DEVELOPMENT: European Commission Shakes Up Aid, Trade Machinery

By IPS Correspondents Reprint | | Print |

Brian Kenety

BRUSSELS, Jul 5 2001 (IPS) - The European Commission has announced reforms of its aid and trade functions that it says are designed to increase efficiency.

The executive branch of the European Union (UE) says it will devolve greater responsibility for the functions of its External Service to field offices. The announcement followed reports that EU spending on aid programmes had grown three-fold during the 1990s, reaching some 11 billion dollars in 2000.

The Commission admitted it is not equipped to manage this volume of aid and the speed of delivery and quality of its projects have been “suffering badly.”

In November 2000, Chris Patten, the commissioner for external relations and Poul Nielson, the commissioner for development and humanitarian aid vowed reform as an “urgent priority.” The following month, the Commission set up its Europe Aid Cooperation Office to improve internal management of its aid budget.

Decentralising management of external assistance is one of the key components of reforms decided in May. The Commission said it would complete the transfer of responsibilities by the end of 2003.

“Anything that can be better managed and decided on the spot, close to what is happening on the ground, should not be managed or decided in Brussels”, where the EU is headquartered, the Commission said.

In a 15-page communiqué submitted Wednesday for approval by ministers from the 15 EU member states and the European Parliament, the Commission detailed how it intended to reduce bureaucratic red tape by opening several new EU delegations and offices throughout the world.

“It should be noted that the cost of an official serving in a third country is approximately double that of one at headquarters,” said the communiqué.

The decision on where to place delegations must therefore be “based on a set of criteria comprising volumes of aid and trade, political significance, workload and management responsibilities,” the paper said.

The Commission’s proposal is ‘budget neutral’, meaning it is not intended to increase overall spending. Thus in order to increase its representation in the Balkans, a key area of security concern, and areas deemed to be of increasing economic importance, cutbacks will have to be made elsewhere.

The EU executive branch said that the “growing commercial importance” of Southeast Asia made it necessary to open delegations in Malaysia and Singapore whilst “strong political considerations” dictated the necessity of a delegation to Saudi Arabia, which would also be accredited to five other member states of the Gulf Co-operation Council, namely Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE).

All in all, Malaysia, Saudi Arabia, the UAE, Singapore and Taiwan are in the list of the 25 biggest markets for EU exports and, except for the UAE, they are also among the 25 biggest EU suppliers.

“The number of trade issues arising from these exchanges was crucial in deciding to have a stronger presence in both regions: these range from general bilateral dialogue on World Trade Organisation (WTO) issues, to market access and anti- dumping (cases),” said the communiqué.

The Commission intends to open delegations to Cambodia and Laos (accredited with a non-resident head of delegation in Thailand), Nepal (with a non-resident head of delegation in India) and Paraguay (with a non-resident delegation chief in Uruguay).

The EU’s aid programmes for Cambodia and Paraguay are considerably larger than those for Thailand and Uruguay respectively.

“It therefore makes sense to move aid management to those countries. Moreover, in the case of Paraguay, the only member of Mercosur (the Southern Cone Common Market) where the Commission is not represented, there is a trade component which is likely to become all the more significant as the Commission is negotiating a free trade agreement with the bloc,” the communiqué said.

In the case of Cambodia, Nepal and Paraguay the net cost to the Commission would be reduced as one official each is to be transferred from Thailand to Cambodia, from India to Nepal and from Uruguay to Paraguay to act as chargé d’affaires in the new delegations.

The Commission further said it was considering opening a trade representation office in Taiwan “in view of Taiwan’s expected accession to the WTO and the Commission’s role in managing trade relations.”

The External Service has 128 delegations and representations. Current plans call for offices to be closed in Antigua and Barbuda, Belize, Comoros, the Dutch Antilles, Sco Tomé and Príncipe, Tonga and Equatorial Guinea.

Originally, the External Service’s role was to represent the Commission in trade negotiations and to undertake development cooperation activities. Over the years, the delegations have also come to represent EU interests in many other areas of activity.

“To reflect these changes, and to implement the reform of external assistance, modernisation is necessary if the External Service is to reply efficiently and rapidly to the demands put upon it,” said the Commission.