Comparative advantage of EU aid

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Comparative advantage of EU aid Carlos Montes

Development Cooperation to 2010 Gareth Thomas MP-

Development Carlos Montes- Development Strategies,

Development Committee, House of Commons Overseas

1 Comparative advantage of EU aid Carlos Montes Development Strategies 24th September, 2003 European Development Cooperation to 2010 Gareth Thomas MP- Under-Secretary of State for International Development Carlos Montes- Development Strategies, Director Chair: Tony Baldry MP- Chair, International Development Committee, House of Commons Overseas Development Institute All Party Parliamentary Group on Overseas Development 1

2 Context in which EU aid operates In presenting the context in which European aid operates I begin with a PREMISE: Donors provide foreign aid not only to address development goals but also to support foreign policy, security and commercial objectives. Tables on top recipients of aid from major donors and aid component of commitment to development illustrate this point.

3 Top Recipients of Aid from Major Donors Country Political Rights Governance indicators: Civil Freedom Liberties Rating Corruption Ranking US Russia 5 5 Partly Free 71 Egypt 6 6 Not Free 62 Israel 1 3 Free 18 Pakistan 6 5 Not Free 77 Ukraine 4 4 Partly Free 85 Japan China 7 6 Not Free 59 Indonesia 3 4 Partly Free 96 Thailand 2 3 Free 64 India 2 3 Free 71 Vietnam 7 6 Not Free 85 Germany China 7 6 Partly Free 59 India 2 3 Free 71 Indonesia 3 4 Partly Free 96 Turkey 3 4 Partly Free 64 Egypt 6 6 Not Free 62 Sources: Democracy ranking: 1represents the most free and 7 the least free. Freedom House, Corruption Ranking: 102 countries; 102 is worst corruption. Transparency International, CPI 2002 Top recipients of ODA/OA: OECD Aid at a Glance, 2003 (incl data) * excludes French Polynesia and New Caledonia ** excludes enlargement candidates- except Turkey

4 Top Recipients of Aid from Major Donors Country Political Rights Governance indicators: Civil Freedom Liberties Rating Corruption Ranking France* Egypt 6 6 Not Free 62 Morocco 5 5 Partly Free 52 Cote d'ivoire 6 6 Not Free 71 Senegal 2 3 Free 66 Cameroon 6 6 Not Free 89 UK Tanzania 4 3 Partly Free 71 India 2 3 Free 71 Uganda 6 4 Partly Free 93 Mozambique 3 4 Partly Free n/a Bangladesh 4 4 Partly Free 102 EC aid ** Yugoslavia 3 2 Free n/a Turkey 3 4 Partly Free 64 Bosnia 4 4 Partly Free n/a Tunisia 6 5 Not Free 36 Morocco 5 5 Partly Free 52 Sources: Democracy ranking: 1represents the most free and 7 the least free. Freedom House, Corruption Ranking: 102 countries; 102 is worst corruption. Transparency International, CPI 2002 Top recipients of ODA/OA: OECD Aid at a Glance, 2003 (incl data) * excludes French Polynesia and New Caledonia ** excludes enlargement candidates- except Turkey

5 Ranking the Rich Commitment to Development Country Aid Index Overall commitment to development index Denmark Sweden Netherlands Belgium France UK Finland Austria Ireland Spain Portugal Germany Greece Italy Japan USA Source: Center for Global Development and Foreign Policy, 2003 Score: 9 points to top performer and 0 points to any country that makes no contribution at all in the relevant category Overall index is the average scores in 6 categories: aid, trade, investment, peacekeeping, environment and migration Aid index: discounts "tied aid administrative costs and debt payments. Aid to poorer countries receives greater weight, as does aid to countries with good governance compared to other countries at similar income levels. Paper by D. Roodman, the rich/aid_component.pdf

6 First observat: Competition between donors is strong and donor specialisation and support to governance is difficult to achieve. This is because, large donors such as the US, Japan and France may share poverty reduction goals in a recipient country but they often have competing foreign policy, security or commercial objectives. Aid will be used to support both development and non-development objectives. In this context donor competition becomes difficult to avoid. Our aid evaluations found strong competition between donors, particularly between the WB and EU aid, in countries such as Albania but also in less strategic countries. Thus, a) Specialisation is difficult as donors are involved in strategic sectors regardless of their effectiveness. b) Support to good governance is difficult as donors may pursue their nondevelopment objectives by providing aid even to countries that are not democratic or have high levels of corruption.

7 Second observ: Good governance is good for aid quality but many poor governance countries are top recipients of aid The dvt. impact of aid depends more on its quality than its quantity. Aid quality is greater when it supports govt. that are reasonably democratic and respect the ROL. This is morally right and facilitates the success of inst. reforms (IGRWB). Democracy also provides an essential feedback on the performance of recipient govt. This is helpful because aid outcomes are not easily observed by donors (e.g. recent election in DR and Bolivia) However, while good governance is good for aid quality; the list of top recipients of aid includes many countries (SEE TABLE) that rank at the bottom of democracy performance (Ch, Viet, Eg, Camer, Pak, Uga) or at the bottom of both democracy and corruption (Viet, Camer, Uga, Bangl) In this context, 1) more aid is not always a good thing and 2) aid to govt. of poor countries is not the same as aid to the poor (in some cases aid to civ soc or good governance midd. income countries, Braz or SA, may have a greater dvt. Impact)

8 Finally, How to improve the governance focus? I argue that the American MCA offers some innovative suggestions The MCA allocates funds to reward only good governance countries which must pass a corruption test. MCA also ensures stability as the rest of the aid programme remains available to traditional aid partners. ((focus on processes rather than content of policies should contribute to donor coordination))

9 Where to find the value of EU aid for EU and MS? 1. Essential soft-power tool to promote EU foreign, security and commercial objectives This soft power tool is central to the European aim of increasing its relative strength in the world and of promoting European values and solutions, the Brussels consensus Democracy, human rights, abolition of death penalty, regulation of markets, welfar state Support to multilateralism: Kyoto, Internat Criminal Court, etc. 2. More specifically, European aid also provides support for the near abroad neighbours and neighbourhood issues central to EU citizens e.g. control of borders, illegal immigration, asylum, organised crime, drug and women trafficking, and regional stability Focus on Russia/ Balkans/neighbour Muslim countries

10 Where to find the value of EU Aid for recipients? 1. European Aid increases variety of aid available: Provides recipient countries with a European option on the standard US/WB aid menu 2. Has the potential to usefully address democracy and Rule ol constraints to dvt. I argue that EU aid has the mandate, capacity and maybe will to work in this area. Also it has some expertise On the mandate, The EU has relied on multilateral processes and financial programmes to ensure European peace, regional stability and democracy, including recent Enlargement. Democratic values are at the centre of EU Treaties and have been included in agreements with other countries e.g. Cotonou. Unlike many multilat. donors, the EU has a strong mandate in this area It also has the capacity as a large donor which is supported by the political legitimacy of the MS. Finally, it may also have the will as EU aid is affected in a less direct way by national interests In terms of expertise: Firstly, the EU aid s most successful interventions have been in this area and support to elections- although with localised impacts. Second, EU has had some success in ensuring that governance is taken into account by other donors. For example, in Uganda, the Commission and MS worked together to ensure the BWI took into account political developments and the war in Congo. Finally, it is already an important player in conflict situations, as the last donor out; Somalia and Central Africa Republic; and first donor in, Congo (last week)

11 ((3 other areas of EU value)): 3. Strong focus on near abroad and neighbourhood issues: (border controls, illegal immigration, asylum, organised crime and regional stability). 4. Approximation to EU legislation approach and Regional Integration (but care is needed). Trade is also a possible area but need to avoid conflict of interests. 5. Provide space for aid coordination with MS (e.g. for harmonization of procedures at EU level)

12 How can the value of EU aid be realised? Firstly - Learn from aid implementation External inspections should become an important way to improve learning and performance but this will take some time as donors (as others) do not generally like inspections However the MCA and working with good governance countries may facilitate this. Secondly - Simplify and focus EU aid on comparative advantages -as much as possible- and create fund to reward good governance performerssimpl MCA And finally - Compact to improve aid management Ideally, the European Parliament and MS should exchange their micromanagement of EU aid for a greater role in strategy setting and inspections. This will also take time

The National Police Immigration Service (NPIS) forcibly returned 412 persons in December 2017, and 166 of these were convicted offenders.

Monthly statistics December 2017: Forced returns from Norway The National Police Immigration Service (NPIS) forcibly returned 412 persons in December 2017, and 166 of these were convicted offenders. The