Speakers:

Simon Maxwell - Senior Research Associate, ODI

Richard Youngs - Director, Fundación para las Relaciones Internacionales y el Diálogo (FRIDE)

Discussant:

Martin Dinham - Director General International, Department for International Development

Chair:

Baroness Joyce Quin - Co-Chair, All Party Parliamentary European Union Group

After welcome and introductions by Baroness Quin, Simon Maxwell opened the event by highlighting the rationale for the publication of the report, ‘New Challenges, New Beginnings: Next steps in European development cooperation’.  It is, he argued, time for a “new kind of conversation” about Europe - and the report aims to set out a new development agenda.  Europe has suffered recently from a great deal of negative press, with a focus on the new appointments in Brussels and the failure of Europe at Copenhagen.  Why does the EU matter?  Simon made the following points:

• The development agenda is changing. Whilst focussing and delivering on the MDGs remains important, there are a number of new, wider global issues, highlighted by the recent DFID White Paper: the global financial crisis; climate change; migration; terrorism. 
• As the development agenda changes, we are moving into an increasingly multilateral space, where building a socially cohesive globalisation requires collective action. However, the multilateral space is crowded: though not quite a multilateral actor like some others, the EU shares the space with other institutions such as the World Bank, the United Nations (UN), regional development banks etc.  Ministers make decisions on which institutions to channel their funds for development through largely based on value for money and effectiveness: where do they “get most bang for their buck”?
• When the EU works together, it brings specific comparative advantage:

1. 1. Shared values;
   2. A commitment to poverty reduction, enshrined in the Lisbon Treaty;
   3. Shared approaches in development policy, laid out in the European Consensus on Development;
   4. New structures, which present real opportunity for joined-up engagement in international development;
   5. International political and economic partnerships, such as Cotonou; and
   6. Economies of scale. 

The World Bank may have similar financial resources, but it does not have the same range of instruments.  The UN has strong values and the political role, but does not have the same level of resources at its disposal.  This gives the EU a unique role.

Simon then elaborated the implications of the above points - the key messages for the new Commission:

• Europe needs to be ambitious about its policy and framework for development.  Is the European Consensus on Development still up-to-date in the face of the changing development agenda?  Arguably, there is insufficient content on issues such as climate change, fragile states etc.  Europe needs to use this opportunity to set out a new vision for development. 
• The Commission needs to “sort out the money”: there is a €20 billion funding shortfall and it is clear which Member States are not on track to meet their financial commitments.  The Commission needs to keep up the pressure on Member States to meet these promises.  It also needs to rethink the way in which the money is spent, with only 45% of EC aid spent in the poorest countries (cf. UK: 80%; DAC average: 65%).  Aid needs to be managed much more effectively.
• Policy coherence for development (PCD) must be a priority, joining up thinking on finance, climate, trade, security etc. 
• New partnerships need to be developed: the characteristics of Cotonou should be continued and extended to include other countries outside the ACP.
• The Code of Conduct on Division of Labour needs to be used properly.  Simon illustrated this with examples of there being 20-30 donors in the health sector alone in some developing countries, and 400-500 ‘priority countries’ amongst the EU Member States. 

Notwithstanding the fact that there have been significant improvements in European development cooperation, such as increased decentralisation to the field, new aid modalities such as budget support etc., there remains much to be done.  Simon outlined two approaches to Europe:

• consolidation – where much more is done centrally through Brussels; and
• cooperation – where bilateralism is valued, and Brussels fulfils a coordinating role. 

Those present at the event were asked to mark their own position on the above on an ‘EU Swingometer’ at the end of the event, in order to gauge opinion in the room.  Simon concluded by remarking that it is time to take another – long, hard – look at Europe and European development cooperation. 

Richard Youngs was then invited to present.  He made two key points:

• The need to understand the broader political and strategic context for development.  A central thread of the report is the need to better understand the linkages between security and development and the need for better coherence.  Richard argued that there is a need for the EU’s whole development narrative to change, from one of altruism to one of enlightened self-interest. 
• The need to get the strategic context for development right provides a “big opportunity” for the new team in Brussels and the EU as a whole, and it can draw on a unique range of instruments. 

Richard argued that, whilst aid to fragile states has increased in recent years, which is often taken as evidence that the linkage between development and security is working better, there are a number of significant situations of grave instability where EU involvement is limited.  A number of ESDP missions are considered to have failed and the New Action Plan on Fragile States which was being discussed has now stalled.  In these instances, Richard argued, policy belies the rhetoric of increased engagement in security issues.  The EU also tends to focus on short-term crisis management, without addressing the longer-term root causes of instability, and this is where a major shift is needed.  The Lisbon Treaty and the creation of the new European External Action Service (EEAS) presents an opportunity – but also a risk – to ensure that Europe does not revert to more traditional methods of diplomacy. 

The current Spanish Presidency: whilst Spain is signed up to a new way of thinking on development, with the fourth largest bilateral aid programme in the EU and the sixth largest globally, there remain significant problems of capacity and coherence.  The Spanish Presidency has had a bumpy start, which has highlighted the need for the EU to move forward quickly in making the new institutional arrangements work.    

Richard concluded by emphasising the need for the EU to move beyond its proclivity for institutional fine-tuning and to look at the broader global context.  It must not return to its traditional position of introspection. 

Martin Dinham was then invited to set the scene for the discussion from the floor.  He commented that, at the Informal Ministerial meeting in Spain last week, many of the issues in the report were discussed.  Commissioners Piebalgs and Georgieva, he remarked, have both got a firm hold of their agendas and clearly mean business.  It is important, he continued, that the Commission pushes itself to become more effective.

Martin remarked that the UK has committed to increasing its contribution to multilaterals, judged on results and effectiveness.  It is clear that, in parallel with the important institutional changes taking place in Europe, developing countries are also facing big challenges.  It is therefore more important than ever that the Commission is appropriately staffed and organised to have maximum impact.   

Martin agreed with the opening remarks of the new report: the significance of increased global interdependence.  The last decade has seen important changes for development, and has been a decade of global leadership by the EU. In 2001, the EU led the way on trade through Everything But Arms, worth €8bn to the poorest countries by 2008. In 2005, already the world’s largest donor, the EU set out ambitious commitments for 2010 and were the first to set a firm date to meet the UN target of 0.7% GNI/ODA in 2015. In 2008, the EU Agenda for Action set clear benchmarks for delivery on the MDGs, and the EU led the global response to the food crisis through the $1bn food facility.

It will be important that, in 2010, the EU delivers on these ambitious commitments.  Now, the EU must focus on its contribution to achieving the MDGs. With five years to go until the MDGs target date, the progress that as been made is under threat. Climate change and the global economic crisis threaten to undermine and even reverse the gains that the EU has helped to achieve.  The EU will have a crucial role to play at the Summit. It must demonstrate that it will deliver on its 2015 ODA target. It must commit us to clear actions on the most off-track MDGs of health, education and hunger and set out how the EU will monitor and drive progress until 2015. This is an ambitious agenda and the EU’s credibility and leadership are at stake. The following will be crucial at the summit:

• First, the EU should set out how collectively we will deliver our ODA pledges and hold ourselves accountable for doing so at the highest level. The UK government would like to see all Member States committing in June to set out national plans to get back on track, and Leaders monitoring progress through an annual discussion at the June European Council, starting this year, on the basis of a Commission report.
• Second, the EU needs to take actions to support the most off-track MDGs on maternal and child health. The EU should support developing countries by committing to help finance access to free basic healthcare and providing long-term, predictable finance for country plans, in line with the principles of the International Health Partnership. The UK government would like to see the Commission identify ten priority countries by the end of the year where EU support to sound country plans could help improve maternal and child health. With the right global action, we could get quality care to 240 million more mothers and newborns by 2015 and save nearly six million lives.
• Third, the June European Council will take place during the 2010 World Cup, where President Zuma and FIFA are supporting the “1Goal” campaign to make education in Africa its lasting legacy. This is another opportunity for the EU to show leadership: by contributing its fair share of the $11bn shortfall in external finance that is needed to get the remaining 72m children into school by 2015, and by setting out its commitments to the reformed Education For All Fast Track Initiative.
• Fourth, the EU should continue its leadership on food security, financing the Africa Union Comprehensive Africa Agriculture Development Programme's agriculture plans in 10 countries by 2012 and setting out how it will reach the 178 million most under-nourished children.
• Fifth, the EU should play a leading role in strengthening the role women play as drivers of development. The proposed EU Gender Action Plan should place women at the heart of all EU external assistance and underline the EU’s role as a key partner of the UN Gender Entity. We welcome the strong lead that the Spanish Presidency has taken on this issue.

An equally important task is to ensure that the institutional structure within the EU delivers coherence of EU policy and a sufficiently strong voice for development. Discussions are still going on between the Commission, Parliament and Council on the shape and roles of the External Action Service and the Development Commissioner. Good cooperation between Commissioners will be crucial and the capable set of current Commissioners have given clear signals of greater collaboration and cooperation across the work strands in the Commission. Achieving policy coherence across the EU, especially on issues such as trade, security and fisheries would have huge benefits for developing countries. The UK is working closely with our EU partners to turn the commitment to coherence in the Lisbon Treaty into practical benefits on the ground. 

Martin concluded by commenting that it is essential to address the evolving challenges in a way that does not undermine the core task of poverty reduction.  The task facing the EU cannot be underestimated – we need to work hard and together to achieve progress for developing countries.

Discussion was then opened up to the floor.  Questions included:

• What of the significance of local government in development, particularly in Spain, where decisions on development funding have been decentralised?  Panellists agreed this was an important area where there was great scope for debate. 
• Is the EU up to the task?  Martin responded that the UK was highly critical of the EU only ten years ago, but their position is very different now.  The EU has made great improvements in the timeliness and effectiveness of its aid, has introduced new aid modalities – in many areas the EU is becoming the gold standard in development.  Much improvement needs to be made on division of labour, however.  Richard commented that 2008 was a record year for development assistance and that there has never been such a rich vein of thinking across the EU.  Whilst Lisbon opens up the possibility of development being mainstreamed across foreign and security policy, there is a danger that it cold lead to development being downgraded. 
• An “elephant in the room” was identified - the importance of engaging with China.  Martin responded that the EU’s relationship with China was very important, particularly on issues such as climate change, and needed to be better understood within the global context and the G20.
• How should the EU position itself on security and development, with particular reference to Afghanistan?  Richard responded that he would like to see a long-term vision of security embedded in a concept of sustainable development.  Despite Afghanistan being a crowded field, the EU has significant comparative advantage and unique levers to pull.  
• What is the role of the European development finance institutions and should they, along with private sector actors, be ‘cooperationist’ or ‘consolidationist’?  Martin commented that the forthcoming review of EIB lending would be important, and that its external lending focus should be more on development.  These actors should be cooperating as far as possible. 
• Simon concluded with the remark that the gap between the rhetoric and the reality of European development cooperation was partly the result of excessive interference by the Member States, where instead there should be much greater trust placed in the Commission. 

Baroness Quin closed the meeting by thanking all who had taken part in the meeting and by remarking that she hoped debate would continue on the important issues raised in the report.