Andris Piebalgs outlines priorities for EU development cooperation

Andris Piebalgs faces a packed schedule in New York this week: a breakfast meeting with members of the European Parliament, a luncheon with United Nations Secretary-General Ban Ki-moon, and parleys with African Development Bank President Donald Kaberuka and UNESCO Director-General Irina Bokova.

But those are only sidelines events. The European commissioner for development is in the U.S. city mainly to join other global leaders in assessing how countries are making progress toward the Millennium Development Goals. He came with European Commission President Jose Manuel Barroso, who was due to speak on behalf of the European Union before the MDG summit.

“[Barroso] will confirm EU’s ambition that this summit provides a new impetus to the partnership with developing countries towards achieving the Millennium Development Goals,” Piebalgs told Devex ahead of the U.N. high-level plenary meeting on the goals. “This partnership must be based on the principles of co-responsibility, ownership, and be results-oriented.”

>> Barroso Identifies EU Goals for Upcoming Summits

The EU, he added, is ready to provide 1 billion euros ($1.3 billion) to support efforts by African, Caribbean and Pacific countries to meet the 2015 deadline of attaining the MDGs, particularly on those targets where they are lagging the most, such as on reducing hunger and improving maternal health.

>> Barroso: EU Committed to Meeting MDGs

On top of the MDGs, reform of the EU development policy is high on Piebalgs and the commission’s agenda, especially with the establishment of the controversial European External Action Service. The Latvian politician and diplomat outlined the strategies for modernizing the bloc’s development policy and shared with Devex the challenges the commission may face as it moves through the reform process, which goes on full gear this autumn and will culminate with the release of the European Development Consensus next year.

What are the short- and long-term effects that the financial crisis will have on development assistance?

In my opinion, we should not use the financial crisis to [deviate] from development cooperation objectives. I know that now each euro is being counted twice. But at the same time, if you see the goals we have to [lift] countries out of the poverty, [you see] that we benefit from economic growth. China’s economic growth, India’s economic growth [provide] challenges but [also] a lot of opportunities for global community.

>> Piebalgs: Donors to Keep Aid Promises

Imagine … just Europe and the United States [were] in this economic crisis. The crisis would be awful. But now it makes an impact. I believe we should not go away from this 0.7 percent [of the gross national product as aid target] … [By] achieving it, perhaps the growth will be stronger in 2011 and 2012. It should be a very sustainable growth to achieve the 0.7 [percent benchmark]. It is reasonable, it is necessary, and, basically, it has our citizens’ support.

>> In Europe, Public Backing for Aid, MDGs Soars

I think it is sometimes that politicians cut it off because it is easy. There is no direct constituency, but [our] population is supporting development cooperation. I mentioned the figures in Poland – 86 percent of the population says “yes” [to the EU meeting the internationally agreed aid target]. And Poland is a country in development, and, also, crisis [has] affected Poland. So, it is not that people do not support [foreign assistance], but they will definitely not fight going in the street if development cooperation aid is being cut. This is why [responsible] leadership is so important.

What do you think about the ongoing reform of European foreign policy? What could be the role of European development?

I think the [European] External Action Service definitely gives new possibilities to make more focused, … stronger policies, particularly … on the more fragile countries, particularly to look [at] the countries that are most [off-track on] the Millennium Development Goals. So, I believe it gives a lot of opportunities.

>> EEAS Gets the Green Light

Today, development [aid goes to] low-income and also middle-income countries. We should be more focused, really, where the biggest challenges are. So, I’m not saying that we should not help projects also in the middle-income countries, but they should be looked [at] from different [perspectives].

So, we have a lot of chances to improve, and we shouldn’t forget that the main goal of the new foreign policy architecture is to speak with one voice. It is not concurrence inside the commission that we are just looking for; it is concurrence [among] member countries. We have the same approach and strategies to each and every country, and [we are looking for] the harmonization of the programming cycle. So, it is a really huge challenge. But it is the only way to be effective in development cooperation.

What do you envision the EU aid architecture to shape up as under the ongoing plans for EEAS? Do you foresee institutional reform or mergers of some of the various bodies that are involved in delivering aid, such as the Directorate-General for External Relations, the Directorate-General for Development and the European Commission’s humanitarian aid department, or ECHO, and how will EuropeAid figure into this?

The Treaty of Lisbon establishes the reduction and the eradication of poverty as the primary objective of the union’s development cooperation policy. This needs to be respected in all policies of the union that affect developing countries.

The existence of the EEAS will help to deliver better results in development aid and ensure better coordination of different actors at EU and national levels. Of course, creating the new external service will trigger some changes in the institutional setting, but the key objective of development – to help the most vulnerable people and fight the poverty – remains. EuropeAid, as one of the largest agencies in the world, is designed to serve this purpose. It is involved in activities in more than 150 countries and lays it the cornerstone of putting our development policies into action. This will not change.

>> EuropeAid: What You Need to Know

You said that as part of next year’s review of the European Development Consensus, you’d like to look at the way the EU provides budget support, which now makes up almost half of the development assistance the EU provides. What specific reforms are on the table? For instance, is it possible that the EU will ask partner countries to provide matching funds, or be accountable in other ways?

>> Piebalgs Pushes for Review of EU Development Policy, Budget Support

I intend to launch a debate on budget support this autumn. Almost half of the current European Development Fund is already disbursed in this way. I want an open debate among stakeholders to check that this instrument is adapted to the new development needs and economic reality. I believe in budget support as a financial instrument, as this is the way to give the ownership of development aid to our partners. We are moving from donor-recipient relationship to the real partnership, and I want to use budget support as one of the ways of achieving this goal.

Just to give you an example: In Mozambique, the primary school enrollment was below 70 percent in 2003. EU, through budget support, and other partners invested in education, and, in 2007, this number reached almost 96 percent. This instrument is focused on results and support to long-term policies in countries.

How exactly do you envision the EU, using tax revenues in developing countries, to spur growth? Is it through programs to reduce informality, or something else?

Everybody is aware that development aid alone will not be sufficient to achieve our goals. A 1 percent increase in [gross domestic product] in a developing country will be far more effective than an increase in [official development assistance]. Supporting developing countries in mobilizing domestic revenues is therefore a key. Sustainable tax systems are critical in providing a stable financing source for the provision of the public services needed to achieve the Millennium Development Goals.

>> Donors Urge Developing Countries to Strengthen Domestic Tax Base

The amount of tax revenue that developing countries lose every year is estimated at several hundred billion dollars; therefore the commission will help [in] fighting tax evasion and putting a stop to the significant illicit outflows from the developing countries. My position on this issue is very clear. We ask our partners to carry out a broad-based due diligence to fight offshore financial centers or tax havens. Mobilization of domestic resources will be discussed in New York on 21st September. Together with the African Development Bank, the commission organized a round-table [discussion] to foster awareness and action on this key issue.

On which sectors and regions is Europe focusing its development assistance?

At this stage, we are definitely very much focusing on the Millennium Developments Goals. So, everything related to the Millennium Development Goals; in particular, the sectors [targeting] the areas most off-track. Our focus, first of all, [is on] maternal health, children’s health, food security, education. But you need to look broader on them. This means also that all the [financial] infrastructures are important, also to … leverage … the money we use for development cooperation, to increase supply of money through the European Investment Bank, through private investments. It is broad, but, in short, [EU policy] is very much focused [on fulfilling the] Millennium Development Goals. That is the biggest priority the union has now in the development cooperation policy.

What sense did you get from June meetings of European leaders about the direction of EU development assistance?

I have to say I was quite pleased because the European leaders reaffirmed their commitment to dedicate 0.7 percent of gross national income for development by 2015. As I said before, development policy requires responsible leadership. This renewed confirmation shows that European leaders are committed to achieving the MDGs by 2015, despite the economic situation.

>> Piebalgs: Donors to Keep Aid Promises

Development ministers also approved the 12-point action plan presented by the commission to foster achievement of MDGs. It notably included request for national yearly scoreboards to be prepared and discussed amongst ministers, a kind of peer pressure. Europe also agreed to put a particular focus on most off-track MDGs and good coordination of national policies. Regarding support to countries, they agreed special attention has to be brought to the most fragile ones, while further support must be provided to those who defined clear national strategies to achieve the MDGs. With this commitment, Europe should play a leading role in the U.N. summit on MDGs, which opens on Monday, 20th September.

Part of your 12-point action plan is to reduce the number of aid-recipient countries. Who would be in charge of implementing this objective? What benchmarks do you suggest?

That is not correct. We don’t want to reduce the number of recipient countries; we want to ensure a true coordination of donors within the EU to avoid inequalities. We want to make sure there are less “aid darlings” versus “aid orphans” countries, and ensure a fairer repartition of aid. Haiti can be seen as an example of such aid effectiveness, where member states worked together to divide the tasks.

>> To Attain MDGs, EU to Work on ‘Priority’ Nations

On the other side, we’d like to adapt the aid to the needs of the different countries. Least developed countries, countries in fragile situation don’t have the same needs than emerging countries. The commission will be active in areas which will be less invested by member states and where we have an added value and expertise such as capacity building or large-scale infrastructures, for instance.

How will the EU and U.S. work more closely together on development assistance and better coordinate efforts such as those on food security, where the EU has a food facility and the U.S. has its Feed the Future initiative?

>> Feed the Future Targets Larger-Scale Projects in Fewer Countries

>> EU Boosts Global Food Security Drive

It is important to remind that the EU and the U.S. have resumed their aid cooperation last April, which had been frozen for the last 12 years. Since I entered into office, I met at least three times with Ravij Shah, the [U.S. Agency for International Development] administrator, and we are both motivated to work in close cooperation to address common challenges. Food security is one of them; MDGs and climate change are others.

>> EU, US Bare Plans for Relaunched Development Cooperation

At the moment, we have been working in identifying pilot countries where our joint action could apply. I can’t give you precise details at the moment, but this is one of my priorities. If the two biggest donors join forces, we can have a higher impact on the ground. This is another example of aid effectiveness at global level.

Are you going to develop new strategies to involve the private sector and civil society?

I believe that with civil society, we have a broader, fruitful cooperation. The most important thing is involving [civil society]. I would not like to lose civil society and NGOs because they believe that we need to be more focused – definitely, you come to this type of decision only [through] involving civil society and NGOs. They should be fully involved and fully take part. So, that’s why, for me, it is crucial to have the support of civil society.

EuropeAid in March kick-started a new strategic dialogue with civil society organizations and think tanks. Also, a recent EU-U.S. agreement pledged to involve CSOs in the creation of country strategies. How else do you plan to involve CSOs and private sector stakeholders? And will this be strictly consultative? Or will these outside groups have actual decision-making power?

I indeed participated to the launch of this strategic dialogue with NGOs and local authorities on 23 March. I am convinced that we need inputs and expertise from all actors involved in development policy. This dialogue will help us to build consensus on major issues and adapt our working practices in order to take them even more into account. A modern development policy will be based on contribution from the public sector, but it is not sufficient. We also need involvement of civil society, foundations and companies. Private sector will be present in the U.N. MDGs summit next week, so that we can further engage with them and define how they can be part of the solution.

Devex News – live breaking news coverage of the Millennium Development Goals and the Sept. 20-22 U.N. MDG summit in New York.