_ann1.pdf

27

2.4.

Sectoral Targeting in the Programming Process

As part of its efforts to improve the impact of Community development assistance,
the Commission has made a consistent effort since 2000 to focus EC assistance on
core areas that are important for poverty reduction and where Community action can
add value. The new EC development policy agreed in November 2000 identified six
priority areas: trade and development; regional integration and co-operation; support
to macroeconomic policies and equitable access to social services; transport; food
security and sustainable rural development; institutional capacity building, good
governance and the rule of law.

This section outlines the main areas of programmed interventions as reflected in the
Country Strategy Papers that have been formally approved or are close to
finalisation. The sectoral breakdown is based on the OECD-DAC classification
system. Some changes in the sectoral breakdown may still occur, after
the
finalisation of CSPs currently being processed and after analysis of draft CSPs still to
come. The overall picture, however, is unlikely to change substantially.

A detailed discussion of the EC’s approach in each region is contained in Chapter 4.

2.4.1.

African, Caribbean and Pacific (ACP) Countries

The multi-annual programming for the ACP countries covers the 9th European
Development Fund (EDF) which will become operational once the Cotonou
Agreement comes into force19 (currently expected early in 2003) for (normally) a
five year period.

The CSPs reviewed so far show a focus on transport and macro-economic support
(for poverty reduction strategies), including budget financing for PRSPs with an
emphasis on health and education. Transport accounts for approximately 31% and
macro-economic support for 21% of resources programmed. The other major
priorities are: direct allocations for education and health (10.4%); water supply and
sanitation (7.1%); food security and rural development (7.1%); and institutional
support and capacity building in favour of government and civil society (10.8%).
Resources earmarked for the mining sector (5.3%) relate to the ‘Sysmin transfer’20.

In summary, around 27% of the available resources programmed thus far for the
period 2002-2006 focus on social services and infrastructure as defined by the
OECD-DAC. In addition to this percentage, 21% of the resources have been
programmed for structural adjustment support frequently linked to performance in
the social sector.

19

20

In order to come into force, the Agreement must be ratified by at least two thirds of the ACP States, by
all the EU Member States and be approved by the European Community (article 93.2 of the Cotonou
Agreement). As of 18 January 2002, thirty-six ACP States, four EU Member States and the European
Community had completed this process.
(SYSMIN: System for Safeguarding and Developing Mineral Production – these funds are allocated to
support traditional industries.) This is the ‘SYSMIN transfer’ from the 8th EDF destined to finance the
development programme identified following a request for aid under the Sysmin programme of the
Lomé Convention but for which no financing decision could be taken before 31 December 2000

28

2.4.2. Mediterranean

The multi-annual programming completed for the MEDA region21 covers the period
2002–2004.

The programming has resulted in a generally high concentration in social
infrastructure and services. An average of 47.8% has been allocated to social
infrastructure and to macroeconomic support liked to social sector performance.
Other priorities include the environment (5%), trade and tourism (7%) and transport
(7%).

2.4.3.

Latin America

The multi-annual financial programming for this region covers the period 2002-2006.

The major areas of programmed intervention are the social sectors (including
education, health and water supply and sanitation - 23%), government and civil
society (18%) and trade and tourism (15%). The choice of sectors reflects the
specific needs in the region i.e. direct interventions to improve social services for the
poorest groups, support to build sustainable institutions to enhance good governance
and growth combined with the promotion of trade and tourism to facilitate further
integration into the world economy.

2.4.4.

Asia

The multi-annual financial programming for this region covers the period 2002-2004.

The programming reflects a strong focus on direct poverty reducing activities.
Particular emphasis is given to education, health and water and sanitation (43%),
trade and tourism (9%), environment (4%) and support to NGOs (5%).

2.4.5.

Eastern Europe and Central Asia

The multi-annual financial planning for this region covers the period 2002-2004.

focuses on no more

TACIS22 funding is programmed in complementary areas. Each national or multi-
country programme
following
areas: institutional, legal and administrative reform; private sector and economic
development; consequences of changes
infrastructure networks;
environmental protection; rural economy; and nuclear safety. This selectivity is
designed to enhance effectiveness. The major areas of intervention are: energy
24.4%; government and civil society 21.1%; and private sector development 16.3%.

in society;

than three

the

of

2.4.6.

The Balkans

The multi-annual financial planning for this region covers the period 2002-2004.

21

22

MEDA covers aid to the reform of economic and social structures in the framework of the euro-
Mediterranean partnership covering Morocco, Algeria, Tunisia (Maghreb); Egypt, Israel, Jordan, the
Palestinian Authority, Lebanon, Syria (Mashrek); Turkey, Cyprus and Malta.
TACIS: Technical Assistance for the Commonwealth of Independent States covering Armenia,
Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Mongolia, Russia, Tajikistan,
Turkmenistan, Ukraine and Uzbekistan.

29

The European Union is by far the single largest donor to the western Balkans as a
whole, through programmes such as PHARE23 in Eastern Europe, OBNOVA24 for
the former Yugoslavia and the Balkans and CARDS25 in the Balkans. For the coming
years, EC assistance will focus on institution building and civil society (42%);
education, water and sanitation and other social services (20%); and private sector
development (11%).

2.5.

Policy Initiatives in EC Priority Areas

2.5.1.

Trade and development

Trade and investment
liberalisation operating within a sound and transparent
economic domestic policy framework plays an important role in the promotion of
economic growth and development.

The European Community is committed to fostering the smooth and gradual
integration of developing countries into the world economy, by mainstreaming trade
in the development strategies of the developing countries in an integrated manner,
and by promoting regional and domestic policy frameworks conducive to economic
growth and social development. The EC is the largest
importer of agricultural
products from all developing countries and, generally, their major trading partner.

In the WTO, the EC has been a strong advocate of a new round of multilateral trade
negotiations, centred on the needs and interests of developing countries. The
priorities agreed at the WTO Ministerial in Doha in November 200126 the ‘Doha
Development Agenda’) set out a clear framework to strengthen the link between
trade and development
trading system. The integration of
developing countries into the world trading system and the global economy is the
core priority of the Doha Declaration. It
takes on board the concerns of the
developing countries as expressed by the ACP group27 on ‘the importance and
urgency of integrating ACP states into the multilateral trading system and, in that
regard, that development issues should be at the core of any future work programme
of the WTO’.

in the multilateral

is negotiating preferential

the EC offers a range of preferential

trade regimes to developing
Bilaterally,
countries. A number of these were under discussion, or amended, during 2001. The
EC has concluded or
trade agreements with the
Mediterranean countries, South Africa, MERCOSUR, Chile, the Gulf Co-operation
Council and is examining the possibility of negotiations with others. In the context of
the Cotonou Agreement (for the ACP countries), the EC is also already providing far
reaching non-reciprocal
the forthcoming
negotiations on Economic Partnership Agreements with ACP sub-regions (due to
commence in September 2002) began in earnest during 2001. Developing countries

trade preferences. Preparations

for

23

24

25

26

27

PHARE: Poland and Hungary: Aid for Economic Restructuring (now extended to cover Bulgaria,
Czech Republic, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia).
OBNOVA: Programme for reconstruction in Bosnia, Croatia, Serbia, Montenegro and FYROM
CARDS: Community Assistance for Reconstruction, Development and Stabilisation covering the
Western Balkans (Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia, the former
Yugoslav Republic of Macedonia and Albania)
see http://www.wto.org/english/tratop_e/dda_e/dda_e.htm
Declaration by the ministers responsible for trade of the ACP states on the 4th WTO ministerial
conference, 7 November 2001

30

are also benefiting from unilateral trade preferences in the context of the Generalised
System of Preferences, which was further improved from 1 January 2002.

In February 2001, the EU agreed to grant duty and quota free access for all products
originating from Least Developed Countries (LDCs) except for arms and munitions:
the ‘Everything But Arms’ initiative28. This became effective in March 2001. In
agreeing to this, the EU did away with remaining tariffs on agricultural products.
Even the three most sensitive products - rice, sugar and bananas - were included,
although these are to be progressively liberalised over the next four to eight years.
The beneficiaries of this liberalisation are the 48 LDCs already covered by the EU
Generalised Scheme of Preferences29.

Ensuring that developing countries - and notably LDCs - benefit ‘from the increased
opportunities and welfare gains that the multilateral trading system generates’30 will
require well targeted technical assistance and capacity building programmes. In
addition to the trade preferences it grants to developing countries (see below), the EC
is offering Trade Related Technical Assistance and Capacity Building measures to
support developing countries in their efforts to strengthen their judicial, regulatory
and institutional capacities. The Country Strategy Papers provide the general
frameworks for all the EC’s interventions. The Commission is also working with EU
Member States, other bilateral donors and the multilateral institutions to promote co-
ordination and complementarity mechanisms for technical trade related assistance.
This is being done in the context of the relevant multilateral funds such as the Doha
Development Agenda Global Trust Fund and the Integrated Framework Trust Fund
for LDCs.

2.5.2.

Regional Integration and Co-operation

The EU is a strong supporter of
integration, which fosters better
understanding and political and economic links between neighbouring countries.
This process can consolidate peace, prevent conflict and promote the integration of
thereby enhancing prospects for
developing countries into the world economy,
economic growth and sustainable development.

regional

The policy context for EC support to regional integration and co-operation evolved
during 2001, and will continue to do so. This was particularly due to the need to
ensure consistency between external developments – such as the WTO Doha
Development Agenda launched in November 2001 and,
for ACP countries,
preparations for the implementation of the Cotonou Agreement and the negotiations
to be launched in 2002 on Economic Partnership Agreements.

2.5.3. Macro-economic Policies and Equitable Access to Social Services (Health and

Education)

There is a growing international consensus that, from an aid effectiveness viewpoint,
it is helpful to move away from stand-alone projects towards direct contributions to

28

29

30

Regulation (EC) No 416/2001 of 28 February 2001, Official Journal of the European Communities L 60
of 1.3.2001; http://Europa.eu.int/eur-lex
See list of LDCs in Annex IV of Regulation (EC) No 2820/98 of 21 December 1998, Official Journal
357 of 30.12.1998. However, all GSP preferences for Myanmar have been suspended, and this also
applies to Everything But Arms.
WTO ministerial declaration, 14 November 2001, para 2

31

the budgets of partner countries (budget support) whenever the conditions in a
country permit it. Moreover, this budget support should be linked to national poverty
reduction strategies – such as PRSPs - wherever they exist. This should result in
stronger country ownership, reduced transaction costs, unified planning and resource
allocation, and enhanced complementarity and flexibility.

Such budget support is only provided where it can be expected to be effective. This
requires that the country manage its macro-economy in a stable and sustainable
manner. Prudent fiscal and monetary policies are central to poverty reduction,
together with structural changes that create the scope for private sector led growth.
All budget
sound
macroeconomic policies, measured through an agreed IMF programme.

support programmes are linked to the continuation of

The European Commission has played a leading role in developing results based
mechanisms for macroeconomic budget support that enhance country ownership and
provide incentives for governments to monitor progress using key indicators of
poverty and of public financial management. Of 24 ACP macroeconomic support
programmes in 2000 and 2001, 12 included a fully results based approach, 6 were
linked to a positive results assessment and to progress with public financial
management and 6 were linked to other (process based) indicators.

In all ACP countries, budget support is linked to the results attained in addressing
aspects of poverty covered in the Millennium Development Goals. Such budget
support thus provides a strong incentive for the government to deliver effective basic
services. It also provides additional resources for the government to allocate to this
goal. If they are to be used in annual performance management, the indicators chosen
(which are focused primarily on basic social services such as health and education)
need to be measured annually, and be capable of being monitored within this
framework i.e. to evolve swiftly). In 2001,
270.31 million was spent on ACP
macro-economic support.

€

In MED countries, budget support is an opportunity for dialogue with the partner
country on social matters and poverty alleviation. The dialogue often concerns major
sectoral programmes e.g. education and health in Tunisia, and water and education in
Morocco. In these programmes, the reason for focusing on education, health or water
is to contribute to major reforms in the sectors, with the objective of improving the
quality and the coverage of basic services, whilst ensuring sound public finance
management. These sectoral programmes targeting social sectors are complemented
by more traditional projects (education in Egypt) or social funds31 (in Egypt and
under preparation in Algeria, Jordan and Lebanon). As a result, a major share of the
total MEDA financing is devoted to social sectors32.

Water Management

Water management has to be seen as a cross-sectoral issue to be mainstreamed
within most development policies associated with poverty reduction. It is particularly
important
for human development, alongside health and education. An EC
Communication on Water Management in Developing Countries was drafted in

31

32

Social funds are used to support local development plans e.g. micro-financing
Social sectors include: health, education, training, employment, civil society, gender, Human Rights,
local development, social protection, social implications of industrial restructuring

32

2001. One objective of this Communication was to highlight where and how policies
surrounding water and development are integrated into the European Community’s
development priorities. The central part of the document articulates key messages on
policy orientation and actions for the way forward. Under the overarching policy
framework of Integrated Water Resources Management, the focus is on water supply
resources management, and cross-sectoral
and sanitation,
coordination and integration of the different water uses. The Communication,
building on the results of the Bonn Freshwater Conference of December 2001,
promoted the development of an EU initiative as a key agenda point for the World
Summit on Sustainable Development in Johannesburg in August/September 2002.

transboundary water

Education and Training

Programming guidelines on education and training have been developed and focused
more closely on poverty reduction. Programming in developing countries has
concentrated on Education For All (basic education) and vocational training, through
macro-economic support and programme support. Gender issues have been carefully
taken into consideration also through the increased focus on primary education and
outcome indicators.

The Commission has organised two meetings with EU Member States’ education
experts on sector-wide approaches,
the poverty focus, and on the Commission
Communication on Education and Training in the Context of Poverty Reduction in
Developing Countries, to be adopted in 2002.

The Commission has influenced the international agenda on education in 2001
through contributions to two major UN events:
the UN Conference on Least
Developed Countries and the UN General Assembly Special Session on Children
(21st May to 7th June 2002).

The Commission has actively participated in the follow-up to the Dakar Conference
on Education for All and the work of the senior officials' G8 Task Force on
education to take forward implementation of the Dakar Framework for Action on
Education for All. The main concerns in this forum have been:

• increased mobilisation and coordination among donors to meet the Millennium

Development Goals in education;

• greater consistency between these targets and the Country Strategies and the

Poverty Reduction Strategies;

• improved coordination at all levels of interaction with national governments

through a Code of Conduct for funding agencies and partner countries; and

• the need to bridge the financial resources gap for countries committed to the

Dakar goals.

2.5.4. Health, AIDS and population policy

For health, AIDS and population policy, programming guidelines have been adopted
in the context of poverty reduction, gender mainstreaming and the Millennium
Development Goals for health.

33

their 2000 summit

The Commission has participated actively in the follow-up to the commitment made
to increase support for action taken against
by the G8 at
communicable diseases in developing countries33. The EC Programme for Action on
Communicable Diseases was adopted in February 2001, endorsed by the General
Affairs Council in May and by The European Parliament in October 200134. The
decisions taken on priority actions led to coherent EC positions in preparation for
major international events. These included:
the UN General Assembly Special
Session on HIV/AIDS; the Least Developed Countries Conference; the EU/US
in Genoa; the EU/Canada Summit; the
Summit in Gothenburg; the G8 Summit
follow-up to the Cairo Plan of Action; the Doha Declaration on Trade Related
Intellectual Property and Public Health; and the transitional process leading to the
establishment of the Global Fund to fight HIV/AIDS, malaria and tuberculosis.

The Commission prepared the legal base for its involvement in the Global Fund as
well as participating actively in the working party established to set up the Fund. It
also prepared two proposals for the revision of the legal bases for two special EC
budget lines: one for poverty diseases and one for reproductive and sexual health and
rights.
the Commission has prepared a new health and poverty
communication. This is the first time there has been a single Community policy
framework to guide future support for health, AIDS, population and the fight against
poverty within the context of overall EC assistance to developing countries.

In addition,

The Commission organised two meetings with health experts from Member States,
one on a European approach to the Global Fund and one on health and poverty
policies and programming. The Commission introduced the first outline of its
Communication on Health, AIDS, Population and Poverty in Developing Countries
scheduled for adoption in 2002 in the latter meeting.

2.5.5.

Transport

In May 2001, in response to the Commission Communication of July 2000 on
‘Promoting Sustainable Transport
the Council
adopted a ‘Resolution on Sustainable Transport on Development Co-operation’36.
These two documents, taken together, establish a strong and clear policy platform for
EU interventions in the sector.

in Development Co-operation’35,

The strategy for reaching the development goals is based on the principle that
transport should be affordable and meet stakeholder needs. It should be safe and
efficient and should have a minimal negative impact on the environment. It is a
comprehensive strategy in the sense that it is valid for all transport modes and
associated services involved in the movement of people and goods.

The Community’s approach to development co-operation in the transport sector is
based on the recognition that effective transport systems in urban and rural areas are
essential in facilitating poverty reduction through the promotion of economic and
to
social development, and access to social services. They are also important
facilitate trade and the integration of developing countries into the world economy.

33

34

35

36

see:http://www.g7.utoronto.ca/g7/summit/2000okinawa/finalcom.htm
COM (2001) 96 of 21.2.2001
COM (2000) 422 of 6.7.2000
Council Resolution 9985/01 following the 2352nd Council Development Meeting of 31.05.2001

34

Support
is designed to assist developing country partners in formulating and
implementing strategies for the sector, in co-operation with all stakeholders, to meet
these poverty reduction and integration objectives. Such strategies need to have a
clear process of prioritisation, with a sound balance between maintenance and
investment, and should be economically, financially and institutionally sustainable,
as well as environmentally sound, safe and socially aware. Financing for these
strategies is generally provided in the framework of sectoral programmes. This
facilitates improved monitoring, simplifies sector management and leads to a more
transparent and improved allocation of resources.

Based on the principles and strategy outlined above, ‘Programming Guidelines’ for
the programming of transport sector support under the 9th EDF were developed and
made available to all Commission Delegations in 2001. These included formats for
analysing transport policy,
in strategy
implementation and recommendations for the formulation of the EC transport
response strategy.

the problems

arising

issues

and

€

Of the 44 ACP Country Strategy Papers presented in 2001, 23 countries - almost all
in Africa - proposed transport, transport infrastructure or roads as a priority sector,
for a total of approximately
1.7 billion. The CSPs for these 23 countries have all
based their proposals for the EC response strategy in the sector on the Programming
Guidelines. The main areas for EC sectoral support under these CSPs are sector
strategy development, road maintenance (backlog and periodic), capacity building in
both the public and private sector (e.g. domestic contracting), and the upgrading of
roads, particularly focussing on key regional transport links between countries.

Policy and strategy coordination with EU Member States, the World Bank and other
donors forms an essential element of EC support to transport, in order to ensure the
coherence and complementarity of EC interventions. In 2001 the Commission held
discussions with the EU Member States transport experts’ group on the above-
mentioned Programming Guidelines and also launched a dialogue on indicators for
monitoring transport sector performance and transport’s contribution to development
co-operation.

Policy and strategy dialogue is also pursued through the Sub Saharan Africa
Transport Policy Programme (SSATP) – which brings together UNECA, World
Bank, EC, several Member States, Norway, etc and approximately 30 African
countries. In 2001 a new governance structure was implemented to increase African
ownership, strengthen programme management, and create a small SSATP Board
(the Commission represents donors). A programme review was also carried out.
These changes have increased African confidence and donor willingness to support
the programme, which should sustain impact at a country level and secure donor
financing in the medium term.

2.5.6.

Food Security and Sustainable Rural Development

Following an external evaluation of the Commission’s Food Security/Food Aid
policy in 1999, an important step was made in 2001 to integrate further these issues
into the Commission’s development objectives and policy. A Communication to

35

Council and Parliament37 on the future orientation of Council Regulation EC 1292/96
defines in details:

• the role of the Regulation and its coherence with other Commission policies and

instruments;

• the specific objectives and applications of the various instruments within the

Regulation; and

• the measures required to improve the efficiency and the quality of programme

management at all stages of the programming and project cycle.

With roughly 70% of the world’s poor living in rural areas, the emphasis in 2001 has
been on reviewing the Community policies and strategies in the rural development
and natural resources sectors (agriculture, livestock, fisheries and forestry), to ensure
their effective contribution to the poverty reduction objective. Moreover, a
Commission strategy to support agricultural research at national, regional and global
levels has been formulated. This work, carried out with broad-based participation
from the relevant Commission services and active support by Member States,
provides the basis for a Communication to Council and Parliament on Fighting Rural
Poverty prepared during 2001 and to be presented in 2002.

For both areas - food security and rural development (including the main natural
resource sectors) - operational guidelines for programming have been developed and
disseminated. Efforts have also been made to ensure the integration of natural
resources issues in the context of regional programming. However, while most of the
Country Strategy Papers provide a good analysis of food security and rural concerns,
these concerns are sometimes missing from the programming perspective.

2.5.7.

Institutional Capacity Building

Efforts have been made to integrate institutional development and governance issues
into the Country Strategy Papers. The multi-annual programming exercise completed
during 2001 has given a high priority to programmes supporting the strengthening of
governments and civil society (see section 2.4.).

CSPs for the ACP States identify this area as a major problem in most of the
countries analysed so far. Consequently, institutional capacity building has been
chosen either as a priority sector for Community support or is treated as a cross
cutting theme.

The TACIS programme, which supports the transition to democracy and a market
economy in the Newly Independent States, has been focused on institution building
since its inception while ACP, MEDA, Asia and Latin America and CARDS
(Balkans) use 4–21% of the available resources in this area, the TACIS programming
provides for more than 40%.

Considerable efforts have been devoted to the provision of policy advice e.g. in trade
policy, drafting of legislation, support for border management, reform of the
regulatory framework of the economy, financial sectors / corporate governance /

37

COM (2001) 1 of 11.01.2001

36

reconstruction of enterprises and the restructuring of public institutions. The
programme is now moving on to include, for example, support for fair and effective
legal systems, sustainable social systems and municipal services. With the realisation
that transition will be a longer process than originally expected, the programme is
shifting from short-term advice to longer-term partnerships between organisations. It
also now differentiates more strongly between the countries of the region, in order to
take account of their different levels of development.

An internal network has been established to develop a set of practical tools to
improve the quality of the design and implementation of EC programmes and
projects in this area.

2.6.

Mainstreaming the Cross-cutting Themes

The Commission recognises that, at every stage of execution of its activities in the
six priority areas, the Community also needs to mainstream crosscutting concerns.
The four crosscutting themes identified in the EC’s Development Policy are :

• the promotion of Human Rights;

• equality between mean and women;

• the environment; and

• conflict prevention.

The main developments
implementation of specific horizontal instruments is discussed in the next chapter.

in each area are outlined below. Progress with

2.6.1. Human Rights

The European Commission made its first policy statement on Human Rights since
1995 when it issued its Communication on the EU Role in Promoting Human Rights
and Democratisation in Third Countries in May 200138. The document recognises
that it is one of the Commission's roles to promote coherence, consistency and
transparency and to avoid double standards in the EU foreign policy as a whole. A
further role is to promote the involvement of civil society in the EU activities in this
area.

This Communication identifies three areas where the Commission can add value:

• promoting coherent and consistent policies in support of Human Rights and
democratisation. This applies both to coherence within and between European
Community policies, and between those policies and EU action, especially the
Common Foreign and Security Policy. It also relates to the promotion of
consistent and complementary action by the EU and member states.

• placing a higher priority on Human Rights and democratisation in the European
Union's relations with third countries and taking a more pro-active approach, in
particular by using the opportunities offered by political dialogue, trade and

38

COM (2001) 252 of 8.5.2001.

37

external assistance. The Commission will henceforth - where it does not already
do so - systematically mainstream Human Rights and democratisation issues into
the political dialogue it holds with non EU countries and its assistance
programmes.

• adopting a more strategic approach to the European Initiative for Democracy and
Human Rights (EIDHR), matching programmes and projects in the field with EU
commitments on Human Rights and democracy. To maximise impact, it identifies
four themes on which the EIDHR will focus as well as a greater concentration on
certain focus countries.

The Commission Communication was welcomed by the Council in the June 2001
General Affairs Council as a ‘valuable contribution towards reinforcing the
consistency and coherence of EU policy’ in this area

On the basis of this Communication, the following activities were undertaken in
2001:

a)

Strengthening of the dialogue with third countries:

The European Commission participated in the two sessions of the EU/China Human
Rights dialogue which China held in Stockholm and Beijing in October 2001. The
Commission also co-organised - with the Presidency in office - two Human Rights’
seminars in the framework of this dialogue in Beijing in May 2001 (the death penalty
and the right to education) and in Brussels in December 2001 (the fight against
torture and the right to education). The Commission also participated in the political
dialogue with North Korea and sent a Human Rights expert as part of the EU
delegation to Pyongyang in October 2001.

The EU approach to Human Rights dialogue with countries outside the EU was
formalised in guidelines adopted by the Council on 13 December 200139. These
guidelines aim to strengthen the coherence and consistency of the European Union's
approach towards the Human Rights’ dialogue instrument and to facilitate its use by
defining the conditions in which it can be applied and made effective.

b) Multilateral fora

The World Conference against Racism, Racial Discrimination, Xenophobia and
to 8
Related Intolerance took place in Durban, South Africa from 31 August
September 2001. The World Conference aimed to focus on action-oriented and
practical steps to eradicate racism, including prevention, education, protection and
the provision of remedies. The Commission prepared a contribution to the World
Conference in a communication adopted on 1 June 200140. This document
summarises the measures which have already been taken in the European Union to
combat racism, and demonstrates what can be achieved by a group of states acting
together at a regional level. The EC budget (European Initiative for Democracy and
3.7 million to the World Conference to encourage the
Human Rights) contributed
participation of NGOs and of Least Developed Countries in the regional preparatory

€

39

40

see http://europa.eu.int/comm/external_relations/human_rights/doc/ghd12_01.htm
COM (2001) 291 of 1.6.2001

38

events and in the World Conference itself. Funding was channelled through the
Office of the High Commissioner for Human Rights and the Council of Europe.

The Commission actively contributed to the 57th session of the Commission on
Human Rights in Geneva and the 56th Third Committee of the UN General Assembly
in New York, covering Social, Humanitarian and Cultural Affairs.

c)

Election observation

the Council adopted conclusions on the
In the field of Electoral Observation,
Commission Communication on Election Assistance and Observation on 31 May
200141, welcoming the Commission document as an important contribution to a
coherent EU policy in such a field. The Council indicated that election support was
an important element of the EU overall contribution to democratisation and
sustainable development
in countries beyond the European Union. Specific
mechanisms for co-operation among EU institutions in election observation were
also outlined in the document. The European Parliament also endorsed the
Commission’s new approach to Election Observation in its Resolution of 14 March
2001. Eight election observation missions were undertaken in 2001: Guyana, Peru,
East Timor, Nicaragua, Bangladesh, Sri Lanka, and Zambia. Needs assessment
in Nicaragua, Togo, Cambodia, Colombia, Congo
missions were carried out
Brazzaville, Bangladesh and East Timor.

d)

Programming of funding

The approach developed in the Communication was put into practice in the 2002-
2004 programming document on the European Initiative for Democracy and Human
Rights (EIDHR) adopted by the Commission on 20 December 2001. In the light of
these requirements, this programming document presents a ‘response strategy’ to
enhance the impact of EIDHR, and examines the best ways of delivering assistance.
This is done by targeting a limited number of thematic priorities and 29 ‘focus’
countries.

e)

Dialogue with Non-Governmental Organisations (NGOs)

in
The dialogue with Non-Governmental Organisations has been developed,
particular through the conference held in Brussels on 28 and 29 May 2001 on ‘The
role of Human Rights and Democratisation in Conflict Prevention and Resolution’
and through the Annual Human Rights’ Forum held in Brussels on 21/22 November
2001. The forum focused on the roles and responsibilities of state and non-state
actors, on the means of implementing Human Rights’ policies at bilateral and
multilateral level, on the types, conditions, objectives and evaluation of the Human
Rights’ dialogues and on the evaluation of the conference report42 and of the Human
Rights fora held so far.

2.6.2. Gender Equality

The mainstreaming of gender equality in Community development co-operation is a
key element in the pursuit of sustainable development and is therefore a priority for

41

42

COM (2000) 191 of 11.4.2000
see http://europa.eu.int/comm/external_relations/human_rights/conf/cp05_01.htm

39

the Commission. This builds on the mainstreaming commitment made by the EC and
partner countries in the Fourth World Conference on Women in Beijing in 1995 and
the subsequent follow-up to the Beijing Declaration and Platform for Action43.

In 2001, the main thrust was to get the Programme of Action for the Mainstreaming
of Gender Equality in Community Development Co-operation of June 200144
completed and adopted by Council on 8 November 2001. To combat the well-known
phenomenon of policy evaporation,
to close the gap between policy and
the Programme of Action proposes building internal capacity
implementation,
through training, clarifying roles and responsibilities, developing methods and
indicators and establishing monitoring systems to follow implementation more
closely.

i.e.

The programme has chosen a tripartite strategy to achieve these objectives, with a
five year timeframe (2001-2006):

• to mainstream gender considerations at the country level;

• to integrate gender considerations in all six priority areas of Community

development policy; and

• to build gender competence at all relevant levels (headquarters and delegations) to

support these processes.

The EC budget lines allocated to gender45 have been a key instrument in introducing
the mainstreaming concept. The funds have proved been both catalytic and strategic.
The aim is to build capacity in the social sectors with the assistance of civil society in
the partner countries.

An evaluation of the Council Regulation of 199846 on ‘integrating gender issues in
development co-operation’ and its financial framework B7-6110 and B7 6220 has
been launched and will be completed in 2002.

A review of 40 Country Strategy Papers (CSPs) was undertaken in order to assess to
what extent mainstreaming of gender equality in development co-operation had been
taken into account in the programming process. It was found that:

• gender was mentioned as a ‘cross-cutting theme’, but

the concept of

mainstreaming gender equality was hard to discern;

• the focus was on women and women’s situations, and analysis on men and boys

was missing; and

• gender was mentioned in the context of education, health and Human Rights
whereas sectors that received the bulk of EC funds (transport and macro-
economic support) were gender blind.

Further monitoring and methodological work is required to improve the situation.

43

44

45

46

see http://europa.eu.int/comm/employment_social/equ_opp/beijingquesen.pdf
COM (2001) 295 of 21.6.2001
B7-6110 and for 2001 B7 6220 amounting to
Council Regulation EC No 2836/98

2.2 million

€

40

2.6.3.

Environment

High rates of environmental degradation continue to undermine prospects for long-
term economic and social development and often offset short-term gains in poverty
reduction. Environmental deterioration,
including depletion of natural resources,
continues apace in developing countries. Soil erosion and land degradation, loss of
forests, habitats and biodiversity, depletion of fish stocks and pollution represent
serious permanent threats to sustainable development in most countries. Furthermore,
developing countries are likely to be particularly vulnerable to the impact of global
climate change, despite their small relative contribution to this phenomenon.

In view of this,
the Commission – in partnership with the UN Development
Programme, the World Bank and the UK Department for International Development
– has initiated a process to reflect on linkages between poverty and the environment,
and ways to reduce poverty and sustain growth. A concept paper, considered as a
‘work-in-progress’, will be subject to broader discussions in the context of the 2002
Johannesburg United Nations World Summit on Sustainable Development.

One of the major accomplishments in 2001 was the formulation of an EC strategy for
‘Integrating the Environment into EC Economic and Development Co-operation’.47
This put an emphasis on links between poverty reduction and the environment, and
aimed to integrate the environment into the six priority areas of EC development co-
operation. One of the important aspects of this strategy was the commitment to the
preparation of an environment integration manual, a draft version of which was
produced in 2001. Furthermore, a number of environmental training courses were
given in 2001 to European Commission staff and local stakeholders.

One of the constraints on the Commission’s activities in this area is the lack of
attention on the part of some developing countries to the protection of their national
environment. This has made it difficult for the Commission to ensure that appropriate
attention is given to this issue in the programming dialogue. One of the ways that the
Commission tries to strengthen environmental dialogue with developing countries is
the promotion of specific opportunities. Unfortunately,
this has not produced
encouraging results so far. The Commission has also focused on high level political
commitments to take action forward in this area in the partner countries.

In 2001, the Commission made substantial contributions to a range of Multilateral
Environmental Agreements. It adopted four Biodiversity Action Plans, including a
Biodiversity Action Plan for Development and Economic Co-operation.48 The
Commission also played a key role in ensuring the success of the negotiations in the
context of the UN Convention to Combat Desertification49 (which issued a key paper
for the World Summit on Sustainable Development preparations) and of the Bonn
and Marrakech agreements (Kyoto Protocol), which contained items of particular
relevance for developing countries (Clean Development Mechanism and Technology
Transfer).

47

48

49

SEC (2001) 609 of 10.04.2001
COM(2001) 162 of 27.03.2001
see www.unccd.org

41

2.6.4. Conflict Prevention

Conflict prevention has been high on the political agenda of the EU in 2001. There
has been some fruitful debate and concrete actions proposed and implemented to
develop further the Union’s capacity in this field. The Commission adopted a
Communication on Conflict Prevention,50 in April 2001. This set out a new strategy
in this field and put forward important recommendations for action. Concrete results
are already visible.

In terms of the mainstreaming of conflict prevention in EU policies and instruments,
Country Strategy Papers (CSPs) have been reviewed from a conflict prevention
angle. This means that risk factors have been systematically checked during the CSP
drafting process. For that purpose, the Commission’s geographical services used
conflict indicators that were developed during 2001 in collaboration with the Conflict
Prevention Network. The indicators look at issues such as, inter alia, the balance of
political and economic power, the control of security forces, the ethnic composition
of the government (for ethnically-divided countries), and the potential degradation of
environmental resources.

On the basis of this conflict analysis, it has been possible to draw more attention in
the CSPs to those underlying causes of conflict that external aid or other EU
instruments should target. At the programming level, the Commission’s intention is
to put more emphasis on strengthening the rule of law, supporting democratic
institutions, developing civil society and reforming the security sector. This approach
is critical both to eradicating conflict and to preventing its re-emergence. It is also
consistent with the Commission’s renewed emphasis on institution building as part
of the EC’s development policy priorities.

In post-conflict situations, peace-building initiatives are essential for ensuring a
lasting peace. Where the situation has allowed, the Commission has begun to engage
more substantially in rehabilitation activities as well as in traditional demobilisation,
disarmament and reintegration programmes (DDR). A good example is the support
given by the European Commission in 2001 to the multi-donor Trust Fund for DDR
in Sierra Leone.

The Commission is actively participating in many international initiatives to tackle
‘cross-cutting issues’ which may create tensions or conflicts. For example, in 2001
the Commission took a much more active role in the Kimberley process, aimed at the
establishing an international control regime for the import and export of rough
diamonds. Following the political agreement reached at Gaborone in November 2001
between the participants in this process, the Commission is now launching the
preparatory work for the full implementation by the Community of the control
regime in the course of 2002.

Concrete recommendations have been put forward in the Communication on Conflict
to increase EU capacity to react quickly to nascent conflicts, notably to improve
early warning mechanisms and CFSP instruments such as political dialogue or the
use of EU Special Representatives. At the Community level, the Commission is in
the process of reforming its instruments to ensure a swift Community reaction to
crisis or pre-crisis situations. An important step was taken with the adoption this year

50

COM (2001) 211 of 11.04.2001

42

of a Rapid Reaction Mechanism (RRM)51, allowing for speedy initiatives in peace
building, reconstruction and development. The RRM is now fully operational and is
being used, in particular in Former Yugoslav Republic of Macedonia, Afghanistan
and Congo, to bring a host of measures to bear quickly on a conflict situation, where
these would previously have been subject to more cumbersome procedures.

Conflict prevention is too big a task for a single organisation. International co-
operation is crucial. Only effective coordination with international partners can
achieve real progress. Following Kofi Annan’s visit to Brussels in May 2001, and the
adoption by the General Affairs Council of a new framework for co-operation with
the UN on conflict prevention and crisis management52, contacts between the EC and
the UN have been significantly enhanced. For example, a joint assessment mission
was carried out in the summer of 2001 to the Great Lakes region to prepare for
possible action on disarmament, demobilisation,
and reintegration. Similar
frameworks are being studied for co-operation with other organisations active in the
field of conflict prevention, such as the Organisation for Security and Co-operation
in Europe.

51

52

Council Regulation (EC) 381/2001 of 26 February 2001
Conclusions from the General Affairs' Council of 11 June 2001

43

3.

IMPLEMENTATION : HORIZONTAL INSTRUMENTS

The European Community has developed a series of instruments to complete the range of
actions covered by the existing geographical programmes. Specific budget lines and legal
bases were adopted in order to put these “horizontal” policies into action. This chapter
outlines activities in 2001 in the following areas:

• Human Rights and Democracy

• Food security

• Health, in particular poverty-related illness and reproductive health

• Drugs

• Relief, rehabilitation and development

• Environment

• Partnerships with NGOs

3.1.

European initiative for democracy and Human Rights

Chapter B7-70 of the budget entitled “European initiative for democracy and Human
Rights” (EIDHR) supports actions in the Human Rights, democratisation and conflict
prevention fields. These operations must essentially be executed in partnership with
NGOs and international organisations. Council Regulation Nos 975/199953 and
976/199954 constitute the legal basis of these activities.

The EIDHR supplements the Community programmes executed with governments
(EDF, Tacis, ALA, MEDA, CARDS, Phare, etc). It also represents a form of “risk-
capital fund for Human Rights” allowing initiatives to be launched on a pilot or
experimental basis. It can be used in the absence of the host country’s consent or
when the main Community programmes are not available for other reasons - for
example, in the case of suspension. In certain regions, it provides the sole legal basis
for some activities, including the promotion of political and civil rights, election
observation and conflict resolution initiatives.

The priorities of the EIDHR for 2001 were drawn up by the Commission.55 The
objectives
thematic sectors by region. The
implementation of the Initiative is also in line with the Commission Communication
of 8 May 2001 on the European Union’s role in promoting Human Rights and

focus on a small number of

53

54

55

Council Regulation (EC) No 975/1999 of 29 April 1999 laying down the requirements for the
implementation of development co-operation which contribute to the general objective of developing
and consolidating democracy and the rule of law and to that of respecting Human Rights and
fundamental freedoms.
Council Regulation (EC) No 976/1999 of 29 April 1999 laying down the requirements for the
implementation of Community operations
Priorities and Guidelines for the implementation of the 2001 European Initiative for Democracy &
Human Rights (EIDHR) Brussels, 6 June 2001-SEC(2001)891
http://europa.eu.Int/comm/external_relations/human_rights/doc/sec01_891.pdf

44

democratisation in third countries56 which is designed to develop a more strategic
approach to the Initiative.

€

In 2001, some
democratisation and conflict prevention fields.

110 million was available to support actions in the Human Rights,

As in previous years, three types of projects were used to implement the EU’s
strategy in the areas in question:

Projects identified by call for proposals: as a result of two general calls, 93
projects obtained a grant, following notification or consultation of the “Human
€
Rights” Committee set up by Council Regulation Nos 975 and 976/1999. A total of
59 million was allocated to the projects selected.

Dedicated projects are systematically used for projects drawn up with international
and regional organisations, including UN specialised agencies and the Office of the
High Commissioner for Human Rights, the Council of Europe and the OSCE -
ODIHR. They are identified by the European Commission as projects that pursue
specific objectives that cannot be achieved by means of a call for proposals.
36
million was earmarked for these projects.

€

€

€

3 000 to

Microprojects are used to finance democratisation projects with a budget ranging
from
50 000. They are designed to give extra support to local civil
society initiatives. They are managed directly by the Commission delegations and are
selected by local calls for proposals.
€

In 2001, microprojects totalling
12 million were selected in south-east Europe
(Albania, Bosnia-Herzegovina, Croatia, Federal Republic of Yugoslavia, and
FYROM), in the new independent states (Armenia, Belarus, Georgia, Kazakhstan,
Kyrghyztan, Moldavia, Russia, Tajikistan and Ukraine), in Latin America (Colombia
and Mexico),
in south and south-east Asia (Cambodia, Indonesia, Nepal and
Pakistan), in West Africa (Nigeria and Côte d’Ivoire), in Central Africa (Democratic
Republic of Congo), in Sudan, the Middle East (Israel, West Bank and the Gaza
Strip), in Haiti, Turkey and Zimbabwe.

3.1.1.

The main priority areas

€

On the basis of the programming document adopted by the Commission57 for 2001,
6 million was allocated to the promotion and defence of Human Rights and
fundamental freedoms (protection of civil, political, economic, social and cultural
rights, minorities, ethnic groups and indigenous peoples;
including
NGOs involved in the protection, promotion and defence of Human Rights;
rehabilitation centres for the victims of torture; education, training and information in
the field of Human Rights; equal opportunities and the fight against racism and
xenophobia; freedom of opinion, expression and conscience).
€

institutions,

35 million was allocated to support for democratisation and strengthening the rule
of law: independence of the judiciary, separation of powers, improved governance
etc.

56

57

COM(2001)252 final.
http://europa.eu.int/comm/external_relations/human_rights/doc/sec01_891.pdf

45

€

17 million was allocated to conflict prevention and the restoration of civil peace.
These projects will be implemented in: Latin America (Columbia, where the EU has
given steady support to initiatives aimed at bringing about a peaceful settlement to
the conflict there and in Guatemala; the Caucasus region; the former Yugoslavia,
Slovenia and Albania; Africa (Sudan, Kenya, the Democratic Republic of Congo,
Rwanda and Somalia); Israel and Palestine; and Afghanistan and Pakistan. The
projects are part of the effort to implement the Commission Communication on
Conflict Prevention of 11 April 2001.58

€

Support for the activities of international criminal tribunals and the setting-up of the
International Criminal Court amounted to
3 million. Measures taken under the
Initiative count as implementation of the EU common position on the international
criminal court adopted in June 2001.59 The Commission supported the setting up of
the Court
for
implementation of
instance. The
legislation and technical co-operation,
Commission also made a contribution to the expense of collecting evidence
(missions, inquiries, travel of witnesses, exhumations, etc.) for the tribunals for
Rwanda and the former Yugoslavia.
€

through regional networks, NGOs and technical assistance

5.95 million was allocated to support for rehabilitation centres for the victims of
torture in third countries and
6 million was allocated to rehabilitation centres for
the victims of torture and their families within the EU. These projects constitute
implementation of the EU guidelines, adopted by the Council (General Affairs) on 21
April 2001 concerning policy towards torture and other cruel, inhuman or degrading
punishment or treatment.

for

€

Efforts were made to integrate the gender equality aspect into the implementation of
the EIDHR by systematically analysing all the projects selected according to their
impact on this aspect.

58

59

COM(2001) 211 final
OJ L 155, 12.6.2001, p.19

46

EIDHR priority areas in 2001

Field

good

Education, training and information in the Human Rights field
Fight against racism and xenophobia and protection of minorities
and indigenous peoples
Freedom of opinion, expression and conscience and the right to
use one’s own language
Strengthening respect for the rights of children60
Abolition of the death penalty
Promoting pluralism at political level and in civil society
Promoting
supporting
governance,
administrative accountability and the prevention and combating of
corruption
Promoting the participation of the people in the decision-making
process at national, regional and local
in particular by
promoting the equal participation of men and women in civil
society, economic life and politics
Promoting respect for Human Rights and democracy with a view
to conflict prevention and the restoration of civil peace
Support for democratic transition and the observation of elections
Prevention of torture and rehabilitation of victims61

particularly

level,

by

(

Amount
€
million)
2.600
6.000

0.420

1.100
0.880
4.400
1.770

4.340

17.000

9.960
5.950

€

As regards education, training and awareness-raising in the Human Rights field, the
2.6 million into university programmes on Human Rights and
EIDHR channelled
democratisation. Three new regional masters in Human Rights were therefore created
in south-eastern Europe, South Africa and Malta. They allow students from each of
these regions to specialise in the Human Rights field. These courses follow the
model of the European masters in Human Rights and democratisation launched in
1997.

The Commission’s activities in the field of support for democratic transition and
election observation are based on its Communication on EU election assistance and
observation of April 2000,62 the Council conclusions of 31 May 2001.63 All these
documents stress the fact that an election observation mission should be deployed on
the ground before, during and after Election Day.

In 2001, the EIDHR financed EU election observation missions at the request of the
governments of Bangladesh, Cambodia, Nicaragua, East Timor, Zambia and Sri
Lanka. In Pakistan, where elections will be held in 2002, a project is designed to

60

61

62

63

€

1 million from budget heading B7-626 “Campaign against sex tourism in non-member

Furthermore,
countries”, was allocated to an international campaign against child sex tourism.
Furthermore, 7 centres located in the European Union also received a grant totalling
6 000 000 from
budget heading B5-813 (this appropriation covers support for the establishment and maintenance of
rehabilitation centres for torture victims and their families and other organisations offering concrete
help to victims of Human Rights abuses).
http://europa.eu.int/comm/external_relations/human_rights/eu_election_ass_observ/index.htm
COM(2000) 191 final of 11.4.2000.
2352nd Council meeting-Development-Brussels, 31 May 2001.

€

47

restore the general public’s confidence in the institutions and in the electoral process
in order to raise their political awareness and their participation in the elections.
the “European Network for Electoral and Democracy Support” project
Finally,
received a grant of over
1.6 million to consolidate the European network born out of
the EUEOP project (European Union Electoral Observation Project).

€

EIDHR Budgetary Execution 2001
% of Total Amount Allocated to the EIDHR
(by region)

€

Region

Amount in

million

% of Total

CEEC & NIS

ACP

Latin America

MEDA

Asia

World-wide (including torture)

EU

Micro

Technical Assistance

18.454

19 049

9.100

9.516

11.101

23.530

6.000

12.000

3.000

TOTAL

111.750

16.51

17.05

8.14

8.52

9.93

21.06

5.37

10.74

2.68

100

48

EIDHR COMMITMENTS 2001
AMOUNTS ALLOCATED TO PROJECTS (By Region)

Region

South Eastern Europe: Balkans

Eastern Europe and Central Asia

ACP

Latin America

South Mediterranean, Near Middle East

Asia

World-wide

TOTAL

€

Amount in

% of Total

11 155 302

8 409 661

19 242 726

15 408 732

10 762 574

12 862 460

12 681 214

90 522 669

12,32

9,29

21,26

17,02

11,89

14,21

14,01

100

14,01%

12,32%

14,21%

9,29%

South Eastern Europe:
Balkans

Eastern Europe and
Central Asia

ACP

Latin America

11,89%

17,02%

21,26%

South Mediterranean,
Near Middle East

Asia

World-wide

3.2.

Food Security

3.2.1.

Performance in 2001

454 million. The aim of
In 2001 the food aid and food security budget amounted to
this Community programme was to integrate the food security requirement more
fully in the overall development strategy of the beneficiary countries referred to in
the country strategy papers – and in the poverty reduction strategy papers. The
programme also focused on increased ownership of the programmes and policies by
the national partners: governments and civil society.

€

3.2.2.

Breakdown by form of intervention

The priority given to direct food aid was confirmed in 2001. The Commission
attaches growing importance to food aid strategy. For 2001, the Commission’s food
aid programme earmarked
201.8 million for direct food aid granted to governments
in the form of financial aid and support operations, including
74 million for budget
support.

€

€

49

€

A sum of
25.2 million was reserved for technical assistance on the ground, follow-
up and monitoring missions, the financing of RESAL (European network for food
security), monitoring of food aid and price adjustment of purchases of foodstuffs.

Every effort was made to follow the recommendations set out
in the general
evaluation of three years of action of food security policy. The priorities were based
on optimising analysis capacities with the support of RESAL. Food aid in kind was
reserved for vulnerable people in countries in crisis and for serious food crisis
situations. It provides a safety net to complement emergency operations.

€
€

Allocations to NGOs consisted of support actions for food security (funding) that
were the subject of direct contracts between the Commission and NGOs amounting
to
60 million while allocations of food aid, tools and seeds to EuronAid amounted
to
76 million. In the interests of consistency and greater effectiveness, NGO
projects were incorporated in the national food security strategy of the intervention
countries.

Programming was done jointly with ECHO in shared intervention countries.

3.2.3.

Intervention countries

These countries are included on the list of eligible countries under Regulation No
1292/96. They are divided into two groups: those that receive structural aid and those
that are in a crisis or post-crisis situation. The first group includes countries classified
as: least developed (LDC), low-income food-deficit countries (LIFDCs), with a high
food insecurity index and where the government is keen for a coherent, long-term
food security strategy. The second group includes countries in a crisis or post-crisis
situation (linking relief, rehabilitation and development: LRRD). Interventions in
these countries are less structural and mostly involve supplying food aid, tools and
seeds, together with additional technical and financial support to prevent the risk of
famine or help rebuild the economic and social fabric damaged by political or ethnic
conflict.

In 2001, the first group included 21 countries: Albania, Burkina Faso, Cape Verde,
Mauritania, Niger, Ethiopia, Eritrea, Madagascar, Mozambique, Malawi, Yemen,
Bangladesh, Georgia, Armenia, Azerbaijan, Kyrgyzstan, Moldova, Nicaragua,
Honduras, Peru and Bolivia. The second group included 18 countries: Afghanistan,
Cambodia, India, Pakistan, Laos, Liberia, Sierra Leone, North Korea, Somalia,
Sudan, Democratic Republic of Congo, Rwanda, Angola, Ecuador, Palestine,
Tajikistan, Montenegro et Haiti.

Concentrating operations on a limited number of countries means a critical mass can
be achieved in each country, thereby increasing the impact of aid on improving food
security.

3.2.4.

Relations with the other donors

The Community food security programme is based on four main principles of action:

–

–

coordinating the programme’s interventions with those of the other donors,
starting with the Member States;

taking part in drawing up a coherent framework for aid in the recipient country;

50

–

–

pursuing discussions and analysis to help with implementing the programme;

focusing interventions in a small number of recipient countries.

3.2.5. Coordination with the Member States

The desire for consistency and coordination in EU interventions and those of the
Member States exists at all
levels at which the food security programme is
implemented. Consistency is systematic when programmes are defined, because it is
the Member States which, within the EU institutions, decide on the strategic policy
outlines of the programme and funding. Furthermore, there is a code of conduct for
Member States and the Commission relating to food aid.

In the field, coordination takes place on a case-by-case basis, as a function of donor
involvement and the nature of the programmes implemented. In Mozambique, for
example, the Commission is coordinating with a number of other Member States as
part of PROAGRI, a sectoral programme to strengthen the capacity of the Ministry
of Agriculture.

3.2.6.

Transatlantic dialogue

In 1995, the European Commission and USAID (US Agency for International
Development) launched a new stage of the transatlantic initiative, the aim of which is
to step up their coordination in various fields. With regard to food security, this
dialogue takes place in the field in seven pilot countries: Bangladesh, Bolivia,
Ethiopia, Haiti, Kyrgyzstan, Malawi and Mozambique. A food aid analysis table has
been jointly drawn up and includes the following points: means allocated;
consultation to assess needs and develop a targeting strategy; factors of long-term
food security; assessment: frequency, criteria, problems encountered and joint
assessment.

this table was used positively to assess the EU and US food aid
In Haiti,
programmes. In Kyrgyzstan, EuropeAid/USAID coordination led to harmonised
intervention by both donors and a reduction in the distorting effects of the US food
aid on local markets. In Bangladesh, it led to the joint production of an impact study
on income-producing programmes for vulnerable populations.

2001 – ALLOCATIONS BY IMPLEMENTING PARTNERS

Partners

Euro M

Direct

Indirect

Other

Total

180,24

250,94

22,81

453,99

INDIRECT AID

Indirect

Euro M

WFP

Euronaid (NGO)

NGO
UNRWA

FAO

Total

98,00

76,00

60,00

15,00

1,94

250,94

51

LIST OF COUNTRIES

Cty

Angola
Ethiopia
Georgia
North Korea
Bangladesh
Afghanistan
Malawi
Eritrea
Mozambique
Sudan
Sierra Leone
Yemen
Burkina Faso
Armenia
Kyrgyztan
Somalia
Honduras
Ecuador
Cambodia
Tajikistan
Peru
Mali
Gaza
DR Congo
Jordan
Lebanon
Niger
West Bank
Syria
El Salvador
Bolivia
Haiti
Zambia
Liberia
Laos
India
Nicaragua
Guatemala

SumOfValue
28,425,191
25,386,971
25,000,000
24,569,523
24,500,000
20,548,177
18,000,000
17,342,773
14,800,000
13,653,576
13,389,602
12,000,000
11,532,345
10,000,000
10,000,000
9,451,499
6,696,996
6,000,000
5,707,110
5,662583
5,000,000
4,740,391
3,792,572
3,445,775
3,119,151
2,894,354
2,612,492
2,609,162
2,584,760
2,210,685
2,145,901
2,000,000
1,602,071
1,258,665
1,060,764
999,724
891,312
447,350

2001 – GEOGRAPHICAL DISTRIBUTION OF ALLOCATIONS

Geographical zones

ACP
Asia
Latin America
NIS
Europe
Mediterranean & Middle East
Other
To be distributed
Total

Euro M
167,64
77,39
23,39
50,66
0,00
27,00
22,81
85,10
453,99

ACP

ACP

East Afica
South Africa
Central Africa
West Africa
Indian Ocean
Caribbean
Total

M Euro
65,83
62,83
6,06
30,92
0,00
2,00
167,64

52

DISTRIBUTION BY PROGRAMME IMPLEMENTING PARTNER
1993-2001

Type of aid (

m)

€

Direct aid

NGO

WFP

UNHCR

ICRC

Other organisations

Other (TA, price adjust.)

1993

1994

1995

1996

1997

1998

1999

2000

2001

137,41

160,13

158,47

15,66

20,96

38,14

43,23

183,18

154,51

144,16

10,55

20,27

21,23

55,20

202,16

214,38

137,54

12,74

23,04

13,63

42,81

272,15

106,51

111,45

-

-

13,40

56,65

287,28

87,21

123,87

-

10,57

11,91

15,60

271,91

113,59

141,47

-

9,21

12,29

29,88

258,55

85,00

104,14

196,06

108,05

90,00

180,24

136,00

98,00

-

-

-

-

-

-

25,50

31,79

15,60

48,70

16,94

22,81

TOTAL

574,00

589,10

646,30

560,16

536,44

578,35

504,97

458,41

453,99

Direct aid

400

300

200

100

0

1993

1994

1995

1996

1997

1998

1999

2000

2001

GEOGRAPHICAL DISTRIBUTION OF ALLOCATIONS- PROGRAMMES 1993-2001

Geographical area (

€

m)

Europe
ACP
Mediterranean & Middle East
Asia
NIS
Latin America
Reserve and not distributed
Other (TA, price adjust. ...)
TOTAL

1993
-

1994
-

329,97 365,34
51,80
64,17
-
49,91
2,68
55,20
574,00 589,10

74,21
61,99
-
55,63
8,97
43,23

1995
-

1997
1996
10,76
-
371,61 248,22 248,02
34,67
22,91
82,18 102,01
62,69
69,00
61,57
69,44
-
-
56,65
15,60
646,30 560,16 523,56

43,33
121,01
-
67,54
-
42,81

1998

0,22
239,09
30,11
154,95
51,10
72,98
-
31,04
579,49

1999
26,90

2000
11,00
226,97 236,83
24,80
61,34
41,43
34,31
-
48,70
504,97 458,41

20,55
80,73
49,87
55,56
12,61
31,79

2001
-
167,64
27,00
77,39
50,66
23,39
85,10
22,81
453,99

ACP countries

400
300
200
100
0

1993

1994

1995

1996

1997

1998

1999

2000

2001

3.3.

Health, AIDS and Population

3.3.1. Community response to the problem

the
Improving the health and welfare of people in the developing countries,
integration of the developing countries into the world economy and the fight against
poverty are an integral part of Community policy (Articles 179 and 177 of the
Treaty).

The Commission, in conjunction with the Member States, has gradually established a
coherent set of aims and principles governing the choice of activities and the
allocation of means to problems related to the major diseases and reproductive
health.64

3.3.2. Objectives

a)

Poverty-related diseases

–

–

–

Maximise the impact of existing interventions, services and commodities
in the fight against the main transmissible diseases affecting the poorest
populations;

Increasing access to essential medicines;

Stepping up research and development, especially into vaccines,
microbicides and innovative treatments.

b)

Reproductive health

–

–

Guarantee the right of women, men and adolescents to good reproductive
and sexual health;

Allow women, men and adolescents access to a full range of care,
services and safe and reliable products concerning reproductive and
sexual health;

64

http://europa.eu.int/comm/development/aids/html/policiesnf_fr.htm

53

–

Reduce the maternal mortality, especially in the countries and population
groups where it is highest.

3.3.3.

Activities in 2001 and areas of intervention

In recent years, greater attention has been paid to health problems in the developing
countries, especially to the major so-called poverty-related diseases.

A Commission Communication concerning the programme of accelerated action on
these diseases was adopted by the Council in May 2001.65

The process of selecting proposals received from the call for proposals, published in
January 2000, and which had already served as a basis for mobilising credits for a
first set of proposals in 2000, was continued. Of the 295 proposals initially submitted
112 were examined.

16 projects were accepted in 2001 for a budget of
breakdown:

€

20.7 million, with the following

€

€

15.2 million and population: 5 projects for

AIDS: 11 projects for
5.5 million.
Several of these projects (6) aim to tackle the problem of HIV mother-to-child
transmission. Others focus on the prevention of AIDS by means of better care for
people affected by sexually transmitted diseases (3) or by education and training
programmes (3). Three projects concern maternal health.

This call for proposals was a first in the context of these budget lines in that it was
addressed to a large range of actors: NGOs, local and national authorities, research
institutes and community organisations, public and private services.

The actions undertaken in 2001 therefore included the implementation and follow-up
of activities launched during that year and those of previous years. In December
2001, over 90 projects worth almost

100 million were being followed-up.

€

3.3.4.

The prospects: the Commission’s active commitment

The Commission’s participation in 2001 in defining the guidelines for a new Council
Regulation on combating diseases (HIV/AIDS, Tuberculosis and Malaria) and
reproductive health, the creation of a Global Fund for the fight against these three
diseases and the Commission Communication on health and poverty66 will help to
define better the role and place of thematic budget headings concerning health.

The priorities and measures to be applied in the future centre around 4 points:

–

–

better communication about the interventions supported by the budget headings
in order to reinforce their impact on improving the quality of the services
provided to people and support for changes in health policies,

in-depth analysis of the context in which interventions are implemented,

65

66

COM(2001) 96 of 21.2.2001 adopted by the Council on 14.5.2001, 2346th meeting of the Council –
General Affairs .
COM(2002) 129 of 22.3.2002.

54

–

–

applying know-how on the ground and ownership of it by local stakeholders,

establishing an operational link between the fight against specific diseases and
reproductive health and support for development of the health system.

3.4.

Fighting against drugs

Prevention, treatment, reintegration of drug addicts into social and working life,
epidemiological studies, combating money laundering, creation of new laws etc. The
questions raised by drug trafficking and consumption require targeted responses that
fit in with the European Union’s global strategy.

3.4.1.

Activities in 2001

In accordance with the European Union’s Action Plan, Community co-operation is
centred on three major areas:

• an intervention balanced between reduction of demand and of supply;

• the principle of “shared responsibility” between producer countries,

transit

countries and consumer countries;

• the incorporation of drugs control into development co-operation.

With regard to the reduction of supply, the Commission has organised its operation
around two major trafficking routes that supply the European Union. In order to
reinforce the impact of European action,
the Commission has agreed on an
information exchange system with the Member States in order to step up European
coordination.

The Commission’s intervention is often based on the expertise of Member States’
national administrations. This mobilisation of European expertise fosters relations
between beneficiary countries and Member States, which is welcome because of the
international nature of trafficking.

€

€

105 million). In the Caribbean, the EC has contributed some

in Latin America, the EC recently began assisting the
On the cocaine route,
Venezuelan government to set up a national drugs observatory and has allocated
2
million to this. In Colombia, the EC wishes to play a major role in the peace process
30 million out of a
and it contributes to this by means of alternative programmes (
total of
23 million
to the Barbados action plan from heading B7-6310 and from the European
Development Fund, which includes a set of programmes covering all aspects of the
fight against drugs. This initiative is the result of a joint approach on the part of the
Caribbean countries, the EU, the USA and the UN. The Community action is
designed to reinforce the fight against money laundering and cocaine trafficking by
stepping up maritime surveillance and setting up central coordination units that
encompass the police, customs and the armed forces.

€

€

On the heroin route, various schemes to combat trafficking have been undertaken in
Central Asia and in the Caucasus. Demand reduction programmes are in the
pipeline. The EC is preparing a new project focused on Iran, designed to prevent
drug addiction and to train magistrates. It also finances efforts to step up co-
operation between the countries of Central Asia, Iran, Pakistan and Turkey.

55

For demand reduction, the Commission supports a global approach that goes well
beyond detoxification.

The Commission finances a set of programmes from heading B7-6310 and other
headings (regional) that support the development of networks of NGOs. These are
designed to provide drug addicts with a wide range of services - from basic medical
care to social, family and professional rehabilitation and including detoxification and
reducing the risks attached to drug use, especially for injecting drug users.

To provide a more appropriate response to the problem, it also intends to improve
third countries’ knowledge of the situation as regards drugs, by financing projects
to collate data in these countries. This approach is particularly important to enable
the beneficiary countries to define their needs more clearly and to participate in
projects in full knowledge of the facts.

The Community also finances several programmes to combat money laundering
and is involved in the work done by the OECD in this field.

3.4.2.

Perspectives

In its Communication of 8 June 200167 on the implementation of the EU Action Plan
on Drugs, the Commission confirmed the importance given to assistance to non-EU
countries in the field of combating drugs. In this context, the Commission has
undertaken to focus the programming of anti-drugs action on the countries crossed
by the EU’s two main supply routes. The Commission will continue to develop
projects to step up coordination between the beneficiary countries and with the
Member States.

3.5.

Linking relief, rehabilitation and development

• In April 2001,

the Commission adopted a Communication on linking relief
rehabilitation and development (LRRD) The Commission has undertaken a
number of actions to implement
the policy principles of Linking Relief
Rehabilitation and Development (LRRD) The Commission is in the process of
proposing further orientations and decisions to that end, including:

–

–

–

restructuring of budget lines and regulations to be used for linking relief
and development;

establishing guidelines for ECHO’s exit strategies;

establishing an agenda for improving its working methods with a view to
increasing its capacity for rapid interventions.

In 2001, ECHO’s mandate and role vis-à-vis the other Community instruments in
the field of external relations was further clarified with respect to its role in the so-
called “transition gap” between relief, rehabilitation and development (LRRD). As
outlined in the Commission Communication on LRRD,68 ECHO will focus on its
core mandate, while development co-operation will have to strengthen efforts to

67

68

COM(2001) 301 final of 8.6.2001.
Commission Communication on Linking Relief, Rehabilitation and Development – An assessment
(COM 2001 (153) final of 23.4.2001).

56

bridge the gap from the other side. In order to further enhance its transparency and
predictability, ECHO prepared a working paper in December 2001 to clarify its
general criteria for phase-outs and hand-overs. The working paper established these
criteria in two steps:

1)

2)

by defining the modalities for a smooth transition from humanitarian assistance
to rehabilitation and development, and

by looking at the main contextual factors that will have an impact on the modus
operandi for phase-outs.

3.5.1.

The main instruments

• Aid for uprooted people

A new legal basis69 came into force in 2001, under which action for Asia and Latin
America can be programmed until 2004.

Furthermore, as the convention currently in force between the European Community
and the United Nations Relief and Works Agency for Palestine refugees (UNRWA)70
is about to expire, the Commission has obtained a negotiating mandate from the
Council to draw up a new Convention to last for 4 years.

As regards the ACP countries, Article 255 of the Lomé IV Convention allows
resources of the European Development Fund to be mobilised to assist uprooted
people in these countries.

• Rehabilitation schemes

EC policy in this field is governed by Council Regulation 2258/96 of 22 November
1996 on rehabilitation and reconstruction operations in developing countries
(published in OJ No L 306 of 28 November 1996). These operations: “of limited
duration and to be launched as quickly as possible without compromising the quality
of assessment, shall be designed to help re-establish a working economy and the
institutional capacities needed to restore social and political stability to the countries
concerned and meet the needs of the people affected as a whole. The operations must
progressively take over from humanitarian action and pave the way for the
resumption of medium-term and long-term development aid”.

• Action against antipersonnel land mines

Although Community operations in this field have their own budget heading of a
general scope, they did not until now have a specific legal basis. Here again, the
adoption of a legal basis71 that is valid until 2009 will help to increase the coherence
of operations by means of medium-term programming.

69

70

71

Regulation (EC) No 2130/2001 of the European Parliament and of the Council of 29 October 2001 on
operations to aid uprooted people in Asian and Latin American developing countries, OJ L 287,
31.10.2001, p 3.
EC-UNRWA Convention 1999-2001, Council Decision, OJ L 261, 7.10.1999.
Regulations (EC) No 1724/2001 and 1725/2001 of the European Parliament and of the Council of
23 July 2001 concerning action against anti-personnel landmines in developing countries, OJ L 234,
1.9.2001.

57

• NGO cofinancing

Council Regulation No 1658/98 of 17 July 199872 on cofinancing operations with
European NGOs is also an instrument for financing development operations that take
over from humanitarian operations.

3.5.2.

The main areas of action in 2001

• Aid for uprooted people

Although operations in Latin America continue, new commitments in this field
primarily concern uprooted people in Asia in situations of prolonged crisis. These are
people who come from Afghanistan, Burma/Myanmar, Sri Lanka and the Philippines
(Mindanao). The projects currently under way cover a wide variety of fields, ranging
from assistance to refugees in camps – generally implemented by the UNHCR – to
operations carried out by international and local NGOs working in the fields of
education, health, water supplies or rural development. Where the situation allows,
the emphasis is on returning people to their regions of origin.

As a result of the deterioration of the situation on the ground in the Middle East, the
European Community has decided to increase its contribution to the activities of
UNRWA. Besides its annual allocation for 2001 (
42 million), an additional
contribution of
15 million was mobilised for operations in the field of education
and primary health care for refugees in four geographical areas: West Bank, Gaza
Strip, Lebanon and Syria.

€

€

25 million was signed with the
As regards the ACP countries, a convention of
UNHCR for the voluntary repatriation of Burundian refugees currently in Tanzania
on the basis of Article 255.

€

• Rehabilitation operations

Rehabilitation operations are financed from various budget headings covering
different regions of the world (Asia, East Timor, Latin America, Mediterranean, New
Independent States and ACP countries). The projects funded take several forms and
for grassroots community
ranging from support
cover very varied sectors,
organisations to large-scale projects to rehabilitate infrastructure.

East Timor deserves special mention: Community support combined with the
international community’s efforts under
the Trust Fund for East Timor is
contributing to the creation of an independent State. The fact that elections for the
constituent assembly went smoothly in September 2001 augurs well for
the
continuation of the reconstruction process.

• Action against antipersonnel land mines

Action against antipersonnel land mines concerns the countries worst affected by this
scourge. These operations cover both de-mining operations (Afghanistan,
the
Balkans, Angola, Mozambique, Somalia, Laos), and the establishment of information
systems (Balkans) and institutional support (Cambodia).

72

OJ L 213 of 30.07.1998 p. 1.

58

3.6.

Environment

The year 2001 has been very intensive in terms of activities carried out in the fields
of Conservation and Wildlife (C&W), Forestry (For) and Sustainable Management of
Natural Resources (SMNR) with the implementation of 7 new programmes/projects
55 1 million, and with the approval of 4 new programmes
for a global amount of
totalling

26 million.

€

€

Ongoing activities have been pursued, in particular in the Congo Basin, with the
ECOFAC programme and related activities co-ordinated by the strengthened
Regional Environmental Unit based in Libreville. The duration of some programmes
planned to end in 2001 has been extended: Wildlife Tanzania, Wildlife vision Gabon,
Indian Ocean Regional Environmental Programme. The Regional SMNR in Western
Africa (AGIR, Guinea, Guinea-Bissau, Mali, and Senegal) has slowed down due to
insufficient internal consistency, and a global evaluation is about to be launched.

The main tangible outcomes of year 2001 are the increase by 5 times of the total area
of the Odzala National Park (Congo Brazzaville) and of the Monte Alen National
Park (Equatorial Guinea) as well as the constructive continuation of the dialogue
with logging companies. Furthermore, it is important to note the establishment of the
Network of Protected Area of Central Africa (RAPAC) with the election of the
President and the organisation of the first meetings of the Board of Directors. The
willingness of the 5 world heritage sites in the Democratic Republic of Congo to join
the network and the new membership of The Zakouma National Park in Chad are
likely to give a very positive impulse to RAPAC.

The 9th EDF programming exercise has begun with particular emphasis on regional
programmes and the need to appoint a network of experts with regional tasks who
can support EC Delegations and the Commission in implementing environmental
policies and programmes.

Water management has to be seen as a cross-sectoral issue to be incorporated into
development policies centred on poverty reduction (see section 2.5.3.)

Energy is recognised as an important crosscutting element in the elimination of
poverty and the achievement of the Millennium Development Goals. The strategy for
sustainable energy support emphasises the need to mainstream it into the social and
economic sectors (health, education, and enterprise development), as well as the
environmental and other benefits of increasing use of energy efficiency and
renewable energy. It also emphasises the importance of institutional capacity
building and policy support in the energy sector, as well as the necessity to enhance
partnerships between the private and public sectors, and involve civil society.

A Working Group of the ACP-EU Joint Parliamentary Assembly on Renewable
Energy developed a resolution, adopted by the Assembly in 2001, recognising the
essential need for energy services in the fight against poverty, and calling inter-alia
for awareness-raising and capacity building measures for renewable energy. As a
follow up to the above resolution and in order to stimulate integration of sustainable
energy into 9th EDF programmes, a conference, for NAOs and key stakeholders, on
sustainable energy in ACP islands was organised by the Commission, in June 2001
in the Dominican Republic, to raise awareness and start the energy mainstreaming
process.

59

3.6.1.

Activities in 2001

The financial allocations earmarked for the environment and forests are designed to:

• support global or regional

the
conventions
desertification) or international agreements;

environmental

in

initiatives, especially in connection with regional
biodiversity,

(climate

change,

field

• select, on a flexible basis,

the partner countries (including middle-income
countries) that are of particular importance in the context of the fight against
environmental degradation in general, such as Mexico, Brazil or certain countries
in Southeast Asia;

• launch pilot initiatives.

In 2001, commitment appropriations amounted to
13 million
were appropriations carried over from 2000 to 2001 because of the late adoption of
the legal bases (the new regulations were adopted in November 2000).

54 million, of which

€

€

Activities in 2001 were a continuation of those carried out in 2000. Essentially they
involved the management of 221 projects adopted in 2000 or earlier, with the
following geographical breakdown:

Environment

Forests

Africa and Madagascar

Pacific

All ACP States

Latin America and the Caribbean

Asia

Mediterranean

Global

Total

49

-

6

22

8

4

6

95

46

2

-

53

16

-

9

126

60

In addition there are 29 projects selected following a call for proposals which
generated almost 640 funding applications, and 5 other targeted projects

Call for Proposals

Africa and Madagascar

Latin America and the Caribbean

Asia

Sub Total

Outside the call for proposals

Africa and Madagascar

Latin America and the Caribbean

Asia

Subtotal

Total

Environment

Forests

1

5

3

9

1

1

2

11

5

11

4

20

2

1

3

23

3.7.

Co-financing NGOs

The Commission cofinances operations in the developing countries and information
campaigns in the Member States with Northern NGOs. It also cofinances operations
to increase co-operation initiated by Southern civil society actors.

The whole 2001 budget of

€

204 million was committed.

3.7.1. Cofinancing with European NGOs73

At 1 January 2001, there were 1 759 projects under way, plus 293 projects selected in
2001 from the 1 200 applications for cofinancing that were presented under the first
Call for Proposals (published in June 2000).

On the ground

These actions are proposed (exclusive right of initiative) by European NGOs (which
have their headquarters and decision-making centre in a Member State) and are
carried out either in the form of “projects” on the ground in the developing countries
or in the form of “Block Grants” when, for reasons of effectiveness, several micro-
operations are grouped together. In this case they are referred to as “contracts”.

Generally speaking,
the Commission cofinances projects and sets of
thematic operations aimed at poverty reduction in the most vulnerable countries to
the tune of

176 million annually.

therefore,

€

73

Budget heading B7/6000 Regulation (EC) No 1658/98.

61

TABLE TOTAL COST/EU PARTICIPATION
BY REGION OF THE BENEFICIARY WORLD in

€

120.000.000

100.000.000

80.000.000

60.000.000

40.000.000

20.000.000

0

7%

34%
Caribbean

Africa
Sub-Saharan

Pacific1%

22%

Asia

Latin

7%

17%
CentralAmerica
America

12%

Mediterranean

Dark: total cost of the operations proposed; light: the share effectively cofinanced by
the Commission. The percentages given correspond to actual
financing by
geographical area.

Comments: This analysis by area corresponds to the distribution of the poorest or
worst affected people; the reason for slight distortions is the exceptional operations
in Mozambique or Cuba during this period.

Development education

Like the operations described above, European NGOs also propose campaigns to
raise public awareness in the European Union. In 2001, the Commission analysed
132 applications, and selected 49 operations for cofinancing totalling

19.3 million.

€

Under the 2000 call for proposals, 21 operations were selected and financed out of
the total of 61 presented in 2000.

3.7.2. Decentralised co-operation74

Out of the 74 requests presented in 2000 and 2001, 19 grants were committed in
2001 for a total of

5 million.

€

74

Budget heading B7/6002 Regulation (EC) No 1659/98.

62

CDC BY ORIGIN OF CONTRACTANTS

Vanuatu (1)

6%

Benin (1)

10%

Germany (1)

12%

Gambia (1)

2%

Morocco (1)

2%

Haiti (1)

10%

Guatemala (1)

7%

Costa Rica (1)

7%

France (5)

18%

Netherlands (2)

7%

Peru (1)

5%

Chile (1)

4%

Argentina (1)

Uruguay (1)

5%

5%

3.7.3. Other activities

–

–

Publication of 2 new Calls for Proposals75 at the end of December 2001 in
accordance with the guidelines approved by the Member State for the years
2002-2003.

Drafting of the Cofinancing Info Guide,76 which will be useful for the
appraisal, execution and evaluation of operations and in the context of the
devolution process, will help the Delegations to keep a firmer hand on follow-
up, monitoring and control activities.

As its design is firmly focused on the new technologies (Internet), users can have
instant and direct access to the relevant information, thereby fostering an effective
operational approach to combat poverty in the developing countries.

Drafting the Programme Contract instrument

In accordance with the rationalisation policy adopted by the Commission following
the decision of 16 May 2000, in view of the proposal made by the NGOs, in
accordance with existing rules, especially to improve the quality and coherence of
long-term operations, a “call for programme contract ideas” was published at the
same time as the call for proposals for 2000.

75

76

http://europa.eu.int/comm/europeaid/cgi/frame12.pl
Available soon at http://europa.eu.int/comm/europeaid/projects/ong_cd/index_fr.htm

63

67 applications were registered totalling more than
300 million. A new evaluation
and selection procedure for this pilot cofinancing instrument is in the process of
being drawn up. 15 proposals, representing a total request of
83.5 million were
chosen for this experiment. A budget allocation of some
40 million will allow the
best programmes to be financed as from 2003.

€

€

€

The Commission intends to participate in the seminars organised by civil society,
particularly to evaluate the start-up of this pilot instrument.

64

4.

IMPLEMENTATION: THE REGIONS

4.1.

Countries covered by the EC External Assistance

The EC External Assistance covers all the regions in the world. The following sections show
the EC partnership and co-operation activities in all of them, under geographical bases. To
make reading easier, we display all of the countries of each region in these pages. The sub-
regions are indicated, where relevant.

The Balkans

Albania, Bosnia and Herzegovina (BiH), Croatia, the former Yugoslav, Republic of
Macedonia (FYROM), the Federal Republic of Yugoslavia (FRY).

The Partner States of Eastern Europe and Central Asia

Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Mongolia,
Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan

South Mediterranean, Near and Middle East

Algeria, Cyprus* Egypt, Israel, Jordan, Lebanon, Malta,* Morocco, Palestinian
Authority, Syria, Tunisia, Turkey*

* Originally Euromed countries, at present EU candidate countries.

African, Caribbean and Pacific (ACP)

Caribbean

Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba** Dominica, Dominican
Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint
Vincent and the Grenadines, Surinam, Trinidad and Tobago.

** Cuba was admitted as a new member of the ACP in December 2000, but is not
signatory of the Cotonou Agreement.

Pacific

Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Papua New
Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu.

West Africa

Benin, Burkina Faso, Cape Verde, Ghana, Guinea, Ivory Coast, Liberia, The
Gambia, Guinea Bissau, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone,
Togo.

Central Africa

Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon, Sao Tome
and Principe.

65

Eastern and Southern Africa and Indian Ocean

Angola, Botswana, Burundi, Comoros, Congo (DRC), Djibouti, Eritrea, Ethiopia,
Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda,
Seychelles, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe.

Asia

Asean

Brunei, Burma/Myanmar, Cambodia,
Singapore, Thailand, Vietnam.

Indonesia, Laos, Malaysia, Philippines,

Saarc

Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.

Other Countries and Regions*

Afghanistan, China, East Timor, Hong Kong, North Korea, Macao.*

* Yemen, Iran, and Gulf countries are dealt with in the Mediterranean section of this
Report

Latin America

Central America

Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama.

Andean Community

Bolivia, Colombia, Ecuador, Peru, Venezuela.

Mercosur

Argentina, Brazil, Paraguay, Uruguay.

Others

Chile, Mexico.

66

4.2.

South-Eastern Europe: The Balkans

Since its inception in 1999, the Stabilisation and Association process is the cornerstone of
EU´s policy towards the Western Balkans. It offers the countries in the region a steadily
closer association with the EU. The three main instruments underpinning this process -
contractual links, autonomous trade preferences and financial assistance – are designed to
equip the countries with the means to maintain stable democratic institutions, to ensure the
rule of law prevails, to sustain open prosperous economies and to create strong links between
the countries and the EU as well as encourage regional co-operation.

The process is already beginning to produce the desired results. The countries are becoming
stable, political and economic reform programmes based on EU law and practice are being
implemented throughout the region. There are many challenges ahead, however. Problems of
weakness in the rule of law and democratic institutions, corruption, poverty, social exclusion
and threats of
resurgence of extremist nationalism remain. The European Union’s
commitment to the region is long term and it will continue assist the countries in coping with
these challenges and make headway on the route towards full integration. The CARDS
programme is one of the tools of this process; it’s aim being to help these countries become
viable, functioning states at the same time as they align their legal and economic systems with
those of the EU.

4.2.1.

Introduction

The year 2001 saw the three basic building blocks of the Stabilisation and Association
Process in place and generating results to the countries or to the region as a whole.

Stabilisation and Association Agreements were signed with the former Yugoslav Republic of
Macedonia on April 2001 and Croatia on October 2001: Interim Agreements were also signed
the same year with the two countries in order to allow the trade and trade-related matters of
the SAA to enter into force in 2001. Also in 2001 the Commission recommended the opening
of the negotiations for an EU/Albania Stabilisation and Association Agreement. BiH
continued during 2001 the work on the Consultative Task Force and progress on the 18 basic
steps identified in the Road Map, hoping for a completion of those in 2002. With respect to
the Federal Republic of Yugoslavia, the EU-FRY Consultative Task Force was launched in
July 2001, holding two meetings during the year leading to its final meeting and preparation
of a Feasibility report in 2002.

The Trade Preferences, following the EU unilaterally granting, in November 2000, of
almost totally free access to its markets for goods from the Balkans, have already provided a
much needed stimulus to exports. The trade regime serves as a catalyst to the development of
a network of free-trade agreements between the countries of the Stabilisation and Association
process and beyond. A Memorandum of Understanding was signed in Brussels on the 27th of
June 2001, in the Framework of the Stability Pact, by Albania, BiH, Bulgaria, Croatia, former
Yugoslav Republic of Macedonia, Romania and the Federal Republic of Yugoslavia aiming
to establish a network of Free Trade Agreements in the SEE region by the end of 2002.

The EU, which has provided massive financial assistance to the region (over
5 billion since
1991) has sifted the emphasis of the assistance as the needs of the region evolve. A new
regulation was adopted in 2000, which brought a more strategic approach to the provision of
assistance to the countries of the region and reinforces the objectives of the Stabilisation and
Association process. The assistance will focus increasingly on support for the reforms and
the obligations in the Stabilisation and
institution building necessary to implement

€

67

Association Agreements.
period.

€

4.65 billion has been agreed for the region for the 2000-2006

A qualitative leap forward has been made in the programming of CARDS assistance with the
adoption at the end of 2001 of Countries’ and Regional Strategy for 2002-2006. These
programmes, designed in close consultation with the partner countries, the Member States,
relevant international organisations and other donors, focus CARDS for the 2002-2006 period
on key Stabilisation and Association priority areas, ranging from essential reconstruction, to
focused measures designed to build each country’s institutional capacity to understand,
legislate on and finally implement core elements of the acquis and entrench the rule of law.

This improvement in programming is being matched by better implementation. CARDS
assistance is on the whole being delivered rapidly and efficiently. The European Agency for
Reconstruction in particular has, since it establishment in February 2000, established an
impressive track record in delivering assistance quickly and efficiently in its area of
operations - initially Kosovo, but now including Serbia and Montenegro, as well as the former
Yugoslav Republic of Macedonia, where in December 2001 the Commission extended its
mandate for the majority of EC assistance programmes in the country. Elsewhere in the
region decision-making is being devolved to Delegations on the spot and their staffing levels
are being increased in order to enhance aid delivery.

In Albania during 2001 implementation of the programmes designed in the previous years
was ongoing. In order to make further progress in the Stabilisation and Association process,
Albania needs to guarantee a stable political environment, with fully functioning democratic
institutions, which would allow the country to re-focus on needed reforms and accelerate their
implementation.

This is why the CARDS allocation 2001 of
37.5 million has been a transitional year to
gradually move the emphasis from the infrastructure investments to institution building
projects. Project implementation of the Cards 2001 is due to start in autumn 2002.

€

Bosnia and Herzegovina continued to proceed with the process of completion of the "road-
map", a work plan indicating the most crucial reforms, which BiH must address. BiH
105.23 Mio.), with main
benefited from substantial financial assistance in 2001 (CARDS:
focus on refugee return, economic development, justice and home affairs and institutional
capacity building.

€

In 2001 the FYROM faced the most serious political and security crisis in its history. This
crisis had a major impact on the economy, democratic institutions and the administration’s
ability to continue the reform process.

Active political mediation by the EU Special Representative facilitated the signing of a
Framework Agreement between the parties involved in the conflict on 13 August 2001. The
Framework Agreement requests that
the EU co-ordinate the international community’s
assistance in the implementation of the provisions of the Agreement, in co-operation with the
Stabilisation and Association Council. The full implementation of this Agreement is essential
to build the countrywide political consensus and stability needed for the reform effort ahead.

The EC’s pro-active involvement is reflected also in the additional assistance provided by
various EC instruments. Immediate humanitarian needs were covered by ECHO, and the
European Initiative for Democracy and Humans Rights supported the monitoring of the
12.8 million) and CARDS emergency
population census. The Rapid Reaction Mechanism (

€

68

€

assistance (
facilitate return of refugees and displaced persons.

13.7 million) concentrated mostly on rehabilitation and reconstruction,

to

By the end of 2001, some 430 houses, many of them seriously damaged, had been or were
being rebuilt. Repair and rehabilitation of power networks, supplying electricity to some
150,000 people, was completed or well under way. Security remained a problem both for
NGOs involved in housing reconstruction and the Macedonian Electricity Company, with
works sometimes having to be suspended and resumed later once security situation
permitting.

Rapid progress in the relationship between the EU and Croatia in 2001 is reflected in the
signature of the Stabilisation and Association Agreement (SAA) in October, and also in the
substantial increase in assistance, from
60 million in 2001. While
refugee return was the main focus in 2000, the 2001 programme extended to human capital
development, compliance with SAA obligations (notably in Justice and Home Affairs
matters), strategy development capacity building and support to civil society.

18.3 million in 2000, to

€

€

55077 million. Assistance
Meanwhile assistance to FRY in 2001 amounted to more than
continued with major repairs and investments in physical infrastructures and utilities, which
accounted for 60% of 2001 funds. Gradually assistance also moved towards support for
longer-term, sustainable development of a market-oriented economy (25% of the funds,
largely directed to enterprise support and rural/agricultural communities)
and the
establishment of democracy, Human Rights and the rule of law (15% of the funds).

€

During 2001, the European Union increased its ties with the region, building on what had
been achieved in 2000.

The European Agency for Reconstruction78 is responsible for the management of the main
EC assistance programmes in FRY and FYROM. The total sum of EC funds newly delegated
to the Agency in 2001 amounted to some
525 million, and it now oversees a portfolio of
over
1.6 billion across its four operational centres. Of the funds under its management at the
end of 2001, 85% had been contracted and 68% paid.

€

€

in the Republic of Serbia,

During 2001,
the Agency helped to stabilise an emergency
situation, ensuring a sufficiency of electricity and fuel oil, basic foodstuffs and essential
medical supplies, while carrying out small-scale infrastructural projects in towns and schools
across all municipalities. In the new 2001 programme it consolidated its work in the energy
sector, while continuing to supply essential drugs and healthcare equipment. It imported
agricultural seed and fertiliser to help revitalise the rural economy. It provided credits to
galvanise the small business sector, and it launched smaller programmes to promote freedom
of the press, and to support civil and environmental regeneration specifically in Southern
Serbia.

In Kosovo, the Agency continued to meet the most basic needs of physical rehabilitation: in
works on the main power plants and coal mines; in rebuilding damaged houses, roads and
it
bridges;
successfully disbursed loans for small and medium-sized businesses and for small-scale
farmers, and boosted productivity in the rural economy through the provision of basic
agricultural inputs. Its projects also paid particular attention to bequeathing longer-term

in ensuring reliable water supply and waste disposal. At

the same time,

77

78

Including Kosovo and part of the regional co-operation budget. Humanitarian assistance is not included.
http:// www.ear.int

69

best practice in Kosovo, by giving technical assistance and building institutional
capacity. Smaller projects were launched to encourage a free and professional press, and
to support small NGO initiatives – particularly for women and for minorities of all
descriptions.

the Agency accelerated key improvements in basic
In the Republic of Montenegro,
infrastructure - buildings roads, bridges, and schools. Increasingly, it gave more impetus to
the reform of central and local administration.

The scale of the EU’s total engagement in the region continues to grow. The European
Union is involved at every level. Strategically, by holding out the prospect of potential
membership in the long term, and much closer association with the EU in exchange for
reform in the short term. Militarily, by supplying 38,000 peacekeeping troops from EU
Member States, the bulk of the total. Politically, by taking a very active role in the affairs of
the region, including in responding to crises like in FYROM and Southern Serbia, or in
helping to find solutions to sensitive political questions like the relationship between Serbia
and Montenegro. Institutionally, by working across the board to build strong institutions, so
that the Western Balkan countries can manage their own affairs, uphold the rights of their
citizens, and tackle organised crime. Economically, by assisting with economic reform, by
providing substantial budgetary assistance, and above all, by taking the radical step of
opening the entire EU market to exports from the Balkans, without, at this stage, demanding
reciprocal concessions in return. Financially, by backing the EU policy with enormous
financial help extending over many years. The region is receiving some of the highest per
capita assistance in the world, comparable to the levels that the EC is giving to the candidate
countries.

CARDS COMMITMENTS AND PAYMENTS IN THE REGION 2001

€

(

PROGRAMMES
Countries/bilateral
Albania
Bosnia and Herzegovina

Croatia
FRY-Serbia/Montenegro
FRY-Kosovo

FYROM-Macedonia
Regional
Co-operation (4)
Sub total
Regional

million)

COMMITMENTS

PAYMENTS

2001

2000

2001

2000

37.50
118.70
(1)
60.00
230.00
171.50

56.20 (3)

768.18
20

788.18
8.00
796.18

32.80
97.30

18.30
215.50
416.00
(2)
20.90

800.80
16.70

817.50
3.00
820.50

56.00
143.20

14.50
195.80
402.10

75.30
191.50

11.50
152.90
213.20

28.10

29.40

968.70
1.70

970.40
1.30
971.70

673.80
- (5)

673.80
2.50
676.30

(1)

(2)

(3)

(4)

(5)

Total Bilateral/Regional
Other budget lines / BA lines (ATA etc.)
GRAND TOTAL
105.23 million.

€

Total 2001 budget is
€

Including

175 million adopted by Noteboom procedure at the end of 2000.

Implementation of 2001 programme started when political conditionality was compiled with end November 2001.

Regional Co-operation elements are included in the figures per country.

Regional elements are included in the figures per country.

70

€
Overview of Commitments/Payments 1995-2001 (

million)

1995 1996 1997 1998 1999

2000

2001

Total

Overall Commitments

440

581

584

462

988

1062

5550

Of which

Commitments

Payments

Ratio payments/
commitments

Commitments

Payments

Ratio payments/
commitments

4.2.2.

Regional co-operation

CARDS (Obnova-Phare-Cards budget lines)

81

73

320

298

330

254

305

146

455

237

843

624

91 % 93 % 77 % 48 % 52 %

74 %

1035

618

60 %

Democracy & Human Rights

3.60

3.20

6.80

6.25

14.00

10.90

6.80

6.26

9.72

4.08

89 % 92 % 78 % 92 % 42 %

10.40

3.01

29 %

11.68

0.35

3 %

3369

2250

67 %

63.00

34.05

54 %

Tackling regional problems and raising levels of regional co-operation are the focus
of the regional strategy adopted in October 2001. The
197 million package for the
period 2002 -2004 aims at providing assistance at the following areas:

€

• Integrated border management to help inter alia tackle cross-border crime, to

facilitate trade across borders and to stabilise border regions.

• Institutional capacity building to develop the rule of

law and develop

understanding of EU policies, standards and laws

• Support for democratic stabilisation to help cement advances in democracy and

boost involvement of civil society in the region's development.

• Support

for planning the integration of the region's transport, energy and

environmental infrastructure into the wider European networks.

These areas have been selected because of their contribution to co-operation between
the countries of the region or because they offer higher efficiency through delivery at
the regional level.

€

In addition to the approval of the strategic framework, the EC launched in 2001 the
14 million addressing key building blocks
regional programme for an amount of
for the regional co-operation. It addressed activities in the areas of Justice and Home
4.2
Affairs and especially on Justice and Police Co-operation and training (
million); in the area of Infrastructure development by making resources available for
3 million and to
an infrastructure project preparation facility for an amount of
6 million), in
strengthen Public Administration reform and regional co-operation (
particular in the areas of accountancy, statistics (with the support of Eurostat) and the
European Environmental Agency. It also launched support to SENSE News Agency
to cover the activities of the International Criminal Tribunal for the Former
€
Yugoslavia (
0.3 million) and the setting up of a Regional University Network (
0.5 million), which is a joint EC-UNESCO programme. The programme’s overall
and accountancy of public
result will be enhanced reliability,

capacities

€

€

€

€

71

administrations especially in respect of the priority areas of provision of civil service,
financial
administrative organisation and control, public finance management,
control/audit, policy and judiciary capacities, public procurement, and tax
administration and international trade agreements.

EC contribution under CARDS 2001:
OBNOVA 2000). This ends in 2003.

€

2.85 million (in addition to

€

950,000 under

CARDS Regional Co-operation Commitments 2001 (

€

million)

Regional
Co-operation

Project Title

Commitment

Justice and Home Affairs

Regional Infrastructure Development

Strengthening Public Administration

Democratic Stabilisation

TOTAL

4.2

3.0

6.0

0.8

14.0

4.2.3.

Transport and Infrastructure, Water and Energy

Ahead of the regional programme 2001, a Regional Balkans Infrastructure Study
Programme (

6 million) was adopted in January 2001.

€

In the transport sector the most high profile achievement of 2001 was the opening of
the Vora-Sukth highway near Tirana. This completed the link between the capital
and Durres, on the coast, nearly all of which was financed by the EC. At Durres, half
of the ferry terminal quay came into operation, with works on the second half starting
later in the year. In May 2001, the 33km Durres-Rroghozine highway opened, a
stretch of road where the East-West and North-South corridors meet.

€

During 2001, phase II of the EC’s support to local community development projects
7 million worth of small scale
was completed, with the funding of more than
infrastructure projects in towns and villages throughout Albania. In 2001 these
included nearly 30 rural and urban roads, almost 20 rural water supply and waste
water systems, two bridges a school and a local court. All projects under Phase III of
the Local Community Development Programme have been concentrated in Tirana,
which has doubled its population over the past decade. Further smaller scale
investments are planned in the local community development projects within
CARDS 2001.. The Commission has already been helping the municipality smarten
up the façades of the main streets – with contributions from businesses and residents.

Repairing the damage of conflict includes repairing national infrastructure as well as
infrastructure linking Bosnia to the rest of Europe. The largest civil engineering
12.3 million, was reconstructed with
reconstruction project, Samac Bridge, worth
EC funds.

€

72

Samac Bridge

2001 saw the completion of Samac bridge, located on the interstate highway E 73 between
Bosnia and Herzegovina and the Republic of Croatia. It is an important link along the Pan-
European Corridor V, identified within the Balkan Stability Pact for future development. The
bridge was blown up during the conflict in 1992, rendering it impassable to traffic. In addition,
the debris in the riverbed diverted the flow towards the south bank causing considerable
erosion. This change in the hydraulic regime was restored during the course of the new works.
In general form the reconstructed bridge follows its predecessor but the width of the roadway
was increased to 6.6 metres between kerbs to facilitate two-way traffic flow. The scope of the
project was extended to include railway works for new track over the bridge and connections to
the existing rail networks on the north and south side of the river.

Reform in civil aviation transport continued to receive support, given the needs of
the sector, and the strategic location of Bosnian air space. Technical assistance (1
million) aims to help establish a strong and effective Department of Civil Aviation,
capable of performing its functions effectively and supervising the safety and
security responsibilities and obligations upon completion of the project.

€

Energy infrastructure rehabilitation received
3.8 million as a complementary action
to an EIB and EBRD funded project. The EC provides a technical assistance
contribution to the interconnection of power systems in South Eastern Europe with
those of Central and Western Europe at the central power station in Ernestinovo in
the Croatian Danube Region.

To date, the European Agency for Reconstruction has repaired 380 km of main roads
in Kosovo. The assistance also included essential safety measures such as horizontal
and vertical road signs, white lines, barriers in key road axes and two bridges. This
work has significantly upgraded the transport infrastructure across Kosovo, thus
facilitating the movement of goods and people. In addition, support has been given to
the railway system in Kosovo (supply of equipment and the repair of tracks).
Institutional support has also been given to the Ministry of Transport (formerly,
UNMIK’s Department of Transport). The border crossing at Blace between Kosovo
and FYROM is also being improved.

In Montenegro, emphasis is being placed on improving the levels of service and road
safety of the coastal road between Petrovac and the Croatian border, and of the main
road between Podgorica and Cetinje. The transport infrastructure programme for the
2001 budget includes:

–

–

–

construction of an 8km third lane on the road from Podgorica to Cetinje

construction of a 1.5 km third lane on the road from Petrovac to the Croatian
border

rehabilitation of two additional landslips on the road from Podgorica to the
Croatian Border

upgrading safety facilities on the sections of the same two roads that are not directly
part of the other two projects. The project will concentrate on 124 km of road and
provide anti-skid surface treatment at “black spots”, and crash barriers. It will also
upgrade warning and information signs and improve road junctions.

73

Transport and infrastructure is key for the development of FYROM, given its
geographical position as a transit country. This sector continued to receive support
from the 2001 budget. Of the
11 million
were committed to finalising the upgrading of the E75 road, part of Corridor X of the
Trans European Network of cross continental
road routes. A small-scale
€
infrastructure Fund with
2.5 million was set up, to provide for upgrading of
infrastructure in municipalities.

13.5 million foreseen for these sectors,

€

€

To alleviate the consequences of the political and military crisis, the EC funded the
repair of the electricity distribution transmission and distribution systems,
local
infrastructure, buildings and houses in the former conflict areas. The EC also
provided cash assistance to about 6,500 families hosting refugees or displaced
people.

€

€

Similarly, in FRY, infrastructure, energy, housing and environment have been the
areas receiving assistance, in total more than
297 million in 2001. Since June 1999,
€
273 million of EU funds have been provided to improve the energy supply in
Kosovo.
80 million were allocated in 1999 and 2000 to pay for electricity imports,
emergency repairs to Kosovo’s own power stations, and the salaries of employees. In
2000 and 2001, the European Agency for Reconstruction implemented a major
overhaul of Kosovo B power plant. To date,
121 million have been spent on the
overhaul. Alongside this overhaul,
50 million of EU funds have been directed
towards an extensive rehabilitation of the coal mines that feed both Kosovo B and
Kosovo A power stations. Repairs on Kosovo’s electricity transmission networks and
the district heating systems have also been undertaken.

€

€

The 2001 Serbian energy programme aimed to help stabilise and secure the domestic
power supply through:

–

–

–

–

rehabilitation of 4 thermo-electric power plants, plus spare parts for other coal/
hydro-electric facilities (

37million)

€

42 projects to overhaul sub-stations and power lines (

€

24 million)

provision of equipment and further spare parts for two coal mines - Kolubara,
Kostolac (

17 million)

€

technical assistance and institution-building (

€

2 million).

Works started in August 2001 and are now complete, with all equipment and other
supplies delivered.

The programme also supported the further rehabilitation and maintenance in power
generation, distribution and in the coal mines, and further imports of electricity.
15
million was allocated to the Serbian Assistance Fund for Energy, a joint venture with
the US Government, which contributed $15 million through USAID. The fund was a
financing mechanism to assist the imports of electricity into Serbia. EU-funded
imports started in early December and concluded in January 2002. Funds were also
allocated to preliminary studies on the setting up of a Serbian Energy Efficiency
Agency and a Serbian Energy Regulatory Agency, and a study on the new measures
needed to increase coal production at the Kolubara mine.

€

74

€

Under the “Energy for Democracy” programme, which began in November 2000,
diesel and heating oil (‘mazout’) were provided for 60 municipal heating systems
(covering 80% of the population), for schools, and for hospital heating systems.
Power plants and coal mines were also supplied. Total funding of the programme
was
45 million. The programme continued through the worst of the winter, and was
completed in April 2001. A substantial proportion (70%) of Serbia’s winter (2000-
2001) electricity needs were imported by the EU, with a total cost of
45 million,
and this helped to stabilise power supplies. Essential spare parts to secure production
€
7 million.
in the lignite mines of Kolubara and Kostolac were also contracted, for
€
Deliveries began in February 2001 and ended in March 2002. A further
7 million
was spent on electricity imports during July and August 2001.

€

By the end of 2002, the Agency's housing programme will have reconstructed over
16,500 houses in Kosovo. This means that over 120,000 people will have been
assisted. Under the 1999 housing programme, 3,540 houses were reconstructed. A
further 8,420 houses were then reconstructed at a cost of
60 million under the 2000
housing programme. The 2001 housing programme reconstructed a further 3,630
houses. 80% of all houses rebuilt by the Agency in 2001 were in what is known as
Category IV (those completely destroyed) and most of the rest were in Category III
(seriously damaged). The European Agency for Reconstruction has also provided
technical assistance to the Housing and Property Directorate (HPD), and is
completing the reconstruction of five kullas (traditional stone tower houses).

€

€

The European Agency for Reconstruction is engaged in a huge programme of works
to rehabilitate the urban water supply and sanitation systems in Kosovo, and to
upgrade levels of waste management to western European levels. A programme of
support for essential public utilities, including improvements to the quantity and
quality of the water supply (
3.7 million) is contributing to the rehabilitation of
water installations, emergency repairs and the procurement of equipment such as 35
vehicles and 14,000 spare parts for the municipal water companies. Under the 2000
10 million was directed towards improving the water supply and
Programme,
sanitation networks. This included repairs to pumping stations and water treatment
works. In 2001, a programme was launched to improve solid waste management in
Kosovo. 19 waste disposal sites across Kosovo were upgraded. The works in 2001
also included the construction of six regional landfills.

€

€
Transport and Infrastructure: Commitments 2001 (

million)

Transport and
infrastructure

Country

Project Title

Amount

Kosovo
Rep of Montenegro
Bosnia and
Herzegovina
Albania

Transport
Transport
Assistance to the Civil Aviation
Authority
National Transport

Albania

Albania
Albania

Transport Infrastructure Pogradec-
Kapsthice

Port of Durres
Cross Border Crossing Kakavija-
Gjirokaster

TOTAL

75

18
7
1

12.5

7

2.1
6.8

54.4

Environment

Within the environment sector, 2001 saw the establishment of the Tirana office of
the Commission-funded Regional Environmental Centre in Budapest. This means
that Albania is now involved in regional environmental policy-making, and can
benefit from the resources made available for building capacity in environmental
management. With a view to launching major works on water and waste water
systems at Vlore, Gjirokaster, Saranda and Lezhe preparatory work has been
in tandem with
undertaken by the Ministry of Public Works and Tourism,
Commission-financed technical assistance.

€

Environment, which has in previous years also been the target of EC assistance, was
allocated
3.25 million for the preparation of the National Environment Action Plan,
solid waste feasibility studies and equipment for air quality monitoring stations in
FYROM.

4.2.4.

Rural Development, Agriculture

In Albania, in the agricultural sector, the EC is working along three lines: food
control; fisheries; and veterinary control. With a view to delivering much-needed
to the central and regional veterinary institutes and laboratories,
equipment
significant preparatory work has been undertaken in 2001. This equipment will assist
the Government in developing the necessary market and service infrastructures to
meet the needs of a reformed agricultural sector.

In Bosnia and Herzegovina agriculture has traditionally been a key economic
sector. The EC has helped veterinary services in ensuring better health and
management of livestock, to increase consumer confidence and trade. Technical
assistance has been provided to create two reproduction centres for pigs of high
genetic value. In the selection of the breed, particular attention was brought to the
adaptability of the breed to the local conditions, with high success. There are as a
result of the project two multiplication centres (each with approx. 50 animals), two
artificial insemination centres (with 5 animals each), and two fattening centres for the
first generation boars. The project has the potential of producing 1800 tons of pig
meat.

The aim of the 2001 Serbian agriculture program was to support the sector, through:

–

–

–

the import of a total of 48,700 tons of fertiliser of Romanian origin (36,700
tons of NPK in August and September 2001, and 12,000 tons of urea in
January 2002). Deliveries to end-users are complete.

arresting the trend of de-stocking of livestock as a result of feed shortages,
through the import of 42,000 tons of maize for reprocessing into animal feed.
Imports from Hungary started in September 2001. Distribution started in
March 2002.

provision of technical support for changes in agricultural pricing and marketing
policy, and for the relevant regulatory framework for food products. The
consultant team started work in January 2002.

In Montenegro, the Agency contracted a procurement team to purchase and distribute
to replace outdated machinery. The
state-of-the-art dairy production equipment

76

procurement
assessing business plans of the selected enterprises receiving the equipment.

the Ministry of Agriculture in policy issues and

team will assist

Agriculture in FYROM is, together with transport, a key economic sector for the
country and for its trade relations with third countries. The importance of EU
markets for exports of agricultural products and the obligations stemming from the
Stabilisation and Association Agreement
in veterinary and
phytosanitary controls as well as in animal identification systems. Building on results
of ongoing programmes,
3 million worth of
technical assistance related to food quality control, equipment
to extend the
veterinary and phytosanitary control capabilities, and training and equipment to
ensure that the animal identification system covers all the livestock of primary
importance.

require reforms
€

the 2001 programme provided

€
CARDS Rural Development, Food Security – Commitments 2001 (

million)

Country

Project Title

Amount

CARDS

CARDS

CARDS

CARDS

Albania

Local Community Development

FYROM

Institutional Capacity Building –
Agriculture

Kosovo

Agriculture

Serbia

Agriculture

TOTAL

10

3

10

20

43

4.2.5.

Institution Building

€

In Albania institution building receives the greatest proportion of EC assistance.
This responds to the need for stronger public institutions, necessary for Albania to
develop closer ties with the EU in the framework of the Stabilisation and Association
23 million were devoted to
Process. Of the
enhancing Albania’s capacity in terms of security and public order, strengthening
rule of law, good governance and respect for Human Rights, strengthening public
strengthening standards and
finances,
certification, and aid co-ordination.

increasing customs and tax revenues,

37.5 million allocated in 2001,

€

Together with refugee return, institution building is the area receiving most EC
31.26 million were directed
funding. In Bosnia and Herzegovina, in 2001 alone,
to institutional capacity building (State and Entity level institutions) and Justice and
Home Affairs (Independent Judicial Commission and border management).

€

€

Institution building is the main focus of the 2001 assistance programme for Croatia,
receiving
28.4 million, and covering sectors such as labour market restructuring,
alignment to EU standards, reform of the judiciary, asylum policy, integrated border
management, public administration reform, intellectual property, competition policy,
statistics, strategy development capacity building and civil society.

Institution building needs vary between the various parts (Serbia, Kosovo,
59.8 million for this purpose in 2001.
Montenegro) of FRY, which in total received
In Serbia, a Policy and Legal Advice Centre featured a special
team of 12
international and local experts assembled to provide advice to the Government on

€

77

key issues: e.g. transition to a market economy, regulatory framework, harmonisation
of legislation with the EU, accession to the World Trade Organisation. The signature
of the agreement financing the Centre took place in October 2001, and the team
started work in December 2001.

In Kosovo, EU local government experts have been seconded to municipalities in
Kosovo to assist
in their institution building. In 2000, the Municipal & Local
Investment Fund (MLIF) was established to finance small-scale infrastructure
rehabilitation projects proposed by municipalities across Kosovo. Examples include
road patching and the repair of street lighting and pavements. The Agency also
supported the OSCE in its organisation of Kosovo’s election in November 2001.

Governance will be enhanced in Montenegro through an Agency project to assist the
decision-making capabilities of several of its institutions, such as the Statistical
Office. Management expertise will be provided, as well as training sessions and
study trips abroad. The project also foresees the provision of technical support to
assist in reforming the administration of capital expenditure in the public sector. The
Agency is also providing technical support to the Budget Office, Treasury Unit,
Internal Audit and IT Unit within the Ministry. In addition, IT equipment to the value
of
1 million has been provided, and a long-term information and technology expert
will support the computerisation of the Ministry. Technical expertise is also provided
to support the restructuring of the Ministry of Finance.

€

€

5 million) and has started developing similar assistance to Serbia (

Centrally managed projects have again included customs and financing of
transitional civilian administrations, owing to the specific nature of
these
programmes. The Balkans Customs Team of EuropeAid Co-operation Office has
continued its direct management of the Customs Assistance Mission in Kosovo
5
(CAM-K) (
million) and to Montenegro (
1.4 million).The Customs Assistance Mission to
2 million) and the Customs and Fiscal Assistance Office
Albania (CAM -A) (
the
(CAFAO) (
Commission continued supporting the running costs of the interim administrations in
Bosnia and Herzegovina and Kosovo.
13,5 million were provided for the Office of
the High Representative and
11 million were provided for the EU Pillar of UNMIK
responsible for the reconstruction and economic recovery of Kosovo.

10.5 million) were also successfully continued.. Furthermore,

€

€

€

€

€

€

In FYROM, the strengthening of government institutions is high on the reform
€
agenda, and institution building therefore continues to receive EC support; in 2001,
11.5 million were earmarked for this purpose. The main focus was in the area of
Justice and Home Affairs (Judicial reform,
integrated border management and
customs administration), building on programmes from previous years. In addition,
1.7
to assist the country in implementing the Framework Agreement for peace,
million were provided to support police reform.

€

78

The Customs and Fiscal Assistance Office (CAFAO)

Since 1996, the Customs and Fiscal Assistance Office (CAFAO), has been assisting the State and
Entity authorities of Bosnia and Herzegovina to implement the customs and tax related
provisions of the Dayton Peace Agreement. Assistance and advice are given on all aspects of
customs and taxation work: management, organisation, structure, procedures, legal questions,
computer systems, investigation, and training. CAFAO is generally viewed as one of the more
successful reform programmes in Bosnia and Herzegovina, with assistance being provided
against a background of an inconsistent and shifting political will to implement change, the
continued existence of ethnically based parallel structures and widespread corruption. The
number of European customs and taxation officers working in the programme has varied from
20 to 40 depending on programme needs and activities. One of the most obvious indicators of its
success is the consistent increase in customs revenue, which in 2001 was three times as much as
in 1996.

This table shows examples of important projects in Institutional Building for 2001.

Institution Building – CARDS Commitments 2001 (

€

million)

Institution

Country

Project Title

Amount

Bosnia &
Herzegovina

Albania

Albania

General Directorate
of Customs
General Directorate
of Taxation
Federation Customs
Administration &
Republika Srpska
Customs
Administration
UNMIK Customs
Service
Croatia
JHA
Institution Building Croatia

Kosovo

Tax and Customs
Administration

Serbia

Tax and Customs
Administration

Montenegro

Customs Assistance Mission
(CAM-A)
Computerisation of taxation

Modernisation of customs

Modernisation of customs

Judiciary and Law Faculties
Support to the Ministry of
European Integration in the
approximation of legislation
Customs and Fiscal Co-
ordination Office in Serbia
(CAFACO)
Customs and Fiscal Assistance
Mission in Montenegro
(CAFAM-M)

4.2.6.

Private Sector and Economic Development

TOTAL

2.0

2.0

10.5

5.0

0.6
0.8

5.0

1.4

27.3

in the transition to a market-oriented
As part of the European policy to assist
€
economy, enterprise development received
36 million in 2001. This economic
regeneration strategy remains focused on private sector development, local economic
development and job creation, and the creation of a single economic space in line
with the European Union. European projects worked to address these problem areas
with 30 projects with a total budget of almost

90 million.

€

79

In 2001 EC projects in the Balkans have worked to strengthen the development of
the domestic banking sector through building up the management capacity of
domestic banks and the establishment of a self-sustaining Micro Enterprise Bank.
Domestic trade also benefited from technical assistance to remove internal trade
barriers with progress now being made in tax harmonisation and creation of effective
customs unions.

The Cards allocation for Albania includes projects within the field of standards and
certification as well as the local community development aiming at enhancing the
local economy by improving infrastructure and local employment.

The Serbian enterprise programme supports the development of small and medium-
sized enterprises (SMEs), through:

–

–

–

–

€

the provision of a credit line (total so far donated by the EU through the
Agency is
10 million) in the form of a revolving credit fund based in the
National Bank of Yugoslavia and lent onwards to SMEs through three
commercial banks, Exim Bank, Novosadska Bank and Zepter Bank (other
banks will
join the scheme soon). These banks have received over 600
€
applications so far. Loans have been approved in 40 cases, for a total value of
4 million.

assistance
Development.

to the Ministry of Privatisation, Restructuring and SME

the establishment of, and assistance to, support facilities for SMEs, in the form
of business advice centres (“Regional Enterprise Agencies”) in seven cities and
towns, with sub-centres in a further 11 towns. The first agencies will open in
May 2002.

the establishment and operation of a Euro Info Correspondence Centre in
Belgrade, which will open in April 2002.

€

1 million funding has been provided for technical assistance for the
In addition,
first stages of restructuring state enterprises. Work on this started in March 2002, in
three enterprises in the field of transport vehicles and agricultural machinery.

in Kosovo. In 2000,

The European Agency for Reconstruction is playing a key role in enterprise
the Agency, along with the World Bank,
development
established the Interim Credit Unit (ICU), which provides credit
to small and
medium-sized enterprises (SMEs). It is the number one lender in Kosovo. As well as
supporting the ICU, the Agency, along with the German Development Bank KfW, is
providing small loans to micro-enterprises through the European Fund for Kosovo.
Three Regional Enterprise Agencies were established at the end of 2001, and EU
funds have also supported the creation of the Kosovo Council for SME Development
which acts as an independent advocate for the private enterprise sector. The Agency
also helped establish the Euro Info Correspondence Centre (EICC) in Kosovo, which
now acts as Kosovo’s business link with the rest of Europe. Much support has also
been given to socially-owned enterprises (SOEs) through the Industrial Development
Programme (IDP). The IDP provides technical assistance and credit to SOEs in order
to re-start production and create jobs.

80

As part of an overall effort
to revitalise the enterprise base in Bosnia and
Herzegovina, the EC is funding the revitalisation of approximately 45 medium sized
textile and leather sectors, as well as regional
companies in the agribusiness,
enterprise development. In addition to the
4.2 million for this revitalisation and
restructuring,
10 million were provided in 2001 for revolving funds for private
sector development.

€

€

Financial Instruments to support SMEs

€

€

8.7 million in
The European Fund for Bosnia and Herzegovina has provided approximately
loans for SMEs, of which
5 million have been provided by the EC. Other bilateral donors
participating in the European Fund for Bosnia and Herzegovina are Austria, Germany and
Switzerland. This credit line is managed by an EU bank through a number of participating
Bosnian banks. The programme is targeted at SMEs and start ups and covers investments in
plant and equipment as well as working capital. It is the only programme so far in Bosnia and
Herzegovina, which supplies long-term credit. There are presently 8 partner banks (6 in the
Federation and 2 in Republika Srpska) which have approved over 123 loans, indicating the
dynamic development of this loan programme. The EC is also channelling
9.5 million for
micro-credits through the Micro-Enterprise Bank (main shareholders are the EBRD and IFC),
which to date has provided more than
19 million in more than 3,400 loans. 30 operational
Projects were committed in 2001 for a total amount of

90 million.

€

€

€

CARDS Private Sector and Economic Development Commitments 2001

€

(

million)

Country

Project Title

Amount

CARDS

CARDS

CARDS

Albania

Standards and Certification

Regional

Regional project on statistics

Croatia

Industrial Standards

TOTAL:

2.0

2.5

3.0

7.5

4.2.7. Health and Education

4.2.7.1. Health

€

€

31.5 million for the health sector in Serbia.

While health is not a designated priority for EC assistance in the Western Balkans (as
opposed to bilateral assistance). At the same time, the CARDS programme in 2001
included
26,5 million were used to
improve the availability of essential drugs throughout Serbia and introduce reforms
such as establishing treatment protocols and the rationalisation and restructuring of
5 million contribution to health reforms in Serbia
the pharmaceutical industry. A
was designed to improve the quality of some basic services in hospitals and health
centres by rehabilitating and supplying priority equipment. Health care reform in
Kosovo received
14 million for a local technical assistance team to assist the
UNMIK Department of Health and Social Welfare, for EC support to a World Bank
project to implement a social insurance system, and for providing essential medical
and information technology equipment.

€

€

4.2.7.2. Education

Reform of higher education in Albania has received
2.5 million, enabling the
country to continue participating in the TEMPUS programme. The main objective of
the programme is the promotion of reform of higher education institutions as well as

€

81

academic teaching and learning, using “Joint European Projects”. The aim of these is
to contribute to the long-term development and renewal of the partner country’s
higher
education
institutions of the European Union and the partner country.

education through co-operation activities between higher

Education reform in Bosnia and Herzegovina focuses on vocational education and
training and higher education. The first vocational education and training programme
resulted in a Green Paper agreed to by the 40 key actors responsible for education in
Bosnia and Herzegovina. In the course of 2001, this paper was followed by a White
Paper, which represents an agreed concept for legislation throughout Bosnia and
Herzegovina and a framework for implementation of the operational steps for
reforming the system state-wide,
including the application of a single frame
curriculum for vocational education. Higher education reform is linked to the
participation of Bosnia and Herzegovina in the TEMPUS programme;
the EC
provided

3 million for this purpose in 2001.

€

Vocational education and training reform and higher education reform will assist
Croatia in tackling unemployment, one of its greatest social problems. The EC is
contributing to vocational education and training reforms aimed at the establishment
of a modern, flexible and high quality vocational education and training system,
responsive to the needs of the labour market and society and well integrated with the
primary, general secondary and higher education systems, with an emphasis in
decentralised management and the preparation of concepts for holistic curriculum
and teacher training reform. Promotion of the reform of higher education institutions
and academic teaching and learning is done through Croatia’s participation in the
TEMPUS programme (

4 million).

€

4.9 million to
FRY including Kosovo (under UN administration) has received
ensure its participation in the TEMPUS programme. In addition, reform of vocational
education and training in Montenegro has received

1 million in 2001.

€

€

The close link between education and unemployment (currently more than 32% of
the workforce) in FYROM has resulted in this area being a target for EC funding. In
3
2001, the EC supported higher education reform with
7 million, of which
4
million, were earmarked for participation in the TEMPUS programme and
1 million for this purpose in 2000) for the creation of the
million (in addition to
first university providing education in the Albanian language as well as in
Macedonian and English. The creation of this university aimed to respond to one of
the main grievances of the large Albanian minority in the country, and improve
interethnic relations.

€
€

€

€

South East Europe University in FYROM. On 20 November 2001 the South East
Europe University opened its doors for the first time. The curriculum will be in
Albanian, Macedonian, English and other European languages. The university will
include faculties of law, business administration, public administration,
teacher
training, communications and computer studies. The total cost of the project, co-
33 million, for which the European
ordinated by the OSCE, was approximately
Union,
4 million) and bilateral
contributions from the EU Member States, is the largest donor. Project activities
have been directed towards the construction of the University buildings, and also
providing student loans and covering the running costs of the institution.

including the European Commission (with

€

€

82

Social development – CARDS Commitments 2001 (

€

million)

Social Development

Country

Project Title

Amount

OBNOVA 2000

Croatia

Tempus

CARDS 2001

Croatia

Tempus

CARDS 2001

Croatia

Labour Market Restructuring

CARDS 2001

Croatia

Vocational Education and Training

Education

FYROM

South East Europe University

1.5

4.0

3.0

0.6

4.0

4.2.8. Cross cutting Issues

4.2.8.1. European Initiative for Democracy and Human Rights

In 2001, EIDHR committed more than
Balkans.

€

10 million for projects in the Western

€

EIDHR provided nearly
4.5 million for projects supporting promotion and defence
of Human Rights and fundamental freedoms in the countries of South-Eastern
Europe. Amongst the initiatives supported, the Roma communities benefit from
specific support. A specific project contributes to the inter-ethnic dialogue through
the strengthening of the management capacity of local authorities when dealing with
the Roma communities in Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, in
725,000). In FYROM one of the projects will allow
FYROM and in Serbia (
observation and monitoring of the census in order to promote an equitable and
impartial
follow international
population,
recommendations with regard to the census (

and
999,800).

presentation

the

of

to

€

€

A Masters Programme in Regional European’s Democracy
and Human Rights in Europe and the South East.

The project will give post-graduate students from Albania, Bosnia and Herzegovina, Bulgaria,
Croatia, and FYROM the opportunity to study Human Rights. This master’s course will
contribute to the emergence of specialist individuals who will join NGOs, local administrations
and become political decision-makers in the Balkans.

1.3 has been granted for this action.

€

€

€

The support to the processes of democratisation and to the reinforcement of Human
3 million spent on five projects. For example,
Rights has benefited from more than
a
820,000 project developed and reinforced the possibilities of action of civil
institutions and NGOs and increased the number and the capacity of active NGOs.
Another project was set up to restore and build up confidence between community
groups and the police forces through parents' and teachers' groups and local police
initiatives. This will encourage the strengthening of a democratic environment that
respects Human Rights in BiH (

300,000).

€

The support for the prevention of conflicts as well as to the restoration of civil peace
is a major priority of the EIDHR. This included for example in 2001 a project
entitled "Actions for women activists beyond the borders." This aims to deal with the
divisions in society and to confront community pressure on an individual and
collective basis in time in an individual and collective basis and to confront today’s
realities in different regions of Albania, Bosnia and Herzegovina, Croatia, Kosovo,

83

€
Macedonia, Serbia and Montenegro and of Slovenia (
660,000). Another project
aims to promote the reconciliation between Albanians and minority groups in the
municipality of Gjakova and Kosovo (

510,000).

€

4.2.8.2. NGO Activities

Civil society has a critical role to play in the democratic stabilisation in the Balkans.
An active civil society is crucial in making government and the civil service both
transparent and accountable to the citizen. Continued improvements are needed on
access to information and also on legislation that facilitates NGO activities.

The CARDS National and Regional Programmes and the EIDHR have been the main
channels for support in this field. In order to enhance ownership at local level and to
improve the EC's responsiveness to needs articulated at the level closest to the
citizen, the EC has endeavoured to work closely with NGOs and other civil society
partners.

€

€

In Albania, for example, support for NGOs and civil society was provided mainly
through small-scale operations. Here, the EC allocated
0.2 million to democratic
stabilisation as a whole. In Croatia,
1 million was devoted to strengthening the
capacities of civil society organisations and improving their delivery mechanisms. In
BiH, EC support focussed on NGO training and capacity building, NGO project
funding and technical assistance, with local NGOs being particularly involved in
2 million to the
projects relating to refugee return. In total, the EC allocated
development of civil society. In FRY EC assistance mainly took the form of
emergency assistance packages focussing on the promotion of pluralism by
strengthening NGOs and civil society as well as on inter-ethnic reconciliation. In
for civil society was to foster national
FYROM,
10.3 million
reconciliation, in the 2001, emergency assistance to FYROM totalling
was approved by decision of the Commission as a rapid reaction mechanism (RRM)
with the aim, among others, of strengthening civil society.

the main aim of support

€

€

In addition to this, micro-projects managed by the Commission Delegations were
used to respond quickly and effectively to funding requests from local NGOs, co-
operatives, educational institutions, women’s and cultural groups etc. These funds
benefited projects that, owing to their size, would not normally attract major donors.

4.2.8.3. Coherence with other policies

EC assistance to the Balkans has been designed to help them participate in the
Stabilisation and Association process and thereby contribute to the goal of conflict
prevention, leading eventually to the conclusion of Stabilisation and Association
Agreements. Under the EU strategy, there is a steady move in emphasis away from
large-scale infrastructure and post war
reconstruction to building up modern
democratic States capable of managing their own affairs and being reliable partners
for the EU. The advancement of the economic reform process and the development
of regional co-operation are coherent with the Community’s trade policy for the
region under which highly favourable trade preferences have been granted. In late
2000, the EU established a uniform Autonomous Trade Preference scheme, which
provides duty and quota free access for practically all exports of the five countries to
the EU markets.

84

4.2.8.4. Refugees Returns

Return of refugees and displaced people to their pre-war homes remains a key
priority for EC aid to the Balkans. The slow return and re-integration of displaced
persons and refugees remains one of the main obstacles to the restoration of political
stability and the return to economic and social normality in Bosnia and Herzegovina.
The EC programme is in line with the objectives defined in Annex 7 of the General
Framework Agreement for Peace (Dayton Agreement), the priorities identified by the
Return and Reconstruction Task Force, the analysis of UNHCR and the “Agenda for
Regional Action” of the Stability Pact.

In 2001, of more than
million were directly directed to refugee return to assist the following:

105 million received for Bosnia and Herzegovina,

€

€

38.4

• specifically to support and sustain breakthrough (minority) and spontaneous

returns;

• to assist the Property Legislation Implementation Plan;

• to ensure the sustainability of the returns through the development of business and

employment opportunities in return areas.

Spontaneous minority returns to pre-war homes in Bosnia and Herzegovina.

The aim of this project was to support the minority community who had already returned to
Kljuc and Bosanska Krupa and to encourage further returns. This was achieved through the
complete reconstruction of 65 houses, repair of the electrical distribution system in Veliki/Mali
Radic – Bosanska Krupa municipality and a job creation component encompassing distribution
of tools, seeds and livestock. The job creation component of the project provided livestock for 32
families; 33 families received agricultural equipment and chainsaws; 3 micro-business were
established, where 9 returnees are employed full-time, 10 part-time and a few on a seasonal
basis.

In Croatia, refugee return continued to receive substantial funding (
23.2 million).
Support is delivered via the “EU Reconstruction programme for return” (EUPOP), in
co-operation with NGOs on the ground. The programme promotes an integrated
approach to the return of refugees and displaced persons, and aims to provide
effective return to pre-war homes, sustainability of
the return process and
reintegration and reconciliation through the improvement of the quality of life for the
entire municipality of return in Croatia.

€

Rebuilding houses damaged by conflict.

The 2001 housing sector programme in Kosovo involves the reconstruction of some 3,630
conflict damaged houses for vulnerable families. Around 3,100 houses were completed and
16,700 people had moved into their homes by the end of 2001. About 6% of the families are
from an ethnic minority background, including families that have recently returned to Kosovo.
NGO partners in the programme identified vulnerable families according to rigorous selection
criteria. Elected Village Reconstruction Committees assisted the NGOS and helped ensure
transparency and local accountability in the selection process. The NGOS are working to
support the “self-help” inputs of beneficiary families to ensure the successful completion of this
programme.

85

4.2.9. Co-operation with other donors in the region

Effective donor co-ordination is essential for the success of the reconstruction in the
Balkans. The European Commission/World Bank Joint Office for South East
Europe79 ensures that overlaps between donors' activities are avoided in programmes
and projects. Among the key mechanisms of donor co-ordination there are the High
Level Steering Group and a Working Level Steering Group which met regularly to
discuss key issues. Other instruments for donor co-ordination include Donors
Conferences and Consultative Group meetings. In 2001, the Joint Office organised 5
major Donor meetings.

Co-operation with other donors in the region can be in the form of joint funding of
projects, or entrusting another organisation to manage EC funds. Examples of the
latter are the management of the Small Medium Enterprise credit
line of the
European Fund for Bosnia and Herzegovina by the German KfW or the OSCE taking
the lead in the creation of the South East Europe University in FYROM, where
financial resources from the EC and Member States were pulled together. An
example of joint funding and pulling together of resources is the EC technical
assistance contribution to the interconnection of power systems in the Croatian
Danube Region, to the works to be funded by EIB and EBRD loans.

€

The EC also provides interest rate subsidies for EIB loans; thus,
FYROM, received
€
received exceptionally support of
and railways improvement.

in the past,
20 million for this purpose. In 2001, Bosnia and Herzegovina
11.89 million for interest rate subsidies for roads

4.2.10. EIB Loans

The EIB operations in the Western Balkans mainly focus on basic infrastructure in
environment, transport and energy, as well as in the support of SME development.
The European Investment Bank works in close co-operation with the EC.

€
Examples of EIB Loans and subsidies 2001 (

million)

EIB Loans

Country

Title of Project

Amount of
Loan

BEI

BEI

BEI

BEI
BEI

Croatia

Albania

FRY

FYROM
Bosnia-
Herzegovina

Rehabilitation and modernisation of Croatian railway
section of Pan-European Corridor Vc
Upgrading of power transmission and distribution
networks
Rehabilitation of transport infrastructure in Serbia
and Montenegro
Financing for small and medium-scale ventures
Rehabilitation of several railway sections of Pan-
European Transport Corridors

TOTAL of all loans and subsidies in the Balkans

40

30

66

20
40

319

4.2.11. ECHO

The recovery of the Western Balkans from the 1999 Kosovo crisis continued in
in the former Yugoslav Republic of Macedonia
2001, although the conflict

79

http://www.seerecon.org

86

(FYROM) overshadowed the improvement in the overall humanitarian situation. In
2001, ECHO continued to be present in five countries and entities in the region
(Serbia, Montenegro, Kosovo, FYROM and Albania) with a budget of
83.05
million. The decrease from the two previous years reflects the improvement in the
humanitarian situation and the increasing involvement of other EC instruments.

€

ECHO’s efforts in the Western Balkans pursued three objectives: to respond to the
new humanitarian needs resulting from the FYROM crisis; to continue addressing
basic humanitarian needs of refugees, IDPs and vulnerable social cases; and, to
promote the LRRD process by supporting the transition to reconstruction and longer
term development and by promoting self-reliance among the beneficiaries of aid.

In Kosovo, ECHO concluded the bulk of one of its largest humanitarian operations,
moving from a pure emergency intervention to rehabilitation and finally resulting in
a successful transition towards a more structural development process. In June 1999,
when the Kosovo refugees started returning, ECHO responded to the pressing
humanitarian needs, providing food, medical assistance, as well as emergency shelter
to more than 22,000 returnee families. In 2000, ECHO continued to respond to the
basic needs of the most vulnerable whilst supporting the initial steps of the recovery
process (in the education and health sector, through the rehabilitation of water
supplies and by supporting self-reliance projects). In 2001, ECHO succeeded in
finalising its prior intervention and continued to support UNHCR’s protection and
assistance efforts in favour of minorities.
In addition, ECHO provided basic
assistance to the refugees from FYROM (72,000 at the peak of the crisis) and to their
host families.

Serbia remained ECHO’s largest operation. The political changes in Serbia and the
reform-minded government have attracted long-term structural assistance from
donors, including the EC, as demonstrated by the success of the donor conference on
FRY, held in Brussels in June 2001. However, humanitarian needs are still
considerable in Serbia, mainly due to the large caseload of refugees and internally
displaced person (IDPs) (almost 600,000). Whilst prospects for the return of IDPs
are, at the moment, still bleak, durable solutions for refugees – mainly integration but
also repatriation - are in sight. ECHO’s programme in 2001 continued to address
basic needs whilst pursuing more long-term solutions, such as facilitating the
repatriation (legal
information, go and see visits) and supporting the private
accommodation of refugees, as a more dignified alternative to life in collective
centres.

In Montenegro and in Albania, the humanitarian needs resulting from the Kosovo
crisis have virtually been fully covered. In Montenegro, ECHO focused on covering
the winter needs and reducing the dependency of beneficiary groups on humanitarian
assistance by funding self-reliance activities. In Albania, one of the poorest countries
in Europe, the focus was on consolidating the previous health and water and
sanitation interventions with a view to facilitating the transition to a development
process.

In FYROM, 2001 witnessed an open conflict between the Ethnic Albanian Armed
Groups (EAAG) and the Macedonian armed forces. The conflict escalated in various
stages in the first half of the year resulting in various waves of population
displacements within the country and outside its borders, especially into Kosovo. The
international community, mainly the EU, adopted a pro-active stance in terms of

87

political mediation, of
reconstruction assistance (through the Rapid Reaction
Mechanism (RRM) and the CARDS 2001 programme) as well as humanitarian
assistance. In strict accordance with its mandate, ECHO has provided food assistance
to all IDPs and to vulnerable returnees, non-food assistance to the host families and
IDPs, and has funded the emergency rehabilitation of schools and health centres
damaged during the conflict, in order to facilitate the return of IDPs. Since the start
of the conflict, close co-ordination within the Commission allowed the establishment
of a task division between the various EC instruments, thus avoiding both overlaps
and gaps. ECHO focused on the immediate humanitarian needs whilst the RRM
addressed medium term needs such as housing reconstruction. On the political front,
in spite of some positive developments following the conclusion of a Framework
Agreement between political leaders from both ethnic groups and the approval, in
November, of constitutional changes, the political process was, at the end of 2001,
still fragile.

ECHO Financing Decisions 2001 (

€

million)

Country

Amount

Serbia

Montenegro

Kosovo

FYROM

Albania

Regional

TOTAL

47.800

7.500

14.000

5.400

6.600

1.750

83.050

4.2.12. Monitoring in the Balkan countries

The Commission, during 2000, conceived an improved results-oriented monitoring
system for the ALA/MED/ACP and Balkan regions, which is rooted in the
Commission’s Project Cycle Management method and tested the system during
2001. The conception and test-phase at its end, the paragraph below describes first,
tentative but
interesting insights on what works and what can be improved
concerning the Balkans. Further information on the results-oriented monitoring
system can be found in chapter 1.4 (monitoring). The system is to be applied globally
as of 2002.

During 2001, 12 projects were visited in the Balkans in two countries. The total
112.3 million. The
volume of EC financing covered by these visits amounted to
most important sectors assessed were firstly infrastructure and economic services
(76%) and secondly economic and institution building, civil society, social
infrastructure and services (22%). The overall rating for projects in the region was
2.28, compared to an average mark of 2.5.

€

sub-criterion of

Effectiveness, impact and sustainability were identified as being the most successful
aspects. The
the
participation of target groups in design and implementation, and the relationship
between project staff and local communities, was given the highest rating in the
region. Among the main criteria, relevance and efficiency were the weakest. Results

socio-cultural adequacy, which includes

88

achievement, as related to efficiency, was the sub-criterion with the lowest rating,
followed by economic adequacy (as a sub-criterion of sustainability).

4.2.13. Conclusions and Perspectives

The adoption of the CARDS programme in 2000 brought a more strategic approach
to the provision of assistance to the countries in the Western Balkans and reinforces
the objectives of the Stabilisation and Association process. During year 2001 the
programme responded both to longer-term development objectives and to immediate
needs caused by conflict or post-conflict situations.

Assistance under the CARDS programme was, on the whole, being delivered rapidly
and efficiently. The European Agency for Reconstruction in particular has
established an impressive track record in delivering assistance quickly and efficiently
in its area of operation - Kosovo, Serbia and Montenegro and since December 2001
also the former Yugoslav Republic of Macedonia. Elsewhere in the region, decision-
making is being devolved to the Commission Delegations.

As the region evolves, assistance has to change. Country Strategies and a Regional
Strategy have been adopted in 2001 for the period 2002-2006. During this period, the
programmes will focus on the key Stabilisation and Association priority areas,
gradually moving from reconstruction to institution building and economic reform,
one important part being to build each country's institutional capacity to understand,
legislate on and finally implement core elements of the Community acquis

89

4.3.

Eastern Europe and Central Asia

Three main challenges faced the region of Eastern Europe, Caucasus and Central Asia in
2001. The dominant issue is clearly the events of 11 September, which will have a major
impact on the EC approach in particular to Central Asia. A doubling of finance for this region
is anticipated in 2002. Second, the EU welcomed the progress in reforms in Russia. This has
been marked by an increased focus in EC support for implementation of the reform agenda,
building on earlier TACIS work, which helped put reform legislation in place. Thirdly, the EC
has given strong support to those countries currently developing Poverty Reduction Strategy
Papers.

As regards sectoral priorities, three themes are of particular note in the EC response in 2001.
Firstly, increased attention was given to justice and home affairs, and this will be further
expanded in the years to come. Secondly, the EC consolidated its support for the social sector,
notably health and education. Thirdly, cross-border issues, notably border management
improvement, have been given particular priority.

4.3.1.

Introduction

The European Union with its Member States, is the largest donor of development
the Caucasus and Central Asia80. The TACIS
assistance to Eastern Europe,
programme continued to be the primary source of EU assistance to this region in
2001.

The main purpose of TACIS is to assist in the transition to a free market economy
and to promote greater democracy. This objective is the centrepiece of the
Partnership and Co-operation Agreements (PCAs), which in turn form the basis of
the EU’s continuing relationship with Eastern Europe, the Caucausus and Central
Asia. PCAs are legal frameworks, based on the respect for democratic principles and
Human Rights, setting out the political, economic and trade relationship between the
EU and its partner countries. Each PCA is a ten-year bilateral treaty signed and
ratified by the EU and the individual state. In addition, the European Union co-
operates with Russia and the Ukraine through Common Strategies under the EU’s
Common Foreign and Security Policy. The Common Strategies aim to strengthen
coherence between the EU and Member States’ policies and activities within these
two countries.

Russia also participates in the ‘Northern Dimension’ initiative concerning the
external and cross-border policies of the European Union covering the Baltic Sea
region, Arctic Sea region and North West Russia. In 2001, the first meetings were
held under the EU/Russia Energy Dialogue, including four thematic working groups,
as well as a Summit meeting. The Commission also produced a Communication on
Kaliningrad in January 200181, the conclusions of which were endorsed by the
Council.

80

81

TACIS: Technical Assistance for the Commonwealth of Independent States covering Armenia,
Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Mongolia, Russia, Tajikistan,
Turkmenistan, Ukraine and Uzbekistan
COM (2001) 26 of 17.1.2001

90

The legal basis for TACIS is Council Regulation N° 99/2000 for 2000-2006, which
came into force in January 2000. The regulation takes account of the European
Union’s experience with the region over the past eleven years. The programming
process has evolved and the relationship between the EC and partner countries is
now based more on a constructive dialogue and less on response to demands from
partner governments. The new Action Programmes, in particular those for Moldova
and Kyrgysztan, have established a strong emphasis on poverty reduction. In
addition, the management of TACIS has seen a shift towards a focus on fewer, larger
projects.

The TACIS programme is divided into two main categories: national and multi-
country programmes. During 2001, Strategy Papers, analysing the situation and
setting out the EU response, have been developed for each of the major programmes
covering the period 2002-2006, except for Belarus and the Central Asian countries.
Indicative programmes, describing the priorities for strategy implementation, were
also developed covering the period 2002-2003. For the national programmes, the
indicative programmes for each country establish two or three of the following areas
of co-operation as priorities:

• institutional, legal and administrative reform;

• private sector and economic development;

• social consequences of transition;

• development of infrastructure networks;

• environmental protection and management of natural resources; and

• development of the rural economy.

The principal multi-country programmes are the following: Regional Co-operation,
Cross Border Co-operation, Baltic Co-operation, Nuclear Safety, and the EU-
European Bank for Reconstruction and Development investment preparation facility.

91

COMMITMENTS AND PAYMENTS IN THE REGION 2001 (

€

million)

COMMITMENTS

PAYMENTS

2001

2000

2001

2000

PROGRAMMES
National Action Programmes (B7-5200B)
Armenia
Azerbaijan
Belarus
Georgia
Kazakhstan
Kyrgystan
Moldova
Mongolia
Russia
Tajiskistan
Turkmenistan
Ukraine
Uzbekistan
Sub total

Multi-country Action Programmes
Cross Border (B7-5210)
Baltic (B7-5211 in 2001, B7-5370 in 2000)
Nuclear Safety (B7-524 for 2001 only)
Regional + other multi-country (B7-5200B)*
Chernobyl Shelter (B7-536)
ATA (B7-5200A)
Sub total

Other budget lines
Food Aid (audit)
Sub total

GRAND TOTAL
* for 2000 includes Nuclear Safety

7.8
21.6

8.5

4.3
53.0

63.5
10.0
168.7

22.5
5.9

214.3

32.4
275.1

4.0
14.0
9.1
19.5

80.0

63.0

189.6

23.0
6.0
51.0
101.7
40.0
12.2
233.9

423.5

443.8

Overview of Commitments/Payments 2000-2001 (Million

€
)

Commitment
Payment
Ratio P/C

4.3.2.

Regional Co-operation

2000
443.8
452.4
102,0%

2001
423.5
395.0
93,3%

4.3
4.6
3.1
3.7
6.1
4.4
4.0
2.4
86.4

2.9
31.2
6.8
159.9

3.4
13.2
1.4
6.6
4.6
2.4
6.7
4.8
91.3

3.1
59.2
11.9
208.6

26.1

19.4

182.0
40.4
2.0
243.9

452.4

35.8
126.2
40.0
5.6
233.6

1.4
1.4

395.0

Total
867.3
847.4
97,7%

Over half of TACIS support is directed through multi-country initiatives. Attention
here focuses on three principal instruments: the regional co-operation programme
(support for co-operation between Newly Independent States), the cross-border co-
operation programme (support for Newly Independent States with joint borders with
the EU/candidate countries) and the nuclear safety programme.

4.3.2.1. Regional Co-operation Programme

The Regional Co-operation programme promotes co-operation between Newly
Independent States. There are three priority areas: networks, environment and justice
and home affairs. The Regional Indicative Programmes 2002-2003 were prepared
and approved in 2001 for the Regional Co-operation Programme. These documents
proposed new activities in several areas, such as assistance with policy development
in accordance with various international environmental initiatives (for example, the
Kyoto Protocol) and also development of a telecommunications’ reform programme.
Aside from these proposed interventions, the Regional Co-operation Programme also

92

continued work on more established programmes of assistance, such as TRACECA
(oil and gas) and INOGATE (transport).

a)

Networks

to networks is directed through two main instruments:

the INOGATE
Support
programme covering the oil and gas sector and TRACECA programme covering
transport. In addition to these two main instruments, support may also be provided in
the telecommunications’ sector.

• Traceca

transport
The Traceca programme supports the development of the East-West
corridor from Europe, to Central Asia, via the Caucasus, in order to enhance the
ability of countries in this area to access European and world markets, as well as
fostering regional co-operation. Legislators in the signatory countries agreed the
Traceca Multilateral Agreement - the key basis of Traceca - based within both the
TACIS and PHARE82 programmes. This was followed by a detailed action plan for
2000-2001. In February 2001, the Traceca Secretariat was established in Baku, in
Azerbaidjan. The programme has six on-going projects, which form part of the
TACIS Regional Action Programme 1999, and which provided road sector studies in
the Caucasus and traffic forecasting between the 12 Traceca countries. A major
supply contract for an optical cable along the railway lines in Armenia, Georgia and
Azerbaijan is also under implementation.

• Inogate

Inogate aims to enhance co-operation between producers, transporters / pipeline
providers and consumers of oil and gas across the TACIS region. In this way, it
hopes to promote interstate oil and gas projects, reduce investment risks and promote
the introduction of international standards – especially in the environmental and
safety fields - in the energy network infrastructure. Twenty-one countries from
Eastern Europe, the Caucasus and Central Asia as well as Greece and Turkey have
signed the Inogate umbrella agreement, which upgrades the East-West oil and gas
corridors in compliance with EU and international standards. Four new Inogate
projects were launched in 2001 to continue work already underway to improve the
accountability of gas transit between the Newly Independent States.

b)

Environment

TACIS funds a range of regional environmental initiatives e.g. a project to help
environmental ministries to implement their national environmental action plans, to
develop common policies and to support sub-projects in environmental financing and
policy reform. Another project funds trans-boundary river management in four river
basins – covering nine countries, in support of the United Nations / Eastern and
Central Europe trans-boundary water convention. The successful Caspian Sea
environmental project ended in 2001 with local experts visiting the Caspian Sea to
monitor invasive and toxic species. The Joint Environmental Programme, which
financing institutions,
brings together

from different

international

investment

82

PHARE: Poland and Hungary: Aid for Economic Restructuring (now extended to cover Bulgaria,
Czech Republic, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia).

93

€

facilitated the signing of a
60 million loan for water protection in Kazakhstan in
2001. There have also been developments under the international framework of
‘Environment for Europe’. Further support was given to the Project Preparation
secretariat based in the European Bank for Reconstruction and Development
(EBRD), and the Task Force for the Environmental Action Programme, based at the
Organisation for Economic Co-operation and Development (OECD). TACIS funds
also assisted Non-Governmental Organisations (NGOs) to prepare a sustainable
development strategy paper to be presented in Brussels in ‘Green Week’83.

c)

Justice and Home Affairs

The European Union is giving increasing attention to supporting the rule of law and
effective law enforcement in its assistance to the Newly Independent States and
Mongolia through the TACIS programme. Key issues are: combating organised
crime, in particular drug trafficking and trafficking in women as well as reducing
illegal migration throughout the territory of the Newly Independent States. The EU is
also giving special attention to the Kaliningrad area and given its future perspective
as an ‘enclave’ within EU Member States. In addition, TACIS seeks to provide
systematic support for enhanced border management. Four new initiatives were
proposed under the Regional Programme for 2001: border management on the
Belarus/Russian border; combating trafficking in women in the Russian Federation;
combating organised crime in Kaliningrad; and fighting the drugs’ trade in the
Western Newly Independent States and the Caucasus.

4.3.2.2. Cross-Border Co-operation

The Cross-Border Co-operation programme is designed to provide support to the
Newly Independent States, which have borders with the EU or the candidate
countries. There are three principal themes to this support: economic development
(specifically SMEs), environment, and border crossings. This support is designed to
be complementary to that provided through the TACIS national programmes, and
details on the individual sectors are provided later in the report. The main focus of
2001 in this area was the opening to traffic of a number of border crossings begun
under earlier programmes. In addition,
the cross border economic development
project at Uzghorod on the Ukrainian, Hungarian and Slovakian borders, was
brought nearer completion. This
is the first major cross border economic
development project to be financed under TACIS and has produced valuable lessons
for projects about to commence in Moldova and the Ukraine. The Cross-Border Co-
operation programme has been particularly active on the Finnish-Russian Border. A
seminar was held in St Petersburg in November 2001 with the aim of helping to
boost the participation of the Ukraine, Belarus and Moldova. It is hoped that this will
result in cross-border committees being established between neighbouring countries.

83

Green Week is an annual campaign organised by the European Commission’s Directorate-General for
Environment, which provides a platform for raising the awareness of EU environmental policies and
activities.

94

Kamenny Log (Belarus) – Medininkai (Lithuania) Road Border Post.

The border crossing at Kamenny Log in Belarus is located on the route between Minsk and
Vilnius. It will facilitate the movement of trade along the important route from Kaliningrad,
through Vilnius and Minsk, and onwards to Moscow, as well as linking the Baltic Sea ports with
Russia Following the independence of both Belarus and Lithuania, there was a need to provide
an external border facility. The need to implement controls was considered all the more
important because Lithuania is not a member of the Commonwealth of Independent States and
not part of the customs union with Russia .It is, therefore, a major interface point between
Eastern Europe, the Caucasus, Central Asia and the expanding European Union. A TACIS
1.34 million supported the construction of the post while equipment is to be supplied
grant of
under a
1.12 million grant that covers three border posts in Belarus. The TACIS funded
construction works commenced in January 2001 and were completed at the end of December
that year. Equipment deliveries to the site will be completed in April 2002.

€
€

4.3.2.3. Nuclear Safety

The EU has made a major contribution to dealing with the problems associated with
through the new Industrial
the closure of the Chernobyl nuclear power plant
Complex for Solid Radioactive waste project and the second contribution of
100
million to the Chernobyl Shelter Fund managed by the European Bank for
Reconstruction and Development.

€

Independent

A particular emphasis has been put on increasing operational safety through ‘on site
assistance’, which is provided on a continuous basis by EU operators at 14 sites in
the Newly Independent States. On site assistance aims to improve the level of design
safety, operating and surveillance conditions and the organisation of operational
safety.
regulatory authorities are being strengthened through EU
technical and financial assistance and much of the necessary legal framework has
now been put in place. The overall safety culture is being improved through more
formal and regular dialogue between plant operators and regulatory authorities (the
so-called ‘2+2’ approach). Nuclear Power Plants (NPPs) are being modernised with
the provision of equipment (a condenser cleaning system to Balakovo NPP, non
destructive testing equipment to several plants, steam generator level control system
to South Ukraine NPP, etc.).

There are 91 ongoing projects for general assistance, 17 ongoing Procurement Agent
contracts for equipment, 3 contributions to the European Bank for Reconstruction
and Development for the Chernobyl Shelter. 18 new projects have been identified
under the Annual Programme 2001, which contribute to the aim of improving the
culture of nuclear safety in Russia, the Ukraine and other CIS countries.

In order to support the establishment of a reliable safeguards system in Russia, the
European Commission is providing support to the Methodological and Training
Centre in Obninsk in its training of both operators and inspectors as well as
providing technical support to Russian operators. In addition, the Ural Siberian
Training and Methodological Centre in Snezhinsk provides training and services to
operators and inspectors involved in the final stage of the fuel cycle.

The Commission not only co-operates with the European Bank for Reconstruction
and Development but also with the International Atomic Energy Agency, whose
activities to improve nuclear safety in the Newly Independent States are presently
channelled through its Technical Co-operation Program and the Contact Expert
Group related to North West Russia.

95

Important steps have also been taken to accelerate the rate of implementation of
existing commitments in the nuclear safety programme. There has been an increase
in staff working on these issues and the team is now well equipped to tackle the four
principal challenges: on-site assistance; design safety and off-site emergency
preparedness; nuclear waste and safeguards, and regulatory authorities and technical
safety organisations.

Ensuring the safety acceptability of plant modifications: the ‘2+2’ approach

Licensees have complete and undivided responsibility for the safety of their plants and their
impact on the environment. Regulatory bodies inspect and assess all nuclear installations to
ascertain compliance with regulations and licence terms. The TACIS nuclear safety programme,
while contributing directly to the upgrading of nuclear installations in the Newly Independent
States, also promotes direct transfer of Western European best safety practice to both licensees
and regulators. More specifically, it addresses the difficult question of the interface between
these two bodies during the licensing of plant upgrades. For this purpose, the so-called ‘2+2’
approach, provides for a coupled co-operation scheme, on the one hand between EU and Newly
Independent States’ nuclear utilities and on the other hand between EU and Newly Independent
States’ regulators and their expert organisations. In addition to improving licensing practices in
the Newly Independent States, this integrated approach also helps to ensure that EC funded
plant modifications do improve safety and conform to West European regulations and practices.

€
Regional Co-operation – Commitments 2001 (

million)

Regional Co-operation

Amount

Regional Co-operation

Cross-Border Co-operation

Baltic Co-operation

EU/EBRD Investment Preparation Facility

Nuclear Safety

Chernobyl Shelter Fund

ISTC/STCU

Miscellaneous

Total

4.3.3.

Transport and Infrastructure

4.3.3.1. Transport

38.0

23.0

6.0

15.4

51.0

40.0

25.0

21.8

220.2

Support to the transport sector is provided both through the Regional Co-operation
Programme (see above) and through the national action programmes. The objective
of the transport projects is to modernise the transport system and to make it suitable
for a modern market economy. In 2001, sixteen projects were under way in the
sector. These projects deployed more than 400 European experts, of whom 30 were
full-time residents in the partner countries.

Transport infrastructures inherited from the Soviet era are oversized in comparison
with current and short term needs. There is, therefore, no need for major investment,
although some assistance is necessary in order to maintain the efficient utilisation of
the existing infrastructures. The transport system is still dominated by railways,
which carry more than 80% of land freight, (compared with 20% in the EU). In order

96

to improve the system’s flexibility, TACIS has been promoting projects in multi-
modal transport by supporting the growth of road transport, breaking up large
transport businesses and transferring management know-how to the partner
countries. Support has also been given to the establishment of modern legal
frameworks and institutional arrangements.

Projects completed in 2001 included Road Transport Safety and Russian Marine
Seaports’ Safety, which managed to successfully introduce western standards in their
respective fields. Major projects started in 2001 include the Moldovan Railways
Restructuring, the Kaliningrad Port Development and the Northwest Russian Road
Management projects.

Moldovan Railways

The Moldovan Railways project seeks to revitalise the country's railways system and to enhance
its competitiveness. The project provides consultancy support and training to the Moldovan
authorities as well as to the Moldovan Railways with a particular focus on the development and
implementation of a Restructuring Plan.

Kaliningrad ports

Kaliningrad ports are the only ice-free Russian ports in the north-west of Russia and will gain in
importance due to the imminent accession into the EU of neighbouring Poland and Lithuania.
The Kaliningrad Port Development project, started in February 2001, is designed to facilitate
trade and investment between EU Member States and the Russian Federation by strengthening
efficiency and upgrading physical and technical capacity of the channel and Kaliningrad ports.
Specifically,
this project promotes opportunities for joint ventures, private banks, and
international funding agencies to finance the improvement of physical infrastructure and freight
handling equipment. Furthermore, it provides management training in commercial marketing
for senior staff at the Port Authority and port operating companies.

4.3.3.2. Infrastructure

Construction/maintenance

The principal activities in the infrastructure sector in terms of works contracts are
financed through the TACIS Cross-Border Co-operation programme (see also section
2.2 of this Chapter). During 2001, the construction of four TACIS-funded border
posts was completed at Salla and Svetogorsk in Russia, Kamenny Log in Belarus and
Leushen in Moldova. The year also saw the start of two separate works contracts for
the approach roads to and bridge over the River Bug on the Ukraine–Poland border,
which will be completed in 2002. Tenders for works contracts were launched for a
railway border station at Ivangorod in Russia, the border post at Bagrationovsk and
for the demarcation of 650 km of the Belarus border with Lithuania. Tenders were
also launched for a total of 30 equipment supply lots (16 in Russia, 4 in Belarus, 6 in
the Ukraine and 4 in Moldova).

Energy Sector

In 2001 eight major projects continued in the energy sector in the Ukraine, Central
Asia and the Caucasus. Three of these focussed on the reorganisation of the oil and
gas sector and three were aimed at promoting the concept of energy efficiency in the
in the
Ukraine. Two more supported structural reform of the energy market
Caucasus. Eleven projects were implemented in the energy sector in Russia, of which
five will continue into 2002.

97

Transport and Infrastructure: Commitments in 2001 (

Transport and Infrastructure

Country

Transport

Environment

Energy

Kyrgyzstan

Kazakhstan

the Ukraine

Total

€

million)

Amount

1.2

2.0

20.0

23.2

4.3.4.

Food Security and Rural Development

In 2001, TACIS supported twelve continuing projects in the food and agriculture
sector in Russia. Two of these focused on promoting agricultural co-operation
(production, processing, and credit co-operatives) in three pilot regions. Another
aimed to promote reform through agricultural training and education. TACIS also
tackled the issue of food quality through a project working in different regions on
selected food products. In addition, there were two projects on farm restructuring (in
Astrakhan and in the Urals), another on agricultural advice centres in South Russia,
and one more, working at
level, gave guidance to the Ministry of
Agriculture and Food in promoting new policies.

the federal

Information on all the projects completed in 2001 was widely disseminated so that it
can be replicated across the region.

livestock);

In the rest of the Newly Independent States, there were seventeen continuing projects
covering all aspects of rural development: improved agriculture production (crops
and
land
privatisation/registration; improved seed production/multiplication; development of
agricultural associations and co-operatives; rural credit facilities; food quality/safety;
and water use/irrigation for agriculture.

agri-processing; marketing/distribution

produce;

of

EU-Russia Food Delivery Programme

Council Regulation (EC) 2802/98 of 17 December 1998 mandated the EC to undertake the
delivery of food products to the Russian Federation. This programme was the largest ever food
delivery undertaken by the EC in the region (about 1.85 million tonnes to over 50 regions) with
a budget expenditure of

400 million.

€

The delivery of products was completed in April 2000 with almost all products sold at prices
reflecting the prevailing market value. The proceeds of these sales were lodged in a special
account at the Russian Ministry of Finance. The objective was to use these funds to clear
pension arrears (80%) and to support the ministries for Health and Labour (20%). The year
2001 was devoted to the management of the special account. In addition to the complex nature
of the food delivery programme, difficulties were encountered regarding the collection and use
of co-finance.

As required by the Council Regulation, the Commission commissioned an external audit of the
programme. The findings of this audit were to be delivered in early 2002.

98

Policy Development, Training and Management Support
to Agricultural Enterprises in Crop Production

This project ran between February 1999 and November 2001. It was designed to improve crop
production in Mongolia through a series of practical demonstrations of, for example, correct use
of fertilisers, seed multiplication, improved irrigation techniques, minimum tillage and chemical
fallow. This project has shown that significant and quantifiable improvements in both crop
quality and quantity were possible with minimal capital outlay. The results of
these
demonstrations were widely disseminated through a series of open field days and through
regular coverage of the project’s activities in local and national media. The project established
five agricultural advice centres, which provide a wide range of advice and information to the
entire agricultural community.

There was active support from the Ministry of Agriculture throughout and the Government has
already implemented many of the project’s recommendations.

4.3.5.

Institution Building

Institution building activities lie at the core of all TACIS support. These activities
support the development of transparent, accountable and effective public institutions.
TACIS support includes provision of advice on administrative reform to individual
ministries, advice on development of modern legislation - where appropriate to be
compatible with EU standards - and support for reform of the judiciary.

It
is also worth highlighting the newly established TACIS Institution Building
Partnership Programme supports three main types of partnership co-operation –
between central government ministries and agencies, between municipal and regional
governments and amongst NGOs. The partnerships involve officials from EU
Member States being seconded to work directly within the beneficiary institution, for
example to help prepare new legislation, reform institutional structures, provide
training on systems software, provide training on the ground or in the EU Member
State.

Thirty institution building projects with an environmental perspective were
implemented in 2001. Many of these focussed on institutional development of
national and local government. There were also two major co-financing projects, one
in St Petersburg, Russia, designed to reduce pollution in the Baltic Sea, and one in
the Black Sea region, which aim to improve water quality, tourism and public health
in two Ukrainian coastal towns. Further investment support for municipal services
was launched during the year.

As to economic development, reform is still needed in some crucial areas including
legal frameworks for the private sector, trade and investment policies, taxation and
access to finance. TACIS projects and programmes aimed to address these problems
both at grass roots level (development of Small and Medium Enterprises - SMEs)
and at the institutional level.

99

Institutional Building – Commitments 2001 (

Country

Georgia

Kazakhstan

Kyrgyzstan

Moldova

Russia

Ukraine

TOTAL

€

million)

Amount

3.0

9.0

4.7

9.7

45

20.5

91.9

4.3.6. Macroeconomic Policies

Facilitating economic reform and developing the private sector is a central objective
In 2001 the EU’s strategy remained focused on
of the TACIS programme.
stimulating business growth whilst continuing to provide support
to the new
institutions of the market economy. Co-operation with other international bodies has
been actively pursued, while strong relationships with local partners continue to be
nurtured.

€

The challenges for TACIS continue to include the current regulatory environment,
inadequate access to finance and investment and poor quality of business practices.
European projects focussed on these problem areas with nearly 200 projects of a total
budget of almost
300 million. Projects such as Supporting Accounting Reform in
Azerbaijan and Supporting WTO Accession - as well as support to the development
of a small business culture in Russia - characterised this trend. By addressing legal
and political reform while helping business to get on its feet, EU projects remained
vitally important principally in the Russian Federation and throughout the Newly
Independent States.

Under the first phase of the Managers’ Training Programme (MTP),
the EU
internship programme for Newly Independent States’ managers, facilitated some 440
internships during 2001 in EU companies, lasting up to three months. During 2001
an additional

9.1 million for MTP was contracted.

€

MERIT 1 – Support to Monoactivity Towns, in particular the Development of Coal Mining
Cities Russian Federation

This project aimed to strengthen five selected coal region cities in order to turn them into
motors for urban and regional development. It supported the role of newly emerging municipal
administrations in coal-mining towns that are affected by industrial re-structuring. Activities
included supporting the development of economic strategies, developing the strategies and
capabilities for attracting investment into the areas, developing local capacity through training,
supporting the SME infrastructure, developing micro-credit
funds, and preparing a
dissemination strategy to involve all mining towns. A series of Flagship Initiatives were
implemented in each town as the focal point for a connected series of economic regeneration
activities. The Municipal Development Planning Process was - and will continue to be after
TACIS – ‘participatory’ in all towns i.e. taking into consideration the views of the wider
community including representatives of the local authority, business and social sectors.

100

Macroeconomic Assistance - Commitments in 2001 (

€

million)

Country

Amount

Georgia

Kazakhstan

Kyrgyzstan

Moldova

Russia

Ukraine

TOTAL

4.3.7. Health and Education

4.3.7.1. Health

1.0

2.5

2.8

3.0

22.0

13.0

44.3

The decline in health services in Eastern and Central Europe has contributed to a
drop in life expectancy, often dramatic. For instance, the life expectancy rate has
dropped from 68 to 58 in Russia over the past decade. A large number of illnesses
that were under control or had even disappeared have re-emerged, and are on the
rise, including diphtheria, cholera and tuberculosis. AIDS is also progressing in an
unchecked way.

The European Commission addresses the health issues in particular in its assistance
programme for Uzbekistan. The table below gives a summary of TACIS actions in
the health sector during the period of 2000-2001.

€

Projects being prepared include ‘Tuberculosis prevention and control (Kiev City) in
the Ukraine (
2 million), ‘Integrated Community Primary Health-support to the
€
Kakheti region’ in Georgia (
2 million).

5 –7 million), and ‘Regional Health in Uzbekistan’ (

€

4.3.7.2. Education

The principal instrument for TACIS support in the education sector is the Tempus84
programme. The aim of this programme is to support the reform and restructuring of
higher education systems in the Newly Independent States and to help adapt them to
new socio-economic needs. Tempus has three principal strands: Joint European
Projects (JEPs), Networking Projects (NP) and Individual Mobility Grants (IMGs).

84

Tempus aims to support the reform of the higher education system in Central and Eastern Europe,
covering: Armenia, Azerbaijan, Belarus, Georgia, Mongolia, Russia, Ukraine and Uzbekistan

101

€
Social Development - Commitments in 2001 (

million)

Country

Amount

Kazakhstan

Kyrgyzstan

Moldova

Russia

Ukraine

4.3.8. Cross Cutting Issues

TOTAL

4.3.8.1. European Initiative for Democracy and Human Rights

1.0

0.9

6.8

23.0

13.5

45.2

the European Initiative for Democracy and Human Rights (EIDHR)
In 2001,
implemented projects in Eastern Europe, the Caucasus and Central Asia to a value of
€
more than

7.5 million.
€

The EIDHR committed
2.6 million to a project aimed at the promotion and defence
of Human Rights and fundamental liberties in the Russian Federation. The objective
of this project was to reinforce and protect Human Rights as part of a monitoring
programme for the 89 regions of Russia, and notably the North Caucasus. In
Georgia, the EIDHR has implemented a project on the rehabilitation of survivors of
torture and for the prevention of torture in the future.

€

3 million for support for the process of democratisation and
EIDHR has provided
reinforcement of good governance. In Belarus, a joint project with the Organisation
for Security and Co-operation in Europe, started in 1999, has increased knowledge of
Human Rights issues amongst young people. In Russia, a joint programme with the
Council of Europe (CoE) is reinforcing good governance and the protection of
Human Rights. In the Ukraine, a joint programme with the CoE is reinforcing
democratic stability and working to prevent conflict. A body of work on European
norms of governance, Human Rights and humane treatment of prisoners has also
been adopted in Moldova.

Support for conflict prevention and peace promotion is a major priority for EIDHR.
In 2001, the EC worked with the Council of Europe on a programme to assist
Armenia, Azerbaijan and Georgia with their accession to the Council of Europe; in
particular with the creation of democratic societies based on good governance,
tolerance and a respect for Human Rights. Another joint project aimed to combat
corruption and organised crime, as well as reinforcing measures to reduce conflict
and promote good governance. For the first time, 2001 saw the EIDHR involved in
conflict prevention and capacity building for Human Rights in the Caucasus.

102

4.3.8.2. NGOs’ Activities

The development of civil society is another core component the TACIS programme,
especially as regards support for institutional, legal and administrative reform.

A special Civil Society Development Programme for civil society in Belarus was
approved in Minsk in November 1999. Implementation started in early 2001. There
are 24 NGO projects, 5 media projects and one institutional twinning project under
implementation.

The final proposals for the TACIS Lien programme (which promotes partnerships
between NGOs) were submitted in spring 2001. Twenty projects were selected and
are now being implemented. The total project value is
3.2 million. The TACIS City
Twinning programme has 35 ongoing projects (total budget
3.5 million) that will
come to an end in 2002.

€

€

Lien and City Twinning programmes have been replaced by the Institution Building
Partnership Programme / Support to Civil Society and Local Initiatives. The new
programme targets NGOs,
and professional
It supports an institution-building process through EU / Newly
associations.
Independent States’ partnership co-operation at a grass-roots level. A call for
proposals was launched in December 2001 and the project implementation is planned
to start in autumn 2002. The total budget for this programme is
15 million over two
years.

local and regional authorities

€

‘NGO assistance to disabled people’
and ‘Creation of a consultation Centre for Invalid Children’

This project was developed by Belarussian NGOs to increase their capacity to help disabled
people. It aims to develop co-operation between NGOs and the Employment Services for the
creation of job opportunities for the disabled, to review existing legislation and propose new
regulations to facilitate the employment of disabled people. The premises for the project office
have been provided free of charge within the Ministry of Labour. This constitutes a major
signal from the national authorities. It is hoped that the project will produce positive and
sustainable results as a good example of NGO assistance and co-operation with the government
of Belarus.

4.3.9. Coherence with other policies

Coherence with other policies takes two forms. Firstly, the European Commission
carefully co-ordinates proposed TACIS assistance activities with the Commission
Directorates-General responsible for all other relevant EU sectoral policies, including
environment, energy,
trade,
transport,
employment and regional policy.

justice and home affairs, competition,

For example, as TACIS assistance to the Western Newly Independent States is often
part of a broader framework involving Community support to the accession countries
through PHARE and Interreg85 it is also essential to ensure better co-ordination
between TACIS, PHARE and Interreg. In April 2001, the Commission produced a

85

Interreg is an EC initiative, financed by the EC’s Structural Funds, which promotes Interregional co-
operation in EU (internal) cross border areas

103

‘Practical Guide to bringing Interreg and TACIS funding together’86 as a first step
towards co-ordinating these two instruments.

In addition, the European Commission is endeavouring to ensure that the TACIS
programme is complementary to support provided to these countries through other
EC instruments; For example, the Moldova and Kyrgyzstan programmes developed
during 2001 contain elements linked with projects undertaken through the EC Food
Security Programme. Similarly, where appropriate,
the TACIS activities in the
sphere of private sector and economic development seek to create a favourable
climate, compatible with the conditions stipulated in the terms of EC macroeconomic
assistance (see chapter 7).

4.3.10. Co-operation with Other Donors

Continued coordination and complementarity with the activities of other donors, and
in particular with EU Member States, is a key strategic priority for TACIS. Greater
coordination at the country level is a direct result of growing relationships between
the EC Delegations and Member States’ own representations in partner countries.
New programmes are prepared in close consultation with other donors and through
formal Commission approval processes
the TACIS Management
Committee). Relationships with non-EU organisations - in particular the World Bank
and the International Monetary Fund - are being strengthened by ongoing co-
operation, especially in such areas as implementation of
in
Kyrgyzstan, of the Comprehensive Development Framework.

the PRSP and,

(such as

4.3.11. ECHO

In 2001, the overall humanitarian situation in the NIS has not improved significantly.
It is evident that the root causes of the difficult humanitarian situation faced by the
most vulnerable strata of society in the NIS are of a structural nature. They have to
be addressed by a more sustainable, long-term approach – and are therefore beyond
ECHO’s mandate. However, in the light of certain delays in the taking over of
activities by Commission instruments more
the
Humanitarian Aid Office continued assistance, albeit to a reduced extent. The aim
the most vulnerable groups,
was
including children in institutions, lonely elderly and disabled people, multi-child
families at risk. In 2001, ECHO continued and practically completed its phasing out
in Belarus, Moldova and Ukraine as well as in the Southern Caucasus (Azerbaijan,
Georgia, Armenia).

to alleviate the precarious

than ECHO,

situation of

appropriate

€

€

By the same token, in Tajikistan overall Global Plan funding was reduced further
(to
10 million), with the food, medical and water and sanitation sectors being given
priority. However, in response to the second consecutive severe drought affecting the
country, an additional
2 million emergency decision was taken to fund small-scale
food security programs, benefiting the most vulnerable rural population. ECHO is
continuing its gradual phasing out from the country (due to be completed by the end
of 2003). Close co-operation with other Commission services is continued to bring
about a smooth transition from relief (so far funded by ECHO) to rehabilitation and
development activities (supported by more appropriate Commission instruments and
Member States), catering for the coverage of needs in the longer term. The

86

See http://europa.eu.int/comm/regional_policy/Interreg3/doc/docu_en.htm

104

heightened international attention given to Central Asia in connection with the
Afghan crisis appears to be acting as a catalyst in regard to the latter issue.

€

In the Russian Federation, ECHO remained involved in the Northern Caucasus,
covering the significant humanitarian needs of the population affected by the –
second - Chechnya conflict (
40,35 million). The conflict erupted in late 1999, and a
political solution is still not in sight. Armed hostilities in Chechnya have entailed
large displacements of people in the Northern Caucasus region, notably from
Chechnya into neighbouring Ingushetia (accommodating some 150,000 IDPs).
However, efforts by the international aid community to help cover those needs have
often been thwarted by extremely difficult working conditions, in particularly due to
an erratic and opaque access system to Chechnya and the lack of NGO access to
VHF radio communication (crucial for the security of humanitarian staff). ECHO
funding benefited some 400,000 civilians, victims of the conflict, providing them
with basic food aid, enhancing the water and sanitation conditions for both IDPs in
camps and spontaneous settlements in Ingushetia and the resident population in the
Chechen capital of Grozny. In addition, 40,000 IDPs living in camps both in
Ingushetia and Chechnya benefited from primary health care services provided by
ECHO partners. IDPs, returnees and residents throughout the Northern Caucasus
received ECHO-funded protection activities, notably legal counselling; and the
coordination of international humanitarian assistance was supported.
€

Also in 2001, ECHO allocated
1.03 million to respond to humanitarian needs
created by the disastrous winter, which affected a large part of the rural population in
Mongolia. Operations were financed to help 40,000 of the most vulnerable people
with basic food items and agricultural inputs.

ECHO Financial Decisions 2001 (

€

million)

Country/sub-region

Amount

Belarus, Moldova, Ukraine

Mongolia

Russian Federation (Chechnya crisis)

Armenia, Georgia

Tajikistan

TOTAL

1.900

1.030

40.350

3.150

12.000

58.430

4.3.12. Monitoring

All TACIS national and regional projects were subject
missions by external monitors in 2001.

to regular monitoring

Their performance was on average assessed as between average and good, with some
greater tendency to the latter in projects completed in 2001.

TACIS monitoring teams operated from four regional offices in Moscow, Kiev,
Almaty and Tbilisi with most of the monitoring work undertaken by long-term
resident specialists. At the end of 2001, TACIS monitoring was integrated into the
global monitoring system.

105

4.3.13. Conclusions and Perspectives

The TACIS programme is now an established player in Europe, the Caucasus and
Central Asia and is gradually adapting to the changing needs of its partners as the
transition process comes to an end and is replaced by new challenges. In particular,
TACIS is now taking account of growing differences between each partner country,
whilst ensuring that regional interventions are appropriately targeted towards genuine
regional needs. Under the new TACIS regulation, the programme will continue to be
directed in the areas where it has the greatest record of effectiveness. As such, it will
focus primarily on support for institutional, legal and administrative reform whilst
phasing out activities in rural development. As the enlargement process continues,
the EC assistance will focus on cross-border and regional issues between the Western
Newly Independent States and those countries on the verge of EU membership.

106

4.4.

Southern Mediterranean and Middle East

The Euro-Mediterranean partnership was launched seven years ago against a background of
regional instability and a worsening Middle-East conflict. Today, it is worth reaffirming the
strategic importance of that partnership, established in Barcelona in 1995 by the fifteen
Member States of the European Union and the twelve Mediterranean partner countries. As a
model for co-operation, it now extends far beyond the economic sphere and aims to promote
lasting regional stability as an indispensable pre-condition for any attempt to bring shared
prosperity to the Mediterranean region.

In 2001, the Euro-Mediterranean partnership has come of age. It is the only regional forum
for discussion and stands for a unique comprehensive and evolutionary approach to
development, a vehicle for the implementation of common policies and strategies in the
region.

At present,
the Euro-Mediterranean Association Agreements concluded with or being
negotiated with nine partner countries constitute the main framework for bilateral co-
operation with the EU. These Agreements also reinforce links between the partner countries at
regional level. Another example of these links is provided by the sub-regional free-trade
agreements, such as the Agadir process between Morocco, Tunisia, Egypt and Jordan, which
demonstrate these four Maghreb and Mashrek countries’ willingness to open up their
economies to each other.

4.4.1.

Introduction

Launched at the Barcelona Conference in 1995, the Euro-Mediterranean partnership
is the main vehicle for co-operation between the European Union and its
Mediterranean partners. It embraces all joint co-operation projects in an attempt meet
the political, economic, social and environmental challenges that will shape the
geopolitical future of the entire Mediterranean region.

It is the lack of homogeneity and the fragility of the social fabric in the South
Mediterranean countries that is chiefly responsible for social exclusion and poverty.
In 2001, average per-capita income in the region was USD 1 512, with very
considerable differences between countries, ranging from USD 990 for Syria to over
USD 5 000 for Lebanon. Reducing these inequalities will require a special effort in
the fields of education, vocational training and health, and more co-operation with
the Member States and international organisations. Fighting poverty forms the basis
of the Community’s new approach to sustainable development and continues to be a
major objective behind the European Union’s strategy for co-operation with the
Mediterranean countries.

Economic and social development in the southern Mediterranean and Middle East is
vital to the stability and prosperity of the whole Mediterranean region.

The MEDA programme87 is the main financial instrument in the Euro-Mediterranean
partnership, accounting for 88% of total funding for co-operation projects in 2001.

87

The Meda Programme is governed by Council Regulation (EC) No 1488/96 of 23 July 1996 on
financial and technical measures to accompany the reform of economic and social structures in the
framework of the Euro-Mediterranean partnership, as amended by Council Regulation (EC) No
2698/2000 of 27 November 2000, commonly referred to as Meda II.

107

The Union is also involved in special projects to support the Middle-East peace
process, to provide Palestinian refugees with aid and to support democracy.

Euro-Mediterranean Association Agreements have already been concluded or are
being negotiated with nine Mediterranean partner countries. These Agreements form
the strategic framework for Community bilateral-co-operation projects. Significant
progress was made in 2001 with Algeria and Lebanon, both of which signed
association agreements with the European Union. Priority was given to projects in
the national indicative programmes (NIPs) which were drawn up jointly with the
nine partner countries and which cover the following areas: economic transition
(structural adjustment and development of the private sector), maintenance of social
cohesion (education, health and rural development) and promotion of civil society.

Euro-Mediterranean Agreements in 2001

Agreements already in force

Tunisia, Palestinian Authority(*), Israel, Morocco

Ratification pending

Jordan (**), Egypt (***), Algeria (****), Lebanon (****)

Negotiations underway

Syria

(*)
(**)

Transitional agreement
The Association Agreement with Jordan should be ratified in March 2002; it is due to enter into force in
May 2002
The Association Agreement with Egypt was signed on 26 June 2001

(***)
(****) An Association Agreement was signed with Algeria on 19 December 2001 and sould be signed with

Lebanon on 10 January 2002

€

564.6 million. The Meda programme itself
€

For 2001, the Commission committed a total of
857.8 million in co-operation
measures linked to the Euro-Mediterranean partnership, while payments amounted to
€
received the largest share of
€
403.7 million.
commitments in 2001 with
Commitments under the specific budget headings (peace process, UNRWA, aid for
€
160.9
Palestinian refugees) amounted to
million.

100.4 million, while payments totalled

757.4 million. Meda payments totalled

€

108

Euro-Mediterranean partnership: commitments and payments 2001 (

€

million)

Programme

2001

2000

2001

2000

Commitments

Payments

MEDA

Algeria
West Bank/ Gaza
Egypt
Jordan
Lebanon
Morocco
Syria
Tunisia
Turkey (excluding global allocation)
MEDA bilateral
MEDA Regional
Total bilateral/regional
Other budget headings

TOTAL

60
-
-
20
-
120
8
90
147*
445
312.4
757.4
100.4

857.8

30.2
96.7
12.7
15
-
140.6
38
75.7
310.4*
719.3
159.8
879.1
122.8

1,002

5.4
62
62.5
10.8
2
41.1
1.9
69
86.4
341.1
62.6
403.7
160.9

564.6

0.4
31.2
64.4
84.5
30.7
39.9
0.3
15.9
15.2
282.5
48
330.5
141.7

472.2

* The funds committed for Turkey under the Meda Programme (budget heading B7-4100) are administered

directly by DG Enlargement.

€
Commitment / Payments 1995-2001 (

million)

1995

1996

1997

1998

1999

2000

2001

Total

Commitments

173

404

981

941

937

879.1

757.4

5071.6

Payments

50

155

211

231

243

330.5

403.7

1624

Payments as percentage of
commitments

4.4.2.

Regional co-operation

29% 38% 21% 24% 26% 37.6% 53.3% 32.0%

Regional co-operation is one of the most original features of the Euro-Mediterranean
partnership and can take the form of joint activities, exchanges of experience and
information involving the 27 partner countries and territories on both sides of the
Mediterranean. A Regional Indicative Programme provides the framework for
regional co-operation. This is implemented through individual regional programmes
devoted to specific areas.

€

In 2001, regional co-operation was given a boost when the Commission adopted a
financing plan for
200 million, which was also committed in 2001. The plan relates
to seven specific programmes to be implemented over a number of years. The idea
behind the plan is to put certain existing activities and projects on a more permanent
footing, in fields such as the environment (
30 million) or cultural youth exchanges
€
€
(
50 million) and transport (

10 million), but it also provides for new measures in areas such as risk capital (

20 million).

€

€

109

Under the heading of politics and security, the Commission has pushed ahead with
effective implementation of three measures aimed at bringing countries and peoples
closer together: two training seminars were held for diplomats from the Meda
countries; funding was provided for the EuroMeSCo network bringing together
independent specialists from foreign-policy institutes; the national civil-protection
agencies from the 27 Euro-Mediterranean partner countries sent people to take part
in four training courses as part of a pilot scheme to improve prevention of accidents
and natural catastrophes.

Under the heading of economic and financial matters, the Commission has continued
to implement ongoing programmes and projects in the fields of energy,
the
environment, the information society and statistics. Five water-management projects
were launched, and five aimed at improving maritime safety. Work on industrial co-
operation concentrated on three themes: promoting investment, fostering innovation,
technology and quality in business and developing policy instruments for the Euro-
Mediterranean market. Four energy projects were launched and sixteen proposals
concerning technology for the information society were selected last year under the
programme. Five environment projects started in 2001. They cover a wide range of
measures from the treatment and management of urban waste to the promotion of
organic farming. In the field of statistics, the aim is still to harmonise figures in all
fields relating to Euro-Mediterranean co-operation. Two statistical yearbooks have
been published, one a yearbook of regional data the other of statistics on tourism.88

Under the social, cultural and human heading, there were six regional-co-operation
projects under the Euromed Audio-visual Programme, 26 projects under the Youth
Programme and, under the Heritage Programme, fifteen projects aimed at preserving
the Mediterranean area’s common heritage, with a further ten proposals selected for
phase II). The promotion of women in economic development and the development
of judicial co-operation were identified as two new priority fields. Lastly, the EU
decided to start work on a regional programme on information and communication.

Young Moroccan and European volunteers involved in the social project in Tunis

In December 2001, as part of the Euromed Youth Programme, four young European women
– two German and two French – and two young Moroccan women jointly ran a number of
social-welfare projects in some very deprived areas of Tunis. They helped take care of old
people and abandoned children in two social centres in La Maouba. They also helped
underprivileged girls from a rural background in the Chebedda district, as well as young
20 000 for the operation, which lasted
women in the Radés welfare centre. The EU provided
six months. ATAV, the Tunisian Voluntary Action Association took care of coordination on
the ground and accommodation and other arrangements for the young volunteers.

€

88

Euro-Mediterranean statistics - ISSN 1561-4034 –
Tourism trends in Mediterranean countries - ISBN 92-894-0066-8 – Official Publications Office of the
European Communities – L – 2985 – Luxembourg.

110

Regional co-operation: projects committed in 2001 (

€

million)

Regional
co-operation

Project title

Amount

Water management*

Transport policy*

SMAP II (Short and Medium-Term Priority Environmental
Action Programme)*

Medstat II*

Eumedis II*

Euromed Youth II*

EIB – Risk Capital*

CGIAR (Consultative Group on International Agricultural
Research)

Energy Forum

Re-commitments

Various regional activities

SUB-TOTAL

Global allocation

Technical assistance

* Projects included in the Meda regional financing plan worth
total.

€

200 million in

TOTAL

4.4.3.

Transport and infrastructure

40

20

30

30

20

10

50

1.5

2

24.8

4.3

232.4

33

46.8

312.4

Measures to develop and consolidate basic infrastructure and transport, energy and
telecommunications networks as part of bilateral and regional programmes are in line
with the priority objectives of the Euro-Mediterranean partnership. In pursuit of
those objectives, 49 projects were implemented in 2001 under bilateral programmes,
accounting for commitments of some

570 million in total.

€

In 2001, efforts were concentrated on meshing together and coordinating proposed or
existing programmes with other Community measures such as those run by the
European Investment Bank and the Member States. Protection of the environment
and the implications for on sustainable development were systematically taken into
account at the preparatory project-evaluation stage.

In operational terms, the main results for 2001 are as follows:

In Morocco, 2001 saw an increase in the rate of Community support for the
development of public services responsible for water management, energy and
transport. With regard to water and sanitation in rural areas, improvements were
made to the water supply to 13 towns and 438 douars, with a combined population of
423 000; work continued on the construction of 65 km of rural tracks in the northern
provinces (payments worth
3.25 million were made); a major decentralised
electrification programme was launched, covering 15 000 Moroccan homes, in co-
operation with Germany and France and local authorities. In addition, progress has
been made in opening up the coastal regions in the north of the country, with

€

111

completion of the preparatory stage in the construction of the El Jehba-Ajdir section
of the “Mediterranean rocade” link road (109 Km) and the ongoing work on the
social infrastructure around Rabat with a view to rehousing 20 000 inhabitants of the
shanty town of Salé (

1 million paid out in 2001).

€

24 million were signed in 2001
In Syria, three new financing agreements worth
covering electricity, telecommunications and cultural tourism. This demonstrates a
sustained increase in the rate of co-operation. The programmes are just starting up. It
was also decided that a sanitation programme for Palestinian refugee camps in Syria
would be given

8 million in funding.

€

€

In Jordan, a technical-assistance team was formed, attached to the Project
Management Unit (40 people). The team is responsible for coordinating programmes
concerned with the rehabilitation and development of water systems in the Amman
region and it is now operational. People in the Karak and Tafilah regions have been
provided with access to an essential public service thanks to the water-supply
projects begun in 2001. Lastly, the Commission is supporting the development of
cultural
tourism with improvements to two archaeological sites and technical
assistance for the Tourist Council.

In West Bank and the Gaza Strip, in spite of deteriorating situation and the tightening
of the blockade around the autonomous Palestinian territories,
improving living
conditions for the Palestinian populations remains the European Union’s priority
objective. Ongoing work on basic infrastructure (such as schools, roads, primary
health-care centres, sanitation networks, refuse collection etc.) is an achievement in
itself. This infrastructure must be maintained and further extended. It will enable the
Palestinian economy to recover more quickly when the right conditions have been
restored. One notable success was the Gaza hospital, with 188 beds and serving a
population of 350 000. In 2001, all departments became fully operational and are
now treating around 2000 patients a month. Lastly, the library of the rehabilitated
École Biblique in Jerusalem was inaugurated on 17 November 2001 by Commission
President, Romano Prodi.

Construction of schools in West Bank and the Gaza strip

Between 1996 and 2001, 21 schools and educational facilities were built in West Bank and the
Gaza Strip. The project, aimed at providing basic infrastructure for primary and secondary
education, was made possible by the

14 million provided by the EC.

€

The Palestinian municipalities that received the support now have 311 new classrooms with a
combined capacity of 14 000 pupils. In addition to the educational benefits, the project has also
had a significant effect on the country’s economic and social environment, generating some
100 000 working days for Palestinian labourers, managers, construction experts and suppliers of
materials.

Lastly, in Iran, an aid programme provided funds for equipment and additional
infrastructure for two existing hospitals in Manjil and Abbar Taroum. The work is
now nearing completion.

112

Transport and infrastructure: Projects committed in 2001 (

€

million)

Transport and
infrastructure

Country

Project title

Amount

Water

Water

Morocco

Water – sectoral adjustment

Syria

Health environment / refugee camps

TOTAL

120

8

128

4.4.4.

Rural development and food security

Some 70% of people classed as poor in the Middle East and North Africa, live in
rural areas where living conditions are generally more precarious than in urban
the South Mediterranean
centres. While rural under-development
countries is linked to climate, the upsetting of natural balances by over-exploitation
of natural ecosystems is also partly to blame.

in most of

In 2001, development activities were primarily concerned with creating permanent
productive employment, strengthening fundamental organisations and managing
natural resources such as water in a sustainable way, and protecting fertile land from
soil erosion. At the operational level, there were 25 projects ongoing in 2001,
433 million in commitments and concentrated on three countries:
accounting for
€
105 million), Morocco (eight projects
Egypt (seven projects accounting for
accounting for
132 million.
€
There were five further projects in other countries in that region, (accounting for
14 million).

182 million) and Tunisia (five projects accounting for

€

€

€

European aid for food security is given in accordance with the Rome Declaration of
the World Food Summit of November 1996. The EU’s aim is to help the most needy
sections of the population in the South Mediterranean get an adequate diet, in
quantitative and qualitative terms, and to ensure they enjoy the most basic standards
of hygiene.

In Yemen, cereal production is falling sharply and now provides only 25% of the population’s
total consumption. Through the Yemeni Government’s strategic poverty-reduction programme,
in 2001 the Commission provided budget support and technical assistance in three area: (i)
institutional support to assist with the task of defining objectives and implement the national
food security strategy (together with financial support for the social-security fund); (ii) support
for the agricultural-census system, with an additional study on the information system for
agricultural markets; (iii) provision of funds to cover 75% of the cost of food-security
programming and implementation of support measures (e.g. construction of small dams for
irrigation; vocational-training programmes and access to micro-credit).

The main measures – modernisation of productive private businesses, improvement
of existing large-scale irrigation schemes and support for initiatives by grassroots
rural communities – have all increased food security. Food supplies to towns have
also been improved and the growth in imports has been brought under firmer control.
Lastly, the need for sustainable management of natural resources and the rural
environment has been consistently taken into account in all aspects of every measure.

On the basis of the operational priorities identified in co-operation with the partner
countries, the following measures were started or continued with in 2001:

113

Modernisation of agricultural businesses

Acting through the specialised national and local institutions, this programme aims to
provide agricultural entrepreneurs in Egypt and Morocco with the technical and
financial support they require to fund and carry out their projects.

In Egypt, some medium-term loans from local banks and advice on financial management
funded by the European Commission have enabled some 3000 small private producers to build
up their businesses, diversifying in response to the requirements of the market. Thanks to good
management, the project has made a very significant impact: there has been a big rise in sales of
poultry products, dairy products, farmed fish and vegetables, leading to the creation of some
30000 jobs and raising incomes for almost 50000 people.

The training given to Egyptian and Moroccan farmers is essential if large-scale
irrigation is to succeed and water resources better managed. As a result of the
reforms, the volume of water required per hectare of land has been cut by 30%.

In Egypt, new, more efficient, water-saving irrigation methods have made it possible to irrigate
20 000 ha of reclaimed floodland, benefiting 8 000 farming families in 33 associations. As a
result, production of cereals and forage has risen by 30% and farming revenues by 20%. The
projects funded by the EC were concerned with drainage and fencing, support for user
associations, technical advice for producers and infrastructure to provide access to production
areas.

Support for initiatives by rural grass-roots communities

In Tunisia and Morocco, the Commission helps grass roots communities to plan and
implement independently measures that they consider are most pressing in order to
improve their living conditions and manage their land in a sustainable way. The
Commission supports small-scale agricultural water engineering schemes, rural
tracks and conservation of water and soil. By stabilising farming incomes and
checking desertification, these projects will act as a brake on migration to towns and
other countries.

In Tunisia, work has been done on 480 lakes and 45 000 ha of drainage basin and over 20 000 ha
put in cultivation, including 5 000 ha of irrigated farm land. 80 cooperatives responsible for
marketing agricultural produce, serve basic units grouped around each lake. Sales of dates and
olives have risen significantly. Around a hundred participatory local development plans are
currently in operation, benefiting over 6 000 people.

Protection of the coastal environment and biodiversity

If the park and protected areas are to remain viable,
the
institutions responsible for local environmental management be strengthened. To
enable them to carry out their duties, plans have been made to improve recovery of
costs through by developing the system of taxes to be paid by the various businesses
in the tourist industry in South Sinai.

is important

that

it

In South Sinai in Egypt, a national park and five protected areas covering 12 000 km2 have
been created, paving the way for the conservation of over 200 km of coral and many fragile
coastal ecosystems on the Red Sea. Protecting these unspoilt natural sites is a double challenge
with implications for the environment and the tourist industry alike. It will enable protection of
the environment to go hand in had with harmonious and controlled development of tourism,
essentially international in character and bringing with it 100 000 jobs in the hotel and leisure
industry.

114

4.4.5.

Institutional support

Institutional support is given under the arrangements for bilateral activities within the
Euro-Mediterranean Partnership, which means measures are agreed on jointly by the
European Commission and the relevant authorities and organisations in each partner
country. Thus, for example, the various sectoral measures to promote modernisation
and democratisation in the EU’s Mediterranean partners go hand in hand with radical
reform of public services and the regulatory framework.

In 2001, the Commission funded two new institutional-support projects:

Support for reform of the Algerian police

This project, launched in 2001 for a period of six years with
8.2 million, committed
in 2000, sets out to reinforce good governance and the rule of law in Algeria. In
practice, a series of measures are planned to raise professional standards amongst
Algerian national-security staff by stressing the importance of Human Rights when
they are fulfilling their security functions.

€

€

Support for Algerian journalists and the Algerian media.
1.53 million were
allocated to this four-and-a-half-year project in 2000 which began in 2001. The
objective is to reinforce the role played by the independent privately owned press in
Algeria and to support the much-needed democratisation of Algerian society. In
more specific terms, the project involves strengthening journalism as a profession
through the adoption of a professional charter for journalists,
the drafting and
adoption of a collective agreement for the press and the adoption of a code of
professional ethics.

€
Institutional support: projects committed in 2001 (

million)

Country

Project title

Amount

Institution
building

Justice

Justice

Jordan

Turkey*

Regulatory reforms / Privatisation

Modernisation of the legal system and penal
reform (JMPR)

Community acquis

Turkey*

Evaluation of pre-accession projects

Community acquis

Turkey*

Administrative co-operation facility II

Community acquis

Turkey*

Participation in Community programmes and
agencies

Community acquis

Turkey*

Civil-service modernisation programme

Community acquis

Turkey*

Local government reform programme

Community acquis

Turkey*

Extension of TAIEX to cover Turkey

Community acquis

Turkey*

Upgrading statistical system

TOTAL

20

8

5

8

11

2.5

3.5

6

15.3

79.3

*

Commitments for Turkey under the Meda Programme (budget heading B7-4100) are administered
directly by DG Enlargement

4.4.6. Macroeconomic policies

The Maghreb and Mashreq economies have no legal or institutional framework
capable of fostering private enterprise. They have a tradition of strong state

115

intervention in the main sectors of the economy and an underdeveloped intermediary
financial industry. Furthermore, a major imbalance between urban and rural areas
only aggravates social inequalities and has a dramatic effect on the distribution of
private incomes. Against this background of economic uncertainty, the reflationary
policies of the 1970s and 1980s, characterised by spiralling expenditure, further
added to the size of budget deficits. Stabilisation policies were needed to reduce
those deficits and to stave off the threat of financial crisis.

In the initial phase, the priority objective of the programmes and projects funded by
the Meda Programme was to support
the stabilisation process and economic
transition of the partner countries. This is in fact a double objective: it involves
promoting reform of the tax system and the state’s gradual withdrawal from
it also
manufacturing activities through extensive privatisation programmes but
entails modernisation of
the legal and regulatory framework, an essential
pre-condition for more private investment (e.g. a programme supporting industrial
restructuring in Algeria and an industrial modernisation programme in Jordan).

€
Algeria: Support for modernisation of the financial sector (
€

23.5 million)

This project was launched in September 2001 for four years. Worth
23.5 million, which was
committed in 1999, the project aims to provide the Algerian treasury, the Central Bank of
Algeria, public-sector banks, insurance companies and various private-sector financial bodies
with technical support. Twinning arrangement are also planned between Algerian financial
institutions and their European counterparts. Up to five institutions – three banks and two
insurance companies – can take part. The project is a new departure in that it will create the
first twinning arrangement in the Maghreb region under the Meda Programme.

€
Jordan: Support for regulatory reform and privatisation (

20 million)

This project is in line with the priorities identified in the National Indicative Plan 2000-02. Its
aim is to help ensure that Jordan’s economic transition goes smoothly by promoting
disengagement by the state and the adoption of a new regulatory framework in the most
important sectors of the economy.

Implementation of the project started with the launch of two inter-connected studies. The first
will investigate how viable an integration strategy would be and what the effect would be of
merging the regulatory authorities. The second study is concerned with the introduction of
compensation mechanisms to ensure that the people employed by the regulatory authority are
of a high enough calibre. An operational action plan will be drawn up on the basis of the
findings from these two studies, and adopted jointly by the Commission and the Jordanian
Government. The ultimate objective is to bring about a significant rise in productivity and in
20 million to this project.
the level of services provided. The European Union is contributing
€

€

€

€

€

120 million for Morocco
20 million for Jordan,
80 million for Tunisia – was committed for structural adjustment measures

In 2001, a total of
and
falling within the scope of economic co-operation with the Mediterranean countries.

220 million –

Implementation of this strategy is supported by Community programmes based on
structural adjustment facilities (SAFs). These provide for direct payments to the
countries’ treasury once a number of structural reforms devised together with the
national authorities have been implemented.

Operations to support macro-economic policies have focused on three general
objectives:

116

• improving the legislative and regulatory framework governing private business

activity (SAFs for Jordan, Lebanon and Tunisia);

• reforming the tax system, particularly indirect

to reduce the national
budget’s reliance on revenue from import duties, and thereby make the system
more efficient and fairer (SAFs for Lebanon and Jordan);

taxes,

• increasing the pace of privatisation in the interests of: (i) more efficient allocation
of resources and enhanced competitiveness; (ii) increased budget resources; (iii)
more dynamic private investment, both domestic and foreign (SAFs for Lebanon,
Jordan and Tunisia).

The Commission also wants to promote adjustment in certain sectors by funding
measures designed specifically for those sectors but which should also boost GDP
and do nothing to undermine the stability of macroeconomic indicators. These
sector-based programmes have two concrete objectives:
to reform the banking
system and to strengthen social-security systems.

Morocco: Structural adjustment programme for the water sector (

€

120 million)

In funding the SAF for the water industry, agreed on with the Moroccan authorities in 2001,
the Commission wants to promote more efficient use of the country’s water resources through
legislative, regulatory, financial and technical measures designed to ensure a reliable, high-
quality water supply despite declining reserves. The programme will directly benefit not just
the national institutions responsible for water use and purification but also, first and foremost,
consumers and all other sectors of the Moroccan economy.

€
Morocco: Structural adjustment programme for the financial sector (

52 million)

Discussions between national authorities and the Commission in the first quarter of 2000
revealed the need to make Morocco’s financial sector more competitive and more efficient.
The financial-sector structural adjustment programme was approved in November 2000 as
part of the reforms of this sector under the Economic and Social Development Plan (2000-04).
The SAF also provides for additional institutional and regulatory reforms designed to inject
new dynamism into the financial sector and diversify the financing of productive economic
52 million in direct, non-linked budget
activity. The Commission’s financial contribution is
2 million and
support. The funds are to be disbursed in three tranches. The initial input of
the first tranche of

25 million were disbursed in 2001.

€

€

€

Macroeconomic policies: Projects committed in 2001 (

€

million)

Macroeconomic
policies

Country

Project title

Amount

Structural adjustment

Tunisia

SAF III

Private sector

Turkey*

SME

Private sector

Turkey*

SME financial facility

TOTAL

80

5

4

89

*

The funds committed for Turkey under the Meda Programme (budget heading B7-4100) are directly
administered by DG Enlargement

117

4.4.7. Health and education

Social development and, more specifically poverty reduction, are basic priorities for the
Euro-Mediterranean Partnership. They form an integral part of the third pillar of the
Barcelona Process launched in 1995.

Accordingly, the Commission is implementing complementary sectoral strategies in areas
such as health and education.

4.4.7.1. Health

The health-care sector is especially important, not just for the economy but also for
€
reducing poverty and increasing social cohesion. Between 1998 and 2000,
248 million were allocated to health care. The nature of Community assistance has
changed over the last decade:
initially, Community projects were exclusively
concerned with maternal and child health but they have gradually evolved into a
(including
reform of
means
health-insurance systems). Improving the way services are funded, and organising
them in ways that improve the quality of the service provided, are both priority
objectives.

health-care

supporting

systems

overall

of

Two new programmes based on this new approach were implemented in 2001, in
Egypt and Morocco. Similar programmes are being drawn up for Syria, Tunisia and
Yemen.89

Egypt – Support for the health care reform programme

With a view to providing high-quality universal health care in the years to come, Egypt has
embarked on an ambitious programme to reform public and private health care services.
This involves restructuring medical insurance and turning it into a universal system capable
of providing a minimum “package” of health care services through family doctors. The
100 million for this comprehensive, seven-year reform programme
Commission is providing
(1998-2005), launched by the Egyptian Government in 1995. The World Bank and USAID are
also supporting the reforms.

€

4.4.7.2. Education

The approach towards education is developing along similar lines. The Community
has moved from supporting targeted measures (as in Morocco, for example) to
pursuing a coherent strategy to complement national reforms, as in Tunisia and soon
in Algeria. A total of

184 million has been committed for 1998-2000.

€

Priority is given to primary and pre-school education, with support for literacy
campaigns. In all projects currently funded, particular attention has been given to
access to basic education for the most deprived sections of the population, women in
particular.

4.4.7.3. Vocational training, labour market and employment

Developing vocational training is a priority for all Meda countries. Workers need to
be
long-term
qualified, which makes
vocational-training policy absolutely essential. The Commission is paying greater

ever more

coherent,

highly

a

89

Measures in Yemen are not finances from the Meda budget heading.

118

attention to the promotion of equal opportunities.
the projects currently in progress.

€

193 million has been invested in

€

In 2001,
60 million was committed for a major six-year programme for overall
implementation of a national vocational-training system in Algeria. The programme
aims to improve strategic management of the system, to upgrade worker’s technical
skills in line with what companies require, particularly SMEs and public corporations
in the run up to privatisation, and to reinforce existing functional links between
vocational training and other means of helping people on the labour market. In
Morocco, a similar project has now entered its operational phase, which involves
supplying equipment and technical assistance for training in fifteen sectors of the
Moroccan economy.

Tunisia – Upgrading the vocational-training system

The European Union has been supporting this measure, with a budget of
45 million, since
1998. This ambitious overhaul of Tunisia’s vocational-training system relies on interaction with
other measures designed to increase participation in the labour market. In 2001 the project
entered a new stage, which involves active restructuring of a large number of public and private
training establishments. This work is building on the results of the initial identification stage,
concerned with analysing the vocational-training needs and skills requirements of a broad and
representative range of businesses.

€

4.4.7.4. Local development and social funds

Co-operation projects aimed at promoting local development, through social funds
for example, are all concerned with finding lasting solutions to the problems of
unemployment and poverty. So far, the Commission has invested
200 million.
There are bilateral co-operation projects with Egypt, Jordan, Yemen and Lebanon.
These take a multi-sectoral approach and have the following objectives: (i) job
creation and the promotion of small businesses, essentially through microcredit; (ii)
construction of the economic and social infrastructure needed to deliver better social
in human and
conditions for the intended beneficiaries; and (iii) improvement
institutional capacities.

€

These measures have gradually developed into an integrated local-development
approach, making it possible to carry out projects covering a limited geographical
area, such as the one in Algeria described below, in response to the real needs of
local communities.

4.4.7.5. Civil society

Support for civil society is a sensitive part of the Community’s co-operation policy,
as it is concerned with the internal balance within society. The goal is to encourage
governments to engage in a more intensive dialogue with all sections in society and
to involve civil society in the decision-making process. Accordingly, the Community
supports for the setting-up and consolidation of grass-roots associations, funds
democracy-building and local-development projects and gives backing to women’s
the Commission pushed ahead with the new approach,
associations. In 2001,
launched in Morocco in 2000,
implementing a project supporting development
associations in Algeria and negotiating a similar project in Tunisia. There are plans
to extend the new approach to other countries in the region, including Egypt, Jordan
and Yemen. This approach, promoting better governance, consists of establishing an
open and ongoing dialogue with those concerned.

119

Social development: Projects committed in 2001 (

€

million)

Social development

Country

Project title

Amount

Voc. training/ employment Algeria

Vocational training

Civil society

Tunisia

Strengthening of civil society

TOTAL

60

1.5

61.5

4.4.8.

The European Initiative for Democracy and Human Rights (EIDHR)
€

In 2001, the EIDHR gave almost
Mediterranean and the Middle East.

11 million in support of projects in the southern

€

€

€

Of this total,
6 million went on promoting and defending Human Rights and
fundamental freedoms. The EIDHR supported two regional projects:
regional
assistance to NGOs, the media and local government in Lebanon, Syria, Jordan and
Egypt (
797 000); and the introduction of a masters degree in Human Rights and
democratisation in the Mediterranean region. The course, which is part of EU’s
regional masters programme in Human Rights and democratisation, will be taken by
36 students from Palestine, Lebanon, Malta, Libya, Egypt, Algeria, Tunisia,
Morocco, Turkey, Cyprus, Jordan and Israel and will take a regional approach. The
Foundation for International Studies at the University of Malta is responsible for the
masters (
640 000). Projects in a number of countries have also been approved: in
€
Lebanon, protection of migrant workers and asylum seekers’ Human Rights (
760 000); in Palestine, promotion of a culture of respect for Human Rights amongst
school-age children and adolescents in the occupied territories of Hebron, Ramallah,
714 000),
Bethlehem and Jerusalem (
350 000); in Turkey,
in Palestine and Israel, training of human-rights activists (
raising awareness of Human Rights amongst DISK members (
550 000) and
promotion of Human Rights and civic values amongst pupils and teachers at primary
376 000); in Tunisia, restructuring of the Tunisian
and secondary-school level (
€
230 000) and in Iran, promotion of Human Rights and
League for Human Rights (
€
abolition of the death penalty (

303 000); in Israel, the rights of prisoners (

300 000).

€

€

€

€

€

€

€

to support

4.5 million in support, shared between seven projects. A grant worth

The process of democratisation and strengthening of the rule of law received almost
€
660 000 was
given to a project
independent reporting and improve security for
journalists in the southern Mediterranean (Algeria, Egypt, Jordan, Lebanon, West
800 000 grant will help pay
Bank and Gaza, Morocco and Tunisia). In Egypt, an
for work to bring prison conditions up to a standard approaching international norms,
€
including 400 visits to prisoners a year and legal aid for prisoners. In Algeria,
900 000 was allocated to a project aimed at upgrading standards in the prison system
to ensure better observance of Human Rights. In Morocco,
550 000 was allocated
to a project to strengthen civil society in rural regions and involve people, especially
513 000 was granted for measures to
women, in local decision-making. In Syria,
promote citizens’ rights. In Yemen,
437 000 was allocated to training for the
internal-security forces in democratic policing methods that respect Human Rights
and individual liberties.

€

€

€

120

In Jordan,
there is a project which aims to increase the involvement of women in
decision-making, particularly in Parliament, by supporting election candidates of both sexes and
all political parties. The project will focus on two objectives: to give students a better
understanding of women’s role in the democratic process and to encourage them to vote at the
next general election; and to give women a better chance of success in that election.

Supporting conflict-prevention and the restoration of civil peace is one of the
EIDHR’s main objectives. In 2001, it gave over
300 000 in support for a project in
Palestine aimed at more effective enforcement of international humanitarian law in
the occupied territories of West Bank, Gaza et East Jerusalem.

€

4.4.9. Consistency with other Community policies

The need for consistency between the EU’s external activities and other Community
policies is an operational priority and a legal requirement. 2001 marked a decisive
stage in the process of strategic harmonisation:
the Commission finalised and
approved all strategy documents for Meda partner countries, with the exception of
West Bank and the Gaza Strip, for 2002-04, prior to starting implementation.

The strategy papers for individual countries were based on a standard framework in
line with the guidelines laid down by the Council in November 2000. The process of
drawing up the strategy papers, in close co-operation with partner countries, the EU
Member States, the European Investment Bank (EIB) and international financial
institutions,
the measures
complemented each other as much as possible. Lastly, in a process quite separate
from the regular process of internal consultation, the projects were examined by the
recently formed quality-support group. The group examined each project to check
that it was coherent and that it complemented and was properly coordinated with
other planned measures.

focused attention on the task of ensuring that

4.4.10. Co-operation with other donors in the region

Better coordination with other donors and greater synergies with their work is a
strategic priority for implementation of the Meda programme. Real progress has been
made in achieving these goals.

Coordination on the ground has been improved: representatives of the Member States
now cooperate with one another and there is regular joint monitoring of programmes
in the partner countries to see that they are being properly implemented.

Coordination with other donors, particularly the World Bank and the International
Monetary Fund, has been further
improved through regular contact, ongoing
exchanges of information and joint analyses of the political, economic and social
situation in the partner countries. The introduction of the third Structural Adjustment
€
Facility in Tunisia, undertaken jointly with the World Bank in 2001 and worth
80 million, is a good example of how such coordination on the ground can work in
practice. Preparations are being made for similar joint operations in Morocco and
Jordan.

4.4.11. EIB loans

1.5
In 2001, total EIB loans to Mediterranean partner countries amounted to
billion, distributed between Algeria, Cyprus, Egypt, Malta, Morocco, Syria, Tunisia

€

121

6
and Turkey. Most were bilateral loans. However, in 2001, the EIB did loan
investment fund, comprising all of the
million to a Middle-East
Mediterranean partner countries. The EIB’s budget for the Mediterranean partner
countries for 2001-07 totals
1 billion
has been allocated to regional co-operation projects in the telecommunications,
environment and energy sectors.

7.4 billion, in the form of loans. A further

technological
€

€

€

€

In 2001, the Commission granted under the Meda Programme
8.5 million in
interest-rate subsidies for a new EIB loan. The loan comes under the programme for
the rehabilitation of the Taparura site in Tunisia, which will involve cleaning up and
generally improving 445 ha along the Sfax coast, which have been affected by
industrial pollution. In Turkey, interest-rate subsidies have also been granted on two
new EIB loans in Turkey. Of the
16.7
have been granted to the Industrial pollution abatement facility and
14.3 million to
the Mersin wastewater project. Both projects are concerned with rehabilitating areas
polluted by industry and urbanisation.

31 million total, subsidies amounting to

€

€

€

The second priority area for the EIB is support for private companies, which,
irrespective of size and turnover, have received a quarter of the loans granted in 2001
by the EIB to regional projects in the Mediterranean region.

Lastly, the third EIB priority is developing the energy sector, which received almost
a quarter of the loans granted last year.

EIB loans: Projects for which commitments were made in 2001 (

€

million)

EIB loans

Country

Project title

Interest-rate
subsidy

Loan

EIB

EIB

EIB

Tunisia

Cleaning up of Taparura

Turkey*

Industrial pollution

Turkey*

Clean water in Mersin

TOTAL

8.5

16.7

14.3

39.5

40

70

60

170

*

The funds committed for Turkey under the Meda Programme (budget heading B7-4100) are directly
administered by DG Enlargement

4.4.12. ECHO

Recipients of humanitarian aid granted to the southern Mediterranean countries
through ECHO include: Sahrawi refugees in Algeria (emergency food aid and a
15.57 million in total); Palestinian Refugees in West Bank and
global plan worth
€
Gaza (
515 000)
and Syria (

26.18 million) but also southern Lebanon (

2.7 million), Jordan (

570 000).

€

€

€

€

122

ECHO’s activities in 2001

Country

Project title

Algeria

Algeria

Algeria

Yemen

Syria

Palestine

Lebanon

Jordan

Syria

4.4.13. Monitoring

Sahrawi refugees

Back-up for the World Food Programme

Flood victims

Aid for people

Vulnerable groups

Palestinian refugees

Palestinian refugees

Palestinian refugees

Palestinian refugees

TOTAL

Amount
€
million)

(

15.57

11.80

0.77

1.88

0.40

26.18

2.70

0.51

0.57

60.38

In 2000, the Commission devised a system for monitoring and improving results
based on project-cycle management. The system was operated in 2001 on a trial
basis in each geographical area (ALA/MED/ACP/Balkans). The system has already
produced some data giving useful knowledge about what stage the projects managed
by each geographical department have reached and what improvements need to be
made. The system will be extended to cover all the Co-operation Office’s activities
and will become fully operational in 2002.

In 2001, 46 projects (including seven that were double-checked) were monitored in
six Mediterranean countries, with a combined value of
788.9 million. The projects
in the Meda countries accounting for the largest share of the budget were those
society,
concerned with economic
infrastructure and services (26%), followed by education and social sectors (25%).
The average score for projects in the Mediterranean area was 2.24 (compared with
2.5 for all geographical regions together).

institution building,

co-operation,

civil

€

The results reveal the poor effectiveness of projects in the Mediterranean region,
largely due to shortcomings in the initial design and insufficient institution-building.
On the other hand, the Meda projects are noteworthy for their sustainability, unlike
projects in other regions. Sectoral analysis of the projects showed that the best results
were obtained by projects concerned with agriculture and projects supporting NGOs,
while the worst results were obtained in the fields of industry and trade. Lack of
efficiency and impact were the critical flaws in the weakest projects. Size is also an
important factor: as a rule, small projects do better than bigger ones. The results
provide some very useful information but they are still quite raw and great care
should be taken when analysing them. The new monitoring system will make it
possible to analyse projects in all regions thoroughly and, on that basis, to draw up
good guidelines for subsequent projects.

4.4.14. Conclusions and outlook for the future

Strategically speaking, 2001 constituted something of a break with the past for the
Mediterranean as a geopolitical entity, and it demonstrated how unstable the balance

123

issues,

brought

existing

concerning

nevertheless

though not directly linked to Mediterranean
was in the region. September 11,
the
tensions
regional
Israeli-Palestinian conflict to the surface, as the second Intifada – an armed struggle
this time – entered its second year, also in September 2001. The worsening of
regional tensions illustrates the need for both sides of the Mediterranean basin to
nurture the ambitious partnership forged at Barcelona through to maturity. Today,
this seems the only global political project capable of delivering political stability
and economic and social development in a region stretching almost 5 000 km from
west to east and currently containing ten odd conflicts, some latent, some open. It is
against
this background that full significance of the objectives spelled out at
Barcelona becomes apparent, i.e. to construct a framework for shared peace, security
and prosperity. The implementation in 2001 of the EU’s common strategy towards
the Mediterranean region, adopted the previous year, illustrates the importance the
Fifteen attach to process, which, more than ever, provides a much needed forum for
discussion. More work needs to be done to make this forum more credible in the eyes
of the partner countries, with regard to the selection of priorities and the qualitative
results. On this front, the fifth conference of Euro-Mediterranean foreign ministers to
be held in Valencia on 22 and 23 April 2002 should look back at the first five years
of the Barcelona progress (1995-2002) and adopt and Action Plan for the launch of a
series of practical joint measures covering the three sections of Euro-Mediterranean
co-operation.

The adoption of
strengthening and intensification of measures concerning the following priorities:

framework should lead in 2002 to a

the new operational

• stronger dialogue on political matters and security, with the ultimate goal of

bringing work on the Charter for Peace and Stability to fruition;

• creation of a dynamic and mutually advantageous financial and economic
partnership, including the signing of association agreements with Lebanon and
Algeria and more speedy negotiations with Syria. Priorities for 2002 are:
promotion of European direct investment in the region, consolidation of economic
dialogue, development of regional infrastructure strategies, planned launch of a
regional programme on internal-market
instruments and creation of a Euro-
Mediterranean development bank;

• the setting up of a real dialogue between the civilisations, peoples and cultures on
both sides of the Mediterranean, reinforcing the existing social, cultural and
human partnership. An action plan will be adopted, based around three themes:
youth (launch of the second phase of the Euromed Youth Programme), education
(extension of the Tempus Programme to cover the Mediterranean partners) and
media and public opinion (launch of a regional programme on information and
communication). The plan will set out
to promote the broadest possible
participation in the Euro-Mediterranean process around the core ideas of
democracy, culture and tolerance;

• support for the Middle-East peace process, with the EU stepping up its efforts to
rebuild the dialogue between the two sides and to stop the violence, as the prelude
to resuming negotiations for a fair solution to a conflict that undermines any
attempts at lasting co-operation between the various players in the region.

124

4.5.

Africa, Caribbean and Pacific (ACP)

Sub-Saharan Africa faces the most difficult challenges in its fight against poverty. Progress
towards achieving the Millennium Development Goals has been modest in 2001 and negative
trends have not been consistently reversed. More than three hundred million Africans still live
in absolute poverty. HIV/AIDS has emerged as the leading cause of death and is now a
fundamental threat to Africa’s future. Africa’s approach towards poverty reduction has been
reinforced through the New Partnership for Africa’s Development (NEPAD) concluded by
the African Heads of State in July 2001. Progress has also been made in restoring peace and
security in some of the most troubled regions such as the Horn of Africa, DRC and Angola.

The Cotonou Agreement concluded in June 2000 provides a new, sound basis for supporting
Africa as well as the Caribbean and Pacific countries in meeting their development
challenges. 2001 was the first year of its operation. Most country strategies for the coming
five years were drafted with wide consultation of society in country. In the context of
Cotonou, the political dialogue between Europe and the African, Caribbean and Pacific
countries has been intensified.

4.5.1.

Introduction

The Cotonou Agreement, signed on 23 June 2000, sets out a new Partnership
Agreement with 77 African, Caribbean and Pacific countries until 2020. In order to
come into force, it must be ratified by at least two thirds of the ACP States, by all the
EU Member States and be approved by the European Community (article 93.2 of the
Cotonou Agreement). Thirty-six ACP States and four EU Member States have
already completed this process.

In 2001, the framework for co-operation with the ACP States therefore took the form
of transitional measures agreed by the ACP-EC Council of Ministers on 27 July
2000. These measures apply most of the provisions of the Cotonou Agreement, with
the 9th European
the exception of the release of the financial resources of
Development Fund.

The legal framework for relations with South Africa was extended in 2001 with the
conclusion of the negotiations for the Wine and Spirits Agreements, which were
finally adopted by the Council and signed in January 2002. The Trade Development
and Co-operation Agreement is still awaiting ratification. By the end of 2001 three
EU Member States had ratified. The Agreement applies provisionally and partially
from 1 January 2000.

The political dimension of EU relations with ACP countries has been strengthened.
An assessment of the political situation has been included in the Country Strategy
Papers. The political dialogue within countries has been developed and made more
systematic.

In 2001, the EC concluded consultation procedures based on Article 96 of the
Cotonou Agreement with the Ivory Coast and Fiji. In addition a Commission
to review the Council decision closing consultations with Haiti was
proposal

125

transmitted to the Council. The EC decided to open consultations under article 96
with Zimbabwe and under article 96 and 97 with Liberia90.

Co-operation with Cuba continued in 2001 with funds going to emergency aid, co-
financing with Non-Governmental Organisations and support for economic co-
operation.

In 2001, the main priority has been to establish new improved Country Strategy
Papers following the new mechanisms provided for by the Cotonou Agreement. Co-
operation strategies are focused on poverty reduction and based on respect for social,
economic, political and Human Rights. The effectiveness of partnership should be
improved by the new approaches including a reinforced focus on good governance
linking allocations to results and rationalising the mechanisms for the
issues,
disbursement of aid. Most importantly, recipient governments are to play an even
greater role in setting priorities and taking forward change on the basis of their own
policy agenda. Under the 9th European Development Fund more emphasis will be
placed on the role of Commission Delegations and a further effort made to target
specific areas of assistance in order to maximise impact.

The new approach strengthens the principle of participatory development. It extends
the partnership to a range of non state actors and takes a more integrated approach by
linking political, economic, social, cultural and environmental aspects into a coherent
framework.

Commitments and Payments in 2001 in the ACP countries

€

million

Commitments

Payments

Programmes
EDF: Bilateral (countries)
National Indicative Programmes
EDF: Regional Co-operation
Regional Indicative Programmes
Bilateral/Regional Sub-Total
EC budget lines

Total

2001

1249

2000

3324

2001

1896

2000

1351

305

1554
502

2056

433

3757
502

4259

172

2068
568

2636

197

1548
357

1905

Overview of Commitments and Payments (EDF) 1995-2001
€

million

1995

1996

1997

1998

1999

2000

2001

Commitments

1 520

965

616

2 296

2 693

3 757

1 554

Payments

1 564

1 317

1 213

1 440

1 275

1 548

2 068

Ratio of Commitments to
Payments

0.97

0.73

0.51

1.59

2.11

2.43

0.75

Total
1995-2001

13 401

10 425

1.29

90

Consultations are opened under Articles 96 and 97 of the Cotonou Agreement in situations where essential
elements of the Agreement are breached (Article 96) or in cases of serious corruption (Article 97). The purpose is
to discuss the problems with the ACP partner country, and to find solutions. Options include agreed corrective
measures with phased implementation of EU aid and, in the absence of other solutions, the suspension of aid.

126

4.5.2.

Regional Integration and Co-operation

Regional integration and co-operation continued to play an important role in the
relations between the EC and the ACP countries throughout 2001. Implementation of
the Regional Indicative Programmes (RIP) of the 8th European Development Fund
(EDF), which were agreed for a five-year period in 1996-97 (concentrating primarily
on transport, agricultural research, conservation of natural resources and regional
economic integration91)
304,923,133 was
committed in 2001 covering all sectors for the regions’ and ‘all ACP countries’’
programmes. Work on the programming process of the 9th EDF also started. Initial
allocations for regional co-operation were:
700 million for Regional Indicative
Programmes,
300 million in reserve.
During the review process the reserve may be used to provide additional support
linked to both performance and needs.

300 million for intra-ACP programmes and

remained the principal activity.

€

€

€

€

€

Regional integration and institutional support are key elements of EC support since
these are essential for the better integration of ACP countries into both their regional
economy and the global economy. Major programmes of technical assistance in
trade, customs, statistical and other areas with the Common Market for East and
Southern Africa, Economic and Monetary Union for West Africa and the Forum of
Caribbean States, continued over the course of 2001. Three new programmes
totalling
13.2 million were approved for the five Portuguese speaking countries
covering legal systems, statistics and administration at all levels. These will be
implemented in co-operation with the Portuguese Government, which is contributing
financial and technical support. Political initiatives were also taken at a regional
1.96 million) and to the
level, such as contributing to the inter-Congolese dialogue (
peace-keeping and conflict prevention activities of the Economic Community of
West African States.

€

€

The intra-regional dimension has remained important in 2001 with programmes
launched, for example, to prepare the ACP countries for the Economic Partnership
20 million) and to enable them to participate more effectively in the
Agreements (
€
World Trade Organisation negotiations (
10 million). In this context, the EC also
€
contributed
1.45 million towards the establishing of an ACP Delegation to the
various international bodies based in Geneva (WTO, UN Conference for Trade and
Development etc.), opened in January 2002 by Commissioner Lamy. Following the
Cairo EU-Africa summit, contacts with pan-African organisations capable of taking
forward specific actions have been intensified.

91

(e.g. promoting economic communities, customs unions and free trade areas)

127

Regional Co-operation Commitments (EDF) in 2001

Region (EDF Regional Indicative Programme)

Caribbean
Central Africa
East Africa
Indian Ocean
Pacific
Southern Africa
West Africa
PALOP (Portuguese speaking countries)
Overseas Countries and Territories

Sub – Total

All ACP
Total

4.5.3. Overseas countries and territories

€

million92
4.14
8.25
3.64
- 0.76
29.8
- 0.43
63.02
8.6
5.71
121.97
182.95
304.92

Member States’ ‘overseas countries and territories’ have been associated with the EC
since its inception in 1957. The purpose of this association, according to Article 182
of the Treaty establishing the European Community, is ‘to promote the economic and
social development of the countries and territories and to establish close economic
relations between them and the Community as a whole.’ There are 20 Overseas
Countries and Territories (OCTs) scattered around the globe. Relations between the
OCTs and the Community are governed by Decisions of the Council of Ministers.
The most recent Council Decision of 27 November 2001 breaks new ground by
providing for greater partnership in the mangement of financial resources accorded to
the OCTs. The new procedures are based on those in force for the Structural Funds.
€
Under the 9th EDF
175 million has been earmarked for the OCTs, of which
€
145 million in programmable aid for the long-term development of 12 OCTs,
€
8 million for regional co-operation,
20 million for the investment facility and
2 million for studies and technical assistance. The OCTs may also receive funding
from the general budget under budget lines for the developing countries.

€

€

Under the three previous Funds mobilisation of the financial aid available (contracts
and payments) was slow (especially in the case of the Dutch OCTs). Ninth EDF
€
procedures should facilitate mobilisation and disbursement. Of
268 million made available under the three previous Funds (excluding regional co-
operation), 82.5% has been committed and 73.5% disbursed.

the some

€

30 million for regional co-operation, 82% has been committed, largely
Of the
thanks to excellent OCT-ACP co-operation in the Pacific, which gave rise to a
number of cofinanced operations under the 8th EDF (fisheries and agriculture).

4.5.4.

Transport and infrastructure

This sector covers transport, water and sanitation, mining, energy and also support
for information technologies and telecommunications. Support for the transport
sector is recognised as a key element in reducing global poverty, and in promoting
sustainable development and enhanced integration of ACP countries. Improving

92

Negative figures occur when ‘decommitments’ (i.e. the freeing up of committed moneys from non-executed
projects from previous years ) outweigh commitments

128

access to basic services is also essential for the enhancement of the quality of life for
all and, in particular, the poorest.

4.5.4.1. Transport

€

Out of the 660 programmes/projects currently under execution within this global
sector, the EC is currently supporting implementation of 87 major projects (more
than
5 million) in the transport sector focusing on sectoral reforms, capacity
building, maintenance and upgrading, and regional integration. This reflects existing
deficits in reliable transport services particularly in Africa.

€

€

€

€

44 million) and Ethiopia (

73 million in new secondary commitments, followed by Benin (

The year 2001 has been characterised by a substantial acceleration of
the
implementation of existing programmes in this area, particularly in countries that
suffered implementation delays at an earlier stage of the programming cycle. New
contracts amounting to a total of
414 million have been concluded in the transport
and infrastructure sectors. A handful of countries (Benin, Ethiopia, Guinea Conakry
and Mali) share, between them, roughly 50 % of this allocation. Mali ranks first in
€
this group with
56 million), Guinea Conakry (
41 million). In Mali, new
contracts cover the upgrading of 437 km of the main road link to Senegal. This
project also opens up access to one of the poorest regions of the country. In Benin,
new contracts cover the periodic maintenance over two years of 490 km of principal
roads (roughly 25% of the country priority network) and the upgrading of 102 km in
the north of the country. In Guinea Conakry, activities covered by the 2001 contracts
focus on the upgrading and improvement of the interregional connection with
Senegal, where the nearest harbour
international
integration of the country in the medium term. In Ethiopia, the upgrading of the 514
km Addis Ababa – Woldiya road, crossing a region with a population exceeding 2
million,
is a major component of the government’s Road Sector Development
Programme and will substantially improve road access between the capital city and
the north of the country. At regional level, the close of 2001 also saw the signature of
165 million. One of
contracts for two major road links for a cumulative value of
these links will allow better international integration of Chad via Cameroon (400 km
link Moundou –Touboro-N’Gaoundéré) and thereby substantially contribute to the
economic integration of the Central Africa region. The other contract covers the 130
km link between Kankan (Guinea Conakry) and Bamako (Mali). Due to its current
condition this road limits the development opportunities of the north west of Guinea
Conakry and the South West of Mali. These regions, with an estimated population of
one million, are currently cut off from the rest of the country for several months a
year.

facilitating better

is located,

€

With regards to programming of the 9th EDF, 23 of the 44 ACP Country Strategy
Papers presented for consideration in 2001 included transport as a priority sector.
Almost all of these 23 countries were in Africa. It is expected that by the end of the
programming exercise, approximately 30 ACP countries and 3 regions will have
adopted transport as one of their priority sectors, involving the probable allocation of
approximately
2 billion. This is a similar amount to that allocated under the 8th
EDF, in recognition of the continuing high priority given to the sector by partner
countries, particularly in Africa, and the Commission's recognised expertise in this
field.

€

129

Transport – Commitments 2001

ACP Country

Project Title

Aruba
Belize
Chad

Congo
(Brazzaville)

Eritrea
Ethiopia

Fiji
Gabon
Guinea Bissau
Guinea Conakry
Kenya
Madagascar
Malawi
Mauritania

New Caledonia

Niger
Salomon
Sao Tome
Surinam
Tanzania
Uganda
Wallis & Futuna
Regional:
Central Africa

Regional:
East Africa
Regional:
West Africa

Preparatory study for designing National Park
Construction of new bridge over Sibun river
Road Doba Sahr technical study and tender preparation
Technical/institutional support to Ministry of Public Works,
Transport, Housing and Urbanism
Technical assistance: implementation of national transport plan
Upgrading of rural roads
Strengthening of the Transport Ministry
Pre-feasibility study: Gondar-Huemra & Arba Minch road
Upgrading of the Harar Jiga road
New Rewa Bridge
Increase of funds for the Larara/Mitzic road project
Joao Landim Bridge – Increased funds
Environmental impact study
Northern Corridor upgrading programme
Programme for road maintenance & improvement of access
Lakeshore road infrastructure support
Technical Assistance to the Ministry of Public Works
Technical Assistance: maintenance of roads
Road Hienghene Pouebo
Fishing Support
Technical Assistance: Transport
Increase of funds for the Malaita rural infrastructure
Support to the national road service
Construction of road to the ferry terminal Suriname - Guyana
Backlog maintenance programme for the central corridor
Strengthening of northern corridor road
Public works equipment
Action Plan for regional transport development
Barouaboulai-Meiganga Ngaoundere Road: feasibility study
Backlog maintenance programme for the central corridor
Northern corridor upgrading programme
Upgrading Kayes-Kidira road

€

million
0.5
2
0.74
1.90

1.95
1.98
0.62
0.74
0.71
11
1.99
2.65
0.2
79.5
42
13.72
0.55
0.75
5.6
2.8
0.75
1.2
0.48
13.2
22
36.6
1.93
1.98
1.9
20
13.6
28.99

4.5.4.2. Water and sanitation

Total

314.53

The focus of EC support in the provision of water and sanitation has progressively
evolved from a project approach focusing on water supply and addressing mainly
social and
technical
environmental concerns, and support for improved management of the resource.
52
million was committed in 2001 to activities related to safer water supply and the
improvement of sewerage and sanitation services in urban areas.

into a programme approach,

featuring stronger

issues,

€

The EC is currently supporting government policy in improving water supply and
sanitation access in small towns in rural areas in five countries. In Ghana, 30% of the
€
32 million allocated to the National Community Water and Sanitation Strategy has

130

been executed to date as planned. It is expected that at the end of this project more
than 560,000 people will have access to safe water and to basic sanitation services.

€

of

the

and

supply

development

rural water

the EC is directly supporting integrated water

In Mozambique,
resources
management in the Zambesi basin, the second largest water-catchment area in the
Southern African Development Community Region, in order to improve the quality
of life of the population, especially in rural areas. The EC contribution of
11,7
million should permit the establishment of the Zambesi Catchment Management
sanitation
Authority
planning/promotion capacity in the basin. The technical assistance for the project
implementation was recruited in 2001. In Uganda, the ‘mid-western towns water
supply’ programme also started in 2001. This
17.5 million programme will benefit
an estimated population of 100,000 by reducing the incidence of water-borne
diseases. In Samoa, a
18,7 million rural water supply programme is currently
coming to an end. This programme is achieving its objective to improve the existing
water supply system in the most populated rural areas of each of Samoa’s two main
islands, thereby benefiting about half of the whole rural population i.e. some 55,000
Samoans. In Mauritius, the implementation of the
16,7 million programme for the
St Martin sewerage treatment plant expansion - serving a population of 220,000 - is
€
19.5 million allocated to address the
on schedule. In Ethiopia, 30% of the
inadequate water supply and the poor sanitation situation among low income
households has also been implemented as planned.

and

€

€

€

Transport and Infrastructure (Water and sanitation)– Commitments 2001
€

ACP Country

Project Title

Angola
Antilles (Dutch)
Ethiopia
Fiji
Ghana
Lesotho
Mauritius

Nigeria
Polynesia (French)
Salomon Islands

Drinking water supply for the city of Tombwa
Sewage system: Bonaire
Addis Ababa water supply project
Environment programme
Small towns water supply & sanitation in northern region
Lesotho lowlands water supply: feasibility study
West coast sewerage study
Technical Assistance to sewerage sector
Small towns water supply and sanitation programme
Improving of the sanitation of Bora Bora
Addition to Kombito water supply project

Total

4.5.4.3. Mining sector

million
7.6
0.5
6
8.5
1.99
1.75
0.15
0.11
15
9.95
0.15
51.70

€

During 2001, EDF mining support programmes were underway in thirteen countries
with a total financing of
452 million. Eight of these countries (Botswana, Burkina
Faso, Dominican Republic, Gabon, Mali, Mauritania, Namibia and New Caledonia)
are being supported in their efforts towards sustainable development of their mining
sector. In some of these countries institutional support and appropriate basic
geological information has been improved, in others efforts have focused on the
recovery of main public or private companies and ways of reducing the negative
impact of mining activities. In the other five countries diversification programmes
are under way mainly focused on the transport sector.

131

€

Since 1st January 2001, following the decisions on the transitional measures between
Lomé and Cotonou, uncommitted funds allocated to support traditional industries93
450 million) are being programmed in the framework of the Cotonou
(around
Agreement. Priority is given to mineral
strengthening
programmes (which may include a wide spectrum of projects, such as revision of
infrastructure,
mining and/or environmental codes, development of geological
to small and
dissemination and communication activities and training), support
medium-sized mining enterprises and environmental protection.
In 2001, nine
appraisal studies were under implementation.

institutional

sector

The EC was also active in ACP countries through specific programmes in other
fields such as energy and information technologies and telecommunications’
systems, in response to the specific regional or local situation.

In the energy sector, different activities covering institutional strengthening, power
supply support - including rural electrification and renewable energy - and transport
are underway in the Dominican Republic, Eritrea, Ethiopia, Ghana, Kiribati, Mali,
Mauritania, Senegal and Sierra Leone. In 2001, efforts have been initiated to
mainstream energy, in order that links between energy and development priorities
(health, education, enterprise development, gender etc) are recognised in the
implementation of the 9th EDF.

€

Efforts are also being made to provide improved information and telecommunication
750,000 project to ensure a regulated and
systems. In the Caribbean region, a
€
integrated development of the telecommunication has been launched as well as a
3.5 million project supporting the modernisation of existing broadcasting. In Africa -
within the
11 million Meteorological Transition programme - the tender for
replacing equipment for all Meteorological Services in 47 countries was launched in
November 2001. When completed, these regional interventions will improve the
access of ACP countries to basic reliable information for sustainable development.

€

93

SYSMIN: System for Safeguarding and Developing Mineral Production. This is the ‘SYSMIN transfer’ from the
8th EDF destined to finance the development programme identified following a request for aid under the Sysmin
programme of the Lomé Convention but for which no financing decision could be taken before 31 December 2000

132

Benin - Support to the transport sector

In October 1993 the Benin Government adopted a transport development strategy. This
strategy included limiting investment to a priority network, setting up a road fund to ensure
that maintenance could be financed, orienting the role of the state towards policy making and
regulation, facilitating private sector participation, supporting the development of transport
services and establishing an investment programme.

€

In the past,
165 million from various European Development Funds have been granted in
support of this strategy mainly for construction and upgrading of 1114 km of priority roads,
thereby enabling Benin to strengthen its role as a transit route to neighbouring countries.
Community support has also focused on institutional aspects, especially the setting up of the
Road Fund. In 2001, the main activity has been the starting of renovation programmes for 600
km of priority roads in the north of the country at a cost of some
90 million. The other
objective of Community aid is to open up the poorest regions by linking them to the priority
network. In addition, EC aid in the transport sector takes into account the problem of the
marginalisation of an ever increasing part of the urban population. Thus, the improvement of
access and traffic within certain areas of Cotonou and Porto Novo is being carried out using
labour intensive methods in order to provide income to some of the poorest people. This last
project created an estimated 5000 or more jobs over 4 years benefiting over 30,000 people when
workers’ dependants are taken into account.

€

It is estimated that the total portion of the priority road network classified as ‘poor’ reduced
from 40 % in 1998 to 10 % in 2000.

Transport and Infrastructure – Other infrastructures - Commitments 2001

ACP Country

Project Title

Barbados
Comoros

Dominican Republic

Expansion of the Barbados language centre
Study for the use of substitute materials for sand
Management of solid waste
Pilot project - solid waste in marginal districts

Ethiopia
Haiti
Kiribati
Montserrat
Namibia
New Caledonia

Saint Vincent
Tonga

Regional: Caribbean
Regional: Pacific

Preservation and conservation of the Lalibela churches
Increased funds for satellite imagery project
Kiribati training programme (infrastructures)
Design and supervision of the community college
Upgrading maritime & fisheries institute at Walvis
New aquarium for Nouméa
Cold store of Nouméa
Learning resources centre
Vava’u development programme (infrastructure for
fisheries, agriculture and tourism development)
Caribbean radar network project
Fiji school of medicine resource development
Reducing vulnerability of Pacific ACP states

Total

4.5.5.

Sustainable Rural Development and Food Security

€

million
3.95
0.10
1.83
0.84

9.10
0.35
6.40
0.15
1.90
0.90
1,00
1.50
5.20

0.20
7.50
7,00
47.92

Three quarters of the 1.2 billion people living in extreme poverty live in rural areas,
and are frequently affected by severe environmental problems. As a result,
sustainable rural development and natural resources management - the basis for
economic growth in most developing countries – are priorities in the work towards
the reduction of rural poverty. Although substantial amounts of resources being
programmed for the social and infrastructure sectors will go to rural areas, the
Commission has not yet fully succeeded in systematically adopting a strategic
approach to rural development.

133

4.5.5.1. Agricultural Development

The major changes in the international (liberalisation and globalisation of markets at
the regional and global level) and national (i.e. less central control of productive
sectors) environments necessitate change in the implementation of projects and
programmes. The new programmes within a Sector Wide Approach (SWAP)
framework support national agricultural sector policies in order to strengthen
agricultural producers’ organisations, to encourage the participation of the private
sector and facilitate access to financial services (microfinance and other credit).

€

In Burkina Faso the ongoing PAOSA (Plan d’Action pour l’Organisation du Secteur
Agricole) programme for
24,2 million is providing support - within the framework
of the Agricultural Structural Adjustment Programme funded by the World Bank -
for capacity building in the existing agricultural professional organisations. It also
offers access to local finance,
institutional support and improvements to the
productivity of the rice industry. It plans to train 30,000 farmers and 50,000 families,
offer small credit facilities to around 500,000 people and establish new rice schemes
(covering 4000 hectares) aiming to increase average annual production by 10%.
However, co-operation in the agricultural sector is still very much project based and
there has been insufficient progress in increasing EC participation in multi-donor
initiatives. With regard to STABEX, and future support in circumstances of short
term fluctuations in export receipts provided for under the Cotonou Agreement, the
new programmes will not only contribute to institutional reform but also to
macroeconomic stability.

During 2001, the Commission continued its support for the 12 traditional ACP
technical and financial assistance94. Ten
suppliers of bananas through special
43 million.
financing proposals were approved for a total amount of
Implementation of the two previous years’ agreements also continued with support to
improve productivity (irrigation and drainage), quality (cold storage) and marketing
and to encourage diversification in countries where banana production is not
sustainable.

€

94

as specified in Council Regulation 856/1999

134

Agricultural Research Support in KENYA

€

The Agriculture/Livestock Research Support Programme (ARSP), Phase II, is a five year
support programme for
8.3 million to the Kenyan National Agricultural Research Project
which started in 1998. The overall goal of the ARSP, is to enhance the economic integration of
rural communities particularly in Arid and Semi-Arid Lands (ASAL) with the rest of the
country’s economy. The initiative aims at ensuring that the private & public sector field
workers engaged in ASAL, as well as community based organisations, make more effective use
of research recommendations in order to offer cattle and other farmers sound and socially
acceptable technologies and concepts. EU contributions (as well as other donors) take the form
of operational funds for research and capacity building, improved infrastructure, scientific as
well as transport equipment and short and long term technical advisory services. This has
produced a larger and more efficient agricultural research capacity, particularly in the Kenyan
ASAL.

Adaptive and applied research programmes focus on soil and water management, livestock and
natural resource management topics in the mostly arid rangelands. The project is aimed at
providing sustainable solutions using a community based and gender sensitive approach, with
strong collaboration of NGOs and government field workers. Collaborative agreements with
community based organisations and NGOs on the promotion of recommended technologies and
facilitation / training during their introduction enhance adaptation and adoption on a wider
scale. This has for example led to the establishment of three small scale dairy units at strategic
centres in the northern Kenyan rangelands supplying about 50,000 people with hygienic fresh
and processed cow and camel milk products. At the same time food security and sustainable
incomes (particularly for women) have increased for these ASAL communities. With improved
tillage and drainage technology about 2.4 million hectares of poorly drained heavy soils
(vertisols) can now be used for timely agricultural production. An early planting tool was
simultaneously developed to increase farmers’ chances of a healthy crop in the semi-arid areas.
The project has been able to raise awareness among the pastoral and semi-pastoral communities
of Kenya about the strategic importance of preserving Kenya’s animal genetic resources, which
are highly adapted to the harsh conditions and disease pressure, notably the approximately 5
million East African Shorthorn Zebu cattle.

4.5.5.2. Livestock Development

€

12,5 million were approved to
Two new financing agreements for a total amount of
support the livestock sector in Madagascar and Guinea in 2001. The projects will
focus on institutional support, animal health, privatisation of the veterinarian services
and improvement of the animal production commodity services. It is hoped that the
sustainability and efficiency of these projects will be substantially enhanced both by
the active involvement of the beneficiary small livestock holders in the project
design and by the strengthening of the livestock farmers’ organisations who are
responsible for implementation.

At regional level, two programmes are implemented through the International Bureau
for Animal Resources based in Nairobi:

€

• The ‘Farming in Tsetse Controlled Areas’ project (

20 million) which started
with Ethiopia, Kenya and Uganda, but which will be extended to Tanzania,
Rwanda and Burundi. The project aims to improve the well being of the rural
population through sustainable livestock development in tsetse affected areas. The
long-term aim is sustainable tsetse control organised and financed by the livestock
owners. In Kenya, for example, an emergency intervention reduced the rate of
infection of trypanosomosis from 80% to 20% of the 50 000 cattle in Teso district.
1 400 farmers have been trained in tsetse control techniques. A new approach to
manage tsetse-transmitted trypanosomosis has been tested in 60 units. Their

135

protection with insecticide-impregnated mosquito nets has led to a significant
reduction of costs for veterinary inputs and an increase in milk production.

€

• The Pan African Control of Animal Diseases (Epizootics) programme (

72
million) covers 32 sub Saharan African countries. 28 countries had an active
national project in 2001. Close coordination between the beneficiary countries, the
donor community and other international organisations (International Livestock
Research Institute,
International Epizootics Office (OIE), UN Food and
Agriculture Organisation) has been established in order to set up a global animal
health system. The project aims at a re-organisation of the veterinary services
enabling them a better control of major animal diseases. This control,
if
internationally recognised, is a precondition for the countries to participate in the
regional and international trade of livestock and animal products. Ten countries
have, for instance, prepared their dossiers to be submitted to the OIE to obtain
‘rinderpest disease free’ status.

4.5.5.3. Research

Agriculture research is contributing to the alleviation of hunger and rural poverty by
improving rural productivity and increasing agricultural incomes. With the growing
scarcity of land and water, future increases in food supplies have to come from
increased productivity. Two major programmes (involving the West and Central
African Council for Agricultural Research and Development and the Association for
Agricultural Research in Central Africa) amount to
41,3 million. These started their
activities in 2001 with the overall objective of improving the agricultural research
capacity and services of more than 20 national agriculture research institutions in the
three regions concerned. These programmes are characterised by capacity building of
national and regional research institutions, an innovative approach of accessing funds
by competitive bidding and co-funding of regional research networks on specific
agricultural products.

€

4.5.5.4. Rural Water Supply

The international community has adopted an international development target for the
increase of access (for the population of sub-Saharan Africa) to an improved water
source, from 49% to 74%, by 201595. One of the EC’s most important projects is the
‘Programme Regional Solaire’, where 626 solar pumps and 660 solar electrification
systems have been installed between 1990 and 1998 in Burkina Faso, Mali, Niger,
Senegal, Gambia, Chad, Mauritania, Cape Verte and Guinea Bissau for the benefit of
one million rural people. After a positive evaluation in 2001 it has been decided to
launch a phase two for
60 million. The second phase aims to establish a long-term
improvement to the availability of drinking quality water for the rural populations of
the Sahel. 465 new solar systems will be established in rural villages (with an
average population of over 3,000). This will involve the active participation of the
beneficiaries and the private and public sectors in exploiting available resources
using solar based technology.

€

95

Millennium Development Goals

136

Fisheries

A number of projects - in particular those in the Pacific (ProcFish), Indian Ocean
(Monitoring Control and Surveillance) and Lake Victoria (Fisheries Implementation
Plan) were launched to build aquatic resource management competence in target
ACP countries and to facilitate regional collaboration. Two new important national
projects on rural coastal fisheries also started in the Pacific promoting private sector
involvement. In co-operation with the Support Unit for International Fisheries and
Aquatic Research of the UN’s Food and Agriculture Organisation, a number of other
fisheries management projects are in preparation. To ensure improvements in
production and trading capacity in relation to fishery products, a
45 million
programme on the strengthening of sanitary control aspects was also financed.

€

Lake Victoria Fisheries Research Project

The fisheries of Lake Victoria have an annual production of 500,000 tons of fish, of which
100,000 tons are exported to western markets. They play an important role in the economic
development of the East African region. The second phase of the Lake Victoria Fisheries
9.4 million) has fostered regional co-operation
Research project (started in 1995 with
between Kenya, Uganda and Tanzania through the Lake Victoria Fisheries Organisation. The
upgrading of facilities and vessels, the training of 150 research staff and the provision of 12
long-term overseas scholarships have all enhanced the research capacity of the three local
research institutions. The project has helped improve the sustainable management of the lake’s
resources, and a Joint Fisheries Management Plan (currently under discussion for
implementation by the countries concerned) has been established.

€

The Pacific Regional Oceanic and Coastal Fisheries Programme (PROCFISH,
comprises two components:

€

10.5 million)

Pacific Fisheries Programme

• The coastal component involves compiling results from the first major baseline assessment
of reef resources covering most of the Pacific area. It stresses reef resources per se as well as
human and social aspects.

• The oceanic component will exploit the results of research and assessment work already
carried out by the Secretariat of the Pacific Community (SPC) on the major Pacific tuna
species. This work, which has received recognition from the international scientific community,
was performed by the SPC as part of the previous South Pacific Regional Tuna Research and
Assessment Project also funded from EDF resources. The scope of the work will be extended to
include more thorough assessment and monitoring of bigeye, yellowfin and by-catch stocks in
the region.

Each of the two PROCFISH components includes an ‘ACP’ component and an ‘OCT’
component for Overseas Countries and Territories. The SPC is the executing agency for this
regional project96.

4.5.5.5. Environment

Work on the environmental field has been very intensive in 2001, particularly in the
fields of forestry, conservation, wildlife, and sustainable management of natural
€
resources. Seven new programmes/projects have been implemented amounting to
26 million.
55.1 million, and four new programmes have been approved totalling

€

96

see: http://www.spc.int

137

€

The major ongoing programme in this sector is ECOFAC, a regional programme for
the conservation and rational use of Central African Forest Ecosystems. A third
phase started in 2000 for
23 million with activities related to the conservation of
biodiversity,
the sustainable use of the natural resources such as forests for
sustainable development and sustainable improvements in people’s standard of
living. Programme activities, co-ordinated by a recently strengthened environmental
unit based in Libreville, are taking place in 6 countries of the Congo forestry basin.
The programme has managed to substantially improve the capacity and the
awareness of the national authorities in the management of their natural resources. In
2001 the size of the Odzala National Park (Congo Brazzaville) has been increased
from 2 800 km² to 13 280 km² i.e. by a multiple of five and the Monte Alen National
Park (Equatorial Guinea) has been extended from 1 004 km²
to 2000 km².
Furthermore, a Network of Protected Area of Central Africa (RAPAC) has been
established. The willingness of the five world heritage sites in the Democratic
Republic of Congo to join the network and the new membership of the Zakouma
National Park in Chad show the positive reception being given to RAPAC. Another
important activity is the dialogue with logging companies to improve management
plans and to involve local communities both in the control of the illegal bush meat
trade and in the establishment of communal forest plots.

Village water supply in Chad

€

Access to drinking quality water is a crucial issue in Chad. Nearly eight inhabitants out of ten
do not have access to clean water and some 33% of the villages (with a population of more than
300 people) do not have a water supply point. Experts estimate that the villages need 15.000
boreholes equipped with hand pumps, and that the nomadic population requires at least 4.000
large wells. A sectoral policy on water has been established in co-operation with other donors.
Since the 1980s, the European Union has allocated over
30 million to this sector. This has
permitted the construction of about 2000 water points equipped with pumps, and in addition,
the construction of 45 drinking quality water distribution systems in the main villages, as well as
the repair of approximately one hundred water points. The area covered has been increased
around the capital, Ndjamena, to include six regions in the west of the country. A programme to
provide more than 1000 new water access points is currently being implemented. Each day,
water is available from new wells. In tandem, the regional solar programme has installed auto-
functioning solar pumps in Chad, which have the added advantage of requiring little
maintenance. A new programme, co-financed with the German and the French development
agencies, will provide - in the near future - access to about 300 new outlets. A study has started
to plan the activities in this priority sector under the 9th EDF, including the construction of some
3400 new wells. All activities seek to ensure sustainability and maximise co-operation with other
donors.

4.5.5.6. Food Security

The EC is active in the food security via its emergency humanitarian aid office,
ECHO and through its overall development assistance strategy. Some examples of
activities in ACP countries in this sector are given below.

Africa – Mozambique

Almost two thirds of the population of Mozambique (of which 80% is rural) live below the
poverty line and encounter serious problems of food insecurity aggravated by recurrent natural
disasters e.g. cyclones, floods or droughts. Community food security programmes come within
the framework of the Poverty Reduction Strategy Paper which supports the public service
reforms judged essential for food security. This strategy is supplemented by direct support to
agricultural producers. Support
for administrative reform is carried out via budgetary
assistance targeted at the Ministries of Agriculture (via the PROAGRI programme) and
Commerce as well as the National Meteorological Institute. Direct support to rural producers
aims to improve productivity and agricultural diversification, focussing on the north and the
south of the country.

138

Caribbean – Haiti

In Haiti the local population only receives 80% of the nutritional minimum requirements set by
the UN and significant environmental damage contributes to a permanent state of food
insecurity. The political instability affecting the country has worsened since the government
elections of May 2000 and this in turn has led to a significant slowdown in international aid.
Despite the freezing of new commitments through the EDF, the European Commission has
continued its assistance to school canteens, ensuring a balanced diet for almost 115 000
schoolchildren. Activities already approved or underway (e.g. renovation of infrastructure,
credit assistance) have also been continued.

Rural Development and Food Security: Commitments in 2001

ACP Country

Benin
Botswana
Burkina Faso
Cameroon
Cayman Islands
Chad
Dominican
Republic
Ethiopia
Gabon

Guinea Bissau
Guinea Conakry
Madagascar
Malawi

Mali

Mauritania

Namibia

Niger
Togo
Uganda
Zambia
Zimbabwe
Regional: Central
Africa
Regional: Pacific

Regional:
West Africa
All ACP

Project Title

Programme for the repair and maintenance of minor roads
Wildlife conservation & management programme
Solar Regional Programme phase II
Institutional support for decentralised road maintenance
Nature tourism development
Solar Regional Programme phase II
Dominican eco-tourism development programme

Coffee improvement programme (CIP IV)
Improvement of tourism management in la Lopé reserve
Technical assistance for forestry and environment
Feasibility study for the Solar Regional Programme
Support for the promotion of rural organisations
Livestock development programme
Evaluation of the social forestry project
Technical assistance to programme preparation Natural
Resources sector
Rice Programme
Solar Regional Programme phase II
Environmental programme against desertification
Adrar Rural Oasis
Seminar on agricultural diversification
Study for the rehabilitation of the PPG dam
Rural infrastructure needs in poor rural areas
Rural development
Support to agricultural marketing & trade negotiations
National agricultural services support programme
Solar Regional Programme phase II
Agro-forestry programme
Forest resources and management programme
Forestry support programme
Sexually Transmitted Diseases control
Anti – poaching initiative

Assistance to plant protection in the pacific
Pacific and regional oceanic and coastal fisheries
Solar Regional Programme phase II
Energy regional programme
Technical centre for development of agriculture

Total

€

million
8.50
14.00
9.96
23.50
0.10
4.00
5.99

15.00
0.10
0.08
0.08
18.50
4.00
0.06
0.35

16.00
6.56
14.00
10.00
0.02
0.08
0.08
0.20
0.19
6.00
2.39
1.98
12.00
1.90
0.04
1.60

0.03
10.50
26.21
5.40
13.31
232.71

4.5.6. Human Rights, Democracy, Good Governance and Capacity Building

Respect
including fundamental social rights, democratic
principles, the rule of law and accountable governance - form an integral part of

for Human Rights -

139

sustainable development and are fundamental elements of the Cotonou Agreement.
These issues are the subject of regular political dialogue between EU and ACP States
and are areas for strong Community support. ‘Institution building’ is one very useful
path in this direction. The Commission Communication on Conflict Prevention97
calls for more activity relating to peace, democracy, political and social stability
being integrated into assistance programmes as a means of conflict prevention. This
is therefore an area where EC activities are increasing all the time, in particular,
through the relatively new field of institutional support through experience gained
from projects and contacts with other donors.

In total, there were 254 new and ongoing projects in this field in 2001 totalling
727
million. They covered a wide range of ‘institution building’ activities and can be
divided into two broad categories: (1) respect for Human Rights, improvement of
legal systems, elections and civic education; (2) good governance through capacity
€
building, civil service reform and decentralisation. In addition there was a total of
121.5 million of projects covering all aspects of institution building in South Africa.
Given the nature of these activities, any assessment of success of these programmes
will have to be made in the medium to long term.

€

4.5.6.1. Human Rights and Justice

€

The EC’s Human Rights’ programmes aim at bringing about and maintaining peace,
e.g. the
800,000 allocated from the rehabilitation programme for Burundi to
promote national reconciliation through training the ‘bashingantahe’ (village elders)
as para-legals and sending them to “collines” (districts) throughout the country where
they are under-represented. The United Nations Development Programme is
3
managing this programme. In Equatorial Guinea, a new pilot programme for
million to support Human Rights, democracy and the rule of law is about to start
after several years of suspension of development aid.

€

€

A properly functioning system of justice is fundamental to the respect for Human
€
Rights. There are currently EDF financed programmes in eight countries totalling
48.4 million specifically targeting this area, e.g. a
16 million programme in
Burkina Faso in support of democracy, law and good governance. This project
focuses in particular on legal reform working through the University of Ougadougou,
and directly links democratic government with sustainable social and economic
government. It also has a prison reform component, including assistance with the
7.2 million justice
provision of defence lawyers. Work has also started on the
including the
programme for Rwanda. This supports various state institutions,
‘gacaca’ i.e. the traditional system of justice, which, it is hoped, will hear prisoners
accused of all but the most serious crimes committed during the 1994 genocide. It
also supports projects promoting community service as an alternative to prison and
NGO projects linked to justice and national reconciliation.

€

Elections

Democracy also depends on the environment for free and fair elections. As the
number of elections increases in ACP countries, the amount of support from the EDF
has also increased from four projects in 2000 to seven in 2001 in Congo, Lesotho, the
Solomon Islands, Sierra Leone, Chad, Togo and Zambia. EDF support begins prior

97

COM(2001) 211 of 11 April 2001

140

to the election with activities such as voter education and registration. Support can
also take the form of, for example, the printing of ballot papers, as well as longer
term civic education programmes. With the exception of Chad and Zambia, all the
financial support outlined above (and approved in 2001) is focused on elections to be
held in 2002.

The results of both the Chad and Zambia elections have been contested. Reflection is
under way within the Commission as to how to make EDF support more effective in
this area. In some cases, additional support is provided for international electoral
observers from the EC budget (line B7-7). Electoral support is generally provided in
consultation with other donors,
including the United Nations Development
Programme. Once elected, representatives often need help with obtaining the
facilities required to carry out their tasks such as staff, libraries and computers. The
EC has various projects of this kind, for example,
to the
National Assembly in Angola.

institutional support

Good Governance

Governance issues are being given increased priority within co-operation strategies,
on the basis of an analysis of problems and needs for institutional development, often
in consultation with other interested donors e.g. Kenya where the EC is a member of
the Economic Governance Group. One of the main forms of support in terms of the
number of projects - and a support which can have an effect far beyond the financial
cost - is the provision of technical assistance to National Authorising Officers. In
most ACP countries this support exists in some form, often in the framework of a
larger programme of aid to the ministry of finance and/or planning with economic,
civil service or other reforms. Assistance is given not only to government ministries
but also to other public bodies that play a role in national policy.

€

launched

in 2001
€

Thus, in Ethiopia, the financial institutions are receiving support to modernise and
25 million programme of
streamline their activities. In the Dominican Republic, a
includes
reform and modernisation which was
state
decentralisation to the local, regional and provincial levels. Devolution of certain
powers to lower levels is a trend that is likely to continue. The
1.91 million pilot
project for the promotion of second-tier towns in Guinea, which originated from the
decentralisation of the 1990s, started in 1998 and aimed at empowering people at the
local authority level to play an active role in development. The recent evaluation
found that, despite the problems, this experiment should be built upon and should be
followed in other parts of the country. With the emphasis in the Cotonou Agreement
on greater inclusion of civil society in the development process and thus on capacity
building, pilot programmes like this one will be a useful source of experience.
Censuses - which are an invaluable tool for macro-economic planning - are also
1.1 million project
financed from the EDF. A recent example is Niger where a
started in 2001. By October 2001 the national population and housing census had
been completed. All
these activities are closely co-ordinated with structural
adjustment, debt relief (HIPC) and other relevant EC or other donor programmes.

€

141

Zambia Public Welfare Assistance Scheme

€

An interesting and somewhat unique EDF project is the Zambia Public Welfare Assistance
Scheme (PWAS), which was signed in 1999. It takes only a relatively modest amount of
resources (
1,160,000) and is designed to improve the Zambia government’s social safety net
through management support, training, and improved co-ordination at all levels. Grass root
organisations are directly involved in decisions on the allocation of resources. The PWAS also
uses existing social structures as much as possible (committees already in place, community
based organisations etc.) rather than creating new ones. The 2001 Zambia Draft Final Poverty
Reduction Strategy Paper recognised the value of the re-designed PWAS. Some
4.13 million
will be provided over the next five years along with co-financing from the government of a
further
0.65 million. A recent mid-term review of the project has found that other countries in
the region could usefully follow it as a model. The evaluation concluded that the PWAS project
should be extended - with an increased budget - into urban areas. Nevertheless, its achievements
- whilst impressive - were fragile, and so needed consolidating, with further capacity building,
networking with other national partners and more focus on local resources in order to increase
sustainability.

€

€

Institution Building – Commitments 2001

€

million

0.40
0.02
0.04
5.12
2.8
0.08
2.81
0.75
13.89
2.44
0.58
0.11
0.02
3
0.74
0.03
3.07
0.2
0.15
0.23
0.54
0.07
0.85
1.34
0.7
0.37
1.99
0.06
1.43
3.22
1.28
0.16
0.1
3.07
0.08
51.74

ACP Country

Angola
Antigua & Barbuda
Bahamas
Botswana
Burkina Faso
Burundi
Cameroon
Central African Republic
Chad
Congo (Brazzaville)
Congo (DRC)
Djibouti
Dominican Republic
Equatorial Guinea
Eritrea
Guinea Bissau
Guinea Conakry
Guyana
Haiti
Ivory Coast
Kenya
Kiribati
Lesotho
Malawi
Mali
Namibia
Niger
Rwanda
Senegal
Sierra Leone
Solomon Islands
Surinam
Tanzania
Togo
Zambia

Total

142

4.5.7. Macroeconomic Policies and Private Sector Development

4.5.7.1. Macroeconomic Policies

Providing macro-economic budgetary support has become an integral part of the
Community’s financial and technical co-operation with ACP countries. Since 1992,
the Community has provided budgetary support amounting to about
2.604 million
in 40 ACP countries. Formerly, these funds were mostly used to support economies
experiencing ‘balance of payments’ problems. The current approach is to assist
countries in changing the way in which their economies work.

€

Consequently, in 2001 the Commission continued to implement its approach to link
its budgetary support programs to poverty reduction and thus to Poverty Reduction
Strategy Papers established by developing countries. Therefore the majority of the
budgetary support programmes contained performance indicators
relating in
particular to health, education and public finance management. On the latter aspect
the Commission has concluded an agreement with the World Bank establishing a
joint EC/World Bank Trust Fund for Public Expenditure and Accountability
Assessments. In addition the Commission is working toward the establishment of
joint arrangements with other donors in order to provide more efficient and effective
donor assistance to the recipient countries.

During 2001, the Commission committed
programmes in ACP countries. It authorised over
ACP countries which have ongoing structural adjustment programmes.

263 million in direct budgetary support
300 million in payments to 38

€

€

Macroeconomic Support - Structural Adjustment Programmes - Commitments 2001

ACP Country

Cape Verde
Gabon
Ghana
Guinea
Ivory Coast
Jamaica
Lesotho
Mali
Mauritania
Niger
Tanzania
Vanuatu

Total

€

million

12.1
4.9
50.8
11.1
12.8
21.7
18.5
31.8
18.3
3.2
76.1
1.6
262.90

Burkina Faso and the New Budgetary Support Approach

From 1997 to 2000 the Strategic Partnership for Africa (an informal group of donors, under the
leadership of the World Bank) carried out an exercise in Burkina Faso to study the issue of
setting conditions for recipient country for the release of aid (known as ‘conditionality’). The
study has been executed under the auspices of the Burkina Faso government. The new approach
means entrusting the partner government with the leading role in the reform process, while
donors limit their role to assessing results in the field of economic growth and poverty
reduction. The results of the ‘Conditionality Test’ have been largely used in the reform of the
Bretton Woods Institution’s instruments related to Structural Adjustment. One of the major
achievements of this reform has been, in the case of HIPC countries, the design of an overall
development strategy reflected in the Poverty Reduction Strategy Paper.

143

In the case of Burkina Faso several donors (the Commission, the Netherlands, Denmark,
Sweden and Switzerland), agreed to operate their budgetary support in a complementary
manner using the same disbursing mechanisms tailored on the PRSP. The idea is to reduce
government transaction costs in dealing with different donors, and to provide financial visibility
in the medium term. The 2001 Budgetary Support for Poverty Reduction Programme included
15 million was linked to the macro-
two elements of direct budgetary support. The first of
economic framework, and has been disbursed according to the IMF review of its programme
with Burkina Faso. The second
10 million component has been disbursed based on
performance on a number of indicators contained within the PRSP. In this way the final
disbursement is linked to the effort invested and to the policy implementation and poverty
reduction results in key areas of the PRSP. Achievements thus far are modest, but the process
has been launched and the stakeholders and their responsibilities are now clearly defined.

€

€

4.5.7.2. HIPC initiative

Two joint ACP-EC Council decisions were adopted in December 1999 on the
Community's participation in the Highly Indebted Poor Countries (HIPC) Initiative98.
360 million to the EIB
As a creditor, the European Commission contributes
administered HIPC Trust Fund, and as a donor, will contribute a maximum of
680
million to the World Bank administered HIPC Trust Fund.

€

€

Framework agreements between the EC and the World Bank and the European
Investment Bank set out the legal and practical basis for the provision of the EU's
debt relief. Following the signature of those agreements, a first payment of
250
million was released to the World Bank Trust Fund (July 2000) and a first payment
100 million was made to the European Investment Bank Trust Fund (December
of
2000).

€

€

To date, 24 out of 41 HIPC countries (of which 34 are ACP countries) have reached
their ‘decision point’99 and are therefore entitled to receive interim debt relief
through the World Bank Trust Fund. The World Bank and the African Development
Bank (ADB) make the evaluation of needs.

With regard to the EC's role as a creditor, the needs analysis is carried out by the EC
services. As countries reach their decision point, the Commission,
in close co-
operation with the European Investment Bank, establishes the total outstanding debt
to the EC on a country by country basis (including special loans and risk capital
operations). It then identifies loans to be considered for debt relief and agrees with
the countries concerned which loans will be finally selected.

€

By the close of 2001, the Commission had sent proposals for debt relief to almost all
€
250 million was transferred in December
eligible countries. A second payment of
2001 to the HIPC Trust Fund administered by the World Bank and a second payment
100 million was made to the HIPC Trust Fund administered by the European
of
Investment Bank. As at 31 December 2001, only Uganda, Mozambique and
Tanzania had reached their ‘completion point’ under the enhanced HIPC initiative.

Funds freed up by the cancellation of debt servicing obligations are then used to
finance poverty reduction initiatives, in particular for the social sector.

98

99

Decision No 1/1999 and No 2/1999 of 8.12.1999, OJ L 103, 28/04/2000 p. 0073 - 0075
see http://www.worldbank.org/hipc/about/FLOWCHRT4.pdf

144

4.5.7.3. Private Sector Development (PSD)

The EC’s objective is to ensure long-term and sustainable economic development.
The private sector is perceived as an engine of economic growth, and thereby an
important source of employment in the ACP countries.

Private sector development is a crosscutting issue and as such is incorporated in the
programming of other sectors like health, education and infrastructure. The European
Commission's
(the business
support at
the meso (financial and non-financial)
environment and investment climate)
intermediary level and the micro level (enterprise competitiveness).

strategy combines

the macro level

At the macro and meso level, ACP national and regional authorities can benefit from
DIAGNOS, a programme which provides assistance in analysis of the private sector
environment in order to identify the main constraints that impede economic growth
in the ACP countries. Diagnostic studies were undertaken in more than 20 ACP
countries in 2001 to help design strategies to provide an ‘enabling’ business
environment for the private sector. At
the meso and micro level ACP private
enterprises and service providers can benefit from the EU-ACP Business Assistance
Scheme (EBAS) which aims to provide effective business development services.
EBAS is under full implementation and by the end of 2001 more than 700 projects
had been approved, supporting enterprises, service providers and intermediary
organisations in more than 60 ACP countries. Out of a total of
20 million grant
17 million had already been committed one year before the
funds available,
programme end.

€

€

The objective of PROINVEST is to promote investment and North-South and South-
South partnership agreements, and it aims primarily to improve investment services.
110 million over seven years. The PROINVEST
The total budget is estimated at
programme was set up in December 2001.

€

In addition, many ACP countries and regions have allocations for private sector
development included in their national or regional indicative programmes. In South
Africa, for example, PSD is one of the key areas of support and an excellent example
where economic development contributes directly to poverty alleviation. A Risk
59 million was decided in 2001 that will provide
Capital Facility Programme for
access to credit and non-financial support to the previously disadvantaged economy.
34 million will strengthen local economic development in
Another programme for
the South African Northern Province.

€

€

With regards to regional initiatives resulting from the Cotonou Agreement, a
70
million programme to support the Caribbean rum sector was approved in 2001. The
programme assists local rum producers to compete in a fully liberalised spirits
market by modernising their plants,
improving their capacity to deal with any
possible environmental impact, increasing their competitiveness and identifying new
markets. The programme will play a fundamental role in strengthening a key sector
within local economies, thereby contributing to job creation and export and tax
earnings on the basis of strong local ownership.

€

The Pesticides Initiative Programme (PIP) is an ‘all ACP’ country programme,
which was drafted at the request of the ACP/EU Council of Ministers meeting in
29.1
Cotonou in July 2000. The overall cost of the PIP is

40.1 million, of which

€

€

145

million will be paid by the EDF. It is a response to the need for ACP horticultural
sector operators to raise standards ,to meet EU regulations, which set stringent
maximum pesticide residue levels. The objective is to help to create a sustainable and
competitive private horticultural sector in ACP countries.

Macroeconomic Support – Private Sector Development - Commitments 2001

ACP Country
Cuba

Ethiopia
South Africa

Trinidad &
Tobago
All ACP

Project Title

Support Programme to enterprises and investment promotion
Havana Trade Fair
Training Programme for heads of companies/business leaders
Micro & Small Business Enterprise Development Programme
Support to Department of Trade and Industry
Risk Capital
Local economic development: Northern Province
Caribbean Business Services Ltd

€

million
2.80
0.19
1.94
7.00
0.40
58.90
34.00
0.90

Rum
Public Expenditure and Financial Accountability Trust Fund
Commodity Risk
Centre for the Development of Enterprise

Total

70.00
1.90
1.78
20.38
200.19

4.5.8.

Social sectors : Health and Education

4.5.8.1. Health sector

ACP countries differ widely in terms of
their political stability and their
governmental capacity and commitment to deliver results in the health sector. EC
responses have been tailored to the country specific situation leading to a mix of
interventions under the EDF and other EU instruments (thematic budget lines, NGO
co-financing, etc.).

the launching of

Wherever possible, on-going projects have been re-orientated towards sector
to sector
dialogue,
programming and finance management. Substantial efforts have been made to
improve the quality of projects implemented. Project management has focused on
speeding up implementation and reducing the time necessary to deliver aid at
beneficiary level.

sector-wide approaches and support

854
The 2001 health portfolio for ACP countries was estimated at
107 million under the EC budget’s South Africa budget
million under the EDF and
line). There were 139 projects in 47 countries with 94 % under National Indicative
Programmes and 6 % under regional or intra-ACP EDF.

960 million (

€

€

€

At the time of identification of EC intervention, special consideration was given to
the specific needs and situations of individual countries with emphasis on access to
basic health services and capacity building. At the same time, special attention was
given to the reduction of ad-hoc projects, the merging of requests covering different
sub-sectors into larger global interventions to reach a critical mass for impact.

National projects range from post-crisis situations (Angola),
resuming of co-
operation through a key sub-sector (e.g. support to immunisation in Nigeria), nascent
SWAPs (Mozambique) to ‘sector accompanying measures’ within poverty reduction
budgetary support projects (Ghana). The regional projects focus on continuation of

146

the fight against onchocercosis in western Africa through the co-financing of a donor
trust fund managed by the World Bank and implemented by the WHO.

A contribution was made to the setting-up of a Global Fund for the fight against
communicable diseases such as HIV/AIDS,
tuberculosis and malaria. Special
attention was given to the complementarity and coherence of the Global Fund in
relation to country level support through other funding mechanisms.

The EC has also taken part in discussions of ways of joint working on projects at
country level with UN agencies (such as the World Health Organisation, the UN’s
Children’s Fund (UNICEF) and Population Fund (UNFPA ) and set-up a health
issues network to bring the sector together, exchange experience and develop good
practice.

Social development - Health - Commitments 2001

ACP Country

Angola
Guinea
Lesotho
Mozambique
Nigeria
South Africa

Swaziland
Zimbabwe
Regional: West
Africa

Project Title

Health sector support programme
Complementary support to the health sector
Support to health sector reform
Health sector support programme
Prime – Partnership to reinforce immunisation efficiency
Partnership for delivery of primary health care including
HIV/AIDS
HIV/AIDS prevention and care programme
Health sector support programme – phase II
Fight against onchocercosis

Total

Support to the health sector in Ghana

€

million
25.00
5.00
1.80
30.00
64.50
25.00

1.96
33.00
4.50

190.76

In 1995 the Ministry of Health, unhappy with results from multiple vertical projects each with
its own plans and procedures, embarked on a Sectoral Wide Approach. Through a participatory
process, a medium term health strategy was adopted in 1996 and translated into a five-year
work programme - agreed with partners - setting out policy, implementation strategies and
resources. The EC joined this process in 1998 with a contribution to the multi-donor fund and
an active participation in the policy dialogue with the government, civil society and donors.
Common management arrangements, monitoring, etc were agreed. In 2001, it became obvious
that despite a budget limited to only US$ 7 per capita, and continuing severe conditions, the
health of the population was improving with, for example, the lowest infant mortality rate in
West Africa and 72,2 % of DPT3 (diphtheria, polio and tetanus) immunisation coverage. At
such a speed of change, Ghana is one of the best performers in the ACP region. Results are very
encouraging. This type of collaboration may prove one of the most efficient in delivering health
outcomes for the benefit of the population.

4.5.8.2. Education, Training and Culture Sector

In 2001, the Commission approved 8 new projects in ACP countries, representing
98.7 million of aid to the education and training sector. This involved 7 commitments
under National Indicative Programmes and one regional project. The financial
support to the ACP countries in this sector increased by 38 % compared to the year
2000, with larger projects and a more ‘sector-wide’ approach.

€

The focus during this period was on improving national capacity in education
(Ethiopia, Uganda, Pacific region) and support for basic education (Gabon, Haiti,

147

Niger). Both sub-sectors are directly linked to poverty alleviation and contribute to
economic growth, greater democracy and the rule of law.

The global education and training portfolio in 2001 is estimated at
540 million,
involving 111 projects. Small projects accounted for a larger share of the portfolio.
the
However it
average size of commitments will increase, and improve the level of impact.

in countries where conditions are favourable,

is expected that,

€

Social development - Education - Commitments 2001

ACP Country

Ethiopia

Gabon
Haiti
Kiribati
Niger
Uganda
Regional: Pacific

Project Title

Capacity building
Education sector development programme
Basic education
Basic education
Training
Basic education
Human resources for health
University of the South Pacific / Human resources
development programme

Total

€

million

0.74
23.00
5.00
28.00
6.40
8.70
17.00
5.00

93.84

Human resource development programme (HRDP) in Papua New Guinea

The Government of Papua New Guinea prepared in the 1990s important education reforms,
addressing the country’s main problems in the human resources’ sector. Under the 7th EDF,
human resources constituted a target sector for EC support i.e. university upgrading, secondary
school extensions, in-country training and overseas scholarships.

Under the 8th EDF, human resources are again a priority, with
24 million allocated for five
years (until March 2004). The programme ensures a continuity of the EC contribution in this
field in order to increase the quality of teaching, the number the students (particularly girls)
and to develop vocational training.

€

The investment in facilities is aimed principally at new buildings and the renovation of existing
ones. The programme will also provide equipment and training materials to seven vocational
centres, teacher training colleges and universities. Training is provided for both public and
private institutions as well as for new teachers. In addition to in-country training about 120
overseas scholarships have been granted.

The EU-Vanuatu Education Development Programme

Vanuatu is a Pacific island state with some 200,000 inhabitants. Since independence in 1980, the
Government has made education its first priority, allocating 26% of the total state budget to it
in 2001.

The Commission has increasingly dovetailed with this government priority under successive
Lomé Conventions. The current EU-Vanuatu Education Development Programme is financed
under the 8th EDF and started in September 1999. The project finances both improvements to
the school
infrastructure and to the learning process. 18 Junior Secondary Schools (8
francophone and 10 anglophone) - to serve an estimated 2,500 pupils - will be rebuilt and/or
refurbished. At the Vanuatu Teachers College a library, teaching facilities and student
accommodation will be provided. To ensure that the new facilities are put to optimal use
capacity building; the strengthening of secondary school management; in-service training for
teacher/advisers/inspectors and provision of new teaching materials are also being funded. The
project will be completed by August 2002.

In addition, the Commission approved
support creative capacity and promote cultural identity among ACP countries.

9.5 million for a set of cultural projects to

€

148

Social development - Culture - Commitments 2001

ACP Country

Angola
Cameroon
Central African
Republic
Chad
Guinea Conakry

Ivory Coast

Mali
Regional: West
Africa

All ACP

Project Title

Film: Na cidade vazia
Decentralised cultural initiatives
Film: Le silence de la forêt

Film: Abouna
Decentralised cultural initiatives
Film: Circus Baobab
Film: Paris selon Moussa
Film: Le fleuve comme une fracture
Decentralised cultural initiatives
Film: Independence Chacha
Film: Kabala
French language radio and television training
Film: Vie de femmes
4th meeting of photography – Bamako
Youth Festival: Mandingue
Choreography days: Madagascar
International Film Festival: Abidjan
Film: The wooden camera
Financial support to 11 films

Total

€

million

0.30
0.25
0.40

0.30
1.60
0.10
0.30
0.30
1.90
0.16
0.18
0.64
0.10
0.15
0.12
0.21
0.05
0.30
2.10
9.46

Co-operation with South Africa

Support to Education and Training in South Africa is provided as part of the
European Reconstruction and Development Programme (ERDP) and financed from
the South Africa budget line from the EC budget.

Between 1995 and 1999, 12 education and training projects were approved
180 million. Of this amount,
representing a financial commitment of approximately
an estimated 40% is for skills development and adult education, 10% for primary
education and early childhood development, 20% for higher education and the
remainder mainly for policy support, reflecting South African needs and preferences
27 million
during the early post-Apartheid years. During 2001 the EC disbursed
towards these projects, increasing their overall disbursement rate to 60%.

€

€

Micro-projects and refugees

In order to respond to the needs of local communities, the EC has continued to
participate in the financing of micro-projects at
local level. In 2001 particular
attention was given to projects with active local participation that have a positive
economic and social impact on the life of local communities. Countries with refugee
problems were prioritised. Whenever possible, the EC has tried to facilitate self-
sufficiency, integration or reintegration of refugees.

149

Social development - Micro projects and refugees - Commitments 2001

Instrument: Microprojects (commitments 2001)

ACP Country

Central African
Republic
Congo (Brazzaville)
Mozambique
Niger

Micro-projects programme

Project Title

Micro-projects programme
Support to the micro-projects co-ordination
Food security and consolidation of the peace-process

Total

Target Group: Refugees (commitments 2001)

ACP Country
Angola
Congo
(Brazzaville)

Congo (DRC)

Liberia

Project Title

Technical Assistance programming of art 255
Support to the economic and social integration of refugees
Reintegration of young displaced and ex-combatants
Scholastic reintegration & fight against HIV/AIDS & drugs
Reintegration and auto-sufficiency for the displaced – Kinsangani
Reintegration of war displaced
Reintegration and auto-sufficiency for displaced
Reintegration programme for returnees and displaced

Total

4.5.9. Cross cutting issues

4.5.9.1. European Initiative for Democracy and Human Rights (EIDHR)

€

million
2.00

1.84
0.36
0.77
4.97

€

million
0.03
1.50
0.75
0.75
4.40
0.74
8.30
25.00
41.47

€

€

19 million
In 2001, EIDHR has supported projects in ACP countries amounting to
6.5 million was allocated to 9 projects for the promotion and protection of
of which
925,000 went towards a project covering Benin, Gambia, Burkina
Human Rights.
Faso, Nigeria, Mali, Ethiopia, Tanzania and Egypt to support a campaign to eradicate
867,000 aims to promote women’s
female genital mutilation. Another project for
rights in West Africa (Togo, Senegal, Nigeria, Mali, Ghana, Burkina Faso and
Benin).

€

€

Support to the African University (Masters Degree) Programme
in Human Rights and Democratisation

This masters programme educates young professionals at post graduate level, providing both a
firm academic training in standards,
institutions and mechanisms for the protection and
promotion of Human Rights and democracy, and the research skills and operational tools
necessary to prepare graduates for work. It emphasises a regional approach to Human Rights
education. Thirty students from a large number of African countries will take part in the
programme, spending the first six months of the year as a group at the Centre for Human Rights
in Pretoria, where they attend advanced lectures on Human Rights. Thereafter they are split up
into four groups that are placed with the participating universities for the last six months of the
year. The participating universities are: the Centre for Human Rights at Pretoria University;
Makerere University in Uganda; the University of the Western Cape (South Africa); the
University of Ghana and the Catholic University of Central Africa (Cameroon).
1.3 million has
been allocated to the project.

€

Other initiatives include a project in Benin and Mozambique to improve living
300,000
conditions for children and enhance respect for their rights (

797,000 and

€

€

150

€

respectively) and a
in the peace process in Sierra Leone.

704,000 media support programme to promote Human Rights

€

Support to the democratic process and the rule of law has been allocated around
6
million e.g. support to staff of Transparency International to develop techniques to
fight corruption and support independent media. In the Democratic Republic of
Congo a
1.2 million project has been set up to promote the rule of law by
enhancing dialogue between government and civil society.
440,000 has been
provided to support the international tribunal in Tanzania which is addressing the
issue of those accountable for the 1994 genocide in the Great Lakes region.

€

€

€

In Cuba, a
500,000 project seeks to contribute to the development of more plural,
democratic and open society, encouraging in particular the free flow of information
and exchange of ideas between Cuban intellectuals on the island and the Cuban
diaspora around the world.

The support for conflict prevention assistance and the restoration of civil peace is one
of the main priorities of the EIDHR. In 2001, it supported 5 projects in Africa to a
sum of nearly

3 million. These projects will be developed in:

€

• Sudan to support the peace process by promoting dialogue between the Sudanese
parties on concrete subjects of negotiation outside the formal mediation
framework (

€

• Somalia, where

600,000 has been allocated to establish a consensus-based
process for identification and prioritisation of reconstruction and development
needs, and recommendations for improved policy & practice.

500 000).
€

• the Democratic Republic of Congo to reinforce the dialogue between the local
€

communities in the provinces of Kivu (

500,000)

• Rwanda where a project aims to facilitate legal proceedings following the

€

genocide in order to ensure a return to a peaceful society (

670,000)

• Sierra Leone to assisting with the reintegration of displaced young people and

women into their own communities.

EIDHR has supported the democratic transition and observation of electoral
processes in several African countries e.g. Zambia (presidential, parliamentary and
local elections in 2001 -
570,000) and in Togo (parliamentary elections expected in
spring 2002 -
527,000) (see also Section 4.5.6. Human Rights, Democracy, Good
Governance and Capacity Building / Elections of this chapter).

€

€

4.5.9.2. Non State actors and NGO activities

The involvement of non state actors in the partnership

The Cotonou Agreement includes innovative provisions to promote participatory
approaches to ensure the involvement of civil society and economic and social
actors. This entails the provision of information on the partnership and consultations
with civil society on the economic, social and institutional reforms and policies
which the EU proposes supporting. In addition, there is a new focus on facilitating
non-state actors’ involvement in the implementation of programmes and projects,

151

and providing them with the necessary financial resources and support for capacity
building.

A preliminary assessment of progress made in implementing those provisions in the
programming process shows that in 42 countries out of the 50 for which draft
Country Strategy Papers were available, a process of consultation was conducted
with non state actors (NSA). In 25 of those 42 countries the draft Country Strategy
Paper was modified following the consultation process.

Different types of strategies have been followed to involve NSAs in future co-
operation. In a number of countries the response strategy is geared at enhancing NSA
participation in all
sectors of EC co-operation and by different means
(mainstreaming). In others, NSA involvement is mainly planned for in the priority
sectors. A third type of strategy provides support to NSAs in non-priority sectors,
either as a means for targeting poor population groups or as a contribution to good
governance and conflict prevention.

Regarding funding, in 26 country programs the provision of direct funding for NSA
capacity building or other support is proposed. In total the proposed funds allocated
directly to NSAs in those countries amount to approximately
130 million out of a
3 billion. However only in 12
total programming envelope of approximately
countries (Gambia, Gabon, Kiribati, Jamaica, St. Lucia, Chad, Vanuatu, Zimbabwe,
Burkina Faso, Guyana, Sao Tome and Botswana) has the eligibility criteria for NSA
funding been discussed with the National Authorising Officer.

€

€

Finally out of the 50 Country Strategy Papers surveyed, 31 mention follow up
arrangements for future consultation and monitoring.

Support to the municipal development programme in West and Central Africa

(PDM) brings

together national associations with local

The ‘West and Central Africa Management Association for the Municipal Development
responsibilities,
Programme’
municipalities and community and non-governmental organisations involved in local and
municipal development initiatives in West and Central Africa. This is particularly aimed at
allowing large urban conurbations to increase their implementation capacity. Two main
activities have been undertaken – the strengthening of local implementation capacity and the
training of around 60 municipal staff (1998 to 2001). Training activities have gone ahead very
successfully, as has the setting up of a programme to strengthen the capacities of national
associations of locally elected people and support the setting up of an African municipal
movement at the sub-regional and continent wide level. This is being taken forward on the
ground in the training cycle of local authority staff. The Canadian International Development
Agency (CIDA), the World Bank, the French Foreign Ministry, the French ‘Ile-de-France’
region and the Canadian Municipalities’ Federation are participating in this project.

4.5.9.3. Gender Issues

As in all regions, gender considerations are one of the driving forces behind EC
interventions in the ACP countries. Where appropriate i.e. in the vast majority of
cases, programmes and projects specifically identify the role of women, female
adolescents and children within the process. This includes targeting women as
beneficiaries, consulting the female population in the preparation of the project,
analysing to what extent women are active participants in implementation, as well as
proposing remedies to any possible obstacles to women’s access to the resultant
benefits. Gender considerations are examined in the planning of all EC support.

152

4.5.10. Trade and Development

For ACP countries, non-reciprocal trade preferences have been in place since 1975.
Preparations are also under way for the negotiations of Economic Partnership
Agreements (EPAs) with ACP sub-regions. To achieve the objectives of EPAs, the
ACP countries have to fully integrate EPAs within their development strategies. The
EC, in turn, will support policies complementary to EPAs through development
support as set out in the Cotonou Agreement.

4.5.10.1.Development support and Economic Partnership Agreements

The link to development co-operation will be a key aspect for the negotiations on
Economic Partnership Agreements both in a narrow sense, regarding the capacities to
manage negotiations, and, in a broader sense, regarding the ability to implement the
emerging agreements and thereby to increase trade flows.

Capacity needs for negotiations

Many ACP countries and regions do not have the capacity to enter
into
comprehensive trade negotiations. However, independently of EPAs, they are faced
with the challenge of following multilateral, regional and bilateral negotiations at the
same time. Instead of exacerbating this situation, the EPA process can help to tackle
this by providing substantial support for ACP countries and regions. In line with the
funds are foreseen in the regional support
Cotonou Agreement, substantial
programmes, to strengthen analytical and negotiating capacities of both the regional
organisations and their member states.

Development support for trade

In a more comprehensive sense, it is necessary to effectively ‘mainstream’ trade into
development co-operation, an important element of
the Cotonou Agreement.
Development co-operation programmes in areas such as macroeconomic support,
transport, private sector support, etc. need to take the trade dimension better into
account. First steps into this direction have been taken by mainstreaming trade
concerns in the national and regional strategy papers for the 9th EDF. In addition, a
number of ‘all ACP’ programmes have been or will be initiated to address trade
bottlenecks in ACP countries. EPAs will enhance this process by linking trade
negotiations closely to development support programmes.

–

–

–

–

–

EC Support for ACP Trade policy

Strengthening the negotiating capacity of the ACP in the WTO and on EPAs.

20 million have so far has been
ACP WTO and EPA support programmes of
offered on an ad hoc basis for studies and co-ordination meetings. However, from July
2002 onwards, programmes will co-ordinated in Brussels though a steering committee
and will be initiated by ACP countries coming forward with requests for assistance.

10 and

€

€

Supporting ACP countries’ presence in Geneva where WTO activities take place.
€

1.4 million has been spent on the new ACP Antenna (will be opened in January 2002) in

Geneva, and will serve as a focal point.

Helping ACP partners fulfil EC sanitary and phyto-sanitary standards.

153

–

–

–

€

29 million 5 year Pesticide Programme for the ACP countries was established in July
A
includes information/communication; regulation; good practice
2001. The project
(working on the implementation of adequate quality control systems) and capacity
building100.

Assisting ACP integration into world trade.

€

At the ACP Ministers of Trade meeting in November 2001, the Commission proposed a
50 million facility to support ACP integration in world trade once the 9th EDF becomes
available. In addition, some
350 million have been earmarked for regional integration
and trade related technical assistance / trade capacity building in the next five year
programming period. Allocations for trade related support can also be included as non
priority sectors of the national indicative programmes, depending on requests made by
ACP authorities.

€

4.5.11. Coherence with other policies

Trade and investment liberalisation can play an important role in economic growth.
The EC is seeking to integrate developing countries into the world economy on the
basis of the Doha Development Agenda,
in the
multilateral trading system. The EC is in addition providing considerable Trade
related Technical Assistance to strengthen partner countries judicial, regulatory and
institutional capacities in this field.

linking trade and development

In the context of the WTO, the EC has been a strong advocate of multilateral trade
negotiations centred on the needs and interests of developing countries.

Under Cotonou, assistance in trade related issues will be provided at national,
regional and horizontal (available to all ACP countries) levels.
10 billion is
260 million for regional interventions.
earmarked for the former along with around
20
Horizontal programmes include a
10 million WTO support initiative and a
million support programme to allow ACP countries to effectively enter
into
negotiations for Economic Partnership Agreements.

€

€

€

€

4.5.12. Co-operation with other donors in the region

The sector wide approach means that donors are increasingly pooling resources
rather than undertaking individual actions. The Cotonou Agreement further stresses
the need for co-operation between donors and this is being reflected by increased
coordination, particularly within partner countries themselves. The EC has various
Framework Agreements with bilateral and multilateral donors such as the agreement
signed with Italy in 1985 which has been renewed up to March 2003 to which the EC
has made a commitment of

140 million. Specific examples are as follows:

€

€

for Public Expenditure

• Joint Programme
Assessments.
2 million programme, financed through a trust fund, has been put in place
A
is
with the World Bank and opened for contributions from other donors. It
designed to improve good governance,
fight corruption and make public
expenditure in ACP countries more effective in pursuing development objectives,
particularly as regards poverty reduction. Methodological studies to identify

and Financial Accountability

100

see http://www.coleacp.org

154

appropriate performance indicators and joint public expenditure reviews should
contribute to a significant improvement in the management of public funds.

• Test Cases on Commodity Risk Management: World Bank Trust Fund.
A financing agreement was signed in July 2001 to provide financing for the
development of eight prototype test cases of commodities price risk management
instruments in ACP countries. The aim of the initiative is to extend price
insurance mechanisms which exist
in the developed countries to developing
countries so as to reduce the risk of sharp falls in the prices of major commodities
(coffee, cocoa, cotton, sugar, etc.) in particular for the benefit of poor farmers.

The total grant amount
Commodities Risk Management Trust Fund is
World Bank with the objective of developing prototype test cases.

to be provided by the Community for
€

the ACP/EU
1,737,600 to be administered by the

The list below provides summarised examples of co-financed activities.

List of Co-financing Arrangements completed during 2001

ACP
Country or
Region
Sierra Leone

West Africa

Somalia

Chad

All-ACP

All-ACP

Project Title

Co-financing Partner

Rehabilitation and
Resettlement
Programme

Agricultural Research
Programme
Pan African control of
animal diseases
Rural water supply
‘Ouadai Biltine’

Trust Fund for Public
Expenditure and
Financial
Accountability
ACP/EU Commodity
Risk Management

Germany; Sweden; UK;
Italy; the Netherlands;
USA; Switzerland;
Canada; Norway; World
Bank
France; UK; Belgium; the
Netherlands; USA,
Italy

Germany & France

World Bank

World Bank

Type of
Co-financing

Two Instalments
made to a multi-
donor trust fund
managed by the
World Bank
Parallel

Joint

Joint

Instalment made to
a single- donor trust
fund managed by
the World Bank
Instalment made to
a multi- donor trust
fund managed by
the World Bank

€

million

EC: 10
Others: 35

EC: 12
Others: 10.36
EC: 72
Italy: 1
EC: 2
Germany: 5
France: 5
EC: 1.95
World Bank:
2

EC: 1.74

4.5.13. EIB loans

The European Investment Bank (EIB) aims to promote economic growth and the
integration of ACP countries into the world economy101. The focus under the
Cotonou Agreement is on the private sector as the main engine of economic growth.
However, viable revenue generating projects in all economic sectors are eligible.

The Investment Facility (IF) is a new instrument that will replace ‘risk capital’ and
provide increased financial resources from the 9th EDF. The IF will:

• be managed along commercial principles to be financially sustainable;

• be a revolving fund i.e. re-flows will be invested in new projects; and

101

see http://www.eib.org/lending/acp/index.htm

155

• assure ACP countries of future availability of resources.

Other EIB financed loans will continue to be available alongside the Investment
Facility.

Some project highlights for 2001
€

€

88 million of EIB resources and

144 million was spent on the Chad-Cameroon Pipeline Project102 in a combination
€
of
56 million of (EDF) risk capital resources.
The Chad-Cameroon Pipeline is part of a broader integrated oil development and
pipeline project, supported by the World Bank and international oil companies. The
environmental and social aspects of the project were scrutinised in close co-operation
with the World Bank.
€

50 million was spent on the N4 Toll Road Project in South Africa103. The project is
a key element in the toll road network to the North and West of Pretoria. The EIB
helped provide Rand funding that enabled the promoter to avoid foreign exchange
risk in this important South African PPP project.
€

15 million was spent on micro-finance ventures channelled through micro-finance
specialist funds. The objective of the bank is to help these funds develop and reach
commercial maturity and financial self-sustainability. Ventures will be co-financed
with other donors and, where necessary, combined with grants from other sources for
institution building measures.

EIB loans to ACP and the Republic of South Africa 1997-2001

€

Sector
million)

(
Energy
Transport &
Telecommunications
Environment
Industry, Services
SMEs (Global loans)
Total

ACP
(1997-2001)
655
191

159
307
584
1 896

ACP
2001
260
16

69
48
127
520

South Africa
(1997-2001)
102
145

South Africa
2001
-
50

45
25
459*
776

-
-
100*
150

*

Also includes support for smaller scale municipal infrastructure schemes.

4.5.14. ECHO

€

€

In 2001, the ACP countries were the biggest recipients of humanitarian aid from
173.32 million. Within Africa, the biggest crisis
ECHO with a total amount of
€
35 million allocated for the Democratic Republic
remained in the Great Lakes with
of Congo,
20 million for
Burundi itself. In addition, hundreds of thousands of refugees, internally displaced
people and other local vulnerable populations all over the continent benefited from
life-saving emergency aid delivered by European Community Humanitarian Office’s
partners under very difficult circumstances.

32 million for Burundian refugees in Tanzania and

€

102

103

Classed as ‘Oil and Gas deal of the Year’ by Project Finance International magazine and ‘Project Finance Loan of
the Year 2001’ by the International Financing Review
Infrastructure Deal of the Year’ by Project Finance International magazine

156

Although the political developments in many of the beneficiary countries leave some
serious doubts as to whether a long-term improvement of the humanitarian situation
is likely, there are nevertheless some positive signs (e.g. a stabilisation in West
Africa).

ECHO managed to improve the delivery of its aid to ACP countries by making the
bulk of funding available at the very beginning of 2001, allowing for quick responses
and fine-tuning of the strategy in the course of the year.

European Community Humanitarian Office’s (ECHO)
Financing Decisions in 2001

ACP Country

Angola
Burundi
Burkina Faso & Chad
Caribbean/Pacific (including ‘disaster preparedness’)
Central African Republic
Congo (DRC)
Eritrea
Ethiopia
Kenya
Madagascar
Mozambique
Sierra Leone, Guinea Conakry & Liberia
Somalia
Sudan
Tanzania
Zimbabwe
ECHO flights (based in Africa, for aid distribution)

Total

€

million

9
20
2.55
3.88
1
35
7
9.2
4.6
0.9
2.84
20.6
1.7
17
32.15
0.5
8.4
176.32

4.5.15. Monitoring in ACP countries

The Commission, during 2000, established an improved results-oriented monitoring
system for the ALA104/MED/ACP and the Balkans, rooted in the Commission’s
Project Cycle Management mechanisms. The system was tested in 2001. Now that
the testing-phase is at an end, the Commission is in a position to offer some initial
insights on what has worked well and what needs substantial improvement in this
region. Further information on the results-oriented monitoring system can be found
in Chapter1 (section 1.4). This new monitoring system will be fully operational as
from 2002).

During 2001, 173 projects (of which 18 have been revisited) have been visited in the
ACP region, in 23 countries. The total volume of EC financing thus covered is
€
1902.9 million of which the most important (DAC) sectors were infrastructure and
economic services (36%) and economic and institution building, civil society and
social infrastructure and services (15%). The overall rating for projects in the region
was slightly above average i.e. 2.55, compared to an average rating of 2.5.

Effectiveness and impact seem to be, relatively,
the most successful aspects.
Environmental and technical aspects also came out well, while weaknesses included
economic and financial factors and efficiency, especially relating to ‘timeliness’.

104

Asia and Latin America

157

Nevertheless, the regional analysis level of project performance should be treated
with some caution (see Section 1.4).

4.5.16. Conclusions and Perspectives

EC development assistance will continue to strive towards the attainment of
Millennium Development Goals (in the ACP, as in other regions). This will require
quality dialogue with national authorities on the development of sector wide
approaches and close co-operation with EU Member States and other partners. The
Cotonou agreement and the Reform of the management of the EC external aid
provide the framework for this.

For beneficiaries and representatives of civil society in the ACP partner countries,
the new programming approach - characterised by the rationalisation of co-operation
instruments and the introduction of a ‘rolling programme’ - represents a unique
opportunity to assume a more ‘hands-on’ approach to and transparent control of
valuable development assistance resources. Nevertheless, there is a ‘price to pay’ of
increased discipline and an undeniable need to assign scarce skilled human resources
to management tasks.

As far as EU Member States are concerned, the new approach represents a golden
opportunity to make real progress with the search for complementarity, which until
now has been more evident in theory than in practice. The corollary is that they too
must accept radical changes in working practices, in information sharing and in
consultation requirements if the mutually accepted deadlines of the new Agreement
are to be achieved. The outcome of the negotiations for a new Internal Agreement
will indicate the extent to which these required changes in practice are going to be
achieved in reality.

It cannot be stressed too much that if the new approach to ‘rolling programming’ is
to be cost-effective in the long run for all concerned, it will inevitably demand a
considerable extra effort ‘up front’ to ensure the quality and viability of the initial
programming exercise. Once this is achieved, and the implementation process is
seamlessly linked with the initial programming of the Country Strategy Papers, the
ongoing management process will become less burdensome and hopefully more
flexible and effective for all concerned.

158

4.6.

ASIA

4.6.1.

Introduction

In early September 2001, and prior to the cataclysmic events of 11th September 2001,
the Commission underlined that “Asia’s importance for the EU is beyond question
whether economically, politically or culturally, or in relation to regional and global
challenges, such as poverty, environment or democracy and Human Rights". This
analysis has become even more relevant in the light of the challenges that have
become evident as a consequence for everyone of the terrible attacks on the World
Trade Centre in New York, and Washington. Many of these concern EU relations
with Asia, particularly in relation to the fight against
the effects of
religious fundamentalism and, as a result, the new challenges of reconstruction faced
in Afghanistan.

terrorism,

On 4th September 2001, the EC adopted a new strategic framework in the EU
relations with Asia and its sub-regions in the coming decade. The main thrust of the
new approach is based on the core objectives of strengthening the EU political and
economic presence across the region, and raising this to a level commensurate with
the growing global weight of an enlarged EU. 105

Asia accounts for 56% of the world’s population (and 66% of the world’s poor), for
25% of world GNP, and for a gradually increasing 27.5% of EU imports (up from
26.9% in 1997) and relatively constant 17.6% of EU exports between 1997 and 2000.
This has resulted in a significant growth in Asia’s trade surplus with EU from
33.1
118.1 billion in 2000. Asia is the EU largest trade partner in
billion in 1997 to
terms of imports and second largest market for exports. With regard to Foreign
Direct Investment (FDI), however, Asia has not regained its market share of EU FDI
since the Asian economic crisis, receiving only an average 6.6% of EU FDI between
1997 and 2000 106.

€

€

4.6.1.1. An evolving regional dialogue

Since 1994, the European Commission’s political dialogue with the region has
evolved considerably, with new Summit dialogues with the Asian partners in the
Asia-Europe meeting (ASEM), and with China, India, Japan and (soon) Korea. The
Ministerial dialogue with ASEAN continues, and now includes active EU
participation in the ASEAN Regional Forum (ARF). High-level contacts with
Australia and New Zealand have likewise been strengthened. In addition in 2001, the
EU has continued to make an active contribution to peace and security issues in the
region, for example in its assistance for the establishment of democratic government
in Cambodia and East Timor, support for refugees in and from Afghanistan, and in
the contribution to KEDO 107.

105

106

107

Viz. Details in section 4.6.14. Conclusions and Perspectives
Trade figures include Japan, China, Hong Kong, South Korea, as well as countries of ASEAN and
South Asia
KEDO: Korean Peninsula Energy Development Organisation

159

4.6.1.2. Bilateral relationships and Co-operation Agreements

EU external co-operation policies are legally formulated and administered through
co-operation agreements, protocols, administrative arrangements and memorandums
of understanding. These provide the basis for the implementation of programmes and
incurring budgetary expenditures.

Trade and Co-operation Agreements for Asia

TYPE OF CO-OPERATION AGREEMENT

DATE OF SIGNATURE

COUNTRY

ASEAN108
China

Macao

India

Co-operation Agreement109
Trade and Economic Co-operation Agreement

Agreement for Trade and Co-operation

Co-operation Agreement on Partnership & Development

Sri Lanka

Co-operation Agreement on Partnership & Development

Vietnam

Nepal

Cambodia

Korea

Lao PDR

Co-operation Agreement

Co-operation Agreement

Co-operation Agreement

Framework Agreement for Trade & Co-operation

Co-operation Agreement

Bangladesh

Co-operation Agreement on Partnership & Development

Pakistan

Co-operation Agreement on Partnership & Development

7th March 1980
21st May 1985
5th June 1992
20th Dec. 1993
18th July 1994
17th July 1995
20th Nov. 1995
29th Apr. 1996
28th Oct.1996
19th April 1997
22nd May 2000
24th Nov. 2001

EC Co-operation with countries in Asia largely takes place under the 443/92 ALA
Regulation which was adopted in 1992. This Regulation encompasses a complete
strategic framework110 which covers development assistance, economic co-operation,
environment, as well as a strong reference to need for promoting democracy and
Human Rights. Priority fields for EC Co-operation activities in Asia have continued
to focus on institutional capacity building, and promotion of primary health care and
education as a means to fight poverty.

€
Commitments and Payments in Asia 2000/2001 (

million)

Programmes

Countries Bilateral

Regional

Sub Total Bilateral/Regional

Other Budget lines

Grand Total

Commitments

Payments

2001

225.0

64.5

289.5

88.8

378.3

2000

283.0

96.6

379.6

67.4

447.0

2001

264.6

41.2

305.8

72.1

377.9

2000

240.2

36.6

276.8

41.7

318.5

108

109

110

Association of South East Asian Nations
Protocol extending the agreement to the Socialist Republic of Vietnam signed on 14th February 1997.
Protocols extending the Agreement to the Kingdom of Cambodia and the Lao People’s Democratic
Republic signed on 28th July 2000
Council Regulation (EC) No.443/92 of 25 February 1992 on financial and technical assistance to, and
co-operation with, the developing countries in Asia and Latin America published in OJ L52, 27th
February 1992.

160

4.6.1.3. Highlights of our co-operation in Asia in 2001

Two major events, one natural and the other man-made, feature significantly in the
2001 report on EC-Asia co-operation. These were the Gujarat Earthquake and the
11th September aftermath in Afghanistan.

India - Gujarat Earthquake

When the earthquake struck Gujarat on Republic Day (January 26th 2001), Chris Patten,
Commissioner for External Relations, was in New Delhi on an official visit. He immediately
conveyed the condolence message of President Prodi to the President of India, Mr. K. R.
Narayanan, underlining that: “The European Union is with the people of India during this hour
of tragedy and we are ready to help in every possible way.

€

3 million on January 27th, and a
ECHO responded very swiftly to the disaster providing
further 10 million four days after the quake. These funds were allocated to European NGOs to
provide emergency aid in the most affected areas. The newly created Europe Aid Co-operation
Office of the EC immediately sent an identification mission to the affected areas to produce a
viable and sustainable aid package to facilitate social and economic recovery in the state. Based
80 million, confirming EU
on its conclusions the EC provided a support package of around
solidarity with Gujarat, and which included a Health (
15 million)
and Natural Resources component (

€
40 million Rehabilitation (

25 million).

€

€

€

Afghanistan - Starting a Recovery Programme

Following the events of the 11th September 2001, the Heads of State and Governments declared
on October 20th that the EU would join the international community in a "far reaching and
ambitious programme of political and humanitarian aid for the reconstruction of Afghanistan".
In 2001, the Commission committed almost
103 million for assistance to Afghanistan, half of
which was channelled through ECHO. Even prior to 11th September, assistance had been
provided to displaced persons and food-related assistance was being delivered to rural areas.
57.5 million for support to a
The Commission subsequently made a proposal for a further
reconstruction programme in Afghanistan to be decided in early 2002. The overall objective of
this Programme is to support the stabilisation of the country by contributing to basic
governance and to meet basic needs.

€

€

€
Overview of Commitments/Payments 1995-2001 (

million)

1995

1996

1997

1998

1999

2000

2001

Total

Commitments

457.3

405.7

435.3

423.3

342.7

447.0

378.3

2900.5

Payments

219.3

279.1

301.9

262.1

289.2

318.5

377.9

2048.0

4.6.2.

Regional co-operation

The EU has a longstanding relationship with SouthEast Asia, which operates through
a number of partnerships.

4.6.2.1. The EU-ASEAN partnership

Relations between the EU and the Association of South East Asian Nations
(ASEAN) are based on a Co-operation Agreement (1980) between the EC and
member countries of ASEAN 111.

111

ASEAN Countries: Brunei, Burma/Myanmar, Cambodia, Indonesia, Lao PDR, Malaysia, Philippines,
Singapore, Thailand, Vietnam

161

4.6.2.2. EU-SAARC

The EU has consistently affirmed its interest in strengthening links with the South
Asian Association for Regional Co-operation (SAARC112) as a regional organisation.
With 1.3 billion inhabitants in 1999, SAARC member countries represent almost
22% of the world population, but only 1.97 % of world GNP (575 billion US $ in
1999) Average per capita income is US$ 441 (World Bank, 1999). Indeed poverty is
one fundamental element characterising the situation in South Asia.

4.6.2.3. ASEM

ASEM (the Asia-Europe Meeting) is an informal process of dialogue and co-
operation bringing together the EU Member States and the European Commission,
with ten Asian countries (Brunei, China, Indonesia, Japan, South Korea, Malaysia,
the Philippines, Singapore, Thailand, and Vietnam). The ASEM dialogue addresses
political, economic and cultural issues, with the objective of strengthening the
in a spirit of mutual respect and equal
relationship between our two regions,
partnership. In 2001, the Commission committed a grant of
20 million for a second
phase of the ASEM Trust Fund, thereby lending continuing support to reforms in the
financial and social sectors particularly in Asian ASEM partners directly affected by
the 1997 Asian crisis.

€

4.6.2.4. Specific programmes include:

–

–

the Asia-Link programme which will provide
40 million over five years to
promote regional and multilateral networking between higher education institutions
in EU Member States and South Asia, South East Asia and China and

€

the Asia Urbs Programme which aims to strengthen the capacity of
local
governments in urban management, with an emphasis on alleviating poverty in the
local communities.

the other

including a jewellery shop and housing four

In 2001, this Asia Urbs co-funded Project ‘Asia Rehab: Improving Daily Life for
Residents by Preserving and Restoring the Historic Centre of Hanoi’ completed its
first year. Residents are being encouraged to improve their own properties and,
to remain in their homes during the improvements. About 50
where possible,
residents from just two buildings – one straddling two streets and housing five
families,
families –
participated in a pilot restoration scheme in the first year. The experience and
achievements will provide an example for other householders to follow in the future.
Establishing a credit system for financing these activities proved one of the more
tricky areas to initiate as raising enthusiasm in the Banking sector has not been easy.
But providing technical assistance and techniques for improving buildings and
associated living space, and intervention of legal and regulatory experts to address
obstacles in landlord/tenant
relationships, and guidance in planning have all
proceeded well.

the Asia-Urbs programme,

Under
local government
partnerships to jointly undertake feasibility studies and/or two-year pilot projects
co-operation– urban management, urban
addressing certain key areas of

funds are provided for

112

SAARC Countries: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka

162

environment, socio-economic development and urban social infrastructure. The main
areas of co-operation for the 28 projects approved (totalling
11 million) for funding
in 2001 were, Waste management (7), Entrepreneurship/economic development (5),
Urban management
(3), Cultural heritage (3), Education/training (3), Water
management (2), Pollution control (2), Innovative technologies (1).

€

Regional Co-operation Commitments 2001 (

€

million)

Regional Co-operation

Project Title

Amount

ASEM

Asia

Asia

4.6.3.

Transport

Asia Trust Fund

ProEco (ex-Ecobest)

ARCBC rider (biodiversity)

SUB-TOTAL

20.0

31.5

0.9

52.4

Air transport and maritime transport are the main components of EC assistance in the
transport sector for Asian countries. These areas will play an important role, as
efficient
transport systems are essential in the economic development of Asian
countries. The implementation of co-operation projects will demonstrate the benefits
of European practices in the region.

4.6.3.1. Maritime transport

€

EU-India Maritime Project: The project aims to improve the efficiency of two ports
in India, and also to support the Government of India to introduce electronic data
8 million (total
interchange in the sector. The EC contribution to this project is
project budget:
10 million). This project has already started to improve the
conditions for trade and investment in the port sector. During 2001, various activities
have been completed at Jawaharlal Nehru Port and Chenai Port,
including the
restructuring of the port community and feasibility studies in the area of electronic
data interchange. Also port maintenance, traffic forecasting and planning capabilities
have been enhanced.

€

4.6.3.2. Air transport

Priority was given to enhance air safety and to increase EU–Asian co-operation in
the aerospace sector through:

EU-India Civil Aviation Project, EC contribution
million)

€

18 million (total budget

€

28

During 2001, European experts have visited 6 Indian airports. Workshops have been
organised concerning such themes as ‘Airspace Management’,
‘Regional Co-
operation’ and ‘Certification of Large Aircraft’. A top-level executive seminar was
also organised on the theme of ‘Airline Management’.
€

€

EU-China Civil Aviation Project, EC contribution
million)

7 million (total budget

15

In 2001 activities on ‘Regulatory Harmonisation’ raised a considerable interest from
Chinese counterparts. In addition training activities on the ‘Airworthiness’ have

163

already resulted in the full qualification of 14 Chinese training organisations.
Likewise the implementation of ‘Production Management’ activities has already
resulted in the setting up of two production lines in Xi’An, and Chendu in Sechuan
Province.

In summary the two civil aviation projects have already:

–

–

–

increased the awareness of the EU industry practices including airworthiness
and safety regulations and standards.

assisted the development of the future air traffic management environment as
well as the development of airport infrastructure.

developed knowledge and practice of modern product support, maintenance
and overhaul techniques.

During 2001, the Commission has also been involved in negotiations concerning the
proposed the EU-Asian Civil Aviation Co-operation Project covering 15 other
countries from South and South East Asia. The EC contribution for this project is
foreseen at

15 million (total project budget:

30 million).

€

€

4.6.4.

Food Security and Rural Development

Sustainable rural development and food security are important components of the
20 million was allocated for
anti-poverty strategies of the Community. In 2001,
€
direct food aid to North Korea with additionally
4.5 million allocated for indirect
assistance via World Food Programme, mainly for purchases of agricultural
24.5 million for food
implements and fertilisers. Bangladesh was allocated
3 million was set aside for food aid).
security (of which

€

€

€

€

€

Afghanistan was allocated
€
5.7 million and Lao PDR
via Euronaid. Cambodia
of food security projects delivered via NGOs. Finally, India received almost
million in the form of food aid via Euronaid.

4 million for food aid
1.1 million were beneficiaries
1.0

16 million (via WFP) as well as

€

€

Rural Development, Food Security – Commitments 2001 (

€

million)

Country

Pakistan

Asia

Indonesia

Cambodia

Project Title

Amount

Veterinary Support

CGIAR Agri-Research

Development of irrigated agriculture in Bululeng Karang Asem

Northern Province (Study)

TOTAL

22.9

7.5

6.1

0.6

37.1

4.6.5.

Institutional Building

Institutional capacity building has been defined as one of the focal areas of the
Community’s development co-operation.

Specific goals in the area of Institutional Strengthening for 2001 include:

–

The development of transparent, accountable and effective governance and
administration in all public and semi-public institutions;

164

–

–

The strengthening of the rule of law and improved access to justice while
guaranteeing the professionalism and independence of judicial systems;

The fight against bribery, corruption and nepotism.

In Cambodia, assistance was provided for the communal elections which took place
early in 2002 including technical assistance to the National Election Committee as
well as financial support through the UNDP.

Implementation continued on institutional support projects in China, such as the EU
China Legal and Judicial co-operation programme, the EU-China Statistical Co-
operation Programme and the EU-China Village Governance Programme (launched
in Beijing by Chris Patten in May 2001).

Development co-operation was for the first time initiated in North Korea (DPRK).
Preparatory work in 2001 allowed identification of two pilot projects for assistance.
These projects will provide training for the economic reform programme and support
increased efficiency in the energy sector.

A new livestock services programme was approved for Pakistan, which involves the
strengthening and restructuring of public livestock service delivery.

Amongst new development initiatives for Vietnam a programme in support of the
Ministry of Labour to improve the supply of skilled labour to key sectors was
identified (
10 million). Another project will focus on institutional support for the
development of small and medium sized enterprises.

€

Institutional Building – Commitments 2001 (

€

million)

Institutional
Reinforcement

Country

Project Title

Amount

Good Governance

Indonesia

Good Governance Partnership

Democratisation

Cambodia

Elections/UN Trust Fund

Institution Building

Institution Building

North Korea
(DPRK)*

North Korea
(DPRK)*

Institutional Support

Nepal

Pilot Project in institutional support /training

Pilot Project in the Energy Sector

Census

TOTAL

13.30

2.95

0.97

0.93

0.40

18.55

* DPRK: Democratic People’s Republic of Korea

4.6.6.

Private Sector Development

Economic co-operation with Asia continues to focus primarily on the promotion of
mutually beneficial business-to-business co-operation, enhancing Europe’s profile in
Asia and that of Asia in Europe, increasing Europe’s economic presence in Asia and
assisting countries to define and implement policies to improve their economic
situation and performance.

165

–

Business to Business

The Asia-Invest Programme started as a cross-sector economic co-operation
programme with Asia, to promote business co-operation through mutually beneficial
partnerships between Asia and the European Union. The Programme provides a
range of grants, support instruments and access to an extensive network and partner
search database to representatives of companies, including Chambers of Commerce,
sector and industry organisations, professional associations, industrial federations
and business development agencies, with particular emphasis on SMEs.

Over the course of the Programme to December 2001, 143 Projects were co-
€
financed. In 2001 alone 85 projects were approved, totalling an EC contribution of
7.98 million.

The EC underpins the capacity of Asian businesses to engage in mutually beneficial
linkages with EU business through its support to European Business Information
Centres (EBICs) throughout the region (i.e. in Sri Lanka, India, Malaysia, and the
Philippines). In 2001, a new EBIC was opened in Hanoi, Vietnam. EBIC’s offer a
range of information to Asian businesses or associations. In 2001 around
805,000
was spent in support of activities of EBIC’s in Sri Lanka, India, Malaysia and
Vietnam.

€

–

€

In Bhutan, the focus in 2001 was consolidation and preparation of the second
phase (
4.2 million) of the EC-supported “Medicinal Plants” project. This
phase will target the full sustainability of the Institute of Traditional Medicines
Services (ITMS) as a component of the long-term development of the
medicinal plants sector for the country.

–

Programmes in the field of Business Training

The China-Europe International Business School (CEIBS) in Shanghai was
established in 1994 as a result of phase I of an EC financed project. The objective of
the CEIBS is to enhance China’s commercial and industrial links with the EU by
providing management
training and by facilitating the transfer of international
management expertise to managers in China. EC support to the CEIBS entered its
10.95 million. In 2001, CEIBS
second phase in 2001 with a EC commitment of
reaffirmed its position as the best business school in the Chinese mainland by
breaking into the world top 100 MBA list. In 2001, around 600 students enrolled for
the MBA and EMBA courses. In addition, CEIBS received some 4300 short-term
students.

€

In 2001, the EU-China Junior Managers Programme (
11.64 million) awarded
diplomas to 24 young EU managers in 2001. The EU-China Programme for the
Development of Industrial Vocational Training trained, 408 employee trainees
and 25 trainer-trainees.

€

Other programmes include a Scholarship Programme in Hong Kong - Special
Administrative Region of China - for a Master of Law in Human Rights at the
University of Hong Kong, three Co-operation Programmes ongoing in Macau -
Special Administrative Region of China, and a new programme on co-operation in
€
the legal sector launched at the end of 2001, with a total EC contribution of
990.000.

166

–

Programme in the field of Information Technologies

is

to

increase

co-operation

The Asia IT&C Programme commenced in October 1999. The aim of the
Programme
and
communications between Europe and participating Asian countries/territories. China
became a participating country in 2001. In 2001, 23 projects were approved (
5.98
million) for projects that search for compatible IT&C solutions between Asian and
European IT&C environments,
improve the transfer of IT&C know-how, and
strengthen the mutual understanding of IT&C regulatory and/or legislative structures
between the regions.

technology
€

information

in

€
Private Sector and Economic Development Commitments 2001 (

million)

Country

Project Title

Amount

India

Vietnam

China

Vietnam

Vietnam

Macao

China

China

Asia

Small Projects Facility

EBIC

Intellectual Property Rights (Addendum)

Human Resources/Tourism

Audio-visual

Co-operation in the legal field

WTO (Addendum)

Interpreter training

Extension to IT&C Program

TOTAL

4.6.7.

Social Services : Health and Education

4.6.7.1. Health

4.04

0.99

0.80

10.80

0.95

0.99

0.60

0.40

5.00

24.57

There are a number of social and economic challenges that stem from poverty, social
change, economic growth and crisis, and under-funding of the health sector. There is
also a health challenge in Asia, which is characterised by a rapid “Health transition”:
demographic transition, changing risks of environment and lifestyle, epidemiological
transition and a widening gap of health status between social and economic classes.
Furthermore, the region is prone to natural and man-made disasters.

The EC response to these challenges under the health sector development programme
in 2001 has focused mainly on the following priorities:

–

–

€

2 million) which was completed in
In Thailand, the Health Reform Project (
2001, assisted the Government of Thailand to achieve universal coverage,
decentralisation and Civil Society involvement to improve responsiveness and
quality of care. Following this positive experience of European support to the
5 million) is due to be
health sector reform in Thailand, a second programme (
committed in 2002. In Vietnam, the on-going Health Systems Development
€
Programme in Vietnam (1998-2003,
improving the
quality of and access to primary health care.

34 million) aims at

€

Even larger EC interventions respond to a variety of sector challenges.
They are increasingly implemented through sector wide approaches and
budget support. In Bangladesh, the Health and Population Sector Programme

167

€

1998-2003 (
70 million) responds to a large reform agenda unifying health
and family planning services. The programme has been agreed between EC,
World Bank and other donors. The sector programme has made good progress
in its first two and a half years. Significant
in most health
indicators continued to be made (e.g. infant mortality down to 62 (2000) from
92 per thousand (1992-6), and Maternal Mortality Ratio (MMR) down below
400 (estimate 2001) from 485 (1991). On the reform agenda, progress has been
more mixed and efforts to push through unification were hampered in the
context of national elections and transition to a new government.

improvement

€

to the Health and Family Welfare Sector Reform
In India, EC support
Programme (
200 million) aims to improve the quality and accessibility of
health services, with particular focus on the status of women’s and children’s
health. Currently 22 states have adhered to the process of reform (from 11
originally participating) and close to 40 NGOs and institutions are assisting in
the implementation of the reform. After the January 2001 earthquake in
Gujarat,
40 million to support
reconstruction and rehabilitation efforts, and maintain the momentum of sector
reforms.

the EC increased its contribution by

€

Strengthening Social Security Systems and Social Health Insurance.
European experience in Social Security and Social health Insurance can be of
particular value for countries aiming to reduce the vulnerability of people who
are close to the poverty line. In China in 2001 the EC started the preparation of
a major programme (
20 million) for Social Security that is expected to be
committed in 2002. In Indonesia a small programme for policy advice on
Social Health Insurance was financed from the 2001 budget.

€

Addressing the unfinished agenda of epidemiological and demographic
transition in terms of poverty-related burden of disease: maternal
mortality, communicable diseases.

–

–

–

The Asia Initiative for Reproductive Health, implemented by UNFPA, aims at
implementing the recommendations of the Cairo Conference on Population and
Development 1994. Operating in Pakistan, Nepal, Sri Lanka, Bangladesh, Vietnam,
Lao PDR and Cambodia through 42 NGO projects (including 3 regional dimension
projects) the AIRH offers a variety of services in sexual and reproductive health,
with emphasis on women and adolescents.
the
implementing NGOs were trained in “Reproductive Health for All: taking account of
Power Dynamics between Men and Women”.

for example,

In Vietnam,

In 2001, the Commission extended the programme to 31 December 2002. Progress
and results achieved for each of the 42 projects are provided in detail in the Annual
Report 2001113.

Programme activity in Cambodia, include: upgrading 4 conventional reproductive
health clinic facilities; workshops for more than 145,000 adolescents; more than
38,000 visits were made to youth centres and libraries; and youth friendly services in
clinics for 30,000 youths. This is the first time in Cambodia that a project has been

113

http://www.asia-initiative.org/annual_report_2001.html

168

able to gather together parents, teachers, community leaders and the young at the
same table to break the silence surrounding adolescent sexuality.

The regional Malaria Control Programme for Lao PDR114, Cambodia and Vietnam
aims to decrease malaria incidence, morbidity and mortality. The programme has
in promoting impregnated bed nets in these three
been particularly successful
countries, and in improving immediate treatment of cases through an effective pre-
packed combination of anti-malarial drugs. In 2001, the EC agreed to an extension of
the programme until December 2002

€

In 2001, the EC also pledged
60 million for the newly created Global Fund to Fight
AIDS, TB and Malaria and endorsed a Communication115 on the Implementation of
the Action Programme against these three major communicable diseases.

–

Responding
natural
rehabilitation and transition to development.

and man-made

to

disasters,

post-conflict

As already indicated, the Commission has reacted quickly to the earthquake in
€
Gujarat by increasing its budget support in the India health sector programme by
40 million. Although physical rehabilitation of infrastructure will form an important
part of the aid package, assistance to Gujarat will also focus on improving quality of
reproductive health services through reform,
reform
programme so far implemented in India.

in line with the sector

The Commission also believes in a continuum of post-conflict rehabilitation towards
development and has pioneered an innovative sector-wide approach in East Timor
together with other donors (i.e. World Bank, Portugal, AusAid, Brazil, JICA). Since
its establishment in early 2000, the multi-donor co-operation programme channelled
through the Trust Fund for East Timor (TFET) has helped achieve fast social and
economic recovery in East Timor.

TFET will help support the implementation of the plan by: (i) continuing to focus on
completing basic capital reconstruction needs in the economic and social sectors in
the first year after independence as Government faces the difficult tasks of assuming
functions previously held by UNTAET (United Nations Transitional Authority for
East Timor), providing continued service delivery, and addressing urgent legal and
institutional actions; (ii) helping to build capacity in development project design and
management, in order to assist Government
in executing a larger development
programme through its central budget after the TFET winds down.

4.6.7.2. Education

The year 2001 has been important for EC support to education development in Asia,
with two significant features. Firstly, the EC’s commitment to support countries,
particularly the least developed countries, in fulfilling the Education for All agenda
and goals, has been sustained. Secondly, the shift from individual, output-oriented
projects to more strategic interventions that help to pave the way to sector
approaches in education has gained further momentum.

114

115

People's Democratic Republic of Lao
COM (2000) 585 Final

169

In Bangladesh the following new commitments were made:

–

–

€

IDEAL (
20.3 million): the key objectives are to improve access to and
quality of education in over 10,000 primary schools in 10 of Bangladesh’s 64
districts. Approximately 2.5 million children and 40,000 teachers will benefit
from support to improve their classroom environment, the quality of teaching
and learning, learning assessment. The project also provides support to school
mapping and planning as well as to school management committees.
€

BRAC Non Formal Education (
23 million): the aim is to contribute to
poverty alleviation through providing access to non-formal primary education
for approximately 1.6 million children traditionally outside formal schooling
(especially girls; 60% of enrolment), and to contribute to the strengthening of
the national education system. The project supports staff and teacher training,
improvement of curricula and learning materials as well as classroom processes.
EC support also enables BRAC to expand its services to improve literacy and
other basic life-improvement skills among particularly poor adults.

to support

In India the EC signed a financing agreement
the Sarva Shiksha
Abhiyan, the national sector-wide programme of the Government of India aimed at
promoting a people’s movement for universal elementary education. EC sector-based
support will enable Central and State Governments to intensify their efforts to
provide access to basic education (formal or non-formal) to all children between 6-14
years by 2003; ensure that all children complete 5 years of primary schooling by
2007 and 8 years of elementary schooling by 2010; improve quality of elementary
education to a satisfactory level by 2010 for all children; close gender and other
social category gaps impeding access to primary education by 2007 and to
elementary education by 2010.

170

€
EC Support to District Primary Education Development (

Evaluation results of project in India -

150 million)

Principal achievements

–

–

–

Quantitative targets116 were all met and in some cases exceeded, while additional
activities have taken place and achieved excellent tangible results

In the two states that have benefited most from the EC grant (Madhya Pradesh and
Chhattisgarh), DPEP objectives were almost completely achieved in terms of increased
access and enrolment, reduction of drop-out and gender/social disparities, improved
learning outcomes, and enhanced planning and management capacity117. Adult literacy
rates also showed substantial improvement over the period of the programme.118

The impact of the programme on the wider education system has been satisfactory. Some
improvements have been brought about
in classroom practice; and management
processes across the states in the education sector, and in other sectors, are becoming
more output-oriented and participative.

–

The programme has proved overall to be both technically and financially sustainable.

Key lessons for future EC support to elementary education in India

–

–

–

–

The funding arrangement whereby the Government deploys the EC grant not merely to
support, but to add ambition and resources to sector interventions in elementary
education at State level, has proved effective.

Release of EC funds in advance, rather than as reimbursement of expenditure, has
brought benefits
flexibility in expenditure and
opportunities for innovation.

in terms of

financial

security,

More attention was given to improving access rather than access and quality.

The impact of support
evaluation can be significantly enhanced with better planning and consensus building.

to capacity building, technical assistance, monitoring and

Some important policy issues facing the development of elementary education

116

117

118

The principal targets of DPEP were: (i) to reduce differences in enrolment, dropout and learning
achievement among gender and social groups to less than 5%; (ii) to reduce overall primary school
dropout rates to less than 10%; (iii) to raise average achievement levels by at least 25% over measured
baseline levels; (iv) to provide 100% access to primary education; (v) to strengthen national, state and
district level capacity in the planning, management and evaluation of primary education.
The gross access ratio for primary schooling rose from an average of 77.4% in 1996 to 100% in 1999 in
Madhya Pradesh and from 86.4% in 1996 to 98% in 2001 in Chhattisgarh. The gross enrolment ratio
(GER) of 6-11 year olds in Classes 1-5 increased from 76.7% to 96.5% in Madhya Pradesh and from
88% to 101.5% in Chhattisgarh. The dropout rate in primary schools has been reduced to less than 10%,
with the reduction in dropout being higher among girls. Gender and social disparities in primary
education enrolment have been reduced to less than 5% in DPEP-I districts in both states. The equity
index in Madhya Pradesh primary school GER has risen for girls, scheduled caste (SC) and scheduled
tribe (ST) children to 97.3, 98.2 and 99.8 respectively. In Chhattisgarh the social disparities, in terms of
enrolment, have been reduced from 12.7% in 1996 to 1.2% in 2000 between the STs and other groups,
and from 7.3% to 1.5% between the SCs and other groups. The gender enrolment disparity has been
reduced from 7.8% in 1996 to 2.7% in 2000. In the baseline, mid-term and terminal achievement
studies tests district-wise improvements in Madhya Pradesh ranged from 5.8% to 51.8% in Class 1
language and from 12.5% to 54.3% in Class 1 mathematics, with similar ranges in Class 4. Similar
improvements in achievement have been noted in Chhattisgarh.
Adult (15+ years) literacy rates in Madhya Pradesh are estimated to have increased over the last decade
from 44.2% in 1991 to 64.1% in 2001 – a rate of increase which is over 50% higher than the national
rate.

171

–

–

–

–

–

Financial ceilings for expenditure on teachers’ salaries.

Measures at state level to rationalise the teaching force.

Medium to long term implications of differential teacher salaries in terms of cost-
effectiveness and equity.

The costs and professional
primary and upper primary teachers.

linkages between pre-service and in-service training of

The issue of school contingency funds and expenditure on quality inputs.

€

In China, the EC launched a
15 million basic education project to support the
Gansu Provincial Government in modernising and improving teacher training, in
strengthening management and institutional capacity for basic education in poor rural
counties of Gansu Province, as well as with research and dissemination of promising
innovative approaches and methods in basic education.

EC co-operation with Asia in education : driving principles

EC co-operation in education in Asia has continued to build on the following key
principles during 2001 :

–

–

–

Concentration and pooling of resources: Sector-
and policy-driven
interventions in the education sector, like in most other social sectors, generally
require a critical mass of resources. EC co-operation resources being limited,
the risk of spreading resources too thinly is significant. Beneficiary countries
are therefore asked to establish clear priorities – see table Co-operation with
other Donors in the Region.

Promoting universal access to basic education as a means of maximising
impact on poverty reduction and closing gender gaps. Formal versus non-
formal education. Sector wide approaches focus attention on the important
role which public-private partnerships can play in promoting access to basic
quality education for all. Where formal provision of basic education services
remain weak, the strategy should be to sustain both formal and non-formal
education and, at the same time, to develop productive linkages between them.
This strategy is being pursued in Country Strategy Papers (CSPs) and National
Indicative Programmes (NIPs) as well as in the pipeline of new and ongoing
programmes. There is a strong link between basic education and improvement
in levels of human wellbeing, especially with regard to life expectancy, infant
mortality, nutritional status of children, and also the fostering of gender equity
and equality of opportunity. As enrolment and completion figures for girls in
primary education generally lag behind those of boys, promoting EFA goals
often requires special efforts towards girls. Development of human resources
through universal basic education also contributes significantly to economic
progress.

Sustaining service delivery and reform. The policy environment and
conditions for sector-based interventions in basic education may be more
advanced in some countries (India) than in others (Bangladesh, Cambodia, Lao
PDR).

172

Helping Pakistan cope with the effects of the Afghan conflict

As a contribution to the support given to Pakistan by the international community during the
Afghan crisis, the Commission undertook to examine ways of further assisting the reform
efforts of the Pakistani Government. This was achieved in part by modifying the procedures of
the Social Action Programme Project (SAPP II) in order to grant direct budget support to the
Government against reform process indicators in the Education and Health sectors. The
Commission had made a first payment instalment of
15.5 million by the end of 2001 under this
new Project mechanism, and the last disbursement, for the same amount, is anticipated by mid-
2002, bringing EC intervention in SAPPII to a close.

€

Moreover, needs and the policy environment may change, due to factors beyond the control of
the Government (e.g. Pakistan). EC support must therefore be tailored to the education
situation in each country and remain sufficiently flexible to enable countries to face new
challenges.

4.6.7.3. Programmes in the Field of Higher Education

EC programmes and projects in the higher education sector pursue the objective of
developing high quality human resources in the partner countries and the EC. In
addition, they help promote Europe as a world -wide centre of excellence for study
and training. These objectives follow the priorities outlined in the Commission
Communication on higher education co-operation with third countries119, that draws
upon the positive experience gained in the framework of intra-Community exchanges
under the SOCRATES/ERASMUS programme.

In 2001, the EC continued to support bilateral European Studies Programmes in
India, Malaysia, China, Pakistan and Vietnam (around
2 million). In addition, the
EC prepared a large-scale second phase of the European Studies Centres Programme
China.

€

The regional Postgraduate Technological Studies Programme (PTS) implemented
at the Asian Institute of Technology (AIT) in Bangkok continued to receive EC
2.7 million and extended to
support. The project was increased to around
December 2002. This allowed the PTS to reach the five-year target of recruiting 90
Asian and 90 European postgraduate exchange students.

€

In addition, the Commission has made preparations for the launch of the
ASEAN-EU University Network Programme (AUNP).

€

7 million

4.6.7.4. Culture

The Asia-Europe Foundation (ASEF) established in 1997 in Singapore in the
ASEM framework, continued to receive EC support
in 2001. EC support has
contributed in establishing the reputation of the Foundation as an effective and
highly reputable organisation and in enhancing its role in strengthening mutual
awareness including cultural activities in the two regions. Since its inception in 1997,
ASEF has set up some 80 separate projects with approximately 4500 participants.
The EC has been financially involved in close to half of these projects.

The EU-India Economic Cross Cultural Programme (EIECP) underwent a mid-
term evaluation in 2001. The evaluation confirmed the relevance of the programme

119

COM (2001) 385 final 18 July 2001

173

and the overall project design. In addition, the evaluation proposed a number of
measures in order to improve the management of the programme. On this basis, the
Commission decided to propose to extend the existing Memorandum of
Understanding and to re-launch the programme in 2002 in the framework of a de-
concentrated management model.

€
Social development – Commitments 2001 (

million)

Sector

Country

Title

Amount

Health
Health
Education

Health
Education
Education
Education
Health
Health
Education

India
India
India

Indonesia
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Asia
Asia

Health support
SCALE
EU Studies (Nehru University)

Health Insurance
BRAC/NFPE III
IDEAL
IDEAL
BRAC
Malaria
PTS Addendum (Post Graduate Technical
Studies)

TOTAL

40.0
25.8
0.60

0.5
23.0
23.3
20.3
28.7
3.2
0.30

165.7

4.6.8. Cross-Cutting Issues

4.6.8.1. European Initiative for Democracy and Human Rights

In 2001 the European Initiative for Democracy and Human Rights committed
10.81 million for projects in Asia and the ASEAN region. This support was
principally for :

€

–

–

–

–

Promotion and defence of Human Rights and fundamental freedoms;

Democratisation process and strengthening of the rule of Law;

Conflict prevention and restoration of law and order;

Transition to democracy and electoral observation.

4.6.8.2. NGOs Activities

36.74 million,
The EC co-financed 51 projects with NGOs in Asia amounting
which represents about 22% of the budgetary line available for co-financing with
NGOs (B7-600). The bulk of projects co-financed capacity building, health and
sanitation as well as rural development.

€

174

4.6.8.3. Tropical Forests & Environment

Tropical Forest

The cost of forest fires

In Indonesia forests are disappearing at an alarming rate as a result of more than three decades
of uncontrolled exploitation. Recent studies indicate that the remaining forests will disappear
within 10 to 15 years if the current rate of deforestation is not halted. The main reasons for
deforestation are unsustainable logging practices, including illegal logging, and the large scale
conversion of forest to plantations, which is often at the origin of uncontrolled, devastating fires.

The fire disaster that took place in Indonesia in 1997 attracted much international attention.
1.5 billion in health treatment
Economists estimated that the smoke haze alone cost at least
and lost tourism revenues. Furthermore, the 1997 fires (total area affected calculated at 9.7
million hectares) were estimated to have resulted in over
3 billion of additional damage from
losses in timber, agriculture, non-timber forest products, hydrological and soil conservation
services, etc. These are conservative estimates, since the indirect costs of carbon release into the
atmosphere and additional long-term health costs of the smoke haze are not included.

€

€

The EC has recognised the role of tropical forests in global environment and the
importance of their preservation for long term sustainable development. In Asia,
forests are important economically, socially and environmentally. Further, they are of
global
importance in relation to environmental stability, atmospheric carbon
sequestration, biodiversity conservation, climate regulation and the preservation of
indigenous peoples’ rights and cultures. In particular, Asian forests are considered to
be amongst
the most
threatened.

in biodiversity and yet are possibly amongst

the richest

The ALA Regulation120 includes environment and natural resources preservation
among its long term priorities. Under the ALA financial instrument some new
projects aimed at the conservation and sustainable management of forests in Asia
were started during 2001.

€

€

As part of the EC-Indonesia Forest Programme, comprised of six on-going
8.5 million)
projects, the new South Sumatra Forest Fire Management Project (
was committed in 2001, to address the specific issue of forest and land fires. Its
objective is to facilitate the establishment of fire management systems at provincial,
district, sub-district and village levels throughout South Sumatra. A Financing
2 million was signed in 2001 for an Illegal Logging Response
Agreement for
Centre the aim of which is to support the Ministry of Forestry to combat illegal
logging. The EC-Indonesia Forest Programme is comprised of ongoing projects for a
total EC commitment of over
100 million and is addressing the key issues of
conservation, sustainable management and institutional strengthening. These projects
contribute to the conservation and sustainable management of over 2 million hectares
of tropical forests in various parts of Indonesia and provide training for several
hundred people in various sectors spanning from sustainable forest management and
mapping to fire prevention and satellite imagery interpretation. Thanks to the
achievements of these projects the EC is now firmly established as the major donor

€

120

Council Regulation (EC) No. 443/92 of 25 February 1992 on financial and technical assistance to, and
co-operation with, the developing countries in Asia and Latin America published in OJ L52, 27th
February 1992.

175

in the forest sector in Indonesia and is regarded as an essential key player in the
political dialogue taking place in the country’s forestry sector.

€

The EC committed
16.9 million in 2001 for the “Natural Forest Management
Project” in China to assist the Government’s Natural Forest Protection Programme
(NFPP) which introduced a ban on logging in natural forests. This is EC’s first major
project in this field in China. The project was prepared together with the World Bank
as a part of a Sustainable Forestry Development Programme, funded also by the
Global Environment Facility and the World Bank.

Environment

ASIA-EcoBest and EU-Asia Pro-ECO Programmes

Since 1997, Asia-EcoBest
(AEB) has promoted European environmental best
practices and business in Asia, operating through the autonomous Singapore-based
Regional Institute of Environmental Technology (RIET). The Asia EcoBest project
(which ended in March 2002) planned to spend around
1.4 million under the work
programme 2001.
€

0.7 million were disbursed on supporting 18 external project proposals
Around
from a total of 40 applications received. In particular ten seminars, training courses
and roundtables took place in China, India, Nepal, Philippines and Vietnam. These
had around 650 participants, 7 studies undertaken (including 2 public presentations
of project results) and 1 facility development project.

€

€

0.7 million for 3 conferences in China, Singapore
RIET spent in addition around
and Thailand (400 European and Regional Participants); exhibition pavilions and
business to business meetings in India, Malaysia, Singapore and Thailand with
participation of 50 European companies; preparing and marketing comprehensive
reports on Asia EcoBest projects 1998-2002.

AEB was instrumental in raising awareness of Asian environmental issues among
business representatives, in particular from SMEs, in Asia. It is expected that AEB
support from EC will trigger additional trade with, and investment from, Europe in
the medium term.

A new programme for environmental economic co-operation EU-Asia Pro-Eco was
approved in December 2001. The overall objectives of this new programme are: (i)
improved environmental quality including a positive influence on global climate
change with the view to ‘a cleaner Asia’, and health conditions (ii) long term
sustainable investment and trade between EU and Asia and (iii) an improved
environmental performance in economic sectors. The purpose of EU-Asia Pro Eco is
to foster the adoption of policies, technologies, and practices that promote cleaner,
more resource-efficient, sustainable solutions to environmental problems in Asia.

EU-Asia Pro Eco comprises an enabling operational and practical dialogue, and
provides support
through grants for Policy reinforcement; Diagnostic studies;
Technology Partnership, and Demonstration activities. The first Call for Proposals is
35
expected in January 2003, with wide interest expected. The total EC budget is
million.

€

176

impact of the
In the field of biodiversity conservation, apart from the direct
the Commission has promoted the creation of the
individual forestry projects,
ASEAN Regional Centre for Biodiversity Conservation. This project, to which
the Commission is contributing
8.5 million, started in 1999 and is based in Manila,
Philippines, and is matched with a network of national Biodiversity Units in the
intensifying biodiversity conservation in the Asean
Asean Countries. It aims at
Region through improved co-operation. This project thus contributes not only to
biodiversity conservation but also to regional integration.

€

€
Environment, Energy, Forestry - Commitments 2001 (

million)

Country

China
China
Indonesia

Title

Amount

Energy/Environment
Natural Forestry
Forest Fire Protection - phase 2

TOTAL

20.0
16.9
8.5
45.4

4.6.9. Coherence with other policies

The EuropeAid Co-operation Office ensures coherence with other EC policies to a
high degree and this is particularly evident in the trade field, as well as in relation to
EU policies on the environment and poverty alleviation.

The Framework Programme for EU support to China’s accession to the WTO was
extended and funding was increased in 2001 - while in Vietnam, the Multilateral
Trade Policy Assistance Programme is under implementation. The assistance of the
EC enables developing countries to better participate in the multilateral trade system
and thereby improve its functioning, which in turn benefits the EU and its citizens.
The related Intellectual Property Rights (IPR) programmes are managed in line with
the EC policies, too. In the environmental economic co-operation, the Asia-EcoBest
programme was
Institute of Environmental
Technologies (RIET) based in Singapore. Relevant services of the Commission were
systematically consulted to ensure full consistency of RIET action with other EC
policies.

implemented by the Regional

The concepts of the various projects and regional programmes in the Asia region are
consistent with the Communication from the Commission “Strategic Framework for
Enhanced Partnerships”121, prepared in April 2001. It is clear that the range of
projects implemented should strengthen the political and economic presence of the
EU across the region

4.6.10. Co-operation with Other Donors in the Region

In the context of Donor Co-operation, the table below lists the countries in Asia that
have identified education as a priority for co-operation. Furthermore, to help build
the critical mass of resources and the policy dialogue and coherence that are required
for sector approaches in education, a systematic effort is made to pool EC and other
donor resources, particularly with Member States.

121

“Europe and Asia - A Strategic Framework for Enhanced Partnership” doc. COM(2001) 469 adopted by
the Commission on September 4th, 2001, subsequently adopted by the Council of Ministers by written
procedure on 27th, December 2001.

177

Country Priority
Countries where basic
education is a priority
for EC

List of countries
Bangladesh
Cambodia
China
India
Indonesia
Laos
Nepal
Pakistan
Vietnam

Pooling of EC resources in the education sector
AsDB, UNICEF, DFID, NL, CIDA

WB, DFID, NL

WB, DANIDA, NORAD, FINIDA
AsDB, WB, SIDA
WB, AsDB, DFID, NL

4.6.11. EIB Loans – 2001

The European Investment Bank (EIB) participates actively in EU co-operation
policies in Asia. Through its lending policies it supports projects of mutual economic
interest. Funding is provided by the budget of the European Union and/or the
Member States, and its aim is to optimise the benefits accruing to beneficiary
populations.

EIB Loans 2001 (

€

million)

Loan Type

Country

Project Title

Manufacturing Industry
Transport / Communications China
Global loan

Indonesia

Philippines

Philips Semiconductor
Guangxi roads development
Rabobank Indonesia GL

4.6.12. ECHO

TOTAL

Amount
of loan

93.3
56.1
28.1
177.5

In 2001, ECHO reacted and responded quickly to two major disasters in India as well
as the significant humanitarian and reconstruction challenges following the liberation
€
of Afghanistan122. Total ECHO assistance to countries in Asia in 2001 reached
104.3 million.

In India, emergency assistance was provided for the victims of the Gujarat
earthquake in January for temporary shelters such as tents, with a mobile field
hospital also being provided. In July, ECHO provided emergency food and non-food
aid for those affected by the floods in Orissa (total:

14.602 million).

€

€

In Afghanistan major operations (
54.7 million) were addressed towards drought
affected population and IDPs through food security, health activities and provision of
shelters mainly supporting the most vulnerable people affected by the post 11
September reaction.

In Nepal an important action of food relief (
2 million) was addressed to 100.000
Buthanese refugees, and in Burma ECHO continued to support the most vulnerable
population and ethnic minorities affected by political isolation and discrimination.

€

ECHO continued to be deeply involved in reconstruction in East Timor (
11.274
million), mainly for projects to improve water, sanitation and healthcare services. By
virtue of relative stability in the country, confirmed by National Independence in

€

122

Viz. Afghanistan - Starting a Recovery Programme page …..

178

May 2002, the focus is shifting from relief operations towards rehabilitation and
development. ECHO is expected to phase out its operations there in the end of 2002.

In addition, in the framework of its regional Disaster Preparedness Programme
€
(DIPECHO), ECHO has approved a first Action Plan for South Asia amounting
3.2 million. This Plan aims at addressing local communities’ vulnerability to
flooding. In 2001 as well, the projects totalling
4 million approved the year before
within the second DIPECHO action Plan for Southeast Asia were under
implementation.

€

The table below indicates the decisions taken in 2001 by ECHO as a humanitarian
response to the specific needs of each of these countries in Asia.

€
ECHO Financial Decisions 2001 (

million)

Country

Afghanistan
and neighbouring
countries
India

East Timor
Cambodia

Thailand

North Korea

Indonesia

China

Nepal
Myanmar/Burma
Philippines

Sri Lanka
Vietnam

ECHO Humanitarian Aid

Project Title

- Food aid
- Assistance to IDPs and returnees
- Air transportation for access
Emergency relief, temporary shelter and medical care to the victims of the
Gujarat earthquake and the floods in Orissa
Improvement of water sanitation systems and health services
- Basic medical health, water and sanitation, and small-scale mine

clearance;

- Emergency assistance to 25,000 families affected by drought
Improving conditions of Burmese Refugees living in camps on the Thai-
Burmese border
- Assistance to the Primary Health Care System
- Supply children’s clothes
- Supply of relief items to flood victims
Assistance to victims of local ethnic conflicts in the Moluccas and East
Timor
Assistance to the victims of natural disasters in the Guangxi province and in
Inner Mongolia
Provision of basic food to Bhutanese Refugees
Assistance to IDP’s* (Sanitation and Health) and Prisoners protection
- Assistance to the victims of conflict in Mindanao
- Assistance to the victims of the storm “Lingling”
Assistance to the victims of the civil war in Jaffna
Emergency Assistance to the victims of the floods

SUB-TOTAL

DIPECHO Programme (Disaster Preparedness Programme)

South Asia

First DIPECHO Action Plan for South Asia

TOTAL

Amount

54.680

14.602

11.274
4.900

4.500

3.365

2.200

2.150

2.000
1.990
1.460

0.700
0.533
104.354

3.200

107.554

*IDP’s: Internally Displaced Persons.

4.6.13. Monitoring

The Commission, in the course of 2000, conceived an improved results-oriented
monitoring system for the ALA/MED/ACP and Balkan regions, which is rooted in
the Commission’s Project Cycle Management method. The system was tested during
2001. The conception and test-phase have been completed and the paragraph below
describes the first tentative but interesting insights on what works and what can be
improved in Asia. Additional information on the results-oriented monitoring system

179

can be found in Chapter Monitoring. The system will be applied for all EC projects
as of 2002.

During 2001, 78 projects (of which 9 have been re-monitored) have been visited in
€
this region, in 12 countries. The total volume of EC financing thus covered is
1,006.4 million of which the most important sector were health (31%) and education
(8%). The overall rating for projects in the region was 2.77, compared to an average
note of 2.5.

Effectiveness and impact are the relatively most successful aspects. The highest
ratings at sub-criteria level are attributed to environmental and technical adequacy,
secondary effects of results, and wider unplanned effects. The weakest areas are
input timeliness and economic adequacy.

As explained in the chapter on monitoring, the results of the regional analysis of
levels of project performance should be treated with great prudence. At best, it may
provide orientation for the preparation of further, more in-depth investigations into
the nature of project performance in specific regions.

4.6.14. Conclusions and Perspectives

The European Commission (EC) first set out an overall framework for EC relations
with Asian countries in its 1994 Communication "Towards a New Asia Strategy". In
September 2001, the EC adopted a new Communication123 updating that strategy,
taking account of key developments in the intervening years, and establishing a
comprehensive strategic framework for EC relations with Asia, and its sub-regions,
in the coming decade.

In particular, the EU should strive to :

–

–

–

–

–

contribute to peace and security in the region and globally,
broadening of our engagement with the region;

through a

further strengthen our mutual trade and investment flows with the region;

promote the development of the less prosperous countries of the region,
addressing the root causes of poverty;

contribute to the protection of Human Rights and to the spreading of
democracy, good governance and the rule of law;

build global partnerships and alliances with Asian countries, in appropriate
international fora, to help address both the challenges and the opportunities
offered by globalisation and to strengthen our
joint efforts on global
environmental and security issues;

–

and help strengthen the awareness of Europe in Asia (and vice versa).

123

“Europe and Asia - A Strategic Framework for Enhanced Partnership” doc. COM(2001) 469 adopted by
the Commission on September 4th, 2001, subsequently adopted by the Council of Ministers by written
procedure on 27th, December 2001.

180

In conclusion, the Communication stresses that Asia is a crucial economic and
political partner for Europe. More than ever before, the EU and its Asian partners
should work together in addressing the global challenges which we both face, and the
global opportunities which we should all be able to share.

181

4.7.

Latin America

The key to the Community's approach to Latin America is its recognition of Latin America's
diversity and the need to tailor dialogue and co-operation to regional and national
circumstances. In recent years both the European Union and Latin America have tried to
develop a more comprehensive relationship through a strategic partnership to achieve
common political, economic and social objectives and acquiring more weight in matters of
mutual interest in the globalisation process, while maintaining their specific character.124
Development co-operation is an essential dimension of this strategic partnership, as shown by
the ever greater number of regional initiatives in 2001.

4.7.1.

Introduction

Co-operation Agreements and Memoranda of Understanding

Latin America: subregions and countries125

Central America (A )

Andean Community (C)

Mercosur (A) (C)

Others

Costa Rica (A )

Colombia

Argentina (A)

Chile (A) (C)

El Salvador (A)

Ecuador (A)

Brazil (B)

Mexico (B) (C)

Guatemala (A )

Peru (B)

Paraguay (A )

Honduras (A)

Bolivia (A)

Uruguay (A)

Nicaragua (A)

Venezuela (A)

Panama (A)

(A) Memorandum of understanding signed in 2001.
(B) Memorandum of understanding in negotiation.
(C) Agreements on frameworks of co-operation inter regional signed up to 2001

The countries of Latin America are broadly faced with three major challenges:
dealing with poverty and inequality, notably by increasing social solidarity;
consolidating the rule of law and ensuring the irreversibility of the democratic
process; integrating into the world economy by pursuing economic reform and
increasing international competitiveness.

Efforts to reduce poverty in Latin America are affected by the region's tremendous
geographical and demographic contrasts. The urbanisation rate is expected to rise
from 75% to 79% by 2020 (highest rates in Argentina, Brazil, Chile, Colombia, Peru
and Uruguay), a factor
in its co-operation
programmes.

the EU takes into account

that

The bulk of EU financing for Latin American countries is governed by Council
Regulation (EEC) No 443/92 of 25 February 1992 on financial and technical
assistance to, and economic co-operation with, the developing countries in Asia and

124

125

COM(2000) 670 "Follow-up to the First Summit organised between Latin America, the Caribbean and
the European Union".
Latin America has distinct subregions: Central America, the Andean Community and Mercosur, to
which Chile and Mexico are attached.

182

Latin America.126 There is also financing for aid to uprooted people in Latin America
rehabilitation and reconstruction operations under Regulation (EC)
and for
No 2130/2001 of
the Council and Parliament and Council Regulation (EC)
No 2258/1996 respectively.

faces important
Despite its immense economic potential, Latin America still
challenges. The average per capita GDP of the region was USD 3800 in 1999; the
difference between the countries is on a scale of 1 to 15 (USD 430 for Nicaragua and
USD 6180 for Uruguay). Wealth is unequally distributed, which makes for difficult
access to healthcare, education and social security.

A variety of regional integration processes are under way in Latin America. They
have gone hand in hand with the increase in the number of free trade agreements,
which has boosted trade between the countries in the region, so contributing to
economic growth and development.

The European Union and its Member States are the leading source of grant aid to
Latin America.

Commitments and Payments in 2000 and 2001 (except the BA* and Cuba lines)

PROGRAMMES

LINES B7-310 /311

COUNTRY/ BILATERAL

COMMITMENTS

PAYMENTS

2001

2000

2001

2000

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

BILATERAL
SUBTOTAL
REGIONAL
SUBTOTAL
Other
(mainly for regional
programmes)

TOTAL
BILATERAL/
REGIONAL

9.910.000
25.000.000
10.304.190
9.000.000

5.000.000

1.320.000

2.350.000

34.800.000
9.600.000
11.000.000
16.150.000

10.900.000
8.650.000

28.942.500
900.000
10.000.000

133.292.500

60.534.190

84.373.500

163.310.000

7.207.145
4.069.269
5.354.877
5.791.622
4.891.196
575.777
2.465.667
14.101.002
5.023.666
764.630
11.760.063
2.933.167
6.575.250
7.642.593
5.976.710
1.626.845
2.298.333

84.647.812

5.674.145
11.069.999
3.565.615
1.795.894
2.841.411
589.328
3.457.072
16.365.748
9.035.130
1.480.430
15.985.406
3.278.359
10.963.918
4.423.313
9.367.046
2.150.271
3.697.053

217.666.000

223.844.190

124.452.601

178.000.366

35.394.789

72.260.228

126

There was no change in the legal framework for co-operation with Latin America in 2001. The
Commission has drawn up a new draft Regulation for Latin America, which will be presented to the
College for approval in 2002.

183

*The BA line covers expenditure on administration, especially concerning the
devolution of programme management to the Delegations.

€

The EU co-operation budget for this region has stood at approximately
500 million
a year since 1996. This figure includes commitments under budget lines B7-310
(financial and technical co-operation), B7-311 (economic co-operation), B7-312
(refugees and uprooted people) and B7-313 (rehabilitation), which are specific to
Latin America, plus other important non-geographical budget lines, such as Human
Rights, food security and NGO cofinancing.
€

96.6 million was decommitted in 2001 as part of the effort to reduce the backlog of

outstanding commitments (RAL); this affected 143 commitments.

Budget lines B7-310 (financial and technical co-operation) and B7-311

€

(economic co-operation) in

million

1995

1996

1997

1998

1999

2000 *

2001**

Total

Commitments

287.6

262.8

254.1

240.9

104.4

229.7

231.6

1611.1

Payments

145.7

151.9

148.8

142.8

158.7

179.5

126.3

1053.7

*
**

Including Cuba
Including line BA

In 2001 the Commission's taking-over of administrative and monitoring activities
previously carried out by Technical Assistance Offices (TAOs) did affect operations.
The process of devolving staff from headquarters to the Delegations somewhat
slowed the payments rate compared with commitments.

4.7.2.

Regional co-operation

Regional co-operation has been stepped up in recent years to implement
the
the bi-regional strategic partnership decided by EU,
development agenda of
Caribbean and Latin American heads of state and government at the Rio Summit in
1999 and to support by appropriate measures the process of regional integration.

4.7.2.1. Horizontal programmes

Regional co-operation has been much developed under "horizontal" programmes.
Such programmes in areas of mutual interest, which are financed in the framework of
economic co-operation, promote partnerships between networks in the two regions
(towns, companies, universities, etc.).

Major horizontal programmes, such as: ALFA, Al-Invest, Atlas, Urb-Al, Alure,
@LIS, were financed in 2001.

ALFA - Latin America Academic Training. This programme promotes co-operation
between Latin American and European higher education institutions and ongoing
inter-regional and regional exchanges (whether EU-LA, LA-EU or LA-LA),
especially in engineering, medical sciences, social sciences and economics.127 The
second phase started up in 2000 and will run until 2005: ALFA II is currently
€
running 54 projects for a total cost of

12.45 million - the Community contributing

€

127

http://www.europa.eu.int/comm/europeaid/projects/alfa/index_en.htm

184

8.89 million, while 104 ALFA I projects are continuing or on the point of
completion.

RESCE: Network of Social Studies - Central America - Caribbean - Europe

This network is coordinated by the University of Costa Rica and embraces the Universities of
the Sorbonne, the Hague, Salamanca, Nicaragua, El Salvador, Havana and Centroamericana de
Mexico. It has set up a "Maestria Centroamericana" (master's degree) on the basis of a
sociology research programme with a specialisation in social policy, which includes a project to
offer training to teachers and graduates of the institutions and university departments in the
network. The teaching materials produced for the training have been used for the master's
programme. Electronic mail has improved communication between network members. ALFA
sponsored the organisation of an international conference on social policy and a book has since
been published (Politica social: vinculo entre estado y sociedad).

AL-Invest. Commission-financed programme of decentralised co-operation to
promote meetings and partnerships between small and medium-sized enterprises
(SMEs) in both continents with the aim of boosting trade and technological transfers.
Since its launch in 1996, 250 events have been organised with the participation of
330 operators (chambers of commerce,
industry associations and European
consultants) and 25 000 SMEs from both regions.128 In 2001, 50 sectoral meetings
were selected for Community support, plus five ARIEL operations (Active Research
In Europe and Latin America, an instrument of the AL-Invest programme). Three of
the programme's many successes are worth citing:

Furniture’00

At this meeting in Uberlandia (Brazil) a European consortium was set up to enter into a joint
venture with Brazilian partners. This involves an investment of
12 million for the building of a
factory in the Uberlandia industrial zone.

€

Exhimoda’99

At this meeting in Mexico a Mexican firm and a Spanish firm signed a
set up a joint enterprise and manufacture clothing for the European market.

18 million contract to

€

At this meeting in Spain a French and a Paraguayan firm signed a
a waste-processing plant in Paraguay; total investment of over

€

20 million.

€

6 million contract to set up

FITUR’98

ATLAS is a programme to support relations between European and Latin American
Chambers of Commerce; the aim is to facilitate transfers of know-how. Some 200
2.4 million programme running over the period
chambers are involved in this
2001-2003.129

€

Urb-AL This programme aims to establish direct and lasting relations between
European and Latin-American local authorities by promoting exchanges of
experience.130 Eight thematic networks were set up initially. They have produced 65
joint projects involving about 750 local authorities (from large cities to small towns)
and a hundred other local actors (NGOs, universities, companies, etc). Urb-Al
enables them to share their resources and experiences and better respond to the

128

129

130

http://www.europa.eu.int/comm/europeaid/projects/al-invest/index_en.htm
http://www.eurochambres.be/whatwedo/atlas.htm
http://www.europa.eu.int/comm/europeaid/projects/urbal/index_en.htm

185

problems caused by urban development (i.e. monitoring urban mobility,
democracy, the urban environment, etc).

local

€

As a result of the success of the first phase, which had a budget of
14 million, the
Commission allocated
50 million to the second phase (i.e. triple the budget of the
first phase). This extra financing will make it possible to launch six new thematic
networks (local financing and participatory budgets, reducing urban poverty, housing
in towns, promotion of women in the local decision-making bodies, towns and the
information society, safety in towns).

€

Equitable exchanges of know-how

The Intendencia Municipal of Montevideo (Uruguay), which coordinates an Urb-AL network
made up of 150 European and Latin-American local authorities, has developed a new approach
to urban social policy based on sharing the experiences of each participant and exchanging
know-how.

This has led to 14 projects to improve the formulation and conduct of public policy in key social
sectors such as education, health, aid to disadvantaged or marginalised groups, urban
migration, domestic violence and policies to promote and defend women.

All these projects serve the same objective: an integrated approach to urban living that treats
citizens as members of interacting families, groups and communities, not isolated individuals.

The economic solidarity project, coordinated by the town of Rio Claro (Brazil) is designed to
promote job-creating economic solidarity projects that are tailored to local social conditions.

€

ALURE. This EU-Latin American economic co-operation programme in the energy
sector, which started up in 1996, will come to an end in 2003.131 The
26 million
programme has promoted 25 gas and electricity projects involving a hundred odd
participants from private companies, public administrations, NGOs and others. This
programme has helped meet
the Latin-American
countries, both quantitatively and qualitatively, while promoting the access of
disadvantaged groups to these services and safeguarding the environment. The
projects generated substantial value added for the recipients, primarily through the
transfer of proven solutions and instruments of the European energy sector, which
were adapted to the Latin-American context.

the energy requirements of

CLIOPE: effectiveness and environmental protection in running power stations

In recent years several Latin America countries have suffered from electricity shortages, mainly
as a result of a big increase in demand and insufficient investment in energy production.
Furthermore, there are many power stations in the region which are highly pollutant, inefficient
and of limited availability. The CLIOPE regional project tackles this by training about a
hundred Latin American managers and technicians and setting up an internet network for the
exchange of information and know-how between the two regions. To date the project has
created three centres for further training (in Colombia, Argentina and Mexico) and forged links
between professionals in the sector, which will facilitate the preparation of projects to convert
power stations,
the acquisition of modern equipment and open up new commercial
opportunities for both regions.

131

http://www.europa.eu.int/comm/europeaid/projects/alure/index_en.htm

186

@LIS, the Alliance for the Information Society, was adopted by the European
Commission on 6 December 2001.132 The programme aims to promote the
information society in Latin America and overcome the digital divide by stimulating
co-operation with European partners and helping to provide solutions to the needs of
the local communities and citizens with a view to sustainable development.

€

€

With a budget of
63.5 million financed by the European
Community, @LIS is addressed to all members of civil society, especially non-profit
making associations.

85 million, including

Most horizontal programmes were reviewed in 1999 and evaluated in 2000/2001.
the programmes have created economic,
Results are very encouraging overall;
links between the two regions, boosted
academic, cultural and technological
European representation in the region and established ongoing relations with
governments, local authorities, the private sector and civil society.

4.7.2.2. Co-operation with regional bodies and bilateral co-operation

At subregional and bilateral levels, co-operation continued in 2001 in pursuit of
specific priorities set out in existing institutional agreements, tailored to the specific
circumstances of each country or region.

Subregional projects were committed under budget
lines B7-310 (financial and
technical co-operation) and B7-311 (economic co-operation) in Central America, the
Andean Community and Mercosur.

a) Central America

Co-operation with Central America is carried out under a Co-operation Agreement
that entered into force in 1999.

In 2001 the Commission allocated
context of economic co-operation with Central America.

8 million to a customs union project in the

€

9 million to Panama,

Bilateral co-operation: the Commission allocated
16
€
€
11
million to Guatemala,
million to Nicaragua. The amount allocated reflects the Commission's determination
to actively support projects that reinforce and consolidate democratic institutions and
that encourage
the rule of law,
economic development and help insert Central America into the world economy.

29 million to El Salvador,
10 million to Costa Rica and

that promote the regional

integration process,

€

€
€

There was aid from other budget lines as well as financial and technical co-operation
and economic co-operation in 2001. In response to natural disasters, the Commission
allocated the region
68 million for rehabilitation and reconstruction projects in
Central America (Nicaragua, Guatemala and El Salvador) and Venezuela.

€

The Regional Programme for the Reconstruction of Central America (PRRAC) is a
large-scale project. Set up after Hurricane Mitch to run over seven years, its remit is
to rebuild and strengthen health and education services, which were hard hit in most

132

http://www.europa.eu.int/alis

187

countries of the region, and to make an assessment of the environmental degradation
caused by bad weather conditions.

The PRRAC is implemented through 16 major projects, the budget for which is
shared between Nicaragua, El Salvador, Guatemala and Honduras.

PRRAC - Honduras

In addition to these large-scale projects, there are smaller projects that have already given
concrete results, such as the water and sanitation project under way in Honduras. About 70% of
the objectives have been achieved: 24 culverts built and another 16 near completion; 52 water
wells sunk, 106 trained local promoters and 1.081 families trained in hygiene and diseases
transmitted by contaminated water. The other 30% are being implemented.

b) Andean Community

Co-operation with the Andean Community countries aims to the strengthen
integration and
democratic institutions and the rule of law, promote regional
socio-economic development, and enhance co-operation in combating drugs and
preventing natural disasters. Support for the difficult peace process in Colombia is
also one of the specific EU priorities in the region.

The "peace laboratory in the Magdalena Medio" is the first major action in the EU's
programme to support the peace process in Colombia. It will be implemented in 13
localities of the Magdalena Medio, a region hard hit by the armed conflict, including
the region's capital, Barrancabermeja. There is Community financing of
35 million
for this eight-year programme drawn up in 2001, which is scheduled to start up in
€
2002. The EU has also committed
11 million in Ecuador for the development of the
10 million in Venezuela for reconstruction in the flood-
Rio Paute basin and
affected state of Vargas. The Commission has committed a total of
500 000 for a
subregional project (68% of the total), which consists of a study on the state of and
prospects for economic and trade relations between the EU and the Andean
Community. Its finding should be available in 2002.

€

€

€

Study on the state of and prospects for economic and trade relations between
the Andean Community and the European Union

Part of 2001 programming, this project will take stock of economic and trade relations between
the EU and the Andean Community of Nations (CAN). The need for such a report was stressed
by the ministers of both regions at the IXth Ministerial meeting between the EU and the Rio
Group (Vilamoura, 24 February 2000).

The study's terms of reference were drafted in 2001 and the study itself will be carried out over
six months by a group of European and Andean consultants. They will analyse five aspects:
foreign trade, public procurement, services, foreign direct investment and intellectual property.

c) Mercosur

The guidelines for co-operation with Mercosur are laid down in the 1995 Framework
Agreement, which in the longer term is likely to be replaced by a more ambitious
association agreement.

188

Co-operation with Mercosur focuses on the process of regional integration and on
€
negotiations on a future association agreement between the two.133 In 2001
5.3 million was allocated to a customs co-operation project that will continue the
integration of the customs administrations of the four Mercosur countries, so laying a
basis for the region's economic and commercial development and its relations with
the EU.

€
Under financial and technical co-operation
€
modernise the Brazilian tax system and
environment in Uruguay.

2 million was committed to projects to
900 000 to improve the quality of the

Mercosur – technical standards

The Community supports Mercosur's integration by helping to create the technical framework
essential for an internal market. Since 1999 the Commission has been implementing a
3.95
million project on Mercosur technical standards.

€

Given developments in the intervention sectors during the programme's implementation, the
actions have had to be regularly adjusted to new national and regional circumstances.

This support for technical standards (mainly institutional support for national and regional
standards agencies and structures for notification, information, certification and accreditation)
creates more favourable conditions for intra-regional and international trade. Measures in the
field of metrology (legal and industrial) pave the way for future specific mutual recognition
agreements. The project takes the form of general actions and eight subprojects in the Mercosur
countries that transfer European experts' know-how about technical standards to local technical
staff.

Regional Co-operation - 2001 commitments (budget lines B7-310 and B7-311)

Region

Regional -
Latin America

–
–

Project title

Support for agronomic research via the CGIAR
EU-Latin American network of experts for
macroeconomic coordination.

Andean
Community
Mercosur
Central
America

– Alliance for the information society @lis.
– WALCUE-S&T thematic workshops ALCUE 2001/2002
– Networking Central and Eastern Europe and Latin

America
Study on EU-CAN economic and trade relations

–

EU-Mercosur customs co-operation

–
– Central American customs union

TOTAL

€

Amount

6,000,000
200,000
63,500,000
639,000
234,500

500,000

5,300,000
8,000,000

84,373,500

4.7.3.

transport and infrastructure

A key element in past development, infrastructure remains an important part of co-
operation with Latin America. This is especially true when it is part of a general
framework of regional integration and of efforts to improve living conditions and
health and to mitigate the risks connected with natural disasters. This sector accounts
for some 10% of Community aid.

133

Trade negotiations with Mercosur continued in 2001 in a difficult context of growing economic
problems in the region, especially the deepening recession in Argentina.

189

4.7.3.1. Road transport

Nicaragua. In 2001, the Commission committed
Jinoteca road project.

€

11 million for the El Guayacan-

Ecuador and Peru: integration by the Piura-Guayaquil road

Physical communications between Ecuador and Peru will be improved by a project to
rehabilitate the Piura-Guayaquil road link. Feasibility studies of the road, the bridges and
2.8 million are currently under
infrastructure at the border between the two countries costing
€
way. The will then be followed by works for which the Community contribution is estimated at
40 million (2002 –2006). The project will help improve relations between the two countries
under a bilateral development plan drawn up following the signing of the peace agreements in
1998.

€

4.7.3.2. Water and Sanitation

The need for drinking water and sanitation systems has led to vast programmes in
various Latin-American countries. Such projects help prevent epidemics, reduce
infantile mortality and improve living conditions and hygiene. In Bolivia the
authorities are particularly sensitive to these problems and they have developed the
Agua para todos programme in rural and urban areas.

Bolivia: drinking water in the Beni department

This project for the 125 000 inhabitants of this sparsely populated department has been running
since January 1998. It focuses primarily on urban centres with 5 000 odd inhabitants but does
not neglect low density areas. By the year 2002, 50 water collection and distribution systems will
have been set up in the centres and 400 in low-population areas. This is an innovatory project
implemented by microenterprises and encouraging the participation of users.. The same
formula has been used to build 3000 latrines with family-type septic tanks, of which 750
collectively on the urban sewage network, plus a waste water treatment station in the town of
Santa Ana. Training programmes on the management and maintenance of the infrastructure,
plus education in hygiene and health complement the project and ensure its viability. This pilot
2.1 million by the government, has
project, financed to the tune of
been reproduced in other departments of the country.

6 million by the EC and

€

€

4.7.3.3. Other infrastructure

El Salvador and Venezuela. Two programmes to rebuild infrastructure following
25 million
natural disasters were prepared in 2001: one in El Salvador allocating
for housing and social and economic infrastructure damaged by the earthquakes of
January and February 2001.

€

The reconstruction and rehabilitation programme for
Venezuela received a Community contribution of
million came from financial and technical co-operation line.

€

the state of Vargas in
10

35 million, of which

€

Ecuador. Steps have been taken towards integrated water basin management: this is
a very complex problem since the imperatives of protecting and conserving natural
resources have to be reconciled with local people's need for agricultural
land,
especially since many of them are indigenous peoples hard hit by poverty. A project
to manage the basin of the Paute river - which recently caused destructive flooding –
has been drawn up. Costing
11 million it will improve the state of these resources
and stabilise the environmental and social framework of the basin.

€

190

Transport, infrastructures and environment: 2001 commitments

Sector

Country

Project title

Infrastructure
Infrastructure

El Salvador
Uruguay

Infrastructure

Venezuela

Support programme for the reconstruction of El Salvador
Improvements: environment/urban development, western
zone of Montevideo
Programme of social reconstruction in the state of Vargas

Infrastructure
Infrastructure

Panama
Nicaragua

Rehabilitation of the historical centre of Panama City
El Guayacan-Jinoteca road project

Environment

Ecuador

Development project in the Paute basin

4.7.4.

Food security and rural development

TOTAL

€

Amount

25 000 000
900 000

10 000 000

950 000
10 900 000

11 000 000

58 750 000

In 2001 a special effort was made to achieve the environmental priorities agreed with
the Latin American countries concerning better management of natural resources and
efficient use of factors of production in rural areas (water management, legality of
acquisition of
the projects
land/land dispute settlement, etc.). To this end,
implemented in this region do not aim merely to satisfy short-term food needs but
also take account of long-term sustainable development.

Ecuador - food security

€

With the collapse of the financial sector and the devastating effects of El Niño and the
proportion of the Ecuadorians living in poverty rose from 49% to 65% between 1995 and 2001.
To reduce the vulnerability of the poorest sections of the population a direct food security
programme costing
6 million was launched in 2001. The programme will both support
production and promote nutritional awareness in health centres. The support for rural
production is implemented in liaison with the World Bank, civil society and central and local
government. This will increase the intervention capacity of local organisations and so bring
about a structural improvement in production capacity in less advantaged parts of the country
The EU is giving substantial financial support to two key instruments in the process, namely a
local investment fund and a rural finance system.

Argentina – integrated project in the Ramón Lista region

The indigenous Wichi community lives in the region of Ramón Lista in Formosa province in
north-western Argentina. The population is concentrated in an area of 3 500 km² along the
Pilcomayo river.

Community aid finances actions covering education, training, nutrition, the construction of
infrastructure (roads, houses, health posts, schools, harvest basins, water supplies, etc),
8.6 million project, 5.5 million of which
reforestation, and environmental protection. The
comes from the EU, has been running since 1995 (EU funds implemented:
3.5 million). The
project benefits 6000 people living in 20 communes.

€

€

The most significant results were obtained with infrastructure, 64 houses with access roads were
built in 2001. The project has also developed a large-scale training programme and provided
communications and transport equipment; side by side there is also the promotion of craft
activities and small businesses. All activities, from programming to the implementation, have
been carried out with the direct participation of the beneficiaries and local organisations.

191

Rural development/food security - 2001 commitments

Sector

Country

Project/programme title

€

Amount

Rural development

Regional L.
America

Support for agronomic research via the CGIAR

6 000 000

Food security

Peru

Food security - European Commission

Food security

Honduras

Several operations

Food security

Ecuador

PROLOCAL (Programa de Alivio de la Pobreza y
Desarrollo Local Sostenible)

Food security

Bolivia

Programa de Apoyo a la Seguridad Alimentaria
(PASA)

Food security

El Salvador

Several operations

Food security

Nicaragua

Several operations

Food security

Guatemala

Several operations

TOTAL

4.7.4.1. Local and regional development

5 000 000

6 696 996

6 000 000

2 145 901

690.010

891 312

447 350

27 871 569

Chile. A project to draw up a master plan for the coastal area of the Coquimbo
region illustrates how environmental concerns can be taken on board in the context
21.5 million project
of good governance and decentralisation of government, The
will help mitigate the negative impact of tourism and fishing on natural resources.
The project will also deal with the problems of managing natural resources, above all
water, in the arid ecosystems of the interior.

€

Programa Integrado de Gobernabilidad y Descentralización

This four-year project in the Coquimbo region in Chile is in its second year of implementation.
The total budget is

21 million.

€

It provides support for decentralisation and institutional development and all the activities take
account of the environmental dimension.

The fields of intervention are: local/municipal development in nine of the 15 communes of the
region, economic development in all 15 communes of the region, and regional development and
regional planning in eight communes. In the latter case, the project activities include basin
management and planning/management of the coastal area (400 km of coast).

The participation of the people affected is systematically encouraged. In the Río Choapa basin
project the users of the water (farmers mainly) act as the equivalent of a basin management
agency. For the planning and management of the coastal area, it is the inhabitants of the
"Choros" and "Punta de Choros" districts of La Higuera who have drawn up their
development project in conjunction with the municipality.

4.7.4.2. Alternative development

In addition to the rural development projects promoted by the EU, another concept
has emerged, that of alternative development. Through a package of measures, it
aims to effect a switch in production from illegal to legal crops. It entails taking
account not only of economic considerations but also the whole way of life in the

192

intervention area. The choice of measures is arrived at
consultation with the interested parties.

through democratic

Bolivia and Peru. In these countries alternative development concerns for the most
part illegal coca production. The Andean countries see the EU programmes as
strategic support in the fight against the production and processing of drugs. The
production,
programmes
provide
infrastructure, support
the
environment and forests.

the democratic process, and management of

support
for

alternative

livestock

crops,

for

PRAEDAC (Programme of support for the alternative development strategy in Chapare)

€

In partnership with the peasant organisations and local authorities of Chapare, this programme
3 million. The local authorities have carried out
has supported projects costing more than
infrastructure works for sewage, education and health and built roads. All works have been
proposed and carried out on a participatory basis. The population of Chapare chose the projects
and implemented them in association with the local authorities, contributing 30% of the
financing themselves. The production of fish, bananas and pineapples for the local and
subregional markets has been a big success.

A credit programme promoted by PRAEDAC via a local financial institution has benefited 400
1.2 million in handicraft projects,
families.. The borrowers have invested a capital of
improvements in the marketing of livestock, agricultural produce and eco-tourism.

€

4.7.5.

institutional support

The Commission efforts here are aimed at
institutional capacity building, good
governance and rule of law.134 Policy is set out in the communication from the
Commission to the Council, Parliament and the Economic and Social Committee on
a "new EU-Latin-American partnership on the eve of the 21st century.135

4.7.5.1. Institutional support at national level

This involves two types of action. One underpins the efforts of Latin American
governments to consolidate the rule of law by helping to improve the working of the
public administration and promote good governance (also at local and municipal
levels). A second consists of support for government reform programmes and
decentralisation in the form of modernisation of the central and local administrations,
tax reform, pruning and modernising public services and training of civil servants. In
2001 three projects were approved for a total of

22.1 million.

€

Institution building - 2001 commitments

Institution building

Country

Project title

€

Amount

Justice

Guatemala

Support programme for reform of the justice system

10 150 000

Tax system

Brazil

Decentralisation

Costa Rica

Support for the modernisation of the Brazilian fiscal
system
Municipal reinforcement and decentralisation

TOTAL

2 350 000

9 600 000

22 100 000

134

135

COM(2000)212 final of 26.4.2000 and Declaration of the Council and the Commission of 10 November
2000.
COM(1999)105 final of 9.3.1999 and Country Strategy Papers.

193

4.7.5.2. Regional integration

The European Union attaches great importance to regional integration. In this sector
the Commission has implemented co-operation projects to support the regional
integration process and enable the countries concerned to endow themselves with the
capacity and institutions necessary for integration into the international system. In
2001 three projects were approved, for Central America, Mercosur and the Andean
Community, for a total of

13.8 million.

€

4.7.6. Macroeconomic policies

In 1999-2000 the Commission used macroeconomic aid as an instrument of co-
operation with Latin America by giving financial support to Bolivia, Honduras and
Nicaragua in the framework of the World Bank's HIPC initiative (Highly Indebted
Poor Countries). The Commission has allocated
45 million to the initiative. It also
collaborates with other donors
studies on
macroeconomic policies. In 2001 the Commission supported a programme of studies
coordinated by CEPA on the analysis of macroeconomic conditions and public
finances.

in financing programmes of

€

4.7.7.

Social services: health and education

4.7.7.1. Health

in Latin America,
Two quite different mortality and morbidity profiles coexist
reflecting poverty or, in contrast, the typical health problems of more developed
societies. The proportion of public spending allocated to health is clearly insufficient,
management of services is poor and the services are not very accessible. What is
more, less than a third of the population has social security cover. There is also a
tendency to concentrate financial and human resources in urban areas but, even
where services are available, access is confined to the more affluent sections of the
population.

There are 11 health projects under way in Latin America, primarily support for
institutional infrastructure.

In Venezuela, there are two projects totalling
sector and the health system.

€

13.5 million to support the hospital

In Peru, two projects totalling

€

3.5 million support reform of the health sector.

Five projects to strengthen the healthcare system are under way in the Central
American countries for a total

29.6 million.

€

25 million was allocated in 2000 to a health sector project, which is now

€

In Bolivia
starting up.
€

In Brazil
which is now in its second year of implementation.

900 000 have been allocated to the São Rafael Biotechnology Centre,

194

Guatemala – Apoyo a la reforma del sector salud

The APRESAL project, to which the Community contributes
11.3 million, has become an
invaluable partner of the Ministry of Health. Its main activities, concentrated in the Alta
Verapaz department where there is a large indigenous population, are designed to improve
infrastructures and equipment, access to water and to health services, the availability and
proper use of essential medicines and traditional medicine.

€

The project has developed original and effective working methods, better management of
services and better training of human resources in the sector. To achieve its goals and carry out
its activities, APRESAL liaises with the Ministry of Health, NGOs and grassroots communities.

Its principal concern is to make these results sustainable and capitalise on this experience in
order to improve the quality of future interventions. It is difficult to measure the direct benefits
of the project but APRESAL's work has clearly contributed to the establishment of a
vaccination system providing suitable cover. Furthermore, after the passage of health
professionals in the project area, maternal mortality in the Alta Verapaz region was reduced by
half. Other results include improved access to secondary healthcare, sanitation systems and
drinking water. Health education has also been introduced in schools.

Nicaragua - Decentralised healthcare
€

14 million project "Fortalecimiento del Sistema de Salud de
The overall objective of the
Nicaragua" is to make the public health system more effective. The activities financed by the
project are concentrated in the north and cover approximately one million people.

The project is based on an integrated intervention strategy using criteria of quality, accessibility
and social participation. The use of health resources is optimised through a decentralised
organisation of health services centred on primary care, which are organised by levels of service
provision. The project is currently being implemented; the expected results are a functional
organisation of decentralised services, developed in an integrated and gradual manner with a
suitable geographical distribution and population cover.

4.7.7.2. Education

EU-Latin America co-operation on education is designed to ensure that activities on
the ground are implemented for and with the local beneficiaries, taking into account
identified priorities. This facilitates the "ownership" of the results and adaptation of
the practices and methodologies developed, so ensuring a multiplier effect.

The European Commission's social development projects that have a preponderantly
educational/vocational training component are designed to reduce inequalities of
access to compulsory schooling and to nurture the capacity to join society thanks to
work and personal development and attenuation of the conditions which can lead to
failure.

There are 14 education/vocational training projects under way in Latin America.
Some support key aspects of educational reform, others are structural, including the
insertion of young people into the world of work, others are specific to vocational
training.

195

El Salvador - Apoyo al proceso de reforma de la educación media en el área técnica

€

EC contribution :

14.2 million

This project aims to improve the quality of lower secondary education, in particular technical
schools, and promote equal opportunities, including gender equality, through provision of
support for national educational reform. The project will transform 22 lower secondary
technical institutes in 14 departments of the country into "model centres".

APREMAT has become an invaluable partner of the Ministry of Education and plays a leading
role in the reform of technical education.

After a participatory development phase to look at new teaching methods, the project is
working closely with the principal actors for the implementation of model teaching approaches.
As well as the Ministry of Education, the educational institutions throughout the country,
industry, governmental and non-governmental organisations, the Chamber of Commerce, and
so on are involved in this decision-making process.

The qualitative
equality and
technical education,
environmental education, should make a decisive contribution to the cultural, social and
economic development of the country.

including gender

improvement of

Peru - Progama marco de formación profesional tecnológica y pedagógica

€

EC contribution:

9 million

This project comprises two components: PROTEC (technical training) and PROEBI (bilingual
teacher training). The PROTEC component is designed to remedy the shortcomings of an
unclear policy on technical education, alleviate the lack of economic and human resources and
improve the quality of the training given. Almost 9000 people were trained in 2001. A network
of 13 HTI's (higher technical institutes) in the main regions of Peru has been set up.

The PROEBI component is intended to train bilingual instructors in Peruvian Amazon. The
indigenous peoples of Amazonia took an active part in the identification, formulation and
implementation of
interdisciplinary work by
anthropologists, linguists, educationalists and indigenous specialists.

the project. There has been extensive

4.7.7.3. Support for disadvantaged groups

Assistance for disadvantaged groups, especially in an urban environment, requires a
multidisciplinary approach and active solidarity between the participants. The aim is
to bring together expertise and commitment in the service of integrated development
that would restore human dignity and cultural pride, as well as reduce economic
poverty.

€

9.2 million project was approved for the "social
El Salvador. In December 2001 a
prevention of violence and juvenile delinquency in El Salvador". It has as objectives
the reduction of juvenile delinquency and the social integration of 50 000 young
people at risk (aged 10 to 25) in the San Salvador metropolitan area.

In Latin America 16 co-operation projects for a total of
carried out in this sector.

€

116.7 million are being

196

Brazil - Support for disadvantaged groups in Rio de Janeiro and São Paulo

€

EC contribution:

12 611 792

In Brazil 70% of the population lives in urban areas. For three years the European Commission
has been making a significant contribution to the fight against exclusion in urban areas by
playing an active part in an urban and social development project carried out in partnership
with the municipalities of Rio de Janeiro and Santo André (state of São Paulo).

The work of Santo André has been recognised and lauded by the Brazilian authorities, notably
at the last "Istanbul + 5" world summit held in New York in June 2001.

More than 60% of the infrastructure started in 1999 in the favelas of Sacadura Cabral and
Tamarutaca has been completed.

In the period 2000/2001 more than 3 000 people received vocational training that would help
them enter the labour market. More than 1 100 children and adolescents took part in
educational and leisure activities (crafts, music, dancing, sport) to underpin the school syllabus.
Some 250 women take part annually in activities relating to equality and domestic violence, and
370 disabled people take part in specific projects to integrate them better into the community.

Argentina - Acción de Apoyo integral a la socialización de menores marginados
en El Gran Buenos Aires

€

EC contribution:

9 million

This project operates a shared management model, supported by a mixed institutional platform
which combines the efforts of the EU, the Argentinian public services at national, provincial and
local levels, and organisations of civil society.

The principal merit of the project is to forge links between the state and representatives of civil
society working with children and adolescents. A major contribution has been made by the
following activities: the building and/or equipping of 58 buildings for non-governmental
organisations; 40 training courses attended by 3 600 professionals of the public services and civil
society; direct care in the form of socio-health prevention for more than 3000 children; the
reinforcement and development of five new NGO networks with a total of 300 participating
organisations; raising public awareness by placing information about the situation of children in
the media (publication of the magazine Foro de Proamba magazine, radio time of 6200 minutes,
16 TV appearances, 30 filmed news items, 6 books about the project, etc.).

Paraguay - AMAR: integral assistance to high-risk minors

€

EC contribution:

10 030 000

In 1996 41% of the 4.1 million inhabitants of Paraguay were under 15, and 130 000 annual
births meant a doubling of the population in 22 years. Migration from the countryside to the
cities was enormous and shanty towns proliferated. Projects aimed at poor families were few
and far between, and not very effective. Faced with this situation, the Commission decided to
10 million grant to cover 79% of the
support Paraguay's Sécretaría de Acción Social with a
AMAR project's budget. the aim of this project is to minimise the social risks to which young
people are exposed by promoting their personal development, improving the families' living
conditions and stepping up institutional support of the community.

€

This five-year project, which started in February 1999 has established coordination with all the
actors on the ground so as to make the best use of resources and ensure complementarity. Close
co-operation between the government, the local church and AMAR has produced some initial
results, one being the entering of thousands of minors without identity documents in the civil
register. There was an eighteen-month pilot phase, at the end of which the initial approach
based on simple assistance was followed by activities to generate income for the families.

197

Social development - 2001 commitments

Sector

Country

Project title

Health

El Salvador

Rehabilitation of Sonsonate hospital

Education

El Salvador

Strengthening the multidisciplinary faculty at
University of El Salvador

the

TOTAL

€

Amount

700 000

129 500

829.500

4.7.8.

Thematic policies

4.7.8.1. European Initiative for Democracy and Human Rights (EIDHR)

€

In 2001 more than
15 million went to projects in Latin America under the EIDHR.
€
Two multiannual regional programmes (2001-2004) also started up in 2001 (
17.5 million from the 2000 budget);
they will promote Human Rights and
fundamental freedoms in the Andean Community and Central America. Activities
these programmes are carried out by non-governmental organisations,
under
independent universities and institutions. Microprojects for a total of
1.1 million
will be implemented in Colombia and Mexico.

€

€

€

the Human Rights of migrants and of

The EIDHR allocated almost
3.7 million to five projects to promote and defend of
1 million for a
Human Rights and fundamental freedoms . In Ecuador, nearly
programme to protect
families,
their
particularly women and children who became victims of trafficking following the
severe difficulties in the country since 1998; a project
to improve the legal
framework of children in El Salvador, Costa Rica, Guatemala, Nicaragua and
Honduras and to monitor the recent research on trafficking in children and their
230 000 wet to the organisation of a
commercial exploitation received
conference, the publication of best practices, the appointment of mediators and
exchanges of experiences on the work of the institutions and enhancing co-operation
between Latin America, the Caribbean and the EU. The aim of this project is to help
strengthen mediation machinery and national arrangements to protect Human Rights
in Latin America and the Caribbean, in accordance with democratic tradition. Five
€
rehabilitation centres for the victims of torture in Latin America were allocated
2.2 million.

450 000;

€

€

€

€

3.6 million for six projects.

Support for the democratisation process and strengthening the rule of law took the
848,000 for a project to develop the
form of almost
activities of the ANDI network (Children' s Rights News Agency), which embraces
five press agencies acting to defend the rights of the child in Brazil; the project will
directly benefit the member organisations, students, companies, media professionals
and organisations working with children and adolescents. In Argentina, a project was
accorded
to promote the participation of citizens in the decision-making
process and to encourage the dialogue between organisations of civil society and the
state in five regions of the country. It also aims to strengthen equal opportunities and
promote the defence of Human Rights in the context of democratisation.

400 000

€

€

€

Support for the prevention of the conflict and the restoration of peace is one of the
main priorities of the EIDHR. In 2001 it financed four projects in Latin America for
1.3 million for a project to safeguard the basic
over
rights of the Uraba communities, which are threatened by displacement as a result of
the conflict currently tearing apart the country. Two other projects in Colombia will

3.6 million. In Colombia,

€

198

€

(i) underpin and develop the work of 900 municipal mediators for the protection and
promotion of Human Rights (
560 000) and (ii) strengthen civil society as a key
actor in resolving the armed conflict in Colombia - the project aims to transform the
town of Barrancabermeja into an area of peace (
984 000). Lastly, a project in
Guatemala is designed to promote peace and reconciliation between communities in
three municipalities of the Alta Verapaz department that have been victims of the
civil conflict.

€

In 2001 the EIDHR supported the transition to democracy in Nicaragua by sending
an EU electoral observer mission to the general elections held on 4 November
2001. The team had six principal members and eight long-term observers, plus 36
€
short-term observers for the first round and 30 short-term observers for the second (
998 915).

4.7.8.2. Gender equality

Promoting gender equality is a crosscutting objective that is systematically taken into
account when co-operation projects are drawn up.

Two projects that are specifically targeted at women in Latin America are currently
under way:

Panama - PROIGUALDAD: The challenge of equal opportunities for women

EC contribution:

9.8 million

Launched four years ago, this project has improved Panamanian women's living conditions.

With the support of 31 institutions, 26% from the public sector and 74% from civil society,
PROIGUALDAD has managed to strengthen women's organisations participating in this
ambitious programme in urban and rural areas. These stakeholders will be able to continue
promoting equal opportunities once the project is concluded.

Campaigns have been carried out to raise awareness of gender equality issues in the public
sector. This aspect has been incorporated more fully in the education system by means of
human resources training and the development of appropriate methodologies.

There were also several communication schemes on this subject in 2001. The nation-wide
multimedia campaign on sexist stereotypes136 generated a huge response.

Paraguay - RED-CIDEM: Decentralisation at the service of women

EC contribution:

8.2 million

€

€

As part of the process of democratic transition in Paraguay, the aim of the project "Network of
Initiative and Development Centres for Women" is to strengthen the organisation of
Paraguayan women and promote their active participation in development. The Agreement
provides for setting up 14 Centres in different departments in Paraguay, 9 of which were up and
running at 31 December 2001.

Each of
these structures plays a vital role in the recently embarked-on process of
decentralisation by promoting in a pilot municipality a local development plan that takes into
account specific male and female aspects and by relying on the departmental authorities to
adopt measures to apply the "National Plan for Equal Opportunities".

These activities have been supplemented by directing 12 000 people to the competent bodies,
training 4 000 beneficiaries and contributing to the drafting, dissemination, circulation and
application of law 1600 against domestic violence. In the run-up to the municipal elections,
candidates from all parties signed a charter of good conduct and solidarity, including as a
priority the promotion and defence of women's rights. The main contributions of this project
are to foster the emergence of mutual trust between social actors and public institutions and a
new sense of citizenship in Paraguay.

136

http://www.proigualdad.com/index2.html

199

4.7.9. Coherence with community policies

Generally speaking, the development co-operation approach to the countries and
regions of Latin America is consistent with the other Community policies. This is
true for example, of
the Community competition policy, which fosters the
harmonisation of the rules of free competition, or the policy of Eurostat, which is
willing to disseminate the European Union's know-how to other; less advanced
regional organisations. Similarly, the Community's research policy allows the Latin
American countries to respond to calls for proposals under the international section
of research framework programmes.

In the trade field, coherence is ensured by means of support for co-operation
activities (presentation seminars) designed to disseminate the generalised system of
preferences (GSP) to the Central American and the Andean countries. Similarly,
regional co-operation activities designed to strengthen regional
integration and
establish common markets are consistent with Community trade policy. The trade
agreements that have been negotiated or are being negotiated with certain Latin
American countries or groups of countries also contribute to the increase in trade
between these countries and the European Union and thus to shared economic and
social development.

4.7.10. Co-operation with other donors

Co-operation between the Commission and other international organisations is
particularly close in Latin America. These institutions are essential partners of
European co-operation policy. They contribute to financing projects of common
interest, especially projects to combat poverty and strengthen democracy.

4.7.10.1.Inter-American Development Bank (IDB)

€

Since 1997 the Commission has contributed some
57 million to the financial
operations of the IDB. Currently the Commission is financing two major trust funds
4 million),
administered by the IDB: the special fund for technical assistance (
which finances missions carried out by national experts from the EU Member States
to prepare studies for IDB projects, and the special funds for small and medium-sized
€
enterprises (SMEs) (
540 000. The Commission also finance the Instituto de Desarollo Económico y
Social (INDES), a regional project for managers of health projects in Latin America.

15 million), which finances microcredit operations of up to

€

€

The Commission actively supports a number of IDB-headed consultative groups
(Colombia, El Salvador, Guatemala, Honduras
-
Reconstruction), which act as a coordinating umbrella for international donors in the
country or group of countries concerned.

and Central America

In addition, the two institutions initiated a programming dialogue in 2001. The
Commission departments concerned (DG External Relations and EuropeAid) sent
representatives to Washington in October 2001 to meet their IDB counterparts and
exchange views on the situation in Latin America., their respective programming
priorities, possible areas of co-operation and ways of better working together.

To that end the two institutions finalised a draft Memorandum of Understanding
which will provide a framework for greater collaboration on jointly agreed priorities,
namely the consolidation of democracy, poverty reduction and social equity, regional

200

integration and the development of
scheduled for May 2002 at the Madrid Summit.

information technologies. The signing is

In October 2001, a European Commission mission visited the IDB's headquarters in
Washington DC. On that occasion, new possibilities for co-operation were identified in the field
of support for microenterprises and regional projects. The Commission also finances the
Instituto de Desarollo Económico y Social (INDES), a regional support project for managers of
health projects in Latin America. The countries where co-operation between the IDB and the
EC should have the most impact are Bolivia, Brazil, Ecuador, Honduras, Nicaragua and Peru.

4.7.10.2.World Bank

In July 2000 the EC signed a Contribution Agreement to the HIPC (Heavily Indebted
Poor Countries) Trust Fund managed by the World Bank that would benefit Asian
and Latin American countries. The EC contribution amounted to
54 million, of
€
which
14 million),
Honduras (
14 million). All the contributions to the
Latin America countries were disbursed in 2001.

45 million was earmarked for debt relief assistance: Bolivia (

12 million) and Nicaragua (

€

€

€

€

The two institutions' loan programme takes place against a backdrop of political and
sectoral reform. Budget support is often applied. The World Bank calls this type of
operation a programme loan – which differs from the "classic" forms of project or
adjustment loans. The programmes must have a timeframe of 5 to 10 years and in
certain cases of up to 16 years. Budget support
is also envisaged for sectoral
programmes lasting 2-3 years.

4.7.10.3.US Agency for International Development (USAID)

The EC works alongside USAID under the New Transatlantic Agenda (NTA) and
joint action plan. Regular contacts are maintained in areas of common interest:
development of the private sector, institutional capacity building, assistance for
democratic institutions, Human Rights, decentralisation and so on. A study into the
evolution of development problems in Central America was carried out by the
Hamburg Institute of Ibero-American studies and the Inter American Dialogue of
Washington, DC. This analysis – warmly welcomed by USAID – proposes a model
of regional economic integration and puts forward proposals for the democratic
strengthening of institutions, for progress towards the customs and monetary union
and for the reform of tax and budget systems in the countries of the region.

4.7.10.4.Organisation of American States (OAS)

During 2001, as the EU Member States have permanent observer status in the OAS,
they met every month to discuss questions concerning the EU and exchange views
with OAS senior officials. The OAS, which is not a financing institution and only
intervenes in partnership with other organisations, has shown a marked ability for
collecting funds (USD 36 for USD 1 of grant). During a mission in October 2001,
there were exchanges of views on three areas of activity: projects concerning natural
risks, for which the OAS has proved to be very efficient and collaborates well with
the local authorities and NGOs; promotion of democracy and the Inter-American
Drug Abuse Control Commission (IDAC). Co-operation between the EC and IDAC
began 8 years ago, with the allocation of grants to combat trafficking in the chemical
substances needed for drug production.

201

4.7.10.5.European investment Bank

Signatory of framework agreements with 15 Latin American countries and a major
European player in the region, the EIB contributes to funding investment projects of
common interest to the EU and Latin America. As the Commission's partner, it has
mainly intervened in the following sectors: industry, energy, telecommunications,
water and sanitation, and transport. In 2001,
365.20 million was allocated to
operations in Argentina, Brazil, Panama and Mexico. An EC mission visited the
Latin America Directorate in June 2001. This mission identified three main areas of
co-operation: risk capital, SME financing and the increase in EIB loans to projects
from the private sector.

€

EIB projects signed in 2001

Country

Project title

Sector

Mexico
Panama
Argentina
Argentina
Brazil
Brazil
Brazil
Brazil

Vetrotex America
Cable &Wireless Panama II
VW Argentina
Central Dock Sud
COMGAS
Vega Do Sul
Veracel Foresty
Light Electricity distribution

Total

Industrial
Telecom
Industry
Energy
Energy
Industry
Agriculture
Energy

Amount
€
million

15.91
54.23
46.61
77.33
46.80
58.00
32.74
33.58

365.20

4.7.11. ECHO

€

In 2001 ECHO (European Community Humanitarian Office) granted humanitarian
aid of
35.05 million to Latin America. The two main areas of intervention were
Colombia and El Salvador. In Colombia, ECHO has been active since 1997 to help
people who are internally displaced as a result of the fighting between various armed
groups and the government, above all in the period immediately following their
displacement. In El Salvador, ECHO aid was used to provide the victims of the two
earthquakes at the beginning of 2001 with temporary shelter, clean water, sanitary
systems and medicines.

Other operations were in response to natural disasters in Bolivia, Paraguay, Peru,
Guatemala, Honduras and Nicaragua, and to help people displaced by the Chiapas
conflict in Mexico. Under its DIPECHO programme, ECHO also launched a series
of projects designed to ensure that local populations are better prepared against
natural disasters in the Andean Community and Central America.

202

ECHO - Financial decisions 2001

Country

Project title

Bolivia/Paraguay

Humanitarian aid for victims of the floods and drought in Bolivia
and by the drought in Paraguay

Colombia

Humanitarian aid for displaced people in Colombia

El Salvador

Humanitarian aid for people affected by the earthquakes of 13/01
and 13/02/01

Amount
€
million

1.950

10.000

10.000

Humanitarian aid for victims of the drought in Central America

3.350

Guatemala/Honduras/
Nicaragua

Mexico

Peru

Humanitarian aid for displaced people in Chiapas

Emergency relief for victims of the earthquake in Peru

1.800

3.150

1.800

32.050

Andean Community

DIPECHO Second Action Plan (disaster preparedness and prevention
measures) for the Andean Community

TOTAL

4.7.12. Monitoring in Latin America

In 2000 the Commission devised a system to monitor the improvement in results
based on the project cycle management tried out in 2001 in each geographical zone
(ALA/MED/ACP/Balkans). The initial data, still provisional, collected under this
new system have provided useful information about the progress of projects managed
by each geographical directorate and about the improvements that should be made.
The system will be extended to cover all of ECHO's activities and will be fully
operational in 2002.

In 2001, 80 projects were reviewed in 13 Latin America States. The Community
€
381.9 million. Of this total, 21% went to
contribution to these projects amounted to
the education sector and the rest was equally divided between the other sectors
analysed.

The average mark obtained by these projects was 2.69 whereas the average mark
obtained by all the projects financed by the European Community worldwide was
2.5.

The projects were marked on the basis of several criteria, such as effectiveness,
efficiency, expected secondary effects or inclusion of the environmental dimension.
In Latin America the effectiveness of projects was judged to be very satisfactory.
None the less, failure to meet deadlines and taking insufficient account of the
environmental dimension were underlined.

These results should, however, be handled with caution for the reasons set out in the
chapter on "Monitoring".

203

4.7.13. Conclusions and prospects

As it announced at the Rio Summit, the European Union is determined to develop a
long-term strategic partnership with Latin America to defend common political,
social, economic and trade interests at international level.

Developing the special relationship between the European Union and Latin America
means maintaining and stepping up dialogue with the Rio and San José Groups and
with the Andean Community, Mercosur, Chile and Mexico. It also calls for certain
conditions to be met, in particular the consolidation of democratic systems and the
strengthening of the rule of law in Latin America, together with reduction of poverty
and social inequalities and the integration of disadvantaged groups. The sustainable
integration of the Latin American economies into the world system and their
trading system requires a certain amount of
participation in the multilateral
adaptation. This calls for a context of regional
integration, as fostered by the
European Union.
In pursuit of these objectives, political dialogue and trade
negotiations must be accompanied by development co-operation

The policies pursued by the EU in 2001 have helped to strengthen the political and
economic autonomy of Latin America, while strengthening both internal regional
the
links and those of partnership with Europe. It
Commission intends to pursue its activities and to continue to direct its external aid
towards the countries and regions of Latin America.

is along these lines that

The second Summit of Heads of State and Government of the European Union, Latin
America and the Caribbean, which will be held in Madrid in May 2002, should
confirm these co-operation priorities.

204

5.

FEATURE : RESULTS-ORIENTED APPROACH TO DEVELOPMENT

5.1.

Country Performance and Project Performance

5.1.1.

Introduction

According to World Bank estimates, an extra $50 billion a year is needed to reach
the Millennium Development Goals (MDGs). The commitments made in Monterrey
in March 2002 to increase ODA levels are a major step forward in achieving global
sustainable development. The Monterrey consensus
aid
effectiveness with country ownership of good policies and sound governance,
promising more aid to good performers.

specifically,

links,

How can we be sure that this extra money, and indeed any development assistance,
actually leads to concrete results on the ground? How can we be sure that our efforts
are contributing bit by bit to prosperity and security for all?

These are not easy questions to answer. Strikingly, in most developing countries
data on poverty reduction are not merely unsatisfactory: they are often non-existent,
out-dated, unreliable, or simply not used as a tool for policy decisions. The
development community (composed of donors, governments and civil society) has
too often failed to examine the results of their policies and financing over the last
decades.

Reporting on financial commitments is not enough. Donors need to report and be
held accountable by their stakeholders for the concrete changes in the lives of poor
people stemming from the collective effort of development partners.

The Commission is in the process of moving increasingly towards results-oriented
development assistance. This commitment
to manage for and by results was
formally underlined in the Communication in 2000 from the Commission on the
European Community’s development policy and the resulting statements and action
plan.

This chapter sets out the two main approaches developed recently to measure
results. The results of any one donor’s efforts can be directly measured only on the
level of single-donor projects or programmes. Larger-scale operations involving
several donors as well as the government and other actors will yield results achieved
by a joint effort which cannot be attributed to one or another member of this team
(the so-called “attribution gap”). The first approach therefore describes how
collective results are monitored at the level of sectors and countries, using indicators
agreed by all stakeholders. The second part of this chapter presents an approach to
measuring and monitoring the results projects achieve,
their outcomes and
possible changes in the lives of the beneficiaries.

i.e.

This chapter describes work in progress, and presents the main elements of ‘where
we are’ in managing for results. These approaches are not yet finalised, and some of
the components not yet fully tested. The Commission understands this chapter also as
an invitation to the reader to participate in a collective reflection on effective and
reliable ways of measuring the impact of our external assistance on global
sustainable development.

205

5.2.

Monitoring Results: Country Performance

The introduction of Poverty Reduction Strategy Papers (PRSP) in 1999 results
orientation being one of the five principles of these – and the agreement of 189
countries on the Millennium Development Goals (MDG) in September 2000 gave
impetus to the move towards increasing attention to results. Concrete and more
results-oriented monitoring of country performance in economic growth and poverty
reduction stems from the necessity, identified in a range of studies, to improve:

For developing countries:

– Country ownership. Assigning responsibility to recipient governments for
achieving their objectives in terms of poverty reduction gives them more space to
define their own strategies and policies to this end.

– National accountability. In countries developing a Poverty Reduction Strategy,
this evolution of donors from monitoring policies and actions to a participative
results-oriented approach is essential if we are to promote the development of
national accountability.

– Policy-making process. The analysis of results on the ground should lead to

policy re-orientations and provide an input to policy dialogue.

For donors:

– Donor accountability to stakeholders. Reporting on financial commitments is
not enough. Donors need to report and be held accountable by their stakeholders
for the concrete changes in the lives of poor people stemming from the collective
effort of development partners.

– Donor co-ordination. Focusing on the results achieved by each country should
in
allow better co-ordination of donor performance assessment. Here again,
countries concerned, PRSPs should provide the framework for this co-ordination.

Two substantial areas of work illustrate that the Commission is moving increasingly
towards results-oriented development assistance: Country Strategy Papers (CSPs),
and the provision of macro-economic support in ACP countries.

5.2.1.

Results-oriented Country Strategy Papers

In the framework of the programming process,
the Commission is developing
guidelines for staff programmers to introduce development indicators in CSPs. As
most donors are still at a very early stage in the conceptual work on development
indicators, the Commission is working closely with Member States, OECD-DAC,
and other donors in drafting these guidelines.

A joint working group has been set up involving Member States, OECD-DAC, and
various Commission services. It held its first meeting in March 2002. The objective
of this working group is to explore the potential for donors to adopt a joint approach,
including common principles and typology, in their monitoring requirements in order
to reduce the burden imposed on recipient countries. The basis for this work is the
Draft guidelines for the definition of development
indicators prepared by the
Commission. This is “work in progress”, and its outcomes will progressively feed

206

into the Commission’s programming and review process. It has been warmly
welcomed by Member States and OECD-DAC.

These Draft guidelines start by defining principles and a typology, and present two
levels at which donors may use results-oriented indicators to monitor country
performance.

5.2.1.1. Typology

Indicators need to be classified according to a clear typology. We propose to use the
following classification, to ensure coherence with earlier work:

Input

Output

Outcome

Impact

– Indicators of

input measure the financial, administrative and regulatory
resources (often called “processes”) provided by the Government and donors. It is
necessary to establish a link between the resources used and the results achieved
in order to assess the efficiency of the actions carried out.

Eg: Share of the budget devoted to education expenditure, abolition of compulsory
school uniforms

– Indicators of output measure the immediate and concrete consequences of the

measures taken and resources used:

Eg: Number of schools built, number of teachers trained

– Indicators of outcome measure the results at the level of beneficiaries. The term

‘results indicators’ is used as well.

Eg: school enrolment, percentage of girls among the children entering in first year of
primary school

– Indicators of impact measure the consequences of the outcomes. They measure
the general objectives in terms of national development and poverty reduction.

Eg: Literacy rate, unemployment rate

These various types of indicators are all relevant for policy makers – that is, for
national Governments. However, they are not all similarly relevant for donors, who
should concentrate on the outcomes of the nationally-owned policies they support.

The conclusions of the pilot exercise on the reform of conditionality137 clearly
showed the need for donors to lay particular weight on outcome indicators. Past
practice however was focused rather on input or output
indicators, whose
improvement gives no guarantee of improvement of services: there are, for example,
numerous examples of an increase in budgets or even in the number of health
centres, which go along with a drop in attendance at these centres. Impact indicators
are slow to respond, complex to measure and depend on numerous factors other than
the Government's policy. Focusing on outcome indicators should allow increasing

137

Lead in Burkina Faso by the European Commission in the framework of the SPA, with 12 other donors.

207

(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
(cid:212)
ownership by Governments of the policies to be implemented in order to attain these
results.

A focus on these indicators should also enhance the credibility of development
assistance, in beneficiary countries as well as in donor countries.

5.2.1.2. Principles

Definition of indicators

(1)

It is necessary that each country and its main donors agree to use common
(outcome) indicators to assess country performance. In relevant countries,
this should be done in the framework of the PRSP monitoring system.

(2)

It is useful to disaggregate indicators, e.g. by:

– Gender

– Public / private sector

– Geographic (by distinguishing in particular the poorest regions)

– Rural / urban

– Income level (although that is seldom possible) and main source of income

In all cases the level of disaggregation should be specified when the indicators are
defined. This disaggregation allows better focus on the target populations for
development and poverty reduction policies.

(3)

(4)

(5)

indicators of all kinds

It is preferable to restrict the list to a limited number of essential indicators. A
multiplicity of
creates great difficulties of
to focus on the essentials. The
interpretation. It also makes it difficult
indicators chosen have then to be defined clearly and unambiguously (e.g. for
vaccination,
is the target
to specify which vaccines this involves, what
population etc.) .

Measurability is a key criterion when selecting indicators. This is a separate
issue from the quality of present data systems (discussed below). When
defining each indicator, it is necessary to consider the time and resources
needed to collect the data, and the frequency with which these data could be
obtained. It is possible that technically an indicator is measurable annually,
but in practice it changes only over the medium/long term. The evolution of
such indicator is then influenced by the policies implemented years earlier,
and its value as a measure of present policies may be limited.

It is often important to express the statistical data for the indicators not only
in percentage terms but also in absolute values, to allow the analysis to
exclude errors due to uncertainties in estimating the total population. It is also
preferable to work on trends rather than just on isolated data. Accordingly, it
is important to review existing databases when selecting the indicators. The
data over the last five years should be available: if this is not possible, the
indicator may need special justification.

208

Reliability and quality of data

(6)

(7)

It
is necessary to keep a watchful eye on the reliability and the
representativity of the data on which the indicators are based. In case of
doubt, it is preferable to use a `proxy', i.e. indirect indicator that is easier to
measure and which gives a good approximation for other indicators that are
more difficult
to adopt an evolutionary
approach, with regular checks on the validity of the indicators in relation to
the objective they are meant to assess.

is then essential

to measure. It

Support often has to be provided initially to check the quality of the data and
to help the Government to improve its reliability and increase the speed of
data processing – existing systems are often excessively heavy and slow. The
aim of this support should be to strengthen the national system. Experience
shows that this support does not in general need large sums of money, and
that quick progress on the essential data is possible. It will be important to
develop collaboration with Eurostat in strengthening statistical capacity.

Setting targets for the indicators

(8)

(9)

The Government of the country will set the target values for the indicators, in
a manner coherent with recent trends and policy orientations. They should be
discussed with the donors who plan to support the country. The Government
should define the targets for at least the period of the PRSP, if it has one, or
the next 3 years if not.

Discussion of the target values faces two difficulties: excessive optimism
(often connected with the fact that the indicators are used as a slogan rather
than as a decision-making tool) and excessive prudence (showing a lack of
ambition). The best way to avoid these two excesses is to follow a transparent
process within the country, involving civil society and Parliament both in the
discussions which lead to the definition of indicators and in their monitoring.
This transparency also affords the targets greater visibility, and contributes to
domestic accountability.

Analysis of the evolution of indicators

(10)

(11)

The analysis of the evolution of the countries’ performance should never be
restricted to a mechanical interpretation of indicators. It should be done in the
framework of a substantial policy dialogue with the Government, taking into
account the influence of internal and external factors.

is necessary to keep in mind that focusing on a limited number of
It
indicators, in particular when performance measured by these indicators is
used by donors to determine their levels of financial support, may alter
reporting behaviour or lead to a bias in prioritisation of policies. The
incentive effect of the overall set of indicators needs to figure in the policy
dialogue between Government and donor partners.

5.2.1.3. Monitoring country performance

The draft guidelines propose two sets of indicators that should be monitored in
Commission programmes at country level.

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At a general level, and in all countries where the Commission is working, a limited
set of indicators should be monitored (annually and in the medium term) in order to
have a global view of progress towards the MDGs. This limited set should draw from
the most relevant of the 48 indicators associated with the MDGs, plus, in order to be
able to report annually on countries’ progress, a small number of annually
measurable key indicators. These supplementary indicators would include input
indicators (which are not part of the MDG monitoring framework), e.g. indicators to
measure the financial support to specific sectors from both Government and donors.
It would also include quick-changing outcome indicators. The draft guidelines
suggest that this minimum set of indicators, once agreed, should be monitored
systematically in all Country Strategy Papers to allow comparability.

including annually
Monitoring this wide range of
measurable outcome and input indicators at country level, will allow the Commission
to keep an eye on the evolution of sectors even where it is not an active player. This
will inform the decisions taken at the review of the Country Strategy Papers.

indicators systematically,

At the sectoral level, in CSP focal sectors, a wider range of indicators is to be
monitored. These indicators should be part of the more comprehensive set of
indicators used for management and accountability purposes by the relevant
Ministries in country. Although they cannot so easily be measured through
generalised quantified indicators, policy orientations and regulatory measures by
Government should be monitored as well.

In all cases, indicators monitored by the Commission are based on the national
processes taking place in country (PRSPs for those countries for which they are
relevant). This is a process of reciprocal influence and experience sharing, as well as
a valuable tool for discussing policy issues and increasing Governments’ domestic
accountability.

5.2.2.

Poverty Reduction Budget Support

A second example of the results-oriented approach is budget support for PRSPs. So
far, this feature concerns only ACP countries. A similar approach is being extended
to other programmes (ALA, MEDA) where appropriate. In ACP countries the
European Commission has an innovative approach,
linking the amounts of aid
directly to the level of performance of the country in social sectors (mainly health
and education) and public finance management. This is done through the use of
performance indicators (e.g. share of spending on health and education; enrolment
rate; attendance at health centres; infant vaccination coverage, etc.) and intensive
discussions with Government on the degree of achievement of the targets it set itself.
Meeting these targets secures full funding; missing them reduces it.

In this way, the Government receives the resources to draw up a budget better
capable of delivering key social services, and also receives incentives to deliver those
common agreements between the
reflect
intentions. Because these targets
Government and the community of donors, they carry greater weight; because the
Commission is one of the leading donors, they should also reflect the priorities of the
Commission in this dialogue. Because they derive from a nationally owned PRSP,
they are more likely to be implemented than externally imposed conditions.

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14 out of the 30 ACP countries where the Commission currently provides budget
support already implement this approach (14 other countries are in the process of
agreeing on a set of indicators). This analysis is based on the 30 financing proposals
for Poverty Reduction Budget Support (PRBS) passed in 2000 and 2001, which
amount for a total of

875 millions.

€

5.2.2.1. New orientations derived from the Burkina Faso Pilot exercise

In the light of the results of the pilot exercise on reform of conditionality carried out
in Burkina Faso138 between 1996 and 2000, the Commission has set out new
orientations and mechanisms for its poverty reduction budget support programmes.
Their objective is to increase effectiveness of aid by improving ownership,
smoothing disbursements, and enhancing donor co-ordination.

The new orientations and mechanisms derived from the Burkina Faso Pilot exercise
aim to increase long term sustainability of
improve Government
ownership and develop donor co-ordination.

reforms,

The main concrete changes in EC budget support resulting from these new
orientations are a shift from traditional process conditionality to results-based
performance assessment, variable disbursements based on the results achieved, and
better co-ordination with other donors in the framework of the PRSP.

The degree of implementation of the new approach varies by country, due partly to
their different stages in the PRSP process and partly to variable availability of data.
However, discussions on donor co-ordination and performance indicators are closely
linked to the PRSP process.

5.2.2.2. Reform of conditionality

to a limited number of key
The EC’s new orientations on conditionality point
should be gradually replaced by
conditions. Traditional process conditions
performance assessment based on outcome indicators, leaving the Government more
space to decide its own policies.

Two main conditions remain associated to the signature of the financing agreement
and release of subsequent tranches. These conditions appear in all 2000 and 2001
financing proposals:

– Signature/satisfactory progress of agreement with IMF (Poverty Reduction &
Growth Facility) and sometimes with the World Bank. This should mean that the
country has a sound macro-economic framework.

– Progress on PRSP process

Therefore, EC programmes are closely linked to IMF (and sometimes World Bank)
conditionality.

138

This pilot was led by the EC with the support of 9 bilateral donors and the IMF, UNDP and WB in the
context of the Strategic Partnership with Africa (SPA). Its findings are summarised in ‘Bilan : Test sur
la Réforme de la conditionnalité’, July 2000.

211

Out of the 30 countries in the sample, financing proposals in 15 countries include no
additional process conditionality, and in 7 countries include process conditionalities
only in public finance management.

The shift
towards results-oriented performance evaluation has been much more
than in public
effective in the social sectors (health and education mainly)
expenditure management. The difficulty of identifying outcome indicators in this
field is the main reason for this slower pace.

A few countries have conditionalities in other domains than health, education, public
finance management and macro-economic framework (e.g.
justice or
regional integration).

transport,

5.2.2.3. Results-oriented performance assessment

The new orientations of EC budget support imply an increased focus on results when
assessing the performance of countries. This focus is strengthened through the
gradual move towards linking financial support to performance evaluations based on
outcome indicators.

3 main steps are necessary before it is possible to base disbursement on the analysis
of performance indicators:

– Agreement between the Government and the Commission on a limited set of
outcome indicators on which to base the evaluation, and clarity on how to monitor
them.

– Confidence that a reliable system exists to collect data on the agreed set of
indicators, if need be supporting its improvement through capacity building and
initial financial assistance.

– Decision of the Government on the target values for these indicators, based on

past trends and policy orientations.

Countries can be classified in three groups according to how far the EC programme
has gone along this path: most advanced countries, intermediate countries and least
advanced countries.

Most advanced countries

In the most advanced countries, prior agreement on a limited set of performance
indicators leads to their use in determining the disbursement of a subsequent variable
tranche in the programme. There is therefore one fixed tranche linked to sound
macro-economic policy (existence of an IMF programme), and one variable tranche
linked to performance assessment. In most countries, this variable tranche is divided
in two sub-tranches. One is linked to satisfactory management of public finances
(assessed through performance indicators), the other to the evolution of the set of
agreed performance indicators compared with the targets set by the Government.

The indicators on which disbursements are based are a mix of input, output and
outcome indicators. The most commonly used are the following:

212

Public finance management / budgetary management

- Share of Government’s budget arriving to most peripheral structures

- Budget allocated to social sectors, and actual expenditures

- Difference in unit costs of public sector procurement and market prices

Health

- Attendance at primary health service points

- Ante natal health care coverage

- Immunisation rates (DTP3, BCG and measles)

- Cost of basic medical care

Education

- Net / Gross enrolment rate (boys/girls) in first year of primary school

- Percentage of children passing from primary to secondary education

- Average pupil-teacher ratio

- Average pupil-classroom ratio

- Average pupil-book ratio

- Cost of access to primary education (private / public) for the family

The process of performance evaluation based on these indicators differs according to
the country. In all cases, the Government is asked to provide an analysis of the
results achieved, and possibly point out any external factors in order to allow an
assessment of the country’s performance on sound but not mechanical basis.
Discussion of the results of the measurement of the indicators involves responsible
line ministries of the Government, the EC, and sometimes organisations representing
beneficiaries or other donors. It may be decided that an indicator should be dropped,
in case of “force majeure” or exceptional circumstances.

The following method is applied in all countries:

– If the agreed target is reached or considerable progress is achieved, it scores 1

point.

– If the target is not reached but positive progress is noted, it scores 0.5 point.

– If the development is negative, or insufficiently positive, it scores 0 points.

• The total of these points gives the level of realised performance.

Calculation of the level of disbursement derived from this level of realised
performance varies according by country. The value of the variable tranche linked to

213

performance evaluation is on average 22% of the total amount of the programme (of
which 38% and 62% are linked to public finance and social sectors performance
respectively).

5.2.2.4. Conclusion

The new orientations for conditionality in EC budget support cannot yet be evaluated
in terms of results. Nevertheless, a review of the process and methodology is
currently under way. Meanwhile, they raise some major issues which all donors need
to consider:

– An increased focus by other donors on outcome indicators would enhance the

Governments’ attention to the results of its policies.

– The definition of a clear PRSP cycle, including an annual matrix of measures and
assessment of performance indicators, would improve the link between donor
support and the PRSP process.

– The

combination of

traditional process

conditionality with result-based

assessment is incoherent and should be avoided.

5.2.3. Way forward

Two main issues are crucial
approach is to be effective.

if the Commission’s choice of a results-oriented

The first one is the need to increase support to strengthening national statistical
system. This can be done in collaboration with Eurostat, and should involve
increased co-ordination with other donors.

The second one is achieving an improved collaboration with Member States and
other donors, both in headquarters and in country. This implies better information
sharing, agreement on a joint approach, and greater willingness to co-ordinate
monitoring and reporting around national systems.

5.3.

Project Results: Results-oriented Monitoring

5.3.1.

Background

Monitoring has many different definitions. It can be described as performance
monitoring, management monitoring or simply project monitoring. In all instances it
must be a timely, speedy and effective process to provide regular information on
involving the
progress. Monitoring is a regular mechanism of observation,
preparation and submission of status reports and analytical assessments of the
project’s evolution. It is concerned mainly with measuring actual against planned
results. It enables focused project management decisions to be taken, in order to:

– Allow adjustments to be made with minimal disruption

– Ensure that projects remain on course and reach their objectives.

Implementation Monitoring of projects or any other activities can be done on a
daily or weekly basis, for example by a project manager who has to keep a good

214

overview of the project's performance. This is mainly geared to overseeing the
transformation of inputs into outputs and is carried out by the project management
itself, supervised by the their own agency or authority and by the EC Delegations.

The results-oriented monitoring system, described below, assesses the project or
programme’s performance, as well as its wider implications (without analysing these
in depth). This system provides the Commission with independent advice by external
experts on its project portfolio. The system used in the ALA/MED/ACP and Balkan
regions since 2000 (as described below) is similar to, but distinct from, the system
used in the NIS (Tacis) countries since 1993. Harmonisation of the two systems is
planned for 2002. Having one consistent approach will ensure that the Commission
has comparable data for all regions where it provides external assistance.

In the present situation implementation monitoring is normally the responsibility of
the Government Authority and the EC Delegation.
In addition projects are
monitored, with a view to results, by an independent monitoring team at regular
intervals.

5.3.2.

Results–oriented Monitoring System for Development projects139 - Description

During 2000, the Commission conceived an improved results-oriented monitoring
system for the ALA/MED/ACP and Balkan regions, which is rooted in the
Commission’s Project Cycle Management system. This system was tested and
improved during 2001.

The main objective is to gather results–oriented information on projects in the field
and to report on progress. The system provides an overview on project progress
towards results for both Delegations and the Office. It is not primarily aimed at
project
requires more detailed
information, although it should of course be of use to them as well as to partner
Ministries and Governments.

authorities, whose day-to-day management

The system involves short field visits to projects by experienced external experts,
who complete semi-standard score-sheets estimating the efficiency, effectiveness,
impact, relevance and likely sustainability of projects and programmes. In order to
ensure consistency in the system, each of the five criteria is thoroughly defined in
conformity with existing methodology and then broken down into its components,
which the monitor has to consider carefully before giving a rating. The external
monitoring experts have varying sectoral and geographic knowledge and experience.
They work in appropriate small teams; their work is based on the analysis of
documents and interviews with representatives from all stakeholders for a given
project, including final beneficiaries. Key data such as the project budget are noted,
but no audit or in-depth financial monitoring is done. The reports, opinions of Task
Managers and basic project documents, are recorded in the central database, which is
be a key management and information tool.

Ongoing projects (at least six months of implementation and of another six months
1 million) are monitored. By the end
duration) of a certain minimum size (approx.
of 2001, about 500 projects with a total value of
4.7 billion had been monitored in
ALA/ACP/MED and the Balkans. It was possible, during the conception and test

€

€

139

Except TACIS countries.

215

phase to monitor some projects twice, the number of monitoring reports is therefore
higher than 500.

5.3.3.

First insights from the conception and test phase

With the conception and test phase having ended in January 2002, first insights have
been gained on what works and what can be improved. These insights should be
regarded with caution, as the sample of projects monitored was relatively small in
comparison to the total volume of aid. In addition, certain instruments, such as
budgetary support, have not been monitored.

Performance of projects/programmes varies according to size, region and sector. A
first general conclusion is that, on average, the projects assessed were progressing
“according to plan” or slightly better. The performance scale used was 1-4,
resulting in an unweighted average score of 2.5. Average scores for the various
attributes range from 2.51 to 2.67.

Two key observations were that:

– As might be expected, projects with well-formulated, clear objectives and
strategies tend to perform better than projects with no or poorly formulated
objectives and strategies.

– Common guidelines for implementation monitoring (daily information for project
management and delegation) and other basic management instruments are likely
to improve the efficiency of projects and programmes.

5.3.3.1. First insights by criteria

In the following section, best practices are highlighted in the shaded boxes.

The five main criteria in the assessments are relevance, efficiency, effectiveness,
impact and sustainability.

Average ratings for main criteria, by region140

Relevance
Efficiency
Effectiveness
Impact
Sustainability

Asia
2.72
2.63
2.93
2.83
2.73

Average rating by region
Balkans
2.17
2.25
2.33
2.33
2.33

ACP
2.57
2.53
2.64
2.59
2.51

LA
2.70
2.53
2.86
2.71
2.68

Med
2.21
2.40
2.27
2.25
2.39

Average rating,
all projects
2.57
2.51
2.67
2.59
2.55

Relevance and design (rating 2.57): Projects were generally relevant and inputs were
adequate, but the design was often a major weakness. Successful projects were
characterised by their clear reference to the national context and the existing needs
and demands of stakeholders. Poor performance in these areas was associated with
lack of a proper identification study or needs assessment to clearly identify the
circumstances and problems of the intended beneficiaries.

140

First monitoring round only, no re-monitoring visits

216

Mali: Programme d’Appui à la Politique Culturelle du Mali - 8 ACP MLI 14

Sector: Culture and recreation

Mali, one of the poorest countries of the world, is endowed with cultural heritage and tourist
potential, which are not sufficiently promoted and exploited. This projects aims to address this.

Relevance and quality of design

“The Programme is designed in strict adherence to the country’s sector policy. It takes up the
challenges of the Cultural Action Plan, establishing clear objectives, purpose and expected
results. The implementation strategy is realistic and the resources made available adequate.
Correctly, the Programme recognises and encourages collaboration and synergies with all other
initiatives, internal, regional or provided by other donors.”

Efficiency (rating 2.51): Projects had generally demonstrated their ability to respond
to changing needs and situations. However,
the timeliness of activities was
commonly estimated to be a serious deficiency. Successful projects employed high-
quality management staff and made good use of logical frameworks, work-plans,
other schedules and internal monitoring systems. Poor performers lacked the
necessary qualified and stable management capacities, and made too little use of
standard project management tools; co-ordination with other involved donors and/or
sub-contractors was difficult. EC procedures were also associated with extended
delays in implementation.

India : Community Management of Natural Resources ALA/ 93/ 33

Sector: Rural Development

The aim of the project is to contribute to reduced environmental degradation and create local
income opportunities through the development of participatory community management and a
series of micro social projects. The project has enabled remarkable improvements in the
economic and social conditions in the small tribal communities.

Efficiency

“A good cost control system has helped project management to achieve much lower costs for
each individual intervention, with the ultimate results that more micro-projects can be under-
taken without budget overruns. Project interventions are well planned, organised and imple-
mented in time. This led to a high success rate. Project staff are all nationals with a good level of
education in their specific fields and a great enthusiasm for the project objectives. Quality of
activities and results reflect this.”

Effectiveness
(rating 2.67): Successful projects were characterised by good
beneficiary involvement, participation and communication. Secondary effects are
sometimes found, and these have been received positively. Weak performers suffered
from problems of poor communication and contact with beneficiaries. Inadequate EC
procedures were also cited as a cause for low effectiveness.

217

Bangladesh : BRAC Education Programme ALA/99/15

Sector: Health policy and administrative management

The overall objective of the project is to contribute to poverty alleviation through access to non-
formal primary education for those children normally outside formal schooling. The project is a
follow-up to a previous phase where non-formal primary schools were opened throughout the
country covering more than one million children. In this phase, the focus is on the provision of
an improved full range primary curriculum.

Effectiveness

“The planned beneficiaries even in remote areas have access to project benefits. A very high
level of community involvement already exists and very good communications are maintained
with planned beneficiaries. The programme has adapted very well to ensure that benefits reach
as many beneficiaries as possible. The beneficiaries themselves have a high perception of the
project benefits exemplified by the fact that poor families prefer the project schools, which have
a token charge, unlike the free government system.”

Impact (rating 2.59): Quite often,
indirect and unplanned effects received high
positive ratings. Strong performance in this area was typically associated with
support to capacity building and awareness-raising, and good contacts with local
populations. Impact was sometimes low if crosscutting issues and potential linkages
to other projects and programmes were neglected.

Honduras: Desarollo de la Educación en Comunidades Urbano-Marginales en Honduras
HND/B7-310/96/204

Sector: Primary Education

The project aims to help marginal urban communities participate more actively in the country’s
democratic, social and economic development.

Impact

“The project is likely to have a strong impact on its environment and to contribute to its overall
objective. Communities are developing their capacity for self-organisation and self-management
of local policies and are likely to play a more active role in the development of civil society and
the country as such.”

Sustainability (rating 2.55): Socio-cultural (including gender), technological and
environmental issues were frequently considered to be good or very good but
financial and economic soundness was often weak. Sustainable projects tended to
interact well with policy makers to ensure high levels of policy support. Capacity
building was important at various levels, responding to local needs with high
involvement of beneficiaries in the design of the project. The findings suggest that
sustainability is likely to be weak if governments do not provide sufficient policy
support as well as local capacities and resources.

218

Tanzania : African Wheelchair Users’ Mobility Programme PVD/1999/284

Sector: Support to NGOs

In Africa, UNDP estimates that less than 1% of the need for wheelchairs is met through local
production, and UNESCO estimates that less than 2% of the people who need a wheelchair have
one. The project will develop the curriculum and course material for the world’s first ever
Wheelchair Workshop Manager’s Training Course (WWMTC). Likewise, the project will
locally produce a range of wheelchair prototypes for training in Tanzania.

Potential Sustainability

“The level of political and budgetary support from the relevant authorities and stakeholders is
high. The project is very much owned by the local stakeholders. The project clearly promotes
the participation of women in its activities. The project, which encourages the development of
local capacities and knowledge (specific training, design, production, distribution and financial
systems, institutional strengthening) will undoubtedly improve the living conditions of the final
beneficiaries”

5.3.3.2. First insights by Region141

Five regions have been distinguished: Asia, ACP countries (Africa, Caribbean,
Pacific), Balkan countries, Latin America, and the Mediterranean region. The
number of countries visited, projects monitored and re-monitoring visits to each
country are presented in the table below. This highlights the small sample size from
which the conclusions have been drawn and, therefore, why the results of the
interregional comparison of levels of project performance should be treated with
caution.

Various factors may contribute to differences in observed performance between
regional groups of projects. For example:

• Projects in one region may have been designed and conceived earlier than in other
i.e. at a period in time, when experience in project planning and

regions,
implementation was more limited.

• Differences in average project size may also lead to differences in performance in

interregional comparisons.

• The sectoral distribution of projects may also lead to differences in performance

in the interregional comparison.

The analysis of the results of monitoring in the regions is done on a fairly aggregated
level. Therefore, it is not possible to isolate the influences of individual factors.
Country-specific factors such as strength of the local project administration, develop-
ment orientation in government policymaking and administration, and existing
human resources and physical/organisational infrastructure for project planning and
factors such as the strength of project
implementation blend in with other
management on the EC side, or the specific portfolio of projects and programmes
allocated to that country.

141

Not including TACIS.

219

If, for example, projects in sector X are particularly difficult to plan and implement,
and most projects of sector X are concentrated in region Y, then performance in
region Y may be particularly low, but
for
performance will be the sector, not the region. Further analyses must be carried out,
before the impact of regional and other factors on project performance can be
assessed in a well-founded manner. For this analysis, a much more solid statistical
base of reports will be indispensable.

the relevant determining factor

These attribution problems are another reason why the results of the interregional
comparison of levels of project performance should be treated with caution. At the
most, the current analysis may provide orientation for the preparation of further,
more in-depth investigations into the nature of project performance in specific
regions.

5.3.4. Monitoring in TACIS Countries

to systematic
the majority of TACIS projects have been subject
Since 1993,
monitoring during their implementation, with a methodology similar to, but distinct
from, the one developed for the ALA/MED/ACP and Balkan regions. In 2001 the
three different external teams were merged and regional particularities harmonised.
In 2001, 856 monitoring reports and 543 country or sectoral notes were submitted to
the EC and other stakeholders. An assessment of project performance showed that
results were globally between ‘standard/to plan’ and ‘good’ with a tendency to
‘good’ for projects completed in 2001.

Further Steps

the reports. The system needs to be extended to cover

The value and usefulness of the monitoring system lies with the quality and
consistency of
the
Commission's co-operation instruments as completely as possible. As mentioned in
the beginning of this sub-chapter, the methodology is being continually improved on
the basis of lessons learnt and it may be further developed for the instruments of
development co-operation which go beyond projects and programmes, notably sector
wide approaches and budgetary support. Where coverage by this monitoring system
is not useful or feasible for technical reasons, another more appropriate instrument
may be needed to allow the Commission to be fully accountable.

The system has been extended to cover as large a share of activities as is
economically reasonable, and contract management has been handed over to the
concerned geographical directorates. The challenge is now not only to ensure high
quality services, but also maintain (and, in the case of Tacis, establish) consistency of
methodology.

Several questions remain open and will have to be decided in due time, such as the
place of monitoring in a deconcentrated external service. There are also firm plans to
assess, after an adequate interval, the usefulness of the monitoring reports and their
application in practice. A delay of two to three years' use of the system is suggested.

5.4.

Conclusion

The final outcome of the Monterrey conference reflected a widely shared consensus
about aid effectiveness. It combines ambitious objectives in terms of more aid, a

220

reduction of debt and trade barriers with a focus on results aiming at poverty
reduction.

The new concepts and agreements for which Monterrey now stands, pose challenges
for development co-operation, results-oriented monitoring and evaluation.

The challenge will be taken up on all levels, political and operational, financial and
technical. This chapter 5 deals with ambitious tools to better identify and judge
concrete results, in order to be accountable for the efforts made (manage for results),
but also steer efforts in directions yielding better results (manage by results).

An important first step in methodological terms has been achieved to monitor results
benefiting the society (global goals) as well as in terms of systematically measuring
concrete improvements in the lives of people (project objectives). More work is
needed, and planned, to test and improve the methodologies and to co-ordinate with
other players in the development community.

These works on improving aid effectiveness are, also, being accompanied and
supported by efforts to improve management, and evaluate outcomes on a strategic
level, described in the first chapter of this report. Efforts for better programming on a
country level go hand in hand with efforts to manage more efficiently operations, in
view of attaining the main development goals (see chapter 2).

221

6.

FINANCIAL TABLES

Breakdown by sector of Official Development Assistance (ODA)
to Part I countries of the DAC list financed on the General Commission Budget and the European
Development Fund (EDF) in 2001
€

Sector of Destination

Amount of Commitments in millions of
Total ODA

Managed by
EuropeAid

Managed by
Other DG's

SOCIAL INFRASTRUCTURE AND SERVICES

Education
Health
Population polices/programs and reproductive health
Water supply and sanitation
Government and civil society
Other Social Infrastructure
Subtotal

ECONOMIC INFRASTRUCTURE AND SERVICES

Transport and storage
Communications
Energy generation and supply
Banking and financial services
Business and other services
Subtotal

PRODUCTION SECTORS

Agriculture, Forestry and Fishing
Industry, Mining and Construction
Trade and Tourism
Subtotal

MULTISECTOR/CROSSCUTTING
General environmental protection
Women in development
Other multisector
Subtotal

Amount

%

243.91
277.00
173.03
224.27
427.93
503.61
1,849.75

200.16
91.37
134.12
158.42
80.78
664.85

473.68
234.13
153.15
860.96

132.57
8.02
1,047.35
1,187.94

4.1%
4.6%
2.9%
3.7%
7.1%
8.4%
30.9%

3.3%
1.5%
2.2%
2.6%
1.3%
11.1%

7.9%
3.9%
2.6%
14.4%

2.2%
0.1%
17.5%
19.8%

232.32
277.00
173.03
224.27
276.93
348.19
1,531.74

200.16
91.37
114.12
158.42
80.78
644.85

273.67
234.13
145.36
653.16

116.86
8.02
1,115.25
1,240.13

COMMODITY AID AND GENERAL PROGRAMME ASSISTANCE

11.59

151.00
3.40
165.99

20.00

20.00

200.01

7.79
207.80

15.71

84.12
99.83

4.51

4.51

0.00

243.14

4.1%

243.14

211.17
112.85
567.16

3.5%
1.9%
9.5%

206.66
112.85
562.65

76.13

1.3%

76.13

609.16

10.2%

119.62

489.54

178.07
5,994.02

3.0%
100%

147.57
4,975.85

30.50
1,018.17

Structural adjustment assistance with World
Bank/IMF
Development food aid/food security assistance
Other general program and commodity assistance
Subtotal

ACTION RELATING TO DEBT

Subtotal

EMERGENCY AND DISTRESS RELIEF

Subtotal

OTHER/UNALLOCATED/UNSPECIFIED

Subtotal

GRAND TOTAL

222

Breakdown by budget line of external aid financed on the
General Commission Budget in 2001

Total

Managed by EuropeAid Managed by other DG's
Commitments Payments Commitments Payments Commitments Payments
30.53
203.26
1,167.89
2.53

540.00
1,121.18
1,650.69
26.30

Item
B7-01..
B7-02..
B7-03..
B7-04..
B7-20..
B7-21..
B7-30..
B7-31..
B7-32..
B7-4...
B7-42..
B7-51..
B7-52..
B7-53

Amounts in M

€

Description

Pre-Adhesion - SAPARD
Pre-Adhesion - ISPA
Pre-Adhesion - PHARE
Pre-Adhesion - Malta & Cyprus
Food Aid
Humanitarian Aid
Asia
Latin America
South Africa
Mediterranean
Near & Middle East
European Bank for Reconstruction & Devt
NIS & Mongolia - TACIS
NIS & Mongolia/CEEC's - Other
actions
Balkans
Cofinancing NGO's

B7-54..
B7-60..
B7-6002 Decentralised co-operation
B7-61..
B7-620.
B7-6211 Global Health Fund
B7-63..
B7-6510 Coordination/evaluation/inspectio

Training & public awareness
Environment/tropical forests

Social infrastructure & services

n

B7-6610 Anti-personnel mines
B7-66..
Other specific actions
B7-6710 Rapid intervention operations
Democracy & Human Rights
B7-70..
International fishing agreements
B7-80..
B7-8710 Bananas ACP
B7-8...

chapters

Other
Community policy

external

of

540.00
1,121.18
1,650.69
26.30
461.39
522.99
407.74
300.20
121.59
808.84
100.30

407.78
40.00

824.98
197.24
5.06
3.72
42.10
60.00
26.75
9.92

12.00
55.87
19.98
104.72
194.30
43.50
32.94

30.53
203.26
1,167.89
2.53
483.86
561.08
383.12
151.94
99.48
477.01
101.97
7.43
382.48
40.65

920.02
161.22
3.52
2.54
33.90

11.19
8.59

4.07
70.30
6.20
54.06
191.96
16.86
25.14

461.39

483.86

522.99

561.08

407.74
300.20
121.59
761.84
100.30

383.58
40.00

704.98
197.24
5.06
3.72
42.10
60.00
26.75
9.92

12.00
2.26

383.12
151.94
99.48
471.93
101.97

361.16
40.00

844.97
161.22
3.52
2.54
33.90

11.19
8.59

4.07
22.11

104.72

54.06

43.50
1.91

16.86
2.55

47.00

5.08

24.20

7.43
21.32
0.65

120.00

75.05

53.61
19.98

48.19
6.20

194.30

191.96

31.03

22.59

B8-0… Common Foreign & Security

32.67

29.50

32.67

29.50

Policy

Total Title B7-B8

8,174.75

5,632.30

3,823.47

3,288.54

4,351.28

2,343.76

223

Amounts in M

€

Breakdown by instrument of development assistance financed on the
European Development Fund (EDF) in 2001

Total

Managed by EuropeAid

Instrument

Commitments

Payments

Programmed aid
Structural Adjustment
Risk Capital
Interest Rebates
Emergency Aid
Aid to refugees
Sysmin
Stabex
HIPC
Others

Total EDF

869.94
215.46
383.47
16.33
11.90
41.14
-0.28

16.20
1,554.16

752.52
303.76
183.46
15.57
30.48
7.95
48.18
353.22
350.00
22.72
2,067.86

Commitments
869.94
215.46
383.47
16.33
11.90
41.14
-0.28

16.20
1,554.16

Payments

752.52
303.76
183.46
15.57
30.48
7.95
48.18
353.22
350.00
22.72
2,067.86

Managed by
other DG's
Commitments Payments

0.00

0.00

Grand Total Budget + EDF

9,728.91

7,700.16

5,377.63

5,356.40

4,351.28

2,343.76

224

Breakdown by country/region of external aid financed on the
General Commission Budget and the European Development Fund (EDF) in 2001

Country/Region

Commitments

Payments

Commitments

Payments

Commitments

Payments

Europe, Total

Albania
Bosnia-Herzegovina
Croatia
Macedonia (FYROM)
Malta
Moldova
Slovenia
Turkey
Federal Republic of
Yugoslavia
States of Ex-Yugoslavia
Unspecified
Europe Unallocated

Africa, Total
North Of Sahara, Total

Algeria
Egypt
Morocco
Tunisia
North of Sahara
Unallocated

South of Sahara, Total

Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Comoros
Congo, Democratic
Republic
Congo, Rep.
Djibouti
Equatorial Guinea
Eritrea
Ethiopia
Gabon
Gambia
Ghana
Guinea
Guinea-Bissau
Ivory Coast
Kenya
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mayotte
Mozambique
Namibia
Niger

Part I: Developing Countries & Territories
Official Development Assistance (ODA)

1,212.75
41.45
141.99
60.61
83.84
8.14
20.95
52.22
203.00
548.89

1,192.71
61.47
168.61
14.40
48.92
3.98
5.18
51.07
91.33
686.37

907.36
36.45
136.24
60.61
57.20
0.64
20.17
0.00
156.00
388.39

949.00
57.30
152.74
14.40
27.69
0.44
4.18
0.00
86.62
595.81

305.39
5.00
5.75
0.00
26.64
7.50
0.78
52.22
47.00
160.50

243.71
4.17
15.87
0.00
21.23
3.54
1.00
51.07
4.71
90.56

0.00

51.59

0.00

0.03

0.00

51.56

51.66
2,038.11
319.07
79.37
1.79
122.42
91.60
23.89

1,719.04
68.25
11.89
1.99
29.32
20.73
66.80
1.05
-1.47
40.88
2.02
54.56

-8.20
0.57
3.09
24.78
69.46
16.35
5.46
51.20
56.21
22.45
14.06
13.95
22.64
24.94
82.17
43.70
58.90
119.44
5.41
0.45
67.76
16.51
13.91

9.79
2,261.32
246.80
23.64
88.16
60.80
74.19
0.01

2,014.52
67.69
49.28
4.87
42.00
70.60
46.66
3.08
17.42
42.49
4.38
49.13

3.66
7.62
3.23
26.20
116.36
20.32
5.13
27.22
23.56
20.19
91.13
90.44
10.33
9.85
64.91
78.39
45.63
130.32
9.25
1.51
72.55
21.44
44.43

225

51.66
1,730.97
302.74
63.04
1.79
122.42
91.60
23.89

1,428.23
31.27
11.89
1.99
29.32
0.73
66.80
1.05
-1.47
40.88
1.67
19.56

-8.20
0.57
3.09
24.78
62.76
16.35
5.46
51.20
48.38
5.95
12.52
10.95
22.64
24.94
80.44
43.70
58.90
33.44
5.20
0.45
65.76
16.51
13.91

9.79
1,947.83
229.61
6.45
88.16
60.80
74.19
0.01

1,718.22
27.83
49.28
4.87
42.00
56.26
46.66
3.07
17.42
42.21
2.46
20.05

2.49
7.62
3.23
23.92
105.56
19.99
5.13
27.22
17.23
7.85
89.89
88.60
10.33
9.85
62.86
78.39
45.63
44.16
9.03
1.51
69.04
21.40
44.08

0.00
307.14
16.33
16.33
0.00
0.00
0.00
0.00

290.81
36.98
0.00
0.00
0.00
20.00
0.00
0.00
0.00
0.00
0.35
35.00

0.00
0.00
0.00
0.00
6.70
0.00
0.00
0.00
7.83
16.50
1.54
3.00
0.00
0.00
1.73
0.00
0.00
86.00
0.21
0.00
2.00
0.00
0.00

0.00
313.49
17.19
17.19
0.00
0.00
0.00
0.00

296.30
39.86
0.00
0.00
0.00
14.34
0.00
0.01
0.00
0.28
1.92
29.08

1.17
0.00
0.00
2.28
10.80
0.33
0.00
0.00
6.33
12.34
1.24
1.84
0.00
0.00
2.05
0.00
0.00
86.16
0.22
0.00
3.51
0.04
0.35

Nigeria
Rwanda
St. Helena
Sao Tome & Principe
Senegal
Seychelles
Sierra Leone
Somalia
South Africa
Sudan
Swaziland
Tanzania
Togo
Uganda
Zambia
Zimbabwe
South of Sahara
Unallocated
America, Total
North & Central, Total

Anguilla
Antigua & Barbuda
Barbados
Belize
Costa Rica
Cuba
Dominica
Dominican Republic
El Salvador
Grenada
Guatemala
Haiti
Honduras
Jamaica
Mexico
Montserrat
Nicaragua
Panama
St. Kitts-Nevis
St. Lucia
St. Vincent & Grenadines
Trinidad & Tobago
Turks & Caicos Islands
North & Central America
Unallocated

South, Total
Argentina
Bolivia
Brazil
Chile
Colombia
Ecuador
Guyana
Paraguay
Peru
Suriname
Uruguay
Venezuela
South America Unallocated

America Unspecified
Asia, Total
Middle East, Total

Iran
Iraq
Jordan

66.96
2.89
-0.08
2.07
28.59
2.26
14.87
5.56
133.18
21.81
0.77
166.41
1.64
70.00
59.61
33.69
87.58

656.90
373.01
-0.01
-0.13
6.51
6.53
9.60
19.11
11.86
20.98
55.32
0.50
29.67
13.19
7.73
29.43
4.85
0.00
45.07
9.32
0.00
12.03
6.38
0.41
3.00
81.66

195.56
1.15
9.75
6.40
3.27
54.86
22.86
21.36
2.23
13.04
16.72
1.61
38.29
4.02
88.33
955.66
188.09
2.65
12.89
20.83

66.96
2.89
-0.08
1.75
20.59
-0.04
3.87
3.86
133.18
4.81
0.77
134.26
1.64
70.00
59.61
33.19
87.58

613.12
349.14
-0.01
-0.13
6.51
6.03
9.60
10.85
11.86
20.76
45.32
0.50
28.90
13.19
6.70
29.17
3.05
0.00
44.04
9.32
0.00
12.03
6.38
0.41
3.00
81.66

175.65
1.15
8.68
6.40
3.27
41.54
22.23
21.36
1.25
9.40
16.72
1.61
38.02
4.02
88.33
746.95
155.31
2.65
0.01
20.83

26.72
50.36
0.00
5.42
26.97
0.93
33.66
22.54
110.78
9.49
12.89
88.45
5.41
76.60
57.91
20.27
62.70

387.89
227.48
0.10
0.19
0.48
6.87
1.41
5.88
5.99
15.13
10.60
0.37
22.43
18.41
15.04
48.79
3.62
0.19
33.73
3.32
4.11
18.27
4.13
1.06
0.22
7.14

124.88
8.69
29.14
16.69
8.77
8.62
5.59
10.12
8.31
21.32
1.73
2.18
3.72
0.00
35.53
686.33
157.57
1.73
0.15
19.65

26.72
50.51
0.00
5.74
34.98
4.99
45.56
27.86
110.78
25.44
12.89
113.73
5.41
77.01
58.04
20.52
73.07

424.61
248.60
0.10
0.19
0.48
7.12
1.41
13.40
5.99
15.35
17.75
0.37
22.63
18.46
16.42
48.79
4.58
0.19
34.85
3.32
4.11
18.27
4.13
1.06
0.22
9.41

140.48
8.69
29.83
17.12
8.77
17.52
6.36
10.16
8.94
23.88
1.73
2.18
5.30
0.00
35.53
870.13
182.90
1.73
12.70
20.15

226

0.00
0.00
0.00
0.32
8.00
2.30
11.00
1.70
0.00
17.00
0.00
32.15
0.00
0.00
0.00
0.50
0.00

43.78
23.87
0.00
0.00
0.00
0.50
0.00
8.26
0.00
0.22
10.00
0.00
0.77
0.00
1.03
0.26
1.80
0.00
1.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00

19.91
0.00
1.07
0.00
0.00
13.32
0.63
0.00
0.98
3.64
0.00
0.00
0.27
0.00
0.00
208.71
32.78
0.00
12.88
0.00

0.00
0.15
0.00
0.32
8.01
4.06
11.90
5.32
0.00
15.95
0.00
25.28
0.00
0.41
0.13
0.25
10.37

36.72
21.12
0.00
0.00
0.00
0.25
0.00
7.52
0.00
0.22
7.15
0.00
0.20
0.05
1.38
0.00
0.96
0.00
1.12
0.00
0.00
0.00
0.00
0.00
0.00
2.27

15.60
0.00
0.69
0.43
0.00
8.90
0.77
0.04
0.63
2.56
0.00
0.00
1.58
0.00
0.00
183.80
25.33
0.00
12.55
0.50

Lebanon
Palestinian Admin. Areas
Syria
Yemen
Middle East Unallocated
South & Centr. Asia, Total

Afghanistan
Armenia
Azerbaijan
Bangladesh
Bhutan
Georgia
India
Kazakhstan
Kyrgyz Rep.
Maldives
Myanmar (Burma)
Nepal
Pakistan
Sri Lanka
Tajikistan
Turkmenistan
Uzbekistan
South & Central Asia
Unallocated
Far East, Total
Cambodia
China
East Timor
Indonesia
Korea, Dem.
Laos
Malaysia
Mongolia
Philippines
Thailand
Viet Nam
Far East Asia Unallocated

Asia Unspecified
Oceania, Total
Cook Islands
Fiji
Kiribati
Marshall Islands
Micronesia, Fed. Sts.
Nauru
Niue
Palau
Papua New Guinea
Samoa
Solomon Islands
Tonga
Tuvalu
Vanuatu
Wallis & Futuna
Oceania Unallocated

LDC's Unspecified
Multilateral Aid

UNRWA
WFP
HIPC
GHF

Part I (ODA), Total

5.83
86.58
8.11
18.25
32.95
466.67
86.01
17.80
1.60
106.70
0.00
42.35
110.85
14.40
19.30
0.00
3.98
7.44
32.61
4.38
19.25
0.00
0.00
0.00

217.23
18.60
46.27
41.94
34.13
43.55
1.66
0.00
1.03
7.44
6.53
15.66
0.42
83.67
65.82
0.00
10.71
6.60
0.00
0.00
0.00
0.00
0.00
-0.18
3.08
0.22
6.25
0.00
2.96
3.92
32.26
857.53
207.25
57.25
90.00
0.00
60.00
5,994.02

5.83
68.57
8.11
16.36
32.95
341.70
29.43
10.20
1.60
106.06
0.00
29.80
95.06
14.40
19.30
0.00
1.99
4.75
26.90
1.96
0.25
0.00
0.00
0.00

166.27
13.70
44.12
30.82
32.23
20.18
1.66
0.00
0.00
5.98
2.03
15.13
0.42
83.67
65.74
0.00
10.63
6.60
0.00
0.00
0.00
0.00
0.00
-0.18
3.08
0.22
6.25
0.00
2.96
3.92
32.26
704.46
207.25
57.25
90.00
0.00
60.00
4,975.85

8.35
114.81
5.94
6.89
0.05
310.51
16.95
9.78
12.79
80.95
1.78
18.21
67.77
4.92
12.37
0.06
2.75
10.71
50.03
6.26
5.43
2.93
6.82
0.00

171.80
23.47
24.03
30.70
11.51
21.44
9.11
0.41
2.42
19.51
6.01
23.19
0.00
46.45
68.96
0.00
0.94
0.41
0.00
0.00
0.00
0.00
0.00
13.81
11.35
35.43
0.24
1.42
4.96
0.00
0.40
433.86
495.96
54.58
91.38
350.00
0.00
4,969.83

0.00
18.01
0.00
1.89
0.00
124.97
56.58
7.60
0.00
0.64
0.00
12.55
15.79
0.00
0.00
0.00
1.99
2.69
5.71
2.42
19.00
0.00
0.00
0.00

50.96
4.90
2.15
11.12
1.90
23.37
0.00
0.00
1.03
1.46
4.50
0.53
0.00
0.00
0.08
0.00
0.08
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
153.07
0.00
0.00
0.00
0.00
0.00
1,018.17

1.34
8.60
0.46
1.67
0.21
99.45
34.18
1.57
1.48
1.60
0.00
8.00
16.21
0.00
0.18
0.00
1.54
1.69
0.20
1.64
26.82
0.00
0.00
4.34

59.02
3.54
2.36
0.00
20.17
23.60
0.13
0.00
1.66
1.74
4.87
0.54
0.41
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
144.21
0.00
0.00
0.00
0.00
0.00
921.93

9.69
123.41
6.40
8.56
0.26
409.96
51.13
11.35
14.27
82.55
1.78
26.21
83.98
4.92
12.55
0.06
4.29
12.40
50.23
7.90
32.25
2.93
6.82
4.34

230.82
27.01
26.39
30.70
31.68
45.04
9.24
0.41
4.08
21.25
10.88
23.73
0.41
46.45
68.96
0.00
0.94
0.41
0.00
0.00
0.00
0.00
0.00
13.81
11.35
35.43
0.24
1.42
4.96
0.00
0.40
578.07
495.96
54.58
91.38
350.00
0.00
5,891.76

227

More Advanced Developing Countries

Aruba
Bahamas
Bermuda
Brunei
Cayman Islands
Chinese Taipei (Taiwan)
Cyprus
Falkland Islands
French Polynesia
Gibraltar
Hong Kong. China
Israel
Korea
Kuwait
Libya
Macao
Netherlands Antilles
New Caledonia
Northern Marianas
Qatar
Singapore
United Arab Emirates
Virgin Islands (UK)
MADCT Unallocated

CEEC's/NIS
Belarus
Bulgaria
Czech Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Russia
Slovak Republic
Ukraine
CEEC's Unallocated
NIS Unallocated
CEEC's/NIS Unallocated

Part II (OA), Total

Part II: Countries and Territories in Transition
Official Aid (OA)

42.59
0.50
-1.03
0.00
0.00
0.10
0.00
18.80
0.00
-0.01
0.00
0.00
15.01
0.00
0.00
0.00
0.00
-0.20
9.46
0.00
0.00
0.00
0.00
-0.04
0.00
3,692.30
1.12
348.45
178.06
70.15
242.18
117.14
186.10
1,049.82
691.91
152.65
148.58
109.83
230.56
165.12
0.63
3,734.89

47.22
0.29
0.84
0.00
0.00
0.00
0.00
3.58
0.00
6.16
0.00
0.00
29.91
0.00
0.00
0.00
0.10
4.84
0.27
0.00
0.00
0.00
0.00
1.23
0.00
1,761.18
3.57
155.27
89.33
30.53
185.90
53.76
68.33
315.85
243.89
109.37
66.17
108.70
136.07
178.76
15.68
1,808.40

11.84
0.50
-1.03
0.00
0.00
0.10
0.00
0.00
0.00
-0.01
0.00
0.00
3.06
0.00
0.00
0.00
0.00
-0.20
9.46
0.00
0.00
0.00
0.00
-0.04
0.00
389.94
0.92
1.07
0.38
0.00
0.53
0.00
0.00
0.28
0.00
112.30
0.00
108.91
0.00
164.92
0.63
401.78

17.26
0.29
0.84
0.00
0.00
0.00
0.00
0.00
0.00
6.16
0.00
0.00
3.53
0.00
0.00
0.00
0.10
4.84
0.27
0.00
0.00
0.00
0.00
1.23
0.00
369.31
3.38
0.13
0.70
0.09
0.00
0.00
0.16
0.04
0.80
84.84
0.13
107.31
0.00
171.73
0.00
386.57

30.75
0.00
0.00
0.00
0.00
0.00
0.00
18.80
0.00
0.00
0.00
0.00
11.95
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3,302.36
0.20
347.38
177.68
70.15
241.65
117.14
186.10
1,049.54
691.91
40.35
148.58
0.92
230.56
0.20
0.00
3,333.11

29.96
0.00
0.00
0.00
0.00
0.00
0.00
3.58
0.00
0.00
0.00
0.00
26.38
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,391.87
0.19
155.14
88.63
30.44
185.90
53.76
68.17
315.81
243.09
24.53
66.04
1.39
136.07
7.03
15.68
1,421.83

Grand Total Part I & Part II (ODA+OA)

9,728.91

7,700.16

5,377.63

5,356.40

4,351.28

2,343.76

228

7.

ANNEXES

These pages cover a series of activities undertaken in 2001 in the context of the EC Reform
described in chapter 1. The first section gives details of developments in the process of
harmonisation of contract and financial procedures. The second section gives a picture of the
financial backlog as on 31 December 2000 and progress with the reduction of this backlog.
Subsequent sections deal with other important activities related to the reform, such as, audit,
EuropeAid’s innovation unit, the EC’s relationship with other major international donors and
steps taken towards greater transparency and visibility.

7.1.

Harmonisation of contract and financial procedures

2001 saw further significant developments in the harmonisation of contract and
financial procedures.

EuropeAid Co-operation Office implemented the Practical Guide to EC external aid
contract procedures in the co-operation programmes and various beneficiary
countries within its area of competence. This activity involved training sessions in
Brussels and in Commission Delegations (see figures below). This Guide also set out
how to transfer management of the projects in the beneficiary countries in the context
of devolution.

The EuropeAid Co-operation Office Finance Guide applicable to the external actions
financed from the general budget of the European Communities and the updated
Finance Guide applicable to the actions financed from the 7th and 8th EDF were
finalised in December 2001. These guides, which are available for consultation on
the Office’s intranet, explain and document existing financial procedures. The new
financial circuits for commitments, contracts, payments, recoveries and closure of
commitments regarding the actions financed from the general budget, which were
approved/laid down by the Office’s management in June and November 2001, are
described in detail. Finally, both guides take into account the new division of duties,
powers and responsibilities between Headquarters and Delegations in the framework
of the devolution process.

On 8 November 2001, the Commission and the World Bank signed a Trust Funds
and co-financing Framework. This contains contract templates to be used in cases
where the Commission contributes to single-donor as well as multi-donor trust funds.
Co-operation between the Commission and the World Bank will now run more
smoothly. EuropeAid Co-operation Office also signed,
the
Commission, an agreement with the UN on the implementing modalities of the 1994
verification clause agreement. This issue had long been a stumbling block in the
relations between the EC and the UN. The outcome of this agreement has allowed
the parties to embark upon a more substantial revision of the 1999 EC-UN
framework agreement, in order to adapt it to the stronger partnership that they are
willing to build.

in the name of

Training

In 2001, the following specific training activities have been carried out by EuropeAid
Co-operation office:

229

Practical Guide to EC external aid contract procedures.

Brussels: 8 sessions for a total of 260 persons

Delegations: 3 missions for a total of 124 persons

Financial implementation.

Brussels: 4 sessions for a total of 100 persons.

Other figures

In 2001, EuropeAid Co-operation Office handled (Budget & EDF)

• more than 26,000 payments totalling

€

5,2 billion
€

• more than 1,600 commitments totalling

5,6 billion

Data concerning the Web-site of EuropeAid Co-operation Office in 2001:

• with reference to the rubric “Tenders & Grants”, the number of documents
published in 2001 is 3 270 (of which 891 are calls for tender & calls for proposal)

• hits (per month) more than 4 million.

• html pages downloaded (per month) more than 700,000

7.2.

External Aid and “RAL”

‘RAL’ is the amount of committed money that has not yet been paid. The term
comes from the French reste à liquider or rest to be paid. It is the sum of total
amounts committed in the past budgetary years, minus the total amounts disbursed or
de-committed.

Its existence derives from the budgetary concepts enshrined in the Financial
Regulation, as article 1.§4 provides for two types of appropriations for actions
running for more than one budgetary year:

• commitment appropriations, setting annual limits for the commitments which will

be entered into with third parties,

• payment appropriations, which are meant to cover the disbursements to these third

parties foreseen in any given year.

Some of the RAL is legitimate, as commitments are made in anticipation of
payments to be made in the future. The Commission uses the terms ‘old’ and
‘dormant’ to describe the money that genuinely makes up a payment backlog. Old
commitments are commitments made more than five years ago, and dormant
commitments are commitments on which no action has been taken for the last two
years.

The overall reduction of RAL was a priority prior to the creation of the EuropeAid
Co-operation Office. All old and dormant commitment are under review, and this

230

process continued throughout 2001, as well as the monitoring of their level in the
overall port-folio.

7.2.1. Old Commitments

As we moved into 2001, commitments made in 1995 were added to the stock of old
commitments.

7.2.1.1. Prior to 1995

– An initial inventory was made in November 1999 of the budget lines covering EC
external assistance under category IV of the budget. (This covers Asia, Latin
America, Mediterranean Countries, the Balkans and Central and Eastern Europe.)

€

€

€

– RAL decreased by 60 %, from

1,092.34 million to

301.85 million) and de-commitments (

429.7 million. This derives
both from payments (
360.80 million)
The number of budget commitments with outstanding balances decreased by 67%,
inventory, a total of 1,114 budget
from 1,662 to 548. Since the initial
commitments prior to 1995 have been closed in the accounting system (no
outstanding balances by the end 2001), either by full payment and/or de-
commitment; their respective RAL at the initial point of reference was
251
million.

€

€

– Considering

the
commitments reviewed or under review (536), by the end of 2001, action had
been taken on 99,2% of the initial stock of old commitments to be reviewed.

already de-committed

commitments

(1,114),

plus

the

7.2.1.2. Year 1995

Commitments from year 1995 were added in 2001 to the systematic review exercise.
During the past year:

The RAL in financial volume decreased by 31%, from
million.

€

656.8 million to

€

456

The number of budget commitments with outstanding balances decreased by 42%,
from 524 to 305;

During 2001, a total of 219 budget commitments from year 1995 have been closed
in the accounting system (no outstanding balances by the end 2001), either by full
payment and/or de-commitment; their respective RAL at the beginning of 2001 was
€

43.3 million.

€

The RAL reduction of
from payments (
million).

€

200.8 million for budget year of origin 1995 derives both
94.59

106.3 million), and also from significant de-commitments (

€

Considering the commitments already de-committed (219), plus the commitments
reviewed or under review (283), action has been taken on 96% of the stock of the
year 95 added in 2001 to the review exercise

7.2.1.3. Prospects for the commitments still outstanding (prior to 95 + year 95)

Reported as ongoing

231

€

– According to the reporting data received, 97 budget commitments prior to 1995
are related to ongoing projects with underlying legally binding obligations. These
313.23 million, that is 73% of the RAL at year-end.39
commitments account for
commitments, amounting to
131 million, have had their final due dates
extended. Almost all of these commitments in that case are in Asia and the
Mediterranean. Decisions to extend were made on a case-by-case basis. Some had
suffered considerable start-up delays but were now proceeding in order to meeting
expectations raised in partner countries. Some have been re-launched on the basis
of new analysis.

€

– For 1995, the proportion of ongoing RAL is still high: 87 commitments for a RAL

€

of

352 million (77%).

Files to be closed

The majority of pre-1995 commitments (accounting for only a small proportion of
the RAL) were found not to be covering ongoing projects and are in the process of
82.6 million of
being closed. The same is true for year 1995 (180 commitments for
RAL). 449 pre-1006 commitments are to be closed. Priority will be given to this task
€
in the first half of the 2002. Some of these files have already been de-committed to
1 (63 commitments prior to 1995 and 8 from 1995).

€

7.2.1.4. Overall evolution of old commitments 1999-2001

The table hereafter shows the evolution over the past two years of the outstanding
commitments that will be considered “old” in 2002. It gives evidence of the
continuing efforts of the managing services in order to proceed with the closing of an
important number of commitments, even before they enter into the category “old”, as
part of normal management procedures.

EuropeAid only

Prior to
1995
Budget
Year 1995
Budget
Year 1996
TOTAL
OLD

)

€

€

Nbr commitments
RAL (M
Nbr commitments
RAL (M
Nbr commitments
€
RAL (M
Nbrcommitments
RAL

)

)

23/11/99
1663
1,092.65

1663

31/12/99
1497
1,015.44
761
936.74
1109
1,249.23
1497

31/12/00
841
741.02
524
656.87
776
928.25
1365

31/12/01
548
429.7
305
455.98
509
685.98
1362

1,092.65
M

€

1,015.44
M

€

€

1,397.89
M
(+37%)

€

1,571.66
M
(+12%)

7.2.2. Dormant commitments

Final data for 2001 show a total of 1,482 dormant budget commitments in the
accounting system, representing an amount outstanding of
1,319 million which is
an improvement compared to the level of end 2000 (a 15% decrease in the total RAL
and a 20 % reduction in the total number of dormant commitments). The slight
degradation observed end 2000 has thus been reversed, as can be seen in the table
hereafter showing the evolution in the period 1999-2001.

€

232

DORMANT

end 1999

End 2000

end 2001

Number of
commitments

Not old

TOTAL RAL (in M

€

)

Not old

“not old”

2,223

1,932

1,482

1,180

1,537

1,314

1,055

1,558

1,350

735

1,319

1,029

95/96/97

96/97/98

97/98/99

It is worth noting that the stock of commitments is not the same as at the beginning
of 2001. Many of those commitments are now no longer dormant. Meanwhile, others
have become dormant. In fact, if one considers only the evolution of the dormant
stock at the beginning of 2001, the decrease was very substantial:
815 million;
however, this reduction was partially cancelled by the adding of commitments from
€
budget year 1999 with no movement yet:
576 million. Hence, the net reduction for
the dormant RAL at the end of 2001 amounted to

239 million.

€

€

When analysing dormant commitments by budget years of origin, the pattern already
described previously has not fundamentally changed: a major percentage of the
amounts outstanding (78% in 2001) and half of the total number of dormant
commitments is from the more recent years (97/98/99).

If one analyses the distribution by the criterion of disbursement (payments already
made or zero disbursement), another feature previously identified remains roughly
unchanged, i.e. a major proportion of the outstanding dormant amounts (RAL) is
related to commitments which have had no payments: 20 % of the dormant
budgetary commitments have had no payments, representing 80 % of the dormant
RAL (the proportion a year earlier was respectively 19% and 81% of the RAL). The
proportion remaining unchanged,
the total amount of dormant RAL related to
commitments with no disbursements has of course decreased in line with the overall
€
1,061 million. This latest figure is still too high.
decrease, from
The ultimate goal
is of course to have no dormant commitments with zero
disbursements, its operational translation being to be able to get the projects going on
the ground less than two years after the year of budget commitment of funds, save
for really force majeure circumstances.

1,256 million to

€

The analysis per region yields more or less the same results as last year: budget
chapter B7-4 (Mediterranean) represents half of the total dormant amounts and 55%
of the dormant RAL related to commitments with no payments. A group of 4 major
programs (Mediterranean, Asia and Latin America co-operation lines, and Food Aid)
account for 90% of the total dormant RAL and 84% of the part related to
commitments with no payments.

When comparing data at end 2000 with 2001, Asia co-operation budget lines have
had the most significant decrease of dormant RAL: -59%.

The figures for the Mediterranean chapter require an explanation: the total amount
667 million. This is due however to
for B7-4 has increased from

576 million to

€

€

233

the commitments for Turkey on the MEDA budget
line managed by DG
Enlargement, which have significantly increased as a result of adding budget year
1999. If Turkey budget commitments are excluded, a decrease, though modest, has
actually occurred: from

519 million to

508 million.

€

€

€

61.7 million out of the total of

The figure for the aggregated chapter B7-6 also requires further analysis by budget
line environment and tropical forests (B7-6200) accounts for a
line: budget
€
significant part,
104 million (60% of the RAL and
a quarter of the dormant commitments). More significant, the percentage in the “zero
disbursement commitments” is higher still: 79% of the amounts come from this
€
budget line. The level of dormant commitments with no payments for B7-6200 (
43.7 million) is the highest among all budget lines and chapters, when related to the
level of commitment appropriations (in 2001 and also for 2002). It exceeds one full
year of new appropriations in the budget (
40 million), and is thus a symptom of
implementation difficulties.

€

Analysis of the dormant budget commitments for this budget line undertaken during
2001 showed a pattern of ill-prepared financing decisions: projects not well defined
enough requiring designing after the decision and thus far from ready for contracting.
Weak follow-up of the portfolio to be implemented also translated in a build-up of
stalled non contracted projects with the correspondent dormant budget commitments.
The analysis of all dormant commitments undertaken in 2001 is to be followed in
2002 by a significant level of de-commitments of dormant non contracted projects,
particularly from 1996, 1997 and 1998.

The systemic management measures already taken in 2001 aimed at ensuring the
maturity of projects submitted to the Commission for decision, that is, commitment
of projects technically far advanced for contracting within one year after decision.
Furthermore in 2001 for the first time, a formal call for proposals was launched, with
standardised submission documents and selection criteria aimed at ensuring receipt
of mature project proposals. A first group of selected projects was financed with
2001 appropriations, and a second group will be financed with 2002 appropriations.

7.2.3.

Evolution of “abnormal” RAL (dormant+old)

“Abnormal” RAL has been defined as comprising “old” commitments or “dormant”
commitments.

The percentage of “abnormal” RAL (old + dormant not included in “old”) was 23%
at the beginning of year 2000; it has decreased to 21%, with 1996 already included in
“old” and excluding the Turkey MEDA portfolio not managed by EuropeAid Co-
operation Office. If the latter is included, the ratio is 22% (due to the high level of
dormant commitments for Turkey).

It should be noted that, for the portfolio managed by EuropeAid, ratios for both
decreased: the RAL (with a slight decrease in absolute terms) and the “abnormal”
part, with a particularly significant decrease in dormant commitments. Given both
factors, this result is to be considered a real improvement (a decrease of the ratio
resulting from an increase in the overall RAL would not necessarily be a progress).

In terms of number of commitments, the ratio appears as having deteriorated (from
34% to 36% of commitments in old or dormant categories). Again, the evolution of
each part of the ratio must be analysed. The absolute number of old or dormant

234

commitments has actually significantly decreased by 14%, even considering the
adding of budget year 96 as old. However the total number of commitments has
sharply decreased, in part due to closures, but also due to the introduction in 2001 of
a new concept of pre-commitment (global commitment) in the accounting system
Sincom2, greatly used in the external actions. Only the pre-commitments plus the
the secondary commitments on pre-
individual commitments are counted (not
commitments).

7.2.4.

The effort on closure and de-commitment

€

The level of de-commitment during 2001 for EuropeAid’s management portfolio
reached
591 million. This was a result, not only of closure of old files, but also of
the whole open portfolio. The part of old
the overall effort of review for
€
commitments prior to 96 amounts to
290.78 million (196.18 prior to 95 plus 94.59
from budget year 95), roughly half of the total amount de-committed in 2001. De-
commitment in financial amounts can derive from partial de-commitments or from
closure of commitments for which remaining balances are fully de-committed.

The effort on closure is best represented by those commitments which are totally
paid and/or de-committed during the year, leaving no amounts outstanding (RAL
zero) and not carried in the next financial year.

7.2.5. Conclusions

Overall results and general comments

After 2 years of continuous work by the operational financial units on old
reduction of the accumulated backlog on closure
commitments, a significant
operations has been achieved.

On dormant commitments, a reduction year-on-year has been achieved, as well as
if only the
compared to 1999 (a slight
EuropeAid portfolio is considered, the level is now under 1 billion
of dormant
amounts. The slight degradation observed last year has been reversed.

increase had occurred in 2000), and,
€

On both counts, there is real quantitative and significant progress, both on figures
and on awareness of the necessity of monitoring the stock of open budget
commitments and of the fact that it cannot have unlimited growth.

On a more general level, however, it would seem important to continue to address in
parallel the systemic factors that allowed such a big backlog to build up over the
years. Three key factors of equal importance can be singled out: the lack of a
common computerised reliable information system covering all aspects of the project
cycle and supporting management decisions, a significant lack of human resources
for managing an ever growing number of projects, the minor importance given in the
past by the top-level management
to the complete management aspects of the
portfolio (the launching of new initiatives being often considered as a nobler task
than bringing the current ones to a successful end). These factors are all the more
critical
in an organisation with a great degree of geographical and functional
decentralisation, and particularly the computerised information systems.

For dormant commitments, the major part in financial volume, as repeatedly stated,
are commitments with zero payments from the major geographical co-operation

235

programs. Addressing this problem means shortening the time between decision,
signing of Financing Agreements and contracting and
budget commitment,
disbursing.

The time delay for signing the Financing Agreements and for contracting the
European technical co-direction and setting up the joint management structure with
the beneficiary country appears to be part of the critical points in the whole process,
as they take place after budget commitment. As to the Financing agreements, they
should be negotiated and ready for signature at the moment of budget commitment.
Regarding the technical assistance, the terms of reference should be prepared in
parallel with the internal Commission’s Financial Decision in order to allow for a
quick start. Perhaps one could think also if it is really necessary or efficient to build
each time such a structure from scratch and if it wouldn’t be possible to rely more on
local capacity, both from the now de-concentrated delegations and the beneficiary’s
administration, either own or seconded by foreign aid.

A major development in this respect in the near future is the modification of the
Financial Regulation and the “n+3” deadline for contracting after year of budget
commitment. This will no doubt entail significant changes in the way projects are
planned and their scope. Major programs will have to be thought in a phased way,
with perhaps successive shorter phased projects, with self-contained physically and
financially controllable items, inscribed in a consistent medium term programming.

7.3.

Evaluation Activities

7.3.1.

Findings from the 2001 Evaluations

Human Rights, Good Governance and Democracy: these evaluations showed that
there was some way to go before Human Rights were established at every level in the
Commission as a true “crosscutting issue” with a common purpose and uniform
policy input to all co-operation programmes and political relations. Clearly, there is a
need for the Commission to define better the frontiers of Human Rights, democracy
and good governance, and to ensure that the roles of the different Human Rights
units within the Commission are better understood. There is also a need to limit the
priorities of the Human Rights budget lines to ensure that, when objectives are
identified for action, sufficient resources are devoted to their achievement. This
could mean establishing country and regional objectives
improving
complementarity with Member States, NGOs and other bodies. Parts of the findings
were taken on board in the Commission Communication of 8 May 2001142.

and

142

COM(2001)252 Final dated 8 May 2001

236

EVALUATIONS COMPLETED IN 2001

Review of evaluation activities on Human Rights, good governance and

1.
democracy

1.1

Evaluation of Positive HRD actions in ACP states 1995-99

1.2

Evaluation of Joint EC/Council of Europe programmes 1995-2001

1.3

Evaluation of Voter Education Actions 1992-2000

1.4

Synthesis report on Human Rights, good governance and democracy

2.

Review of evaluation activities on economic co-operation

Evaluation of financial assistance for the Mediterranean countries managed by the

2.1
European Investment Bank (EIB) on behalf of the EC

Evaluation of economic co-operation between the EC and Partner States in Asia and

2.2
Latin America (ALA)

2.3

TACIS Enterprise Restructuring Facility (TERF) – Russian Federation

2.4

The Cross-Border Initiative (CBI)

3.

Review of evaluations related to poverty reduction

Evaluation of EC Food Aid Security Policy, Food Aid Management and Programmes

3.1
in support of Food Security

Evaluation of co-financing operations with European non-governmental development

3.2
organisations (NGOs)

3.3

Evaluation of the education sector of EC aid to ACP countries

4.

Review of evaluations on country or regional programming

4.1

Albania

4.2

FYROM

4.3 Moldova

4.4

Burkina Faso

4.5 Namibia

4.6 Uganda

Evaluation of regional co-operation between the PALOP countries (Pays Africains de

4.7
Langue Officielle Portugaise) funded through the EDF

Economic co-operation: the most striking feature of EC interventions in this area
was their diversity, reflecting very different concepts and approaches. Broadly
speaking, two main categories could be distinguished: the first includes programmes
that focused on the "enabling environment for the private sector” of institutional,

237

legislative and fiscal provisions, and of financial and physical infrastructure; the
second includes direct and indirect support to private sector investments or start-up
activities. The studies concluded inter alia that the concept and contents of economic
co-operation evolved and were applied differently over time and in relation to
different geographic regions; and that the choice of the various instruments was
scattered and poorly articulated. They also reaffirmed the importance of creating an
"enabling environment" for private sector development. Other studies on economic
co-operation are still underway.

Poverty reduction: poverty is defined as encompassing not simply a lack of income
and financial resources, but also the notion of vulnerability and such factors as lack
of access to food supplies, education and other basic needs. Sustained growth is not
sufficient in itself. While this programme is still under way, key findings of the three
evaluations completed under this heading in 2001 were:

• co-financing with NGOs added another successful dimension to European
development policy, although the budget line was open to too wide a range of
actions for a consistent focus on anti-poverty activities (this evaluation has been
used for a new dialogue with NGOs);

• while European Food Aid and Food security policy had made a major qualitative
leap in terms of policy, implementation on the ground lagged, partly due to
insufficient management capacity (this evaluation was used as an input to a recent
Communication to Council and Parliament on this subject); and

• although support to education in ACP countries had made good progress, there
to link education support directly to poverty

had been no pro-active effort
reduction strategies.

Country Strategy Evaluations: while care is needed in drawing overall conclusions
from a few studies covering the 1996-2000 period, they revealed a variation in
performance in the Commission’s local programmes which indicates two needs.
First, more consistent harmonisation of the strategic and programming processes (the
introduction of i-QSG and Country Strategy Papers address this); and second,
stronger and more consistent linkages and communications both within the Brussels-
based services at all levels, and between them and the Delegations, to ensure more
consistent objective setting. More specifically, the studies found that:

• the quality of the political and socio-economic analyses of country situations on
which strategy and programming documents were based had been variable. Even
where they were good, they were not always adequately taken into account in
programming documentation;

• although the Commission was often well-placed to assist with the strengthening of
too often

the local capacities of governmental and civil society institutions,
opportunities were not grasped;

• where poverty alleviation was an over-riding priority, local programmes did not

always clearly reflect this priority;

• Delegations too often suffered from cumbersome administrative procedures and

from excessive demands on their services; and

238

• sector-based approaches worked better than project-based approaches, assuming
that the Commission exercised sufficient flexibility to disengage rapidly from
sectors in which the impact of assistance proved weak and was unlikely to
improve.

The Commission has often taken an effective lead in donor co-ordination,
particularly with EU Member States, although there is a need for more consistent
consultation procedures with the Bretton Woods Institutions in the interests of
reduced overlap, enhanced complementarity, and better co-ordinated budgetary aid.

7.3.2.

Priorities for Action Highlighted by the 2001 Evaluations

As a whole, the results of the studies were encouraging. But, overall, they revealed
the need to focus more on:

• objectives, leaving open the choice to the Commission and the partner country of

the most appropriate instrument or the most appropriate mix of instruments;

• flexibility of financing, it being particularly important that EU interventions are

not dependent on a budgetary line addressing one type of action; and

• simplifying administrative procedures for implementing EU actions which,
during the period under review, were cumbersome and impeded effectiveness and
efficiency.

7.3.3.

Evaluations in 2002 and beyond

The evaluation strategy for the years 2002-2006143 and the work programme for 2002
were approved by the EuropeAid Co-operation Office Board during its November
meeting. The strategy for 2002-2006 is given in Chapter 5.

The strategy is based on a combination of various evaluation standpoints: a
geographic approach (countries and regions); a sectoral or thematic approach;
financial instruments; and regulatory requirements. All these approaches have proved
to be necessary as a way of providing managers with reference points or practical
bases to enable them to better define the priority sectors for development. Moreover,
the Commission can use them to take account of its strengths and weaknesses in each
sector in relation to other donors, as well as a means to select the best instruments or
channels for directing its aid, according to the context and the intended results.
Evidently, the Board is always entitled to request ad-hoc evaluations, in response to
needs or emergencies.

2001 saw the introduction of a universal new results-oriented monitoring system (see
Chapter 5), with the temporary assistance of the Evaluation Unit. This will greatly
increase the flow of management information and help to improve the targeting and
quality of evaluations.

143

Published on our web site : http://europa.eu.int/comm/europeaid/evaluation/index.htm

239

Strengthening the Quality and Usefulness of Evaluations

• Dissemination and feedback

– Major evaluation findings have been regularly reported to the Board of EuropeAid

Co-operation Office.

– The final stage of the majority of evaluations is a seminar at which key findings
and recommendations are presented to interested services, management, and other
specialists. In some cases, evaluation reports are discussed in the appropriate fora
with representatives of EU Member States.

– The Inter-service Quality Support Group has been tasked with progressively
harmonising and improving the quality of programming work, including full
consideration of relevant evaluation findings. The Head of the Evaluation Unit
takes part in the work of the iQSG and can check how far the lessons drawn from
evaluation have been taken on board.

– The reinforcement of the 'fiche contradictoire': this fact sheet sets out evaluation
recommendations and findings against the responses of the services concerned (in
a second column), with the aim of informing the Commissioners of agreed
changes or of why recommendations for change were not accepted. In its meeting
of November 2001, the Board agreed to add a third column to indicate how far the
accepted recommendations of the evaluations have been followed up.

– The full

text of all evaluation reports commissioned by the Evaluation is
published on the evaluation section of EuropAid Co-operation Office’s web
site144. In addition,
the service maintains a database of Commission-funded
evaluation reports of individual projects. The evaluations themselves are all done
by external, specialised consultants.

• Exchange of evaluation experience and information with Member States and

others

During 2001, two meetings took place with the Evaluation Services of the Member
States at which planned, ongoing and recently completed evaluations were discussed.
Further steps were also taken on the joint evaluation work on the "3Cs" – Co-
ordination, Complementarity and Coherence. Exchanges with other donors were
maintained particularly via the OECD/DAC Working Party on Evaluation.

7.4.

Audits

EDF: efforts focused on audits of budgetary aid. The three audits started in Ethiopia,
Zambia and Niger, plus finalisation and follow-up of eight audits carried out in 2000
(Cameroon, Guinea, Madagascar, Cape Verde, Malawi and Burkina Faso) absorbed
for a relatively small number of
all available capacity. Note also support
non-budgetary audits, such as the audit on airport construction in Madagascar and
In addition to its
those for the EBAS, DIAGNOS, CDE and ATF projects.
the IAS Board for an
operational work, the Audit unit's expertise was sought

144

http://europa.eu.int/comm/europeaid/evaluation/index.htm

240

administrative survey on the management of counterpart funds and for a strategy to
promote collaboration between international donors.

The audits of MEDA-financed programmes and projects were carried out for the
third consecutive year by auditors of the MEDA team. Acting on requests of the
operational directorate or, with its agreement, in response to the Delegations, the
audit team carried out 24 audits. Additional work was needed on 12 of the audits
done in 2000. The winding-up of technical assistance offices at the end of 2001 also
meant the end of the MEDA audit team.

No audit was done for programmes or projects in Latin America or Asia. Of the
four audits carried out in Central and Eastern Europe, those most important were
those concerning the delivery of food aid to Russia and budgetary aid for FYROM.

Of the "non-geographical" audits, the most noteworthy were those of CLONG, the
ECIP and the follow-up of the UNRWA audit.

Since March 2001 the unit has been preparing a framework-contract for audits to
facilitate the selection of auditors. The contract should be in use in summer 2002.

7.5.

Innovation

Within the framework of initiatives taken by EuropeAid Co-operation Office towards
the improvement of quality in the management of development co-operation, the
Innovation Unit was involved in the following main areas :

– Support to the establishment of thematic networks

During the second half of the year six thematic networks were established covering
the following subjects:

• Budgetary aid

• Health sector

• Education sector

• Capacity building, good governance and rule of law

• Trade

• Private sector development

This initiative responds to both the objective of ensuring good co-ordination among
different geographical directorates and the objective of accompanying the on-going
devolution process.

More specifically the objectives are :

• Develop coherent approaches among different geographical regions, and within
the same region, while maintaining the necessary flexibility to allow for
adaptations to local conditions and specificities ;

241

• Support geographical directorates with the aim of

improving quality and

efficiency in implementation, as well as the visibility of co-operation ;

• Contribute to the training of personnel in Headquarters and Delegations.

The role of each thematic network is to be a forum for discussions and exchange of
information with the aim of improving quality of implementation through the sharing
of best practices. The role of thematic networks is also to contribute to the
preparation of operational guidelines which is an on-going activity.

– Preparation of Guidelines

Work on the guidelines on programming and implementation of budgetary aid
operations in third countries progressed smoothly. A wide consultation process was
launched building upon expertise within EuropeAid and in other Directorates
General. A significant number of delegations were also involved.

Prepraratory work for the other guidelines (i.e. SWAPS in education ; Private Sector
Development) was also launched.

– Preparation of Training courses on PCM, SWAPS and Budgetary Aid

Two tenders for the recruitment of external consultants for the implementation of
training courses and provision of help desk services on PCM, SWAPS and Budgetary
aid as well as economic and financial analysis were launched in November.
Consultants are expected to be recruited by the end of the first quarter of the year
2002.

Help desk services and training activities are meant to complement the work aimed at
preparing the operational guidelines.

– Reflections on rationalisation and revision of implementation modalities for

budget lines

EuropeAid launched an analysis aimed at
rationalising and reviewing the
implementation modalities for thematic programmes financed under specific budget
lines. EuropeAid also launched a comprehensive analysis focusing on the devolution
of thematic programmes financed under specific budget lines. Both the former and
the latter are ongoing.

– Screening of Projects

Screening of projects were undertaken during the year
education projects and private sector development projects.

focusing primarily on

– New Themes

Access to new technologies, information society, renewable energies and its possible
integration within development co-operation programmes was given attention.
Emphasis in this area is expected to increase during the year 2002.

242

7.6.

Relations with other International Donors

A new specialised service was created to this purpose in EuropeAid Co-operation
Office. These are the results of its first year of life:

A Co-financing and Trust Funds Framework Agreement was signed on November 8
with the World Bank. This Framework Agreement sets out the rules applicable in
case of EC co-financing of projects undertaken by the World Bank. It contains
guidelines for the conduct of verification missions, as well as contract templates to
ease the negotiations of each individual contract.

As a follow-up to the Commission communication “Building an effective partnership
with the United Nations in the fields of development and humanitarian assistance”,
several measures have been taken :

• an Agreement on the Implementing Modalities of the Verification Clause was also
reached with the United Nations. This question had been a stumbling block
between the Commission and the UN for years. This new agreement opens the
way for a more comprehensive revision of the currently applicable framework
agreement between both organisations ;

• a report was established on EuropeAid Co-operation Office’s experience of
working with different UN organisms, to be followed by a proposal of partners
with which to build a stronger partnership ;

• a table of EC projects with UN for 1999-2000 was compiled from the operational

units, which will be regularly updated ;

• a number of high-level contacts to initiate the identification and programming to
reinforce concrete co-operation on programmes and projects co-financing, was
taken with some of those organisms,
including UNDP, UNHCR, ILO and
UNESCO.

In the field of strengthening co-ordination and complementarity with bilateral
donors, the Office has developed high-level contacts with the majority of them. In
particular, a memorandum of co-operation for co-financing projects in Chad was
signed in December with the French and German executing agencies.

7.7.

Transparency and visibility

A considerable effort has been undertaken in 2001 in order to produce the first
Annual Report gathering information on the implementation of the EC external
assistance in all the regions managed by the newly created EuropeAid Co-operation
Office. It presented a state of the play at 01/01/2001, the first day of the European
Commission’s new structure for the management of the EC external assistance.

On the other hand, the web continues being the main instrument for information and
transparency. Some improvements have been made and 2002 will see a new more
user-friendly approach to show the activities on the spot. The co-operation sections
the
of the Delegations webs will be linked so as to show, wherever possible,
individual projects on the screen.

243

The most visited section of EuropeAid site is, also this year, the one devoted to
tender opportunities where interested partners can find all the information on all the
external activities to be developed by the European Commission. The evaluation site
has
visitors.
in
http://europa.eu.int/comm/europeaid/tender/survey/index_en.htm.]

improved

number

also

size

and

of

The following table shows the number of hits for the different External relation sites
in the European Commission server. It should be borne in mind that the number of
hits is always larger than the number of times a computer user accesses a particular
web site since a hit
is recorded for each element on the web page (including
photographs and links).

THE EUROPEAN COMMISSION EXTERNAL RELATION WEBSITES

SERVICES

ADDRESS

DG External Relations
DG Development
EuropeAid
Co-operation Office
DG Trade
DG Enlargement
ECHO
The EU in the World

Europa.eu.int/comm/external.relations
Europa.eu.int/comm/development
Europa.eu.int/comm/europeaid

Europa.eu.int/comm/trade
Europa.eu.int/comm/enlargement
Europa.eu.int/comm/echo
Europa.eu.int/comm/world

AVERAGE
HITS PER
MONTH
IN 2000

AVERAGE
HITS PER
MONTH
IN 2001

1,000,000
600,000
600,000

1,000,000
1,000,000
400,000
200,000

2,125,000
200,000
4,200,000

1,800,000
400,000
250,000
200,000

7.8.

EC Assistance not covered by the Report

the external assistance activities managed by the
This document covers all
EuropeAid Co-operation Office. Humanitarian and Pre-Accession Aids are outside
the scope of this report. Nevertheless, a concise description of ECHO’s activities is
included in each regional section so as to give the reader a comprehensive view of
the global EC contribution.

For full details, annual reports are available on Humanitarian Aid as well as on the
Assistance to Candidate Countries. The following short summary indicates the
significance of EC activities in these two areas.

Humanitarian aid

ECHO’s response to humanitarian crises in 2001 amounts to a total of
543.7
million. Humanitarian projects have been funded in more than 60 countries. 1031
contracts have been signed (including contracts implementing decisions made in
2000). African, Caribbean and Pacific countries were the biggest recipient of
€
humanitarian aid with a total amount of
173.3 million (35%). Assistance to the
Western Balkans decreased compared to 2000, due to the stabilisation of the region,
whereas aid for Asia increased slightly.

€

ECHO’s main partner group remains European NGOs (62.5 % of ECHO’s funding
was implemented through them). With the UN High Commission for Refugees
(8.6%) and the World Food Programme (7.25%) as ECHO’s main partners, funding
for the UN increased considerably in 2001 and reached 26.5% (2000:19.2%). Other

244

international organisations, including the International Committee of the Red Cross ,
received 7.9%.

Assistance to Candidate Countries

The European Community made available over
3 billion of assistance in 2001 to
countries that are candidates for membership of the European Union. Nearly 95% of
this pre-accession assistance was directed to the ten candidate countries of Central
and Eastern Europe145 through three separate programmes.

€

€

The Phare Programme, managed by Directorate General for Enlargement, accounted
for about
1.6 billion. It concentrates on priorities for accession, as defined by the
Council in the 'Accession Partnerships' and progress in meeting them identified in the
Commission's annual Regular Reports. Around 30% of Phare resources are allocated
to Institution Building and 70% to investments, equally divided between investment
to strengthen the regulatory infrastructure needed to ensure compliance with the
acquis and investment in Economic and Social Cohesion. The latter helps candidate
countries bridge to structures and procedures needed to use Structural Funds
efficiently and effectively upon accession.146

€

€

€

1
Ispa, managed by Directorate General Regional Policy, accounted for about
billion. It focuses on major investments in the environment and transport sectors.147
About
500 million were made available for Sapard, which focuses on rural
development and agriculture. DG Agriculture manages this programme.148
€

194 million,

11.5 million and

7.5 million were allocated to Turkey, Cyprus and
Malta respectively, in 2001. Assistance to Cyprus and Malta was provided on the
basis of a pre-accession regulation agreed in March 2000, whereas assistance to
Turkey was implemented under the MEDA and European Strategy regulations. A
new financial regulation for Turkey, adopted in December 2001, will be used from
2002. Assistance to these three countries is managed by DG Enlargement, though
they remain eligible for support from MEDA regional programmes in the context of
the Barcelona process, managed by EuropeAid.

€

For each pre-accession programme, the managing DG is responsible within the
Commission for the whole project cycle from programming through implementation
to evaluation. However implementation of these programmes is highly decentralised,
with the candidate countries themselves directly responsible for project management
(subject to checking of tendering and contracting by Commission services).

Macro Financial Assistance for Third Countries

The Commission implements macro-financial assistance (MFA) in association with
support programmes from the IMF and the World Bank, and after consulting the

145

146

147

148

Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Rumania, Slovakia and
Slovenia.
Please find the Phare Annual Report on the following web page:
http://www.europa.eu.int/comm/enlargement/pas/phare/publist.htm
Please find the Ispa Annual Report on the following web page:
http://www.inforegio.cec.eu.int/wbpro/ispa/ispa_en.htm
Please find the Sapard Annual Report on the following web page:
http://www.europa.eu.int/comm/enlargement/pas/sapard.htm

245

Economic and Financial Committee and securing a Council Decision. MFA
incorporates a set of principles which underline its exceptional character (ad-hoc
Council Decisions), its complementarity to financing from the international financial
institutions and its macroeconomic conditionality. It is an instrument designed to
help the beneficiary countries meeting serious, but
generally short-term
macroeconomic imbalances (serious balance of payments and fiscal difficulties).
In close co-ordination with IMF and World Bank programmes, MFA has promoted
policies that are tailored to specific country needs with the overall objective of
stabilising the external and internal financial situation and establishing market-
oriented economies.

€

€

380 million of MFA were disbursed, comprising two
€

In 2001,149
€
and a
million to Kosovo; a grant of
10 million to FYROM150; a
million and a grant of
million grant to the Federal Republic of Yugoslavia.

60 million loan to Tajikistan; a
€

6 million grant to Georgia; a grant of
15 million to Bosnia and Herzegovina; a loan of
€
225 million loan and a

7 million grants
15
12
35

€
€
€

€

The Commission reports on a yearly basis to the European Parliament and the
Council about the implementation of macro-financial assistance to third countries.151

149

150

151

€

€

€

€

10 million grant and a

10 million loan to Bosnia and Herzegovina, a

10 million loan to FYROM
12.95 million grant to Montenegro were disbursed in early 2001. However, the disbursement

A
and a
decisions were made in 2000 and the payments were made with appropriations from the 2000 budget.
The actual payment of both the loan tranche and the grant instalment took place in January 2002.
However, the decision was made in December 2001 and, with regard to the grant, the payment was
made with appropriations of the 2001 budget.
Report from the Commission to the European Parliament and to the Council on the Implementation of
Macro-Financial Assistance to Third Countries in 2001 (COM(2002)352 final of 11.07.2002).

246