Policies, principles and processesunder the EU Agenda for ChangeGeert Laporte, Deputy DirectorFlorian Krätke, Policy Offic...
ECDPM Page 2Introducing ECDPM• Independent development policy ‘think and do’ tank working onEuropean Union’s relationship ...
1. A new EU development policy• Agenda for Change2. A new budgetary context• EU budget 2014-2020• Funding for the 11th EDF...
A new EUdevelopment policyECDPM Page 4
ECDPM Page 5The Agenda for Change explained5An extension of the European Consensus on Development, the ‘Agenda forChange’ ...
The Agenda includes initiatives to increase theeffectiveness of EU development cooperation:• Joint programming;• Sectoral ...
• With the Agenda for Change, the EU subscribesto current global trends in development and avision ‘beyond aid’;• ‘differe...
ECDPM Page 8A new EUbudgetary context
A new EU budget – how muchfor development?ECDPM Page 9• Member States agreed on Multi-annual Financial Framework (MFF) (EU...
• EU Member States further from 0,7%target;• Certain instruments / programmes seeonly little growth (EIDHR, IfS, PAP, DCI)...
• 11th European Development Fund keptoutside the EU budget;• Overall approximately 1% decrease infunding per annum;• EU-15...
• Internal Agreement agreed in principle, ImplementingRegulation and Financial Regulation still undernegotiation in EDF Co...
ECDPM Page 13Differentiation andthe 11th EDF
1. Differentiated eligibility todevelopment assistance.2. Differentiated levels ofdevelopment assistance;3. Differentiated...
• Differentiated treatment has historicallybeen part of EU development cooperation(Lomé onwards);• European Consensus on D...
‘Differentiation’ is fundamental principle of ACP –EU cooperation:“co- operation arrangements and priorities shall varyacc...
• Based on:need, performance, capacity, commitment &potential EU impact;• Differentiation applied in two stages of aidallo...
• Likely indicators used for 11th EDF:• GNI p/c;• Population;• Human Asset Index (HAI);• Economic Vulnerability Index (EVI...
Envisions a transition of certain countries to different aidand non-aid modalities through thematic envelopes (DCI)and par...
• Criteria for differentiation have not changedmuch from the 10th EDF – important factor isthe weighing;• LICs and LMICs a...
ECDPM Page 21National and regionalprogramming for the11th EDF
• Programming principles closely linked to Agenda forChange;• Sector definition / choice:• Alignment to partner country/re...
First phase completed: Delegations havesubmitted analysis and proposals for overalllines of EU response (or draft joint-pr...
• Simplified process, yet still delayed;• Though process not the same as in the past, oldhabits continue:• Little transpar...
• Joint programming aims at delivering morewith less resources and enhancing cost-effectiveness of aid through coordinatio...
Initial experiences with jointprogramming (contd.)ECDPM Page 26• Aid fragmentation is the main rationalesupporting EU join...
• The Agenda for Change reflects an EU aid developmentpolicy that proposes to do more/better with less andcontains strong ...
Thank youwww.ecdpm.orgwww.slideshare.net/ecdpmPage 28
ECDPM Page 29EUR million – 2011 prices. Data from EUCO37/13Annual commitment appropriations forEU development cooperation ...
Comparison of the EDFsECDPM Page 30EUR millions – current prices, adapted from Gavas, 2013YearscoveredTotalamountAverageam...
1. EC 11th EDF Impact Assessment (Dec ‘11)“11th EDF should allow for a more differentiated approach”argues for sharpened g...
1. ‘Differentiated mix of policies and instrumentsCPA goes ‘beyond aid’ (e.g. trade & politicaldimensions)CPA refers to in...
3. ‘Differentiated eligibility of developmentassistanceViews of applicability of approach to halt bilateralgrant assistanc...
• Needs – allocation indicators:Population sizeGDP per capitaDemographic dynamics (youth dependency)AIDS prevalence rateHu...
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Policies principles and processes under the eu agenda for change

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National and Regional Programming for the 11th EDF
Geert Laporte, Deputy Director, ECDPM
Florian Krätke, Policy Officer, ECDPM
Meeting for senior ACP officials in charge of development financing
Brussels, 15-16 April 2013

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Policies principles and processes under the eu agenda for change

  1. 1. Policies, principles and processesunder the EU Agenda for ChangeGeert Laporte, Deputy DirectorFlorian Krätke, Policy OfficerMeeting for senior ACP officials in charge ofdevelopment financingBrussels, 15-16 April 2013National and RegionalProgramming for the11th EDF
  2. 2. ECDPM Page 2Introducing ECDPM• Independent development policy ‘think and do’ tank working onEuropean Union’s relationship with Africa, Caribbean and Pacific(ACP) for more than 25 years;• Providing practical, policy-relevant analysis and support to ACPand European stakeholders;• Non-partisan facilitator of dialogue;• Systematic linking with key players in the EU and the ACPthrough networks and partnerships;• Independent sounding board for ACP and EU developmentpolicies;• Currently funded by some 10 European States;• Board of ECDPM drawn from ACP and Europe.
  3. 3. 1. A new EU development policy• Agenda for Change2. A new budgetary context• EU budget 2014-2020• Funding for the 11th EDF3. Differentiation and the 11th EDF• Legal basis for differentiation• Different types of differentiation• Likely consequences for the 11th EDF4. National and regional programming• Programming process• Joint programming• Priority sectorsContentsPage 3ECDPM
  4. 4. A new EUdevelopment policyECDPM Page 4
  5. 5. ECDPM Page 5The Agenda for Change explained5An extension of the European Consensus on Development, the ‘Agenda forChange’ (2011) presents a strategic shift in EU development policy, with morefocused areas of intervention;Differentiatepartnerships based onneeds, capacities, commitments, performance and potentialimpact, includingfragile states;Coordinated EUaction and coherenceamong EU policies(PCD).I) Humanrights, democracyand goodgovernance;II) Inclusive andsustainable growthfor humandevelopment.PRINCIPLES FOCUSDemocracy, human rights &rule of law; Gender equality;Public sector management;Tax policy & administration;Corruption; Civil society &local authorities; Naturalresources; Development-security nexus.1) Socialprotection, health, educationand jobs;2) Businessenvironment, regionalintregration and worldmarkets;3) Sustainable agricultureand energy.ACTIONJoint programmingtogether with EUMember States;Modalities for jointactions (budgetsupport, trustfunds, delegatedcooperation);Innovative financing(including blending);Common framework formeasuring &communicating results.MODALITIES
  6. 6. The Agenda includes initiatives to increase theeffectiveness of EU development cooperation:• Joint programming;• Sectoral concentration (2-3 sectors);• Enhanced budget support;• Using ODA to leverage other resources (blending, DRM);• Policy Coherence for Development (PCD);• Differentiated approach to partner countries.Note that 20% of EU aid should support ‘social inclusionand human development’, an 20% of the EU budgetshould contribute to ‘low-carbon resilient societies’.The Agenda for Change (contd.)ECDPM Page 6
  7. 7. • With the Agenda for Change, the EU subscribesto current global trends in development and avision ‘beyond aid’;• ‘differentiation’ of countries (focus on thepoorest)• leveraging non-ODA financial resources(blending)• Much reaffirmation of past commitments (jointprogramming, PCD), some codification of pastpractice;• Will the EU be able to put in practice thisambitious programme? How?A new direction for EUdevelopment cooperation?ECDPM Page 7
  8. 8. ECDPM Page 8A new EUbudgetary context
  9. 9. A new EU budget – how muchfor development?ECDPM Page 9• Member States agreed on Multi-annual Financial Framework (MFF) (EUbudget) 2014-2020 at the European Council of 8th February.• Negotiations still ongoing in EU: European Parliament still to giveconsent, new EC proposal limits increases of aid to DCI, EIDHR and IfS;• Resources for the external action, including development, suffered thelargest cuts:Heading MFF 2007-2013 MFF 2014-2020 % changeMFF – Total CommitmentAppropriations€ 993.60 billion € 959.88 billion - 3.5Heading 4 – Global Europe (includesDCI, IfS, EIDHR etc.)€ 55.935 billion € 58.704 billion + 511th European Development Fund(outside the MFF)€ 22.687 billion € 26.984 billion + 18.92011 prices
  10. 10. • EU Member States further from 0,7%target;• Certain instruments / programmes seeonly little growth (EIDHR, IfS, PAP, DCI);• Increased pressure to deliver on aideffectiveness commitments reflected inAgenda for Change.Implications of the budget cutsfor EU aid and programmingECDPM Page 10
  11. 11. • 11th European Development Fund keptoutside the EU budget;• Overall approximately 1% decrease infunding per annum;• EU-15 decreased contributions slightly, EU-12 increased moderately;• Increasing talks of review and‘budgetization’ in the run-up to theexpiration of the Cotonou Agreementbetween ACP and EU in 2020.Funding for the 11th EDFECDPM Page 11
  12. 12. • Internal Agreement agreed in principle, ImplementingRegulation and Financial Regulation still undernegotiation in EDF Committee;• Some concern over timing of ratifications of the 11thEDF (as usual);• Large MSs (FR, UK, DE) still have over 50% of votingrights in EDF Committee;• EDF preserved at the status quo, thought there aredoubts in EU Member States’ on the future of the EDF;• New EU Member States’ increased contribution doesnot mean they are more committed to the ACP.Next steps and considerationsECDPM Page 12
  13. 13. ECDPM Page 13Differentiation andthe 11th EDF
  14. 14. 1. Differentiated eligibility todevelopment assistance.2. Differentiated levels ofdevelopment assistance;3. Differentiated mix of policies andinstruments;All types have a legal basis in the CPA.Types of differentiationECDPM Page 14
  15. 15. • Differentiated treatment has historicallybeen part of EU development cooperation(Lomé onwards);• European Consensus on Development(2005) identifies differentiation as a‘necessity’:• Use of cooperation modalities and levels varyaccording to circumstances in partnercountries/regions;• Criteria: needs and performance;• LDCs and fragile states areprioritised, ‘appropriate attention’ given toMICs.History and legal basisECDPM Page 15
  16. 16. ‘Differentiation’ is fundamental principle of ACP –EU cooperation:“co- operation arrangements and priorities shall varyaccording to a partner’s level of development, itsneeds, its performance and its long termdevelopment strategy. Particular emphasis shall beplaced on the regional dimension. Special treatmentshall be given to the least developed countries. Thevulnerability of landlocked and island countries shallbe taken into account. Particular emphasis shall beplaced on regional integration, including atcontinental level” (CPA, Article 2)History and legal basis (contd.)ECDPM Page 16
  17. 17. • Based on:need, performance, capacity, commitment &potential EU impact;• Differentiation applied in two stages of aidallocation:(1)eligibility to grant-based bilateral aid (new);(2)aid allocation at programming stage.• Criteria for first stage:• UMICs according to the OECD-DAC;• More than a 1% share of global GDP;• Other indicators (next slide).This type of differentiation will not beapplied to the 11th EDF.Differentiated eligibility todevelopment assistanceECDPM Page 17
  18. 18. • Likely indicators used for 11th EDF:• GNI p/c;• Population;• Human Asset Index (HAI);• Economic Vulnerability Index (EVI);• Worldwide Governance Indicators (WGI).• Other indicators suggested:• Environmental Performance Index (EPI);• Human Development Index (HDI);• Absorption capacity.• Provisions for state fragility.Differentiated levels ofdevelopment assistance (contd.)ECDPM Page 18
  19. 19. Envisions a transition of certain countries to different aidand non-aid modalities through thematic envelopes (DCI)and particular instruments (EIDHR, PI):• Loans (esp. blending of loans and grants);• Technical cooperation;• Support for trilateral cooperation.Differentiated mix of policiesand instrumentsECDPM Page 19
  20. 20. • Criteria for differentiation have not changedmuch from the 10th EDF – important factor isthe weighing;• LICs and LMICs already the focus of the EDF(over 90% of allocations, increasing trend);• Explicitly stated differentiation policyindicates that UMICs will likely receive loweraid allocations;Key question: how will differentiationaffect programming, and what is the‘destination’ of differentiation?Likely consequences for the 11thEDFECDPM Page 20
  21. 21. ECDPM Page 21National and regionalprogramming for the11th EDF
  22. 22. • Programming principles closely linked to Agenda forChange;• Sector definition / choice:• Alignment to partner country/region definitions;• Drivers: 1) ownership of sector priorities and policies, 2)expected results and impact, 3) EU priorities and comparativeadvantage;• Implementation modalities should not drive;• Specific allocation may be made to strengthen CSOs and LAs.• Sector concentration:• SIDS only one sector (critical mass);• Possibility of additional interventions in fragile states.Programming instructions for Delegations possiblyadjusted at a later stage in light of MFF outcome.Guiding principles andinstructions for programmingECDPM Page 22
  23. 23. First phase completed: Delegations havesubmitted analysis and proposals for overalllines of EU response (or draft joint-programming document) to EEAS/DEVCO lateSeptember 2012;EEAS/DEVCO have not yet responded withinstructions to all Delegations to start thesecond phase of programming;Some Delegations started drafting MIP/NIPalready.Outline of the programmingprocessECDPM Page 23
  24. 24. • Simplified process, yet still delayed;• Though process not the same as in the past, oldhabits continue:• Little transparency in designing and programming aidallocations per country;• prescriptive approach to programming leading totensions with partner countries.• Strong push by EC interest for sustainable agricultureand energy; move away from infrastructure;• B-envelopes will be at € 0 unless need arises;• Regional programming yet to begin though guidelinesexist.Programming process so farECDPM Page 24
  25. 25. • Joint programming aims at delivering morewith less resources and enhancing cost-effectiveness of aid through coordinationamong the Commission and EU MemberStates;• The initiative is at various stages inEthiopia, Ghana, Laos, Rwanda, Guatemalabut potential for joint programming is beingassessed in around 40 countries;• A list of countries where joint programmingwill be undertaken in the future is expectedby June 2013.Initial experiences with jointprogrammingECDPM Page 25
  26. 26. Initial experiences with jointprogramming (contd.)ECDPM Page 26• Aid fragmentation is the main rationalesupporting EU joint programming;• Other drivers, both technical and political, pushdonors to undertake joint programming – butMember States have different approaches;• Partner country’s role generally limited (exceptin Rwanda) yet different reactions of partnergovernments;• Scope for other donors’ involvement providedthey adhere to rules and fundamental principles(alignment of programming cycles).
  27. 27. • The Agenda for Change reflects an EU aid developmentpolicy that proposes to do more/better with less andcontains strong ‘beyond aid’ elements;• Differentiation principle likely to lead to reduced aidallocations to UMICs – no clarity on the ‘destination’ ofgraduation;• Programming process delayed, prescriptive orintransparent in certain places;• Prepare for a new post-2015 developmentframework, with more emphasis on domestic resourcemobilisation and other financial flows for development;• Reflect on EU-ACP relations in anticipation of a newpost-2020 framework.Key conclusionsECDPM Page 27
  28. 28. Thank youwww.ecdpm.orgwww.slideshare.net/ecdpmPage 28
  29. 29. ECDPM Page 29EUR million – 2011 prices. Data from EUCO37/13Annual commitment appropriations forEU development cooperation 2014-2020Commitmentappropriations2014 2015 2016 2017 2018 2019 2020 TotalHeading 4 - Global Europe 7.854 8.083 8.281 8.375 8.553 8.764 8.794 58.704Emergency Aid Reserve 0.28 0.28 0.28 0.28 0.28 0.28 0.28 1.9611th EDF (outside the MFF) 2.952 3.868 3.911 3.963 4.024 4.094 4.174 26.984Total 11.086 12.231 12.472 12.618 12.857 13.138 13.248 87.648
  30. 30. Comparison of the EDFsECDPM Page 30EUR millions – current prices, adapted from Gavas, 2013YearscoveredTotalamountAverageamount offunding peryearNo. ofACPcountriesNo. ofEUcountriesEDF 1 1959-1964 569 -- -- --EDF 2 1964-1970 730 121.67 18 6EDF 3 1970-1975 887 177.40 18 6EDF 4 1975-1980 3,053 610.60 46 9EDF 5 1980-1985 4,207 841.40 58 9EDF 6 1985-1990 7,882 1,576.40 65 10EDF 7 1990-1995 11,583 2,316.60 68 12EDF 8 1995-2000 13,151 2,630.20 70 15EDF 9 2000-2007 14,300 2,042.86 77 15EDF 10 2008-2013 22,687 4,537.40 77 25EDF 11 2014-2020 26,984 4,497.33 79 27
  31. 31. 1. EC 11th EDF Impact Assessment (Dec ‘11)“11th EDF should allow for a more differentiated approach”argues for sharpened geographical focus & alternative forms ofcooperation with more advanced partners2. EC proposal for Internal Agreement 11th EDF (Dec ‘11)No explicit reference to differentiation3. Implementing regulation & Financial Regulation (2012-2013)Not formulated yet – remains to be seen4. Joint programming ACP – EU (2013)• EU gives ACP indication of indicative amounts per country &region• EU & ACP jointly agree on forms of cooperation (policymix, use of blending mechanisms,…)11th EDF decision-makingprocessECDPM Page 31
  32. 32. 1. ‘Differentiated mix of policies and instrumentsCPA goes ‘beyond aid’ (e.g. trade & politicaldimensions)CPA refers to innovative financing mechanisms since2010 revision2. Differentiated level of development assistancelevels between countries & regions have alwaysdiffered‘Needs’ and ‘performance’ criteria only(CPA, Annex IV), while Agenda for Change alsopromotes ‘capacity’ and performance’ criteriaBut: capacity & impact criteria proposed for DCIpost-2013 quite similar to performance indicators10th EDF (e.g. economic growth, FDI)Legal basis for different types ofdifferentiationECDPM Page 32
  33. 33. 3. ‘Differentiated eligibility of developmentassistanceViews of applicability of approach to halt bilateralgrant assistance to Upper-Middle Income CountriesdiffersBut: theoretically EC could allocate one euro A-envelopeLegal basis for different types ofdifferentiation, contd.ECDPM Page 33
  34. 34. • Needs – allocation indicators:Population sizeGDP per capitaDemographic dynamics (youth dependency)AIDS prevalence rateHuman poverty indexMalnutritionVulnerability based on Economic growth fluctuations, structuralhandicaps of LDCs & enclave or landlocked countries• Performance indicatorsAid performance (absorption capacity, aid dependence)Macroeconomic performance (recent economic growthrates, environmental performance, external debt, reallocations atEDF-9 mid-term review)Investment climate (external tariff protection, FDI, gross domesticcapital formation)Political performance (based on national programming dialogues)Social performance (public spending on health and education dividedby spending on military, progress on MDGs 2 and 5)10th EDF indicators fordifferentiationECDPM Page 34

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