European Cooperation

Jean-Marc Bellot, Director of AFD’s office in Brussels

► Why does AFD have a representation at the European level?

Because the European Union, the world’s leading donor, is an essential actor in development assistance. In 2011, the European Commission’s aid amounted to almost EUR 11bn, exclusively in grants. Its aim: to eradicate poverty.

European aid has real comparative advantages: the unparalleled impact of its grants and an expertise in the field of budget support and democratic governance. The EU is also an organization that pursues an objective of integration, which gives it competence on issues of regional integration in the South.  

The 0.7 %* target is a fundamental commitment which the EU aims to achieve by using the different instruments that it has developed over time.

First, there is the European Development Fund (EDF), which was established in 1959 and is the main instrument for “African, Caribbean and Pacific” countries.
The EU also has so-called “geographical” tools for the Asia and Latin America region, via the Financing Instrument for Development Cooperation (DCI), and for the Mediterranean, via the European Neighbourhood and Partnership Instrument (ENPI).

There are, in addition, “thematic” instruments which have an impact, for example, on the sectors of the environment and social and human development.

European programme allocations for education, health and the environment are substantial in partner countries. This is also the case in international fora – the UN for example – where the European Commission is active.

We need to work with Europe on these topics.

"By intelligently coordinating our mechanisms, we enhance the impact and effectiveness of aid"

Finally, and this is certainly the main reason why we are here, we should bear in mind that European aid is a “shared responsibility”. This means that the aid of the 27 Member States of the European Union coexists alongside that of the Commission. This is where the challenge lies: how to find the right geographical, sectoral and instrumental allocation to ensure that both these tools – Community and bilateral – produce an added value that we would not have been able to create alone. The aim is to intelligently coordinate our efforts in order to have a greater impact and be more effective.

This requires a mutual understanding of our areas of operation, our instruments, our working methods and of our development “philosophies”. As you can imagine, this requires “long-winded discussions” and a relational capacity to influence, which we have only been able to develop by being in Brussels.

► What then are the main “missions” of the Brussels office?

I see three main missions, which we conduct in close cooperation with the Permanent Representation to the European Union (PR).

The first is to play an initiating role in terms of financial innovation. AFD played a leading role in reflection on loan/grant blending, especially during the French Presidency of the EU in 2008. This is a new method for the Commission whereby grants can top up and/or “subsidize” our loans.

Mr. Cissokho, President of the Network of West African Farmers and Producers Organisation (ROPPA), J-M. Bellot and Benoît Lebeurre from AFD during a Forum organized by  Friends of Europe on 17 May 2011
 

Our office here in Brussels has, with headquarters, participated in the establishment of the first instruments of this kind – EU-Africa Infrastructure Trust Fund , Neighbourhood Investment Facility, etc. We now need to actually use these instruments, which give AFD and our partners access to essential additional resources. The office therefore sits on the decision-making bodies of these “blending Facilities”, along with colleagues from AFD departments. Our presence here allows us to be responsive, to be consulted and to maintain a permanent dialogue with donor partners and the Commission.

“AFD has been implementing European Commission funds since 2008…”

As you may be aware, we have been accredited to implement European Commission funds since 2008.

For these “delegated cooperations” to be effective, the number of which is significantly increasing, an almost daily dialogue with the Commission is required.

During the preparation phase for operations, we need to ask questions to the technical, legal and financial departments at headquarters, to engage in a dialogue with DG DEVCO – the Commission’s Directorate General for Development and Cooperation – and to make AFD’s voice heard in the validation process. We therefore play the role of intermediary and advisor between the Commission and our teams in the field.

“Intensive dialogue with European institutions”

Finally, certain European institutions are becoming increasingly important, such as the European Parliament, which is a “joint decision-maker” with the Council on an increasing number of policies and with which we need to work.
If we add to this the role currently being built for the European External Action Service, the EU’s “diplomatic” body, there is a wide array of major actors with whom it is necessary to dialogue. We therefore have a monitoring and dialogue role with these institutions.


The hemicycle of the Parliament in Brussels

The status as a major bilateral European agency, which we benefit from here along with KfW, is largely due to our ability to ensure that we have visibility and to propose and lead debates.

Although each institution has made a great deal of headway in intelligently implementing this common policy, the consensus is still fragile and it is necessary to remain vigilant, constantly meet our partners and convince. We can see this with  the “Practitioners' Network for European Development Cooperation” , a group of European development agencies and operators. We made a major contribution to its creation and it allows us to build operational responses.

AFD is also turning to the Parliament, notably by meeting the members of the “Development Committee”, organizing technical sessions with parliamentary assistants, having experts participate in debates, for example, on 4 October 2011 when Pierre Jacquet, our Chief Economist, presented his research in the hemicycle in the framework of the G20. Being visible in these fora helps us to be recognized as a leading actor and opens up new opportunities.

► What are the main future challenges for European aid?

I think that the major challenge for European aid is to continue its modernization, beyond the crucial negotiations that have been underway since 2011 on the European Union budget for 2014-2020.

A great deal of headway has already been made and the Commission’s recent strategic documents, such as the “Programme for Change”, by simplifying objectives on the basis of the two pillars of human rights and inclusive growth, help enhance the clarity of what European aid does.

“Act ‘with’ and not ‘like’ Member States”

The Commission must also resolve a remaining challenge: not to act “like” Member States, but “with Member States”, by constantly seeking to bring together skills and to remain responsive and flexible.

The Commission does not have expertise on all topics, which is only natural. It therefore listens to and needs bilateral agencies (like AFD) in terms of financial aspects, a field in which it continues to have relatively little command.

Similarly, it cannot achieve its aim of investing in the “private sector” without a partnership with private sector finance agencies (EDFIs). The initiatives taken with Proparco are in line with this.

However, a European development aid mechanism will not be built through the efforts of the Commission alone. It is also up to Member States and bilateral agencies to accept to make concessions in order to help a common project to move forward. This is notably where “joint programming”, a major issue for the coming years, takes on its whole meaning. 

* In the field of aid, the most well-known international objective is that of raising Official Development Assistance (ODA) to 0.7% of donors’ national income.

Andris Piebalgs, European Commissioner for Development

What are the main objectives of European aid? Which sectors, topics and geographical areas are priorities today?

I recently proposed a reorientation and refocusing of European aid via the European Development Policy “ Agenda for Change ”. Why? Simply to tailor it to the new global realities.

The European Development Policy has certainly made headway in recent years, notably with the adoption of the European Consensus on Development based on the common values and objectives of Member States and the European Parliament; we have considerably advanced the Millennium Development Goals and contributed to reducing poverty in the world.

However, the arrival of emerging countries as new donors, the new global challenges, such as climate change and food security, the economic and financial crisis, etc. make it necessary for us to modernize our aid and further scale up its impact. 

I therefore proposed to focus it on essential sectors in order to combat poverty, establish long-term development and step up its action in the poorest countries. Consequently, our aim is to promote growth that benefits all and is sustainable. We will continue to support human development – education and health – and job creation via two core sectors: agriculture and energy. We will also be scaling up our support for democratic governance, including respect for human rights, the fight against corruption, gender equality and the role given to civil society.

We then wish to focus our aid on countries that need it the most, the fragile countries, where European aid can really make a difference. We can no longer conduct cooperation with China as we do with Côte d'Ivoire or Haiti! However, this does not mean that we leave aside the pockets of poverty that remain in emerging or middle-income countries. It is for this reason that we propose to work in partnership with these countries in sectors of mutual interest, such as the fight against climate change or pandemics.

Finally, I want to explore innovative methods for development finance, such as grant/loan blending, in order to scale up the impact that our operations have on programs that generate economic growth.

What innovations are expected under the next EU budget 2014-2020 in terms of aid instruments?

The European Commission presented its proposal for the financial instruments for the EU’s external action between 2014 and 2020 last December. It amounts to EUR 96 billion, which is roughly 7% to 8% of the total budget. The main objective is to give the EU the capacity to speak with one voice and meet its ambitions to promote democracy, peace, solidarity and poverty reduction. The share allocated to development assistance – in addition to the European Development Fund – would allow the EU to play its role in contributing to the objectives of devoting 0.7% of European GDP to external aid. The Heads of State and Government reaffirmed this pledge during the European Council last June. In times of crisis, development assistance represents an intelligent investment in the future and not a burden.

Andris Piebalgs, during its speech at the European Development Days in Warsaw on December, 2011

The main innovations of this new budget relate to the proposals of the European Development Policy “Agenda for Change”. Consequently, our main budget instrument, the Development Cooperation Instrument, will be more strategic. In addition to the country envelopes, we have proposed three thematic programs: the first on global public goods, under which at least 25% of funds will be earmarked for climate and environmental objectives, and 20% for social sectors; the second will support civil society and local authorities in developing countries; and a third, “the Pan-African Instrument” will be destined to fast track the implementation of the EU-African Union Partnership.

The European Development Fund will be negotiated at the same time as the budget negotiations and will continue to support efforts to reduce poverty in African, Caribbean and Pacific countries under the Cotonou Agreement.

Finally, we have proposed to stop development assistance as such to 19 countries for which we have very little impact due to their growth. We will continue to work with these countries thanks to a new so-called Partnership instrument, which will allow us to cooperate in sectors of mutual interest.

What synergies need to be developed between the Commission, Member States and their aid agencies in order to make European aid more effective and more visible?

You know, the Commission has put a lot of efforts into supporting aid effectiveness. We have just marked another step with the joint programming between the Commission and Member States. In practical terms, it will involve producing a single programming document as from 2012. It will be negotiated with the partner country and will substitute and take account of the activities conducted to date by Member States and the relevant countries. 

The European Development Days in Warsaw, December 2011

This will reduce the fragmentation of European operations in these countries and will above all increase coherence and complementarity on the basis of the comparative advantages of each actor in the field. According to the OECD, the cost of fragmentation, overlaps, etc. amounts to EUR 5 billion a year. Beyond the savings that this type of initiative could generate, it will lead to real synergy. European visibility in the field will be enhanced, particularly in a context of increasing competition with non-traditional actors.

The Financial Instruments of European Aid – 2007-2013 

Today, our main instruments are the European Development Fund (EDF) and the Development Cooperation Instrument (DCI). There are other instruments, such as the European Neighbourhood and Partnership Instrument for EU neighbourhood countries, for example in North Africa or Central European countries.
The EDF is the financial arm of the Cotonou Agreements between us and 79 African, Caribbean and Pacific countries. It has a budget of EUR 22.3 billion and runs until 2013. Its main aim is to combat poverty. This fund is outside the EU budget since it applies to an agreement with non-EU countries.
The DCI, for its part, covers the remaining developing countries in Asia, Latin America and the Middle East.
Among the other main European Union instruments, there is the Instrument for Stability, which focuses its action on crisis management and building peace (EUR 2.5 billion); the European Instrument for Democracy and Human Rights (EUR 1.4 billion), and the Nuclear Safety Co-operation Instrument (EUR 560 million), thanks to which we have, for example, made the Chernobyl power plant safe.

L'aide européenne a connu des modifications profondes. Elle représente aujourd'hui la première aide mondiale en volumes. Le Commissaire au développement Andris Piebalgs décrit ici les changements à l'oeuvre, Mme Striffler et M. Tirolien, respectivement vice-présidente et membre de la Commission du développement du Parlement européen, nous présentent quant à eux deux exemples d'actions européennes en faveur du développement.

La Lettre « Parlementaires et Développement » est un nouvel outil d’information sur l’actualité et les enjeux de la politique française de développement. Réalisée en coordination avec le ministère de la Coopération, elle  témoigne du travail et de la mobilisation des parlementaires qui sont de plus en plus investis sur les problématiques de développement. D’autres rubriques consacrées aux principaux acteurs de l’aide française (AFD, collectivités territoriales, entreprises) permettront d’avoir régulièrement une information synthétique des principales activités des acteurs français en matière de développement.

Nevertheless, the issue of evaluating public policies is neither a new idea, nor a novel practice. It becomes increasingly essential, however, to determine whether the evaluation task is properly conducted. We need to discuss whether the way evaluations are undertaken produces an accumulation of knowledge that is accessible to decision makers, or whether the context in which development policies are implemented severely reduces the usefulness of past experiences for designing future projects.
Can we learn from our own and others’ experiences in the field of development? If so, how can evaluation contribute and how is it that we seem unable to translate these experiences into practice? If not, what are the factors hampering the learning process?

Conference Center Pierre Mendès-France Ministère de l’Economie, des Finances et de l’Industrie , Paris 

This meeting followed on from the recent EC Communication on the future of its development policy that set out the objective of developing the use of blending mechanisms.

This meeting was open to parliamentary assistants concerned by development financing. Following a theoretical presentation by KfW (the advantages of grants and loans), for AFD, Céline Boulay (EBC/IFP) presented concrete examples of projects that use leverage from EC “grants” in addition to Member State loans.

This session achieved its objective as it gave participants, who still know relatively little about the subject, the opportunity to ask their questions: “Will the mechanisms crowd out projects financed by grants? Is there a risk of re-indebtedness? Do blending mechanisms contribute to the fight against poverty? Are projects that have local impacts covered by these mechanisms? What control does the Parliament have over these blending mechanisms?”.

The Head of Unit for “Financial Instruments” at Devco (EC) presented the Commissions expectations, saying that it offered a particularly effective tool, provided that Member States increase their volumes of aid. This type of meeting is extremely useful for improving parliamentarians’ understanding of development policies and of the positive impacts of blending mechanisms.