Commission Working Paper - EU Report on Policy Coherence for Development {SEC(2007)1202}
Date: 2007-09-20
Institutions: European Commission
Subjects: EU aid, EU policy, developing countries, development aid, development policy, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.9.2007 
COM(2007) 545 final 

COMMISSION WORKING PAPER 

EU Report on Policy Coherence for Development 

{SEC(2007)1202} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

2.7. 

2.8. 

2.9. 

Introduction ..................................................................................................................3 

Main findings................................................................................................................3 

Trade.............................................................................................................................4 

Environment .................................................................................................................5 

Climate change .............................................................................................................5 

Security.........................................................................................................................6 

Agriculture....................................................................................................................6 

Fisheries........................................................................................................................7 

Social dimension of globalisation, employment and decent work ...............................7 

Migration ......................................................................................................................7 

Research .......................................................................................................................7 

2.10. 

Information Society ......................................................................................................8 

2.11. 

Transport.......................................................................................................................8 

2.12. 

Energy...........................................................................................................................9 

3. 

Conclusion ....................................................................................................................9 

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1. 

INTRODUCTION 

Policies  other  than  development  cooperation  have  a  strong  impact  on  developing  countries. 
The European Union (EU) concept of Policy Coherence for Development (PCD) aims to build 
synergies  between  those  policies  and  development  objectives.  This  in  turn  will  increase  the 
effectiveness  of  development  aid.  Against  the  backcloth  of  the  EU  commitment  to 
substantially  increase  official  development  assistance,  the  importance  of  ensuring  that  these 
resources are not rendered inefficient or wasted by policy incoherence is even greater.  
The  aim  of  this  report1  is  to  shed  some  light  on  progress  made  by  the  EU  in  promoting  a 
higher degree of coherence between the main policies that affect developing countries as well 
as to identify the main outstanding issues to be considered for further action. 

The policy framework that serves as a reference for this report was set in 2005, as part of the 
package  of  measures  adopted  to  accelerate  progress  towards  the  Millennium  Development 
Goals2.  These  commitments  were  confirmed  at  the  highest  political  level  in  the  European 
Consensus on Development3.  

This  report  provides  a  basis  for  assessing  the  application  of  PCD.  It  should  help  raise 
awareness  and  inform  debates  with  all  stakeholders  within  the  EU,  including  the  European 
and national Parliaments, civil society organisations active in development as well as in the 
other relevant policy areas, with a view to further promoting PCD. It concerns Member States 
as much as the EU. Therefore, it is expected to also feed the debate internally in each Member 
State. 

2. 

MAIN FINDINGS 

As  regards  the  organisational  mechanisms  put  in  place  by  the  EU  to  improve  the  degree  of 
coherence of its policies with the development objectives, the situation is nuanced: 

–  Awareness of the external impact of EU policies beyond development has increased within 
EU  institutions  and  the  importance  of  PCD  seems  widely  recognised,  as  reflected  by  the 
many  PCD  mechanisms  put  in  place  at  Member  State,  EU  and  Commission  levels. 
Adequate policy frameworks, procedures and instruments  to promote  PCD have been  set 
up  and  must  now  be  used  in  a  more  systematic  way  and,  if  necessary,  improved  and 
adapted based on experience.  

–  Within  the  Commission  a  series  of  relevant  mechanisms  are  in  place  in  particular  Inter-
Service  Consultations,  the  Impact  Assessment  System  and  the  Inter-Service  Group 
specifically mandated to promote PCD. Within the Council much progress has been made 
so  far  due  to  Presidency  actions,  but  PCD  is  not  institutionalised  well  enough  in  the 
decision-making process. Within the European Parliament the Development Committee is 
increasingly  engaging  in  PCD  which  it  furthers  through  issuing  reports,  defending 
positions in plenary sessions and related activities.  

1 

2 

3 

The  report  is  based  on  Commission  services'  and  Member  States'  contributions  collected  through  a 
questionnaire sent in January 2007. 
Commission  Communication  on  'Policy  Coherence for Development  –  Accelerating  progress  towards 
attaining the Millennium Development Goals' – COM(2005)134 final of 12 April 2005 and May 2005 
General  Affairs  and  External  Relations  Council  (GAERC)  Conclusions  on  the  Millennium 
Development Goals (Doc. 9266/05). 
Joint  Statement  by  the  Council  and  the  representatives  of  the  governments  of  the  Member  States 
meeting within the Council, the European Parliament and the European Commission – 'The European 
Consensus on Development', December 2005 (OJ 2006/C 46/01). 

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–  In spite of these efforts, the EU is still at an early stage of PCD development. Capacity is 
often  lacking  and  awareness  amongst  non-development  departments  remains  low.  The 
process of preparing this report itself may have contributed to starting to reverse the trend. 

–  Overall, Member States' assessment is that progress towards PCD has been greater at EU 

level than at national level. 

–  Conflicting  political  priorities  amongst  policies  or  different  interests  amongst  Member 

States as well as amongst developing countries are the main obstacles to PCD.  

Progress made in establishing PCD Mechanisms 

Blue: Number of EU MS and Institutions who have refered to PCD in official documents.  
Purple: Number of EU MS and Institutions who have operationalised PCD and put in practice

25

20

15

10

5

0

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source : ECDPM, ICEI, Particip. 

2.1. 

Trade 

–  Trade is a powerful engine for economic growth and countries rely for a substantial part on 
trade to fight poverty. While trade alone cannot solve development problems, openness to 
trade and support for supply capacity are important elements in any coherent development 
strategy. 

–  The existing EC market access regime is already quite favourable to developing countries. 
Still,  developing  countries  face  a  number  of  obstacles.  As  a  consequence,  the  poorest 
countries' share in international trade remains marginal. To facilitate their integration into 
the  world  economy,  the  EU  has  taken  a  number  of  initiatives.  It  has  for  instance  been  a 
major proponent in making development the key issue at the WTO negotiations and it has 
since been active in seeking a successful outcome to the Doha Development Agenda. The 
Economic  Partnership  Agreements  that  are  being  negotiated  with  the  ACP  countries  are 
conceived as long-term partnerships based on a comprehensive approach to development.  

–  With  the  reform  approved  in  2005,  the  GSP  system  also  now  provides  more  stability, 
predictability  and  trading  opportunities  for  its  users.  Furthermore  additional  preferences 
are  provided  to  countries  that  have  ratified  and  effectively  implement  key  international 
conventions on sustainable development, labour rights and good governance. 

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–  In addition, the Commission is presently in the process of revising its Preferential Rules of 
Origin  with  a  view  to  making  them  simpler,  more  transparent  and  easier-to-use  hence 
promoting development and preventing circumvention. 

–  The  EU  complements  its  negotiation  agenda  with  Aid  for  Trade,  with  a  commitment  to 
reach 2 billion euros a year by 2010, in order to help developing countries take advantage 
of  new  and  existing  trade  opportunities,  assist  them  with  the  implementation  of  new 
agreements  and,  if  necessary,  help  them  to  adapt  to  a  changing  external  trading 
environment. 

2.2. 

Environment 

–  While affecting everyone, the magnitude of environmental challenges varies considerably 
from  one  region  or  one  country  to  another.  Many,  if  not  most,  developing  countries  are 
directly threatened by environmental degradation and the poor are usually those who suffer 
most from environmental problems. 

–  The Renewed EU Sustainable Development Strategy (SDS)4 stresses that economic, social 
and  environmental  objectives  reinforce  each  other  and  underlines  the  importance  of 
working with external partners. 

–  The positive effects of the EU's environmental policy for developing countries are usually 
indirect  and  achieved  through  spillover  effects  such  as  preserving  biodiversity  or 
introducing measures to protect consumers from environmental hazards. The EU is also a 
strong  supporter  of  the  delivery  of  'environmental  public  goods'  that  are  the  subject  of 
Multilateral  Environmental  Agreements.  Furthermore,  the  Commission  and  EU  Member 
States support the effective participation of developing countries in MEAs. The EU is also 
ready  to  help  developing  countries  adapt  to  changes  regarding  EU  environmental 
standards. 

2.3. 

Climate change 

–  While  climate  change  is  affecting  all  countries,  developing  countries  and  poorest 
populations will be hit earliest and hardest. Hence, all efforts deployed under the ambitious 
EU climate policy aimed as a long term goal to limit climate change to an average of 2°C 
as compared to pre-industrial levels, will directly or indirectly benefit these countries.  

–  The  positive  spill-over  effects  of  scientific  research  programmes  and  investments  in 

appropriate technologies will also indirectly benefit partner countries.  

–  The  development  of  the  biofuel  policies  at  international  level  could  have  both  positive 
impacts  on  developing  countries  in  their  capacity  as  producers  and  negative  impacts  if 
sustainability criteria are not observed, for instance as regards the deforestation rate, loss of 
soil fertility, water availability and food security in developing countries. 

–  Further  improvements  are  required  regarding  the  integration  of  climate  change  concerns 
into the policy dialogue with developing countries as well as into development cooperation 
programmes.  The  Commission  proposal  to  establish  a  Global  Climate  Change  Alliance 
(GCCA)  between  the  EU  and  its  developing  partners,  particularly  the  LDCs  and  other 
vulnerable developing countries will be an important step in this direction.  

4 

Council Document 10917/06 of 26 June 2006. 

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2.4. 

Security 

–  Even  though  the  number  of  conflicts  in  the  world  has  declined,  internal  civil  wars  are 

devastating and lack of security hampers people's legitimate aspirations.  

–  The EU deploys a broad range of instruments both for security and for development. In the 
recent  past,  it  has  constantly  been  strengthening  the  links  between  those  two  areas. 
However,  ensuring  coherence  between  security  and  development  is  as  important  as  it  is 
difficult.  Structural  difficulties  due  to  the  nature  of  the  problems  and  situations  to  be 
addressed,  the  diversity  of  contexts  in  which  they  erupt  as  well  as  the  complexity  of  the 
EU's institutional set-up as a security actor constitute serious challenges. 

–  Ongoing  efforts  range  from  integrating  conflict  prevention  analysis  and  actions  into 
development  cooperation  programmes,  addressing  situations  of  fragility,  promoting 
transparency and equity in the management of natural resources, supporting Disarmament, 
Demobilisation  and  Reintegration  programmes  as  well  as  Security  Sector  Reform,  or 
controlling arms exports, the illicit trafficking of small arms and light weapons as well as 
of human beings, narcotics and explosives.  

–  Cooperation with other actors, in particular the UN and the OSCE, regional organisations 

such as the AU, and civil society organisations, is essential. 

take  account  of  development  concerns 

–  However,  improved  coordination  between  security  and  development  is  still  needed.  This 
implies  strengthening  organisational  mechanisms  in  the  Commission  and  the  Council  to 
better 
in  security  decisions,  conducting 
systematically  security-related  analyses  when  informing  and  guiding  development 
cooperation,  improving  the  transition  between  the  different  financial  instruments  and 
continuing  to  build  and  sustain  partnerships  with  the  different  international  and  regional 
organisations and civil society. 

–  Concrete  initiatives  will  be  considered  in  the  framework  of  the  future  joint  EU-Africa 
strategic  partnership  with  a  view  to  responding  to  the  African  continent's  requirements 
through  a  package  of  increasingly  integrated  and  cross-cutting  development  and  security 
measures. 

2.5. 

Agriculture 

–  Agriculture  is  of  particular  importance  for  developing  countries  and  plays  a  key  role  in 

their economic growth, poverty reduction and food security. 

–  The  EC  has  come  a  long  way  in  making  its  Common  Agricultural  Policy  more 
development-friendly.  With  low  and  zero  tariffs,  access  to  the  EC  market  is  generally 
favourable  to  developing  countries.  Decisive  progress  was  made  on  export  subsidies  and 
the  distorting  effects  on  prices  of  domestic  agricultural  subsidies  through  successive 
reforms which attempt to reconcile internal agricultural needs with the objectives of PCD. 

–  Since  2003,  export  subsidies  and  trade-distorting-domestic  subsidies  have  been  reduced 
drastically. By 2011, at which time the CAP reforms launched in 2003 and 2005 will be 
fully implemented, almost 90% of EU direct payments will be decoupled from production. 
In  the  context  of  the  WTO  negotiations,  the  EU  has  offered  to  eliminate  all  export 
subsidies by 2013 and to reduce trade-distorting-domestic support by 70%.  

–  EU  development  cooperation  entails  supporting  to  agricultural  and  rural  development  in 
particular  with  Africa.  Ongoing  initiatives  to  strengthen  cooperation  with  developing 
countries  on  the  setting  and  implementation  of  SPS  are  also  an  important  step  in  that 
regard.  

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2.6. 

Fisheries 

–  Fisheries is an important economic activity in many coastal developing countries and it can 

make an important contribution to food security. 

–  Fisheries  Partnership  Agreements  (FPAs)  provide  EU  fleets  with  access  to  the  maritime 
resources of developing countries which do not fully exploit their fishery resources. Since 
the reform of the EC Fisheries Policy in 2002 and 2004 the coherence of these agreements 
with development objectives has substantially improved.  

–  Key issues include the quality of the scientific evaluation of fish stocks and fish surpluses 
and  the  integration  of  sustainable  development  and  biodiversity  concerns;  the  way 
developing countries actually use the financial contribution they receive under the FPA to 
develop their own fisheries activities; and the measures taken to counter illegal unreported 
and unregulated fishing. 

2.7. 

Social dimension of globalisation, employment and decent work 

–  The working poor represent one half of the poor across the world and child labour affects 
millions of children. The EU's efforts to enhance the social dimension of globalisation are 
fundamentally favourable to the MDGs. 

–  The  promotion  of  employment,  social  cohesion  and  decent  work  is  part  of  the  European 

Social Policy Agenda and of the European Consensus on Development. 

–  While  developing  countries  are  not  directly  affected  by  internal  employment  and  social 
policies,  EU  actions  in  this  area  have  an  important  positive  impact  through  two  main 
channels. Firstly the EU is promoting the international agenda for the social dimension of 
globalisation  and  decent  work.  Secondly,  at  regional  and  national  level,  the  EU  is 
increasingly  integrating  employment  and  social  issues  into  its  dialogue,  cooperation 
programmes and trade relations with developing countries and regions. 

–  EU support for Fair Trade as well as the GSP+ scheme are examples of EU actions which 
can have strong effects especially when they are coupled with corresponding development 
cooperation programmes. 

2.8.  Migration 

–  There is now a clear understanding that migration can be good for development and vice 
versa. Hence the importance of trying to harness the positive links and synergies that exist 
between the two policy areas.  

–  Progress  in  the  field  of  migration  and  development  has  so  far  been  good  as  regards 
establishing of the policy framework and launching the political dialogue at regional and 
country level, particularly with Africa. 

–  With a solid framework in place, progress is now needed on translating policy orientations, 
agreements and action plans into concrete actions that have a genuine impact. So far, only 
a  few  actions  have  been  taken  to  make  remittances  cheaper,  faster  and  safer,  to  support 
cooperation with diaspora communities and to turn brain drain into brain circulation, areas 
where  most  Member  States  are  just  beginning  to  develop  adequate  measures.  Political 
dialogue and the future new EU-Africa Strategy will open avenues for more cooperation in 
the future. 

2.9. 

Research 

–  The  ability  to  generate,  absorb  and  apply  new  knowledge  is  an  increasingly  important 
factor  determining  the  international  competitiveness  of  modern  economies  as  well  as 

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contributing to sustainable development. Yet developing countries, particularly in Africa, 
often lack the human and institutional resources necessary to address those issues. 

–  EU research policy contributes to the development objectives in two main ways. Firstly, it 
supports  research  programmes  in  areas  of  global  interest,  including  for  developing 
countries. Secondly, by supporting specific international cooperation projects that involve 
research  centres,  universities  and  other  stakeholders  from  developing  countries,  it 
contributes to creating context-specific knowledge and building capacity in the South. 

–  Similarly,  the  European  Space  Policy  (ESP)  contributes  to  development  and  will  be  the 
basis  for  increased  cooperation  between  Europe  and  Africa  regarding  the  use  of  space 
assets  and  research  for  sustainable  development.  Navigation,  Earth  observation  (namely 
the  European  initiative  Global  Monitoring  for  Environment  and  Security),  satellite 
communications  and  sciences  can  be  considered  as  a  cross-cutting  enabling  tool  in 
Europe's commitment to the achievement of the MDGs. 

–  The  7th  Research  Framework  Programme  (FP7-2007-2013)  is  completely  open  to  all 
countries across the world. However the participation of developing countries in particular 
the  least-developed  ones  is  hampered  by  insufficient  human  and  institutional  S&T 
capacities. The countries' efforts to build S&T capacity should therefore be supported by 
development cooperation in synergy with other instruments and programmes.  

–  Another issue of concern from the development perspective is the brain-drain effect of EU 
research  policy,  with  high-level  researchers  being  attracted  in  Europe.  With  a  view  to 
addressing  this  issue,  the  Commission  continues  the  system  of  Marie  Curie  Action 
'International  Reintegration  Grants'  (IRG)  to  enable  researchers  who  go  back  to  their 
country to continue their own research activity. 

2.10. 

Information Society 

–  ICT  can  be  a  powerful  tool  for  development,  driving  competitiveness,  economic  growth 
and  social  progress,  as  well  as  opening  up  new  channels  for  the  free  flow  of  ideas  and 
opinions  which  can  promote  democracy,  freedom  of  speech,  human  rights  and  mutual 
understanding  amongst  people.  However  ICT  can  also  contribute  to  widening  the  North-
South gap, as well as the divide between info-rich and info-poor. 

–  Promoting  the  information  society  in  developing  countries  requires  a  balanced  approach 
combining,  on  the  one  hand  private  investment  in  ICT  infrastructures,  and  on  the  other 
hand  government  action  aimed  at  creating  a  favourable  regulatory  environment  and  an 
ICT-literate society and workforce.  

–  The  policy  dialogue  and  support  for  capacity  building  should  be  further  promoted.  This 
should  be  complemented  by  the  extension  of  access  to  research  and  education  networks, 
and a greater participation of developing countries in FP7. Particular emphasis should be 
placed on Sub-Saharan Africa.  

2.11.  Transport 

–  The provision of an effective and efficient transport infrastructure is needed to achieve the 
MDGs,  and  is  a  key  element  underpinning  competitiveness  and  economic  growth.  The 
promotion  of  sustainable  transport  is,  therefore,  an  important  part  of  EU  development 
cooperation  programmes,  covering  all  transport  modes  as  well  as  services  to  facilitate 
movement of goods and people. 

–  The EU's internal transport policy affects developing countries through two main channels. 
Firstly  through  EU  action  within  international  bodies  for  setting  international  standards, 

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aviation  agreements,  or  cooperation  in  international  projects  such  as  Galileo.  Secondly, 
through  the  EU's  policy  to  develop  high  environmental,  social,  safety  and  security 
standards applying to the aircraft, ships and land vehicles that enter its territory and to its 
own fleets.  

2.12.  Energy 

–  For the two billion people in the world who rely on traditional biomass fuels for cooking 
and/or  have  no  access  to  modern  energy  services,  electrification  and  the  availability  of 
clean cooking fuels could substantially improve sanitary and health conditions and increase 
standards of living5. 

–  The  EU  is  engaged  in  several  major  initiatives  aimed  at  supporting  the  provision  of 
adequate,  affordable  and  sustainable  energy  services  in  developing  countries.  The  most 
notable  ones  are  the  EU  Energy  Initiative  for  Poverty  Eradication  and  Sustainable 
Development (EUEI) , the EU-Africa Infrastructure Partnership and the EU-Africa Energy 
Partnership. 

–  The  new  'Energy  Policy  for  Europe'6,  which  aims  to  deliver  sustainable,  secure  and 
competitive energy to all EU Member States, also aims at integrating Europe's energy and 
development policies in a win-win game. Developing countries, particularly in Africa, will 
benefit  from  the  EU's  efforts  to  diversify  energy  supply  and  to  develop  energy-efficient 
and renewable energy technologies. 

–  Addressing  cross-cutting  issues  such  as  environment,  climate  change  and  poor  people's 
access to energy services, including in rural areas, will also be key to the overall success of 
energy initiatives in developing countries. 

3. 

CONCLUSION 

All  the  policy  areas  analysed  in  this  report  have  an  effect  on  the  economic,  social, 
environmental or political situation and prospects in developing countries.  

Even  policies  which  are  perceived  to  be  mostly  internal  ones,  such  as  social  policies  or 
transport, can influence development processes positively or negatively. Their effect depends 
on  the  evolving  global  context  and  on  country-specific  situations.  For  instance,  climate 
change and energy are becoming major priorities not only from an internal EU point of view 
but  also  in  a  developmental  perspective.  Also,  with  a  changing  balance  of  powers  on  the 
international stage, the EU's policy of promoting social values at global, regional and country 
levels will become increasingly important in the future.  

This report therefore confirms the relevance of keeping an eye on the whole range of policy 
areas  from  the  PCD  angle.  Furthermore,  some  areas  that  hold  substantial  potential  for 
development, such as ICT and research could be better exploited. 

For  each  of  the  twelve  policy  areas  analysed,  outstanding  issues  were  identified,  where 
synergies with development policy could be further explored. In particularly sensitive areas, 
such  as  migration  or  security,  the  promotion  of  European  interests  and  the  identification  of 
partner countries' own concerns must be balanced, with a view to finding win-win solutions. 

5  

6 

The  World  Energy  Assessment:  Overview  -  2004  Update',  UNDP,  UNDESA  and  World  Energy 
Council. See:http://www.undp.org/energy/weaover2004.htm 
COM(2007) 1 final of 10 January 2007. 

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Generally  speaking,  the  EU  has  taken  concrete  steps  to  improve  the  degree  of  PCD.  It  has 
improved  its  organisational  mechanisms  to  that  end,  at  Member  State,  Council  and 
Commission levels. The drawing-up of this report has, in itself, been instrumental in raising 
internal policy departments' awareness of the effects their policies have on development. 

In terms of concrete results however, progress remains below the ambition set in the European 
Consensus on Development. Awareness and knowledge remain insufficient. The involvement 
of actors beyond the development community is still limited, both within the institutions and 
within civil society and the private sector.  

Continuous high-level political commitment is needed to ensure further progress so that, the 
coherence,  effectiveness  and  visibility  agenda  of  'Europe  in  the  World'7  becomes  a  reality. 
This in turn calls for increased awareness of the fact that development and poverty reduction 
are eventually in Europe's own interest. 

In concrete terms, the main outstanding issues raised in the replies received are as follows: 

–  as underlined by Member States, review and improve Council procedures, 

–  intensify the inclusion of PCD in national and regional cooperation strategies, 

–  improve information-sharing, 

–  better use the Impact Assessment process, 

–  make the Rolling PCD Work Programme more operational. 

There are also still a number of potential links that should be further explored. Dialogue with 
developing countries on the effects of EU policies other than aid must be enhanced, at country 
and regional  levels as well as  globally. The process of drawing up  Country Strategy Papers 
offers  a  framework  in  which  the  Commission  and  Member  States  can  develop  such  policy 
dialogue.  The  relevance  of  the  PCD  approach  to  developing  countries'  own  policies  should 
also be considered, since in most policy areas the positive impact of EU policies depends on 
parallel efforts being undertaken by partner countries. The inclusion of PCD in the new Joint 
EU-Africa Strategy under preparation is an important step in that direction. 

7 

COM(2006)  278  of  8  June  2006  'Europe  in  the  World  —  Some  Practical  Proposals  for  Greater 
Coherence, Effectiveness and Visibility' and European Council Conclusions of June 2006. 

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