Dawn of a new era for development aid

Date: 04/11/1999

As EU development policy emerges from the dark days of crisis and confusion, ministers will meet next week to assess the progress made so far in drawing up a new strategy. Gareth Harding reports

EU DEVELOPMENT policy rarely hits the headlines. But for the past year it has been doing so for all the wrong reasons.

The Union's humanitarian arm ECHO has been investigated by the European Commission's fraud-busting unit for allegedly bending staffing rules; aid groups have slammed the EU executive for failing to pay up on time; and governments have called for a radical shake-up of the Union's development policy to end the waste, drift and duplication which have characterised it in recent years.

Earlier this year, UK Development Minister Clare Short warned that there were "serious weaknesses"in the EU's development work and attacked the Commission's aid programmes for being "too often of poor quality and ineffective". Many of her criticisms were echoed in a paper drawn up by Europe's 11 Socialist development ministers which called for "far-reaching reform"of the Union's aid policy.

But in the past few months things have slowly begun to change for the better and the future of EU development policy looks rosier than it has done for years.

Changes at the top have certainly helped. A year ago, British official Philip Lowe - who was chief advisor to Neil Kinnock while he was Transport Commissioner - became head of the institution's development directorate-general and embarked upon a series of far-reaching internal reforms which are now beginning to pay dividends.

For the first time, the EU executive also has a Commissioner solely dedicated to development policy. In President Jacques Santer's team, five Commissioners were responsible for different aspects of the dossier, with regional fiefdoms often leading to turf wars between departments. One of new President Romano Prodi's first moves was to give current Development Commissioner Poul Nielson overall control of development policy, humanitarian aid and relations with third-world countries.

Prodi could not have given the task to a better qualified man. Prior to his Brussels posting, Nielson was Denmark's development minister for five years and the EU's candidate to head the United Nations development programme. It is therefore little wonder that members of the European Parliament's development committee declared themselves impressed by Nielson's "in-depth professional experience of European development policy"after his audition before the assembly last month.

At his hearing, Nielson took a hard-line approach to waste in the Commission's €5-billion aid budget, declaring that "there will be a policy of zero tolerance for fraud and mismanagement".

One source close to the Commissioner described the present system of dividing responsibility for aid projects between those who draw up the policy and those who sign the cheque as a "recipe for disaster".

To solve this problem, Nielson is toying with the idea of setting up an independent public procurement office to make sure procedures are abided by and money accounted for.

He also wants to devolve responsibility for drawing up development projects to those in the field. "The Commissioner does not believe in teleguided development assistance, where you sit behind your desk and zap policies and projects over to countries 6,000 miles away," explained one source.

He added that instead of diktats from Brussels, greater feedback, more inter-action and deeper dialogue with the developing countries themselves would be the hallmarks of EU development policy in the future.

But the Commission will still need to check on the effectiveness of projects to ensure that tax-payers get value for their money - and for that, it needs more staff.

Over the last 30 years, the proportion of Union aid channelled through the Commission has increased from 7% to almost 20%. But the number of officials managing this money has not kept pace, leading to waste, mismanagement and suspect hiring practices.

Development ministers agree with Nielson and Lowe that the Commission "is not sufficiently resourced to efficiently and effectively manage"all the development programmes which it is currently undertaking. However, rather than simply throwing money at the problem, there is a growing consensus that the EU needs to focus on a narrower range of activities.

But for the Union to set priorities, it first needs a development policy worthy of the name. At present, as a recent Organisation for Economic Cooperation and Development (OECD) report pointed out, "there is no coherent Commission-wide development strategy or statement"and the institution's policies and programmes "lack EU-wide consistency and coherence".

Lowe admits that "EU development aid at the moment is a confused concept," but points out that as responsibility for development policy is shared between the Commission and member states, the Union's policy is actually "composed of 16 different parts".

To avoid drift and duplication, EU development ministers have called on the Commission to draw up a global statement on the Union's development policy by the first half of 2000. Nielson plans to present his strategy in February and submit a report on how EU countries and the executive can better coordinate their policies by the end of the year.

It is unlikely that the strategy currently being drawn up by the institution's services will contain any great surprises, as there is a growing consensus on what the basic goals of development policy should be.

The Commission, EU governments and international bodies such as the World Bank all agree that poverty reduction should be the number one aim and all three bodies have signed up to the UN's goal of halving the number of people below the poverty line by 2015.

There is also a recognition that the volume of aid needs to be increased to meet the UN's target of 0.7% of gross national product. Since the 1980s, development aid from OECD countries has actually fallen from 0.33% to 0.23% of GNP and there is little hope of this rising dramatically in the current economic climate.

But of equal importance to how much money is in the development aid pot is where it eventually ends up. In the past year, the Commission has been severely criticised for giving more money to middle-income states in the Middle East and Latin America than to desperately poor countries such as Ethiopia, Bangladesh and India.

Short has described as "truly appalling" the fact that the EU now gives only half of its aid budget to poor nations in Asia and sub-Saharan Africa compared to three-quarters a decade ago.

Nielson has pledged to devote more resources to the world's poorest countries as part of the Union's attempt to focus development policy more on poverty eradication.

But he will continue to insist that trade is as important as aid in development policy and will carry on arguing that Europe's former colonies in Africa, the Caribbean and the Pacific must be weaned off costly EU subsidies and edged towards signing regional free-trade agreements with the Union.

Nielson will sketch out the progress made so far in drawing up a more coherent aid policy at a meeting of EU development ministers next Thursday (11 November). As a Socialist and former development minister himself, he is likely to get a warm reception from a Council dominated by left-leaning governments.

The "new agenda for development coooperation" drawn up by the EU's 11 Socialist development ministers earlier this year called on the Commission to "strengthen and refocus European development assistance" by relying less on 'tied aid', ensuring faster debt relief for poor countries and concentrating more on sustainable development, gender equality and the promotion of human rights and democracy.

Many of the ideas in the paper found their way into the conclusions of the last development ministers' meeting in May and there is no doubt that the Council is in the driving seat in pushing for a coherent EU development policy.

But after years of dragging its feet, the Commission is now firmly on board the reform train. In recent weeks, it has published policy papers on integrating environmental concerns into development policy and it is taking steps to ensure a smoother transition between emergency aid and long-term development than is currently the case.

Development organisations still criticise the Commission for spending too much on bureaucracy in Brussels and too little in the field. They also question what they claim is the institution's blind belief in free trade as the panacea for third-world problems. But although development groups want to go further and faster down the reform route, the two sides are at least travelling in roughly the same direction.

Major feature. As EU development policy emerges from the dark days of crisis and confusion, ministers are to meet to assess the progress made so far in drawing up a new strategy.