COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-12-07
Institutions: European Commission
Subjects: EU aid, cooperation policy, developing countries, development aid, economic situation, poverty

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1470 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a financing instrument for development cooperation 

{COM(2011) 840 final} 
{SEC(2011) 1469 final} 

 
 
 
 
  
 
1. 

PROBLEM DEFINITION  

Poverty  remains  a  major  problem  in  developing  countries.  While  there  have  been  significant 
advances  in  the  fight  against  poverty,  most  of  them  are  off-track  in  the  achievement  of  the 
Millennium  Development  Goals  (MDGs)  and  they  are  not  benefitting  from  sustainable 
development. In addition,  global challenges continue to be prominent and  developing countries 
were  hit  hard  by  the  succession  of  recent  crises  resulting  in  social  and  economic  instability, 
forced  migration,  food  insecurity  and  an  increased  vulnerability  to  external  shocks.  The 
environmental  and  natural  resources  are  increasingly  recognized  as  being  vital  for  sustainable 
economic growth and poverty reduction. Furthermore, climate change is exacerbating an already 
fragile  situation  and  risks  undoing  part  of  the  development  achievements  if  not  properly 
addressed. The EU remains committed to helping developing countries to reduce and ultimately 
eradicate poverty. 

To achieve this objective, the Development Cooperation Instrument (DCI) was established for the 
2007-2013  period  with  the  primary  and  overarching  objective  of  eradicating  poverty  in  partner 
countries and regions. It is one of the key EU instruments providing development assistance to 
non-European  countries,  alongside  the  European  Development  Fund  (EDF)  and  the  European 
Neighbourhood  Partnership  Instrument  (ENPI).  It  is  organised  into  three  categories  of 
programmes: (i) bilateral and regional geographic programmes covering cooperation with Asia, 
Latin  America,  Central  Asia,  the  Middle  East  and  South  Africa;  (ii)  thematic  programmes 
covering the following issues: investing in people, environment and sustainable management of 
natural  resources,  Non-State  Actors  and  local  authorities,  food  security,  and  migration  and 
asylum; and (iii) sugar accompanying measures. 

New challenges, together with the priorities set out in the Europe 2020 Strategy, have prompted 
the Commission to make proposals to review and adapt the EU’s development policy through the 
upcoming  Communication  "Increasing  the  Impact  of  EU  Development  Policy:  An  Agenda  for 
Change". The various reviews undertaken have also highlighted a number of shortcomings within 
the DCI while acknowledging its overall added value and its contribution to the achievement of 
the  MDGs.  On  the  aforementioned  basis,  the  following  problems  in  the  current  DCI  regulation 
have been identified: 

(1) 

(2) 

(3) 

(4) 

The  DCI  does  not  fully  take  into  account  the  objectives  of  the  latest  trends  of  EU 
development policy. 

The  world  has  changed  since  2007  and  a  number  of  current  beneficiaries  of  the  DCI 
have since emerged as new world powers and have themselves become donors. The DCI 
does  not  ensure  sufficient  differentiation  amongst  its  beneficiaries  with  regard  to 
economic and social disparities amongst and inside partner countries. 

The  DCI  does  not  sufficiently  take  into  account  partner  countries'  progress  on 
democratisation and respect for basic human rights. 

Supporting  cross-regional  or  continent-wide  initiatives  has  proved  difficult  given  the 
current  architecture  of  external  assistance  instruments,  in  particular  regarding  the 
implementation of the Joint Africa-EU strategy. 

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(6) 

(7) 

(8) 

Thematic programmes are not sufficiently flexible and are too fragmented to respond to 
recent global crises or to international commitments taken at the highest political level.  

The  specific  needs  of  countries  in  crisis,  post-crisis  and  fragile  situations  do  not 
sufficiently feature in the current DCI, thus not always allowing a swift EU response to a 
rapidly evolving situation. 

The  DCI  suffers  from  an  overall  lack  of  flexibility,  as  it  does  not  foresee  un-
programmed funds to be used in response to unforeseen needs. 

The current programming process of the DCI is too complex and rigid. For example, it 
does not permit the alignment of the EU programming cycle and strategy to those of its 
partners,  and  it  also  does  not  sufficiently  facilitate  joint  programming  with  Member 
States, as required by the aid effectiveness agenda. It does not provide a sufficient legal 
basis  for  using  innovative  measures  for  the  delivery  of  aid  such  as  mechanisms  for 
blending loan- and grant-based assistance or public-private partnerships. 

2. 

ANALYSIS OF SUBSIDIARITY  

As the world's largest donor, the EU and Member States provide more than half (56%) of global 
aid to developing countries. The EU provides aid to the poorest people on the planet in more than 
150 countries worldwide and is committed to achieving the MDGs on time by the end of 2015. 
The official development aid managed by the European Commission alone represents about 20% 
of total EU aid so far. The EU is in a uniquely neutral and impartial position to deliver external 
action on behalf of and with Member States, giving it enhanced credibility in the countries where 
it  works  in.  With  27  Member  States  acting  with  common  policies  and  strategies,  the  EU  has  a 
critical mass to respond to global challenges, in particular the achievement of the MDGs.  

3. 

OBJECTIVES OF THE EU INITIATIVE  

The general objectives of the successor to the DCI will remain focused on (i) reducing and, in the 
long  term,  eradicating  poverty  in  partner  countries  and  regions  as  well  as  on  (ii)  promoting 
democracy, the rule of law, human rights and good governance. In line with the proposed revised 
EU  development  policy,  a  third  general  objective:  (iii)  supporting  inclusive  and  sustainable 
growth-oriented development will also be introduced. 

The successor to the DCI will be based  on  the existing instrument, which has  demonstrated its 
relevance in contributing to poverty reduction and, in the long term, to poverty eradication, while 
addressing the problems identified under part 1.  

4. 

POLICY OPTIONS  

Maintaining  the  DCI  without  any  amendment  is  the  first  option  considered  (option  1  =  no 
change). 

Under option 2 (amend the DCI regulation), two alternative scenarios were considered against the 
status quo: 

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Aligning the objectives of the instrument with the new trends in EU development policy, 
considering  the  strengthening  of  development  policy  in  the  Lisbon  Treaty  and  latest 
trends in development policy; 

Ensuring significant differentiation by focusing EU cooperation on a limited number of 
countries,  differentiating  through  allocated  amounts  and  altering  the  type  of  assistance 
according to a defined set of criteria; 

Strengthening the inclusion of good governance, democracy, human rights and the rule 
of law in the fund allocation mechanism;  

Establishing a Pan-African programme within the DCI; 

Increasing  the  flexibility  and  reducing  the  fragmentation  of  thematic  programmes 
through a reduction of their number; 

Allowing  a  more  flexible  (re-)programming  process,  tailor  made  ad-hoc  reviews,  and 
specific  implementation  procedures  for  countries  in  crisis,  post-crisis  and  fragile 
situations; 

Introducing  further  flexibility  in  fund  allocations  within  the  DCI  through  new 
mechanisms such as an un-programmed reserve; 

Increasing the flexibility of and simplifying the programming process to facilitate joint 
programming and alignment to programming cycle of partner countries. 

5. 

ASSESSMENT OF IMPACTS  

Option  1,  continuing  the  status  quo,  would  not  address  the  problems  emerging  from  past 
experience, mentioned under Section 1.  

Option 2, developing the DCI further, would allow the following:  

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aligning  the  objectives  of  the  successor  to  the  DCI  with  the  new  trends  in  EU 
development policy; 

applying a clear differentiation amongst partner countries in order to fight poverty more 
effectively and giving the EU more leverage and impact in countries where its assistance 
is needed the most; 

further including good governance, democracy, human rights and the rule of law in EU 
assistance  in  order  to  ensure  more  effective  cooperation  and  dialogue  with  partner 
countries regarding these values; 

facilitating  a  more  efficient  implementation  of  the  Joint  Africa-EU  Strategy  and, 
therefore,  facilitating  the  achievement  of  EU  political  objectives  within  the  African 
continent; 

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streamlining thematic programmes to provide the flexibility necessary for the EU to be 
responsive to global challenges; 

putting  in  place  flexible  mechanisms  to  facilitate  a  more  effective  EU  response  to 
rapidly evolving situations in crisis, post-crisis and fragile states; 

enhancing the flexibility of fund allocation to address evolving situations in the external 
arena due to political circumstances, crises or new challenges; and 

improving the effectiveness of EU aid by simplifying and making the programming and 
implementation  procedures  more  flexible  in  order  to  enable  joint  programming  and  to 
align  to  partner  countries'  programming  cycles,  as  well  as  to  promote  the  use  of 
innovative measures for aid delivery. 

6. 

COMPARISON OF OPTIONS  

The  first  option  would  not  allow  the  EU  to  meet  the  objectives  described  under  paragraph  3. 
Under  option  2,  for  each  specific  objective  the  alternative  sub-option  B  is  preferred  over  sub-
option  A  as  they  tackle  all  problems  identified  and  respond  to  the  objectives  defined  under 
section  3  more  appropriately.  This  will  allow  for  incorporating  the  revised  orientations  of  EU 
development  policy  into  the  successor  to  the  DCI  and  thus  further  increasing  the  effectiveness 
and the impact of EU assistance to developing countries. 

7. 

MONITORING AND EVALUATION  

The  DCI  is  an  enabling  Regulation  establishing  the  essential  elements  and  the  basis  for  EU 
intervention. The exact actions are defined through multiannual programming and annual action 
programmes detailing the activities to be carried out by the EU, including the objectives pursued 
by the actions in question and the expected results. Specific indicators are fixed at that moment, 
bearing in mind the particularities of the action in question. 

Internationally agreed targets and indicators on the MDGs and climate change are already known. 
For instance, for the overarching objective for reducing and, in the long term, eradicating poverty 
in partner countries and regions, the MDG indicators for Goal 1 may be used. 

Expenditure  that  promotes  climate  action  or  energy  efficiency  as  well  as  the  protection  and 
sustainable management of biodiversity and ecosystems, will be tracked based on the established 
OECD methodology (‘Rio markers’). 

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