The EU is the world’s largest foreign aid donor however its actual development programme is an embarrassment.
Unless Europe targets spending more effectively at achieving the internationally agreed millennium development goals of halving poverty, getting all children into school, reducing child and maternal mortality, and focusing on sustainable development, Britain and the other member states should “renationalise” their aid budgets.
Globally, untying aid, focusing it where the poor are and backing reformers would increase the value of existing aid by 50% to $87bn – and massively improve public confidence. We therefore need to target parts of the international system which can do most to achieve this.
The worst offender for highly ineffective aid spending is the European commission. With an annual spend of about €6bn, it has programmes in almost every developing country. And 25% of the UK’s aid budget – more than €1bn in 2000 – is transferred to the EC each year.
Some of its work is now of high quality but, overall, EC programmes are not focused on reducing poverty. The proportion of EC aid spent in low-income countries has fallen from 70% in 1990 to 38%.
Commissioners Chris Patten and Poul Nielson have made a start on tackling inefficiency. The turnaround in the quality of EC programmes in the Balkans is one example. But they would be the first to admit that procedures are still too slow and complex. The confus ing political direction set by member states and the European parliament means that EC spending is not focused on the reduction of poverty.
In the past few years we have worked to tackle some of the most glaring problems, and the EC now at least has an agreed objective of reducing global poverty. But the radical progress we need has not been achieved. We must grasp every opportunity for reform.
First, make poverty reduction the overriding objective. Too often the political consensus reached by the council of ministers and the European parliament is to maintain spending at historical levels in regions where the sole motive is that the EU has a general political interest there. Large resource transfers to middle-income countries with high lev els of poverty simply prop up the status quo and do not generate reform.
The events of September 11 highlight the links between poverty and insecurity and the need for the EU to widen its horizon beyond the near-abroad, and focus its scarce resources where they can make the most difference in tackling poverty and instability.
We need a clear commitment to the millennium development goals in the EC. This requires a major refocus ing of its aid spending on poverty reduction and a stronger commitment to development in trade, the environment and other policies. Programmes should operate at the highest EU standards, not the lowest.
Second, we need to focus EC programmes where they can add value, and cut back other activities. That means a hard look at why EU member states have EC programmes as well as national ones.
If EC programmes can be better delivered through national agencies or other multilateral ones, then it is hard to justify their continuation. Likewise, if the EC can find a way of being effective then we should also use it more as a channel for national funds.
Third, we need to streamline radically the instruments used by the EC, which have created complex and slow procedures. EC development legislation is byzantine, with overlapping regulations governing external programmes. On top of this, the annual budget process encourages complexity through its tendency to promote special interests.
I would instead like to see a single regulation for EC development spending that ends the unhealthy focus on geo-political regions and encourages a global approach to poverty reduction – with resources allocated where they will do most to achieve this – backed up by clearer measurement of effectiveness and quality of performance.
This would give the commission more freedom to manage EC programmes effectively without micro-management from member states and the parliament.
I welcome recent reforms of EC development programmes. They are beginning to make a difference. But as they roll out we also run up against their limitations. We have until 2006 when a new external affairs budget will be set.
My personal view is that we should demand a massive improvement in EC programmes and a return to at least 70% of resources spent on low-income countries. If this is not achieved, we should demand re-nationalisation of the aid programme.
If the EC cannot add value to the work of member states then this is what the principle of subsidiarity dictates.