Malta will help shape EU development policy

New member states' participation in the European Union's development co-operation programme will be highly significant on the international level, according to Poul Nielson, European Commissioner responsible for development and humanitarian aid, who made an official visit here on Friday.

In an exclusive interview with The Sunday Times, the former Danish development minister said that the new members would be immediately contributing to the EU aid programme via their budget payments. "EU-15 member states' bilateral aid plus the Union's programme aid already account for half of global aid flows ($60 billion in 2003), and for 0.35% of their Gross National Income. New members have assumed the EU commitment to allocate 0.7% of GNI to development assistance by 2015."

Malta's Commissioner, Dr Joe Borg, will be sharing the development co-operation portfolio from this week until the new Commission is appointed in November and undertaking numerous trips and missions, Mr Nielson said. Three MFA officials will join his cabinet.

"I am certain that the new member states, including Malta, will influence the future direction of EU development policy. Malta's experience in specific regions, such as the Mediterranean, and of domestic political and economic transition will enrich the EU's collective understanding. Having been recipients of external assistance, you should, from your own experience, also be able to contribute to more efficient aid delivery.

"The EU's development co-operation programme managed by the Commission's EuropeAid office (€7.7 billion in 2003), reaches every developing country; humanitarian aid (€600 million) is extended to 60", Mr Nielson explained. "Our activities have been totally transformed under Commission reform proposals endorsed by member states in May 2000, resulting in sweeping changes in design, management, implementation and evaluation procedures as well as extensive staff training.

"Our biggest problems were the absence of clearly defined priorities, low-quality preparatory work, insufficient staff, complicated tendering procedures, over-centralisation in Brussels, poor interface with United Nations and other donor programmes, a huge backlog of undisbursed commitments and lack of ownership by recipient states.

"There was also the 'coherence' problem - with EU trade and agriculture policies undermining development goals. Now there is much more progressive and globally-oriented equilibrium; development considerations are 'baked into' other policies."

The six focus areas of EU's revamped programme are: the link between trade and development; regional integration and co-operation; support for macro-economic policies and equitable access to social services; transport; food security and rural development; institutional capacity building - good governance and the rule of law. European development NGOs also receive about €200 million annually.

Mr Nielson added that development co-operation was now based on country and regional strategy papers worked out with recipient governments, other donors, as well as representatives of local civil society. The preceding project-by-project approach was replaced by financial support to partner countries' national budgets and sectoral policies, and linked to outcome indicators in health and education. The Euro-Mediterranean Partnership's MEDA programme had benefited enormously from these reforms.

"Decision-making has been devolved to local EC delegations. However, the programme is still constrained by excessive and over-detailed control by member states. We also need to make further progress in harmonising all member states' individual donor programmes with each other, and with the Union's activities."

The EU's central development co-operation goal, also enshrined in the draft Treaty, is to reduce and eventually eradicate poverty - with three billion people (half the world's population) still living on less than $2 (66c) a day. As a first step, the EU is committed to enabling fulfilment by developing countries of United Nations Millennium Development Goals for 2015. These goals include reducing by half the one billion people with less than $1 a day and of those without access to safe water or sanitation, by providing these services to 1.6 billion and two billion people respectively by 2015. All EU development programmes are annually monitored for their MDG contributions.

"Our largest venture is the wide-ranging Cotonou agreement concluded in 2000 with 78 former member state colonies and possessions in Asia, Africa and the Caribbean countries plus South Africa", Mr Nielson continued. "The agreement succeeds four previous 'Lomè Conventions' (from 1975) and incorporates a number of new features.

"Between now and 2007, EU will be negotiating Economic Partnership Agreements with these states, interfacing with an ambitious project for four regional integration areas in Africa (also to be linked to each other), and two others in the Caribbean and the Pacific. Non-state actors such as NGOs will be consulted in EPA design, and will receive up to 10 per cent of future aid allocations."

Mr Nielsen rebuts accusations of European development NGOs that trade liberalisation under the EPAs will ruin local economies, by eliminating revenues from import duties and opening their markets to EU goods which will outcompete domestic products. "Liberalisation will take place from 2008 to 2020, and the ACP countries will open their markets more slowly than the EU. Least developed nations already have full access to EU under the 'Everything but Arms' initiative.

"Moreover, the regional integration process will open up new markets in neighbouring countries, while attracting foreign investment. Our support will include flanking measures to develop critically needed infrastructure, capacity building, standardisation of regulations, introduction of modern management methods, the elimination of monopolies, and a switch of government revenue sources from import duties to VAT."

Contrary to other accusations from development groups, Mr Nielson denies that EU is pushing wholesale privatisation of developing countries' public utilities, as a condition for extending aid - and a way of profiting European investors. "The Commission's proposals on the Reform of State Owned Enterprises, endorsed by the European Council in November 2003, stated that SOE rationalisation will not automatically require privatisation. This approach has been endorsed by the World Bank, which for years has pushed the privatisation agenda. The skills and experience of private companies are essential, but within a socially responsible framework so that the poor are also served, not just the emerging middle class and the tourist trade."

At the World Summit for Social Development (2002) the EU launched two global initiatives on water and energy. Under the €1 billion water initiative, studies have been launched on major African river basins, Mr Nielson stated, and consultations are underway at national level to define water priorities which EU can support.

"Energy poses huge problems since half the world's population lives in villages where 90 per cent of energy is derived from fuelwood, collected by women and girls, resulting in galloping deforestation The initiative will emerge gradually from country requests"

In relation to rumours that the new Commission might not include a Development Co-operation Commissioner, the portfolio being absorbed into that of the External Relations Vice-President, Mr Nielson said: "I prefer to think that I will have a successor".