Sven Kuehn von Burgsdorff - Acting Head of Unit, DG Dev, European Commission
Gideon Rabinowitz - Coordinator, UK Aid Network (UKAN)
Simon Maxwell - Senior Research Associate, ODI
Claire Melamed - Head of Growth and Equity, ODI
The EU ‘Spring Package’ on development is the first major policy statement by the new Development Commissioner, Andris Piebalgs. Does it mark new strategic leadership? Does it suggest the Commissioner will take political risks? Will it excite and challenge the Member States? Will it enable the EU to lead the way at the UN MDG Summit in September?
1. After welcome and introductions from Claire Melamed, Sven Kuehn von Burgsdorff, recently appointed Head of Policy in DG Development began by outlining the key messages from the Foreign Affairs Council (FAC) conclusions of June 14 2010. They were:
a. That the EU believes the Millennium Development Goals (MDGs) can still be achieved, with the necessary political will, resources and by sharing responsibility internationally. There should be a renewed focus on the MDGs and countries that are most off-track. The Council has asked the Commission to compile a list of priority countries, which is underway (a meeting with the Member States has been convened in a couple of weeks to agree on a methodology). This list should contain two elements: (i) a needs assessment, most likely using UN, WTO and FAO data, and (ii) an ownership assessment, an assessment based on the commitment of developing countries to reaching the MDGs.
b. That so far, the discussion on MDGs has been donor-driven and this needs to change; in this respect, Sven sees the Council Conclusions as a “call to action” for developing countries.
c. That there is a need to look at financing for development from a holistic perspective. ODA alone is not sufficient and new sources of financing must be found. The conclusions emphasise the importance of domestic resource allocation, the need to improve the international tax environment and to increase foreign and domestic investment, mobilising the private sector and creating more public-private partnerships. Whilst ODA will remain for the neat future the backbone of development assistance, innovative, predictable and stable finance to complement ODA must be ensured.
d. The importance – and complexity - of policy coherence for development. There must be coherence not only between policies but also between policies and means, and amongst all international donors, not just European ones.
e. The commitment to the ongoing aid effectiveness agenda. The Council has invited the Commission to develop proposals in terms of joint programming, division of labour and on mutual accountability and transparency; the Commission has committed itself to produce a Communication on accountability and transparency before the end of this year and on joint programming by the beginning of 2011. In addition, the Commission will agree on a division of labour chapter which is still missing from the Operational Aid Effectiveness Framework which was adopted by the Council in November
2. Sven then gave a ‘reality check’ on where the Conclusions fell short:
a. On ODA, contrary to what was proposed in the Commission Communication which suggested realistic, “verifiable Annual Action Plans” and individual targets, the Conclusions speak instead of “verifiable actions”, and without dates.
b. The recommendation of annual EU internal Peer Reviews has disappeared from the Council Conclusions; however, it does specifically mention the Monterrey Report which, by intelligent interpretation, becomes more of a self-standing document.
c. National legislation for setting ODA targets has not been accepted, but this is perhaps not surprising given the current economic context.
3. However, there are issues on which the Council Conclusions are even more ambitious than the Commission’s original Communication, such as the tax and governance conclusions, particularly, for example, on proposals for tax information. In response to the framing questions of the debate, he believes that the Spring Package marks new political leadership only “to an extent”, that it marginally suggests that the Commissioner is willing to take political risks, that it most certainly has excited and challenged the Member States and it will only enable the EU to take the lead at the UN Summit in September “a bit”.
4. Gideon Rabinowitz responded to the presentation, focussing his comments on aid issues arising from the Spring Package and the subsequent Conclusions in particular. Aid remains an important agenda for the EU. Sharing some insights from the recently published Aidwatch report, Gideon gave a brief overview of the current EU aid picture. On aid quantity, in 2009, EU aid was down €1 billion to €49 billion (although this was an increase in share of GNI, from 0.4% to 0.42%). An analysis of EU Member States forward-looking budgets suggests that the EU will be €11 billion short of what was committed to by 2010. Moreover, the Aidwatch Report looks at the make-up of aid flows from Member States and has indentified three categories of what it calls “inflated aid”: (i) spending on refugees in the donor country, (ii) supporting developing country students in the donor country and (iii) debt relief.
5. On aid quality, Gideon observed that there have been few signs of urgency amongst donors to make substantial progress on aid effectiveness post Accra. Gideon had hoped that the Spring Package would have been a forward-looking agenda in this respect. However, whilst the Commission has played a progressive role with the Members States on aid quantity, particularly given what a “hard sell” aid is post-Greece, the collective European effort on aid effectiveness is stalling. There was no statement in the Spring Package on the decisions and changes that would need to occur to increase aid effectiveness, no reference to the High Level Forum in Seoul next year, no political statement on what needs to happen post-Accra. The FAC Conclusions are an even more “watered down” version, without a forward-looking agenda and without Member State champions of particular issues.
6. Simon Maxwell began by saying that it was important to have realistic expectations of the new Development Commissioner, Andris Piebalgs. He had not had the luxury of being able to prepare for the post or write a manifesto; he had had to deal with the architectural upheavals of creating the European External Action Service, which would result in DG Development being broken up; and Europe was struggling with its vision in the face of the financial crisis. Under the circumstances, the Spring Package was a creditable start, as he and Mikaela Gavas had written in their blog when it was first published. It was of course important to track implementation, and there were some notable omissions in the Council version of the package agreed in Brussels.
7. At the same time, there were many other topics on the agenda. The Council had agreed text on gender, on child labour, on priorities for the UN General Assembly, on an EU Strategy for Central Asia, and on the arms trade. Hidden in the child labour text were important and wide-ranging commitments on business and development and corporate social responsibility, and also on trade policy. It was really difficult to follow all these different initiatives, and there was a sense that the agenda was overloaded. Simon also questioned who in the Commission was responsible for tracking progress from last year’s Spring Package; Sven responded that this wasn’t followed due to staffing capacity constraints.
8. Simon suggested that the Commissioner needed to formulate a small number of over-arching policy priorities. One of the most important of commitments Piebalgs has outlined, and a vehicle for this, is a review of the European Consensus on Development in 2011. This will be a great opportunity to outline the future story of development. The changing development landscape – with 60% of the world’s poor in Middle Income Countries and only 150 million in Least Developed Countries – requires a different kind of development programme. Whilst the MDGs have been a fantastically useful tool, they are not enough: we now need a new development story and a new approach – as outlined in the report of the European Think-Tanks Group.
9. Discussion was then opened up to the floor and ranged across:
a. Tax: where will the EU go next on the issue of capital flight and domestic resource allocation? Sven responded that the Council Conclusions proposed mutual accountability from all partners, which he sees as having significant implications for NGOs as partners.
b. Aid leakage: what studies have been done on the issue of aid leakage? Gideon responded that at the moment, there is no systematic tracking of leakages, but that the International Aid Transparency Initiative is currently seeking to develop one.
c. Priority countries: will the Council’s request that the Commission compile a list of priority countries mean that funding to some countries will be cut? Sven highlighted again the scarcity of data on the performance/ commitment aspect of the assessment. For ACP countries, following the mid-term review, there can be financial reallocations within the current Financial Perspectives. With the DCI, however, there can only be reallocations within current country allocations.
d. How are policies from the Commission being adjusted to reflect the number of new administrations in Member States?
10. Claire Melamed closed the meeting by thanking all who had taken part and with a reminder of the next events in the series.