31.5.2017   

EN

Official Journal of the European Union

C 173/62

Rapporteur:

Jan SIMONS

1.1.

The European Economic and Social Committee (EESC) welcomes the establishment of the European External Investment Plan (EIP) and the proposal for a Regulation on the European Fund for Sustainable Development (EFSD) and establishing the EFSD Guarantee and the EFSD Guarantee Fund as steps in the right direction towards tackling the causes of irregular migration at its roots. The eradication of poverty is also a goal on which the EFSD should focus.

1.2.

The Committee calls for a particular focus on resolving the situation in the countries that are the main source of migration where economic, social and security conditions have led to economic devastation and spiralling poverty while blocking any efforts towards sustainable development.

1.3.

The Committee refers to its previous opinions where it has stressed the need to involve the private sector in development on condition that such development is in line with the sustainable development goals and that the private sector respects basic economic, environmental and social rights, the core International Labour Organisation (ILO) conventions and the Decent Work Agenda. This should apply also to the investment projects financed by the EFSD.

1.4.

The Committee considers the proposal on the EFSD compliant with its recommendation to use development assistance as a multiplying factor for matching private capital with investments in developing countries and to link them to clearly defined aims, such as the creation of more and better jobs, production quality improvement and transfer of management know-how to the private sector.

1.5.

The Committee calls on the Commission to study and analyse the experience of the implementation of the Investment Plan for Europe and the European Fund for Strategic Investment to avoid any shortcomings and obstacles taking into consideration that the situations in the partner countries covered by the EFSD are much more complicated than those in the EU Member States.

1.6.

The Committee welcomes the coordination of the cooperation and governance through the strategic board of the EFSD where all the relevant institutions and bodies should be represented. Given the irreplaceable role of civil society in development cooperation, the EESC asks to be given the status of observer on the strategic board and recommends involving the representative civil society organisations in partner countries in the decision making process, including the preparation of concrete projects.

1.7.

The Committee recommends that the one-stop shop to be established for the investors should not be limited to investment issues but should provide guidance and all necessary information and contacts for those who would like to engage in development activities.

1.8.

The Committee would suggest that the Regulation include the commitment to extend the validity of the EFSD and the Guarantee beyond the limit of 2020 after the evaluation of the results of its implementation and calls on the Commission, the Council and the EP to take this into consideration when preparing the new Multiannual Financial Framework.

2.1.

On 28 June 2016, the European Council asked the Commission to present a proposal for an ambitious External Investment Plan (EIP) as a part of the EU’s new Partnership Framework with third countries under the European Agenda for Migration (1). The new plan is based on three pillars: a new investment fund (pillar 1); technical assistance (pillar 2) to help local authorities and companies to develop a higher number of sustainable projects and attract investors; and (pillar 3) a range of dedicated thematic, national and regional EU development cooperation programmes combined with structured political dialogue targeted at improving the investment climate and overall policy environment in the countries concerned.

2.2.

Pillar 1 will be partly implemented through the establishment of the European Fund for Sustainable Development (EFSD). The EFSD will have the key objective of providing an integrated financial package to finance investments starting in the regions of Africa and the Neighbourhood. The EFSD will be composed of regional investment platforms, which will combine financing from existing blending facilities and the EFSD Guarantee. It will operate as a ‘one-stop shop’ to receive financing proposals from financial institutions and public or private investors and deliver a wide range of financial support to eligible investments.

2.3.

The key objective of the EFSD is to provide an integrated financial package to finance investments for countries that are signatories to the Partnership Agreement between the members of the African, Caribbean and Pacific (ACP) Group of States of the one part, and the European Community and its Member States (2), and the Neighbourhood, thereby creating growth and employment opportunities, maximising additionality, delivering innovative products and crowding-in private sector funds. The EFSD is expected to mobilise up to EUR 44 billion of investments using funds from the general budget of the Union and other sources amounting to EUR 3,35 billion up to 2020.

2.4.

The Union will make available a total of EUR 750 million for the EFSD Guarantee until 2020 stemming both from the Union’s general budget and the 11th European Development Fund (EDF). The Commission intends to propose the mobilisation of the contingency margin to provide EUR 250 million. Other contributions from the Union budget would be made by the use of redeployments or refocusing of programmed funds. Further financing could also include other contributions by other contributors, such as Member States.

2.5.

The EFSD will be managed by the Commission and implemented through regional investment platforms, which will combine financing from existing blending facilities for Africa and for the Neighbourhood and the granting of the EFSD Guarantee. The Commission will be advised by a strategic board and two operational boards, one for each Regional Investment Platform. The Commission will manage the EFSD secretariat, which will ensure the performance of all tasks and functions needed to fulfil the objectives of the EIP.

3.1.

The EESC represents European organised civil society in several bilateral committees such as ACP-EU, Euromed, the East Partnership, Latin America and others, and presents its views on the role of civil society in supporting development (3). Civil society can play a very important role in evaluating the usefulness and sustainability of the investment projects, in overseeing the transparency of their financing and in monitoring their implementation.

3.2.

The Committee considers the problem of the great number of refugees and irregular migrants to the EU as one of the great challenges that the EU has faced in recent years. The two phenomena have different causes and call for differentiated solutions. The top priority for the international community must be to deploy all its efforts in bringing an end to military conflicts and establishing a peace settlement in order to create the conditions necessary for real development and implementation of the Sustainable Development Goals (SDGs). Alongside the important role of civil society in prevention, mediation and solving conflicts, the EU, as the biggest donor of development aid, should play the major role in these efforts.

3.3.

The causes of irregular migration are often the result of weak economic prospects and low economic growth in the countries of origin combined with poor social conditions and significant security issues, which result in exacerbated poverty and force thousands of people to take the road of exile. The Committee welcomes the efforts of the Commission and the Council to find the best approach to resolving the issue of irregular migration by tackling its root causes

3.4.

Official Development Assistance remains irreplaceable in the fight against poverty especially in the least-developed countries, fragile states and for vulnerable populations but it cannot cover all development needs.

3.5.

The Committee, in its opinions on the role of the private sector (4) and on financing development (5), concluded that that it is necessary to mobilise all available resources and give a much greater role to the private sector both at European and local levels on condition that this development will be in line with the sustainable development goals and that the private sector will respect human rights including economic and social rights, especially the core ILO conventions. The new jobs created should comply with the ILO Decent Work Agenda and this should apply also to the investment projects carried out by means of the European Fund for Sustainable Development.

3.6.

The new instruments such as the EFSD Guarantee and the Guarantee Fund should be used as a multiplying factor for attracting private capital to the investments in developing countries and linking them to clearly defined aims, such as the creation of more and better jobs, improvement of production quality and transfer of management know-how to the private sector. Furthermore, the blending of the public and private investments must be transparent and respect the necessary balance to avoid the situation where the private investors reap all the benefits and the public sector covers the loses. The results of the projects must be clearly measured and benchmarked, evaluating among other positive results the elimination of the causes of irregular migration.

3.7.

Since the EFSD is inspired by the Investment Plan for Europe and the European Fund for Strategic Investment the Committee is asking the Commission to draw lessons from its functioning since it cannot be described as a complete success This experience has to be studied and analysed carefully to avoid any shortcomings and obstacles when managing the EFSD, taking into consideration that conditions in partner countries are different and much more complicated than those in the EU Member States.

3.8.

The proposed EFSD will transform the existing blending Africa Investment Facility (6) and the Neighbourhood Investment Facility (7) into two investment platforms under one umbrella. The Committee considers it necessary to involve representative civil society organisations at local level in the decision making process, including the preparation of concrete projects, to enable them to play their part in monitoring the transparency of the financing and the effectiveness of the investment projects.

3.9.

The EU has an excessive number of financial tools linked to development programmes (11th European Development Fund with its different financing envelopes, facilities, platforms, the Multiannual Financial Framework 2014 to 2020 (EU budget) with its different territorial and regional programmes, sectorial programmes, EIB with its facilities and programmes, EBRD, etc.). which makes it very complicated for the general public and the relevant partners to understand them and find out how to use them. The EFSD plans to become the one-stop shop for those who are interested in investment in the developing countries. The Committee recommends that it should not be limited to investment but provide guidance with all necessary information and contacts for those who would like to engage in the development activities.

3.10.

Only 6 % of the EU development assistance went to fragile states and most of it was directed at the 10 countries that have plentiful natural resources. The Committee hopes that the EFSD will also bring positive results to fragile states, especially those with military conflicts, devastated economies and failed governance where the proposed Guarantee may help private investors face higher risks for their projects. The Committee is also against the attempts to set a maximum percentage that the Guarantee can cover which would limit its application to investments in fragile countries.

3.11.

The Committee considers that the main qualitative change to the present situation could be to address coordination and streaming of cooperation and governance through the strategic board of the EFSD, where all the relevant institutions and bodies should be represented. Given its role in the development cooperation the EESC calls on the Commission to give observer status to representatives of the Committee so that the views of civil society can be represented.

3.12.

The Committee considers that the very significant added value of the new External Investment Plan should be provided via its second pillar related to technical assistance and the third pillar, which would cover the issues of improving democracy and governance in partner countries especially transparency, monitoring and accountability and creating a business environment that was conducive to investment leading to growth and new jobs and the eradication of poverty.

3.13.

It is also necessary to improve communication about the investment plan and its specific projects to enable civil society to monitor its implementation.

4.1.

The proposal for a regulation on the EFSD Guarantee states (8) that it would be granted for an initial investment period ending on 31 December 2020, which in the Committee’s view is too short to fulfil the goals of the EIP. The Committee would hope that it would be possible to extend the EIP and enlarge its scope to include other countries and regions depending on its success and this should be taken into consideration when the new Multiannual Financial Framework is prepared.

4.2.

It is proposed that Member States will have the option of providing contributions in the form of a guarantee earmarked by a region, sector or investment window (9). The Committee recommends adding that Member States’ contributions should be in line with the EU’s development priorities.

4.3.

We welcome the Commission’s commitment to reporting annually to the European Parliament and the Council on the financing and investment operations covered by the EFSD Guarantee and are pleased to note that the report will be made public to allow the relevant stakeholders, including civil society, to express their views. The EESC will be keen to participate in the evaluation of whether the EFSD contributes to the Sustainable Development Goals, including the key reason for its creation — removing the causes of irregular migration.

4.4.

In all its opinions on development cooperation, the Committee has insisted that aid must be provided in a completely transparent manner in order to prevent fraud, corruption, money laundering, and tax evasion. It therefore supports the explicit mentioning of these principles in the proposal (10).

4.5.

The Committee suggests adding the eradication of poverty to the SDGs mentioned in Article 3(2) on which the EFSD will focus and to mention it also among the general objectives under Article 8(1)(a).