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The Earth Times | Posted March 21, 2002




FINANCING FOR DEVELOPMENT

European Union speeds up aid
> BY ROMAN ROLLNICK
Copyright © 2002 by The Earth Times. All rights reserved


MONTERREY, Mexico -- The European Union, the world's biggest aid donor, said Thursday it was working to speed up delivery of aid to poor nations and keep bureaucratic bottlenecks to a minimum. Europe also rejected the idea of some developing nations that further institutions should be created to monitor aid disbursement. In response to criticism this week by leaders of several developing nations at the International Conference on Financing for Development in Monterrey, Poul Nielson, the European Commissioner for Development and Humanitarian Aid, said that although aid delivery was up to each of the 15 countries in the world's biggest trading bloc, the executive commission of the EU was pushing to reduce the gap between pledges and disbursement.

The Brussels-based commission is responsible for the disbursement of roughly $5.5 billion or 20 percent of the EU's total annual aid budget that currently amounts to $25.4 billion. "We are acutely aware of this discussion," said Nielson. "When I took office in 1999, the level of existing commitments against the speed of delivery translated into 4.6 years. This figure was reduced the following year to 4.1 years, and to 3.6 years by end of last year," he said.

Nielson, the former Danish development minister, is widely credited by diplomats with being behind the push not only to speed up delivery, but also to get the leaders of the EU to agree to a new aid package which effectively reversed the downward trend of official development assistance (ODA). At their summit in Barcelona last week, EU leaders agreed to an average ODA target of 0.39 percent of national income by the year 2006.

Although this falls short of the UN target of 0.7, it represents an additional $7 billion, more than the latest US increase of $5 billion annually from that year.

In Monterrey this week, the prime ministers of Norway, Denmark, Sweden, Luxembourg and the Netherlands issued a joint statement urging leaders to "do what it takes" to meet the UN target and halve the proportion of people living in extreme poverty by 2015.

"Our system has been organized very rigidly allocating assistance country by country, and in times of breakdown and conflict, the money remains on the shelf for when things improve. Thus, for example, there was development assistance money waiting for Mozambique after the conflict, and for Nigeria after the end of military rule," Nielson said. "The whole point is that when democracy returns, there is a democracy dividend."

He also reminded world leaders that he was constantly seeking to balance the reality of the mandate from voters and taxpayers in Europe against the reality of the requirements in poor nations. The commission also had to subject its decisions to scrutiny by the European Parliament in Strasbourg, France.

He called the EU Barcelona meeting and the Monterrey conference major breakthroughs that had come about because the goals had been set at the UN Millennium conference. He said that in the late 1990s, donor nations did not like the demanding language of nations in the south, and that considerable argument had ensued. "The rationale has not been changed by the September 11 terrorist attacks, it has been accentuated," he said explaining the breakthrough. "Poverty and the dangers of marginalization were there already, and our understanding of it may have improved. The Millennium summit gave us the inspirational tools." Europe had worked hard to improve its aid budgets, and had done so through a "very transparent" process. He insisted that EU aid did not consist merely of hand-outs, but was part of a well planned program, which was clear and predictable to its partners in the ACP Group of African, Caribbean and Pacific nations, with aid allocations decided five years in advance.

In a message to developing nations, Nielson added, "The recipients need to clarify their needs better. The notion of ownership should be strengthened to manage donors as their partners." Nielson, who will be traveling to Johannesburg, South Africa later this year for the World Summit on Sustainable Development, said that summit would be an important chance to take stock now that the goals have been set.

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