Aid: It’s not the giving that counts so much as the receiving

Date: 18/01/01

The European Union spends some €12 billion a year on external aid but has been attacked in the past for failing to ensure that it reaches those who need it most. A new body, EuropeAid, now has the job of seeing that help gets to the right people - and fast. Gareth Harding reports

AS THE clocks struck midnight on the first day of the third millennium, a new European Commission body was born. Understandably, most people were too busy popping champagne corks and marvelling at firework displays to concern themselves with yet another addition to the EU's bureaucratic empire.

But if the fortnight-old EuropeAid Cooperation Office meets even half the challenges it has set for itself, it could prove to be a turning point in the way the Union approaches development aid, handles billions of euro of taxpayers' money and is viewed by the poor countries which receive the lion's share of this handout.

At present, the EU doles out more than €12 billion in external aid every year, making it one of the largest donors in the world. The downside is that this money often arrives late and rarely ends up in the hands of the people who need it most.

Part of the problem is that unlike most other donors in the world, the amount of spending managed by the Commission is actually increasing - and fast. Over the past decade it has jumped threefold. But the number of officials handling this vast amount of money has not increased at a similar rate, leading to bottlenecks in disbursing the funds and a decline in the quality of the projects financed.

The Commission freely admits that with the present rate of payments, it would take more than four years just to clear the backlog of budgetary commitments. This means that while millions die of preventable causes in countries such as Ethiopia and Sudan, more than €20 billion of aid destined largely for Third World countries is sitting in the Commission's coffers in Brussels because there are simply not enough people to hand it out.

Currently, the Commission has fewer than three officials for each €10 million that it manages, while some member states have as many as nine. The recent decision to provide more than 500 new posts in the institution's external relations directorates should help redress this imbalance.

But the Union's executive arm also urgently needs to change the procedures it uses for drawing up programmes and doling out cash. By the Commission's own admission, its current financial management systems are out-dated, over-complicated and excessively bureaucratic. As one background paper points out, "even routine decisions can require more than 30 individual signatures before going ahead".

The Commission, and most importantly the dozens of countries that rely on EU aid, are crossing their fingers that EuropeAid will be able to sort out the Union's current external-assistance mess.

The new office, which was only given the green light by the Commission shortly before the Christmas break, will in future be responsible for managing 80% of the EU's aid budget. Indeed the only areas outside its control will be emergency aid and funding for the dozen or so central and eastern European countries queuing up to join the Union.

Officials insist that EuropeAid is not a new directorate-general. But with a staff of about 1,200 by the end of the year, it will dwarf many other Commission departments. Neither is it a semi-independent entity like the European Environment Agency in Copenhagen. Instead it is described in Brussels-speak as an EU 'office', like the two which deal with publications and statistics in Luxembourg.

Most of the officials will come from the much-criticised Common Service for External Relations (SCR), which EuropeAid effectively replaces. But the new office is also busy poaching staff from the Commission's development and foreign policy directorates. So far, 120 have been transferred from the former and 100 from the latter and these will be added to by hundreds of temporary aides from the disbanded technical assistance offices.

EuropeAid already has a director-general, the respected Italian Giorgio Bonacci. All it needs now is a permanent home. The staff are currently housed in cramped offices on the busy Rue de la Loi in the heart of Brussels' drab EU district. But a shiny new base is close to completion just round the corner from the headquarters of External Relations Commissioner Chris Patten, who will chair its management board.

After EuropeAid was officially launched on 21 December, Patten described it as a "milestone in our efforts to reform the Commission and run our external aid programmes much more efficiently". Development chief Poul Nielson said the decision was an "important contribution to making the Union's development policy serve the needs of the poor".

Clearly a lot of hope has been invested in the new office, but does it deserve the hype?

One of the fatal flaws of the old system was an almost complete divorce between the process of drawing up aid projects and overseeing their implementation. This often resulted in friction between Commission departments and a lack of individual accountability.

Under the new approach, all foreign-aid programmes will be managed under a single roof, from the identification of projects to the drawing up of budgets, to the monitoring of their implementation and the assessment of their results. This should not only speed up the disbursal of aid but also give officials a greater sense of responsibility over the whole project cycle. So, too, will the decision to devolve much of the onus for implementing aid projects to officials in the field.

The EU has 128 delegations around the world, but almost all major decisions about how aid is paid out are made in Brussels. The Commission believes that a 'bottom-up' approach will allow it to be more responsive to the needs of beneficiaries, lead to an improvement in the speed and quality of aid and ensure that projects are developed hand-in-hand with other donors.

By the end of this year, decision-making power will have been devolved to 23 delegations and by 2004 all EU embassies should manage the external assistance programmes in the countries for which they are responsible. Few doubt that the new approach will lead to a swifter delivery of aid to those who need it most. The only question remains: what will EuropeAid actually do when all power has been transferred to the field?

The creation of the new office has been broadly welcomed by experts, but is not without its critics. MEPs, development groups and officials in the Commission's development directorate are all worried that external aid will be driven less by development goals and more by foreign policy objectives under the new system.

The central goal of the Union's development policy is supposed to be poverty alleviation, yet a brief glance at the major recipients of EU aid over the last decade shows that political considerations are often more important than questions of life and death when it comes to handing out money.

Commission figures show that between 1986-98, most of the largest recipients of Union aid have been countries in central and eastern Europe and the Mediterranean basin, rather than the desperately poor countries of sub-Saharan Africa and the Indian sub-continent. And development groups fear that this trend is likely to increase as all beneficiaries of Union largesse are lumped together, rather than split up into groups of the most and least needy.

One official said that the new approach was the death of the "boy scout spirit of aid, where development is seen as a generous activity rather than an act of self-interest".

There is little doubt that the Commission's development directorate has been the one big loser in the whole aid shake-up. By the end of the year, a mere 300 officials will be left in the DG and many within the directorate fear that it will cease to exist in two years' time.

But supporters of the new regime point out that as long as European aid gets to the people it is meant for quicker, it does not matter which official in Brussels has his or her signature on the cheque.

Patten believes that the EU's failure to deliver aid swiftly to the people who need it most has undermined the credibility of its nascent foreign policy and its standing on the international stage. This is undoubtedly true, but for many of the world's poorest people, when it comes to assessing whether aid is effective or not, the proof of the pudding will literally be in the eating.

Major feature. The European Union spends some €12 billion a year on external aid but has been attacked in the past for failing to ensure that it reaches those who need it most. A new body, EuropeAid, now has the job of seeing that help gets to the right people - and fast.