EU Development Policy: Maximizing Impact for Sustainable Change

1. Increasing the Impact of EU Development Policy An Agenda for Change

2. CONTEXT • Lisbon Treaty (2009): poverty elimination in the context of sustainable development as one pillar of external action (Art.21 TEU); primary importance to PCD (Art.208 TFEU) • European Consensus on Development (2005): remains point of reference • Commitment to the MDGs (2000): Common EU Position and 12-point Action Plan (2010) • Commitment to aid effectiveness (2005): implementing the Accra Agenda for Action (2008); Code of Conduct on Division of Labour (2005); EU Operational Framework (2009-2010) • Sectoral and cross-cutting policies e.g. gender, environment, governance, fragility … • Policy Coherence for Development (2005)– PCD Work Programme (trade, climate, migration, security, food security) • Comprehensive partnerships, global presence: Cotonou, EU-Africa, Neighbourhood policy, EU-LA, Asia, etc

3. GREEN PAPER On “EU development policy in support of inclusive growth and sustainable development”: Key results from the public consultation: • Poverty focus of EU development policy • Partner country ownership • Differentiated approach to partner countries • Inclusive growth for poverty reduction incl. governance, health, education • EU comparative advantage in energy, infrastructure, agriculture, aid for trade • Important EU role in good governance, security, human rights… • EU commitments on PCD and aid effectiveness • Private sector engagement with certain norms (e.g. decent work) • Communication of results to secure political and public support • innovative and private-sector financing • EU to work only in growth-enabling sectors or have a balanced portfolio that includes growth and social sectors? Only aid to Least Developed Countries?

4. AGENDA FOR CHANGE Higher impact of EU support and faster progress towards MDG • Concentration: Priority on • Good Governance (human rights, democracy, …) • Inclusive and Sustainable Growth for human development using • Climate change, agriculture and energy to drive sustainable development • Innovative financial instruments (blending…) • Differentiation: geographical focus towards countries most in need • Coordinated EU action • Improved coherence among EU policies

5. CONCENTRATION • Higher impact of EU aid by concentrating resources on a limited number of sectors • increasing the EU's critical mass • Max. of 3 sectors per country, among following policy priorities: • Good governance, democracy, human rights • Foundations for inclusive growth (e.g. social protection, health & education) • Drivers for growth and job creation (e.g. business environment, regional integration) • Sectors with strong multiplier impact and contributing to environmental protection + climate change prevention/adaptation (sustainable agriculture and efficient renewable energy)

6. HUMAN RIGHTS, DEMOCRACY, GOOD GOVERNANCE Principles • Incentives for results-oriented reform • EU general budget support should be linked to the governance situation and political dialogue with the partner country • mix and level of aid will depend on the country’s situation, including its ability to conduct reforms • Should a country loosen its commitment to human rights and democracy, the EU should strengthen its cooperation with non-state actors and local authorities and use forms of aid that provide the poor with the support they need Areas of action • Democracy, human rights and the rule of law • Gender equality and the empowerment of women • Public-sector management • Tax policy and administration • Corruption • Civil society and local authorities • Natural resources • Development-security nexus

7. 2. INCLUSIVE GROWTH: Health, Education and Social Protection • Intensified policy dialogue and tool such as sector reform contracts (SBS) to: • health systems, reduced inequalities in access to health services, policy coherence, increase protection against global health threats and improved health outcomes for all • Quality education to give young people knowledge and skills and vocational training for employability • Decent work agenda, social protection schemes and floors and policies to facilitate regional labour mobility

8. 3. GROWTH AND JOB CREATION: Business environment, regional integration and world markets • Competitive local private sector • Globally integrated markets, trade facilitation • Improving infrastructure • Leveraging private sector activity and resources for delivering public goods  up-front grant funding, blending grants and loans and risk-sharing mechanisms to catalyse PPP and private investment • Regional development and integration, Aid for Trade, EPA

9. 4. SUSTAINABLE GROWTH: Sustainable agriculture and renewable energy • Agriculture: sustainable, locally-developed practices, safeguarding of ecosystem services, smallholder agriculture, producer groups, supply and marketing chain, responsible private investment, nutritional standards, food security governance, reduced food price volatility at international level, climate change • Energy: price volatility and energy security; climate change, access to low carbon technologies, access to secure, affordable, clean and sustainable energy services, capacity development and technology transfer

10. DIFFERENTIATION • Target resources where they are needed and where they have greatest impact • Allocation of EU development assistance according to partner countries' needs, capacities, commitments and performance, as well as the potential EU impact • Supporting development in the Neighbourhood and Sub-Saharan Africa, as well as in fragile countries • Need for other types of cooperation and new partnerships with more advanced developing countries • Diversified aid modalities and develop other types of cooperation (e.g. loan-grant blending, technical coop, twinnings, etc.) • Development of partnership based on mutual interests with emerging economies and strategic partners • Accountability and transparency

11. COORDINATED EU ACTION • Joint programming of EU and Member States’ aid • Support to partner country’s strategy by developing joint multi-annual programming documents with MS synchronised with partner countries’ strategy cycles • Joint EU response strategies or donor strategies where possible, containing a sectoral division of labour • Joint action: single EU budget support contract, EU trust funds and delegated cooperation • CommonEU results reporting framework

12. IMPROVED COHERENCE AMONG EU POLICIES • Policy Coherence for Development – PCD • Future Multiannual Financial Framework should reinforce PCD • New thematic programmes that build synergies between global interests and poverty eradication • e.g. joint approach to security and poverty or relation between development and migration.