Wilton Park Conference 2000
Europe's Link with the Development World - New Directions?
Joined-up Development Policy:
Europe's role within the international donor community.
Mirjam van Reisen*
1.Joining-up: who are the actors?
There are several possible ways of looking at the title of this session: 'Joined-up Development Policy: Europe's role within the international donor community.' It is the word 'joined-up' that needs further examination. It begs the question, which actors are to be joined-up, and for what purposes should they be linked?
There is a broad range of relevant actors who are somehow joined into Europe's development policy and practice. There are the Member States, each with their own individual approaches and programmes while at the same time working together through the common programme of the EC. There is the European Commission which manages the common programme - but which is often dismissed in Europe as just another 16th donor. There is 'Europe', usually only meaning the Commission, but of course this should also include the Council and the Parliament who fulfil an important task in promoting Europe's global role at the international level. There are the other non EU-donors, as well as other multilaterals in which EU members have a substantial stake. And, perhaps most importantly, there are the developing countries themselves for whom Europe's development policies are intended. We also need to recognise the different kinds of actors in both Europe and the developing countries, the state, the private sector and civil society - all of which have their own important part to play.
Most of the political actors are of course not implementing EC aid. Nevertheless they are crucial to its performance. I am delighted to have the possibility here at Wilton Park to explore with you in depth some fundamental aspects of the relationships between these various actors and to examine in which way they can contribute to making EC aid better. The effectiveness of development assistance cannot, of course, be seen as a purely technical question. It is intimately linked with the political structures that support, or undermine these efforts to promote development in developing countries. Assessing the effectiveness of aid requires us to examine how sound are the structures that enhance political responsibility, transparency and accountability.
2.Joining-up the EU Member States
Let us begin with the Member States. Development Ministers in Europe are responsible for their country's official contributions to development. As politicians their primary public identity is with their country's bilateral programme on which basis they seem to be competing in their criticism of the EU aid programme. Ironically, it is these Member States which have the shared authority in the European Council to determine the tasks of the European Commission. As more tasks have been added to Europe's programme, often for political reasons, the capacity for implementing these has been denied. So while European development policy has evolved in line with general donor approaches, the Commission has neither the means nor the resources to implement schemes directed at 'poverty eradication'. Clearly here the principle applies, 'what you get, is what you pay for' and it is not surprising, therefore, that the programme of the European Commission lacks quality.
At the same time, the lack of clarity on the relationship between the individual programmes of the Member States, and that of the EC has resulted in seeming competition. In my book "EU 'Global Player'" I quote a British official who says of European development co-operation:
"It is good when the programme of the European Commission is bad, because it makes the bilateral programme look good."
There are several ways in which the Member States harm the Commission's programme through their joint decisions. This certainly includes decisions relating to the overall scope of the European programme - both in size and geographical spread - and the capacity for implementation. Most damaging, however, is the micro-management that the Member States exercise over the Commission's programme - with 'commitology' implemented to such a degree that the boundaries between governing and executive responsibilities have been completely blurred. This system, clearly intended to protect Member States self interests, has promoted the bureaucratic and cautious culture of the Commission that is now so readily criticised for its inefficiency. Many of the deficiencies and shortcomings of EU development aid that have occurred as a result have been reported in the excellent report by the Select Committee of the House of Commons.
2.1.Poverty focus
Many Member States Ministers have been particularly firm in criticising the lack of a poverty focus by the European Commission. I find that this criticism has been most disingenous. Apart from the lack of relevant capacity and skills for what is in reality a relatively new approach for the Commission, the overall lack of such a poverty focus results from decisions taken at various Summits of the Council. These boosted the programmes to Central and Eastern Europe and the Mediterranean countries out of all proportion. I should make the point that for most, if not all Member States, EU aid is a useful tool for getting the EU as a whole to contribute to external political and economic objectives that are of interest to them. For the most part these have nothing to do with eradicating or even reducing poverty. Alliances they promote are still strongly related to their past connections and colonial histories, and to possible advantages they see in maintaining and strengthening those links. While unified in this approach, it makes the Council fiercely divided in directing the EU's foreign outlook.
2.2.Two-facedness
While the Council has put emphasis on aid to the near abroad, it has opposed the proper integration of Commission managed aid to most Least Developed Countries (LDC's) into the European budget. Almost all LDC's are part of the ACP group for which Europe's aid is provided through the European Development Fund (EDF). The EDF is a separate intergovernmental agreement of the Member States, which operates completely outside the normal EU budget and without the normal parliamentary control. A Committee of Member States (the EDF Committee) approves all projects and programmes.
Attempts within the European Parliament and Commission to (partially) integrate the EDF in the budget has run into trouble with the Member States. In its first reading of the 2001 budget, the Council deleted all reference to the EDF. It is difficult to see this being compatible with an effective poverty approach. At the same time Clare Short is calling for 70% of EC aid to go to LDC's by 2006. How is this to work? With the EDF outside the budget it would be impossible for the budgetary authority to implement. The priority here should clearly be on including the EDF in the budget.
I found it very revealing in reading the report of the Select Committee, to see that all of the UK's budgetary contributions to the EC's external programme come from Dfid, including funding of EU support to Poland, Hungary and other applicant countries. Clearly, as a consequence much of British development aid is spent on pre-accession support, which is as absurd as if this were the case for Structural Funds for Portugal or Ireland. Hence it appears that the domestic political problem of Short within her own government is transferred to the EU - where, she knows, the proposal has little chance of ever being adopted.
This is illustrative of a mechanism continuously used by the Members of the Council. Such ideas have a popular moral appeal, blaming the Commission for problems created by the Member States in the first place. The net effect is the creation of the image that the 'problem' IS 'Europe', and even that Member States are 'victims'. The populist positioning of Member States governments and politicians not only hides some incredible hypocrisy, but is also inherently damaging to the EU's development programme.
3.Organization in the European Commission
Given the contradictory and inconsistent leadership by the European Council on European aid it is hardly surprising that the EU programme is weak - and lacks a poverty focus. The Council's positions are seriously paradoxical and a much sharper focus should be given to its failings to direct an internally consistent European development policy. If there is anything surprising or worrying about the lack of quality of the Commission's programme, it is that even the Commission seems to agree on it being the case. Is it not amazing that we now have a Commissioner for Development and a Commissioner for External Relations who have made it their mission to go around publicly explaining how dysfunctional is European Commission development programme? Is this a new interpretation of how to take, or rather avoid, 'political responsibility'?
3.1.Reforming the European Commission
In its attempt to deal with the problems related to the lack of effectiveness in EU aid, the European Commission has tended to concentrate on internal technical reforms - rather than focus on the real underlying causes for the lack of effectiveness. In doing so the political differences that it has with the Council remained unaddressed. A first analysis of the current internal reforms might suggest that this time round the changes are more fundamental. But is this really so?
In the current reforms the Commission is setting up an office, with the name 'Euroaid' or something like that - quite along the lines of the name of the American office USAID. In technical and administrative terms this has some sound logic, particularly in comparison with the system it is to replace. However, I have to say that the political context in which this new office is to operate is far from clear. Curiously, the European office is not being established in the Directorate General for Development, or as an independent office having its primary relationship with that Directorate. Based on the Common Service for External that was located within the Directorate for External Relations, it is, at present, still operating within the Directorate for External Relations - from which it should, in the future, move out. In addition the Commissioner for External Relations carries, as the chair of the new Office, the final political responsibility.
3.2.Emperor without clothes
This restructuring has meant that the tasks remaining in DG Development are further diminished. While the new Office will employ something close to a thousand people for implementing the development programme, one or two hundred people may remain in DG Development. Worse still, only policy and programming remain as tasks in DG Development. Even then, DG Development's programming responsibilities are limited to ACP countries, as those for other parts of the world will remain in the Directorate General for External Relations. In addition, with an increasing emphasis on decentralisation of programming to country level, and with hardly any expertise available on policy, one is left to wonder whether this is designed as an innovative form of 'occupational therapy'.
It is for this reason that the image of the Commissioner for Development as an emperor without clothes has come to mind. For instance, while the Commissioner continues to argue that he is in charge of overall development, the budget for most parts of the development programme has been proposed by the DG for external relations. By these shifts of responsibilities, slowly but surely, the powers on development have been shifted to External Relations.
3.3.Dr. Jekyll, Mr. Jekyll and Mr. Hyde
So far, the Commissioner for Development argues that he will be 'promoted' to be the 'CEO' of the new office 'Euroaid'. He sees that, on his part, as an increased form of influence on development policy, even though the Commissioner for External Relations is the chair of that new Office. In answer to a question on this subject by the House of Commons Select Committee, the Commissioner for Development stated that he saw himself as Dr. Jekyll and Mr. Jekyll at the same time. It is clear that the Commissioner sees himself being the good guy in the story - in more ways than one. But who is the evil Mr. Hyde - Jekyll's alter ego, in the analogy? The problem lies exactly in the confusion between political and executive functions, particularly as they are seemingly invested in the same person.
3.4.The emperor on the Titanic
There will, of course, be a Director of the new office, who was appointed just last week. So what are the respective responsibilities and relationships between the Chair, CEO and Director? What powers will they have in this structure? And who reports to whom? Can the Development Commissioner, acting as a Chief Executive, take political initiatives when he is implementing tasks, which are supervised by another Commissioner who, after all, carries the final political responsibility? Who has the final word when the implementation of development cooperation is discussed in the College of Commissioners? How can a Commissioner be in charge of development policy, without carrying the final responsibility for its implementation?
Surely, at least one can say that the agreement between the Commissioners downgrades the level of political responsibility held by the Commissioner of Development, and at the end of the day, simply subordinates development policy to external affairs policy. In the political structure of the College of Commissioners these reforms are in danger of making the existence of a Commissioner for Development, with an equal voice in the College of Commissioners redundant and DG Development, frankly already almost void of any responsibility, would be dismantled. The emperor without clothes, who is gaily dancing on the Titanic - while those who can afford it flee off in small boats, would capture the imagination of what is happening in Brussels at the moment.
3.5.The relevance of EU development policy
There should be no doubt in anybody's mind that the success of the construction of the EU is the result of the economic benefits it has brought to its member countries. Promoting economic self-interest is the prerequisite for the EU's political sustainability. The nature of EU external relations is, almost by definition, geared towards creating access for economic development of the EU. Development policy is the only exception to this, and this space, where poverty eradication outside the EU is the central objective, should be nurtured. It creates a political space for building external relations on the basis of motivations other than self-interest, which, in the long term, and for the sake of human development as a whole, is valuable and must be kept.
4.Joining-up at the international level
We have already landed in the second part of the question: what is Europe's role within the international donor community? Here we must distinguish two questions. What is its role, and what should it be?
4.1.Poverty Reduction Strategy Papers (PRSPs)
Internationally donors increasingly stress the importance of eradicating poverty. The Global Poverty Report of the World Bank (2000) comes to the conclusion that the number of people in poverty in Africa, Latin America and South Asia, has increased. According to their figures, in Sub Sahara Africa the number of people living in poverty increased by 74 million people, reaching a total of 291 million in 1998.
In September 1999, the objectives of the IMF’s concessional lending were broadened to include an explicit focus on poverty reduction in the context of a growth oriented strategy. The IMF set out to support, along with the World Bank, strategies elaborated by the borrowing country in a PRSP which would be prepared with the participation of civil society, and other development partners. It states in a recent explanation (July 31, 2000) of its Poverty Reduction and Growth Facility:
"But it has become increasingly apparent that more needs to be done to achieve faster growth and broader-based poverty reduction. While the underlying objective of IMF-supported policies has always been rapid sustainable growth, there has been a growing realization that there is also a need for policies that are aimed directly at the poor, allowing them to benefit from and contribute to growth by expanding their economic opportunities. From this (..) has come a commitment to making IMF-supported programs for low-income countries better integrated with policies to fight poverty, better-owned, and better-financed."
But are these objectives of fighting poverty and increasing national ownership of governance real or merely rhetoric? Is the IMF intending to assess whether the macro-economic fast growth oriented policies it has promoted are compatible with the objective of combating poverty? Is the IMF re-assessing its decision-making structures vis-à-vis developing countries?
4.2.Ownership versus conditionality
While the intention of the PRSP process is stated as being to enhance ownership of policies by national governments (and their societies) in developing countries, no changes have been made in the decision-making power that developing countries have within the multilateral organisations. However, the dependency of developing countries on the concessional lending of World Bank and IMF has not diminished.