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DEVELOPMENT: Crucial Role for EU at Accra Meet on Aid

David Cronin

BRUSSELS, Jul 31 2008 (IPS) - As the world's largest provider of development assistance, the European Union is bound to play a prominent role at a Sep. 2-4 international conference on boosting the effectiveness of aid in Accra, Ghana.

It is not clear, however, that European taxpayers will be given firm assurances at the event that their money – a total of 46 billion euros (72 billion dollars) at last count – will be better used to fight poverty.

An 'agenda for action' drafted for the conference appears at first glance to take on board many of the criticisms that have been directed at development aid for many years. It states that there should be greater consultation with parliaments and such bodies as trade unions and organisations working on social policy about the use of aid, and that donors should not attach conditions to their aid such as requiring that recipients carry out free market reforms.

Despite the laudability of such goals, the draft agenda is not flanked with robust mechanisms to make donors keep their word.

"We are very worried that the meeting in Accra is not going to deliver anything to hold donors to account for," said Lucy Hayes, an aid policy specialist with the European Network on Debt and Development (Eurodad). "The meeting is supposed to result in the 'Accra agenda for action'. But to be called the 'Accra agenda for action', you need some concrete time-bound commitments. What we fear is that something bland and vague is going to be launched.

"Some of the delegations in Accra will have over 1,000 officials. If they don't come out with anything, that's just scandalous."

In public statements ahead of the event, Louis Michel, the European commissioner for development aid, has highlighted the need to avoid an overlap that can occur as a result of the EU effectively having 28 different aid policies. Each of its 27 governments manages its own foreign assistance activities, while also contributing to a budget managed by the European Commission in Brussels.

Michel has cited Tanzania as an example of the administrative headaches that can ensue when a recipient country has to deal with a plethora of uncoordinated aid programmes. Each year, he said recently, the Dar Es Salaam authorities have to "produce some 2,400 reports for the different donors and – listen to me carefully – more than 8,000 audit reports for the multilateral banks dealing with development.

"We should admit that that leaves them flabbergasted and that it is a real problem," he added.

Development aid has been one of many policy areas subject to a dispute between the Commission and some EU governments. Efforts by Michel to argue that there should be an improved division of labour in this area were initially regarded by diplomats from a number of EU states as an attempt to make them cede power to Brussels. However, all EU governments signed up to a 'code of conduct' in May 2007 under which they promised to liaise more on their aid activities.

Joakim Stymne, Sweden's state secretary for international development, has suggested that the lack of coordination can undermine the EU's credibility. "The EU is the world's largest donor but it doesn't always feel that way," he said. "We don't always understand we are part of the world's largest donor community and we don't always act that way."

Guidelines drawn up for EU participants at the Accra conference, meanwhile, state that the Union should not make the disbursement of aid conditional on poor countries undertaking particular reforms. This follows decades of criticism directed particularly at the World Bank and the International Monetary Fund that they have been using aid to foist privatisation and other policies deemed favourable to large corporations on countries in Africa, Asia and Latin America. The EU has also been accused more recently of insisting that some countries sign free trade agreements with it if they are to receive the full amount of aid available to them.

Although the guidelines say that the practice of making aid conditional on economic reforms should end, they do not propose a deadline for when that should happen.

A paper written by David Booth from the Overseas Development Institute in London points out that the issue of conditionality was already addressed to a certain extent by a previous international declaration on aid effectiveness agreed in Paris in 2005. That declaration stated that conditions for aid that are not in accordance with those set by a recipient itself require a "sound justification".

"In international development folklore, the International Monetary Fund and the World Bank are the big bad wolves in the conditionality forest," said Booth. "However, our research in Ghana and Tanzania suggests that the Bank and the Fund have made important headway in reforming their approaches to conditionality. In contrast, bilateral donors including the European Commission continue to require monitoring of agreements with elaborate matrices of policy actions and outcomes. In this respect, they are still inclined to try to 'buy' reforms by attaching specific preconditions to disbursement."

While EU officials may have devoted a great deal of energy to addressing the aid effectiveness issue, the Union could have a more fundamental problem of credibility in Accra. All of the Union's countries have pledged to increase their aid budgets in order to help the realisation of the United Nations Millennium Development Goals of reducing extreme poverty. But last year more than half of the EU's governments not only failed to keep that promise, their aid donations decreased.

"Increasingly, some governments are using the aid effectiveness discussion to cover up the fact they haven't delivered on their promises for aid quantity," said Joanna Maycock from the organisation ActionAid. "You can't replace quality with quantity and you can't replace quantity with quality. You need both."

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