On June 14, the European Commission (EC) presented its legislative proposal for the ‘Neighbourhood, Development and International Cooperation Instrument’ (NDICI) as part of the package for financing external action. The proposed instrument merges a large number of self-standing EU external financing instruments into one and is intended to administer the majority of the funding under the next EU budget’s heading titled ‘Neighbourhood and the World’.
One major issue raised by the proposal regards the balance between development and external action objectives. Is this a development instrument that contributes to external action or an external action instrument that appropriates a development budget? Likewise, questions have been raised on whose priorities the instrument will reflect, for example on migration or Least Developed Countries (LDCs), and how it will balance predictability with flexibility. This blog examines some of these questions.
Will Europe deliver on poverty reduction and the SDGs?
The objective of poverty reduction is notably – and worryingly – absent in the list of proposed general and specific objectives for the instrument. Similarly, no reference to the Sustainable Development Goals (SDGs) is included in the objectives section. Instead, article 3 of the proposed instrument presents the general objective as realising the EU’s values and interests worldwide and pursue the objectives and principles of its external action. Reference is made to the EU Treaty, which defines poverty reduction as the primary objective of EU development policy. As such, poverty reduction appears only indirectly in the proposed legal basis, and it could be assumed that the SDGs are an overarching reference for all the EU does. However, it is significant that these are not explicitly mentioned as an objective of the principal instrument for EU external actions.
The regulation proposes that at least 92% of the funds will meet Official Development Assistance (ODA) criteria. This is an important safeguard, since the definition of ODA requires expenditure to primarily benefit developing countries. However, both the nature of reporting practices and changes introduced to ODA reporting rules have received much criticism in recent years. A stronger, additional guarantee would emerge from a more cohesive EU-wide position across member-states, the Parliament and the European Commission on what the instrument should ultimately achieve.
Getting these objectives right is fundamental as they will determine the nature of the instrument, as well as provide the basis for accountability relations across the EU institutions, member states, and other relevant actors. Given that the current budget period has been characterised by ongoing – and unresolved – debates about the definition of EU external development policy, the single instrument has a strong potential to provide a unitary legal basis for future consistent actions in these areas.
Given the instruments’ proposed budget of Euro 89.2 billion in current prices for 2021-2027, this will be a fierce battle. But parties should also find common ground to defend the heading, as negotiating different objectives with a smaller budget will be even harder.
Migration and development: where will the pendulum swing?
The legal text carries various references to the root causes of irregular migration, but how the EU intends to influence human mobility through development action remains unclear. The absence of a clear definition of ‘root causes’ means that monitoring and evaluating the budget’s effectiveness in the area of migration will be difficult. It will also be worryingly easy to argue that almost any action addresses such root causes, or to undertake initiatives that seek to contain migration but have limited development impact.
Worryingly, cooperation with the EU on migration appears among the criteria to assess country performance and allocate more funds, along with more development-oriented indicators such as economic governance and reforms, or human rights. It is not yet clear to what extent the new instrument will replace (or replenish) the EU’s Emergency Trust Fund for Africa, and also what this might mean for regions that are not involved in migratory routes to Europe. For example, will it mean less funds for a country like Malawi, compared to West-African LDCs?
How much for LDCs?
The proposal has a welcome strong focus on fragile states: these are the contexts where people are most likely to be left behind and least likely to escape poverty. The commitment to LDCs is much softer with the reiteration of the longstanding target for 0.2% of ODA as a share of GNI. At the same time, the instrument contains various references to Middle Income Countries (MICs), including the accompanying assessment that the current policy of ‘graduating’ UMICs from bilateral cooperation should be revised. While this is a positive, it also requires solving the existing conundrum of a Union which pledges attention to countries most in need and allocates most of its resources to MICs, namely 58% of its bilateral ODA in 2016.
Different views among member states over how to balance aid between LDCs and MICs, as well as path dependence in EU approaches to development cooperation have so far hampered finding more creative solutions to such an issue. An approach in which each actor defends their own priorities during the budget negotiations will unlikely provide space for a better dialogue, but negotiating a single instrument does provide an opportunity to have it.
Predictable and flexible funding: squaring the cycle
The need for enhanced flexibility is stressed repeatedly throughout the proposal, which also acknowledges concerns that this may lead to reduced predictability. Getting this balance right is key.
The Commission and External Action Service stress that the geographical element of the instrument will remain predictable. However, member states and the European Parliament are inevitably sensitive on this issue as they want to retain control over how funds are spent.
Recent analysis by ETTG researchers suggested that preserving flexibility and resisting pressure to lock in precise budget outcomes is important. But clear spending criteria linked to SDGs would provide much needed reassurance and transparency on how resources will be spent.
To this end, unambiguous objectives and SDGs-driven allocations should be combined with a detailed results framework, which should be publicly available so as to inform analysis and scrutiny by all actors concerned. In the end, if the European Commission wants more flexibility and less cumbersome accountability procedures, it must get better at documenting, communicating and evaluating its programming and providing a convincing development narrative. Similarly, reflections on the role and responsibilities of the EP committees and Council working groups need to follow suit.
Should it stay or should it go?
The proposal of the Neighbourhood, Development and International Cooperation Instrument is certainly ambitious. The European Commission is well aware of this and has tried to appease different development and foreign policy communities, in particular with more external action resources and a prominent neighbourhood window. However, various member states have already expressed scepticism for the European Neighbourhood instrument to be merged (see our blog on advantages and disadvantages).
There will also be ample debate on proposals to integrate the European Development Fund into the budget, something that the Commission last proposed fourteen years ago.
Although many actors will understandably be preoccupied with what the proposed instrument may do to “their” instrument, it is important that all those involved look beyond these concerns to also consider how a single instrument could best promote their collective interests in securing an ambitious EU development cooperation budget for the next seven years.
Authors: Niels Keijzer, Clare Castillejo, Mariella Di Ciommo
Photo courtesy: Joe Thorn via flickr