European Development and External Assistance Policies: 2008 Report

The European Union (EU) and its Member States are the largest donors of development assistance, accounting for nearly 60 % of global assistance in 2008. This Report demonstrates the EU’s rapid response capacity, particularly required during the economic crises which affected developing countries in this year.

ACT

Report from the Commission to the Council and the European Parliament of 30 June 2009 - Annual Report 2009 on the European community's development and external assistance policies and their implementation in 2008 [COM(2009) 296 final – Not published in the Official Journal].

SUMMARY

2008 was marked by soaring food and energy prices and the global financial crisis. Despite these unfavourable conditions, the European Union (EU) demonstrated its ability to meet its commitments and to respond to the new needs of developing countries.

The EU is a key partner on the global stage, particularly with regard to issues such as climate, energy, trade and achieving the Millennium Development Goals (MDGs). This Report highlights the importance of making European development policies coherent, whilst taking into account the growing interdependence between the EU and its partners.

In 2008, the Commission assessed the progress made towards achieving the MDGs at mid-way and set new milestones for 2010. The Commission also increased efforts to integrate issues such as gender equality, the environment and the rights of children and indigenous people into the development process. Furthermore, the Commission considers good tax and democratic governance to be essential for successful reforms.

More and better aid

In order to offset the impact of soaring prices, the EU created a Food Facility (FR) with a budget of EUR 1 billion for the period 2008-2010. In 2008 the Commission also increased the budget for humanitarian aid by EUR 140 million and called up EUR 200 million from the European Development Fund (EDF).

The EU renewed its commitment to increasing overall development assistance in coming years. The volume of assistance has increased by 90 % since 2001, reaching EUR 9.33 billion in 2008.

Aid efficiency must also be improved. In this context, it involves:

• prioritising the channelling of aid through country systems to reinforce local ownership of projects and reduce transaction costs;
• increasing the predictability of aid, through setting up MDG contracts to provide longer-term aid. The first countries to benefit from these contracts were Burkino Faso, Ghana, Mali, Mozambique, Rwanda, Uganda and Zambia;
• adopting a strategy of long-term aid, targeted towards those partner countries achieving results and good budget management.

The Report highlights an increase in budget support to 39 % (EUR 3.68 billion from EU and EDF budgets), in the form of funds transferred to the national treasury of the beneficiary country. This is gradually replacing direct project-linked funding, provided that public finance management in the beneficiary country has received a positive assessment. The Commission is working to improve eligibility criteria and risk assessment.

In 2008, the Commission began reforms to increase its capacity for action in terms of technical cooperation and to strengthen its development project implementation units. This reform was supported by the launch of “Capacity4Dev”, an on-line interactive platform.

Partnership steps

More effective aid must be based on donor coordination and the sharing of experience. This approach prevailed in the distribution of aid in Afghanistan, in the Occupied Palestinian Territory using the funding instrument PEGASE and in Iraq using the funding instrument IRFFI.

The Commission has continued its cooperation with the United Nations, the World Bank and all of the donors in planning recovery operations after a crisis, disaster or conflict has occurred.

The Commission is preparing a new strategy in favour of local authorities participating in development cooperation actions.

Assessment of actions taken

In terms of development cooperation, the EU carries out results-oriented actions. In order to increase the effectiveness and impact of its aid, the Commission assessed geographical and thematic programming and aid delivery modalities. It concluded that greater visibility of actions, synergy between activities and coherence between country and regional aid is required.

Last updated: 27.11.2009